AMENDED AND RESTATED
PURCHASE AGREEMENT
BETWEEN
MATSUSHITA-KOTOBUKI ELECTRONICS INDUSTRIES, LTD.,
AND
QUANTUM CORPORATION
TABLE OF CONTENTS
Page
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1. DEFINITIONS.........................................................................................................1
1.1. Confidential Information.......................................................................................1
1.2. DPSG Products..................................................................................................1
1.3. Engineering Change.............................................................................................1
1.4. Master Agreement...............................................................................................1
1.5. Products.......................................................................................................1
1.6. Product Specifications.........................................................................................1
1.7. Purchase Order.................................................................................................1
1.8. Quantum........................................................................................................2
1.9. Spare Parts....................................................................................................2
1.10. Technical Information.........................................................................................2
1.11. Unique Customer Configured Products...........................................................................2
1.12. WSSG Products.................................................................................................2
2. CONTROLLING DOCUMENT................................................................................................2
2.1. Controlling Agreement..........................................................................................2
2.2. Conflicts......................................................................................................2
3. PURCHASE ORDERS.....................................................................................................2
3.1. Orders.........................................................................................................2
3.2. European Purchase Orders.......................................................................................3
3.3. Confirmation...................................................................................................3
3.4. Contents.......................................................................................................3
3.5. Emergency Orders...............................................................................................3
3.6. Shipment Report................................................................................................3
4. FORECASTS/COMMITMENTS...............................................................................................3
4.1. Purchase Orders................................................................................................3
[CONFIDENTIAL TREATMENT REQUESTED]
4.3. European Purchase Commitment...................................................................................4
4.4. Discontinuance of Model........................................................................................4
5. PRICES..............................................................................................................4
5.1. Price..........................................................................................................4
5.2. Special Pricing................................................................................................4
6. CURRENCY............................................................................................................4
7. TAXES...............................................................................................................4
8. PURCHASE ORDER RESCHEDULES AND FORECAST ADJUSTMENTS.................................................................4
9. PAYMENT TERMS.......................................................................................................5
10. TITLE..............................................................................................................5
11. DELIVERY...........................................................................................................6
11.1. Transportation................................................................................................6
11.2. Packaging.....................................................................................................6
11.3. Delivery Times................................................................................................6
12. INSPECTION AND ACCEPTANCE..........................................................................................6
12.1. MKE Inspection................................................................................................6
12.2. Quantum Inspection............................................................................................6
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TABLE OF CONTENTS
(continued)
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12.3. Quantum Corrections...........................................................................................7
12.4. Non-conforming Acceptance.....................................................................................7
12.5. Lot Failures..................................................................................................7
12.6. Ongoing Reliability Testing...................................................................................7
12.7. OEM Customer Inspection.......................................................................................8
13. WARRANTY, PATENT INDEMNIFICATION...................................................................................8
13.1. MKE Warranty..................................................................................................8
13.2. Quantum Warranty..............................................................................................8
13.3. Remedy........................................................................................................8
13.4. Warranty Costs................................................................................................8
13.5. Exclusive Remedy..............................................................................................9
13.6. Warranty and Service by MKE for Sales by MKE to MKE Customers.................................................9
13.7. Patent Indemnification........................................................................................9
14. ENGINEERING CHANGES................................................................................................9
14.1. MKE Changes...................................................................................................9
14.2. Quantum Changes...............................................................................................9
15. SPARE PARTS.......................................................................................................10
15.1. Spare Parts During Product Manufacture.......................................................................10
15.2. Prices of Spare Parts During Product Manufacture.............................................................10
15.3. Spare Parts After Termination of Product Manufacturing.......................................................10
15.4. Prices for Spare Parts After Termination of Product Manufacturing............................................10
16. DOCUMENTATION.....................................................................................................10
16.1. Quantum's Brands.............................................................................................10
17. Components........................................................................................................11
18. TERM AND TERMINATION..............................................................................................11
18.1. Term.........................................................................................................11
[CONFIDENTIAL TREATMENT REQUESTED]
18.3. Rights Upon Termination......................................................................................12
19. ARBITRATION.......................................................................................................13
20. GOVERNMENTAL CONSENTS.............................................................................................13
20.1. Compliance with Laws.........................................................................................13
21. MISCELLANEOUS.....................................................................................................14
21.1. Nonassignability.............................................................................................14
21.2. Failure to Enforce...........................................................................................14
21.3. Governing Law................................................................................................14
21.4. Severability.................................................................................................14
21.5. Notices......................................................................................................14
21.6. Entire Agreement.............................................................................................15
21.7. Force Majeure................................................................................................15
21.8. Limitation of Liability......................................................................................15
21.9. Binding......................................................................................................15
21.10. Agency......................................................................................................16
21.11. Headings....................................................................................................16
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TABLE OF CONTENTS
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21.12. Trading Company.............................................................................................16
iii
AMENDED AND RESTATED PURCHASE AGREEMENT BETWEEN
MATSUSHITA-KOTOBUKI ELECTRONICS INDUSTRIES, LTD.,
AND QUANTUM CORPORATION
THIS AMENDED AND RESTATED PURCHASE 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") and is intended to be
an amendment and restatement of the Purchase Agreement between the parties dated
as of December 1987, as amended.
