13
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
(Mark one)
X Annual Report Pursuant to Section 13 or 15(d) of the Securities
--- Exchange Act of 1934
For the fiscal year ended March 25, 1995
--------------
or
Transition Report Pursuant to Section 13 or 15(d) of the
--- Securities Exchange Act of 1934
For the transition period from to
---------- ----------------
Commission file Number: 0-14016
---------
Maxtor Corporation
- -------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 77-0123732
- --------------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
211 River Oaks Parkway, San Jose, CA 95134
- ------------------------------------------ ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408) 432-1700
----------------
Securities registered pursuant to Section 12(b) of the Act: None
------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
----------------------------
(Title of class)
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
--- ---
Indicate by checkmark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K.
-----
As of June 2, 1995, 32,800,361 shares of the registrant's Common
Stock, $.01 par value, and 19,480,000 shares of the registrant's Class
A Common Stock, $.01 par value, were issued and outstanding,
respectively. The aggregate market value of the registrant's voting
stock held by nonaffiliates of the registrant as of June 2, 1995 was
$167,229,804, based on the closing price on NASDAQ National Market
System reported for such date.
This Form 10-K/A Amendment No.1 contains 36 pages of which this is
number 1. The Index to Exhibits begins on page 3.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
MAXTOR CORPORATION
Date: December 7, 1995 By: /s/ Nathan Kawaye
------------------------
Nathan Kawaye
Vice President, Finance,
Chief Accounting Officer
INDEX TO EXHIBITS
Exhibit No. Description Sequentially
Numbered
Pages
- ---------------------------------------------------------------------
3.1 (6) Certificate of Incorporation
3.2 (8) Certificate of Amendment of Certificate of
Incorporation of Maxtor Corporation, dated
December 23, 1987
3.3 (8) By-Laws as amended July 21, 1987
3.4 (21) Amended and Restated By-Laws of Maxtor
Corporation, A Delaware Company, effective
February 3, 1994
3.5 (21) Restated Certificate of Incorporation of
Maxtor Corporation effective February 3, 1994
4.1 (3) Form of Certificate of Shares of Registrant's
Common Stock
4.2 (7) Maxtor Corporation Rights Plan
4.3 (22) Amendment to Rights Agreement between Registrant
and the First National Bank of Boston, dated
September 10, 1993
10.1 (1) Omnilease Corporation Master Lease Agreement
No. 300362, dated as of January 14, 1983 and
addenda thereof
10.2 (1) Lease Agreement between Orchard Investment
Company No. 801, formerly Nelo, a California
general partnership and Registrant, dated
March 23, 1984
10.3 (1) Lease Commitment between Walter E. Heller &
Company and Registrant, dated as of March 11, 1985
10.4 (1) Stock Purchase Agreement between Steven P.
Kitrosser and Registrant, dated May 21, 1985
10.5 (1) Stock Purchase Agreement between James McCoy
and Registrant, dated May 21, 1985
10.6 (1) Equipment Lease Agreement between Pacific
Western (formerly Pacific Valley) Bank and
Registrant, dated June 26, 1985
10.7 (1) Continuing Guaranty between Maxtor Singapore
Limited and Bank of America N.T. & S.A.,
dated July 27, 1985
10.8 (9) Lease Agreement between John Arrillaga,
Separate Property Trust, Richard T. Perry,
Separate Property Trust and Registrant, dated
August 27, 1986
10.9 (3) Marketing and Distribution Agreement between
Ricoh Company, Ltd. and Registrant, dated
October 14, 1986
10.10 (3) Land Lease Agreement between Housing and
Development Board, Singapore and Maxtor
Singapore Limited, dated December 22, 1986
10.11 (3) Indenture dated February 16, 1987
10.12 (8) Stock Bonus Plan and Cash Bonus Plan between
Storage Dimensions, Inc. and Registrant dated
June 15, 1987
10.13 (8) Merger Agreement between MAXSUB II, Inc., and
Storage Dimensions, Inc. dated October 26, 1987
10.14 (3) 1986 Outside Directors' Stock Option Plan
10.15 (3) Commitment from Union Bank to Registrant
regarding letters of credit for the benefit of
the officers and directors of the Registrant
10.16 (4) Agreement and Plan of Reorganization
10.17 (9) Revised Equipment Lease Agreement between
Capital Associates International, Inc. and
Registrant, dated September 28, 1988
10.18 (9) Credit Agreement between Bank of America
National Trust and Savings Association and
Registrant, dated October 18, 1988
10.19 (9) Equipment Lease Agreement between Pitney Bowes
Credit Corporation and Registrant, dated
November 2, 1988
10.20 (9) Equipment Lease Agreement between Concord Leasing
(Asia) Pte Ltd. and Maxtor Singapore, Limited,
dated November 16, 1988
10.21 (9) Lease Agreement between Maxtor Singapore,
Limited and Jurong Town Corporation, dated
November 16, 1988
10.22 (9) Lease Agreement between Greylands Business Park
Phase II and Storage Dimensions, Inc., dated
December 14, 1988
10.23 (8) Stock Purchase Agreement among Registrant,
Storage Dimensions, Inc., David A. Eeg, Gene E.
