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EXHIBIT 10.83
MASTER AGREEMENT
BETWEEN
MATSUSHITA KOTOBUKI ELECTRONICS INDUSTRIES, LTD.,
AND
MAXTOR CORPORATION
Confidential treatment requested. Confidential information
in this agreement have been omitted and filed separately with the
Securities and Exchange Commission.
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TABLE OF CONTENTS
MASTER AGREEMENT
Page
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1. Roles............................................................................ 1
1.1 Maxtor.................................................................... 1
1.2 MKE....................................................................... 2
1.3 Cooperative Roles ........................................................ 2
1.4 Regular Meetings 2
2. Definitions ..................................................................... 3
2.1 "Components" ............................................................. 3
2.2 "Confidential Information" ............................................... 3
2.3 "Development Costs" ...................................................... 3
2.4 "Exclusive" .............................................................. 3
2.5 "Manufacturing Costs" .................................................... 3
2.6 "MEI" .................................................................... 3
2.7 "Products" ............................................................... 3
2.8 "Maxtor" ................................................................. 4
2.9 "MKE" .................................................................... 4
2.10 "Technical Information" .................................................. 4
3. Marketing Rights ................................................................ 4
3.1 Maxtor Rights ............................................................ 4
3.2 Marketing Decisions ...................................................... 5
3.3 Product Components ....................................................... 5
3.4 MKE Cooperation .......................................................... 5
4. Manufacturing Rights ............................................................ 5
4.1 MKE Rights ............................................................... 5
4.2 Manufacturing Decisions .................................................. 6
4.3 Maxtor Manufacturing ..................................................... 7
4.4 Non-Competitive Products ................................................. 7
5. Development And Manufacturing Costs ............................................. 8
5.1 Development Costs ........................................................ 8
5.2 Manufacturing Costs ...................................................... 8
6. Excluded Products; Product Development .......................................... 8
6.1 Excluded Products ........................................................ 8
6.2 Development .............................................................. 8
6.3 Design Convergence ....................................................... 9
6.4 Development of New HDD Technology and Products ........................... 9
6.5 Product Changes .......................................................... 9
7. Components ...................................................................... 10
7.1 Component Integration .................................................... 10
7.2 Component Purchases ...................................................... 10
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TABLE OF CONTENTS
Page
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8. Technical Cooperation .......................................................... 10
9. Proprietary Rights ............................................................. 11
9.1 Existing Technology ..................................................... 11
(a) Ownership ........................................................ 11
(b) License .......................................................... 11
9.2 Developed Technology .................................................... 11
(a) Product Designs .................................................. 11
(i) Ownership ................................................. 11
(ii) License ................................................... 11
(b) Manufacturing Processes. ......................................... 12
(i) Ownership ................................................. 12
(ii) License. .................................................. 12
9.3 Patent Protection ....................................................... 12
9.4 Patent Rights ........................................................... 12
9.5 Trademarks .............................................................. 13
9.6 Patent Contributions. ................................................... 13
10. Confidentiality ................................................................ 13
10.1 Confidentiality ......................................................... 13
10.2 Restrictions ............................................................ 13
11. Patent Indemnification ......................................................... 14
12. Purchase agreement ............................................................. 15
12.1 Purpose ................................................................ 15
13. Term And Termination .......................................................... 16
13.1 Term .................................................................... 16
13.2 Interim Review Prior to Scheduled Termination ........................... 16
13.3 Termination. ............................................................ 16
13.4 Rights Upon Termination ................................................. 17
14. Arbitration .................................................................... 17
15. Governmental Consents .......................................................... 18
15.1 U.S. Requirements ....................................................... 18
15.2 Japan Requirements ...................................................... 18
15.3 Visas ................................................................... 18
15.4 Compliance with Laws .................................................... 18
16. Miscellaneous .................................................................. 18
16.1 Nonassignability ........................................................ 18
16.2 Failure to Enforce ...................................................... 19
16.3 Governing Law ........................................................... 19
16.4 Severability ............................................................ 19
16.5 Notices ................................................................. 19
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TABLE OF CONTENTS
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16.6 Entire Agreement ........................................................ 20
16.7 Force Majeure ........................................................... 20
16.8 Limitation of Liability ................................................. 20
16.9 MEI ..................................................................... 20
16.10 Binding ................................................................. 20
16.11 Agency. ................................................................. 20
16.12 Headings ................................................................ 20
16.13 Changes in Control ...................................................... 21
16.14 Bankruptcy Code ......................................................... 21
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MASTER AGREEMENT BETWEEN MATSUSHITA KOTOBUKI ELECTRONICS INDUSTRIES, LTD.,
AND MAXTOR CORPORATION
THIS MASTER AGREEMENT is made by and among MATSUSHITA KOTOBUKI
ELECTRONICS INDUSTRIES, LTD., a Japanese corporation, and its subsidiaries
(hereinafter collectively, "MKE"), listed in the attached schedule ("Schedule")
which Schedule will be modified by MKE from time to time and MAXTOR CORPORATION,
a Delaware corporation, and its subsidiaries (hereinafter collectively,
"Maxtor"), listed in the attached schedule ("Schedule") which Schedule will be
modified by Maxtor from time to time. This Agreement is entered into as of the
2nd day of April, 2001 (the "Effective Date").
