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EXABYTE PURCHASE AGREEMENT
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THIS EXABYTE PURCHASE AGREEMENT ("Agreement"), dated this twenty-second
day of February 1995 among Hitachi, Ltd. Electronic Sales Office, a Japanese
corporation having its principal place of business at 0-0, Xxxxxxxxxx 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, the 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 28th day of September, 1994, 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 Exabyte and Buyer, and Exabyte and
Buyer desire 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. Affiliate shall mean any entity in which Hitachi's Division has
directly or indirectly a majority equity interest.
1.2. Development Agreement shall mean the agreement entered into by and
between Hitachi's Division and Exabyte on the 28th day of September,
1994 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 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 Video and Personal Media
Systems Division.
1.5. Product shall mean the product and other items manufactured, assembled
at Hitachi's Division and sold by the Seller which are listed in
Appendix I of this Agreement (and those items, if any, hereafter added
by the parties to Appendix I), including the Product defined by the
specifications included in Exhibit A.
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 additional twelve (12) month periods, unless Buyer
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 the right to purchase Products from Seller and for Buyer and
Exabyte to promote, lease, rent or re-sell such Products in modified
form or otherwise throughout the world.
2.3. Exclusivity
Seller and Seller's Affiliates agree not to sell any products 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 Exabyte and Buyer 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 the Product and the insurance companies and agents
responsible for adjusting such claims, and Exabyte and Buyer shall
have no responsibility with respect thereto.
3.2. Price for Products
The prices which the Buyer shall pay the Seller for the 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.
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3.2.1. Price Increases
The prices to be paid by Buyer 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. Such prices are subject to
increase only in accordance with Section 5.1.2.2 and Section 3.2.3.
Orders for Product placed by Buyer shall, provided delivery is to be
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made within ninety (90) days of placement of order, be filled at the
price in effect at the time of order.
3.2.2. Product Price
3.2.2.1. Price Reviews
Exabyte and Buyer 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 90 days. Supplier will formally provide
Exabyte and Buyer 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 Exabyte, and the cost shall be amortized
over the Product units purchased by Buyer 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
ninety-seven and one-half (97.5) Japanese yen to one (1) U.S.
dollar. At such time as the yen-to-dollar exchange rate varies
by more than an average of five percent (5%) in either
direction over a ninety (90) day period, such exchange rate
being that indicated in The Wall Street Journal, the parties
agree to share equally in the effects of any such variance
beyond such five percent (5%), and will adjust the Product
price accordingly.
3.3. Purchase Order and Acceptance
3.3.1. Purchase Orders
Purchase orders ("Purchase Orders") issued by the Buyer ninety
(90) days prior to initial shipment relating to such Purchase
Order for the purchase of Product and/or spare parts shall
include the following information:
a. Model of Product.
b. Quantity to be purchased.
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c. Unit price and total order price.
d. Delivery instructions.
Delivery Dates shall be separately provided by the Shipment Request
Form pursuant to Section 3.3.3.
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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
Purchase Order or Seller's acknowledgment thereof (either
printed, stamped, typed or written) except those specifying
the quantity and identification of the 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 the Seller shall be dependent
upon the grant of appropriate licenses, permits and the like
from the countries of export and import.
3.3.3. Delivery Dates
Delivery Dates shall be reflected on a shipment request form
("Shipment Request Form") for quantities not to exceed the
total Product units 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 or Exabyte's Purchase
Order, and any Shipment Request Forms thereto, Buyer and/or
Exabyte may not change any quantities to be delivered during
the first four (4) weeks from the date of Buyer's request for
changes.
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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%
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, based
on materials availability.
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3.4. Postponement
Notwithstanding the provisions of Sections 3.3.3 and 3.3.4, Buyer
shall be entitled to postpone delivery of all or part of Product units
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 units were originally scheduled for delivery.
3.5. Shipments
3.5.1. Terms
Product shall be shipped at Seller's expense to Buyer's
specified location in the vicinity of Tokyo.
3.5.2. Packaging
Seller will provide proposed deck and Spare Parts packaging
specifications for Exabyte's review and approval. Seller will
package each 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 Exabyte and Buyer 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 Exabyte in writing a
minimum of fifteen (15) days prior to the occurrence of the
expected delinquency and provide Exabyte with a schedule to
remedy the delinquency. Exabyte shall provide written
acceptance or rejection of the proposed revision to the
delivery schedule within three (3) business days of such
notification. If Exabyte rejects with reasonable cause
Seller's remedy schedule, the original or the latest Order
schedule shall remain in force. During the period of
delinquency by Seller, Seller may either, at Seller's sole
option ship the Product to Exabyte's or Buyer's designated
destination at Seller's sole expense, or Seller will ship all
Product to a location in Japan designated by Exabyte or Buyer
in the most expeditious manner. Buyer or Exabyte will then
expedite shipment of such Product from Japan to Exabyte's
designated plant, and Seller agrees to reimburse Buyer 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 Exabyte may
conduct, at its own expense, source inspection to confirm that
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each Product unit 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 acceptance of such Product. Seller will
provide adequate space within reasonable proximity to factory
and/or required inspection equipment to complete such
inspections, at no cost to Exabyte.
