***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SEC. 200.80(b)(4),
200.83 AND 240.24b-2
DEVELOPMENT AGREEMENT
THIS AGREEMENT ("Development Agreement") dated this 22nd day of April,
1999, between Hitachi Digital Media Products Division of Hitachi, Ltd., a
Japanese corporation having its principal place of business at 1410 Inada,
▇▇▇▇▇▇▇▇▇▇▇-▇▇▇, ▇▇▇▇▇▇▇-▇▇▇, ▇▇▇-▇▇▇▇ ▇▇▇▇▇ ("Hitachi"), and Exabyte
Corporation, a Delaware corporation, having its principal place of business
at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Exabyte").
W I T N E S S E T H :
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WHEREAS, Exabyte desires to have designed and developed an 8mm data
storage device; and
WHEREAS, Hitachi has previously designed an 8mm deck for video storage
applications; and
WHEREAS, Hitachi has facilities, equipment and employees which permit it
to undertake the development of the unique components to adapt the existing
deck to a data storage device; and
WHEREAS, Exabyte and Hitachi are willing to enter into an agreement under
which Hitachi will undertake such design and development for Exabyte;
NOW THEREFORE, in consideration of the covenants and agreements contained
herein, Exabyte and Hitachi hereby agree as follows:
1. DEFINITIONS
1.1 "Base Product" as used herein shall mean Hitachi's existing 8mm TH
Consumer deck system for video storage applications.
1.2 "Development" as used herein shall mean the design and development
of heads, drum, transformers, reel motor, front load mechanism, and other
components for the conversion of Base Product into Product as set forth in
Exhibit A.
1.3 "Development Prototypes" as used herein shall mean the prototypes
identified in Exhibit A.
1.4 "Final Specifications" as used herein shall mean a complete detailed
statement of design of and functions to be performed by the Product, to be
provided pursuant to Section 2.3.
1.5 "Payment Term" as used herein shall mean the term of payments by
Exabyte to Hitachi as set forth in Exhibit B.
1.6 "Preliminary Specifications" as used herein shall mean an initial
statement of design and function to be performed by Product as shown in
Exhibit C.
1.7 "Product" as used herein shall mean the 8mm data storage device
consisting of the Base Product as modified by the development carried out
pursuant to this Development Agreement and as described in and limited by the
Preliminary Specifications until Final Specifications are available at which
time Final Specifications shall apply.
2. DEVELOPMENT
2.1 Performance of Tasks. Subject to the terms and conditions contained
in this Development Agreement, Hitachi hereby agrees to carry out the
Development of the Product in accordance with Exhibit A and to deliver
Development Prototypes in accordance with Section 2.2.
2.2 Delivery of Development Prototypes. Hitachi agrees to deliver to
Exabyte Development Prototypes in accordance with the schedule set forth in
Exhibit A. Exabyte agrees to notify Hitachi within thirty (30) days if, in
Exabyte's reasonable opinion, Development Prototypes fail to meet applicable
specifications. Failure of Exabyte to so notify Hitachi within such thirty
(30) days shall constitute agreement by Exabyte that such Development Prototype
meets all the pertinent requirements. Upon receipt by Hitachi of such written
notification that an item delivered does not, in Exabyte's reasonable opinion,
meet the requirements of a Development Prototype, Hitachi shall commence
diligently and in good faith to rectify any specified deficiencies and to
deliver an item as to which such specified deficiencies are corrected.
Exabyte shall give Hitachi access to all test and other evaluation data
generated by or for Exabyte with respect to Exabyte's evaluation of Development
Prototype delivered to Exabyte under this Development Agreement.
2.3 Specifications. Exabyte and Hitachi shall act diligently and as
expeditiously as possible in reaching an agreement on Final Specifications.
The Final Specifications shall replace entirely all previous specifications,
including Preliminary Specifications.
3. PAYMENT
3.1 Exabyte agrees to pay Hitachi for development of Product in
accordance with this Development Agreement. Engineering costs (NRE) shall be
paid in quarterly installments in accordance with the Payment Terms set forth
in Exhibit B. [***] Tooling shall be owned by Exabyte upon payment for such
tooling by Exabyte to Hitachi.
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*CONFIDENTIAL TREATMENT REQUESTED
4. TERMINATION
4.1 Termination
4.1.1 Phase Termination. Exabyte may terminate this Development
Agreement if Exabyte and Hitachi reasonably conclude that Hitachi is unable
to either (1) deliver a Development Prototype on a timely basis, or (2) in a
timely manner correct a deficiency in accordance with Section 2.2.