RECITALS:
WHEREAS, Maxtor is a leader in designing, developing, manufacturing and
marketing hard disk drive products for worldwide business and consumer markets
and MKE is a leader in manufacturing hard disk drive products;
WHEREAS, Quantum Corporation ("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. Quantum and MKE entered into Amended and Restated
Master Agreement ("Previous Master Agreement") on April 30, 1997 setting forth
the terms of such manufacturing and marketing relationship;
WHEREAS, Maxtor and Quantum HDD have agreed to merge, and Maxtor will
take over certain of the assets and liabilities of Quantum HDD;
WHEREAS, Maxtor and MKE are desirous to establish a new relationship
with respect for and maintain the partnership which has existed between MKE and
Quantum over the past 16 years, and such mutual understanding were set forth in
the "memo of understanding" by the parties dated October 2, 2000; and
WHEREAS, MKE represents that the Previous Master Agreement is to be
terminated upon execution of this Agreement as confirmed between MKE and
Quantum.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants and promises in
this Agreement, the parties agree as follows:
1. ROLES.
1.1 Maxtor. Subject to the terms and conditions of this Agreement,
Maxtor 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, Maxtor shall have the Exclusive, worldwide
right to market, offer to sell and sell the Products. Maxtor shall be
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responsible for the purchase and ownership of such facilities and capital
equipment as Maxtor may determine to be necessary for Product manufacture at its
facilities.
1.2 MKE. Subject to the terms and conditions of this Agreement, MKE
shall have the non-exclusive, worldwide right and responsibility to manufacture
the Products designed by Maxtor and to be purchased by Maxtor 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 at its facilities.
1.3 Cooperative Roles. The parties will work together and maintain a
successful working relationship for discussing and implementing operational
details of the development, manufacture and supply of Products which were
established with Quantum. The parties intend to continue this successful
operational relationship. MKE and Maxtor 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 the future.
1.4 Regular Meetings. MKE and Maxtor shall hold the following regular
meetings, but not less than once each calendar quarter, at a location
alternating between Japan and California:
(i) Top Management Meeting
to discuss and confer regarding the following topics from a
high level point of view:
(a) Market trend and marketing strategies
(b) Technology trend and technology strategies
(c) Manufacturing strategies, and
(d) Other critical issues relevant to long term business
strategy
(ii) Technology Review Meeting
to discuss the following issues in depth from a technical
stand point:
(a) Technology roadmap
(b) Product roadmap, and
(c) Update on specific critical technology development
(iii) Executive Meeting
to discuss the following long term (in the range of 2-3
years) business issues concretely and clarify the alignment of joint business:
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(a) Sales/Marketing strategies
(b) Product roadmap
(c) Manufacturing strategies (Products to be built at MKE
and Maxtor, production volume allocation, manufacturing capacity planning, etc.)
(d) Purchasing strategies, and
(e) Various cost reduction ideas
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
or for Maxtor which are included in a Product, including heads, disks and
motors. The parties agree that any parts and components for hard disk drives
developed by MKE and/or MEI or any other third party which do not (i) utilize
Technical Information and/or Confidential Information of Maxtor as further
described in Section 6.1 and (ii) parts and components for AV-HDDs developed or
to be developed by Maxtor, MEI and/or MKE under a separate agreement to be
entered into among the parties, are excluded from the scope of Components.