3.6.2. Rights of Rejection
Upon receipt of shipment hereunder, Buyer shall inspect the
Product under such shipment. Claims by Buyer for shortages,
incorrect materials or invoicing errors must be made within
forty-five (45) days after receipt of shipment by Buyer.
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
Exabyte may reject Product units not in accordance with the
specifications provided by Exhibit B. Product delivered to
Exabyte shall be deemed to be accepted by Exabyte unless
notice of rejection in writing is given by Buyer or Exabyte to
Seller within ninety (90) days after receipt of Product by
Exabyte at Exabyte's acceptance location. Payment by the
Buyer or Exabyte does not constitute or evidence acceptance.
3.6.4. Return of Rejected Products
All defective and suspect defective Products and Spare Parts
will be returned for credit to Seller for failure analysis
and corrective action and Seller shall exercise its best
efforts to ship to Buyer or Exabyte a replacement Product or
Spare Part as soon as possible, but in any event not later
than sixty (60) days from Seller's receipt of such Product
or Spare Parts. 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
the Product to Seller and to ship repaired or replaced Product
to Buyer 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 after shipment of Products
as described on the Purchase Orders. Invoicing by Seller shall
not occur more frequently than once per month.
3.7.2. Payment Method
Buyer will make payment to Seller within thirty (30) days
following the receipt by Buyer of an invoice from Seller.
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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 hereunder.
4. BUYER'S OBLIGATIONS
4.1. Reports and Estimates
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 Exabyte's or Buyer'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
to implement Engineering Change Orders ("ECO's"). The
following outlines the proper procedures.
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5.1.2.1. Seller Requests Buyer
For all proposed ECO's which do not affect form, fit
or function of the Product, Seller will communicate
with Buyer 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, or safety certification
requirements, Seller is to notify Buyer in writing of
all such proposed ECO's and will provide Buyer with
samples of all such ECO's. This notification will
include the appropriate documentation to support
Buyer'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 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 is to report to Seller within ten (10)
business days.
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b. Seller is to notify Buyer in writing within ten
(10) business days of its decision as to the
ECO-associated proposed costs and the commencement
dates.
c. Buyer 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.
5.1.2.2. Buyer Requests Seller
a. Buyer 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 within ten (10)
business days of Buyer's request the costs that are
involved for obsolete material in work-in-process,
in the stockroom, and what is on order. Buyer 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 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
The Seller shall offer for sale Spare Parts necessary for the
maintenance of the Product during the term of this Agreement and for
a period of five (5) years after the date of delivery of the last
Product unit under this Agreement. The Spare Parts shall be
interchangeable with and of the same quality as those installed in
the Product and will be produced or inspected by the Seller, in the
same manner and according to the same procedure as the Seller uses for
parts installed in the Product.
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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
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, 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
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
Products for Buyer under this Agreement or as otherwise provided in
the Development Agreement or as otherwise agreed to by 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 Exabyte agree to discuss in good faith the appropriate
level of technical training and support provided by Seller to Exabyte.
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5.5. Documentation
Seller and Exabyte agree to discuss in good faith the appropriate
level of documentation provided by Seller to Exabyte.
6. SELLER'S REPRESENTATION, WARRANTY AND INDEMNIFICATION
6.1. Product Testing
Prior to delivery, Seller shall conduct an acceptance test at its
plant on each Product unit manufactured by Seller. A complete record
of inspections and tests performed on each such Product unit shall be
kept by the Seller for a reasonable period and made available to the
Buyer upon request. The Buyer's representative may, upon reasonable
request and at its sole expense, witness the final inspection tests
carried out by the Seller, but Buyer's failure to witness such tests
shall not be grounds for refusing delivery or for a refusal to accept
any Product unit.
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6.1.1. Quality Plan
Seller will provide to Buyer 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 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 the Product and the manufacturing process must meet the
quality requirements set forth in Exhibit C of this Agreement.
Seller agrees to accommodate Buyer's requests for any
additional or different testing and Buyer 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 Products within
each weekly Product lot shall be defective in design,
material and/or workmanship which would cause a
Product failure ("Epidemic Failure"). In the event
that any weekly Product lot qualifies hereunder as
Epidemic Failure as herein defined, Buyer has the
right to reject such entire Products. In case of such
a failure, Seller shall take one or more of the
following corrective actions, at Seller's sole cost
and expense and at its sole option: (1) repair such
Products; (2) replace such Products; (3) credit
Buyer for such Products at Buyer's landed cost;
(4) reimburse Buyer for its expense including labor
and materials in correcting such Products. Buyer
shall notify Seller of any such defects within sixty
(60) days after discovery thereof. Buyer 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 the
Product to Seller and to ship repaired or replaced
Product to Buyer or Exabyte. From time to xxxx Xxxxxx
and Buyer 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, but not later than sixty (60) days from
Buyer's or Exabyte's notice to Seller of such defects.
