AMENDED AND RESTATED MASTER AGREEMENT
BETWEEN
MATSUSHITA-KOTOBUKI ELECTRONICS INDUSTRIES, LTD.,
AND
QUANTUM CORPORATION
TABLE OF CONTENTS
Page
1. ROLES...............................................................................................................2
1.1. Quantum........................................................................................................2
1.2. MKE............................................................................................................2
1.3. Cooperative Roles..............................................................................................2
1.4. Regular Meetings...............................................................................................2
2. DEFINITIONS.........................................................................................................2
2.1. "Components"...................................................................................................2
2.2. "Confidential Information".....................................................................................2
2.3. "Development Costs"............................................................................................2
2.4. "Exclusive"....................................................................................................2
2.5. "Manufacturing Costs"..........................................................................................2
2.6. "MEI"..........................................................................................................3
2.7. "Products".....................................................................................................3
2.8. "Quantum"......................................................................................................3
2.9. "Technical Information"........................................................................................3
3. MARKETING RIGHTS....................................................................................................3
3.1. Quantum Rights.................................................................................................3
3.2. Marketing Decisions............................................................................................4
3.3. Product Components.............................................................................................4
3.4. MKE Cooperation................................................................................................4
4. MANUFACTURING RIGHTS................................................................................................4
4.1. MKE Rights.....................................................................................................4
4.2. Manufacturing Decisions........................................................................................4
4.3. Quantum Manufacturing..........................................................................................4
4.4. Third Party Manufacturing......................................................................................5
4.5. Non-Competitive Products.......................................................................................5
5. DEVELOPMENT AND MANUFACTURING COSTS.................................................................................6
5.1. Development Costs..............................................................................................6
5.2. Manufacturing Costs............................................................................................6
5.3. Technology Exchange Costs......................................................................................6
5.4. Component Development Costs....................................................................................6
6. EXCLUDED PRODUCTS; PRODUCT DEVELOPMENT..............................................................................6
6.1. Excluded Products..............................................................................................6
6.2. Development....................................................................................................6
6.3. Development of New HDD Technology and Products.................................................................7
6.4. Product Changes................................................................................................7
7. COMPONENTS..........................................................................................................8
7.1. Component Integration..........................................................................................8
7.2. Component Purchases............................................................................................8
8. TECHNICAL COOPERATION...............................................................................................8
9. PROPRIETARY RIGHTS..................................................................................................8
9.1. Right To Use...................................................................................................8
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TABLE OF CONTENTS
Page
9.2. Product Designs and Manufacturing Processes....................................................................8
9.3. Patents........................................................................................................9
9.4. Patent Protection..............................................................................................9
9.5. Patent Rights..................................................................................................9
9.6. Trademarks.....................................................................................................9
9.7. Patent Contributions...........................................................................................9
10. CONFIDENTIALITY....................................................................................................9
10.1. Confidentiality...............................................................................................9
10.2. Restrictions..................................................................................................9
11. PATENT INDEMNIFICATION............................................................................................10
12. PURCHASE AGREEMENT................................................................................................12
12.1. Purpose......................................................................................................12
13. TERM AND TERMINATION..............................................................................................12
13.1. Term.........................................................................................................12
13.2. Interim Review Prior to Scheduled Termination................................................................12
13.3. Termination..................................................................................................12
13.4. Rights Upon Termination......................................................................................13
14. ARBITRATION.......................................................................................................13
15. GOVERNMENTAL CONSENTS.............................................................................................14
15.1. U.S. Requirements............................................................................................14
15.2. Japan Requirements...........................................................................................14
15.3. Visas........................................................................................................14
15.4. Compliance with Laws.........................................................................................14
16. MISCELLANEOUS.....................................................................................................14
16.1. Nonassignability.............................................................................................14
16.2. Failure to Enforce...........................................................................................15
16.3. Governing Law................................................................................................15
16.4. Severability.................................................................................................15
16.5. Notices......................................................................................................15
16.6. Entire Agreement.............................................................................................16
16.7. Force Majeure................................................................................................16
16.8. Limitation of Liability......................................................................................16
16.9. MEI..........................................................................................................16
16.10. Binding.....................................................................................................16
16.11. Agency......................................................................................................17
16.12. Headings....................................................................................................17
16.13. Changes in Control..........................................................................................17
16.14. Bankruptcy Code.............................................................................................17
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AMENDED AND RESTATED MASTER AGREEMENT BETWEEN
MATSUSHITA-KOTOBUKI ELECTRONICS INDUSTRIES, LTD.,
AND QUANTUM CORPORATION
THIS AMENDED AND RESTATED MASTER AGREEMENT is made by and among
MATSUSHITA-KOTOBUKI ELECTRONICS INDUSTRIES, LTD., a Japanese corporation, its
subsidiaries, IRELAND KOTOBUKI ELECTRONICS INDUSTRIES, LTD. , an Irish
corporation, and KOTOBUKI ELECTRONICS INDUSTRIES (S) PTE. LTD., a Singapore
corporation (collectively, "MKE") and QUANTUM CORPORATION, a Delaware
corporation, and its subsidiary QUANTUM PERIPHERALS (EUROPE) SA, a Swiss
corporation (hereinafter collectively "Quantum"). This Agreement is entered into
as of the 30th day of April, 1997 (the "Effective Date").
