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EXABYTE PURCHASE AGREEMENT
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THIS EXABYTE PURCHASE AGREEMENT ("Agreement"), dated this 11th day of
December, 1996 among Hitachi, Ltd. Electronic Sales Office, a Japanese
corporation having its principal place of business at Nippon Xxxxxxxx, 0-0,
Xxxxxxxx 0-xxxxx, Xxxxxxx-xx, Xxxxx 000, Xxxxx ("Seller"), Nihon Exabyte
Corporation, a Japanese corporation having its principal place of business
at Kioicho TBR Building 1214, 0-0 Xxxxxxxxxx, Xxxxxxx-xx, Xxxxx 000, Xxxxx
("Buyer"), and Exabyte Corporation, a Delaware Corporation of the United
States of America, located at 0000 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000
X.X.X. ("Exabyte"), also known as the parties, agree as follows:
WHEREAS, Buyer is a wholly-owned subsidiary of Exabyte in Japan, engaged
in the business of purchasing various components for resale to Exabyte and to
other approved parties; and
WHEREAS, Seller and Exabyte entered into a Development Agreement (as
hereinafter defined) on the 22nd day of February 1995, for the design and
development of an 8mm deck for data storage applications for use in certain
Exabyte products ("Development Agreement"), said Development Agreement being
incorporated by reference as if fully set forth herein; and
WHEREAS, Seller desires to sell to Buyer and/or Exabyte, and Buyer and/or
Exabyte desires to purchase from Seller such 8mm data storage devices
developed under the Development Agreement for the purpose of integrating in
the manufacture of Exabyte's products or systems upon the terms and conditions
hereafter set forth.
1. DEFINITIONS
1.1. Buyer and Seller shall also mean Buyer's Affiliates and Seller's
Affiliates, respectively.
1.2. Development Agreement shall mean the agreement entered into by and
between Hitachi's Division and Exabyte on the 22nd day of February
1995 for the design and development of an 8mm deck for data storage
applications.
1.3. Funded Hard Tooling shall mean any tooling purchased or paid for by
Buyer and/or Exabyte pursuant to this Agreement or the Development
Agreement.
1.4. Hitachi's Division shall mean the division engaged in the commercial
production of Product during the term of this Agreement. Upon
execution of this Agreement, it shall mean Image and Information Media
Systems Division.
1.5. Product shall mean the product and other items manufactured, assembled
at Hitachi's Division and sold by Seller which are listed in Appendix
I of this Agreement (and those items, if any, hereafter added by the
parties to Appendix I), including Product defined by the
specifications included in Exhibit A, "Product Specifications".
1.6. Spare Parts shall mean all parts or components of Product which are
listed in Appendix II of the Agreement (and those items, if any,
hereafter added by the parties to Appendix II).
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2. SCOPE OF AGREEMENT
2.1. Term of Agreement
This Agreement shall become effective upon its execution by both
parties by their authorized representatives. The Agreement shall
expire thirty-six (36) months thereafter unless the Agreement is
terminated earlier pursuant to Section 8. and shall be automatically
extended for two (2) additional twelve (12) month periods, unless
Exabyte notifies Seller in writing at least ninety (90) days prior
to the beginning of such period that it desires not to renew.
2.2. Marketing Rights
Subject to all terms and conditions of the Agreement, Seller grants
Buyer and/or Exabyte the right to purchase Product from Seller and
for Buyer and/or Exabyte to promote, lease, rent or re-sell such
Product in modified form or otherwise throughout the world.
2.3. Exclusivity
Seller and Seller's Affiliates agree not to sell Product to third
parties which would violate the terms of Section 5.1. of the
Development Agreement. The terms of the letter of October 31,
1994 attached as Appendix IV, shall be incorporated herein by
reference.
3. TERMS OF PRODUCT SALE
3.1. Title and Risk of Loss
Title and risk of loss shall pass to Buyer and/or Exabyte upon
delivery of Product to Buyer's receiving dock or as otherwise
identified in the purchase order specified in Section 3.3.1.
All claims for shipping damages shall be resolved between Seller,
carriers or freight forwarders handling Product and the insurance
companies and agents responsible for adjusting such claims, and
Buyer and/or Exabyte shall have no responsibility with respect
thereto.
3.2. Price for Product
The prices which Buyer and/or Exabyte shall pay Seller for Product
sold pursuant to this Agreement are set out in Appendix I to this
Agreement. All prices listed in Appendix I are in Japanese yen,
Freight on Rail ("F.O.R."), Buyer's dock. The pricing for Product
defined by the Specifications set forth in Exhibit A shall in no
event be greater than that specified by Appendix I to the Development
Agreement. Any change to the prices set forth in Appendix I shall be
identified by an amendment to Appendix I which shall be approved by
authorized representatives of the parties.
3.2.1. Price Increases
The prices to be paid by Buyer and/or Exabyte for Product shall remain
in effect for the time period set forth in Appendix I. Seller may
decrease prices at any time, without notice to Buyer and/or Exabyte.