Bowles, Jr., David P. Williams and David Lance
Robinson
10.24 (8) Fiscal 1988 Stock Option Plan
10.25 (8) Employee Stock Purchase Plan
10.26 (8) Dual Currency Loan Agreement between Maxtor
Singapore Limited, Maxtor Delaware, Maxtor
California and American Express Bank Limited
10.27 (8) Amended and Restated Fiscal 1985 Stock Option
Plan, including the Immediately Exercisable
Incentive Stock Option Agreement and the
Immediately Exercisable Nonqualified Stock
Option Agreement
10.28 (9) Loan Agreement between Probo Pacific Pte Ltd. and
Maxtor Singapore Limited, dated March 20, 1989
10.29 (9) Loan Agreement between Concord Leasing (Asia)
Pte, Ltd. and Maxtor Singapore Limited, dated
April 14, 1989
10.30 (10) Product Discontinuance Agreement between
Matsushita Communication Industrial Co., Ltd.
(MCI) and Registrant, dated August 23, 1989
10.31 (10) Equipment Lease Agreement between Capital
Associates International, Inc. and Registrant,
dated October 17, 1989
10.32 (10) Maxoptix Corporation 1989 Stock Option Plan
10.33 (9) Forms for Promissory Note and Amended and
Restated Promissory Note
10.34 (10) Amended and Restated Credit Agreement between
Bank of America National Trust and Savings
Association and Registrant, dated January 31, 1990
10.35 (10) Amendment to Lease Agreement between Orchard
Investment Company No. 801, formerly Nelo, a
California general partnership, and Registrant,
dated February 15, 1990
10.36 (10) Sublease Agreement between RACAL-VADIC, a
Division of Racal Data Communications, Inc.
("Sublessor"), and Storage Dimensions, Inc.
("Sublessee"), dated February 16, 1990
10.37 (10) Collateral Sharing and Subordination Agreement
between Registrant and Standard Chartered Bank,
dated April 5, 1990
10.38 (10) Loan and Security Agreement between Registrant
and MiniScribe Corporation, dated April 5, 1990
10.39 (11) Agreement for the Sale and Purchase of Shares in
Tratford Pte. Ltd. between the Registrant,
MiniScribe Peripherals (Pte) Ltd. and certain
Individuals, dated May 8, 1990
10.40 (11) Agreement for the Sale and Purchase of Shares in
Silkmount Limited between MaxSub Corporation,
Silkmount Limited and certain Individuals,
dated May 18, 1990
10.41 (11) Assignment of Debt between Registrant, MiniScribe
(Hong Kong) Limited and certain Individuals,
dated May 18, 1990
10.42 (10) Asset Purchase Agreement between Registrant,
MiniScribe Corporation and Standard Chartered
Bank, dated May 30, 1990
10.43 (14) License Agreement with Rodime PLC, dated
December 8, 1987 assigned to Registrant on
June 29, 1990
10.44 (14) Patent Cross License Agreement with IBM dated
October 1, 1984 assigned to Registrant effective
June 30, 1990
10.45 (14) Lease Agreement between MiniScribe Corporation
and 345 Partnership dated June 6, 1990, assigned
to the Registrant effective June 30, 1990
10.46 (14) Lease Agreement between Maxtor Colorado and Pratt
Partnership (Lot 1A), dated July 5, 1990
10.47 (14) Lease Agreement between Maxtor Colorado and Pratt
Partnership (Lot 1C), dated July 5, 1990
10.48 (14) Lease Agreement between Maxtor Colorado and Pratt
Partnership (Lot 4), dated July 5, 1990
10.49 (14) Agreement for the Purchase of Land and
Improvements between Registrant and Nixdorf,
dated August 16, 1990
10.50 (15) Grant Agreement dated 25 October 1990 between the
Industrial Development Authority, Maxtor Ireland
Limited and Registrant
10.51 (12) Amendment of Agreement between Registrant, Maxtor
Colorado, Maxtor California and Standard Chartered
Bank, dated November 6, 1990
10.52 (14) Guarantee for Dastek between Registrant, Dastek
and Silicon Valley Bank, dated November 30, 1990
10.53 (10) Judgment, William Lubliner vs. Maxtor Corporation,
James M. McCoy, William J. Dobbin, B.J. Cassin,
W. Charles Hazel and George M. Scalise