In consideration of the mutual covenants and promises in this Agreement, the
parties agree as follows:
1. DEFINITIONS.
The following terms, as used in this Agreement, shall have the meanings
referenced below:
1.1. "Confidential Information" shall have the meaning set forth in the
Master Agreement.
1.2. "DPSG Products" shall mean Products designed by Quantum primarily for
the storage needs of desktop and portable systems, including by way of example
but not limitation, personal computers for home and business use.
1.3. "Engineering Change" regarding design shall mean any electrical or
mechanical changes to the Products or Spare Parts, proposed by Quantum or MKE,
which would affect the performance, reliability, safety, serviceability,
appearance, dimensions, tolerances, final assembly or Product Specifications of
the Products. Regarding manufacturing process, "Engineering Change" shall mean
any change to the manufacturing process, proposed by Quantum or MKE, which may
affect form, fit, function, quality, and/or reliability of the Products.
1.4. "Master Agreement" means the Amended and Restated Master Agreement
between MKE and Quantum dated as of even date herewith.
1.5. "Products" [CONFIDENTIAL TREATMENT REQUESTED].
1.6. "Product Specifications" shall mean the specifications for the
Products mutually agreed by the parties from time to time in accordance with the
procedures of the parties in effect on the Effective Date.
1.7. "Purchase Order" shall mean purchase orders submitted to MKE from
Quantum in accordance with Sections 3 ("Purchase Orders") and 4
("Forecasts/Commitments") of this Agreement.
1.
1.8. "Quantum" shall also include any subsidiary of Quantum not
specifically referenced above.
1.9. "Spare Parts" shall mean all spare parts for the Products.
1.10. "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.
1.11. "Unique Customer Configured Products" shall mean Products based upon
standard Products but incorporating changes that may include electrical,
hardware interface, firmware and/or form factor made pursuant to the terms of
this Agreement. The specifications of such products will be mutually confirmed
in writing on an as-needed basis.
1.12. "WSSG Products" shall mean Products designed by Quantum primarily for
the storage needs of storage-intensive applications, including by way of example
but not limitation, servers, workstations, disk arrays, networked databases,
storage subsystems and mini-computers.
2. CONTROLLING DOCUMENT.
2.1. Controlling Agreement. All purchases of the Products by Quantum from
MKE shall be subject to the terms and conditions of this Agreement, the Master
Agreement and the Exhibits, if any, attached to each. Any additional,
inconsistent and conflicting clauses in any Purchase Order, release, acceptance
or other written correspondences from one party to the other, are to be
considered rejected and of no effect. Any addition to, deletion from or
modification of any of the provisions of this Agreement shall be made in writing
signed by duly authorized representatives of both parties and shall state that
it is an amendment of this Agreement.
2.2. Conflicts. If a conflict arises between any of the terms in the
following documents, the order of precedence shall be: (i) this Agreement, (ii)
the Master Agreement, and (iii) written terms on any issued and accepted
Purchase Order.
3. PURCHASE ORDERS.
3.1. Orders. The purchase and sale of Products and Spare Parts shall be
made against specific Purchase Orders placed by Quantum to MKE and accepted by
MKE during the term of this Agreement in accordance with the provisions hereof,
provided that such acceptance shall not be unreasonably withheld or delayed in
accordance with the provisions hereof. Purchase Orders and change orders may be
placed by facsimile. A Purchase Order may provide for delivery of the Products
for a period up to one hundred eighty (180) days following normal expiration of
this Agreement and all terms and conditions of this Agreement shall govern.
Subject to the provisions of
2.
Section 18.2 ("Termination"), no Purchase Order is required to be accepted by
MKE on and after the expiration or the termination of this Agreement. Any
Purchaser Order issued, or to be issued, for any firm commitment of purchase of
Products hereunder shall be noncancellable except as otherwise provided for in
Sections 11.3 ("Delivery Times") and 21.7 ("Force Majeure") hereof and Quantum
shall be responsible for taking deliveries of and paying for all Products set
forth in such Purchase Order.