Such prices are subject to increase only in accordance with Section
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5.1.2.2. and Section 3.2.3. Orders for Product placed by Buyer and/or
Exabyte shall, provided delivery is to be made within ninety (90) days
of placement of order, be filled at the price in effect at the time of
order.
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3.2.2. Product Price
3.2.2.1. Price Reviews
Buyer and/or Exabyte will provide to Seller quarterly
price targets as a continuous effort toward a
cost/price reduction program. Seller agrees to
exercise reasonable efforts to meet these targeted
reductions.
Supplier agrees to a cost/price reduction review
meeting every ninety (90) days. Supplier will formally
provide Buyer and/or Exabyte with specific information
for price reduction opportunities.
3.2.2.2. Approval of Unique Charges
All non-recurring related expenses shall be approved
in advance by Buyer and/or Exabyte, and the cost shall
be amortized over Product purchased by Buyer and/or
Exabyte over a twelve (12) month period. No charges
beyond those defined in Exhibit C to the Development
Agreement shall be deemed to be approved except as
otherwise agreed by the parties in writing.
3.2.3. Foreign Exchange
All prices shall be in Japanese yen. The parties agree that at
the time of execution of this Agreement the exchange rate is
one hundred seven (107) Japanese yen to one (1) U.S. dollar.
At such time as the yen/dollar exchange rate, indicated in The
Wall Street Journal, on average, drops below 92.625 yen/dollar
or exceeds 121.375 yen/dollar over the previous ninety (90)
day period, the parties agree to share equally in the effects
of such exchange rate variance, and will adjust Product price
accordingly.
3.3. Purchase Order and Acceptance
3.3.1. Purchase Orders
Purchase orders issued by Buyer and/or Exabyte ninety (90)
days prior to initial shipment relating to such purchase order
for the purchase of Product shall include the following
information:
a. Model and revision level of Product.
b. Quantity to be purchased.
c. Unit price and total purchase price.
d. Delivery dates and instructions.
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3.3.2. Acceptance of Orders
Orders shall not be considered as accepted until written
acceptance (may be a facsimile) has been made at the principal
office of Seller or assignee as appropriate. It is agreed that
all such orders shall be governed by the provisions of this
Agreement and that none of the provisions of Buyer's and/or
Exabyte's purchase order or Seller's acknowledgment thereof
(either printed, stamped, typed or written) except those
specifying the quantity and identification of Product, the
price, invoice information and shipping instructions shall be
applicable to the purchase if in conflict with this Agreement,
unless specifically accepted or approved in writing and signed
on behalf of Seller by an authorized officer. A general or
standard acknowledgment of any such order or the making of
deliveries with respect thereto shall in no case be construed
as an acceptance or approval of the type required of provisions
in conflict with the terms of this Agreement. Fulfillment of
any purchase order accepted by Seller shall be dependent upon
the grant of appropriate licenses, permits and the like from
the countries of export and import.
Each month, Buyer and/or Exabyte will furnish Seller a
forecast. Seller will advise Buyer and/or Exabyte within seven
(7) business days, in writing, of its acceptance of the latest
schedule iteration, or will propose a revision to Buyer's
and/or Exabyte's schedule.
Buyer and/or Exabyte will provide Seller with a minimum of
three (3) months' purchase orders plus a minimum six (6)
month forecast. Seller will purchase materials against Buyer's
and/or Exabyte's purchase orders and forecast based upon a
purchase policy consistent with Appendix III, Unique Long-Lead
Time Components List.
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3.3.3. Delivery Dates
Delivery dates shall be reflected on a purchase order for
quantities not to exceed the total Product provided on purchase
orders which have been previously accepted by Seller. Such
delivery dates shall not extend beyond one hundred twenty (120)
days from the date of the purchase orders.
3.3.4. Changes to Quantities to be Delivered
Upon Seller's acceptance of Buyer's and/or Exabyte's purchase
order, Buyer and/or Exabyte may not change any quantities to
be delivered during the first four (4) weeks from the date of
Buyer's and/or Exabyte's request for changes.
Buyer and/or Exabyte may decrease the quantities by up to
twenty-five percent (25%) of the total orders in the second
four-week period and/or may increase the quantities by up to
twenty percent (20%) of the total orders in the second
four-week period.
Weeks 1-4 Weeks 5-8 Weeks 9-12
+/-0% +20% +/-50%
-25%
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Seller agrees to accept both increases and decreases in the
quantities, provided that these changes do not exceed fifty
percent (50%) of the total order for the third four-week
period. All of the parties hereto agree to negotiate in good
faith any requests for additional changes in quantities.
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3.4. Postponement
Notwithstanding the provisions of Sections 3.3.3. and 3.3.4., Buyer
and/or Exabyte shall be entitled to postpone delivery of all or part
of Product then on order. Such postponement may defer delivery for a
maximum of ninety (90) days. Notice of such postponement must be
received at least thirty (30) days prior to the beginning of the month
in which such Product was originally scheduled for delivery.
