[Page 1, cover] IXI SYSTEMS CONFIDENTIAL [Page 2] SYSTEM OUTLINE PAGE THE IXI DIGITAL SYSTEM 1 SOME GOOD POINTS 2 RECORD COMPANY DECISIONS 3 PIRACY, COPYING, COUNTERFEITING 4 RELIABILITY 4 STOCK HOLDING AND CONTROL 4/5 BILLING, SALES ANALYSIS AND AUDITING 5 REPROGRAMMING 5 THE BENEFITS OF IXI DIGINTAL SYSTEMS RECORD COMPANY 6 THE ARTIST 6 PUBLISHER 6 P.R.S./A.S.C.A.P. 7 RETAILER 7 CONSUMER 7 [Page 3] THE IXI DIGITAL SYSTEM The system replaces the heavy costs of distribution of records and tapes etc., in the following manner: Record albums and/or singles issued by recording companies are fed in digital form into a computerised Central Data Bank. This data bank is connected by telephone lines to all retailers. The computer holds this digital information and upon receipt of coded instructions from the retailers terminal, will transmit the requested music instantaneously to the terminal, where it is then programmed onto a blank IXI CHIP. It calculates and bills the retailers account, splits the relative apportionments of PRS, Artists Royalties, writers and record companies share, all in a matter of seconds. [Page 4] * This method has the same inherent security as a bank cash card regarding piracy and duplication. * Record companies catalogues need never be obsolete. * Rare out of print titles instantly available from the IXI data bank. * With IXI it is only necessary to have one copy on the central data bank for it to be purchased an unlimited number of times from anywhere where a terminal is installed. * Up to the minute sales reports by area/shop/territory, updating chart news as it happens. * The catalogue on the central data bank would be so vast, it would normally be quite unthinkable for a retailer to carry such a product range. * Immediacy of delivery. * It eliminates the need for retailers to carry any inventory. * Total compatibility with all existing hi-fi equipment. * IXI CHIPS being solid state, do not suffer from mechanical wear and continuous use. * Its digital characteristics gives pristine audio reproduction. * The dimensions of the IXI CHIP cards are such that several could fit into a cigarette packet (i.e. similar size to credit cards). * Replay units in various forms are able to be programmed to select any track in any order. * Portable replay units similar to the Walkman are benefited by having a very low power consumption, due to their unique solid state construction. * The power needs are negligible as there are no motors or moving parts in the replay unit. * Cards can be readily re-programmed. * In a matter of seconds, a live performance at Carnigie Hall can be recorded and available in shops all over the world. - 2 - [Page 5] RECORD COMPANIES DECISIONS OBSOLENSCENCE OF SHOP STOCKS Every week in the UK alone, approximately 100 new singles and 75 new albums are released. Naturally a company with many weekly releases have to think very carefully which product to produce in quantity. Another consideration is the unpredictability in which a record reaches a top charting position. The main problem that has to be overcome; a Catch 22 situation. 1. UNKNOWN ARTIST When a record company produces say 2000 units of an unknown artist (an average pressing quantity), the product is distributed to radio stations, music/national media and record retailers. If the product dies early, only the music production and short run pressing costs are lost. If the product receives immediate air-play and press coverage, the initial product run may be purchased by consumers in a matter of hours. If the demand for that product is say 50,000 units a week, it can take easily three weeks to have the product produced and distributed to the shops, by this time the bulk of the sales are lost. Even the largest companies are unable to produce quantities of units and distribute them as quickly as demand requires. 2. KNOWN ARTIST The record company would press perhaps 100,000 copies of a new single or album. These would be sold to the retailers by a team of salesmen (usually on a sale or return basis). If the record retailer does not achieve his forecasted sales on the product, the stock would be returned for credit or held in stock and reduced in price - a costly affair. With IXI, delivery is immediate to satisfy demand as it occurs. IXI removes the guess work out of predicting pressing quantities on a new release. [Page 6] PIRACY COPYING (HOME) COUNTERFEITING For every record or tape of conventional format sold, over one copy is made in an illegal form. Therefore over 100% of the total sales potential is lost. With IXI, all programme material (recordings) is stored and transmitted on a high security enclosed digital network, all terminals being supplied under a licence to retailers. Because of the attention to security, it is impossible to break into the system undetected, thus preventing bootlegging of the programme material by fraudulent means. The first stage at which the digital encoded programme material is converted to analogue (audio) signals, is when the IXI CHIP is played back in the home playback unit. It can be seen from the above, that the format prevents mass copying of programme material by fraudulent traders and home copying. RELIABILITY Due to