RECITALS:
WHEREAS, Quantum is a leader in designing, developing and marketing hard disk
drive products, and computer memory storage products for worldwide business and
consumer markets and MKE is a leader in manufacturing hard disk drive products;
WHEREAS, Quantum and MKE have been partners in a manufacturing and marketing
relationship since 1985 pursuant to which MKE has manufactured, and Quantum has
marketed, hard disk drive products which Quantum has designed and developed;
WHEREAS, Quantum and MKE entered into an agreement on December 31, 1992 setting
forth the terms of such manufacturing and marketing relationship;
WHEREAS, Quantum and MKE are desirous of continuing their long-term business
relationship and wish to continue such relationship as herein provided;
WHEREAS, Quantum has the exclusive right to market all hard disk drive products
manufactured or to be manufactured by MKE, excluding only hard disk drives
developed by MKE and/or MEI which do not utilize Technical Information and/or
Confidential Information of Quantum;
WHEREAS, MKE has the exclusive right to manufacture all such hard disk drive
products for Quantum;
WHEREAS, each of Quantum and MKE is willing to grant such exclusive rights and
MKE is willing to manufacture such products; and
WHEREAS, as a result of the expanded scope of their manufacturing and marketing
relationship, Quantum and MKE now desire that the terms of the agreement between
the parties dated as of December 31, 1992, as amended September 1, 1994, and
January 26, 1996 (the "Master Agreement"), be amended and restated in their
entirety as set forth herein;
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AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants and promises in this
Agreement, the parties agree as follows:
1. ROLES.
1.1. Quantum. Subject to the terms and conditions of this Agreement,
Quantum shall have the responsibility for product development and design of the
Products (as hereinafter defined) and completion of the prototype thereof.
Except as expressly set forth herein, Quantum shall have the Exclusive,
worldwide right to market, offer to sell and sell the Products.
1.2. MKE. Subject to the terms and conditions of this Agreement, MKE shall
have the Exclusive, worldwide right and responsibility to manufacture the
Products designed by Quantum and to be purchased by Quantum under the terms and
conditions hereof. MKE shall be responsible for the purchase and ownership of
such facilities and capital equipment as MKE may determine to be necessary for
Product manufacture.
1.3. Cooperative Roles. The parties have worked together over time
regarding the manufacture of the Products and have established a successful
working relationship for discussing and implementing operational details of the
development, manufacture and supply of Products. The parties intend to continue
this successful operational relationship. MKE and Quantum intend that sound
cooperation will result from the contributions of each party and this division
of responsibilities. Both parties understand, however, that full cooperation is
necessary to fully develop this business and achieve the potential opportunities
in this new market.
1.4. Regular Meetings. MKE and Quantum shall hold regular meetings, but not
less than once each calendar quarter, at a location alternating between Japan
and California, to discuss and confer on issues relating to the joint interest
of the parties in developing, manufacturing and marketing the Products. The
matters to be discussed at such meetings shall include, without limitation, new
product development, manufacturing process development, marketing strategy,
financial matters and technology strategy.
2. DEFINITIONS.
The following terms, as used in this Agreement, shall have the meanings
referenced below:
2.1. "Components" shall mean parts and components specially designed by
Quantum or MKE which are included in a Product, including heads, disks and
motors.
2.2. "Confidential Information" shall have the meaning set forth in Section
10.1.
2.3. "Development Costs" shall mean all expenditures associated with
Product development until the completion of the drawings defining the
requirements and design of the Products, including testing and completion of
prototypes, up to the stage that such Products can be put into pre-production by
MKE in Japan.
2.4. "Exclusive" shall mean sole rights excluding all other parties.
2.5. "Manufacturing Costs" shall mean all costs of the design development
and construction of the manufacturing hardware for the Products, including
tooling design and equipment acquisition.
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2.6. "MEI" shall mean Matsushita Electric Industrial Co., Ltd., a
corporation organized under the laws of Japan, having its principal place of
business at 1006, Xxxxxx, Xxxxx 000 Xxxxx.
2.7. "Products" [CONFIDENTIAL TREATMENT REQUESTED]
2.8. "Quantum" shall also include any subsidiary of Quantum not
specifically referenced above.
2.9. "Technical Information" shall mean all non-public information and
know-how which is proprietary to Quantum or MKE, as the case may be, directly
related to the development and manufacturing of any Products, including all
inventions, processes and discoveries known, actively used, or hereafter
developed by either party with respect thereto during the term of this
Agreement. Technical Information shall be mutually exchanged between the parties
solely for the purpose of contributing to, or assisting with, the design,
manufacturing, marketing, testing and service of the Products, provided that
either party has the right to transfer such information without the consent of
or payment of royalties to a third party, and further provided that such
Technical Information as will be transferred by MKE to Quantum may not be used
for Quantum's manufacturing of any product, including the Products, without
MKE's prior written consent. Notwithstanding anything to the contrary contained
herein, no exchange of Technical Information shall be deemed to transfer,
license or otherwise assign from one party to the other party any proprietary
rights any party hereto may have in the Technical Information.
3. MARKETING RIGHTS.
3.1. Quantum Rights. Subject to the terms and conditions of this Agreement,
Quantum shall have the Exclusive worldwide rights to market, distribute and sell
Products during the term of this Agreement. Quantum agrees to use its best
efforts to market and sell Products subject to the terms and conditions of this
Agreement.
[CONFIDENTIAL TREATMENT REQUESTED]
3
[CONFIDENTIAL TREATMENT REQUESTED]
3.2. Marketing Decisions. Except as expressly set forth in Section 3.1
("Quantum Rights") above, Quantum will have complete responsibility and
authority for all decisions regarding the marketing and sale of the Products.
Quantum will evaluate and determine the distribution methods, the organization
to be established, the customers to whom the Products will be sold and the
strategy to be utilized. Quantum shall further be responsible for planning and
reviewing marketing opportunities. Quantum is responsible for all costs incurred
in the sale and marketing of the Products. Quantum agrees that all Products will
be manufactured by and purchased from MKE, except as otherwise provided in this
Agreement.