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6.2.1.2. Exclusions
Seller is free from any warranty obligation in the
following cases:
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a. Defects and damages caused by storage,
transportation or use exceeding the limits of the
Specifications after delivery of the Products by
Seller to Buyer;
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 unique feature and
specification incorporated in the Products at the
direction of Buyer.
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 hereunder title to all Product delivered by
Buyer 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 the 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.
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 the
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, but 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 the
Product with other equipment or parts to form an allegedly infringing
system or product. Buyer and/or Exabyte shall not indemnify Seller
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against and shall not hold Seller harmless from any other claims or
actions including, but not limited to, a claim involving any
combination of the 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 the 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 the Product sold to Buyer and/or
Exabyte hereunder.
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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 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 reasonable 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, 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.
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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. Exabyte will then authorize
in writing Seller's procurement of such raw materials and, in
the event of termination of this Agreement, Exabyte's liability
for the cost of such raw materials and the associated work-in-
process, is limited to the quantity which Exabyte approved in
writing. Seller shall provide unique long-lead time components
exception list in Appendix III.
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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 Exabyte.
Such Disaster Recovery Plan shall be submitted to Exabyte
concurrent with shipment to Buyer 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 "Exabyte and/or Buyer".
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
written agreement provided for termination.
8.3. Termination by Bankruptcy
This Agreement may be immediately terminated by the 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 Exabyte
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 Exabyte as of the effective date of such termination
without further notice to Seller.
8.5. Effects of Termination by Exabyte
In the event Exabyte terminates pursuant to Section 8.3, Seller's sole
obligations shall be as follows:
14
8.5.1. Seller shall, upon the effective date of such termination,
cease all assembly operation and production required by
purchase orders issued under this Agreement.
8.5.2. Seller shall deliver promptly all completed acceptable Products
manufactured pursuant to Exabyte and Buyer purchase orders.
8.5.3. Seller shall return immediately at Exabyte's expense all loaned
or leased equipment provided to Seller by Exabyte under this
Agreement.
8.5.4. Seller shall prepare and submit to Exabyte and Buyer an
itemization of all partially completed Products, assemblies and
process and parts inventories (including parts which Seller is
committed to purchase from its subcontractors) which are
allocated to the Exabyte and Buyer purchase order releases
placed and Section 6.5.1 under this Agreement.
9. FORCE MAJEURE
The Seller shall not be liable for delays in delivery or failure to
manufacture or deliver Product or to otherwise perform any obligation
due to the Buyer under this Agreement due to any cause beyond the 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 under this Agreement shall not be affected by Buyer'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, blockage, 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
15
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.
PAGE(15-16)
11. GENERAL PROVISIONS
11.1. Entire Agreement: Counterparts
This Agreement, as implemented by Purchase Orders for Products, is
intended to be the sole and complete statement of the obligations of
the parties as to the sale and purchase of the Products 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 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, but all of which together shall
constitute one and the same Agreement.
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.
PAGE(17)
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:
16
SELLER:
Hitachi, Ltd. Electronic Sales Xxxxxx
0-0, Xxxxxxxxxx 0-xxxxx
Xxxxxxx-xx, Xxxxx
000 Xxxxx
Attn: Mr. Natsuki Kogiso
BUYER:
Nihon Exabyte Corporation
Kioicho TBR Building 1214
0-0 Xxxxxxxxxx, Xxxxxxx-xxXxxxx 000, Xxxxx
Attn: Xx. Xxxxxxxx Xxxx
EXABYTE:
Exabyte Corporation
0000 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 X.X.X.
Attn: Xx. Xxxxxxx X. Xxxxx
Such notices shall be deemed to have been given upon mailing. Notices also
may be given by facsimile, if in the case of the Buyer, they are sent to the
following facsimile number: 00-0000-0000, and in the case of the 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 telex 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(18)
11.6. No Agency Created
Neither Exabyte nor Buyer is a partner, joint venturer, agent, legal
representative, or employee of the 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
17
party providing the notice or document and the English translation
shall then be the controlling form of the document or notice.
PAGE(19)
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 Xxxxxx
0-0, Xxxxxxxxxx 0-xxxxx
Xxxxxxx-xx, Xxxxx
000 Xxxxx
By:-------------------------------------
Mr. Natsuki Kogiso
Title: Director/General Manager, Electronic Devices Trade Division
WITNESSED BY:---------------------------
Hitachi, Ltd. Video and Personal Media Systems Division
By:-------------------------------------
Xx. Xxxx Xxxxxxx
Title: General Manager
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:
--------------------------