the solid state construction of the device, there are no moving parts required in the playback or record operations of the IXI CHIP. Reliability is therefore determined by the actual memory chips which have a very high inherent reliability. STOCK HOLDING AND CONTROL 1) With existing recording formats, stockholding is a difficult and expensive operation if a satisfactory service is to be provided to the customer. Unless a sufficient range of stock is held, additional costs are incurred in providing special deliveries of out of stock recordings. Another side effect of a small product range is the loss of spontaneous sales from customers who are not interested in waiting the required time for recordings to be delivered to the retailer. With the IXI format, stockholding of prerecordings is eliminated. [Page 7] The retailer simply holds stocks of unrecorded IXI CHIPS, on receipt of an order from a customer, he plugs an IXI CHIP into his terminal, types in the recording identity number, and within seconds the IXI CHIP is programmed with the required recording, the information being concurrently transmitted from the central data bank to the terminal. 2) BILLING, SALES ANALYSIS AND AUDITING On completion of the information transfer, the terminal and central data bank communicate with each other to provide sales chart updating, retailer billing, commission and royalty accounting. The central data bank also monitors the IXI CHIP stock levels held by the retailer, and automatically despatches batches of IXI CHIPS to the retailer when his stocks become low. REPROGRAMMING Cards can be reprogrammed once purchased from a retailer in two ways: 1) By taking the IXI CHIP into an IXI store for reprogramming by the retailer. 2) By reprogramming the card at an unattended coin/credit card operated station. The station would have a keypad for entering the title number of the recording in the same way as the retailers terminal. The central data bank would continuously monitor the status of the station, i.e. when the coin box is getting near to full and therefore requires emptying, or if the station has developed any faults. All stations could have the top ten displayed and show their minute by minute changes. The location of these machines could be in petrol stations, supermarkets, public houses etc., as well as actually located in IXI stores, to provide self-service facilities for customers in the shop. (Similar to cash card dispensers located in banks). [Page 8] THE BENEFITS OF IXI DIGITAL SYSTEMS RECORD COMPANY After very small capital investment, the product is always available in unlimited quantities when and where it is required. Instantaneous feedback on sales by territories, cities and individual areas, giving improved profitability and simplified accounting. A tremendous advantage, enabling the management to spend time on marketing and advertising, resulting in improved sales and efficiency. Because of the programmable nature of the IXI CHIP, the record company can present artists work to the consumer in the most lucrative form by varying the content, number and prices charged for each "track". e.g. 5 or 3 or 1 preferred track from an album, or even 5 or 10 plays of your preference and the card would destruct the memory when the last play has completed. THE ARTIST The shops are never sold out and the product has the finest possible quality reproduction available. This coupled with the benefits of immediate accounting direct from the data bank, makes the IXI system a very attrractive proposition. PUBLISHER The simplified accounting procedures will allow more energy to be put in the direction of increasing artistic resources, whilst improving profitability and efficiency. [Page 9] PERFORMING RIGHTS SOCIETY OR SIMILAR i.e. A.S.C.A.P. It is the job of the Performing Rights Society to collect royalties on behalf of publishers, artists and record companies. It is a very complicated procedure and extremely costly. It is necessary to ask the record company for sales figures and to a great extent the figures are relied upon by P.R.S. and the publishers to account to the artist. Utilising IXI Digital Systems, this whole process of accounting is short circuited, thus saving huge cost on collection and accounting, and improving efficiency. RETAILER The cost of holding stocks of current formats of records and tapes is very expensive. An IXI terminal is cheap to install and means to the retailer that he always has as much of anything he may require in stock, without the expense of actually having it in stock. He only has to pay for the product as it is sold, and IXI will put a higher profit margin on the bottom line. CONSUMER The benefits to the consumer are as follows: Sound quality is of exceptionally high (digital) quality. Sound quality is not degraded by time, use or wear. Having no moving or mechanical parts, the IXI CHIPS and replay units are extremely robust and resistant to abuse. The chips are reprogrammable, therefore hardware costs will be saved on new recordings made on a used IXI CHIP. The chips are small and are very portable. Because of IXI's digital sound and size, together with software availability, the IXI system has tremendous natural consumer appeal.

