CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
EXHIBIT 2.2
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT is effective this 15th day of June 2001 (the "EFFECTIVE
DATE"), between OVERLAND DATA, INC., a California corporation, having a place
of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("SELLER") and SEAGATE
REMOVABLE STORAGE SOLUTIONS LLC, a Delaware limited liability company, having
a place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ("BUYER").
In consideration of the mutual promises and covenants contained herein and
for other good and valuable consideration, the receipt of which is
acknowledged by both parties, the parties agree as follows:
ARTICLE I.
DEFINITIONS
For purposes of this Agreement, the following terms and all other
terms defined in this Agreement shall have the meanings so defined:
1.1 ASIC. The term "ASIC" means an application specific integrated
circuit.
1.2 CORE TECHNOLOGY. The term "Core Technology" means the patent rights as
described and claimed in United States Patent Nos. 5712863, 5815514 and
5931968.
1.3 DOCUMENTATION. The term "Documentation" means all present and future
manuals, notebooks, quick reference guides, comments and publications of
every nature, and all corrections, modifications and revisions thereto,
relating to Products.
1.4 IMPROVEMENTS AND MODIFICATIONS. The term "Improvements and Modifications"
means any and all changes in the design or Specifications of any of the
Products or the Core Technology, including the addition of new features
or capacities.
1.5 CORE TECHNOLOGY IMPROVEMENTS. The term "Core Technology Improvements"
means the improvements and modifications to the Core Technology where
implementation of such improvements and modifications would infringe upon
the patent claims of the Core Technology.
1.6 INTELLECTUAL PROPERTY. The term "Intellectual Property" means copyright
rights (including, without limitation the right to use, reproduce,
modify, distribute, publicly display and publicly perform the copyrighted
work), trademark rights (including, without limitation, trade names,
trade marks, service marks and trade dress) patent rights (including,
without limitation, the exclusive right to make, use or sell), trade
secrets, moral rights, rights of publicity, goodwill and all other
intellectual property rights as may exist now and/or hereafter come into
existence and all renewals and extensions thereof, regardless of
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
1
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
whether such rights arise under the laws of the United States or any
other country or jurisdiction.
1.7 INVENTION. The term "Invention" means any idea, design, concept,
technique, invention, discovery, algorithm or improvement relating to the
Products, whether or not patentable.
1.8 NEXT GENERATION TRAVAN CARTRIDGE. The term "Next Generation Travan
Cartridge" means the next and future generations of Travan Cartridges,
including (1) TR6 Cartridge, and (2) ▇▇▇ ▇▇▇▇▇▇▇▇▇, and (3) off-path
Travan technology based Cartridges, all of which are presently expected
to have a capacity of greater than 20 GB (compressed).
1.9 NEXT GENERATION TRAVAN DRIVE. The term "Next Generation Travan Drive"
means a non-read-while-write drive which reads and writes data onto a
Next Generation Travan Cartridge.
1.10 PRODUCTS. The term "Products" means any present or future Travan VR2
ASIC.
1.11 SPECIFICATIONS. The term "Specifications" means the specification for the
Product as described in EXHIBIT B attached hereto.
1.12 TRAVAN VR2 ASIC. The term "Travan VR2 ASIC" means an ASIC embodying the
VR2 technology, which is a modification of existing ASIC designs of
Seller specifically adapted for incorporation into Next Generation Travan
Drives which utilize non-read-while-write technology, such ASIC
specification for which is attached as EXHIBIT B.
ARTICLE II.
SALE AND PURCHASE OF PRODUCTS
2.1 SALE AND PURCHASE. Seller agrees to sell and Buyer agrees to buy Products
and such other items as may be mutually agreed upon subject to the terms
of this Agreement. Buyer will purchase Products pursuant to this
Agreement by issuing purchase orders from time to time.
2.2 RESTRICTIONS. Throughout the term of this Agreement and for five years
thereafter, Buyer will not (i) market, offer to sell, or sell any
Products purchased from Seller, except as part of Next Generation Travan
Drives, to third parties.
2.3 TERM OF AGREEMENT. This Agreement will commence on the Effective Date
and, except as otherwise provided in this Agreement, will terminate one
year from the Effective Date. The term of this Agreement will
automatically renew for an additional one-year term on each anniversary
of the Effective Date unless either party provides the other party with
written notice of such party's intention not to renew at least 90 days
prior to such anniversary.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
2
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
2.4 PURCHASE ORDERS. Buyer will order Products by submitting purchase orders
to Seller in writing by priority or overnight U.S. mail, facsimile,
overnight private courier, or other electronic means mutually agreed upon
between the parties (the "PURCHASE ORDERS"). Each Purchase Order will
contain the item ordered, description, quantity, date for delivery or
performance, destination, and total price of the Purchase Order. Seller
will have 10 business days after receipt of a Purchase Order to reject
the Purchase Order. Acceptance by Seller is limited to the provisions of
this Agreement and Seller's Acknowledgement. Seller will not ship any
Products to Buyer without prior receipt of a Purchase Order.