10.54 (10) Settlement Agreement, William Lubliner vs. Maxtor
Corporation, et al
10.55 (10) Fiscal 1991 Profit Sharing Plan Document
10.56 (10) Board of Director Compensation Approved for
Fiscal 1991
10.57 (14) Resignation Agreement and General Release of
Claims between Alexander E. Malaccorto and the
Registrant, dated January 11, 1991
10.58 (14) Employment Agreement between James M. McCoy and
Registrant, dated January 17, 1991
10.59 (14) Resignation Agreement and General Release of
Claims between James N. Miler and the Registrant,
dated January 20, 1991
10.60 (14) Letter Agreement between George Scalise and the
Registrant, dated February 22, 1991
10.61 (14) Resignation Agreement and General Release of
Claims between Steven Strain and the Registrant,
dated February 22, 1991
10.62 (14) Foothill Capital Credit Facility between Registrant,
Certain of its Subsidiaries and Foothill Capital
Corporation, dated April 22, 1991
10.63 (14) Employment Agreement between Laurence Hootnick
and Registrant, dated May 3, 1991
10.64 (14) Employment Agreement between Roger Nordby and
Registrant, dated May 7, 1991
10.65 (14) Employment Agreement between Thomas F. Burniece
and the Registrant, dated May 12, 1991
10.66 (15) Amendment of the Registrant's Continuing Guarantee
in favor of Foothill Capital Corporation, dated
July 10, 1991
10.67 (15) Settlement, Resignation and General Release of
Claims between Registrant and Taroon C. Kamdar,
dated August 2, 1991
10.68 (15) Amendment of Registrant's Continuing Guarantee in
favor of Foothill Capital Corporation, dated
August 9, 1991
10.69 (15) Amendment No. 1 to Lease by and between John
Arrillaga, Trustee, and Richard T. Peery, Trustee,
and Registrant, dated August 23, 1991
10.70 (15) Amendment of Registrant's Continuing Guarantee
in favor of Foothill Capital Corporation, dated
September 20, 1991
10.71 (13) Amendment of Agreement between Registrant, Maxtor
Colorado, Maxtor California and Standard Chartered
Bank, dated December 27, 1990, and further amended
July 26, 1991 and October 4, 1991
10.72 (15) Lease Agreement between Registrant and Devcon
Associates 31, dated December 6, 1991
10.73 (15) Deed of Partial Discharge and Release between
Barclays Bank PLC and Maxtor Singapore Limited,
dated December 19, 1991
10.74 (15) Agreement for Purchase and Sale of Assets among
Registrant, Read-Rite International, Read-Rite
Corporation and Maxtor Singapore Limited, dated
November 14, 1991, and amended December 20, 1991
10.75 (15) Asset Purchase Agreement among Registrant, Storage
Dimensions, Inc. and USD Acquisition, Inc., dated
December 27, 1991
10.76 (15) Resignation Agreement and General Release of
Claims between Registrant and David S. Dury,
dated January 31, 1992
10.77 (15) Sublease between Registrant and Hauser Chemical
Research, Inc., dated March 23, 1992
10.78 (15) First Amendment to Lease Agreement between PCA
San Jose Associates and Registrant, dated
March 25, 1992
10.79 (15) Asset Purchase Agreement among Registrant, Maxtor
Singapore LTD., and Sequel, Inc., dated March 12,
1992, and amended March 25, 1992
10.80 (5) Fiscal 1992 Stock Option Plan
10.81 (15) Form of Indemnity Agreement between the Registrant
and each of its Directors and Executive Officers
10.82 (15) Maxtor/Sequel 8K/Panther Subcontract
Manufacturing and Warranty Services Agreement,
dated March 23, 1992
10.83 (15) Maxtor Corporation 1992 Employee Stock Purchase Plan
10.84 (15) Maxtor Corporation 1991 Employee Stock Purchase Plan
10.85 (15) Maxtor Corporation FY'93 Incentive Plan Summary
10.86 (15) Fiscal 1992 Profit Sharing Plan Document
10.87 (17) Security Agreement between Registrant and Chrysler
Capital Corporation, dated April 14, 1992
10.88 (17) Subordination, Non-Disturbance, Estoppel and