3.2. European Purchase Orders. All purchase orders from Quantum Peripherals
(Europe) SA ("Quantum-Switzerland") to Ireland Kotobuki Electronics Industries,
Ltd. ("MKE-Ireland") shall be issued to MKE and the copy of such purchase orders
shall be delivered to MKE-Ireland simultaneously with such issuance. Control of
order acceptance and production allocation shall be made by MKE.
3.3. Confirmation. MKE will notify Quantum of receipt of a Purchase Order
within five (5) working days after receipt of Quantum's Purchase Order.
Confirmation of receipt and acceptance by MKE may be by facsimile. No individual
Purchase Order shall be binding upon MKE unless and until accepted in writing by
MKE, but such acceptance shall not be unreasonably withheld or delayed.
3.4. Contents. All Purchase Orders for Products and Spare Parts submitted
by Quantum shall state the following: (i) price, (ii) the quantities ordered,
(iii) delivery dates, (iv) destination (which shall be the mutually agreed
Quantum facility unless otherwise specifically agreed by the parties), (v)
requested method of shipment (and specific carrier if desired) and (vi) Product
model or Spare Parts number in accordance with the terms and conditions hereof.
Quantum shall use the form of Purchase Order agreed upon by the parties from
time to time to place the Purchase Order and emergency orders referred to in
Section 3.5 ("Emergency Orders") below. Any additional or inconsistent terms
contained on such form of Purchase Order shall not be applicable and are hereby
rejected.
3.5. Emergency Orders. The monthly rolling forecasts and Purchase Orders
placed by Quantum under Sections 3.1 ("Orders") and 4.2 ("Commitments") shall
not prevent Quantum from placing emergency orders for Products for delivery up
to the quantities as may be agreed to by MKE in accordance with the provisions
hereof in less than ninety (90) days and MKE agrees to make reasonable efforts
to deliver the Products on the requested schedule but shall have no liability
hereunder for failure to deliver such emergency orders on the requested
schedule.
3.6. Shipment Report. MKE will supply Quantum a weekly shipment report for
all Products shipped during the past week, which report shall specify the
quantity, part number (including revision or configuration level), shipment date
and commercial invoice number with the form and method to be mutually agreed
upon between the parties.
4. FORECASTS/COMMITMENTS.
4.1. Purchase Orders. Quantum will issue a non-cancelable Purchase Order on
a monthly basis, on or before the 10th day of such month, [CONFIDENTIAL
TREATMENT REQUESTED].
4.2. [CONFIDENTIAL TREATMENT REQUESTED]
3.
[CONFIDENTIAL TREATMENT REQUESTED]
4.3. European Purchase Commitment. Quantum warrants and guarantees that
Quantum or Quantum's subsidiaries will utilize MKE-Ireland's product first in
meeting European demand; provided that Quantum and MKE shall mutually agree as
to the timing of any increases in MKE- Ireland's production capacity. Quantum
agrees to use diligent efforts to market, sell and promote the Products and
Unique Customer Configured Products in Europe through Quantum-Switzerland.
4.4. Discontinuance of Model. Quantum shall promptly notify MKE of
Quantum's decision to discontinue to order any specific model of Product.
Notwithstanding any such notice, Quantum shall remain obligated to purchase the
specific model of Product pursuant to the application of Section 3.1 ("Orders")
and Section 8 ("Purchase Order Reschedules and Forecast Adjustments").
5. PRICES.
5.1. Price. The purchase price to Quantum for each item of the Products
sold to Quantum shall be agreed to from time to time by the parties.
5.2. Special Pricing.
a. In order to obtain business from specific potential customers
identified by Quantum and deemed to be in the mutual best interests of Quantum
and MKE, Quantum and MKE shall in good faith work together to establish a
mutually agreeable price for the Products between MKE and Quantum where such
special pricing may be necessary in order for Quantum to obtain the business
from such customers.
b. All prices to Quantum for Products, Unique Custom Configured
Products and/or Spare Parts, where MKE's trading company provides export
services from Japan, shall be F.O.B. Japanese Port (Osaka, Kobi or their
vicinity) as designated by Quantum [CONFIDENTIAL TREATMENT REQUESTED] the Ex-MKE
factory price for such Products, Unique Custom Configured Products and/or Spare
Parts as set forth in Section 5.1 ("Price") above.
6. CURRENCY.
MKE sales of Products and Spare Parts to Quantum shall be in U.S.
Dollars.