3.3. Product Components. During the term of this Agreement, the parties
contemplate that a number of the Components, which are integral parts of the
Products, will be developed. MKE anticipates that certain Components will be
useful in other products and that sales opportunities will develop for such
Components. If MKE desires to market any such Component to the mutual benefit of
both parties, the parties agree to enter into good faith discussions to reach
agreement on MKE's marketing rights, although neither party shall be obligated
to enter into any such agreement. Nothing herein shall limit MKE's ability to
manufacture and market parts and components for MKE Customers or third parties
which do not utilize Quantum Technical Information.
3.4. MKE Cooperation. With the prior approval of MKE, MKE shall permit the
customers of Quantum to tour and evaluate MKE's manufacturing facilities for the
Products.
4. MANUFACTURING RIGHTS.
4.1. MKE Rights. Subject to the terms and conditions of this Agreement,
Quantum hereby grants MKE the Exclusive worldwide rights to manufacture any and
all Products during the term of this Agreement. MKE shall not have the right to
grant rights to manufacture or have manufactured the Products without Quantum's
written consent.
4.2. Manufacturing Decisions. MKE will have complete responsibility and
authority for the development of manufacturing processes, acquisition of
production equipment and the construction of facilities. [CONFIDENTIAL TREATMENT
REQUESTED] Except as expressly set forth in Section 3.1 ("Quantum Rights")
above, all Products manufactured by MKE will be sold to and marketed by Quantum.
4.3. Quantum Manufacturing. The parties understand that the assurance of
continued production of quality and low-cost Products is critical to Quantum's
business and that Quantum is relying on MKE as the sole source of the Products.
[CONFIDENTIAL TREATMENT REQUESTED]
4
[CONFIDENTIAL TREATMENT REQUESTED]
4.4. [CONFIDENTIAL TREATMENT REQUESTED]
4.5. Non-Competitive Products. On a case-by-case basis, the parties will
negotiate in good faith the rights and consideration to use each other's
Technical Information and/or other intellectual property for non-competitive
products or to work together to produce such non-competitive products. For
purposes hereof, "non-competitive products" are products that would not compete
with then-existing or contemplated Products as mutually agreed upon by the
Parties.
5
5. DEVELOPMENT AND MANUFACTURING COSTS.
5.1. Development Costs.
a. [CONFIDENTIAL TREATMENT REQUESTED]
b. [CONFIDENTIAL TREATMENT REQUESTED]
5.2. Manufacturing Costs.
a. [CONFIDENTIAL TREATMENT REQUESTED]
b. [CONFIDENTIAL TREATMENT REQUESTED]
5.3. Technology Exchange Costs. MKE and Quantum will be exchanging
engineering personnel as part of the initial and ongoing technology exchange
under Section 8 ("Technical Cooperation"). [CONFIDENTIAL TREATMENT REQUESTED]
5.4. Component Development Costs. The parties expect that further cost
reductions will be achieved in the Products after they are developed by further
development of Components through vertical integration techniques. [CONFIDENTIAL
TREATMENT REQUESTED]
6. EXCLUDED PRODUCTS; PRODUCT DEVELOPMENT.
6.1. Excluded Products. MKE shall be free to pursue the development,
manufacture and sale of any products, including but not limited to components
and parts, not utilizing the Technical Information of Quantum as is confidential
pursuant to the provisions of Section 10 ("Confidentiality") hereof.
6.2. Development. For each Product proposed by Quantum and determined to be
economically attractive for production under this Agreement, [CONFIDENTIAL
TREATMENT REQUESTED] MKE and Quantum will work together in selecting and
locating low-cost component sources on a worldwide basis. The Product design and
key component design will be transferred by Quantum for MKE to develop the
processes and tooling to manufacture
6
the Product. The parties recognize that the development process necessary to
insure that the developed Product will be complementary with MKE's manufacturing
processes, while requiring the assistance of MKE, shall be the sole
responsibility of Quantum.
6.3. Development of New HDD Technology and Products.
a. [CONFIDENTIAL TREATMENT REQUESTED]
b. [CONFIDENTIAL TREATMENT REQUESTED]
c. In accordance with Section 9 ("Proprietary Rights") of this
Agreement, MKE shall own all rights to any new manufacturing process technology
developed under this Section 6.3. In accordance with Section 9 of this
Agreement, Quantum shall own all rights to any new Product design technology
developed by employees, agents and consultants of MKE under this Section 6.3;
provided, however, that such ownership shall not impair MKE's rights to use such
technology as provided in paragraph (b) of this Section 6.3.
6.4. Product Changes. Quantum shall have the right to control changes to
the Products provided that any changes that would materially alter the
manufacturing process or cost shall require MKE's prior written consent, such
consent not to be unreasonably withheld or delayed. If MKE believes that design
changes to the Products are beneficial, the proposed change shall be submitted
to Quantum for approval, such approval not to be unreasonably withheld. MKE
understands that after the Products are introduced into the marketplace by
Quantum that subsequent changes may affect the design of the system into which
an OEM incorporated such Product. MKE agrees to notify Quantum of any changes in
the manufacturing process employed by MKE that may affect form, fit, function,
or reliability of the Product. Enhancements and modifications to the Product
design may be submitted from time to time by Quantum and MKE agrees to cooperate
in promptly incorporating such revised design in the manufacturing process
subject to the sufficient time allowance and the changes in the price of the
Products to be paid by Quantum to MKE.