Attornment Agreement between Loma Mortgage USA,
Inc. and Registrant, dated June 4, 1992
10.89 (17) Office Lease between Cabot Associates and Registrant,
dated July 23, 1992
10.90 (17) Revolving Credit Agreement among Registrant, Barclays
Bank PLC and The First National Bank of Boston, dated
as of September 9, 1992
10.91 (17) Security Agreement between Registrant and the CIT
Group/Equipment Financing, Inc., dated September 18,
1992
10.92 (17) Deed of Priorities among Maxtor (Hong Kong) Limited,
Registrant and General Electric Capital Corporation,
dated September 25, 1992
10.93 (17) Lease among Dares Developments (Woking) Limited,
Maxtor Europe Limited and Registrant, dated
October 1992
10.94 (16) Stock Purchase and Asset Acquisition Agreement
amoung David A. Eeg, Gene E. Bowles, Jr.,
CP Acquisition, L.P. No. 4A, CP Acquisition,
L.P. No. 4B, Capital Partners, Inc., FGS, Inc.,
Registrant, Storage Dimensions, Inc. and SDI
Acquisition Corporation, dated December 4, 1992
10.95 (17) Loan and Security Agreement between Registrant and
Household Bank, f.s.b., dated December 11, 1992
10.96 (17) Global Master Rental Agreement between Comdisco,
Inc. and Registrant, dated December 16, 1992
10.97 (17) Amendment No. 1 to Lease between Devcon Associates
31 and Registrant, dated December 21, 1992
10.98 (17) Continuing Guaranty among Maxtor Peripherals (S)
Pte., Ltd., Barclays Bank PLC and Registrant,
dated January 26, 1993
10.99 (17) Amendment No. 2 to Lease between Devcon Associates
31 and Registrant, dated February 1, 1993
10.100 (17) Instrument of Resignation, Appointment and
Acceptance among Registrant, The First National
Bank of Boston and Bank of America National Trust
and Savings, dated as of March 22, 1993
10.101 (17) Waiver and First Amendment to Credit Agreement
among Registrant, Barclays Bank PLC and the First
National Bank of Boston, dated as of April 16, 1993
10.102 (17) Waiver and First Amendment to Continuing Guaranty
Among Registrant, Barclays Bank PLC and the Lenders
dated as of April 19, 1993
10.103 (17) Security Agreement between Registrant and Barclays
Bank PLC, dated April 16, 1993
10.104 (17) Lease Agreement between Registrant and Pratt
Partnership, dated April 30, 1993
10.105 (17) Agreement for Stock Transfer Services between
Registrant and The First National Bank of Boston,
dated May 6, 1993
10.106 (17) Maxtor Corporation CY93 Profit Sharing Plan
10.107 (17) Maxtor Corporation Management Incentive Plan
for CY93
10.108 (18) Production Agreement between International
Business Machines Corporation and Registrant,
dated July 27, 1993 (with certain information
deleted and indicated by blackout text)
10.109 (19) Letter of Intent between Registrant and Hyundai
Electronics Co., Ltd., dated August 18, 1993
10.110 (20) Financing Agreement between Registrant and The
CIT Group/Business Credit, Inc., dated
September 16, 1993
10.111 (21) Form Letter Agreement between Registrant and All
of Its Named Executive Officers, except Laurence
Hootnick, dated November 17, 1993
10.112 (21) Waiver to Financing Agreement among Registrant and
The CIT Group/Business Credit, Inc., dated
January 12, 1994
10.113 (21) Stock Purchase Agreement between Registrant and
Hyundai Electronics Industries Co., Ltd., Hyundai
Heavy Industries Co., Ltd., Hyundai Corporation,
and Hyundai Merchant Marine Co., Ltd., dated
September 10, 1993
10.114 (22) Confidential Resignation Agreement and General
Release of Claims between Registrant and Thomas
F. Burniece III, dated February 4, 1994
10.115 (22) License Agreement between Registrant and MiniStor
Peripherals Corporation, dated February 23, 1994
10.116 (22) Confidential Resignation Agreement and General
Release of Claims between Registrant and John P.