7. TAXES.
The price for the Products includes all taxes necessary to pass title
to the Products, Unique Customer Configured Products and Spare Parts to Quantum
at the delivery point. In the case of substantially high rate taxes, charges or
duties such as 100% sanctions, Quantum and MKE agree to meet immediately and to
agree upon a method to resolve such problem. Title to the Products, Unique
Customer Configured Products and Spare Parts shall pass to Quantum from MKE
ex-MKE Factory unless MKE's Trading Company provides export services, in which
event title shall pass to Quantum F.O.B. Japanese Port (Osaka, Kobe or their
vicinity) as designated by Quantum.
8. PURCHASE ORDER RESCHEDULES AND FORECAST ADJUSTMENTS.
[CONFIDENTIAL TREATMENT REQUESTED]
4.
[CONFIDENTIAL TREATMENT REQUESTED]
It is expected that a significant portion of Quantum's business will
require special configuration of the Products. Some may be as minor as code
changes while others may require special brackets or other hardware changes.
Quantum's customers also will change the mix of Products in addition to their
configuration with virtually no lead time. Therefore, Quantum shall be able to
change the configuration and mix of products on a weekly basis. Quantum and MKE
will work together to establish a mutually agreeable procedure for changing the
configuration and mix of Products and Unique Customer Configured Products.
9. PAYMENT TERMS.
Unless otherwise specifically provided herein, all payments, including
without limitation payments for the Products, Unique Customer Configured
Products and Spare Parts made by Quantum hereunder shall be payable in U.S.
Dollars, [CONFIDENTIAL TREATMENT REQUESTED], in case of Products manufactured in
Japan and [CONFIDENTIAL TREATMENT REQUESTED], in case of Products manufactured
in Ireland or Singapore, after delivery of the Products, Unique Customer
Configured Products or Spare Parts to Quantum. Delivery of the Products, Unique
Customer Configured Products or Spare Parts shall be deemed to occur when such
Products, Unique Customer Configured Products or Spare Parts are delivered
ex-MKE Factory unless MKE's designated Trading Company provides export service
to Quantum, in which event delivery shall be deemed to occur when the Products,
Unique Customer Configured Products and/or Spare Parts are delivered F.O.B.
Japanese Port (Osaka, Kobe or their vicinity) as designated by Quantum.
[CONFIDENTIAL TREATMENT REQUESTED]
10. TITLE.
Title to the Products, Unique Customer Configured Products and/or Spare
Parts and risk of loss shall pass to Quantum upon MKE's delivery thereof, as
delivery is defined in Section 9 ("Payment Terms") above regardless of any
provisions for payment of freight or insurance or form of shipping documents.
5.
11. DELIVERY.
11.1. Transportation. The method of transportation and the carrier selected
shall be as specified by Quantum in its Purchase Order. All transportation
charges, including insurance, shall be paid by Quantum.
11.2. Packaging. The method of packaging shall be in accordance with
specifications established by Quantum from time to time. The cost of packaging
for shipment to the United States is included in the price. Each shipment shall
include a packing list containing: (i) Purchase Order number, (ii) Product,
Unique Customer Configured Products or Spare Part number, and (iii) quantity of
shipped Products, Unique Customer Configured Products or Spare Parts. Serial
numbers of Products shipped to Quantum shall be delivered concurrently with the
packing list but by separate communications in accordance with the parties'
standard practices. Quantum shall indemnify and hold harmless MKE from and
against any and all liabilities, cost, expenses, loss and damages, arising out
of or relating to the packaging for the Products provided that the Products and
Spare Parts are packed in conformity with Quantum's specifications.
11.3. Delivery Times. The delivery dates and quantities specified by
Quantum in its Purchase Orders accepted by MKE are firm. If a delivery date,
along with the appropriate quantities, is missed by more than five (5) days,
then Quantum may reschedule the delivery in question.
12. INSPECTION AND ACCEPTANCE.
12.1. MKE Inspection. MKE shall provide and maintain an inspection
procedure and quality assurance program for Products and Spare Parts and their
production processes. Complete records of all inspection work done by MKE
including equipment calibration, shall be made available to Quantum upon its
request and reasonable times during the term of this Agreement. Quantum is
authorized to perform source inspection and quality assurance audits at MKE's
manufacturing facilities, but this shall not relieve MKE of its obligation to
deliver conforming Products or waive Quantum's right of inspection and
acceptance at destination.