7
7. COMPONENTS.
7.1. Component Integration. After product designs are submitted to MKE, the
key Components of the design will be integrated by MKE for cost-effective
manufacturing to the extent the parties mutually agree. As part of the
integration and cost reduction of the manufacturing process, Components may be
jointly redesigned or additional Components may be developed.
7.2. Component Purchases. MKE will negotiate with various suppliers to
establish sources of supply for the Components needed to manufacture the
Products. Should MKE desire to change or add vendors of Components for
particular components following initial selection for a particular Product, MKE
shall notify Quantum thereof and shall obtain Quantum's prior written approval
for any change or addition of vendors for key components.
8. TECHNICAL COOPERATION.
The Technical Information exchange will be an ongoing process during the
term of the Agreement. Each party shall have full access to the other's
facilities and production processes for the Products and full cooperation will
be provided by all parties. The parties recognize, however, that it is intended
that information transfer shall be efficiently accomplished and not impede the
business of any party. Quantum agrees to make available to MKE design
information (including Technical Information) relating to a Product, as it is
developed by Quantum, and to compile the product documentation to facilitate
transfer. Quantum agrees to use reasonable commercial efforts to assist and
provide technical support as reasonably necessary to enable MKE to manufacture
the Products. MKE agrees to retain and create documentation for its
manufacturing processes for the Products to the extent that is possible and
practical. Quantum recognizes that it may be expensive and impractical for MKE
to assemble complete information relating to MKE's manufacturing processes for
the Products. Quantum shall have full access to all information relating to
MKE's manufacturing processes for the Products upon reasonable request, provided
that Quantum may not use the Technical Information of MKE included in such
information for any purpose except as expressly provided in this Agreement. Both
parties recognize that continued access to the Technical Information of the
other party pursuant to this Agreement is necessary for broad business planning,
which includes implementing product designs and changes and assisting the other
party in overcoming problems.
9. PROPRIETARY RIGHTS.
9.1. Right To Use. Subject to the terms and conditions of this Agreement,
Quantum hereby grants to MKE a worldwide, [CONFIDENTIAL TREATMENT REQUESTED],
nonexclusive and [CONFIDENTIAL TREATMENT REQUESTED] license to use any
manufacturing processes, techniques, Technical Information and know-how of
Quantum used in the production of the Products, including any modifications,
alterations or revisions thereof for manufacture of any Product.
9.2. Product Designs and Manufacturing Processes. MKE agrees that all
rights to the Products and Product designs, including modifications and
enhancements, shall remain proprietary to Quantum or the third party from which
it has been licensed, regardless of the contributions of the parties. Quantum
agrees that all rights to manufacturing processes, techniques, Technical
Information and know-how used in the production for the Products, including any
modifications, alterations or revisions thereof regardless of contribution of
the parties but excluding any test software programs supplied by Quantum to MKE
without charge, shall remain proprietary to MKE or the third party from which it
has been licensed, and that such MKE technology may be used by MKE
8
for other purposes. Neither party shall have the right to transfer any Technical
Information of the other party obtained hereunder to a third party without the
prior written consent of the disclosing party.
9.3. Patents. The parties recognize that during the term of this Agreement,
inventions and patentable technology may be developed by Quantum and MKE within
the scope of this Agreement. If an invention or patentable technology relates to
Products or Product designs, Quantum shall have sole ownership and MKE agrees to
assign to Quantum any rights it may have to such invention. If an invention or
patentable technology relates to manufacturing techniques or processes, MKE
shall have sole ownership and Quantum agrees to assign to MKE any rights it may
have to such invention.
9.4. Patent Protection. The parties agree to develop and diligently pursue
a strategy for protecting the proprietary rights developed under this Agreement
against infringement by third parties, which shall include filing patent
applications in countries which the parties mutually agree. The cost of
obtaining all Product patents will be borne by Quantum and the cost of obtaining
all manufacturing and process patents will be borne by MKE. Each party shall
provide assistance to the other, as requested, without charge.
9.5. Patent Rights. If MKE desires to utilize the technology covered by a
Product patent owned by Quantum for the development of a product outside the
scope of this Agreement, Quantum and MKE agree to in good faith discuss the
grant of rights to MKE.
9.6. Trademarks. Except as set forth in the Purchase Agreement, each party
shall have the right during the term of this Agreement to use trademarks and
tradenames of its own selection and neither party shall have any rights to use
the trademarks of the other without the other's written consent.
9.7. Patent Contributions. The parties acknowledge that when one party
makes a significant contribution of demonstrated substantial commercial value to
the operations of the other party pursuant to this Section 9, they will enter
into good faith discussions to determine whether the contributing party should
receive compensation for such contribution. It is expressly understood that
there is no obligation to provide any compensation to any party and the
determination of any compensation, if any, shall be in the sole discretion of
the party who may wish to pay such compensation.
10. CONFIDENTIALITY.
10.1. Confidentiality. All parties acknowledge that, in the course of
performing their respective obligations, they will be receiving information
which is confidential and proprietary to the disclosing party and which the
disclosing party wishes to protect from public disclosure. "Confidential
Information" means any information which has been or will be disclosed between
the parties relating to the Technical Information and to their respective
businesses, customers, products, marketing plans, financial status and the like.
The parties agree that regardless of the date of termination of this Agreement,
each will keep confidential any "Confidential Information" of the other party
for a period commencing upon receipt thereof until three (3) years following the
date of such termination and any extension hereof.