2.5 FORECASTS. Buyer will provide Seller monthly rolling forecasts of Buyer's
anticipated requirements for the Products for the six-month period
following the date of the forecast, including the first two months of
such forecast as a firm purchase order. Buyer will not be bound by the
forecast for any period beyond the first two months and will have no
liability to Seller for any differences between a forecast requirement
for any period beyond the first two months of such forecast and the
actual Purchase Orders for such months submitted by Buyer.
2.6 PRECEDENCE. Each Purchase Order issued under this Agreement will be made
part of, and be incorporated into, this Agreement. Unless otherwise
specifically agreed to in writing between Buyer and Seller, the terms and
conditions of this Agreement will take precedence and govern any accepted
Purchase Order, or any additional terms stated on any such Purchase
Order, notwithstanding any contrary terms and conditions in the printed
portion of Buyer's Purchase Order form or Seller's Order Acknowledgment.
2.7 CANCELLATION OF PURCHASE ORDERS. Buyer may cancel the undelivered portion
of any purchase order upon written notice of cancellation to Seller. Upon
receipt of notice of cancellation, Seller shall immediately stop work on
the undelivered portion of the affected Purchase Order and make no
further commitments for materials or services to complete such affected
Purchase Order.
a. In the event of such notice of cancellation (unless such
cancellation is due to the default of Seller), Buyer will pay Seller for
direct, reasonable and actual out-of-pocket expenses, excluding overhead
and similar items, and any other expenses for which Seller is obligated
to reimburse its foundry, which either Seller or its foundry incurred
directly as a result of preparations to deliver such canceled Products.
b. In connection with such cancellation of Purchase Orders, Buyer may
require Seller to transfer title and deliver to Buyer, in the manner and
on the terms hereinafter set forth for non-cancelled orders any completed
Products from such cancelled order.
c. In no event shall Buyer's liability to Seller as a result of
cancellation of a Purchase Order exceed the total price of the cancelled
portion of such Purchase Order.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
3
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
2.8 CAPACITY AND ALLOCATION. Seller will use commercially reasonable efforts
to satisfy Buyer's Purchase Orders and forecasted requirements. In the
event that Seller's capacity to produce the Products is constrained for
any reason, Seller will allocate such constrained supply among the
accepted purchase orders of its customers at its sole discretion, and
Buyer shall be released from Purchase Order obligations for amounts in
excess of Product allocated to Buyer.
2.9 SHIPPING. Buyer reserves the right to designate means of shipping.
Shipping methods will be as stated on Buyer's Purchase Order. No changes
will be made unless authorized in writing by Buyer. F.O.B. point will be
Seller's foundry facility. All shipments will be adequately packaged to
prevent any damage during normal transportation.
2.10 TITLE AND RISK OF LOSS. Title to, and risk of loss of, the Products will
pass to Buyer upon transfer of the Products to the F.O.B. point of
shipment. Buyer will make any claims against Seller for shortages in
quantities shipped within 30 days from the date of shipment.
2.11 FORCE MAJEURE. Neither party will be considered in default or liable for
any failure to perform its obligations under this Agreement if such
failure arises out of an act of nature, war, strikes, lockouts, trade
disputes, fires, quarantine restrictions, Governmental action or any
other causes beyond the reasonable control of that party. The affected
party will immediately notify the other in writing if a force majeure
event delays performance and will state the revised date for performance.
Should Seller's inability to perform because of a force majeure event
continue for a period in excess of 30 days, Buyer will not be obligated
to purchase, at a later date, that portion of the Products that Seller is
unable to deliver because of a force majeure event.
ARTICLE III.
PRICES AND TERMS OF PAYMENT
3.1 PRICES. All Buyer purchases will be based on the prices in attached
EXHIBIT A. Upon any automatic renewal pursuant to the provisions of
SECTION 2.3, the parties will execute and date another revision of
EXHIBIT A setting forth Product pricing for such renewed term.
3.2 PAYMENT TERMS. Payment terms are *** after receipt of Seller's invoice.
Bills of lading and shipping notices will be forwarded with Seller's
invoice as needed. Seller's invoice will specify Buyer's Purchase Order
number. All sales of Product will be F.O.B. foundry facility.
3.3 TAXES. Unless otherwise stated in writing by Seller, all prices quoted
will be exclusive of all national, federal, state, local or any other
governmental use, sales, excise, occupational, property (ad valorem) and
similar taxes or duties now in force or enacted in the future. If any
such tax, fee or charge of any nature whatsoever is imposed on the
transaction, such tax
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
4
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
will be paid by Buyer in addition to the prices quoted or invoiced. If
Seller is required to pay any such tax, fee or charge at the time of sale
or thereafter, Buyer will promptly reimburse Seller after Seller provides
Buyer with evidence of the amounts paid.
3.4 CREDITS. Amounts owed to Buyer due to rejections of Products, or
discrepancies on paid invoices will be, at Seller's option, fully
credited against future invoices payable by Buyer, or paid by Seller
within 30 calendar days from Seller's receipt of a debit memo or other
written request for payment from Buyer.
3.5 NO SET-OFFS. Buyer will not set off any amount owing at any time from
Seller or any of Seller's affiliated companies to Buyer or its
subsidiaries or affiliates against any amount payable at any time by
Buyer in connection with this Agreement and/or any Purchase Order issued
pursuant to this Agreement.