12.2. Quantum Inspection. All Products, Unique Customer Configured Products
and Spare Parts ordered by Quantum under this Agreement shall be subject to
inspection and acceptance by Quantum at its destination in accordance with
incoming inspection test procedures agreed to by MKE. All Products, Unique
Customer Configured Products and Spare Parts shipped, under this Agreement will
comply one hundred percent (100%) to the Product Specifications. Products,
Unique Customer Configured Products and Spare Parts which fail to pass Quantum's
incoming test or inspection requirements for the Products, Unique Customer
Configured Products and Spare Parts which have been established by the mutual
agreement of Quantum and MKE may be rejected by Quantum and returned to MKE for
repair or replacement, with all costs to repair or replace and of transportation
(with MKE choosing the carrier) and risk of loss from Quantum's principal
facility, to be paid as provided below.
a. During the Agreement term, and by mutual agreement between Quantum
and MKE, MKE shall provide at MKE's expense, at Quantum's facility, technical
personnel for purpose of analyzing manufacturing defects found during incoming
acceptance tests.
b. In the event that MKE's technical personnel at Quantum's facility
cannot correct defects relating solely to manufacturing defects within a
reasonable number of working days following MKE's receipt of Quantum's notice of
defects, the non-conforming Products, Unique
6.
Customer Configured Products and Spare Parts may be returned to MKE for repair
or replacement. Quantum shall notify MKE prior to return of nonconforming
Products, Unique Customer Configured Products or Spare Parts. All returned
Products, Unique Customer Configured Products or Spare Parts will be shipped to
MKE's designated facility.
c. All shipments of non-conforming Products, Unique Customer
Configured Products or Spare Parts pursuant to (b) above shall be made freight
collect and MKE assumes risk of loss and damage during transit. Replacement
Products, Unique Customer Configured Products or Spare Parts will be delivered
to Quantum, at Quantum's applicable facility, at MKE's expense within thirty
(30) days after the date of receipt of non-conforming Products, Unique Customer
Configured Products or Spare Parts by MKE. Should MKE fail to repair or replace
rejected Products, Unique Customer Configured Products or Spare Parts and return
conforming Products, Unique Customer Configured Products or Spare Parts to
Quantum within thirty (30) days, Quantum shall have the option to cancel without
cost or liability the purchase of such Products, Unique Customer Configured
Products or Spare Parts and receive, at Quantum's option, a credit or rebate if
payment has been made. Quantum shall pay freight charges, insurance and other
customary charges for transportation for improperly rejected Products, Unique
Customer Configured Products or Spare Parts. Notwithstanding the foregoing,
Quantum and MKE shall separately negotiate in good faith if either party
believes that different procedures for repair and replacement of WSSG Products
or other new Products should be established because of the differences in such
Products.
d. It is understood that all costs to repair or replace and of
transportation with respect to defective Products, Unique Customer Configured
Products or Spare Parts shall be [CONFIDENTIAL TREATMENT REQUESTED].
12.3. Quantum Corrections. Quantum may attempt to correct deficiencies with
Spare Parts purchased under this Agreement. Such correction by Quantum shall
neither invalidate nor act as a waiver of Quantum's rights to satisfaction under
Section 12.2 ("Quantum Inspection") above nor affect any other terms of this
Agreement, including, but not limited to, the warranty under Section 13
("Warranty"). The act of payment for Products or Spare Parts shall not of itself
signify acceptance by Quantum of the Products or Spare Parts.
12.4. Non-conforming Acceptance. Quantum may choose to accept Products,
Unique Customer Configured Products or Spare Parts which fail to conform in a
minor aspect to the specifications established by this Agreement without
prejudice to its right to reject non-conforming items in the future. If Quantum
so chooses, Quantum will notify MKE of its intent to accept non-conforming
items. MKE agrees to negotiate in good faith a price reduction for such items
based upon Quantum's added expenses to correct such deficiencies provided that
the basis for non-conformance is not the result of a design defect. After the
parties agree on a price Quantum will notify MKE that Quantum has accepted the
non-conforming items.
12.5. Lot Failures. If a lot fails the acceptance quality yield level
established by the parties from time to time then Quantum may reject the entire
lot and require MKE technical personnel to verify individual Products in the lot
as acceptable provided that the basis for failure of quality yield level is not
the result of a design defect.
7.
12.6. Ongoing Reliability Testing. MKE shall perform ongoing reliability
testing in a manner and frequency mutually agreed upon by the parties from time
to time.
12.7. OEM Customer Inspection. MKE shall allow with prior arrangement,
Quantum's OEM customers to perform or cause to be performed inspection, audit
and/or test of Product and/or manufacturing process. The OEM customer is to be
accompanied by a Quantum employee(s) who will be the interface between the OEM
customer and MKE.
