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EXHIBIT 10.24
[EXABYTE LOGO]
THIS EXABYTE PURCHASE AGREEMENT ("Agreement"), dated this 3rd day of
February, 1999, between Singapore Shinei Sangyo PTE, Ltd., a ____________
corporation, having its principal place of business at ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ("Seller"), and Exabyte Corporation, a Delaware
corporation, located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Exabyte"),
also known as the Parties, shall be effective as of the date last signed below.
WHEREAS, Seller agrees to sell Product (as hereinafter defined) to Exabyte
upon request, subject to the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the promises and agreements contained
herein, the Parties agree as follows:
1. DEFINITIONS
Whenever used in this Agreement, the following terms shall have their meanings
as assigned below, except where the context clearly requires otherwise.
1.1. "Confidential Information" has the meaning stated in Section 7 of this
Agreement.
1.2. "Exabyte" and "Seller" also mean, in addition to the entities as
described in the above opening paragraph, any other entity
controlling, controlled by or under common control with the respective
Party, but only so long as such control exists.
1.3. "Funded Tooling" means any device used in the manufacture of Product
paid for partially or wholly by Exabyte. See Appendix V.
1.4. "Product" means the product and other items manufactured, assembled or
sold by Seller to Exabyte which are defined by the specifications set
forth in Exhibit A ("Specifications") and listed in Appendix I of this
Agreement, and those items, if any, added later to Appendix I by
mutual agreement of the Parties.
1.5. "Intellectual Property" means a patent, trademark, copyright, trade
secret, trade name, license or know-how and associated or other
industrial rights arising under any governmental authority, whether or
not registered, filed, applied for or the like.
1.6. "Notice" and "Notify" mean written notice in accordance with Section
9.4 of this Agreement.
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1.7. "US" means the United States of America.
2. SCOPE OF AGREEMENT
2.1. Term of Agreement
This agreement shall become effective upon the date of the last valid,
authorized signature applied hereto. This Agreement shall expire
thirty-six (36) months thereafter unless terminated earlier pursuant
to Section 6.
2.2. Marketing Rights
Subject to all the terms and conditions of this Agreement, Seller
grants Exabyte the right under any and all pertinent Intellectual
Property to purchase Product from Seller and for Exabyte, its
distributors and resellers to use, copy, modify, promote, lease, rent,
distribute and re-sell Product throughout the world. These rights
shall exist so long as Exabyte or its resellers have inventory of
Product.
2.3. New Product Inclusion
Seller shall promptly inform Exabyte of any new product(s) or
improvements to existing Product that Seller expects to offer. Seller
will provide early evaluation units of new product(s) or improvements
to Exabyte as soon as they are available.
3. TERMS OF PRODUCT SALE
3.1. Price for Product
Appendix I to this Agreement contains the prices which Exabyte shall
pay Seller for Product. Such prices are exclusive of tax, duties or
tariffs. Under the terms of Section 9.1, the Parties may revise
Appendix I and II from time to time. Exabyte has the unequivocal right
to set any resale price for the Product.
3.1.1. Price Changes
The prices to be paid by Exabyte for Product shall remain in
effect for the period set forth in Appendix I, except that Seller
may decrease Exabyte's price at any time without notice to
Exabyte.
3.1.2. Approval of Additional Charges
Exabyte shall not be liable for any expenses or other charges not
expressly identified in this Agreement.
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3.1.3. Most Favored Customer Pricing
Seller warrants to Exabyte that the prices in this Agreement do
not exceed those offered to Seller's other customers purchasing
similar products, parts and/or services of like grade and
quality, and that if, during any term of this Agreement, Seller
agrees to sell such products, parts and/or services for lower
prices, at greater discounts or under more favorable terms to any
other customer of Seller, thereupon and thereafter Exabyte shall
be offered the same aforementioned considerations. Seller agrees
to notify Exabyte of any such considerations within ten (10)
calendar days after the consummation of any such agreement.
3.2. Payment for Product
3.2.1. Invoicing
Seller shall submit invoices to Exabyte after shipment of Product
as described on the purchase orders. Payment in full is due
within thirty (30) days of invoice date. All prices and payment
shall be in US dollars. Payment is conditional on acceptance of
Product by Exabyte. Payment of invoices shall not be deemed
acceptance of Product.
3.2.2. Taxes
The price(s) for the Product listed in Appendix I do not include
sales, use, excise or similar taxes levied by any government on
Seller's sale of Product to Exabyte. Exabyte shall be responsible
for the payment of such taxes, duties or tariffs.
3.3. Purchase Order and Acceptance
3.3.1. Purchase Orders
Exabyte may issue purchase orders (or released against a blanket
purchase order) ninety (90) days prior to the initial ship date
of Product pursuant to that purchase order (or release). Purchase
orders shall include the following information if appropriate:
(i) model and revision level of Product;
(ii) quantity of Product to be purchased;
(iii) unit price and total purchase order price;
(iv) delivery location, dates and instructions;
(v) name of Exabyte contact person; and
(vi) invoicing instructions.
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3.3.2. Acceptance of Orders
Seller shall accept all of Exabyte's purchase orders issued in
accordance with the provisions of this Agreement and shall
provide Exabyte Notice thereof.