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 mass-production
by MKE in Japan or Singapore.
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.
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 000-0000 Xxxxx.
2.7 "Products" shall mean [ * ].
The parties may add any other hard disk drive products to the scope of
Products by mutual written consent.
2.8 "Maxtor" shall also include any subsidiary of Maxtor listed in the
Schedule or subsequently added, as provided hereinafter, or deleted by Maxtor.
Maxtor may add any
* Confidential material redacted and filed separately with the Commission.
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subsidiary in which it has greater than fifty percent (50%) ownership or
control, provided however, if a third person or entity having an ownership
interest in any such subsidiary is a competitor of Maxtor in the sale of hard
disk drives to the public, then the consent of MKE shall be required prior to
such subsidiary being added by Maxtor, which consent shall not be unreasonably
withheld.
2.9 "MKE" shall also include any subsidiary of MKE listed in the
Schedule or subsequently added, as provided hereinafter, or deleted by MKE. MKE
may add any subsidiary in which it has greater than fifty percent (50%)
ownership or control, provided however, if a third person or entity having an
ownership interest in any such subsidiary is a competitor of Maxtor in the sale
of hard disk drives to the public, then the consent of Maxtor shall be required
prior to such subsidiary being added by MKE, which consent shall not be
unreasonably withheld.
2.10 "Technical Information" shall mean all non-public information and
know-how which is proprietary to Maxtor or MKE, as the case may be, 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. 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, and one party's rights to use the other party's Technical
Information shall be set forth in Section 9.1 and 9.2.
3. MARKETING RIGHTS.
3.1 Maxtor Rights. Subject to the terms and conditions of this
Agreement, Maxtor shall have the Exclusive worldwide rights to market,
distribute and sell Products during the term of this Agreement. Maxtor agrees to
use its best efforts to market and sell Products subject to the terms and
conditions of this Agreement. [ * ].
3.2 Marketing Decisions. Except as expressly set forth in Section 3.1
("Maxtor Rights") above, Maxtor will have complete responsibility and authority
for all decisions regarding the marketing and sale of the Products. Maxtor 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. Maxtor shall further be responsible for planning and reviewing
marketing opportunities. Maxtor is responsible for all costs incurred in the
sale and marketing of the Products.
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 Components 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
* Confidential material redacted and filed separately with the Commission.
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manufacture and market parts and components for MKE Customers or third parties
which do not utilize Maxtor Technical Information.
3.4 MKE Cooperation. With the prior approval of MKE, MKE shall permit
the customers of Maxtor to tour and evaluate MKE's manufacturing facilities for
the Products.
4. MANUFACTURING RIGHTS.
4.1 MKE Rights.
(a) Subject to the terms and conditions of this Agreement, MKE
has worldwide rights to manufacture any and all Products that are determined by
the parties pursuant to the provisions of Section 4.2 below during the term of
this Agreement. MKE's rights shall be non-exclusive, provided, however, that
Maxtor agrees to seriously consider MKE's manufacturing capacity and Product
allocations as set forth in Section 4.2 below.
(b) [ * ].
(c) MKE shall not have the right to grant rights to manufacture
or have manufactured the Products without Maxtor's written consent.
4.2 Manufacturing Decisions.
(a) MKE and Maxtor will agree on the manufacturing capacity
plans and specific Products for MKE manufacturing at the Executive Meeting.
According to the plans (capacity and Product models) agreed by the parties at
the Executive Meeting, MKE will secure manufacturing capability (capital
equipment and workforce). [ * ].
(b) [ * ].
(c) [ * ].
(d) [ * ].
(e) [ * ]. Except as expressly set forth in Section 3.1 ("Maxtor
Rights") above, all Products manufactured by MKE will be sold to and marketed by
Maxtor.
4.3 Maxtor Manufacturing. The parties understand that the assurance of
continued production of quality and low-cost Products is critical to Maxtor's
business. [ * ].
4.4 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.
* Confidential material redacted and filed separately with the Commission.
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5. DEVELOPMENT AND MANUFACTURING COSTS.
5.1 Development Costs.
[ * ].