13. WARRANTY, PATENT INDEMNIFICATION.
13.1. MKE Warranty. The MKE warranty period extended to Quantum shall be
[CONFIDENTIAL TREATMENT REQUESTED]. Such warranty period shall commence from the
date of delivery of Products by MKE to Quantum as described in Section 9
("Payment Terms") hereof. All Products, Unique Customer Configured Products or
Spare Parts furnished under this Agreement, except for software/firmware and
product interface components supplied by Quantum, will be warranted by MKE to be
free of defects in materials and workmanship, and will conform to applicable
Product Specifications, drawings and/or samples provided or incorporated in this
Agreement. Notwithstanding the above, the warranty period may be extended by
mutual agreement. The terms of the warranty periods will be reviewed on an
annual basis. Quantum and MKE agree to negotiate in good faith extensions of the
warranty period due to competitive market conditions.
13.2. Quantum Warranty. Quantum warrants for the period of time that
Quantum warrants to its customers from the date of delivery of Products by
Quantum to its customers that all Products, Unique Customer Configured Products
and Spare Parts furnished under this Agreement will be free from defects in
design. These warranties shall survive any inspection, delivery, payment and
termination or expiration of this Agreement, and shall run to MKE and MKE
Customers, or its successors and assigns.
13.3. Remedy. Correction of warranty defects hereunder shall be performed
at either Quantum's or MKE's facility, as MKE and Quantum shall agree. MKE
shall, with the mutual agreement of Quantum, repair or replace all defective
Products, Unique Customer Configured Products and Spare Parts within thirty (30)
days of receipt of defective Products returned to it by Quantum. During the term
of this Agreement, and if mutually agreed between Quantum and MKE, MKE shall
provide, at Quantum's facility, technical personnel for the purpose of analyzing
and repairing defects in the Products, Unique Customer Configured Products and
Spare Parts. Notwithstanding the foregoing, Quantum and MKE shall separately
negotiate in good faith if either party believes that different procedures for
repair and replacement of WSSG Products or other new Products should be
established because of the differences in such Products.
13.4. Warranty Costs. [CONFIDENTIAL TREATMENT REQUESTED]
8.
[CONFIDENTIAL TREATMENT REQUESTED]. The parties shall review on a semi-annual
basis the procedures for warranty repairs and allocation of warranty expenses as
well as the reimbursement policy for such warranty repairs as hereinafter set
forth. Initially, a report shall be prepared by MKE and Quantum on a calendar
quarterly basis indicating the warranty costs incurred by the parties pursuant
to this Section 13. Within thirty (30) days after a warranty cost report is
submitted, the owing party shall reimburse the owed party. Any disputes pursuant
to this Section 13 shall be resolved by arbitration in the manner established by
Section 19 ("Arbitration") below.
13.5. Exclusive Remedy. THE WARRANTIES SET FORTH ABOVE CONSTITUTE THE SOLE
AND EXCLUSIVE REMEDY OF MKE AND QUANTUM REGARDING THE PERFORMANCE OF THE
PRODUCTS. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, QUANTUM AND MKE MAKE
NO WARRANTIES, EXPRESS OR IMPLIED, AND HEREBY EXPRESSLY DISCLAIM ALL OTHER
WARRANTIES, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. NEITHER MKE OR QUANTUM SHALL BE LIABLE FOR
CONSEQUENTIAL DAMAGES.
13.6. Warranty and Service by MKE for Sales by MKE to MKE Customers. MKE
shall at its cost, expense and responsibility, warrant the Products and/or
provide after-sales service on the Products sold to MKE Customers hereunder.
Notwithstanding, Quantum shall at MKE's request provide in good faith reasonable
technical advice and assistance regarding Product design in support of such
warranty and after-sales service. Quantum shall reasonably support MKE's
requests regarding customer specifications, firmware changes, and assignment of
part numbers for Product sold hereunder. The parties agree to negotiate in good
faith reasonable terms and conditions regarding any specification and/or
schedule changes.
13.7. Patent Indemnification. The provisions of Section 11 ("Patent
Indemnification") of the Master Agreement shall be deemed incorporated into this
Agreement.
14. ENGINEERING CHANGES.
14.1. MKE Changes. MKE shall notify Quantum of any Engineering Change
proposed to be made by MKE to the Product, Spare Parts, or manufacturing process
and shall supply a written description of the expected effect of the Engineering
Change on the Product or manufacturing process, including the effect on
performance, all test results of the proposed change, reliability, quality and
serviceability and any cost changes expected by the Engineering Change. In
deciding whether or not to give its consent to the inclusion of an MKE-proposed
Engineering Change, Quantum may elect to evaluate parts and/or designs specified
as part of the proposed change. Quantum agrees to approve or disapprove
MKE-proposed changes or respond with alternate proposals within sixty (60)
working days of receipt of a written request including all necessary
documentation and materials to correctly evaluate the requested change for
changes requiring customer approval and ten (10) working days for changes
requiring only Quantum approval.