3.4. Forecasts
From time to time, Exabyte will furnish Seller a forecast for some
time period with Exabyte's expected Product purchase volume and
delivery dates. Seller will Notify Exabyte within seven (7) business
days of its acceptance of Exabyte's latest forecasted purchase volume
and Product delivery schedule, or will propose a revision thereto.
Seller's acceptance represents a commitment to deliver Product in
substantial conformance with the forecast. Seller may retract this
commitment upon thirty (30) days prior Notice to Exabyte.
3.4.1. Procurement of Components
Seller will only purchase materials for Product against accepted
purchase orders and consistent with Appendix IV. The forecast
described in Section 3.4 above is for general planning purposes
only, and does not represent any assurance to purchase Product on
Exabyte's part, and Seller shall not rely upon it to make any
commitments to third parties such as purchasing components or
materials for the manufacture of the Product other than described
in Appendix IV.
3.5. Postponement and Rescheduling Shipments
The Parties agree to negotiate in good faith any request for changes
in Product quantities on order. Exabyte, at its sole discretion, shall
be entitled to postpone shipment of all or part of a Product order.
3.6. Shipment
3.6.1. Shipment Terms and Liability; Authorized Agent
Seller shall ship Product cxworks except as noted in this
Agreement. Exabyte may instruct Seller to ship Product directly
to an authorized agent of Exabyte which shall have the authority
to reject Product. Title and risk of loss shall pass to Exabyte
upon Seller's delivery to the common carrier specified by
Exabyte. Seller shall tender Product to that carrier in such a
manner and with sufficient time to ensure timely delivery to
Exabyte in accordance with the agreed delivery schedule and the
terms of this Agreement. Notwithstanding the foregoing, Seller
accepts the responsibility for any loss due to its failure to
properly preserve, package, or handle
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Product or for any release of chemicals during shipment. Seller
agrees to cooperate with Exabyte's efforts to resolve claims for
shipping damages.
3.6.2. Packaging
Seller shall package and ship Product according to Exabyte's
instructions, including those contained in Exhibit C, in a manner
assuring protection and timely delivery of Product, and
conformity with all applicable regulations and laws of every
applicable governmental jurisdiction. All shipping containers
shall be plainly and permanently marked with Seller's part
number, Exabyte's part number, and Product serial number range in
human-readable form and bar code format. Shipping containers
shall indicate the Product quantity, number of cartons, and carry
any markings required by Exabyte. The Product price in Appendix I
includes the cost of packaging for normal shipment.
3.6.3. Shipping Documents
All shipping documents shall be placed inside the shipping
container and shall include the following information:
(i) the name of Exabyte's purchasing agent responsible for the
shipment;
(ii) complete "ship to" address (including building number);
(iii) waybill/▇▇▇▇ of lading number; purchase order number;
quantity;
(iv) description of Product (including Exabyte part number);
(v) indication of partial or complete shipment;
(vi) dimensions and net and gross weights of the shipping
container(s);
(vii) information to permit the shipment to be tracked, and
(viii) other shipping information as may be needed by Exabyte.
3.6.4. Delinquent Shipments
Seller shall Notify Exabyte and Exabyte's authorized agent, if
any, as soon as Seller has knowledge that it will not or it
probably will not met agreed-upon delivery dates. Seller shall
provide Exabyte an explanation for, take steps to remedy, and
offer a remedial schedule to recover from, any actual or expected
delinquency. Seller agrees shipments of Product to Exabyte shall
not be delayed or preempted by Seller's other customers.
3.6.4.1. Remedies for Delinquent Shipments
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During the period of delinquency by Seller, Seller agrees to pay
all costs to ship Product in the most expeditious manner to
locations designated by Exabyte. Exabyte reserves the right to
cancel the delayed shipment and purchase elsewhere and if Seller
is at fault, charge Seller the difference between the price paid
for the substitute goods and the purchase price of the delayed
shipment (as stated in Exabyte's purchase order to the Seller).
In the event Exabyte elects to cancel a delayed shipment, Exabyte
shall not be responsible to Seller for the quantity or the
purchase price of the canceled shipment and may recover from the
Seller any increase in the market price of the Product as
damages.
3.6.5. Overshipments
Exabyte need not accept Product delivered prior to its proper
delivery date or shipments of Product in quantities exceeding the
ordered amount. Such shipments will be held by Exabyte at
Seller's risk and expense for a reasonable time awaiting shipping
instructions and Seller shall pay return freight charges.
3.7. Product Testing
Prior to shipment, Seller shall test Product to ensure compliance with
the Specifications. A complete record of such testing shall be kept by
Seller and made available to Exabyte upon request. Exabyte may, upon
reasonable request and at its sole expense, witness all Product tests
carried out by Seller. Seller understands that the Specifications and
other written documents cannot enumerate every requirement or
procedure necessary to design, produce and deliver acceptable Product
and agrees that implied standards apply to the supply of Product.
Seller further understand that the Specifications may contain
ambiguities and inherent idiosyncrasies requiring Seller diligence and
communication with Exabyte.
3.8. Inspection, Acceptance, Rejection
3.8.1. Source Inspection
At its own expense, Exabyte may conduct inspections at Seller's
factory or at the source of supply of Product to confirm
compliance with this Agreement. Such source inspections do not
relieve Seller of its obligation to deliver conforming Product
and do not constitute acceptance testing. Seller will provide
inspection equipment and adequate space within reasonable
proximity to Product at no cost to Exabyte Seller agrees to
implement Exabyte's suggestions to improve processes relating to
Product.