5.2 Manufacturing Costs.
[ * ].
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 Maxtor as is confidential
pursuant to the provisions of Section 10 ("Confidentiality") hereof.
6.2 Development. For each Product proposed by Maxtor and determined to
be economically attractive for production under this Agreement, [ * ]. MKE and
Maxtor 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 Maxtor for MKE to develop the processes and tooling to
manufacture 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 Maxtor.
6.3 Design Convergence. [ * ].
6.4 Development of New HDD Technology and Products. [ * ].
6.5 Product Changes. Maxtor 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 Maxtor for approval, such approval not to be unreasonably withheld. MKE
understands that after the Products are introduced into the marketplace by
Maxtor that subsequent changes may affect the design of the system into which an
OEM incorporated such Product. MKE agrees to notify Maxtor 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 Maxtor 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 Maxtor to MKE.
* Confidential material redacted and filed separately with the Commission.
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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 Maxtor thereof and shall obtain Maxtor'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, to the extent it is necessary for
such party to perform its obligations hereunder, 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. Maxtor agrees to make available to MKE design information
(including Technical Information) relating to a Product, as it is developed by
Maxtor, and to compile the Product documentation to facilitate transfer. Maxtor
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. Maxtor recognizes
that it may be expensive and impractical for MKE to assemble complete
information relating to MKE's manufacturing processes for the Products. Maxtor
shall have full access to all information relating to MKE's manufacturing
processes for the Products upon reasonable request, provided that Maxtor may not
use, without MKE's prior written consent, the Technical Information of MKE
included in such information for any purpose including, but not limited to, for
use in its own manufacturing (including subcontracting) of the Products, except
as expressly provided in this Agreement. In case Maxtor desires to use Technical
Information of MKE and/or purchase MKE manufacturing equipment for Maxtor's own
manufacturing, both parties will negotiate the terms and conditions in good
faith. 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 Existing Technology.
(a) Ownership. The parties acknowledge and agree that all
Technical Information of Maxtor existing as of the date hereof and intellectual
property rights derived therefrom ("Maxtor Existing Technology") shall belong to
Maxtor, and all Technical
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Information of MKE existing as of the date hereof and intellectual property
rights derived therefrom ("MKE Existing Technology") shall belong to MKE.
(b) License. Subject to the terms and conditions of this
Agreement and during the term of this Agreement, Maxtor hereby grants to MKE a
[ * ] license to use any Maxtor Existing Technology for the design, testing or
manufacture of any Product. Subject to the terms and conditions of this
Agreement and during the term of this Agreement, MKE hereby grants to Maxtor a
[ * ] license to use any MKE Existing Technology [ * ] for the design, testing
or manufacture of any [ * ].
9.2 Developed Technology
(a) Product Designs.
(i) Ownership. MKE agrees that all rights to the
Products and Product designs, including modifications and enhancements, made
solely by Maxtor during the term of this Agreement and intellectual property
rights derived therefrom ("Maxtor Product Design") shall remain proprietary to
Maxtor or the third party from which it has been licensed.
The parties agree that all rights to the Products and Product
designs, including modifications and enhancements, made jointly by Maxtor and
MKE during the term of this Agreement and intellectual property rights derived
therefrom shall be jointly owned by the parties ("Jointly Owned Product
Design").
Maxtor agrees that all rights to the Products and Product
designs, including modifications and enhancements, made solely by MKE during the
term of this Agreement and intellectual property rights derived therefrom ("MKE
Product Design") shall remain proprietary to MKE or the third party from which
it has been licensed.
(ii) License. During the term of this Agreement, Maxtor
hereby grants to MKE a [ * ] license to use any Maxtor Product Design for the
design, testing or manufacture of any Products. During the term of this
Agreement, MKE hereby grants to Maxtor a [ * ] license to use any MKE Product
Design for design, testing or manufacture of any [ * ]. During and after the
term of this Agreement, each party may freely practice the [ * ] without a
notice, consent and account to the other party.
(b) Manufacturing Processes.
(i) Ownership. Maxtor agrees that all rights to
manufacturing processes and techniques for the production of the Products,
including any modifications, alterations or revisions thereof made solely by MKE
during the term of this Agreement and intellectual property rights derived
therefrom ("MKE Process Technology") shall remain proprietary to MKE or the
third party from which it has been licensed.