3.5. Shipments
3.5.1. Terms
Product shall be shipped at Seller's expense to Buyer's and/or
Exabyte's specified location in the vicinity of Tokyo.
3.5.2. Packaging
Seller will provide proposed deck and Spare Parts packaging
specifications for Buyer's and/or Exabyte's review and
approval. Seller will package Product according to approved
specifications.
3.5.3. Charges
The cost for packaging for normal shipment to Buyer's dock is
included in the quoted price provided, however, expedited
deliveries will be subject to additional transportation and
packaging charges to be paid by Buyer and/or Exabyte unless
expedited deliveries are caused by Seller's inability to
deliver to agreed-upon schedules.
3.5.4. Delinquencies
If Seller has knowledge that it will not meet the agreed-upon
delivery dates, Seller shall notify Buyer and/or Exabyte in
writing a minimum of fifteen (15) days prior to the occurrence
of the expected delinquency and provide Buyer and/or Exabyte
with a schedule to remedy the delinquency. Buyer and/or
Exabyte shall provide written acceptance or rejection of the
proposed revision to the delivery schedule within three (3)
business days of such notification. If Buyer and/or Exabyte
rejects with reasonable cause Seller's remedy schedule, the
original or the latest purchase order schedule shall remain in
force. During the period of delinquency by Seller, Seller may
either, at Seller's sole option ship Product to Buyer's and/or
Exabyte's designated destination at Seller's sole expense, or
Seller will ship Product to a location in Japan designated by
Buyer and/or Exabyte in the most expeditious manner. Buyer
and/or Exabyte will then expedite shipment of such Product from
Japan to Buyer's and/or Exabyte's designated plant, and Seller
agrees to reimburse Buyer and/or Exabyte for the additional
shipping expense incurred due to Seller's delinquency.
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3.6. Inspection, Acceptance, Rejection
3.6.1. Source Inspection
With advance conference with Seller, Buyer and/or Exabyte may
conduct, at its own expense, source inspection to confirm that
Product substantially meets the requirements of this Agreement.
Such source inspections do not relieve Seller of its obligation
to deliver Product conforming to this Agreement and do not
constitute Product acceptance. Seller will provide adequate
space within reasonable proximity to factory and/or required
inspection equipment to complete such inspections, at no cost
to Buyer and/or Exabyte.
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3.6.2. Rights of Rejection
Upon receipt of shipment hereunder, Buyer and/or Exabyte shall
inspect Product under such shipment. Claims by Buyer and/or
Exabyte for shortages, incorrect materials or invoicing errors
must be made within forty-five (45) days after receipt of
shipment by Buyer and/or Exabyte. Claims for defects in
materials, workmanship or failure to meet Specifications must
be made in accordance with Section 3.6.3.
3.6.3. Acceptance
Buyer and/or Exabyte may reject Product not in accordance with
the Specifications provided by Exhibit A and Product Acceptance
Specifications set forth in Exhibit B. Product delivered to
Buyer and/or Exabyte shall be deemed to be accepted by Buyer
and/or Exabyte unless notice of rejection in writing is given
by Buyer and/or Exabyte to Seller within ninety (90) days after
receipt of Product by Buyer and/or Exabyte at Buyer's and/or
Exabyte's acceptance location. Payment by Buyer and/or Exabyte
does not constitute or evidence acceptance.
3.6.4. Return of Rejected Product
All defective and suspect defective Product and Spare Parts
will be returned for credit to Seller for failure analysis
and corrective action and Seller shall exercise its best effort
to ship to Buyer and/or Exabyte replacement Product or Spare
Part as soon as possible, yet in any event not later than sixty
(60) days from Seller's receipt of such Product or Spare Part.
In the event that Seller reasonably determines that such
defects and/or failures are the fault of Seller, Seller shall
be responsible for all freight charges to return Product to
Seller and to ship repaired or replaced Product to Buyer and/or
Exabyte. Defects are defined as commodities/parts that do not
meet print or Specifications. Failure reports or preliminary
analysis shall be due within ten (10) business days after
receipt of returned Product by Seller. Each failure analysis
report shall determine the root cause and corrective action to
be taken.
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3.7. Payment for Product
3.7.1. Invoicing
Seller will submit invoices to Buyer and/or Exabyte after
shipment of Product as described on the purchase orders.
Invoicing by Seller shall not occur more frequently than once
per month.
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3.7.2. Payment Method
Buyer and/or Exabyte will make payment to Seller within thirty
(30) days following the receipt by Buyer and/or Exabyte of an
invoice from Seller. Payment shall be made by check or wire
transfer to:
Daiichi Kangyo Bank
Head Office #1167845
3.7.3. Exabyte as Guarantor
Exabyte hereby agrees to act as guarantor for all payments to
be made by Buyer.