Livingston, dated April 8, 1994
10.117 (22) Tenancy Agreement between Barinet Company
Limited and Maxtor (Hong Kong) Limited, dated
April 26, 1994
10.118 (23) Confidential Resignation Agreement and General
Release of Claims between Registrant and Laurence
R. Hootnick, dated June 14, 1994
10.119 (23) Confidential Resignation Agreement and General
Release of Claims between Registrant and Mark
Chandler, dated June 28, 1994
10.120 (24) Amendment No.2 to Lease between John Arrillaga &
Richard T. Peery and Registrant, dated June 28, 1994
10.121 (24) Amendment No. 3 to Lease between Devcon Associates
31 and Registrant, dated June 28, 1994
10.122 (24) Confidential Resignation Agreement and General
Release of Claims between Registrant and Skip
Kilsdonk, dated September 7, 1994
10.123 (24) Confidential Resignation Agreement and General
Release of Claims between Registrant and Sallee
Peterson, dated September 23, 1994
10.124 (24) Waiver to Financing Agreement among Registrant
and The CIT Group/Business Credit, Inc., dated
October 11, 1994
10.125 (24) Amendment No. 1 to Financing Agreement between
Registrant and The CIT Group/Business Credit,
Inc., dated October 31, 1994
10.126 (27) License agreement between Registrant and NEC
Corporation, dated October 18, 1994
10.127 (27) Lease Agreement for Premises Located at 1821
Lefthand Circle, Suite D, between Registrant and
Pratt Land Limited Liability Company, dated
October 19, 1994
10.128 (27) Lease Agreement for Premises Located at 1841
Lefthand Circle between Registrant and Pratt Land
Limited Liability Company, dated October 19, 1994
10.129 (27) Lease Agreement for Premises Located at 1851
Lefthand Circle between Registrant and Pratt Land
Limited Liability Company, dated October 19, 1994
10.130 (27) Lease Agreement for Premises Located at 2121 Miller
Drive between Registrant and Pratt Land Limited
Liability Company, dated October 19, 1994
10.131 (27) Lease Agreement for Premises Located at 2190 Miller
Drive between Registrant and Pratt Land Limited
Liability Company, dated October 19, 1994
10.132 (27) Confidential Resignation Agreement and General
Release of Claims between Registrant and Patricia
M. Roboostoff, dated November 30, 1994
10.133 (27) Stock Purchase Agreement between Registrant,
Maxoptix Corporation and Kubota Electronics
America Corporation, dated December 26, 1994
10.134 (28) Confidential Resignation Agreement and General
Release of Claims between Registrant and Larry
J. Smart, dated Feburuary 7, 1995
10.135 (28) Lease Agreement by and between 345 Partnership
and Registrant, dated February 24, 1995
10.136 (28) Lease Agreement for Premises Located at 1900
Pike Road, Suite A, Longmont, CO, between
Registrant as Tenant and Pratt Land Limited
Liability Company as Landlord, dated
February 24, 1995
10.137 (28) Lease Agreement for Premises Located at 2040
Miller Drive, Suite A, B, & C between Registrant
as Tenant and Pratt Land Limited Liability
Company as Landlord, dated February 24, 1995
10.138 Manufacturing and Purchase Agreement by and
13 - 36
Between Registrant and Hyundai Electronics
Industries Co., Ltd., dated April 27, 1995
(with certain information deleted and
indicated by blank spaces)
10.139 (28) Lease Agreement for Premises Located at 2040
Miller Drive, Suites D, E, & F, Longmont, CO,
between Registrant as Tenant and Pratt Management
Company, LLC as Landlord
11.1 (28) Computation of Net Income (Loss) Per Share
20.1 (25) Maxtor Corporation 1995 Stock Option Plan