3.6 METHOD OF PAYMENT. All payments under this Agreement for the Products
purchased by Buyer will be made in United States dollars by (i) check, or
(ii) wire transfer to the account specified in Seller's Acknowledgement.
A finance charge of 1.5% per month will be assessed on any amounts which
are past due.
ARTICLE IV.
WARRANTIES
4.1 WARRANTY OBLIGATION. Seller warrants that for a period of one year (the
"WARRANTY PERIOD") from the date of shipment of the Products that such
Products will (a) be in compliance with the material terms of the
Specification attached hereto as EXHIBIT B, and (b) be of good
workmanship and free from substantial defects. Seller further warrants
that Seller has title to the Products. Seller does not warrant that all
defects will be corrected. The foregoing warranty will be subject to
Buyer or the end-user installing and using the Products in accordance
with the Specifications. Further, the foregoing warranty will not extend
to any Products which have been subject to mishandling, misuse, accident,
improper installation, application or use, nor does such warranty extend
to any Products that have been modified, repaired or altered by persons
other than Seller. Seller's sole obligation under this warranty is
limited to either (i) correction or modification of any substantial
defect(s) to the extent that such defect(s) can be documented, isolated,
reproduced and corrected, or (ii) product replacement.
4.2 FUNCTIONAL TEST VECTORS. Seller shall provide Buyer with functional test
vectors for the Products. It is the intent of the parties that the
functional test vectors will be provided as tools to assist Buyer in
verifying that the Products meet the Specifications.
4.3 REMEDY. If Seller receives notice, verbal followed by written, from Buyer
within the Warranty Period of failure of Products to satisfy the above
warranties, then, one of the
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
5
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
following remedies will be selected upon mutual agreement of the parties:
(i) Seller will replace the Products upon receipt from Buyer of the
Products which prove to be defective, (ii) Seller will correct at no
charge to Buyer any defective or non-conforming Products, (iii) Buyer
will return such defective or non-conforming Products to Seller and
recover from Seller the amount paid to Seller by Buyer thereof, or
(iv) Buyer will correct the defective or non-conforming Product itself
and charge Seller with the cost of such correction upon prior approval
of Seller. If, for Products alleged to be defective or non-conforming and
which are returned to Seller by Buyer, Seller determines that the parts
returned by Buyer are not defective, Seller will return such
non-defective parts to Buyer at Buyer's expense and Buyer will refund all
shipping charges previously paid by Seller. THE ABOVE REMEDIES ARE THE
SOLE AND EXCLUSIVE REMEDIES OF BUYER FOR A BREACH OF THE WARRANTY BY
SELLER FOR THE PRODUCTS.
4.4 EXCLUSIONS. The foregoing warranty will not apply to adjustments,
modifications, replacements, or repair caused by: (i) accident,
transportation, mishandling, neglect, misuse or alterations by persons
other than Seller; (or (II) the use or operation of the Products in
violation of the Specification.
4.5 DISCLAIMER. SELLER DOES NOT WARRANT THAT THE PRODUCTS WILL MEET BUYER'S
REQUIREMENTS OR THAT THE PRODUCT WILL OPERATE IN THE COMBINATIONS WHICH
BUYER MAY SELECT FOR USE. THE PRODUCTS ARE PROVIDED WITHOUT ANY EXPRESS
OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE . FURTHER, SELLER DOES NOT WARRANT, GUARANTEE, OR MAKE ANY
REPRESENTATIONS REGARDING USE, OR THE RESULTS OF USE, OF THE PRODUCTS.
THE ENTIRE RISK AS TO THE RESULTS AND PERFORMANCE OF THE PRODUCTS IS
ASSUMED BY BUYER.
ARTICLE V
LIMITATION OF LIABILITY
5.1 LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, SELLER WILL NOT BE RESPONSIBLE OR LIABLE UNDER ANY PROVISION
OF THIS AGREEMENT OR UNDER ANY CONTRACT, NEGLIGENCE, PRODUCT LIABILITY,
STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR LOSS OR
INACCURACY OF DATA, COST OF PROCUREMENT OF SUBSTITUTE GOODS, SERVICES OR
TECHNOLOGY, OR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES
INCLUDING, WITHOUT LIMITATION, LOSS OF REVENUES AND LOSS OF PROFITS
REGARDLESS OF WHETHER SELLER HAS BEEN ADVISED OF THE EXPECTATION OR
EXISTENCE OF SUCH DAMAGES. ANY LIABILITY OF SELLER UNDER ANY THEORY
WHATSOEVER WILL BE LIMITED EXCLUSIVELY TO PRODUCT REPLACEMENT OR, IF
UNENFORCEABLE, TO PAYMENT OF AN
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
6
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
AMOUNT NOT GREATER THAN AMOUNTS ACTUALLY RECEIVED BY SELLER PURSUANT TO
THIS AGREEMENT OR ***, WHICHEVER IS GREATER.