4. BUYER'S OBLIGATIONS
4.1. Reports and Estimates
Buyer and/or Exabyte will provide Seller with a twelve-month rolling
forecast of Product and Spare Parts to be purchased hereunder. Such
forecast is for planning purposes only, and does not represent any
commitment to purchase on Buyer's and/or Exabyte's part, and is not
to be relied upon by Seller as a commitment to purchase.
5. SELLER'S OBLIGATIONS
5.1. Supply of Product
5.1.1. Terms of Product Sale
All sales of Product shall be made pursuant to the terms of
Section 3.
5.1.2. Product Modification
Engineering Change Orders: the parties recognize that from
time to xxxx Xxxxxx will request or will be requested by Buyer
and/or Exabyte to implement Engineering Change Orders
("ECO's"). The following outlines the proper procedures.
5.1.2.1. Seller Requests Buyer and/or Exabyte
For all proposed ECO's which do not affect form, fit
or function of Product, Seller will communicate with
Buyer and/or Exabyte via a telephone conference to
discuss such proposed changes. No further action
shall be required of either party unless mutually
agreed to during such telephone conference. For all
proposed ECO's which do affect form, fit or function,
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or safety certification requirements, Seller is to
notify Buyer and/or Exabyte in writing of all such
proposed ECO's and will provide Buyer and/or Exabyte
with samples of all such ECO's. This notification
will include the appropriate documentation to support
Buyer's and/or Exabyte's investigation of the impact
of this proposal, as well as costs that are involved
for obsolete material in work-in-process, in the
stockroom, and what is on order. Buyer and/or Exabyte
will review the labor cost and impact for the
implementation of the proposed ECO. If lead time or
new costs are required for the ECO, lead time and new
costs will be reviewed.
a. Buyer and/or Exabyte will advise Seller of its
decision with respect to the proposed ECO within
ten (10) business days.
b. Seller will notify Buyer and/or Exabyte in writing
within ten (10) business days of its decision as
to the ECO-associated proposed costs and the
commencement dates.
c. Buyer and/or Exabyte reserves the right to accept
or reject all such proposed ECO's which in its
reasonable opinion affect form, fit, function or
safety certification requirements.
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5.1.2.2. Buyer and/or Exabyte Requests Seller
a. Buyer and/or Exabyte agrees to notify Seller in
writing of all proposed Engineering Change Orders
(ECO's). This notification will include the
appropriate documentation to support Seller's
investigation of the impact of this proposal.
b. Seller is to report to Buyer and/or Exabyte within
ten (10) business days of Buyer's and/or Exabyte's
request the costs that are involved for obsolete
material in work-in-process, in the stockroom, and
what is on order. Buyer and/or Exabyte will review
the labor cost and impact for the implementation of
the proposed ECO. If new material is required for
the ECO, lead time and new cost will be reviewed
and mutually agreed upon.
c. Buyer and/or Exabyte is to notify Seller in writing
within ten (10) business days of its decision as
to the proposed ECO associated costs and the
commencement dates.
5.2. Supply of Spare Parts
Seller shall offer for sale Spare Parts necessary for the maintenance
of Product during the term of this Agreement and for a period of five
(5) years after the date of delivery of the last Product under this
Agreement. The Spare Parts shall be interchangeable with and of the
same quality as those installed in Product and will be produced or
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inspected by Seller, in the same manner and according to the same
procedure as Seller uses for parts installed in Product.
5.2.1. Terms of Sale of Spare Parts
5.2.1.1. Title and Risk of Loss
Title and Risk of Loss to Spare Parts shall pass to
Buyer at Buyer's dock.
5.2.1.2. Shipments
Shipment terms for Spare Parts shall be identical to
the shipment terms for Product. Section 3.5. shall be
incorporated by reference into this Section with the
term Product replaced herein by the term Spare Parts.
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5.2.1.3. Payment
Section 3.7. shall be incorporated herein with the
term Product replaced by the term Spare Parts.
5.2.1.4. Price
Seller to provide Spare Parts pricing to include
recommended items, quantity of issue and lead times.
The price for Spare Parts shall be identified in
Appendix II.
5.3. Maintenance and Disposition of Funded Hard Tooling
The Funded Hard Tooling developed by Seller and paid for entirely by
Buyer and/or Exabyte pursuant to the Development Agreement and as
identified in Exhibit C to the Development Agreement, shall be deemed
to be exclusively owned by Exabyte. Seller agrees that if will not
encumber any Funded Hard Tooling which is owned by Exabyte, and will
take all actions necessary to assure that all such Exabyte-owned
Funded Hard Tooling shall remain free of any and all liens. Seller,
at its own expense, shall be responsible to store, protect, preserve,
repair and maintain such Funded Hard Tooling in accordance with
Seller's usual practice (wear and tear excepted). Upon termination
or expiration of this Agreement, Seller shall request disposition
instructions for all Funded Hard Tooling. Seller agrees to make such
Funded Hard Tooling available to Buyer and/or Exabyte according to the
disposition instructions of Exabyte, including preparation, packaging
and shipping. Preparation, packaging and shipment shall be at
Exabyte's expense. The use of Funded Hard Tooling by Seller shall be
expressly limited to the manufacture of Product for Buyer and/or
Exabyte under this Agreement or as otherwise provided in the
Development Agreement or as otherwise agreed to by Buyer and/or
Exabyte in writing. Exabyte will be responsible for the necessary
insurance coverage of specified tooling items in Exhibit C in the
Development Agreement.