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3.8.2. Acceptance
Product shall be deemed accepted ninety (90) days from receipt of
Product unless Exabyte or its authorized agent provides Notice of
rejection sooner. Acceptance of any non-conforming Product or
shipment shall not constitute a waiver of:
(i) that or future Product's need to conform with the
requirements of this Agreement, express or implied,
(ii) Seller's need to supply Product in compliance with the
latest express delivery schedule under Section 3.4; or
(iii) any other Exabyte rights.
3.8.3. Rejection and Remedies
Exabyte or its authorized agent may reject Product shipments in
whole or in part that do not conform with the requirements of
this Agreement, express or implied. Seller agrees to immediately
cure shortages, incorrect material, or other errors at Exabyte's
option but in no event later than twenty (20) days after receipt
of the non-conforming shipment. Exabyte reserves the right to
procure substitute goods and charge Seller the difference between
the price paid for the substitute goods and the purchase price of
the nonconforming shipment (as stated in Exabyte's purchase order
to the Seller). Seller grants Exabyte a security interest in all
Product to the extent Exabyte has made uncamed payments to
Seller.
3.8.4. Return of Product
At Exabyte's option, Exabyte may return to Seller, at Seller's
expense, nonconforming Product for credit or replacement. At
Seller's option, Seller may request Exabyte to scrap such Product
in lieu of incurring the return shipping cost. Seller shall
exercise its best efforts to replace nonconforming Product as
soon as possible in the event Exabyte elects to receive
replacement Product. Seller agrees to pay all reasonable costs
incurred by Exabyte relating to nonconforming Product including,
but not limited to, return freight and shipment of replacement
Product. Seller will issue a Return Material Authorization (RMA)
number within 72 hours after Exabyte Notifies Seller of any
Product to be returned. Seller mush diagnose returned Product and
inform Exabyte within 10 business days after Seller's receipt of
rejected Product of the results of its failure analysis and the
corrective action taken or planned.
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4. PRODUCT SUPPORT
4.1. Engineering Support
Seller will support Exabyte's engineering, prototype, and production
requirements with appropriate engineering and technical support.
Seller will also actively participate in engineering reviews upon
Exabyte's request regarding design changes, manufacturability,
durability, compatibility and testability.
4.2. Exabyte Property for Seller's Use
Exabyte may offer Seller the use of Exabyte's property including
tooling. Such property, whether or not identified in Appendix V, shall
be owned exclusively by Exabyte. Seller will not nor will it allow any
third party to encumber, pledge or hypothecate such property. Such
property shall remain under the exclusive control of Seller on
Seller's promises and be used exclusively for Exabyte's sole benefit.
Exabyte may enter Seller's premises and remove Exabyte's property at
any time.
4.3. Product Training
Seller shall train up to ten (10) Exabyte sales and technical
personnel in the sale, use and maintenance of the Product sufficient
to permit Exabyte to fulfill its obligations to third parties and meet
its objectives with respect to or causing the purchase of Product. The
training shall be at no charge and conducted at a location selected by
Exabyte. Exabyte shall pay for the reasonable expenses incurred by up
to two (2) of Seller's training personnel traveling to the location
selected by Exabyte for such training provided Exabyte pre-approves
such expenses. Exabyte shall pay for the expenses of Exabyte
personnel. Exabyte shall have no other liability with respect to
training. Seller shall provide Exabyte's personnel with written
reference materials regarding the Product and other support
information.
4.4. Technical Support
Seller will provide Exabyte with technical support for the Product at
no charge via telephone and fax during the term of this Agreement and
for a period of five (5) years after the date of the last Product
shipment. Such technical support shall be available during the hours
of 5:00 a.m. to 9:00 p.m. Pacific Time, excluding holidays. Seller
shall not provide any direct support to Exabyte's customers except as
specifically requested by Exabyte.
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4.4.1. Product Malfunction or Failure
If a malfunction or failure of any Product cannot be corrected by
Exabyte's service engineers after consulting with Seller by
telephone or fax, then Seller shall either provide technical
assistance at the site of the Product to resolve the difficulty
together with Exabyte or Exabyte may resort to the warranty
remedies. In the event of an on-site response, Seller may not
charge Exabyte for technical support time if Product's warranty
is still effective.
4.4.2. Continued Support
Exabyte shall have the right to continued support of Product at
Seller's then-current rates for at least seven (7) years after
termination or expiration of this Agreement for any reason.
4.5. Documentation
Seller shall supply Exabyte with reasonable quantities of appropriate
documentation for Product. Such documentation shall include the
customary items offered upon the sale of such a Product. Seller shall
also furnish Exabyte complete Product documentation in
machine-readable form or magnetic media in a format readable by
Exabyte. Seller hereby grants Exabyte permission and a royalty-free,
worldwide license to copy, modify and distribute such documentation as
necessary in Exabyte's use or resale of the Product. Seller shall not
charge Exabyte for the documentation described in this Section 4.5.
5. PRODUCT SUPPLY
5.1. Quarterly Business Reviews
The Parties agree to hold a business review meeting every ninety (90)
days for the purpose of discussing business issues related to Product
manufacturing and supply as described in the Quality Plan, Exhibit B.