ARTICLE VI
CONFIDENTIAL DATA AND DISCLOSURES
6.1 CONFIDENTIAL INFORMATION. Each party agrees that any information
identified, and marked as confidential ("CONFIDENTIAL INFORMATION"),
including this Agreement and any schedules and exhibits thereto and the
VR2 Technical Information, which is made available to the other party in
accordance with this Agreement shall be kept confidential. Each party
will use the other party's Confidential Information only for the purposes
contemplated and permitted by this Agreement. Neither party will disclose
the other party's Confidential Information to any third party except as
may be required (i) by court order (provided that the party subject to
such court order gives prompt written notice thereof to the party whose
Confidential Information will be disclosed and cooperates in any motion
or action to prevent or limit the required disclosure), (ii) pursuant to
any discovery obligation in litigation provided that a mutually agreeable
protective order has been entered by the court, and (iii) pursuant to any
applicable Securities and Exchange Commission ("SEC") filing rules,
regulations and/or requirements ("SEC DISCLOSURE"), provided, however,
that if a party desires to so disclose the Confidential Information of
the other party, the filing party (a) will provide 30 days written notice
to the other party of its intent to file such other party's Confidential
Information so as to enable the other party to indicate which portions of
its Confidential Information to excerpt (the "EXCERPTED PORTIONS") and
the general reasons therefor, and (b) will make application to the SEC
for confidential treatment of the Excerpted Portions unless the filing
party provides a written opinion of counsel addressed to the other party
that disclosure of certain of the Excerpted Portions is mandatory under
applicable SEC rules and regulations and that filing of such a request
for confidential treatment would be improper. Each Party further agrees
to protect the other party's Confidential Information from unauthorized
use or disclosure in the same manner as it protects its own similar
Confidential Information (but in no event with less than reasonable
care), and to limit access to the other party's Confidential Information
to those of its employees and agents who need such access for purposes
contemplated and permitted by this Agreement. This obligation of
confidentiality shall last for four (4) years from the date the
Confidential Information is disclosed to the recipient, regardless of the
termination date of this Agreement.
6.2 EXCLUSIONS. The obligations in this Article VI will not apply to any
information which is (i) publicly available, except as disclosed in
violation of this Agreement; or (ii) lawfully received by any party from
a third party who is or who was not bound in a confidential relationship
to the other party; or (iii) already properly and lawfully in possession
of any party prior to the date of this Agreement or the date of its
disclosure, or information which such party demonstrates with appropriate
documentation was known prior hereto; or (iv)
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
7
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
required by law or governmental regulation or necessary for the purpose
of enforcement of this Agreement; or (v) independently developed by one
party without use of any Confidential Information of the other party by
employees who have had no access to such Confidential Information; or
(vi) not marked as "Confidential" or other similar legends indicating the
confidential nature of the information.
6.3 THIRD PARTY MANUFACTURERS. Notwithstanding the above, Buyer may share
such Confidential Information with a third party, but only to the extent
necessary for that third party to integrate Product into Buyer's product.
Prior to such disclosure Buyer will insure that the third party signs a
confidentiality agreement incorporating restrictions on disclosure of
Confidential Information substantially similar to restrictions in this
Section 6.3.
ARTICLE VII
INTELLECTUAL PROPERTY RIGHTS
7.1 INTELLECTUAL PROPERTY RIGHTS TO THE PRODUCTS AND CORE TECHNOLOGY. All
right, title and interest in or to the Intellectual Property of the
Products, including the Core Technology and including any and all
Inventions, Improvements and Modifications to the Products and Core
Technology developed by or for Seller, shall be solely owned by Seller.
7.2 IMPROVEMENTS AND MODIFICATIONS TO THE CORE TECHNOLOGY DEVELOPED BY BUYER.
If Buyer desires to develop or develops any Core Technology Improvements,
the parties must mutually agree upon the ownership or licensing to Seller
of such Core Technology Improvements prior to the implementation of such
Core Technology Improvements in the Product by either party.
7.3 IMPROVEMENTS AND MODIFICATIONS TO THE PRODUCT (EXCLUDING THE CORE
TECHNOLOGY) DEVELOPED BY BUYER. All right, title and interest in or to
the Intellectual Property of the Product, excluding the Core Technology
and including any and all Inventions, Improvements and Modifications to
the Products (excluding Core Technology) developed by or for Buyer, shall
be solely owned by Buyer.
ARTICLE VIII
LICENSE GRANT
8.1 LICENSE GRANT. Subject to the terms and conditions of this Agreement,
Seller hereby grants to Buyer a ***
8.2 TRADEMARK USAGE. Buyer will comply with all applicable laws and
governmental regulations pertaining to the proper use and designation of
Seller's lawful trademarks.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
8
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
ARTICLE IX
INDEMNITY
9.1 INDEMNITY BY SELLER. Seller will indemnify and hold harmless Buyer and
its directors, officers, employees, agents, successors and assigns from
and against any and all liability, damages, losses, claims, demands,
actions, judgments, costs, attorneys' fees, disbursements and expenses
incurred in connection with any action, claim or demand against Buyer by
reason of injury to or death of any person or damage to or destruction of
property arising out of or resulting from the negligent, reckless or
willful acts or omissions of Seller, its employees, subcontractors or
agents in supplying the Products to Buyer pursuant to this Agreement.