10.2. Restrictions. Each party (i) agrees to use Confidential Information
only for the purposes described in this Agreement, and not to disclose
Confidential Information given to it by the other party to any person, real or
legal, except as authorized in this Agreement; (ii) shall require a
9
third party to whom disclosure of Confidential Information is authorized to sign
a confidentiality agreement in form mutually acceptable to the parties; (iii)
shall exercise the same degree of care to safeguard the confidentiality of such
Confidential Information as it would exercise in protecting the confidentiality
of similar property of its own; and (iv) agrees to use its diligent efforts to
prevent inadvertent or unauthorized disclosure, publication or dissemination of
any Confidential Information. The obligations to avoid publication or
dissemination of Confidential Information will not apply to any information
which a party can show:
a. is already in the possession of such party;
b. is or becomes publicly available without breach of this Agreement
by such party or through ordinary marketing or sale of the Products;
c. is rightfully received by such party from a third party not known
(whether at the time of receipt or dissemination of such information) to be
under an obligation of confidence to the other party with respect thereto;
d. is released for disclosure by the other party with its written
consent;
e. is disclosed pursuant to the requirement of a governmental agency
or operation of law, provided that such party is obligated to use its best
efforts to prevent disclosure or seek confidential treatment as requested by a
party under such circumstances; or
f. is independently developed by such party.
11. PATENT INDEMNIFICATION.
Quantum will defend any action brought against MKE based on a claim that a
Product manufactured by MKE and any software/firmware and Product interface
supplied by Quantum infringes any trade secret, copyright, patent or any other
intellectual property rights. Quantum will indemnify and hold MKE harmless and
Quantum agrees to defend any action brought against MKE and hold MKE harmless
from any and all damages, liabilities, costs and expenses, including reasonable
attorneys' fees and cost of investigation, arising as a result of infringement
or a claim of infringement covered by this Section. If promptly notified in
writing of any action or suit or threats thereof brought against MKE based on a
claim that the Product supplied hereunder, including any software/firmware and
Product interface supplied by Quantum, infringes any patent, trade secret,
copyright, or any other intellectual property rights, Quantum shall defend such
action or suit at its own expense, by reputable counsel selected by Quantum and
reasonably acceptable to MKE and shall pay any and all fees, costs and damages
that may be awarded in such action or in settlement thereof. MKE shall provide
Quantum information and assistance reasonably required to defend and/or settle
such action or suit or threats thereof. Settlement shall be at the option of
Quantum; provided that no settlement shall require MKE to take or refrain from
taking any action or give or accept any property or forgive or forbear any right
of action; and provided further that Quantum shall not effect any settlement
that does not provide for the full and unconditional release of all applicable
claims against MKE without MKE's prior written consent. In the event that a
charge of infringement of a patent, trade secret or copyright is made or a final
injunction is obtained against MKE prohibiting the supply of the Products to
Quantum hereunder or any part thereof, by reason of such infringement, Quantum
shall have the right, after consulting with MKE and upon written notice to MKE,
to either (A) at its expense, procure for MKE the right to continue supplying
the Product or replace or modify the Product, or (B) modify the Product so that
it is non-infringing so long as such modification does not
10
affect the Product's functioning, or (C) direct MKE to dispose of MKE's
inventory of such Product at Quantum's expense. In case of (B) above, Quantum
shall be liable to MKE for, and MKE shall be entitled to recover from Quantum,
all of the following costs and expenses in the event of any such change of the
Product design:
a. MKE's inventory of certain components and/or parts useful only in
the Product before such change of the Product design;
b. Working and processing costs and expenses actually incurred by MKE
prior to notice of such change of the Product design for the finished and/or
unfinished Product;
c. Working and processing costs and expenses actually incurred for
disassembling the finished and/or unfinished Product in MKE's inventory at the
time of notice of such change of the Product design, if and to the extent such
disassembling is required to mitigate the costs and expenses due to such change
of the Product design.
In case of (C) above, this Agreement shall be terminated with respect to
the affected Product. If any Product is so disposed of by MKE in line with
Quantum's discretion, MKE shall not be liable for the result thereof and Quantum
shall pay to MKE the original purchase price for such Product in addition to the
expense incurred by MKE in such disposal of the Products.
Notwithstanding anything in this Section 11 to the contrary, Quantum shall
have no liability for any claim of patent, trade secret, or copyright
infringement, if the alleged infringement arises from (A) changes and
modifications to the Products by MKE other than those provided in the Purchase
Agreement; or (B) the manufacturing process by which the Product is manufactured
unless the product design provided by Quantum requires the manufacturing process
or the manufacturing process which is the subject of such claim is originated
with Quantum and has been performed by MKE in compliance with Quantum
engineering drawings.
MKE shall defend such action or suit at its expense, by reputable counsel
selected by MKE and reasonably acceptable to Quantum and shall pay any and all
fees, costs or damages that may be awarded in such action or in settlement
thereof, provided Quantum gives MKE full information and assistance to defend
and/or settle such action or suit or threats thereof. Settlement shall be at the
option of MKE. In the event that a charge of infringement of a patent, trade
secret or copyright is made or a final injunction is obtained against Quantum
prohibiting usage of the Product purchased hereunder or any part thereof, by
reason of such infringement, MKE shall have the right, upon written notice to
Quantum, to either (A) at its expense, procure for Quantum the right to continue
using the Product or replace or modify the Product, or (B) modify the
manufacturing process for the Product so that it is non-infringing so long as
such modification does not affect the Product's functioning, or (C) direct
Quantum to return such Product to MKE at MKE's expense. In case of (C) above
this Agreement shall be terminated with respect to the affected Product. If any
Product is so returned to MKE, MKE shall not be liable for the result thereof
except that if MKE has been paid for the products by Quantum, MKE shall pay to
Quantum the original purchase price for such Product which does not contain any
part originated with Quantum's request and involving possible infringement upon
the patent, trade secret or copyright in question.
