***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 20th of December,
1999 between Hitachi Digital Media Products Division of Hitachi, Ltd., a
Japanese corporation having its principal place of business at 1410 Inada,
Xxxxxxxxxxx-xxx, Xxxxxxx-xxx, 000-0000 Xxxxx ("Hitachi"), and Exabyte
Corporation, a Delaware corporation, having its principal place of business
at 0000 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 ("Exabyte").
W I T N E S S E T H :
---------------------
WHEREAS, Exabyte desires to have designed and developed an 8mm data
storage device; and
WHEREAS, Hitachi has previously designed an 8mm drum 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 its existing
drum to a data storage component; 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 drum system for video storage applications.
1.2 "Development" as used herein shall mean the design and development
of the head, drum, transformer 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 component
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 the timeframe set forth in
Exhibit A if, in Exabyte's reasonable opinion, Development Prototypes fail to
meet applicable specifications. Failure of Exabyte to so notify Hitachi within
the timeframe set forth in Exhibit A 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. Price for prototypes (EVT/DVT)
and engineering costs (NRE) shall be paid in accordance with the Payment Terms
set forth in Exhibit A and Exhibit B. [...***...] Tooling shall be owned by
Exabyte upon payment for such tooling by Exabyte to Hitachi.
-------------
*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 6 months 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 with 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.
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 this 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: Xx. Xxxxxx Xxxxxx. TO: Xx. Xxxxxxx X. Xxxxx
General Manager Vice President
Hitachi, Ltd., Exabyte Corporation
Digital Media Products Division 0000 00xx Xxxxxx
Video Equipments Operation Xxxxxxx, Xxxxxxxx 00000
1410 Inada, Hitachinaka-shi
Xxxxxxx-xxx, 000 0000 Xxxxx
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
BY---------------------------- BY---------------------------
TITLE------------------------- TITLE------------------------
DATE-------------------------- DATE-------------------------