THE IXI DIGITAL SYSTEM The system replaces the heavy costs of distribution of records and tapes etc., in the following manner: Record albums and/or singles issued by recording companies are fed in digital form into a computerised Central Data Bank. This data bank is connected by telephone lines to all retailers. The computer holds this digital information and upon receipt of coded instructions from the retailers terminal, will transmit the requested music instantaneously to the terminal, where it is then programmed onto a blank IXI CHIP. It calculates and bills the retailers account, splits the relative apportionments of PRS, Artists Royalties, writers and record companies share, all in a matter of seconds.

PC2 (top left) PIX4S (top right) SELECT PLAY - and + (either side of the control pad)

Labels around the drawing: Bright flor green; Flor orange; Dark plastic; Dark blue; Black plastic. On the device: PIX[4/Y?] name panel; a screen with track listing lines and the words "Type", "Time" and "Next page?"; Volume; Start; Shift; Repeat; Stop [?]; Pause [?].

Labels: Contacts; Clip; Card; Headphones; Liquid Crystal Display; Keyboard; Batteries. © Kane Kramer 1982.

VISUAL AUDIO (sign above the counter, with arrows) © Kane Kramer 1982.

(21) Application No 8133003 (22) Date of filing 2 Nov 1981 (43) Application published 14 Sep 1983 (51) INT CL3 G10G 3/04, G11C 19/02 (52) Domestic classification H3B XX (56) Documents cited: GB A 2004107, GB 1566663, GB 1541856, GB 1504196, US 4296664, US 4250787, US 3786445, EP A 0013191, EP A 0013192 (58) Field of search: H3B, G5J, G4A (71) Applicants: Kane Nicholas Kramer, Oaktree Lodge, Arkley, Barnet, Hertfordshire. James Sebastian Campbell, 7 Alwyne Place, London W.1. (72) Inventors: Kane Nicholas Kramer, James Sebastian Campbell. (74) Agent and/or Address for Service: Gee and Co., Chancery House, Chancery Lane, London WC2A 1QU. (54) Portable data processing and storage system (57) A credit card size portable system comprises (a) a bubble memory 22 for storage serially of digital data, especially of sound analogue signal which has been digitally encoded. (b) decoder means 26 for converting the memory output into analogue form, preferably several decoders each for one sound band, (c) a control register 34 for controlling input and output of data from the memory 22 and which is responsive to control data present in the input and output stream, and an input 14 and an output 15 for the data entering and leaving the card system. The memory can be of 8 megabyte size, which can record 3½ minutes of music signal. (57) continued overleaf... Drawing labels: Signal detector and transmitter (18); Output multiplexer (32); Analogue signal mixer (28); Output register (30); Controller (34); Input register (20); Memory clock (36); Memory (22); Decoders (26); Demultiplexer (24); input 14, output 15. The drawing originally filed was informal and the print here reproduced is taken from a later filed formal copy.