5.4. Technical Training and Support
Seller and Buyer and/or Exabyte agree to discuss in good faith the
appropriate level of technical training and support provided by Seller
to Buyer and/or Exabyte.
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5.5. Documentation
Seller and Buyer and/or Exabyte agree to discuss in good faith the
appropriate level of documentation provided by Seller to Buyer and/or
Exabyte.
6. SELLER'S REPRESENTATION, WARRANTY AND INDEMNIFICATION
6.1. Product Testing
Prior to delivery, Seller shall conduct acceptance testing on Product.
A complete record of inspections and tests performed on Product shall
be kept by Seller for a minimum of six (6) months and made available
to Buyer and/or Exabyte upon request. Buyer's and/or Exabyte's
representative may, upon reasonable request and at its sole expense,
witness the final inspection tests carried out by Seller, however,
Buyer's and/or Exabyte's failure to witness such tests shall not be
grounds for refusing delivery or for a refusal to accept Product.
6.1.1. Quality Plan
Seller will provide to Buyer and/or Exabyte documentation of
all related manufacturing, maintenance, and quality control
processes, including explanations of what types of data are
maintained and what type of information is available, given
such processes ("Quality Plan"), to be furnished as Exhibit C
hereto. Seller will provide Buyer and/or Exabyte with such
final Quality Plan no later than thirty (30) days after the
execution of this Agreement. Seller must provide Product
that is of an acceptable quality level and both Product and
the manufacturing process must meet the quality requirements
set forth in Exhibit C of this Agreement. Seller agrees to
accommodate Buyer's and/or Exabyte's requests for any
additional or different testing and Buyer and/or Exabyte agrees
to be responsible for all additional expenses for such testing.
6.2. Product Warranty and Epidemic Failure
6.2.1. Warranty
6.2.1.1. Representation
Seller warrants that for a period of eighteen (18)
months from the date of shipment by Seller, no more
than five percent (5%) of any and all Product within
each weekly Product lot shall be defective in design,
material and/or workmanship which would cause Product
failure ("Epidemic Failure"). In the event that any
weekly Product lot qualifies hereunder as Epidemic
Failure as herein defined, Buyer and/or Exabyte has
the right to reject such Product. In case of such a
failure, Seller shall take one (1) or more of the
following corrective actions, at Seller's sole cost
and expense and at its sole option: (1) repair such
Product; (2) replace such Product; (3) credit Buyer
and/or Exabyte for such Product at Buyer's and/or
Exabyte's landed cost; (4) reimburse Buyer and/or
Exabyte for its expense including labor and materials
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in correcting such Product. Buyer and/or Exabyte
shall notify Seller of any such defects within sixty
(60) days after discovery thereof. Buyer and/or
Exabyte shall notify Seller of the total liability
chargeable to Seller for a particular incident within
twenty (20) months after the date of such shipment
from Seller. Seller is responsible for all freight
charges to return Product to Seller and to ship
repaired or replaced Product to Buyer and/or Exabyte.
From time to xxxx Xxxxxx and Buyer and/or Exabyte
shall mutually agree on the minimum quantity of
Product to be returned in each such shipment.
Seller shall perform all such repairs, replacements,
credits or reimbursements as soon as reasonably
possible, yet not later than sixty (60) days from
Buyer's and/or Exabyte's notice to Seller of such
defects.
PAGE(11)
6.2.1.2. Exclusions
Seller is free from any warranty obligation in the
following cases:
a. Defects and damages caused by storage,
transportation or use exceeding the limits of the
Specifications after delivery of Product by Seller
to Buyer and/or Exabyte;
b. Defects and damages caused by modifications without
approval by Seller;
c. Defects and damages caused by the software created
solely by Buyer and/or Exabyte and/or unique
feature and specification incorporated in Product
at the direction of Buyer and/or Exabyte.
Seller reserves the right to inspect allegedly
defective Product.
6.2.1.3. Clear Title
Seller warrants that at the time of delivery by Seller
to Buyer and/or Exabyte hereunder title to all Product
delivered by Seller shall be free and clear of all
liens, encumbrances or other claims.