4.1.2 Noticed Termination. Either party may unilaterally terminate
this Development Agreement at any time by giving written notice of such
termination to the other party provided that Hitachi agrees to provide Exabyte
at least one year advance written notice of any termination by Hitachi that is
not the result of Exabyte's material breach of this Development Agreement
after a reasonable cure period.
4.1.3 Expiration. This Development Agreement shall expire under
its normal terms upon satisfactory completion of Development Verification
Testing as set forth in Exhibit A.
4.2 Rights and Obligations Upon Termination. Termination shall not
relieve Exabyte from an obligation to make any payments under this Development
Agreement for Development Prototypes which have been accepted by Exabyte.
Upon any termination by Hitachi, Hitachi agrees to deliver to Exabyte all
technical information produced prior to termination relating to Product
including documentation and other tangible manifestation of development,
provided, however, that nothing herein shall provide Exabyte with rights to
Base Product. The rights and obligations set forth in Sections 5 and 6 shall
survive the termination of this Development Agreement.
5. INTELLECTUAL PROPERTY
5.1 Inventions and Test Data. Any design, developments, inventions,
know-how, computer programs or technical information which result from the
Development including, without limitation, the copyright, patent and all other
proprietary rights, including intellectual property rights relating thereto
("Development Rights"), shall be owned by Exabyte subject to the rights of the
parties as set forth below:
1) Exabyte and its affiliates shall own and may perpetually use the
Development Rights for any application;
2) Hitachi and its affiliates shall be licensed and may perpetually
use the Development Rights on a royalty-free basis for any and all VCR and
Camcorder and image storage applications and for any other applications that
are not primarily directed to data storage;
3) Except for the supply of Product to Exabyte as set forth in
Section 7, Hitachi and its affiliates agree not to use or license the
Development Rights on behalf of itself or third parties for data storage
applications without the prior written consent of Exabyte.
4) Neither party shall have any rights in any other inventions made
by the other party outside of the Development Agreement including any rights
by Exabyte with respect to Base Product.
5) Each party grants to the other party a limited, non-exclusive,
royalty-free license, without the right to sublicense, of all patents and
other proprietary rights owned by such party as is reasonably necessary for
the development of Development Prototypes and Product. The patents and other
proprietary rights licensed by Hitachi to Exabyte hereunder shall be limited
to those owned by the Hitachi Digital Media Products Division provided,
however Hitachi represents that the Development Prototype and Product shall
not infringe the patent rights or other proprietary rights owned by any other
Hitachi division or affiliates and agrees to hold Exabyte harmless with regard
to any such claim. Such representation and agreement to hold harmless shall
apply only to the subject matter of this Development Agreement and shall not
apply to any other Exabyte product.
6) Hitachi shall report to Exabyte any potentially patentable
developments arising out of the Development and Exabyte shall have the right
of first refusal to obtain, at Exabyte's cost and in its name, patent or other
legal protection for such developments in those countries of Exabyte's choice
and Hitachi shall have the right to obtain, at Hitachi's cost and in its name,
patent or other legal protection for such developments for which Exabyte does
not exercise its rights of first refusal provided that any such protection by
either party shall be subject to a royalty-free license to the other party in
accordance with the terms and understandings of this Section 5.1.
Exabyte shall inform Hitachi of Exabyte's interest in obtaining
patent protection within two weeks of actual receipt by Exabyte of a
reasonably detailed description of any potentially patentable developments
and failure by Exabyte to inform Hitachi of such interest shall provide
Hitachi the right to obtain patent protection in its own name for such
potentially patentable developments.
Exabyte agrees to procure patents in its name with assignment to
Hitachi where necessary for Hitachi to obtain patent protection for those
potentially patentable developments for which Exabyte has not exercised its
right of first refusal provided Hitachi shall pay for all costs of patent
procurement and assignment.
7) Each party agrees that any transfer of technology by one party
to a third party shall be limited by and subject to the rights of the other
party as established pursuant to this Section 5.
5.2 Base Product. Hitachi reserves all rights in any design,
developments, inventions, know how, computer programs or technical information
of Hitachi including, without limitation, the copyright, patent and all other
proprietary rights with respect to the Base Product.