[11] Patent Number: 4,667,088 [45] Date of Patent: May 19, 1987 [54] PORTABLE DATA PROCESSING AND STORAGE SYSTEM [76] Inventors: Kane N. Kramer, Oaktree Lodge, Arkley, Barnet, Hertfordshire; James S. Campbell, 7, Alwyne Place, London, N.1., both of United Kingdom [21] Appl. No.: 910,350 [22] PCT Filed: Nov. 1, 1982 [86] PCT No.: PCT/GB82/00311; § 371 Date: Jul. 1, 1983; § 102(e) Date: Jul. 1, 1983 [87] PCT Pub. No.: WO83/01705; PCT Pub. Date: May 11, 1983 Related U.S. Application Data: [63] Continuation of Ser. No. 517,520, Jul. 1, 1983, abandoned. [30] Foreign Application Priority Data: Nov. 2, 1981 [GB] United Kingdom 8133003 [51] Int. Cl.4 G06K 5/00 [52] U.S. Cl. 235/380; 255/379; 255/487; 255/492 [58] Field of Search 235/380, 487, 492, 379; 365/2 [56] References Cited, Foreign Patent Documents: 2912139 10/1980 Fed. Rep. of Germany; 2924647 1/1981 Fed. Rep. of Germany; 2115996 3/1985 United Kingdom. Primary Examiner: Harold I. Pitts Attorney, Agent, or Firm: Murray and Whisenhunt [57] ABSTRACT A credit card size portable system comprises a bubble memory for storage serially of digital data, especially of sound analogue signal which has been digitally encoded including, a decoder means for converting the memory output into analogue form, preferably several decoders each for one sound band, a control register for controlling input and output of data from the memory and which is responsive to control data present in the input and output stream, and input and output for the data entering and leaving the card system. The memory can be of 8 megabyte size, which can record 3½ minutes of music signal. Optical input can be used, with a photoelectric converter at the input. A card is readily programmed with the digital data and can readily be stored or transported for replay of sound signal as desired, in place of conventional discs or cassettes. The control data bits are detected by the control register and serve to control the recording and replay steps. The digital data may be replayed directly from memory without passing through the decoders for input into another memory upon command from the control register. 14 Claims, 2 Drawing Figures Drawing labels: Signal detector and transmitter; Output multiplexer; Analogue signal mixer; Output register; Controller; Input register; Memory clock; Memory; Decoders; Demultiplexer.

Block diagram of the card (10): contacts 12 and 13 (power), optical input 14 and output 15; Signal detector and transmitter (18); Input register (20); Controller (34); Memory clock (36); Memory (22); Output register (30); Output multiplexer (32); Decoders (26); Analogue signal mixer (28); Demultiplexer (24). Connections 38, 39, 40, 41, 42.

Block diagram of the replay unit: optical connections 44 and 46; contacts 50 and 52; Signal detector and transmitter (64); Input register (60); Controller (58) with connection 76; Decoders D to A (62); L/R decoder (66); Speech or digital filter (68); R. channel filter (70); L. channel filter (72); Power supply (80).

On the cartridge: IXI (on the top); IXI CARTRIDGE; by Lyricdata Ltd [partly legible]; 001. On the prototype: small lettering on the front panel [illegible].

December 1985, £1.20 SOUND ENGINEER + PRODUCER Producer of the Year: Chart Analysis Weller's Solid Bond: A Family Affair The Gear: Rebis/Akai, Samplers, Fostex, Synchronisers, TC Spatial Expander The Producers: Langer & Winstanley, Don Was, Alan Shacklock The Engineer: Damien Korner The Studios: Solid Bond, Workhouse, Westheath The Features: Mixdown, Mixing Desk Guide, Paul Hardcastle, Digital Futures The Professional's Guide to Pro Audio

On the front panel: I.X.I. DIGITAL SYSTEMS. The three slots are numbered 1, 2 and 3, and the keypad is labelled A, B, C and D. A smaller line under the name [illegible]. The photograph carries no article text.

Waxing lyrical over card-carried music By Noel Keywood IF YOU thought the future of music recording was a battle between compact discs and digital audio tapes, reconsider. This week a team of British entrepreneurs unveils the most radical system yet: a music recorder on a chip. The prototype IXI comes from Lyric Data of London, where Kane Kramer and James Campbell have spent the past few years working on a system which could record, play and re-record music on a sliver of plastic with a chip in it, like a credit card. The IXI is the first commercially viable version. It produces high-quality digital stereo from cartridges slightly smaller than video cassettes. Three are held in a player at once and each plays for 10 minutes so half an hour's playing time can be achieved by "cascading", or running them together. Kramer, Lyric's managing director, and Campbell, who is technical director, are convinced that a model which works for up to an hour will be a reality within two years. Current tape machines and disc players, or "boxes of wheels" as the consumer electronics industry dubs them, are, in comparison, expensive to make, bulky, noisy and wear out. They are bound eventually to be superseded by "solid-state" chip based systems: electronic systems with no moving parts. Video recording will go the same way. The problem Lyric Data reckons it has solved is that of the huge volume of storage needed: 600m binary digits of information for each 10 minutes of music. This is way in excess of the biggest memory chips yet. Campbell and Kramer's solution uses inexpensive standard memory chips, each of which holds around 1m binary digits. About 600 of these are joined in one package. The chips can be wiped clean by an electrical signal, then re-recorded, having an operating life "in excess of five thousand passes," according to Campbell. Lyric Data is holding talks with three different chip manufacturers for the revolutionary music memory device. But it says potential manufacturers are nervous about tying up a large part of their output with this as yet unproven technology. The Sunday Times tested an earlier system which played 16 seconds of music and found the quality similar to that of a compact disc. It had a full frequency range and virtual absence of distortion and noise. "Packing in more memory will extend the playing time of production units to ten minutes," says Kramer. At the moment the cost of one 10-minute cartridge is £3,000. While this is far too high for domestic use, it may prove acceptable to broadcasting companies for jingles and commercials where the IXI offers reliability, durability and split second, computer controlled cueing. Photo caption: The weight of recorded music's future on their shoulders? Kramer (left) and Campbell