6.3. Patent Indemnification
For any Product wholly designed by Seller and sold hereunder, Seller
shall indemnify and hold harmless Buyer and/or Exabyte against any
liability arising out of or in connection with any claim or action
that Product infringes any third party patent provided that (i) Seller
shall be promptly notified in writing of such claim or action within
five (5) days after Buyer and/or Exabyte shall have received actual
notice thereof; (ii) Seller shall have the sole control of the
defense of any suit on such claim and all negotiations for settlement
or compromise; and (iii) Buyer and/or Exabyte shall provide all
reasonable assistance at Seller's expense in defending any suit.
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For any Product wholly designed by Buyer and/or Exabyte, Buyer and/or
Exabyte shall indemnify and hold harmless Seller against any liability
arising out of or in connection with any claim or action that Product
infringes any third party patent provided that (i) Buyer and/or
Exabyte shall be promptly notified in writing of such claim or action
within five (5) days after Seller shall have received actual notice
thereof; (ii) Buyer and/or Exabyte shall have the sole control of the
defense of any suit on such claim and all negotiations for settlement
or compromise; and (iii) Seller shall provide all reasonable
assistance at Buyer's and/or Exabyte's expense in defending any
suit. Such indemnification shall extend only to actual damages
assessed against or incurred by Buyer and/or Exabyte, or Seller as
appropriate. Buyer and/or Exabyte shall not be entitled to recover
from Seller any loss of profits suffered by Buyer and/or Exabyte as
a result of said infringement; nor shall Seller be entitled to recover
from Buyer and/or Exabyte any loss of profits suffered by Seller as a
result of said infringement. Seller shall not indemnify Buyer and/or
Exabyte against and shall not hold Buyer and/or Exabyte harmless from
any other claims or actions including, though not limited to, a claim
involving any Product manufactured in accordance with Buyer's and/or
Exabyte's Specifications or manufactured by a process specified by
Buyer and/or Exabyte, or a claim involving any combination of Product
with other equipment or parts to form an allegedly infringing system
or product. Buyer and/or Exabyte shall not indemnify Seller against
and shall not hold Seller harmless from any other claims or actions
including, though not limited to, a claim involving any combination of
Product with other equipment or parts to form an allegedly infringing
system or product. In no event shall Seller be liable to Buyer and/or
Exabyte, nor shall Buyer and/or Exabyte be liable to Seller for any
special or incidental or consequential damages arising from
infringement or alleged infringement hereunder. For any Product
jointly designed by Seller and Buyer and/or Exabyte and sold
hereunder, neither party shall indemnify nor hold harmless the other
against any liability arising out of or in connection with any claim
or action that Product infringes any third-party patent unless it be
judicially determined that one party contributed all elements of the
design necessary to infringe all claims of the patent, in which case
the all-contributing party shall indemnify and hold harmless the other
in accordance with the terms hereof. The foregoing states the entire
liability of both parties for infringement on third party rights which
arises out of Product sold to Buyer and/or Exabyte hereunder.
PAGE(12)
6.4. Intellectual Property Ownership
In connection with any idea (whether or not patentable or protectable
by copyright), designs, improvements, inventions (whether or not
patentable), discoveries, and copyrightable works relating to the
business of Buyer and/or Exabyte, which are made, authored,
co-authored, reduced to practice, devised or conceived either solely
by Seller using funds or proprietary information of Exabyte or jointly
by Seller and Exabyte, such idea, designs, improvements, inventions,
discoveries and copyrightable works shall be disclosed to Exabyte, and
be jointly owned by Exabyte and Seller. Seller agrees that Seller and
Seller's employees, agents, and contractors will execute any
instruments and to do all things reasonably requested by Exabyte in
order to more fully vest in Exabyte the joint ownership rights and
those items mentioned in the preceding sentence to Exabyte. Seller
also agrees to provide Exabyte with all documents necessary in
connection with the filing of any patent application of the idea,
13
designs, improvements, inventions, discoveries and copyrightable works
which are made, authored, co-authored, reduced to practice, devised or
conceived either solely by Seller using funds or proprietary
information of Exabyte or jointly by Seller and Exabyte. Seller
further agrees that Seller will not independently file any patent
application of the idea, designs, improvements, inventions,
discoveries and copyrightable works which are made, authored,
co-authored, reduced to practice, devised or conceived either solely
by Seller using funds or proprietary information of Exabyte or jointly
by Seller and Exabyte.
PAGE(13)
6.5. Continuity of Supply, Disaster Recovery
6.5.1. Procurement of Components
Should Seller require more than the defined lead time to
acquire certain raw materials, Seller shall identify such raw
materials and required lead times. Buyer and/or Exabyte will
then authorize in writing Seller's procurement of such raw
materials and, in the event of termination of this Agreement,
Buyer's and/or Exabyte's liability for the cost of such raw
materials and the associated work-in-process, is limited to the
quantity which Buyer and/or Exabyte approved in writing. Seller
shall provide Unique Long-Lead Time Components exception list
in Appendix III.