9.
Quantum will use its best effort to reduce the response time for MKE - proposed
changes that require customer approval.
14.2. Quantum Changes. Quantum may request, in writing, that MKE
incorporate an Engineering Change into the Product or a manufacturing process.
Such request will include a description of the proposed change sufficient to
permit MKE to evaluate its feasibility and the proposed effect on quality,
reliability, performance, cost and serviceability. Within ten (10) working days
of such request by Quantum, MKE will advise Quantum of the terms and conditions
under which it would make the Engineering Change requested by Quantum. MKE's
evaluation shall be in writing and shall state the cost savings or increase, if
any, expected to be created by the Engineering Change, and its effect on the
performance, quality, reliability, safety, appearance, dimensions, tolerance,
inventory cost and lead time, provided such advice and evaluation by MKE shall
be deemed conditional only and such change request shall be of no force and
effect until such time as Quantum and MKE shall agree in writing upon a
commensurate increase or decrease in the purchase price or revision of delivery
schedule or both. If Quantum requests MKE in writing to incorporate an
Engineering Change into the Product or manufacturing process and it is agreed to
by MKE, the Product Specifications will be amended as required. MKE shall not
unreasonably refuse to incorporate Quantum's Engineering Changes into the
Product or manufacturing process.
15. SPARE PARTS.
15.1. Spare Parts During Product Manufacture. During the manufacture of the
Products Quantum shall have the right to order all piece parts for the purpose
of providing service on the Products by Quantum, or any authorized third party
repair organization. Quantum will order Spare Parts with at least ninety (90)
days lead time and MKE agrees to supply the Spare Parts.
15.2. Prices of Spare Parts During Product Manufacture. The prices of all
piece parts or subassemblies that compose the Product [CONFIDENTIAL TREATMENT
REQUESTED] of the total Product price to Quantum.
15.3. Spare Parts After Termination of Product Manufacturing. Quantum shall
have the right to purchase the recommended Spare Parts and MKE agrees to supply
these Spare Parts for a period of seven (7) years after discontinuance of a
relevant model of a Product. Quantum shall also have the right to purchase all
mutually agreed upon individual piece parts from MKE or their vendors during
this time period so that MKE is not required to stock every individual piece
part. MKE will assist Quantum in purchasing and obtaining the best prices from
their vendors.
15.4. Prices for Spare Parts After Termination of Product Manufacturing.
After termination of this Agreement, Prices for the Spare Parts shall be
mutually agreed upon, however, the parties agree to negotiate commercially
reasonable prices for said Spare Parts. At Quantum's option certain Spare Parts
of U.S. manufacture may be purchased directly from the manufacturers. Warranty
for MKE - supplied Spare Parts will be the same as for the Product under Section
13 ("Warranty"). Order lead times and payment terms for parts and subassemblies
shall be the same as for Spare Parts.
16. DOCUMENTATION.
16.1. Quantum's Brands.
a. Quantum grants to MKE the right to apply such of Quantum's Brands
to the Products to be manufactured and delivered to Quantum pursuant to this
Agreement as Quantum shall direct upon reasonable written notice. Quantum's
Brands shall not be used in combination with any
10.
other tradenames, trademarks, characters, figures or marks by MKE without the
prior written approval of Quantum. Quantum represents and warrants that it is
the sole and exclusive owner of Quantum's Brands and that the use thereof on the
Product will not infringe the rights of any third party.
b. Quantum's Brands shall be affixed to each unit of the Product, in
such manner as may be specified by Quantum trademark guidelines issued by
Quantum to MKE from time to time.
c. Quantum shall indemnify and hold harmless MKE from and against any
and all liabilities, costs, expenses, loss and damages, including reasonable
counsel fees and expenses for the cost of settlement, arising out of or relating
to any claim by any third party of any proprietary right or interest in
Quantum's Brands or any claim relating to any art work, labeling and other
printed matters supplied by or included at the direction of Quantum. Quantum
shall, at the request of MKE, assume the defense of any action or suit against
MKE relating hereto, by reputable counsel reasonably acceptable to MKE retained
at Quantum's expense, and shall pay any damages assessed against or otherwise
payable by MKE as a result of the disposition of any such action or suit. MKE
shall promptly notify Quantum of the commencement of any such action or suit, or
threats thereof, and Quantum shall be afforded the opportunity to determine the
manner in which such action or suit should be handled or otherwise disposed of.
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. Notwithstanding the foregoing, if MKE is a named party in any
action or suit, MKE may participate in any such action or suit at its own
expense and by its own counsel. MKE shall not undertake to settle, or agree to
any settlement herein, without first obtaining the written consent of Quantum.