12. PURCHASE AGREEMENT.
12.1. Purpose. This Agreement is intended to set forth the general
framework of the relationship of the parties, including the roles and rights of
each party. The specific terms of the
11
business relationship between MKE and Quantum relating to the manufacture,
purchase and sale of the Products are set forth in a separate Amended and
Restated Purchase Agreement entered into by and between the parties hereto of
even date herewith, including any amendments thereof.
13. TERM AND TERMINATION.
13.1. Term. This Agreement shall be effective on the first date set forth
above and shall continue until December 31, 2007, unless earlier terminated
pursuant to this Section 13. Upon its scheduled expiration this Agreement shall
be renewed automatically for one additional term of five (5) years; provided,
however, that either party may elect not to renew this Agreement by giving no
less than sixty (60) days written notice to the other party prior to the
expiration date of its intention not to renew this Agreement. The date upon
which the Agreement expires in accordance with the provisions set forth in this
Section 13.1 or in accordance with the provisions of Section 13.2 ("Interim
Review Prior to Scheduled Termination") shall be referred to as the "Expiration
Date."
13.2. Interim Review Prior to Scheduled Termination. At any time after
December 31, 2002, either party may request a review of and propose changes to
this Agreement (the "Request"). The parties shall promptly commence such review
and negotiate in good faith with respect to the proposed changes. If agreement
with respect to such changes is not reached within twelve (12) months from the
date of the Request, either party may upon written notice to the other party,
delivered within thirty (30) days after the end of such twelve (12) month review
period, terminate this Agreement [CONFIDENTIAL TREATMENT REQUESTED].
13.3. Termination. This Agreement may be terminated prior to its expiration
for the reasons described below in paragraph (a) (an "Event of Default"),
paragraph (b) (an "Event of Bankruptcy") or paragraph (c) (a "Change of
Control"). Termination shall become effective following an Event of Default or a
Change of Control only after the party seeking to terminate has complied with
the notice requirements and/or time periods set forth in paragraph (a) below or
Section 16.13, respectively. Termination may occur following an Event of
Bankruptcy upon notice from the party entitled to terminate to the other party.
In all cases, the date of notice of termination of this Agreement (i.e., after
the expiration of any required time periods) shall be referred to as the
"Termination Notice Date." [CONFIDENTIAL TREATMENT REQUESTED].
a. The material default by one party on a material obligation of such
party under this Agreement or the Purchase Agreement shall entitle the party not
in default to give the party in default written notice describing such default
and requiring the party in default to remedy such default. If such default is
not fully remedied within sixty (60) days after the date of such notice, the
party not in default shall be entitled to terminate this Agreement immediately.
b. Either party may terminate this Agreement at any time upon or after
the filing of an order for relief in respect of any petition against the other
party filed under Title 11 of the United States Code, or the entry of a decree
or order by a court having competent jurisdiction in respect of any petition
filed or action taken against the other party looking to reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any other present or future federal or state statute, law or
regulation, resulting in the appointment of a receiver,
12
liquidator, custodian, assignor, trustee, sequestrator or other similar official
of the other party or of any substantial part of its property, or resulting in
the winding-up or liquidation of its affairs, in the case of any involuntary
filing or petition, and the continuation of any decree or order is unstayed and
in effect for a period of sixty (60) consecutive days; or at any time upon or
after the filing of a petition for relief under Title 11 of the United States
Code by the other party or the consent, acquiescence or taking of any action by
the other party in support of a petition filed by or against it looking to
reorganization arrangement, composition, readjustment, liquidation, dissolution,
or similar relief under any other present or future federal or state statute,
law or regulation, or the appointment, with the consent of the other party, of
any receiver, liquidator, custodian, assignor, trustee, sequestrator or other
similar official of the other party or of any substantial part of its property,
or the making by it of an assignment for the general benefit of all creditors,
or the admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the other party in
furtherance of any such action.
c. Either party may terminate this Agreement upon the occurrence of a
change in control of the other party in accordance with Section 16.13 ("Changes
in Control").
13.4. Rights Upon Termination.
a. In the event of any termination of this Agreement under Article 13,
Articles 2, 10, 11, 14, 15 and 16, and Sections 9.1, 9.2, 9.3 and 13.4 shall
survive. Any termination of this Agreement shall only be effective upon
completion of the wind down phase described in the Purchase Agreement.
b. In addition, in the event of any valid termination of this
Agreement by MKE under Section 13.3 ("Termination") due to a material breach by
Quantum, MKE shall be entitled to such remedies as may be awarded in arbitration
pursuant to Section 14 ("Arbitration").
c. In addition, in the event of any valid termination of this
Agreement by Quantum under Section 13.3 due to a material breach by MKE, Quantum
shall be entitled to such rights as set forth in Section 4.3 ("Quantum
Manufacturing") and such other remedies as may be awarded by arbitration
pursuant to Section 14 ("Arbitration").
d. This Section sets forth the sole remedy of a party in the event of
a material breach of this Agreement by the other party.
e. Following termination or expiration of the Agreement, amounts due
and owing prior to termination or expiration of this Agreement shall still be
due and payable to the party owed such payment in accordance with the terms and
conditions of this Agreement.
14. ARBITRATION.
This Agreement shall be governed in all respects by the laws of the United
States of America and by the laws of the State of California, excluding its
conflict of law provisions. This Agreement is prepared and executed in the
English language only and any translation of this Agreement into any other
language shall have no effect. All disputes, controversy or claim arising out of
or relating to this Agreement, or the breach, termination, or invalidity
thereof, shall be settled by arbitration in Geneva, Switzerland, in accordance
with the United Nations Commission on International Trade Law (UNCITRAL)
Arbitration Rules. The language of the arbitration shall be English. The award
rendered by the arbitrator shall include costs of the arbitration, reasonable
attorneys' fees and reasonable costs for experts and other witnesses. Judgment
on the award may be entered in any court having jurisdiction.