The Parties shall explore methods to improve quality and service, and
reduce Product lead time, cost and price.
5.2. Maintenance of Product Quality and Process Control
5.2.1. Stability of Design, Process, Personnel
Seller will Notify Exabyte in accordance with Appendix III and
Exhibit C prior to any changes to Product, its manufacturing
process or relevant employment changes affecting Seller's key
personnel assigned to support Exabyte's business. Seller will not
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make any changes to Product which affect its form, fit or
function without Exabyte's prior written approval.
5.2.2. Quality
Seller must provide Product of quality acceptable to Exabyte.
Product and the manufacturing processes must meet the quality
requirements set forth in Exhibit B. Seller shall also be
responsible for the quality of the materials/components of its
suppliers, including those suppliers assigned to Seller by
Exabyte.
5.2.3. Manufacturing Processes
Seller will provide Exabyte documentation of all related
manufacturing, maintenance, and quality control processes,
including types of data available and maintained. Seller shall
not make any changes to the Product or processes governed by the
Quality Plan.
5.2.4. Engineering Change Orders
From time to time, Seller may request permission from Exabyte, or
Seller may be requested by Exabyte, to implement Engineering
Change Orders ("ECOs") in accordance with this Section 5.2.4.
Seller shall effectively manage ECOs to minimize scrap or rework
while maximizing price reduction, quality and performance of
Product or processes relating to its supply. Each Party shall
Notify the other of all proposed ECOs and provide a sample of the
pertinent ECO. Each party agrees to supply the appropriate
documentation to support the other Party's investigation of the
impact of the proposed ECO.
5.2.4.1. Seller Requests ECO
Seller shall provide Exabyte prompt Notice and a copy of all
ECOs proposed by Seller for the Product or its manufacturing
processes. Seller shall provide all necessary information to
Exabyte to permit a proper evaluation of the ECO including
written estimate of costs to be paid by Exabyte and the
commencement date for the proposed ECO. Seller shall not
implement any ECO affecting the Product or its manufacturing
processes without Exabyte's written approval. Exabyte may
accept or reject any such proposed ECOs. Exabyte will advise
Seller whether to allow Seller to implement its proposed ECO
within a reasonable time after Seller provides complete
information as described above and in the
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Quality Plan. The Parties shall share equally any cost
savings resulting from Seller's ECO initiative.
5.2.4.2. Exabyte Requests ECO
Seller shall report to Exabyte all substantial costs to
implement an ECO proposed by Exabyte, including those for
obsolete material, within five (5) business days of
Exabyte's request for an ECO. If new material is required
for the ECO, the implementation date and the new cost will
be mutually agreed upon. The entire cost savings resulting
from Exabyte-initiated ECOs will be applied directly to
reduce the purchase price to Exabyte.
5.3. Exclusivity
If Product contains or is based on any Exabyte Intellectual Property
(other than Seller's grants of licenses to Exabyte herein), Exabyte
Confidential Information or if the Product has been customized by
Seller for Exabyte, Seller agrees not to sell Product or a
substantially similar product to any party other than Exabyte during
any term of this Agreement and for five (5) years thereafter.
5.4. Continuity of Supply
5.4.1. Factory Allocation
If Seller is unable to meet Exabyte's demand for Product despite
Seller's best effort, Seller agrees to allocate at least the same
percentage of its factory production of Product that was
allocated to Product prior to such constrained supply as averaged
over the last four (4) months of full production until such time
as Seller is able to meet Exabyte's demand for Product.
5.4.2. Disaster Recovery Plan
Seller agrees to develop a disaster recovery plan, reasonably
acceptable to Exabyte, to assure the continued supply of Product.
Such disaster recovery plan shall be submitted to Exabyte before
the first shipment of Product.
5.4.3. Discontinuance and Last Buy
Seller agrees to provide Exabyte with one (1) year's prior
written Notice of its discontinuance of any Product. Upon
Exabyte's request, Seller will act in good faith to accommodate
Exabyte's last buy proposal.
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5.5. Product Warranty
Seller warrants Product will meet Specifications and be free of
defects in material or workmanship under normal use and service for
thirty-nine (39) months from the time of shipment. Seller shall, at
its option and expense, repair or replace such nonconforming or
defective Product within thirty (30) days of Seller's receipt of such
Product returned by Exabyte, or, at Exabyte's option, refund the
purchase price of such Product. At Exabyte's option and request,
Seller shall exercise its best efforts to ship replacement Product at
Seller's expense as soon as possible. Seller shall not be required to
remove or install Product from or into Exabyte's product(s) or
system(s) for the purpose of such repair or replacement. Abuse or
accident resulting in damage to product shall void this warranty with
respect to such damage. The return of Product shall be governed by
Section 3.8.4 above.
5.5.1. Latent Defect
Notwithstanding acceptance by Exabyte or the limitations of the
Product warranty, Seller agrees to repair or replace at its
expense Product that contains a defect that:
(i) existed at the time of manufacture yet was not then active,
discernible or evident so that such defect could not have
been reasonably detected at the time of purchase using
acceptance tests or procedures customary in the industry or
actually used under this Agreement; and
(ii) results in the material failure of Product to conform to the
functional or reliability requirements set forth in the
Specifications as determined by Exabyte.