6.5.2. Disaster Recovery Plan
Seller agrees to develop a suitable disaster recovery plan to
assure the continued supply of Product to Buyer and/or Exabyte.
Such disaster recovery plan shall be submitted to Buyer and/or
Exabyte concurrent with shipment to Buyer and/or Exabyte of
first production units.
7. MUTUAL REPRESENTATIONS
7.1. Non-Disclosure of Agreement
Seller and Buyer and/or Exabyte agree not to disclose the existence of
the relationship between Buyer and/or Exabyte and Seller arising under
this Agreement or the fact that Seller is performing services for
Buyer and/or Exabyte without the advance written permission of the
other party.
7.2. Confidentiality
The terms provided in Section 6.1. of the Development Agreement shall
apply with the term "Exabyte" replaced by "Buyer and/or Exabyte".
8. TERMINATION
8.1. Initial Term
This Agreement shall extend for the period provided in Section 2.1.
8.2. Termination by Mutual Consent
This Agreement shall be subject to termination prior to the initial
term at any time by mutual consent of the parties, evidenced by a
14
written agreement provided for termination.
8.3. Termination by Bankruptcy
This Agreement may be immediately terminated by Seller if Exabyte,
or by Exabyte if Seller, files a voluntary petition in bankruptcy or
under any similar insolvency law, makes an assignment for the benefit
of its creditors, or if any involuntary petition in bankruptcy or
under any similar insolvency law is filed against it, or if a receiver
is appointed for, or a levy or attachment is made against all or
substantially all of its assets, and such involuntary petition is
not dismissed or such receiver or levy or attachment is not discharged
within sixty (60) days after the filing or appointment thereof.
PAGE(14)
8.4. Termination by Buyer and/or Exabyte
Buyer and/or Exabyte shall have the right to terminate this Agreement
without cause upon six (6) months' advance written notice to Seller.
In the event of such termination, all purchase orders issued hereunder
may be canceled by Buyer and/or Exabyte as of the effective date of
such termination without further notice to Seller.
8.5. Termination for Cause
Either party shall be entitled, without prejudice to any other rights
accruing under this Agreement or in law, to terminate this Agreement
in the event the other party fails to meet any of its material
obligations stipulated herein provided that the former party has
given written notice of the alleged default to the failing party
and that during a ninety (90) day period following said notice, said
failing party has not remedied such default to the reasonable
satisfaction of the other party. Should such event occur, termination
shall become effective at the end of the said ninety (90) day period.
8.6. Effects of Termination by Buyer and/or Exabyte
In the event Buyer and/or Exabyte terminates pursuant to Section 8.4.,
Seller's sole obligations shall be as follows:
8.6.1. Seller shall, upon the effective date of such termination,
cease all assembly operation and production required by
purchase orders issued under this Agreement.
8.6.2. Seller shall deliver promptly all completed acceptable Product
manufactured pursuant to Buyer and/or Exabyte purchase orders.
8.6.3. Seller shall return immediately at Buyer and/or Exabyte's
expense all loaned or leased equipment provided to Seller by
Buyer and/or Exabyte under this Agreement.
8.6.4. Seller shall prepare and submit to Buyer and/or Exabyte an
itemization of all partially completed Product, assemblies and
process and parts inventories (including parts which Seller is
committed to purchase from its subcontractors) which are
allocated to the Buyer and/or Exabyte purchase order releases
placed and Section 6.5.1. under this Agreement.
15
9. FORCE MAJEURE
Seller shall not be liable for delays in delivery or failure to
manufacture or deliver Product or to otherwise perform any
obligation due to Buyer and/or Exabyte under this Agreement due
to any cause beyond Seller's reasonable control, such as acts
of God, acts of civil or military authority, labor disputes,
fire, riots, civil commotions, sabotage, war, embargo,
blockage, floods, epidemics, power shortages, or when due to
governmental restrictions or failure of a supplier to deliver.
The rights of Buyer and/or Exabyte under this Agreement shall
not be affected by Buyer's and/or Exabyte's failure to meet any
condition contained herein where such failure is directly and
primarily due to any cause beyond its reasonable control such
as acts of God, acts of civil or military authority, labor
disputes, fire, riots, civil commotions, sabotage, war,
embargo, blockages, floods, epidemics, power shortages, or when
due to governmental restrictions.
PAGE(15)
10. CONSTRUCTION OF AGREEMENT
10.1. Headings
Headings, which include the underlined portion following the Section
number, have been used for reference purposes only and shall have no
operative effect in the construction of the rights or obligations
pursuant to this Agreement.
10.2. References
Any reference to a Section number shall include all subsections of
such Sections.
10.3. Controlling Law
This Agreement shall be construed under and governed by the laws of
the State of New York, United States of America and any disputes
between the parties in respect to this Development Agreement shall
be decided by the competent federal courts in the State of New York.