13
The parties agree that the arbitrator shall have the authority to issue interim
orders for provisional relief, including, but not limited to, orders for
injunctive relief, attachment or other provisional remedy, as necessary to
protect either party's name, proprietary information, trade secrets, know-how or
any other proprietary right. The parties agree that any interim order of the
arbitrator for any injunctive or other preliminary relief shall be enforceable
in any court of competent jurisdiction. In addition, either party shall be free
to seek provisional relief from any court of competent jurisdiction, in order to
protect that party's name or proprietary rights, prior to or after the
arbitration procedure set forth in this Section.
Anything in this Agreement to the contrary notwithstanding, in no event
shall the failure to agree upon the prices of the Products and the minimum
quantities be subject to arbitration.
15. GOVERNMENTAL CONSENTS.
15.1. U.S. Requirements. MKE recognizes that the transfer of technology
from Quantum is subject to compliance with United States export laws. Quantum
agrees to use its best efforts to promptly obtain necessary consents for the
export of technology under this Agreement.
15.2. Japan Requirements. Quantum recognizes that approval of the
government of Japan may be required prior to this Agreement becoming effective.
MKE agrees to use its best efforts to promptly obtain such necessary approval.
15.3. Visas. During the term of this Agreement, both parties agree to
assist the other to obtain visas necessary to permit the exchange of personnel.
15.4. Compliance with Laws. All parties agree during the term of this
Agreement to comply with all applicable laws of any country or government
authority including, but not limited to Foreign Exchange and Foreign Trade
Control Act and Export Trade Control Order of Japan and administrative guidance
prohibiting use of products or technology for design or manufacture of nuclear
weapons, chemical weapons, biological weapons or missiles, or Export
Administration Act and Regulations of the United States. The parties recognize
and agree that products and technology delivered or transferred from one party
to the other party may be subject to restrictions on export or reexport imposed
by the United States Department of Commerce or the Ministry of International
Trade and Industry of Japan.
16. MISCELLANEOUS.
16.1. Nonassignability. Except as specifically permitted by this Agreement,
neither party may assign, transfer or sublicense any of the rights or
obligations arising under this Agreement (including any affiliate or subsidiary
of a party) other than to a successor to its entire business by reason of merger
or sale of assets provided that the other party first receives written notice of
any such proposed merger or sale of assets and the intended successor in
interest of such proposed merger or sale of assets pursuant to such transaction
acknowledges in writing to be bound by the terms and conditions of this
Agreement, without the prior written consent of the other party, and any
attempted assignment without such consent shall be void and without effect.
16.2. Failure to Enforce. The failure of either party to enforce at any
time or for any period of time the provisions of this Agreement shall not be
construed to be a waiver of such provisions or of the right of such party to
enforce each and every such provision.
14
16.3. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, United States of America,
excluding its conflict of law provisions.
16.4. Severability. In the event that any of the provisions of this
Agreement shall be held by a court or other tribunal of competent jurisdiction
to be unenforceable, the remaining portions of this Agreement shall remain in
full force and effect.
16.5. Notices. Any notice which any party desires or is obligated to give
to the other shall be given in writing and sent to the appropriate address shown
below or to such other address as the party to receive the notice may have last
designated in writing in the manner herein provided. Unless otherwise provided,
any notice required or permitted under this Agreement shall be given in writing
and shall be deemed effective (i) if personally delivered, at the time delivered
by hand, (ii) if delivered by facsimile transmission, upon confirmation of
transmission, (iii) if by courier, on the business day such courier guarantees
delivery, and (iv) if delivered by U.S. Mail, seven (7) business days after
deposit in the U.S. mail, postage prepaid, all properly addressed as follows:
Quantum Corporation
000 XxXxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: Chief Executive Officer
facsimile: (000) 000-0000
Matsushita-Kotobuki Electronics
Industries, Ltd.
0-0 Xxxxxxx-Xxxxx
Xxxxxxxxx-Xxxx, Xxxxxx 000, Xxxxx
Attention: Xxxxxxx Xxxxx, President
facsimile: 011-81-(878) 511047
Quantum Peripherals (Europe) SA
Xxxxxx-Xxxxxxxx 00x
XX-0000 Xxxxx-Xxxxxxxx
Xxxxxxxxx, Xxxxxxxxxxx
Attention: Chief Executive Officer
facsimile: 011-41-32-753-5541
Ireland Kotobuki Electronics, Ltd.
Finnabair Industrial Park, Xxx'x Road
Dundalk, Co Louth
The Republic of Ireland
Attention: Managing Director
Kotobuki Electronics Industries (s) Pte. Ltd.
0 Xxxxxxxxxxx Xxxx #02-01/12, #00-00/00
Xxxxxxxxxxx Xxxxx
Xxxxxxxxx 000000
15
16.6. Entire Agreement. Except for the Purchase Agreement, an Inventory
Storage Agreement between the parties effective December 8, 1993, a Revised
Hydrodynamic Spindle Motor Proprietary Right and Manufacturing Agreement between
the parties effective February 3, 1995, and a Limited Voice Messaging/Processing
Industry Sales Agreement between the parties effective July 28, 1993, as well as
any agreements between the parties regarding the establishment and operation of
TA Diamond LLC (which may in future be known as Quantum-MKE Components LLC), and
the supply of products manufactured by such entity, this Agreement and any
attachments or exhibits hereto constitute the entire agreement among the parties
pertaining to the subject matter hereof, and any and all other written or oral
agreements existing between the parties are expressly canceled. Any
modifications of this Agreement must be in writing and signed by duly authorized
officers of all parties.