5.5.2. Epidemic Failure
An epidemic failure of Product occurs when [two (2%)] percent or
more of Product prove to be nonconforming or defective in
Exabyte's application due to the same root cause traceable to
Seller (as compared with all Product sold to Exabyte during the
same time period as the affected Product) within [four (4) years]
of their first sale. Epidemic failure excludes Product failures
directly due to action(s) that voids the warranty under this
Agreement. In the event of epidemic failure, Seller agrees to
extend warranty coverage to all Product actually or reasonably
expected to be affected by such epidemic failure and incur
reasonable expenses to correct such affected Product including,
but not limited to, the costs associated with replacing or
repairing such affected Product.
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5.5.3. Title
Seller warrants that at the time of delivery and thereafter,
title to Product shall be free and clear of all liens,
encumbrances, or other claims.
5.5.4. Year 2000 Compliance: Product
Seller warrants that Product and related supporting data and
files, will function correctly when manipulating, calculating, or
otherwise dealing with dates, times and related data in the
following manner:
(i) date and time data will be accurately processed (including
calculating, comparing, and sequencing) from, into, and
between the twentieth and twenty-first centuries, and the
years 1999 and 2000 and leap year calculations;
(ii) Product will accurately process date and time data and not
inhibit the proper function of any other device when used
in combination with other products; and
(iii) Product will neither contain nor create any logical or
mathematical inconsistency, will not malfunction, and will
not cease to function when processing date and time data
("Year 2000 Compliant").
The warranty under this Section 5.5.3 shall not apply to output,
results, errors, or abnormal terminations caused in whole or in part
by erroneous or ambiguous input from a source other than Product.
5.5.5. Year 2000 Compliance; Seller, Major Vendors and Customers
Seller warrants that its computers and other business processes
are Year 2000 Compliant. Seller warrants that its major vendors
and customers are Year 2000 Compliant. For the purpose of this
Section 5.5.4. "Year 2000 Compliant" means the names entities
have taken reasonable steps to ensure that the use of dates past
1999 will not adversely affect business operations as
substantially described in the previous Section 5.5.3.
5.5.6. Warranty Disclaimer
EXCEPT AS SET FORTH HEREIN, SELLER HEREBY DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
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5.6. General Warranties.
Seller represents, warrants and agrees that:
a) Seller is the owner of all rights, title and interest in and to
the Product;
b) Seller has the full right and power to enter into this Agreement
and its performance hereunder does not conflict with or cause a
breach under any agreement, license or other instrument, law,
rule, order or regulation binding Seller or relating to Product;
c) Product furnished by Seller to Exabyte shall be free and clear of
any and all encumbrances and/or liens of any nature whatsoever;
d) Seller has not used or disclosed, in an unauthorized manner, any
Confidential Information or Intellectual Property of third
parties in its creation or supply of the Product;
e) Product does not infringe any third party's Intellectual
Property;
f) Any computer programs delivered by the Seller, and the media upon
which they are contained, do not and shall not include
instructions whose purpose is to disrupt, damage or interfere
with the operation of computers; and
g) Except as to countries to which a general trade embargo by the
United States applies, the Product may be lawfully exported
worldwide without obtaining any validated export licenses.
5.7. Limitation of Liability
5.7.1. Limitation on Damages
Neither Party shall be entitled indirect, punitive, special,
incidental or consequential damages, in connection with or
arising out of this Agreement (including loss of profit, use,
data or other economic advantage), however it arises, whether for
breach of this Agreement, including breach of warranty, or in
tort, even if the complaining Party has been previously advised
of the possibility of such damage.
5.7.2. Intellectual Property Indemnification
Seller shall defend, indemnity and hold Exabyte, its directors,
officers, employees, agents, affiliates, assignees,
subcontractors and customers harmless against any and all
liability arising from or in connection with any claim, demand,
fee, obligation or action ("Claim") that:
(i) Product infringes a third party's Intellectual Property; or
(ii) arises due to Seller's neglect in removing symbols, words,
numbers or marks from rejected, returned or unpurchased
Product.
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Should Product become, or in either Party's opinion, be likely to
become, the subject of such a Claim, then Seller shall, at
Seller's expense, use its best efforts to procure for Exabyte the
right to continue using Product. If Seller cannot procure such a
right for Exabyte's benefit, Seller shall replace or modify
Product to eliminate the infringement and pay all of Exabyte's
costs due to the infringement. Seller's obligations as set forth
in this Section are conditioned on the following:
(i) Exabyte must provide reasonable prompt Notice to Seller of
such Claim;
(ii) Seller must have the option to have sole control of the
defense of any action on such Claim subject only to
Exabyte's reasonable consent of any settlement;
(iii) Exabyte must provide reasonable assistance to Seller at
Seller's expense in defending such Claim;
(iv) Product must have no alterations to in a manner relevant to
the Claim by Exabyte;
(v) Exabyte must use updated Product provided to eliminate
infringement;
(vi) Product must have been used for its intended purpose; and
(vii) the Claim must not arise solely from Exabyte's Intellectual
Property.
5.7.3. Hold Harmless
Seller agrees to defend, indemnify and hold Exabyte harmless from
all loss, cost, damage, or expense based on or arising out of
Seller's performance or nonperformance under this Agreement,
Seller's breach of any warranty, or any claims arising from
Seller's fault, negligence or strict liability.