10.4. Arbitration
All disputes, controversies or differences which may arise between
the parties in relation to or in connection with this Agreement
shall be settled by amicable negotiation by both parties. If both
parties are unable to settle such disputes, then, such disputes
shall be referred to and finally settled by arbitration under the
Rules of Conciliation and Arbitration of the International Chamber
of Commerce. The arbitration shall be conducted in English and take
place in Japan if it is initiated by Buyer and/or Exabyte or in the
U.S.A. if it is initiated by Seller. The award of arbitration shall
bind both parties.
11. GENERAL PROVISIONS
11.1. Entire Agreement: Counterparts
This Agreement, as implemented by purchase orders for Product, is
intended to be the sole and complete statement of the obligations of
16
the parties as to the sale and purchase of Product and supersedes
all previous understandings, negotiations and proposals as to such
sale and purchase provided, however, that the terms of the
Development Agreement shall be deemed to survive. In the event of
any conflict between the terms and conditions contained in the
Development Agreement and this Agreement, the terms and conditions
contained in this Agreement shall prevail. This Agreement may not
be altered, amended, or modified except in writing signed by duly
authorized representatives of Seller, Buyer and/or Exabyte. Any
printed conditions on purchase orders and acceptance forms are
superseded by this Agreement and shall be of no effect. This
Agreement may be executed in several counterparts, each of which
shall be deemed an original, all of which together shall constitute
one and the same Agreement.
PAGE(16)
11.2. Enforcement
In the event any provisions of this Agreement are declared
non-enforceable by a duly authorized court having jurisdiction, then
this Agreement with respect to enforceable provision shall continue
in force and all rights and remedies under the remaining enforceable
provisions shall survive any such judicial declarations; provided
that this Agreement still expresses the general intent of the
parties. In the event the general intent of the parties cannot be
preserved, this Agreement shall either be renegotiated or rendered
null and void.
11.3. Notices
Notices and other communication by a party under this Agreement
shall be given in writing by mail, postage prepaid, certified,
recorded, or registered, and addressed to the parties at their
respective addresses as set forth below:
SELLER:
Hitachi, Ltd. Electronic Sales Office
Nippon Building, 6-2, Otemachi 2-chome
Xxxxxxx-xx, Xxxxx
000 Xxxxx
Attn: Mr. Xxxxxx Xxxxxxxx
BUYER:
Nihon Exabyte Corporation
Kioicho TBR Building 1214
0-0 Xxxxxxxxxx, Xxxxxxx-xx
Xxxxx 000, Xxxxx
Attn: Xx. Xxxxxxxx Xxxx
EXABYTE:
Exabyte Corporation
0000 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 X.X.X.
Attn: Xx. Xxxxxxx X. Xxxxx
17
Such notices shall be deemed to have been given upon mailing.
Notices also may be given by facsimile, if in the case of Buyer
and/or Exabyte, they are sent to the following facsimile number:
00-0000-0000, and in the case of Seller, they are sent to the
following number: 00-0000-0000. If given by facsimile, notices
shall be deemed to have been given on the date of transmission.
All facsimile notices shall be confirmed by written notice mail,
as provided above, within five (5) days of the date the facsimile
is sent.
11.4. Assignment
This Agreement is not assignable by either party without the written
permission of the other party.
11.5. Waiver
A waiver by either party of its rights under this Agreement with
respect to a breach of the other party's obligations hereunder shall
not be construed as a continuing waiver with respect to other
breaches of the same or of other provisions of this Agreement.
PAGE(17)
11.6. No Agency Created
Neither Buyer nor Exabyte is a partner, joint venturer, agent,
legal representative, or employee of Seller. Neither party is
granted the right or authority to assume or to create any
obligation or responsibility, express or implied, on behalf of or
in the name of the other party or to bind such other party in any
manner to anything whatsoever.
11.7. Official Language
The official language of this Agreement is English. Documents or
notices not originally written in English shall have no effect
under this Agreement until they have been translated into English
by the party providing the notice or document and the English
translation shall then be the controlling form of the document or
notice.
IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized representatives, effective as of the date first set forth above.
Hitachi, Ltd. Electronic Sales Office
Nippon Xxxxxxxx, 0-0, Xxxxxxxx 0-xxxxx
Xxxxxxx-xx, Xxxxx,
000 Xxxxx
By:------------------------------------
Mr. Xxxxxx Xxxxxxxx
Title: General Manager, Electronic Devices Trade Division
WITNESSED BY:--------------------------
Hitachi, Ltd. Image and Information Media Systems Division
18
By:------------------------------------
Xx. Xxxx Xxxxxxxxx
Title: Deputy General Manager, AV Consumer Products Operation
NIHON EXABYTE CORPORATION
Kioicho TBR Building 1214
0-0 Xxxxxxxxxx, Xxxxxxx-xx
Xxxxx 000, Xxxxx
By:
--------------------------
Title:
-----------------------
EXABYTE CORPORATION
0000 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 X.X.X.
By:
--------------------------
Title:
-----------------------