On the front panel: I.X.I. DIGITAL SYSTEMS. The three slots are numbered 1, 2 and 3. Smaller lettering under the name and at the lower left [illegible]. The image is the photograph only; its caption is shown above.

COMMENT ALVIN GOLD continues the story of Lyricdata’s no-moving parts digital recording system, the like of which may one day supersede CD and DAT SOLID STATE AS ADVERTISED, HERE IS PART 2 OF THE feature on Lyricdata, started in last month’s issue, concerning the IXI (pronounced as ‘pixie’ but without the 'p’) solid state digital audio system. Here we flesh out the details in a conversation with the managing director of the company, Cane Kramer. The interview started with a discussion of the cartridge technology . . . There are two types of memory that we will employ. The more expensive of these - and suitable production quantities are not yet available - are electrically erasable prog- rammable read-only memory devices - E²PROM for short. It’s a non-volatile memory, and it doesn’t require a battery backup, But our initial production is much more likely to be on something that is available to use, that can be packaged as we require, and that is available in the quantities we require from a large number of sources. With E²PROMs there isn’t the depth of suppliers to give us the confidence to go with them yet. But it’s undoubtedly what we will be using in about six or nine months’ time, which will be an eternity in terms of where we are now. Until then we'll be using low power consumption CMOS RAM chips with a lithium battery which will last about 10 years without recharging or changing. "Storage capacity of the cartridges is in the region of 800 Mbyte altogether, and it comes as a sealed unit. The only connections are an inset electrical contact on either side, and a red window fitted with three little transceiv- ers. The centre one is the clock, and the outer two are for bi-directional transmission of data. This will enable you, for example, to programme a series of edits that you want in a piece of music, and then load the instructions off the computer, or an IXI master module, onto the cartridge. Then, if you take the cartridge somewhere else, it knows what it’s supposed to do. In effect it’s intelligent: you can programme it with running orders. That makes the whole system that much more versatile in the professional arena. "The infra-red based optical interface itself is very cheap and operates at clock rates well in excess of what we need - about 0.75MB/track/sec. It’s more than most - we're running at 48kHz sampling frequency - because we're recording one-for-one. We use no data compression at all. We have error correction, but it doesn’t have to be tuned so fine because the chances of serious errors occurring of the kind you get with tape are infinitessimal. "The system seems to be running almost before we're really ready to work. We thought others might want to license the system perhaps 6-9 months down the road, after we had it firmly launched into the [column break; page footer: HI-FI ANSWERS MARCH 1987] studios. But we realise that the agreement has to be now. "Pricing is a bit complicated. Starting with a basic two-track system, you can up that to a 24 track system by adding rack mounting units. You don’t have to put in more microprocessors, another master controller or a lot more clocks. All you need is extra ADCs and DACs, and a small amount of software in the form of a couple of E²PROMS to cope with any new facilities it has to accommodate. You can build the system up as big as you want. It'll take 10 minutes of mono. If you put in six cartridges, which is an hour of mono, you can have 60 channels of one minute if that’s what you want and if you don’t mind buying the additional ADCs and DACs. "As a basic stereo recorder and replay unit with no edit facilities it will cost more than a DAT machine, but not horrendously more. The thing that will inhibit the price in this kind of application is the price of memory - the cartridges - which at the start will cost about £3,000 each. But you can do millions of rewrites and unlimited replays, so the cost can be amortised. And the system is so flexible that you can do things you wouldn't dream of doing any other way. "The player itself would be very cheap. A straight stereo player might cost about £1,000 - £1,500 to start with. A recorder needs ADCs as well, and probably quite a bit of sophisticated editing on board, but it’s quite straightforward with IXI to perform some sophisticated tasks like stretching the sound and adjusting the waveform to keep the pitch the same, and all sorts of other peculiar things. These facilities will appear on a more expensive unit primarily for film and advertis ing work - a kind of audio Quantel (a professional video effects unit). A basic recorder will cost about £2,500-£3,000. An all-singing, all-dancing professional base unit would cost about £20k, but this really would enable you to do almost anything. "Compared to DAT, there are no moving parts, no servicing, no motors, indefinite longevity - remember there are no heads to wear out - and digital audio quality will be better because less error correction is needed. And costs will fall as the cost of memory falls. We've been doing practically nothing but watch the price of memory falling over the last seven years. Prices will continue to fall and there won't be any letup. From the portability point of view, looking down the road a bit, you won't get all the problems with jogging and so on that affect CD. It will be a proper portable system. Another advantage of IXI will be true random access. There’s no question of winding forward or anything like that. When you do an edit it’s not destructive of information. The system just relocates data in memory. "It's so different from RDAT. If you imagine you have a monotrack, you can take any piece of that track, starting anywhere and ending anywhere. Against an eternal clock and a trigger mechanism which is in the internal microprocessor you can make that passage start and stop whenever you want. You can then have 10 bits starting and stopping simultaneously, or allow them to slip slightly in relation to each other. You don't actually have tracks, though for the purposes of the operator, it’s convenient to think of it that way.’ For background, plans call for the IXI system to see its first commercial applica- tions in broadcast studios - and possibly for data storage purposes. Lyricdata also fore- see a consumer market, but not until the early 1990s. One idea is to use IXI in much the same way that the video industry deals with films. The customer will go into a retailer's store, and via a computer terminal linked to a central database download any piece of music he requires. This could be a logical successor to the singles market. Everything then is in stock all the time. Certainly it would solve all kinds of distribution problems. [continues] [page 13]