* Confidential material redacted and filed separately with the Commission.
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The parties agree that all rights to manufacturing process and
techniques for the production of the Products, including any modifications and
enhancements thereto, made jointly by MKE and Maxtor during the term of this
Agreement and intellectual property rights derived therefrom, shall be jointly
owned by the parties ("Jointly Owned Process Technology"), provided, however,
that (i) any test software programs supplied by Maxtor to MKE without charge
shall continue to be solely owned by Maxtor and (ii) any Technical Information,
Confidential Information or intellectual property rights derived therefrom
solely owned by MKE or Maxtor shall continue to be solely owned by MKE or
Maxtor, as the case may be, and are expressly excluded from the definition of
Jointly Owned Process Technology.
MKE agrees that all rights to manufacturing process and
techniques for the production of the Products, including any modifications and
enhancements, made solely by Maxtor during the term of this Agreement and
intellectual property rights derived therefrom ("Maxtor Process Technology")
shall remain proprietary to Maxtor or the third party from which it has been
licensed.
(ii) License. During the term of this Agreement, MKE, upon
request from Maxtor, grants to Maxtor a [ * ] license to use any MKE Process
Technology that both parties agree is required for the design, testing or
manufacture of any [ * ]. During the term of this Agreement, Maxtor, upon
request from MKE, grants to MKE a [ * ] license to use Maxtor Process
Technology, except such test software programs supplied by Maxtor to MKE without
charge which shall continue to be solely owned by Maxtor, for the design,
testing or manufacture of the Products. [ * ]. During and after the term of this
Agreement, each party may freely practice the [ * ] without a notice, consent
and account to the other party.
9.3 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 patents will be borne by Maxtor and MKE respectively. Each party shall
provide assistance to the other, as requested, without charge.
9.4 Patent Rights. If MKE desires to utilize the technology covered by a
Product patent owned by Maxtor for the development of a product outside the
scope of this Agreement, Maxtor and MKE agree to in good faith discuss the grant
of rights to MKE.
9.5 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.
9.6 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
* Confidential material redacted and filed separately with the Commission.
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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 [ * ] 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 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.
* Confidential material redacted and filed separately with the Commission.
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11. PATENT INDEMNIFICATION.
Maxtor will defend any action brought against MKE based on a claim that
a Product manufactured by MKE and any Components, software/firmware and Product
interface designed and/or supplied by Maxtor infringes any trade secret,
copyright, patent or any other intellectual property rights. Maxtor will
indemnify and hold MKE harmless and Maxtor 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 Components, software/firmware and Product interface
designed and/or supplied by Maxtor, infringes any patent, trade secret,
copyright, or any other intellectual property rights, Maxtor shall defend such
action or suit at its own expense, by reputable counsel selected by Maxtor 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
Maxtor information and assistance reasonably required to defend and/or settle
such action or suit or threats thereof. Settlement shall be at the option of
Maxtor; 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 Maxtor 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
Maxtor hereunder or any part thereof, by reason of such infringement, Maxtor
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 affect the Product's
functioning, or (C) direct MKE to dispose of MKE's inventory of such Product at
Maxtor's expense. In case of (B) above, Maxtor shall be liable to MKE for, and
MKE shall be entitled to recover from Maxtor, 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
Maxtor's discretion, MKE shall not be liable for the result thereof and Maxtor
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.
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Notwithstanding anything in this Section 11 to the contrary, Maxtor
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 Maxtor requires the manufacturing process
or the manufacturing process which is the subject of such claim is originated
with Maxtor and has been performed by MKE in compliance with Maxtor engineering
drawings.
MKE shall defend such action or suit at its expense, by reputable
counsel selected by MKE and reasonably acceptable to Maxtor and shall pay any
and all fees, costs or damages that may be awarded in such action or in
settlement thereof, provided Maxtor 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
Maxtor 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
Maxtor, to either (A) at its expense, procure for Maxtor 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
Maxtor 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 Maxtor, MKE shall pay to
Maxtor the original purchase price for such Product which does not contain any
part originated with Maxtor's request and involving possible infringement upon
the patent, trade secret or copyright in question.