Seller will not be responsible for any such losses, damages, liabilities,
claims, actions, judgments, costs, demands, attorneys' fees,
disbursements and expenses caused by the sole negligence or willful
misconduct of Buyer, its directors, officers or employees. If an action,
claim or demand is filed against Buyer for which Seller is to be
responsible under this provision, Buyer will promptly notify Seller in
writing of such action, claim or demand. Upon receipt of such notice from
Buyer, if Seller acknowledges in writing to Buyer that Seller is
obligated to indemnify Buyer under the terms of this SECTION 9.1 in
connection with such action, claim or demand, then Seller will be
entitled, if it so elects, to take control of the defense and
investigation of such action, claim or demand and to employ and engage
attorneys of its own choice to handle and defend the same at Seller's
sole cost, risk and expense and Buyer will thereafter cooperate in all
reasonable respects with Seller and its attorneys in the investigation,
trial and defense of such action, claim or demand and any appeal arising
therefrom. Buyer may also, through independent counsel and at its own
cost, participate in such investigation, trial and defense of such
action, claim or demand and any appeal arising therefrom. Seller may
effect no settlement without the prior written approval of Buyer, which
approval will not be unreasonably withheld. Seller also agrees to carry
fire and extended coverage insurance, and to be responsible for any of
Buyer's property while in Seller's possession, to maintain such property
in good condition, and not to dispose of such property except in
accordance with Buyer's instructions and the terms hereunder.
9.2 INDEMNITY BY BUYER. Buyer will indemnify and hold harmless Seller and its
directors, officers, employees, agents, successors and assigns from and
against any and all liability, damages, losses, claims, demands, actions,
judgments, costs, attorneys' fees, disbursements and expenses incurred in
connection with any action, claim or demand against Seller by reason of
losses, injury to or death of any person or damage to or destruction of
property arising out of or resulting from any sales or use of devices
incorporating the Products, or the negligent, reckless or willful acts or
omissions of Buyer, its employees, subcontractors or agents in the use or
sale of the Products. Buyer will not be responsible for any such losses,
damages, liabilities, claims, actions, judgments, costs, demands,
attorneys' fees, disbursements and expenses caused by the sole negligence
or willful misconduct of Seller,
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
9
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
its directors, officers or employees. If an action, claim or demand is
filed against Seller for which Buyer is to be responsible under this
provision, Seller will promptly notify Buyer in writing of such action,
claim or demand. Upon receipt of such notice from Seller, if Buyer
acknowledges in writing to Seller that Buyer is obligated to indemnify
Seller under the terms of this SECTION 9.2 in connection with such
action, claim or demand, then Buyer will be entitled, if it so elects,
to take control of the defense and investigation of such action, claim or
demand and to employ and engage attorneys of its own choice to handle and
defend the same at Buyer's sole cost, risk and expense and Seller will
thereafter cooperate in all reasonable respects with Buyer and its
attorneys in the investigation, trial and defense of such action, claim
or demand and any appeal arising therefrom. Seller may also, through
independent counsel and at its own cost, participate in such
investigation, trial and defense of such action, claim or demand and any
appeal arising therefrom. Buyer may effect no settlement without the
prior written approval of Seller, which approval will not be unreasonably
withheld. Buyer also agrees to carry fire and extended coverage
insurance, and to be responsible for any of Seller's property while in
Buyer's possession, to maintain such property in good condition.
9.3 LIABILITY FOR INJURIES TO PERSONNEL. Each party will be solely
responsible for, and will indemnify the other party against, all claims,
losses, litigation, damages and expenses resulting from injuries to or
the death of any of its personnel occurring while any such person is
traveling to or from any of the other party's facilities, or is otherwise
engaged in activities incident to this Agreement.
ARTICLE X.
INTELLECTUAL PROPERTY INFRINGEMENT
10.1 REPRESENTATIONS. Seller represents and warrants that it knows of no trade
secret misappropriation that has occurred and has no reason to believe
that a misappropriation will occur with regard to any Product or
Documentation delivered to Buyer, and it knows of no patent, trademark,
copyright or other proprietary rights infringement by the Products on the
Effective Date of this Agreement.
10.2 DEFENSES. Seller will indemnify, defend any suit or proceeding brought
against, Buyer or its customers based on a claim that the Products, or
any part thereof, as supplied by Seller and used within the scope of this
Agreement constitutes an infringement of any U.S. patent, copyright,
trademark, trade secret or any other proprietary right of any third party
or embodied in the Products as supplied by Seller, provided that (i)
Buyer notifies Seller in writing within 30 days of the claim, (ii) Seller
has sole control of the defense and all related settlement negotiations,
and (iii) Buyer provides Seller with the assistance, information and
authority necessary to perform the above. Seller will have no liability
or obligation to defend any such claim of infringement based on: (a) use
of a superseded or altered version of the Product if such infringement
would have been avoided by the use of a current
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
10
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
unaltered version of the Product supplied by Seller; (b) any customized
Products, to the extent such customization was at the request of Buyer;
or (c) the combination, operation, or use of the Products supplied by
Seller pursuant to this Agreement with other devices and components not
supplied by Seller if such infringement would have been avoided by the
use of the Products solely without such devices or components.