5.7.4. Survival
The provisions in this Section 5.6 shall survive for five (5)
years after termination or expiration of this Agreement.
6. TERMINATION
6.1. Termination by Exabyte
Exabyte shall have the right to terminate this Agreement without cause
upon thirty (30) days advance Notice to Seller. In the event of such
termination, Exabyte may cancel all purchase orders issued hereunder
as of the effective date of such termination without further notice to
Seller.
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6.2. Termination for Cause
Either Party shall be entitled, without prejudice to any other rights
accruing under this Agreement or in law, to immediately terminate this
Agreement in the event:
(i) the other Party fails to meet any of its material obligations
herein after the terminating party has given Notice of the
grounds for termination to the other Party and, if the breach
can be cured, that other Party fails to cure the alleged breach
within thirty (30) days of said Notice;
(ii) a petition in bankruptcy (or under any similar insolvency law)
is filed against or by the other Party;
(iii) the other Party makes an assignment for the benefit of its
creditors; or
(iv) a receiver is appointed for, or a levy or attachment is made
against, all or substantially all of the other Party's assets.
The Party which terminates this Agreement for cause retains any remedy
for breach of the whole contract or any unperformed portion whether
allowed in this Agreement, at law, equity or otherwise.
6.3. Effect of Termination
In the event either Party terminates this Agreement:
(i) Seller shall deliver promptly all completed Product manufactured
pursuant to Exabyte's purchase orders;
(ii) Seller shall fulfill all accepted purchase orders at Exabyte's
option;
(iii) both Parties shall return immediately the other's property,
including but not limited to, Funded Tooling and equipment, and
tangible manifestations of Confidential Information except as
allowed in any Agreement between the Parties;
(iv) Exabyte shall reimburse Seller for any unpaid portion of Funded
Tooling as described in Appendix V; and
(v) any claim by Seller for Exabyte to pay for work-in-process and
parts inventories shall be accompanied by complete documentation
and shall be governed by Appendix IV, Unique Long lead Time
Components.
Notwithstanding Appendix IV or the preceding, if Exabyte terminates
for Seller's breach, Seller shall not be entitled to any cost incurred
with respect to the canceled portion of any purchase order. In no
event shall Seller be entitled to any cancellation charges or fees in
excess of payments negotiated under this Agreement.
6.4. License Under Termination
In the event of termination of this Agreement by Exabyte for cause,
Seller grants to Exabyte a perpetual, irrevocable, non-exclusive,
world-wide, royalty free license, together with the right to
sublicense, to Seller's
17
Intellectual Property and supportive technologies related to Product
to make, have made, use, sell, lease, or otherwise dispose of Product
in order to provide Exabyte full rights to the commercial exploitation
of the Product. Additionally, Seller shall provide all reasonable
assistance necessary to enable Exabyte to exercise this license. Such
license shall be freely transferable without the consent of Seller.
7. CONFIDENTIALITY
Each Party ("Receiving Party") may receive or learn of Confidential
Information from the other Party ("Disclosing Party"). Receiving Party
shall hold the Disclosing Party's Confidential Information in trust and
confidence employing at least the same measures to protect the
Disclosing Party's Confidential Information as the Receiving Party
employs to protect its own Confidential Information and in no event
less than due care. Receiving Party shall only disclose the Disclosing
Party's Confidential Information to persons:
(i) with a need to know such Confidential Information and only to the
extent necessary to permit the performance of obligations arising
under this Agreement; and
(ii) who are bound not to discuss such Confidential Information under
at least the same terms as dictated in this Agreement.
"Confidential Information" means Intellectual Property, models,
components, parts, drawings, sketches, programs, specifications,
techniques, processes, test data, methods, inventions, research,
design, costs, forecasts, plans, profits, pricing, customer names, or
other information with respect to either Party that the Disclosing
Party relies upon for a competitive advantage or that must be kept
confidential under law or other obligation. "Confidential Information"
also includes oral or written disclosures of information identified as
secret, confidential or proprietary at the time of disclosure or
within a reasonable time thereafter. The undertaking and obligations
of Receiving Party under this Agreement shall not apply to
Confidential Information that is:
(i) already known to Receiving Party without any wrongful action or
inaction by any party;
(ii) independently developed by Receiving Party without reference to
the other Party's Confidential Information;
(iii) in the public domain at the time of either Party's disclosure;
or
(iv) generally disclosed to third parties without restriction.
7.1. Compelled Disclosure
In the event the Receiving Party is compelled by proper judicial or
governmental authority to disclose the other Party's Confidential
Information, then the Receiving party shall, prior to disclosure;
(i) promptly Notify the Disclosing Party;
(ii) allow the Disclosing Party a reasonable time to oppose the
disclosure; and
18
(iii) Work with the Disclosing Party to set in place adequate measures
for the protection of such Confidential Information despite any
disclosure.
7.2. Return of Confidential Information
Receiving Party shall, immediately upon request of Disclosing Party,
return to Disclosing Party any or all tangible manifestations of
Disclosing Party's Confidential Information in the possession of the
Receiving party and permanently destroy its electronically stored
records of such Confidential Information. Receiving Party further
agrees to employ commercially reasonable efforts to retrieve tangible
manifestations of Disclosing Party's Confidential Information that
Receiving party has given to third parties and seek the permanent
destruction of all electronically stored records of such Confidential
Information.