It is agreed by the parties that MKE shall not be liable for, and Maxtor
shall indemnify MKE from, any and all claims of patent, trade secret, copyright
or any other proprietary right infringement arising from or in relation to the
Products manufactured by Maxtor or for Maxtor by a party other than MKE (subject
to the Section 4.1 (b) and 4.3).
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 business relationship between MKE and
Maxtor relating to the manufacture, purchase and sale of the Products are set
forth in a separate 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, [ * ], unless earlier terminated
pursuant to this Section 12. Upon its scheduled expiration this Agreement shall
be renewed automatically for one additional term of [ * ] years; provided,
however, that either party may elect not to renew this
* Confidential material redacted and filed separately with the Commission.
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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 12.1 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, [ * ], 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 [ * ] 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 [ * ] month review period,
terminate this Agreement [ * ].
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 15.13, 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." [ * ].
(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, 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
* Confidential material redacted and filed separately with the Commission.
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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
15.13 ("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 Period.
(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
Maxtor, 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 Maxtor under Section 13.3 due to a material breach by MKE, Maxtor
shall be entitled to such rights as set forth in Section 4.3 ("Maxtor
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 accordance with the International
Commercial Arbitration Rules of the American Arbitration Association. The place
of arbitration shall be Geneva, Switzerland. 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-
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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 Maxtor is subject to compliance with United States export laws. Maxtor
agrees to use its best efforts to promptly obtain necessary consents for the
export of technology under this Agreement.
15.2 Japan Requirements. Maxtor recognizes that the transfer of
technology from MKE is subject to compliance with Japanese export laws. MKE
agrees to use its best efforts to promptly obtain necessary consents for the
export of technology under this Agreement.
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 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
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 Economy, 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.
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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:
Maxtor Corporation
000 XxXxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Chief Executive Officer
Copy to: General Counsel
facsimile: (000) 000-0000
Matsushita Kotobuki Electronics
Industries, Ltd.
0-0 Xxxxxxx-Xxxxx
Xxxxxxxxx-Xxxx, Xxxxxx 000 - 0000, Xxxxx
Attention: President
facsimile: 011-81-(878) 511047
16.6 Entire Agreement. Except for the Purchase Agreement, 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.
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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. Maxtor 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 Maxtor's Technical Information to MEI and its subsidiaries other
than MKE.
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 Maxtor 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 Maxtor or MKE, i.e., a person or entity acquires more than fifty
percent (50%) of the voting control of either Maxtor or MKE, the party likely to
undergo such change of control will notify the other party and the parties will
discuss the likely effect. [ * ].
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 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
* Confidential material redacted and filed separately with the Commission.
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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 related 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.
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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.
MAXTOR CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xx. Xxxxxxx X. Xxxxxx
Title: President and CEO
MATSUSHITA KOTOBUKI
ELECTRONICS INDUSTRIES, LTD.
By: /s/ Tomiyasu Chiba
-----------------------------------
Name: Xx. Xxxxxxxx Chiba
Title: President
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SCHEDULE 2.8
LIST OF SUBSIDIARIES OF MAXTOR
Maxtor Asia Pacific Limited Hong Kong
Maxtor Disc Drives Pty Limited Australia
Maxtor Europe GmbH Germany
Maxtor Europe Limited United Kingdom
Maxtor International Sarl (2) Switzerland
Maxtor Europe SARL France
Maxtor Japan Limited Japan
Maxtor Korea Limited Republic of Korea
Maxtor Ireland Limited Ireland
Maxtor Peripherals (S) Pte. Limited Singapore
Maxtor Sales Private Limited Singapore
Maxtor Receivables Corporation California
Maxtor Thailand Limited Thailand
Maxtor Malaysia Sdn Bhd Malaysia
Maxtor Sub Bermuda
Maxtor Sub Gibraltar
Maxtor Sub Luxemburg
Maxtor Realty Corporation California
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SCHEDULE 2.9
LIST OF SUBSIDIARIES OF MKE
1. Matsushita Kotobuki Electronics Industries Singapore Pte. Ltd. (Singapore)
2. PT. Matsushita Kotobuki Electronics Peripherals Indonesia (Indonesia)
3. Matsushita Kotobuki Electronics Peripherals of America Inc. (USA)
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