10.3 REMEDIES. If the Product is held or is believed by Seller to infringe,
Seller will have the option, at its expense, to (i) modify the Product to
be non-infringing; (ii) obtain for Buyer and its customers a license to
continue using the Product; or (iii) replace the Product with
non-infringing alternatives which conform to the Product specification.
THIS SECTION STATES SELLER'S ENTIRE LIABILITY FOR INFRINGEMENT.
ARTICLE XI
[INTENTIONALLY OMITTED.]
ARTICLE XII.
TERMINATION
12.1 TERMINATION. Either party may terminate this Agreement immediately (i) in
the event of a material breach, including any failure by Buyer to make
payments of any amounts to Seller when due, of any term of this Agreement
by the other party which continues uncured for a period of *** after the
non-breaching party provides written notice to the breaching party; (ii)
upon any breach of the provisions of Article VI (Confidential Data and
Disclosures); or (iii) upon a breach by a party of any provision of
Article XII (Compliance with Laws)..
12.2 INSOLVENCY. Either party may terminate this Agreement or suspend
performance, if at any time during the term of this Agreement the other
party will becomes insolvent or is unable to meet its obligations as they
become due; makes a general assignment for the benefit of creditors;
petitions, applies for, suffers or permits with or without its consent
the appointment of a custodian, receiver, trustee in bankruptcy or
similar officer for all or any substantial part of its business or
assets; avails itself or becomes subject to any proceeding under the
Federal Bankruptcy Code or any similar state, federal or foreign statute
relating to bankruptcy, insolvency, reorganization, receivership,
arrangement, adjustment of debts, dissolution or liquidation, which
proceeding is not dismissed within sixty (60) days of commencement
thereof.
12.3 ACCRUED OBLIGATIONS. Termination of this Agreement will not relieve
either party of any then-accrued payment obligation under this Agreement,
unless payment is disputed.. Any and all payments by either party to the
other accrued pursuant to this Agreement as of the date of termination
will remain due and payable in accordance with the terms hereof.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
11
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
12.4 CONSEQUENCES OF TERMINATION. Upon termination of this Agreement for any
reason whatsoever, each party will immediately deliver to the other all
Confidential Information and other materials related to, embodying, or
associated with, any of the Documentation, the VR2 Technical Information,
and the Intellectual Property made available to, or produced by, Buyer
pursuant to the terms of this Agreement. Any termination of this
Agreement will not eliminate any liability arising out of the conduct
prior to the actual date of termination, and either party may, following
such termination, pursue such remedies as may be available with respect
to such liabilities. In addition, the obligations of ARTICLE IV and
SECTIONS 5.1, 6.1, 6.2, 7.1, , 9.1, 12 and 13, will survive any
termination of this Agreement. Within 30 calendar days after termination
of this Agreement for any reason whatsoever, each party will certify in
writing to the other that it has satisfied all of its obligations under
this Section.
ARTICLE XIII.
COMPLIANCE WITH LAWS
13.1 CERTAIN LAWS. Parties hereby acknowledge and agree that certain laws of
the United States, including the Foreign Corrupt Practices Act, 15
U.S.C. sections 78dd-1, ET SEQ., prohibit any person subject to the
jurisdiction of the United States from making any payment of money or
anything of value, directly or indirectly, to any foreign political
party or candidate for foreign political office for the purpose of
obtaining or retaining business. Parties hereby represent and warrant
that, in the performance of their duties pursuant to this Agreement,
each has not made, and will not make, any such proscribed payment. Each
party will indemnify and hold harmless the other from and against any
and all claims, losses and liabilities attributable to any breach by
that party of its obligations under this SECTION 13.1.
13.2 UNITED STATES EXPORT CONTROLS. Without limiting the generality of
SECTION 13.1, each party specifically acknowledges that certain of the
Confidential Information ("TECHNICAL DATA") may be subject to United
States export controls, pursuant to the Export Administration
Regulations, 15 C.F.R. Parts 768-799. Each party will comply strictly
with any applicable requirements of the Export Administration
Regulations with respect to all such Technical Data.
ARTICLE XIV.
ARBITRATION
14.1 GOVERNING LAW. This Agreement will be governed in all respects solely and
exclusively by the laws of the State of California, U.S.A. without regard
to conflict of laws principles.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
12
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
The United Nations Convention on the International Sale of Goods will not
apply to this Agreement.
14.2 DISPUTE RESOLUTION. In any disputes, controversies, or claims arising out
of, relating to, or in connection with this Agreement or between the
parties, including the determination of the scope of the agreement to
arbitrate, the parties agree to first endeavor to settle the dispute in
an amicable manner by good faith discussions and bargaining between the
parties. If the parties are unable to resolve the controversy, upon
request of one party, the parties agree to submit the dispute to an
arbitrator for final and binding arbitration at a location to be
determined by the non-requesting party. The arbitration will comply with
and be governed by provisions of the California Arbitration Act before an
arbitrator experienced in the matter to be decided.