Letterhead: BIXPY MANAGEMENT LIMITED, 26 Kingsland Road London E2 8DA. Telephone: 01-729 2666 (9 lines) [...], 1980 ([...]te Petent) [...] Chip in the form of a cassette or credit card or similar [...]ll be used as a memory to memorise music and speach. This will [...] to replace records and tapes. It will be pluged into a deck or [...] to decipher the information on the silicone chip and turn the [...]ion back into music speach or any sound. The same principal will [...] visual display on a T.V. screen or monitor or similar as well. [...] is wholly original. Witnessed: J. Swinburn [handwritten; reading uncertain] [...]mer [signature line, cut off] Footer: USA Offices: Los Angeles, Suite 306, 9229 Sunset Blvd. Beverly Hills Los Angeles. Tel: 213-550 1168 Telex: 255910 4905952. Miami: 1611, The Cricket Club 1800 Northeast 114th Street, North Miami, Florida 33181. A SUBSIDIARY OF THE M.K.& L KRAMER ORGANISATION

[Page 1] Kane Kramer, 26 Kingsland Road, London E2 8DA. 28th June 1983 Mr. P. McCartney, M.P.L. Communications Limited, 1 Soho Square, London, W.1. Dear Paul, Re: PIXIE SYSTEMS Following a discussion with Steve at which time he passed on your request for as brief as possible and easy to understand description of our rev- olutionary break-through, the following represents an outline of the project. The device is of credit card dimensions, digital, no moving parts, and does not require the normal distribution network that records and tapes do. Instead, information is held at a Central Data Base. This computer (that is to say the individual record company’s or their designated agents) holds the entire catalogue in digital form and upon receipt of coded instructions from the retailer’s data link will transmit the digital signal directly onto his blank card, calculate and bill the retailer’s account, split up the relative apportionments of P.R.S., Artist Royalty, writers and record companies share - all in a matter of seconds. * This method has the same inherant security as does a bank cash card with respect to piracy and duplication. * It eliminates the need for retailers to carry any inventory and allows them to place their money in the more direct areas of marketing/promotion advertising and point of sale display material helping create a boom for our industry. * Its digital characteristics display the usual pristine audio re-production. * The dimensions of the player and 2 cards are such that you could fit them into a packet of Rothmans and still have room for a row of smokes. Complete portability. * The power needs are negligible as there are no moving parts. * Total compatability with existing hi fi equipment. * Cards can be readily re-programmed - that is to say re-recorded from the Data Base, so if you’re fed up with an album, you can just buy a new one, cheaper, having already born existing card cost. * It is totally conceivable to record many hours of music on to a single card. Cont... [Page 2] - 2 - All new formats so far introduced to the market place have had more than just great difficulty in becoming a standard format because: - a) The lack of availability of catalogue, due, to cost of reproduction for inventory. b) Prohibitive cost of the players themselves. c) The record retailers resistance to purchasing and duplicating their already existing stock of the same merchandise. Whereas here, the stock is never obsolete and is tailor-made to order upon insertion of their blank card into the retailers data link. The player (once into full production) can be made to retail at prices along side todays’ miniature calculators, since the technical elements are similar, apart that is, from the miniature pre amp. Say £10 - £15 per unit. Thus making consumer resistance to this new format practically nil. The cards cannot be damaged or their audio quality impaired by contact or friction from contact with foreign objects and repeated playing does not impair the sound quality