16.7. Force Majeure. In the event of any delay in performance or failure of
performance of obligations under this Agreement by either party due to any
causes arising from acts of God, war, mobilization, riot, strike, fire,
earthquake, flood, embargo, delay of carrier, power failure or attributable to
acts, events or omissions beyond the reasonable control of the party concerned,
such delay or failure of performance shall not be deemed a default and the party
so delayed or prevented shall be under no liability for loss or injury suffered
by the other party. Nothing in this paragraph shall affect the right of either
party to terminate this Agreement as otherwise provided herein.
16.8. Limitation of Liability. IN NO EVENT AND UNDER NO CIRCUMSTANCES SHALL
ANY PARTY UNDER THIS AGREEMENT BE LIABLE FOR ANY SPECIAL OR CONSEQUENTIAL
DAMAGES OR LOSS OF PROFITS OF THE OTHER PARTY OR PARTIES OR ANY EXPENDITURES,
COSTS OR INVESTMENTS MADE OR INSURED BY THE OTHER PARTY OR PARTIES AS PROVIDED
HEREIN.
16.9. MEI. Quantum acknowledges that MKE is a subsidiary of MEI which is a
manufacturer of products which may be competitive with the Products and that MEI
and its subsidiaries other than MKE may now have or will have under development
products which are competitive with the Products.
16.10. Binding. This Agreement is not binding upon MEI, its subsidiaries,
and their respective affiliates other than MKE and nothing herein shall be
construed as a limitation upon the rights of MEI and its subsidiaries other than
MKE to sell any products to any customers or potential customers therefor
anywhere in the world, but nothing herein contained shall authorize the
disclosure of Quantum's Technical Information to MEI and its subsidiaries other
than MKE. Also, this Agreement does not apply to the design, manufacture or
supply to or from TA Diamond LLC, of Products or Components to either party
hereunder, which are addressed by separate agreement among the parties hereto
and TA Diamond LLC.
16.11. Agency. This Agreement does not create a principal to agent,
employer to employee partnership, joint venture, or any other relationship
except that of independent contractors between Quantum and MKE.
16.12. Headings. Headings to Paragraphs and Sections of this Agreement are
to facilitate reference only, do not form a part of this Agreement, and shall
not in any way affect the interpretation hereof.
16.13. Changes in Control. Prior to the occurrence of a change of control
of either Quantum or MKE, i.e., a person or entity acquires more than fifty
percent (50%) of the voting control of either
16
Quantum or MKE, the party likely to undergo such change of control will notify
the other party and the parties will discuss the likely effect. [CONFIDENTIAL
TREATMENT REQUESTED].
16.14. Bankruptcy Code. All rights and licenses granted under or pursuant
to this Agreement by one party to the other with respect to the Products or the
Technical Products of the Technical Information are, and shall otherwise be
deemed to be, for the purposes of Section 365(n) of the United States Bankruptcy
Code, 11 U.S.C. Section 101, et seq. (the "Bankruptcy Code"), licenses of rights
to "intellectual property" as defined under Section 101(56) of the Bankruptcy
Code; provided it abides by the terms of this Agreement. The parties further
agree that, in the event that any proceeding shall be instituted by or against a
party seeking to adjudicate it bankrupt or insolvent or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy of
insolvency or reorganization or relief of debtors, or seeking an entry or an
order for relief of debtors, or seeking an entry or an order for relief or the
appointment of a receiver, trustee or other similar official for it or any
substantial part of its property, or such party shall take any action to
authorize any of the foregoing actions (each a "Proceeding"), the other party
shall have the right to retain and enforce its rights under this Agreement
including, but not limited to the following rights, provided it abides by the
terms of this Agreement: (i) the right to continue to use the Technical
Information, all documentation and other supporting materials relater thereto
and manufacture and sell Products and all versions and derivatives thereof; and
(ii) the right to complete access to, as appropriate, all Technical Information
and Products and all embodiments of such to be provided under this Agreement,
including documentation therefor, and the same, if not already in the
non-bankrupt party's possession, shall be promptly delivered to such party: (a)
upon any such commencement of a Proceeding upon written request therefor by such
party, unless the bankrupt party elects to continue to perform all of its
obligations under his Agreement; or (b) if not delivered under (a) above, upon
the rejection of this Agreement by or on behalf of the bankrupt party upon
written request therefor by the non-bankrupt party.
17
IN WITNESS WHEREOF, the parties hereto here caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written. Notwithstanding such execution, this Agreement shall become
effective only after obtaining required approval of the government of Japan.
QUANTUM CORPORATION
By: /s/ Xxxxxxx Xxxxx
----------------------------------
Name: Xxxxxxx Xxxxx
Title: President and CEO
QUANTUM PERIPHERALS
(EUROPE) SA
By: /s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title:
MATSUSHITA-KOTOBUKI
ELECTRONICS INDUSTRIES, LTD.
By: /s/ Takashi Hanjo
----------------------------------
Name: Takashi Hanjo
Title: President
IRELAND KOTOBUKI
ELECTRONICS INDUSTRIES, LTD.
By: /s/ Yoshiyuiri Aono
----------------------------------
Name: Yoshiyuiri Aono
Title: Managing Director
KOTOBUKI ELECTRONICS
INDUSTRIES (S) PTE. LTD.
By: /s/ Hironijo Sakioka
----------------------------------
Name: Hironijo Sakioka
Title: Managing Director
AMENDED AND RESTATED MASTER AGREEMENT
18