14.3 ARBITRATION EXCEPTION; INJUNCTIVE RELIEF AVAILABILITY. Notwithstanding
the foregoing, any claim relating to either of the parties' confidential
information, trademarks, or other proprietary technology or intellectual
property may be, at either parties' election, be determined by a court
located in San Francisco, California, to whose exclusive jurisdiction the
parties hereby consent. Each party shall be authorized and entitled to
obtain preliminary and permanent injunctive relief, which rights and
remedies shall be cumulative and in addition to any other rights or
remedies to which a party may be entitled.
14.4 ANCILLARY RELIEF. Nothing herein will prevent a party, prior to
appointment of the arbitrator, from making application to any court of
competent jurisdiction, for any provisional remedy available at law or in
equity. Such application for relief will not constitute a waiver of this
agreement to arbitrate. Upon appointment, the arbitrator will have
exclusive authority to order provisional or interim relief, except that
any relief ordered by the arbitrator may be immediately and specifically
enforced by a court otherwise having jurisdiction. The parties waive
objection to venue and consent to the personal jurisdiction of the
federal courts of San Francisco, California, U.S.A. in any action to
enforce this agreement to arbitrate or any order or award of the
arbitrator, or for the provisional or interim remedies provided for in
this Agreement.
14.5 EXPENSES. In any arbitration proceeding pursuant to this Agreement, each
party will bear the expenses of its witnesses. All other costs of
arbitration, including, without limitation, the fees and expenses of the
arbitrators, the cost of the record or transcripts thereof, if any,
administrative fees, the attorneys' fees of the parties, and all other
fees and costs will be allocated to the parties to the arbitration as
determined by the arbitrator, except that the prevailing party in such
arbitration will be entitled to recover its reasonable attorneys' fees
and expenses.
14.6 DISCOVERY. In any arbitration proceeding pursuant to this Agreement,
discovery will be limited to written requests for the production of
specific documents. The period for requesting documents will be 30 days
commencing upon the day that the answer is due under the Rules. The
responding party will have 15 days to produce the requested
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
13
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
documents by sending copies to the requesting party or its representative
via a recognized international courier service. The parties will also
voluntarily produce all documents that they intend to use at the
arbitration hearing and a list of intended witnesses before the close of
discovery subject to supplementation for purposes of rebuttal or good
cause shown. The parties waive any right to seek any discovery not
provided for in this Agreement irrespective of whether the laws of any
country provide for different or additional discovery in international
arbitration. The arbitrator will hold a pre-hearing conference within
three days of the close of discovery and will schedule and hold the final
hearing within 30 days of the close of discovery. Except as set forth in
Section 14.3, EACH PARTY HERETO HEREBY AGREES THAT THE ARBITRATION
PROCEDURE PROVIDED IN THIS AGREEMENT WILL BE THE SOLE AND EXCLUSIVE
METHOD OF RESOLVING ANY DISPUTES, CONTROVERSIES OR CLAIMS ARISING IN
CONNECTION WITH, OR OUT OF THIS AGREEMENT, OR OTHERWISE BETWEEN THE
PARTIES TO THIS AGREEMENT.
ARTICLE XV.
EPIDEMIC PRODUCT FAILURE
15.1 EPIDEMIC PRODUCT FAILURE. For the purposes of this Agreement, "Epidemic
Product Failure" means *** The parties agree, however, that in no event
shall an Epidemic Product Failure be deemed to occur during a Product
ramp-up period *** from the first shipment of Products to Buyer. In the
case of an Epidemic Product Failure, Buyer and Seller shall cooperate to
implement the following procedure:
15.1.1 Buyer shall promptly notify Seller upon discovery of
the failure.
15.1.2 Within five (5) working days Seller shall give an
initial response indicating its preliminary plans for diagnosing the
problem.
15.1.3 Seller and Buyer shall jointly exert all commercially
reasonable efforts to diagnose the problem and plan a work-around or more
permanent solution.
15.1.4 Seller shall prepare and consult with Buyer regarding a
recovery plan as well as an appropriate work-around, as an interim
solution, if the parties mutually decide that such an interim solution is
required.
15.2 MANUFACTURING LICENSE. Seller hereby grants to Buyer a *** license to
manufacture or have manufactured the Products (the "Manufacturing
Rights") which Buyer may exercise at any time upon notice to Seller and
upon the occurrence of either of the following:
15.2.2 A Recovery Plan is not mutually agreed to in writing by
the parties within thirty (30) days from the date of initial notification
of the problem by Buyer to Seller. For
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
14
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
the purposes of this Agreement, a "Recovery Plan" means a plan for which
each party has devoted all commercially reasonable efforts to determine
the root cause of the problem, and which includes (i) identification of
the corrective action, and (ii) written milestones for the performance of
the corrective action.
15.2.3 Notwithstanding the terms of Section 2.8 hereof, if
Seller consistently or continuously fails to supply Buyer with Products
meeting the Specifications in the quantities (i) contained on a firm
forecast of Buyer, and (ii) included in a firm non-cancelable Purchase
Order submitted by Buyer and accepted by Seller pursuant to the terms of
Section 2.4 ("Purchase Orders") hereof. For the purposes of this Section
15.2.3, Seller shall be deemed to have failed consistently in performing
its obligations to supply Products ***
15.2.4 If Buyer does exercise its Manufacturing Rights
pursuant to this Section 15.2, the provisions of Section 15.3 shall
additionally apply.
