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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Art Bechhoefer who wrote (20708)	8/13/2001 9:23:06 PM
From: Ausdauer	Read Replies (1) \| Respond to of 60323

Art, you can see how the settlement with Lexar really smarts. Message 16206677 Lexar is signing more and more licensees to its controller technology. These licensees generally buy flash from sources other than SanDisk/Toshiba and then compete head-to-head with us at the retail level. I had hoped that '987 was impenetrable, but now it looks like SNDK made great concessions last Fall with the only reward being the one-time payment by LEXR and a fully paid-up SmartMedia license for the ImageMate product line. The one hope that I am holding out for is that NAND manufactured with MLC technology will not be covered by Lexar's non-infringing controller. One has to believe that the controller technology for MLC is significantly more complicated that standard NAND. I think only time will tell if this expectation is realistic. If I were able to get through on any of the c.c.'s this is the first question I would ask Eli. Aus

To: Art Bechhoefer who wrote (20708)	8/13/2001 9:40:18 PM
From: Ausdauer	Respond to of 60323

Art, I could not find any info about Viking in the May SEC filing by Lexar... ...but suspect they will have to disclose additional payments to SanDisk as a result of the infringement by Viking. I assume by the plain fact that they are "indemnifying" Viking that Lexar is culpable, but I wish to wait for confirmation in the 10Q. We need more information and I hope this is available soon. I suppose Lexar could "indemnify" Viking and still enter into legal proceedings with SanDisk to contest any additional royalty payments. I also noticed that Lexar re-wrote the covenants of their loan agreement as they had apparently defaulted on one of the terms of the original loan last December. I couldn't sift through all of the financing details, but it seems that they are once again in good standing with the lender. I am gonna guess that Viking has a large inventory of infringing cards. I wonder about the magnitude of a payment by Lexar on behalf of Viking. Any idea how large this could be? Aus