6. CONFIDENTIALITY AND NON-USE
6.1 Confidentiality. Hitachi and Exabyte shall receive from the other
party certain components, parts, drawings, data sketches, plans, programs,
specifications, techniques, processes, inventions and other information of a
secret, confidential or proprietary nature relating to development of Product
and marked as "Confidential" (hereinafter collectively referred to as
"Proprietary Information"). Each party shall hold in trust and confidence,
and shall not disclose to any person outside its organization, any Proprietary
Information which is disclosed by one party to the other party under this
Development Agreement. Proprietary Information disclosed under this
Development Agreement may be used by the receiving party(ies) only for the
purpose for which it was disclosed. The receiving party(ies) shall disclose
Proprietary Information to persons within its organization only if such
persons are bound to protect the confidentiality of such Proprietary
Information. The undertaking and obligations of the receiving party(ies)
under this Development Agreement shall not apply to any Proprietary
Information which is disclosed in printed publication available to the public,
is described in a patent anywhere in the world, or is otherwise in the public
domain at the time of disclosure, is generally disclosed to third parties by
the disclosing party without restriction on such third parties, is approved
for release by written authorization of the disclosing party(ies), or is not
designated by the disclosing party(ies) in writing or by the appropriate stamp
or legend to be of a secret, confidential or proprietary nature. After
termination and/or expiration of the Agreement, the receiving party(ies):
1) will return or certify a destruction of, all tangible Proprietary
Information received from the disclosing party(ies), without retaining any
copy, and; 2) upon return or destruction of such Proprietary Information,
will be free to use the Residuals of such Proprietary Information for any
purpose. The term Residuals shall mean information in non-tangible form
relating to general engineering know-how. Any obligation pursuant to this
Section 6.1 shall expire three (3) years after the date of the disclosure of
the subject information.
6.2 Non-Disclosure of Development Agreement. Hitachi and Exabyte each
agree not to disclose the existence of the relationship between Exabyte and
Hitachi arising under this Development Agreement or the fact that Hitachi is
performing services for Exabyte without the advance written permission of the
other party.
7. SUPPLY OF PRODUCT
The parties contemplate that Hitachi will supply Product to Exabyte
following completion of the Development Agreement. Exabyte agrees that
Hitachi shall have the first right of refusal with regard to the supply of
Product. Any such supply of Product shall be subject to separate negotiation
of terms and conditions relating to Product price, quantity, configuration,
and test requirements. Any obligation on the part of Exabyte to purchase
Product from Hitachi shall be subject to the successful conclusion of a
separate supply agreement.
8. INDEPENDENT CONTRACTOR
Each party represents that it is an independent company that has its own
regular place of business and maintains a set of books and records that
reflect all items of income and expense. Each party shall operate as an
independent entity and is not, and shall not represent itself to be the agent,
employee, partner, joint venturer of the other party and may not obligate the
other party or otherwise cause the other party to be liable under any contract
or otherwise.
9. OBLIGATION UPON ESTATE OR LEGAL REPRESENTATIVE
The rights and obligations of the parties under this Development
Agreement shall be binding upon the successors and assigns of the parties.
10. SUPERSEDES PRIOR AGREEMENTS
This Development Agreement supersedes any oral or written agreement
previously executed by Hitachi and Exabyte relating to the subject matter of
this Development Agreement.
11. CHANGES TO THIS DEVELOPMENT AGREEMENT
This Development Agreement may be amended, terminated or superseded only
by written agreement between Hitachi and Exabyte that expressly amends,
terminates or supersedes this Development Agreement. The controlling language
of this Development Agreement and any amendments shall be English.
12. MAINTENANCE OF AGREEMENT
If one or more provisions of this Development Agreement should be
invalid, illegal or unenforceable in any respect, the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
13. EXPORT CONTROL
The parties agree not to export or re-export, directly or indirectly,
(i) any technical data received from the other party under this Development
Agreement, or (ii) any product, process or technical data using such received
technical data, to any country to which such export or re-export is restricted
or prohibited by Japanese, U.S. or other relevant laws, without obtaining
prior authorization from the competent government authorities as required by
those laws. This export control clause shall survive any termination or
expiration of the Development Agreement.
14. ARBITRATION
All disputes, controversies or differences which may arise between
Exabyte and Hitachi ("Parties") in relation to or in connection with this
Development Agreement shall be settled by amicable negotiation by both
Parties. If both Parties are unable to settle such disputes, then, such
disputes shall be referred to and finally settled by arbitration under the
Rules of Conciliation and Arbitration of the International Chamber of Commerce
applying the laws of the State of New York, U.S.A. The arbitration shall be
conducted in English and take place in Japan if it is initiated by Exabyte or
in the U.S.A. if it is initiated by Hitachi. The award of arbitration shall
bind both Parties.
15. NOTICES
All notices, requests and other communications called for by this
Development Agreement shall be deemed to have been given if made in writing
and mailed, postage prepaid, to the following address:
TO: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇. TO: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
General Manager Vice President
Hitachi, Ltd., Exabyte Corporation
Digital Media Products Division ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Video Equipments Operation ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
1410 Inada, Hitachinaka-shi
▇▇▇▇▇▇▇-▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
IN WITNESS WHEREOF, each party has caused this Development Agreement to
be executed by its duly authorized representative.
HITACHI, LTD. EXABYTE CORPORATION
Digital Media Products Division
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