15.3 ROYALTIES AND REPORTING PROVISIONS. In the event that Buyer exercises its
Manufacturing Rights as provided in Section 15.2, and in the event that
the parties have not previously executed a VR2 Core License Agreement ,
the parties shall negotiate in good faith prior to the first sale of the
Products manufactured by or for Buyer (i) the Product royalties to be
paid to Seller by Buyer, (ii) the payment procedures and (iii) the sales
and royalty reporting obligations of Buyer. In general, Buyer shall
additionally permit Seller to conduct an audit, no more than *** and upon
prior written notice to Buyer, to examine such books, records and
accounts of Buyer to verify royalties due to Seller hereunder. The
parties currently intend to negotiate and execute a VR2 Core License
Agreement for the Products which shall contain such additional terms as
are described in this Section 15.3.
ARTICLE XVI.
MISCELLANEOUS
16.1 INDEPENDENT CONTRACTORS. Buyer and Seller hereby declare and agree that
each is engaged in an independent business and will perform its
obligations under this Agreement as an independent contractor and not as
the agent or employee of the other; that the persons performing work for
each party hereunder are not agents or employees of the other. Neither
party will have the right or authority to assign or create any obligation
of any kind, express or implied, on behalf of the other party, or to act
for or on behalf of the other party, to make commitments of any kind or
bind it in any way, to accept any service of process upon, or to receive
any notices of any nature whatsoever in its behalf.
16.2 ASSIGNMENT. Except as otherwise expressly proved in this Agreement,
neither party may assign its rights or delegate its duties under this
Agreement without the prior written consent of the other party; provided,
however, that any party may assign its rights and delegate its duties,
either in whole or in part, under this Agreement to any wholly owned or
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
15
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
controlled affiliate, provided that such assignment includes an express
assumption of the assignor's obligations hereunder. Any attempted
assignment or delegation in contravention of this SECTION 16.2 will be
void and of no effect.
16.3 NOTICE. Except as otherwise provided in this Agreement, all notices will
be deemed to have been given when in writing and delivered in person,
sent by electronic facsimile transmission, deposited in the United States
Mail, postage prepaid, certified mail, return receipt requested or sent
by a express courier service which provides documented delivery, and
addressed as follows: (i) if to Seller, Overland Data, Inc., ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇; and (ii) if to Buyer: Seagate Removable
Storage Solutions LLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇. These
addresses may be changed by written notice given by such party to the
other pursuant to this SECTION 16.3.
16.4 NO THIRD PARTY BENEFICIARIES. Except as otherwise provided in this
Agreement, the provisions of this Agreement are for the benefit solely of
the parties and not for any other person.
16.5 WAIVERS. Waiver by either party of any breach by the other party will not
be deemed a waiver of any other default. The failure or delay of either
party to assert any of its rights under this Agreement will not be deemed
a waiver of that party's right thereafter to enforce each and every
provision of this Agreement
16.6 AMENDMENTS. No provision of this Agreement will be deemed waived, amended
or modified by either party, unless such waiver, amendment or
modification is in writing and signed by the authorized representative of
the party against whom it is sought to enforce such waiver, amendment or
modification.
16.7 HEADINGS. The section and paragraph headings contained in this Agreement
are for reference purposes only and will not affect in any way the
meaning or interpretation of this Agreement.
16.8 SEVERABILITY. If any provision of this Agreement or the application of
any such provision to any person or circumstance, is declared judicially
to be invalid, unenforceable or void, such decision will not have the
effect of invalidating or voiding the remainder of this Agreement, it
being the intent and agreement of the parties that this Agreement will be
deemed to have been amended by modifying such provision to the extent
necessary to render it valid, legal and enforceable while preserving its
intent or, if such modification is not possible, by substituting therefor
another provision that is legal and enforceable and that achieves the
same objective.
16.9 COUNTERPARTS. This Agreement may be executed in several duplicate
originals , each of which will be deemed an original but all of which
together will constitute one and the same instrument.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
16
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
16.10 ENTIRE AGREEMENT. This Agreement embodies the entire agreement of Buyer
and Seller respecting the Products and supersedes all prior agreements,
understandings and communications, whether written or oral, between the
parties with respect to its subject matter.
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
duly executed as of the Effective Date.
SELLER: OVERLAND DATA, INC. BUYER: SEAGATE REMOVABLE STORAGE
SOLUTIONS LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------- -------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Chief Title: President
Financial Officer
Date: 6-15-01 Date: 6-15-01
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
17
CONFIDENTIAL TREATMENT REQUESTED
BY OVERLAND DATA, INC.
LIST OF OMITTED EXHIBITS
Exhibit A - Travan-TM- VR(2)-TM- ASIC Pricing
Exhibit B - Single Channel with Four Decoders VR(2)-TM- ASIC Specification
The exhibits referenced in the agreement have not been included because they are
either disclosed in such agreement or would not be material to an investment
decision; they will be furnished supplementally to the Commission upon request.