17. COMPONENTS.
MKE and Quantum agree to work together and mutually agree on sourcing of
parts components to insure that consideration be given to sources outside MKE,
given price, quality, delivery and other procurement considerations are equal.
While Quantum and MKE will jointly develop the specifications for the key
components and parts, Quantum shall be responsible for establishing the actual
specifications for such components and parts. MKE shall be responsible for the
components and parts after such components and parts successfully pass MKE's
incoming test inspection subject to Section 13.1 ("MKE Warranty") and Section
13.2 ("Quantum Warranty") hereof. Notwithstanding the aforesaid, should the
application of the previous sentence work a hardship on either party, Quantum
and MKE shall, in good faith, negotiate a reasonable commercial solution.
It is contemplated that all components and parts for the Products or Unique
Customer Configured Products will be either provided by MKE or other worldwide
sources resulting in the lowest total cost.
Quantum shall provide reasonable assistance to MKE to resolve any material
problems of such components and parts if such problems may occur after the
commencement of mass-production of such components and parts.
18. TERM AND TERMINATION.
18.1. Term. This Agreement shall be effective as of the date first set
forth above and shall continue in effect for the same period of time as the
Master Agreement remains in effect. In the event the Master Agreement terminates
for any reason, this Agreement shall terminate concurrently. In the event
11.
the term of the Master Agreement is extended for any reason, this Agreement
shall automatically be extended for the same period of time.
18.2. [CONFIDENTIAL TREATMENT REQUESTED]
12.
[CONFIDENTIAL TREATMENT REQUESTED]
b. [CONFIDENTIAL TREATMENT REQUESTED].
18.3. Rights Upon Termination.
a. In the event of any termination of this Agreement following
completion of the wind down period under Section 18.2, Articles 1, 6, 9, 13, 15,
16, 19, 20 and 21, and Sections 18.2 and 18.3 shall survive.
b. In addition, in the event of any valid termination of this
Agreement by MKE under Section 18.2 ("Termination") due to a material breach by
Quantum, MKE shall be entitled to damages as awarded in arbitration pursuant to
Section 19 ("Arbitration").
c. In addition, in the event of any valid termination of this
Agreement by Quantum under Section 18.2 ("Termination") due to a material breach
by MKE, Quantum shall be entitled to damages as awarded in arbitration pursuant
to Section 19 ("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.
19. 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. 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.
13.
20. GOVERNMENTAL CONSENTS.
20.1. 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 re-export imposed
by the United States Department of Commerce or the Ministry of International
Trade and Industry of Japan.
21. MISCELLANEOUS.
21.1. 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.
21.2. 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.
21.3. 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.
21.4. 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.
21.5. 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
14.
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
21.6. Entire Agreement. Except for the Master 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 be known in future 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.
21.7. 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.
21.8. LIMITATION OF LIABILITY. IN NO EVENT AND UNDER NO CIRCUMSTANCES SHALL
ANY PARTY UNDER THIS AGREEMENT BE LIABLE FOR ANY
15.
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.
21.9. Binding. 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.
21.10. 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.
21.11. 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.
21.12. Trading Company. Unless otherwise agreed to in writing by MKE and
Quantum, MKE and Quantum agree that either Quantum will establish a "trading
company" (as hereafter defined) or establish a relationship with an existing
trading company acceptable to MKE, for the purpose of expediting the necessary
documentation for that shipment of Products and Spare Parts under this Agreement
and the importation of components and parts by Quantum for MKE and may be
responsible pursuant to the specific terms and times of payment as provided for
elsewhere in this Agreement for the collection and payment of all monies due to
the appropriate party under this Agreement during the term of this Agreement and
any other functions necessary to carry out the business between Quantum and MKE.
A "trading company" shall mean such organization existing, or to exist, which
is, or shall be, able to effect the functions described in the proceeding
sentence. At any time during the term of this Agreement, Quantum shall have the
right to establish its own trading company to act as such in replacement of any
prior existing relationship, or Quantum may change its relationship from a
non-Quantum affiliated trading company to any other non-Quantum affiliated
trading company, with the written consent of MKE, which shall not be
unreasonably withheld.
16.
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/ Xxxxxxxxx Xxxx
----------------------------------
Name: Xxxxxxxxx Xxxx
Title: Managing Director
KOTOBUKI ELECTRONICS
INDUSTRIES (S) PTE. LTD.
By: /s/ Hironijo Sakioka
----------------------------------
Name: Hironijo Sakioka
Title: Managing Director
AMENDED AND RESTATED PURCHASE AGREEMENT
17.