7.3. Publicity
Neither Party shall, without first obtaining the other's written
permission, in any manner advertise, publish, or disclose the material
terms, details, or unique Specifications of or in this Agreement
expect as otherwise allowed under law.
7.4. Removal of Identifying Marks
Seller agrees to not deliver, sell, or release Product containing
Exabyte Confidential Information to any party other than Exabyte
except by Exabyte's written authorization under the terms of Section
9.4 below. In the event Seller leases, sells or otherwise transfers
Product to a third party, Seller shall remove from such Product any
symbols, words, numbers or any such marks related to the sale of the
Product to Exabyte or otherwise identified with Exabyte.
7.5. No License or Assignment
The furnishing of Confidential Information shall not be construed to
grant any license or constitute any assignment of a right to any
Confidential Information for the benefit of any party other than the
Disclosing Party except as expressly provided in this Agreement.
7.6. Non-Solicitation
To further protect Confidential Information, neither Party shall
directly or indirectly encourage or seek to influence any employee of
the other Party to leave that other Party's employment during the term
of this Agreement and for six (6) months after its termination or
expiration. In the event of breach of this provision, the breaching
party shall pay the other Party an amount equal to one year's salary
of the pertinent employee.
19
7.7. Survival
Notwithstanding anything in this Agreement to the contrary, all
obligations of confidentiality and non-disclosure between the Parties
shall survive termination of this Agreement and be binding upon the
Parties for an additional period of five (5) years after the
termination or expiration of this Agreement.
8. CONSTRUCTION OF AGREEMENT
8.1. Headings and References
Section headings are for reference purposes only and shall have no
operative effect in the construction of the rights or obligations to
the Parties pursuant to this Agreement. References to a section number
include all of its subsections.
8.2. Official Language
English is the official language of this Agreement and the English
version of this Agreement shall be the sole binding version. Documents
or Notices not originally written in English shall have no effect
under this Agreement until they have been translated into English by
the Party providing the Notice or document and the English translation
shall then be the controlling form of the document or Notice.
8.3. Applicable Law
This Agreement shall be construed under and governed by the laws of
the State of Colorado without regard to that jurisdiction's conflict
of laws doctrine. The Parties hereby specifically exclude the Untied
Nations Convention for the International Sale of Goods from any
application with respect to this Agreement.
8.4. Order of Precedence
In the event of any conflict between:
(i) the provisions of the main body of this Agreement and those in
the Exhibits hereto; or
(ii) any subsequent amendments of this Agreement and the documents in
(i) above;
the order of precedence shall be: first, the amendments; second, the
Exhibits; and third, the main body of this Agreement without regard to
any conflicting Attachments.
20
8.5. Singular and Plural Expressions
Defined terms, words or other expressions shall retain their meanings
as defined herein regardless whether their definition or the usage
occurs in the singular or plural form as necessary in the context.
9. GENERAL PROVISIONS
9.1. Entire Agreement; Counterparts
This Agreement, together with its Attachments, Exhibits and Appendices
is the sole and complete statement of the rights and obligations of
the Parties as to the sale and purchase of Product and it supersedes
all previous understandings, negotiations and proposals between the
Parties concerning the subject matter. By their signatures below, the
Parties execute this Agreement and all its Attachments, Exhibits and
Appendices. This Agreement may not be altered, amended, rescinded or
modified except by written agreement between Seller and Exabyte and
signed by an authorized officer of each Party that expressly amends,
rescinds, supersedes or terminates this Agreement. Any printed
conditions on purchase orders and acceptance forms are superseded by
this Agreement and not effective except as stated in this Agreement.
This Agreement may be executed in several counterparts, each of which
shall be deemed an original, all of which together shall constitute
one and the same Agreement.
9.2. Disputes
All disputes or controversies that arise between Exabyte and Seller in
relation to or in connection with this Agreement shall be finally
settled by a federal court located in Boulder County, Colorado. In the
event such federal court lacks subject matter jurisdiction, disputes
shall be referred to a state court in Boulder, Colorado. The Parties
hereby consent to the jurisdiction and venue of such courts in
Colorado.
9.3. Enforcement
In the event an authorized court with jurisdiction declares any
provisions of this Agreement unenforceable, the remaining enforceable
provisions shall survive, provided this Agreement still expresses the
general intent of the Parties. In the event the general intent of the
Parties cannot be preserved, this Agreement, or such provisions, shall
either be renegotiated in good faith or rendered null and void.
9.4. Notices
All Notices and communication between the Parties under this Agreement
shall be in English. Notices shall be deemed to have been given on the
21
date Notice was sent if evidenced by a receipt generated as a result
of the method used to notify the other Party. Otherwise, the date of
Notice shall be that date the Notice was received as indicated by a
date stamp customarily used by the receiving Party for that purpose.
Notice may be given by facsimile, if in the case of Notice to Exabyte,
Seller sends Notice to the following:
(▇▇▇) ▇▇▇-▇▇▇▇ attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
fax number program manager
and in the case of Notice to Seller, Exabyte sends Notice to the
following:
65 861 6680 attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇
fax number sales manager
9.4.1. Notice of Default, Breach, Termination or Disclosure
Notice of default, breach, termination, or expected or actual
disclosure of the other Party's Confidential Information under
Section 7.1 above, shall be given in writing by certified or
registered mail addressed to the respective Party at their
respective addresses below:
SELLER:
Singapore Shinei Sangyo PTE, Ltd.
▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇
EXABYTE:
Exabyte Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇.▇.▇.
Attn: General Counsel
A Party may send initial Notice under this Section 9.4.1 by
facsimile, however, that Party agrees to immediately send
confirmation of such Notice by mail, as provided above, and in no
case later than five (5) days after the date the facsimile was
sent. The effective date of such Notice shall be the mailing date
as evidenced by the mail receipt.
22
9.5. Assignment
Except as allowed in Section 3.6.1, this Agreement is not assignable
by either Party.
9.6. Waiver
A waiver by either Party of its rights hereunder with respect to a
breach of the other Party's obligations shall not be construed as a
continuing waiver with respect to other breaches of the same or other
provisions of this Agreement.
9.7. No Agency Created
Neither Party is a partner, joint venture, agent, representative, or
employee of the other Party. Neither Party or that Party's employee,
consultant, contractor or agent is granted the right or authority to
assume or create any obligation or responsibility, express or implied,
on behalf of or in the name of the other Party or to bind such other
Party in any manner to anything whatsoever.
9.8. Compliance with Laws and Indemnification
Seller represents that it does and shall at all times comply with the
provisions of all applicable national, international, federal, state
and local laws, rules and regulations and agrees to provide
information to enable Exabyte to comply with such laws and regulations
in the use and sale of the Product.
If the Product is purchased for incorporation into merchandise sold
under a US government contract or subcontract, the terms required by
law to be inserted shall apply to that purchase. Seller warrants that
Seller has commercial general liability insurance in the minimum
amount of one million dollars (US $1,000,000) per occurrence and two
million dollars in the aggregate (US $2,000,000) including product
liability and completed operations coverage. Seller agrees to provide
Exabyte evidence of such insurance upon request. Seller agrees to not
use in the course of performance of this Agreement, and warrants that
the Product does not contain nor has been manufactured using any
"class I substance" within the meaning of 42 USC Section 7671a. Seller
shall Notify Exabyte if any chemicals on the Exabyte List of
Restricted Chemicals are used in the manufacture of, or are contained
in, the Product. Seller agrees to indemnify and hold Exabyte harmless
for any costs, damages, and/or expenses arising from Seller's
non-compliance with this Section.
23
9.8.1. Federal Law
Seller represents that it complies with US federal laws,
including, but not limited to, the Fair Labor Standards Act, the
Occupational Safety and Health Act, the Service Contract Act, the
Clean Air and Water Act, the Drug-Free Workplace Act, and the
Equal Employment Opportunity Act and affirmative action clauses
prescribed by Executive Orders, and agrees to provide statements
substantiating Seller's compliance.
9.9. Import Requirements
If the Product is imported, Seller agrees to allow Exabyte to be the
importer of record where possible. Exabyte reserves the right to file
third party duty drawback claims in the event that Seller is the
importer of record on foreign parts and/or products purchased for and
sold to Exabyte in the US. The Seller will provide all necessary
documents to Exabyte for duty drawback claims in accordance with US
Customs regulations. Seller agrees to provide, upon Exabyte's request,
documents to prove importation and to transfer duty drawback rights to
Exabyte. Seller shall ▇▇▇▇ every Product or its container with the
country of origin and otherwise comply with all applicable import
rules, regulations and laws.
9.10. Force Majeure
Either Party's non-performance under this Agreement shall be excused
to the extent that performance is rendered impossible due to major
disruptive acts of God, war, debilitating fires, or when directly due
to government restrictions, for so long as such disturbance continues.
The obligations of the Parties shall be restored when such force
majeure dissipates or no longer directly affects the Party's ability
to perform. Notwithstanding the foregoing, non-performance due to
force majeure that continues for more than twenty (20) calendar days
may be cause for termination.
9.10.1. Return to Production
Upon Seller's return to production following force majeure,
Seller agrees to allocate its factory production to Product based
on the following: Seller will determine what percentage of its
total factory production was allocated to Product, averaged over
the last four (4) months of full production plus the upcoming
1-month period indicated on Exabyte's firm purchase order, and
will allocate that same percentage, or greater, of production to
Exabyte until such time as Seller is able to meet Exabyte's
demand for Product.
9.11. Express Remedies No Limitation
The Remedies enumerated herein shall not limit either Party's right to
resort to other remedies available at law or equity.
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9.12. Survival of Provisions
In addition to those provisions so noted, any other provisions in this
Agreement, which by their nature should survive after termination or
expiration of this Agreement, shall survive.
25
IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly
authorized representatives, effective as of the last date signed below
("Effective Date").
EXABYTE CORPORATION SINGAPORE SHINEI SANGYO PTE, LTD
By: By:
------------------------------------- -------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
Title: President/Chief Executive Officer Title: Sales Manager
--------------------------------- ----------------------------
Date: March 28, 1999 Date: March 18, 1999
---------------------------------- -----------------------------
26
INDEX OF ATTACHMENTS
APPENDIX I Product and Pricing
APPENDIX II Key Technical Personnel
APPENDIX III Exabyte's Liability for Work-In-Process
APPENDIX IV Funded Tooling
EXHIBIT A Specifications
EXHIBIT B Quality Plan with Process Verification Plan (PVP)
EXHIBIT C Shipping Requirements