as does most existing technology. The foregoing together with the enclosed rough sketches, represents a minimal outline of the device itself. Funding for the proto-type/marketing strategy/ergonmics/product design has been stated in previous communications. Should you need further copies I can supply them at a moments’ notice. It is essential that the progress of the patents is not impeded in any way. I enclose a summary of work to be carried out taking us up to the proto- type stage. Once again, it was never intended that M.P.L. Communications would bear the entire cost of development and to that end we are having some preliminary conversations with 3rd party investors that I shall fill Steve in on when we next speak. I trust the foregoing serves to educate you more fully on the project at hand. Kindest personal regards, [signature] Kane Kramer. c.c. S. Shrimpton.

- 2 - All new formats so far introduced to the market place have had more than just great difficulty in becoming a standard format because:- a) The lack of availability of catalogue, due, to cost of reproduction for inventory. b) Prohibitive cost of the players themselves. c) The record retailers resistance to purchasing and duplicating their already existing stock of the same merchandise. Whereas here, the stock is never obsolete and is tailor-made to order upon insertion of their blank card into the retailers data link. The player (once into full production) can be made to retail at prices along side todays’ miniature calculators, since the technical elements are similar, apart that is, from the miniature pre amp. Say £10 - £15 per unit. Thus making consumer resistance to this new format practically nil. The cards cannot be damaged or their audio quality impaired by contact or friction from contact with foreign objects and repeated playing does not impair the sound quality as does most existing technology. The foregoing together with the enclosed rough sketches, represents a minimal outline of the device itself. Funding for the proto-type/marketing strategy/ergonmics/product design has been stated in previous communications. Should you need further copies I can supply them at a moments’ notice. It is essential that the progress of the patents is not impeded in any way. I enclose a summary of work to be carried out taking us up to the proto- type stage. Once again, it was never intended that M.P.L. Communications would bear the entire cost of development and to that end we are having some preliminary conversations with 3rd party investors that I shall fill Steve in on when we next speak. I trust the foregoing serves to educate you more fully on the project at hand. Kindest personal regards, [signature] Kane Kramer. c.c. S. Shrimpton.

Letterhead: EGOROFF & ASSOCIATES, CONSULTING ENGINEERS. 486 Funston Ave. 302, San Francisco, Cal. 94118. Tel: (415) 668-7420 Lyricdata Ltd., 73A De Beauvoir Road, London N1 5AV. 21 November 1984 Dear [redacted] Kane & James, Further to our recent meetings and in response to your letter of 12th October 1984, we are pleased to confirm that we have now acquired firm commitments to supply of all the materials, technology and facilities necessary to produce the following:- 3 only ten minute IXI non volatile memory packs 3 only five minute IXI non volatile memory packs. Our associates and colleagues in the U.S.A. were so excited by the prospects of the IXI project that they have mounted a major effort in contacting top academics at the Universities and key men in the semi-conductor manufacturing facilities to enable the IXI "dream" to come true. We strongly recommend that Lyricdata Ltd takes advantage of this situation as soon as possible and embarks upon the next stage of the development of the IXI project. The schedule of time and costs of each stage have been carefully prepared by us and will be forwarded to you under separate cover for your perusal. We remain, Yours sincerely, D. Egoroff