20.2 (26) Maxtor Corporation Individual Stock Option
Agreement, dated November 8, 1994
21.1 (28) Subsidiaries of Maxtor Corporation, incorporated
in Delaware ("Maxtor")
23.1 (28) Consent of Ernst & Young LLP, Independent Auditors
27 (28) Financial Data Schedule
- ----------------------------------------------------------------------
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(1) Incorporated by reference to exhibits to Registration Statement
No. 2-98568 effective August 7, 1985
(2) Incorporated by reference to exhibits to Registration Statement
No. 33-4092 effective April 2, 1986
(3) Incorporated by reference to exhibits to Registration Statement
No. 33-12123 effective February 26, 1987
(4) Incorporated by reference to exhibits to Registration Statement
No. 33-12768 effective April 23, 1987
(5) Incorporated by reference to exhibits to Registration Statement
No. 33-43172 effective October 7, 1992
(6) Incorporated by reference to exhibits to Registration Statement
No. 33-8607 effective September 10, 1986
(7) Incorporated by reference to exhibits of Form 8-K filed February
8, 1988
(8) Incorporated by reference to exhibits to Annual Report on Form 10-
K effective June 24, 1988
(9) Incorporated by reference to exhibits to Annual Report on Form 10-
K effective June 24, 1989
(10) Incorporated by reference to exhibits to Annual Report on Form 10-
K effective June 1, 1990
(11) Incorporated by reference to exhibits of Form 8-K filed July 13,
1990
(12) Incorporated by reference to exhibits of Form 8 filed November
13, 1990
(13) Incorporated by reference to exhibits of Form 8 filed January 8,
1991
(14) Incorporated by reference to exhibits to Annual Report on Form 10-
K effective July 15, 1991
(15) Incorporated by reference to exhibits to Annual Report on Form 10-
K effective June 25, 1992
(16) Incorporated by reference to exhibits of Form 8-K filed January
8, 1993
(17) Incorporated by reference to exhibits to Annual Report on Form 10-
K effective May 27, 1993
(18) Incorporated by reference to exhibits of Form 10-Q filed August
10, 1993
(19) Incorporated by reference to exhibits of Form 8-K filed August
19, 1993
(20) Incorporated by reference to exhibits of Form 10-Q filed November
8, 1993
(21) Incorporated by reference to exhibits of Form 10-Q filed February
7, 1994
(22) Incorporated by reference to exhibits of Form 10-K filed June 24,
1994
(23) Incorporated by reference to exhibits of Form 10-Q filed August
5, 1994
(24) Incorporated by reference to exhibits of Form 10-Q filed November
8, 1994
(25) Incorporated by reference to exhibits to Registration Statement
No. 33-56405 effective November 10, 1994
(26) Incorporated by reference to exhibits to Registration Statement
No. 33-56407 effective November 10, 1994
(27) Incorporated by reference to exhibits of Form 10-Q filed February
7, 1995
(28) Incorporated by reference to exhibits to Annual Report on Form 10-
K effective June 23, 1995
28
MAXTOR CONFIDENTIAL 4/27/95
DISCLOSE AND DISTRIBUTE SOLELYHyundai-Maxtor Mfg. Agmt.
TO MAXTOR EMPLOYEES HAVING A
NEED TO KNOW
MANUFACTURING AND PURCHASE AGREEMENT
BY AND BETWEEN
MAXTOR CORPORATION
AND
HYUNDAI ELECTRONICS INDUSTRIES CO., LTD.
DATED APRIL 27, 1995
TABLE OF CONTENTS
RECITALS 1
1.0 DEFINITIONS 1
2.0 SCOPE; ROLE OF THE PARTIES 2
3.0 OBLIGATIONS OF THE PARTIES DURING TRANSITION PERIOD; 3
PAYMENT OF EXPENSES; ON-GOING SUPPORT
4.0 GRANT OF LICENSE; TRANSFER OF TECHNOLOGY 4
5.0 OBLIGATIONS DURING PRE-PRODUCTION PERIOD 6
6.0 OBLIGATIONS DURING PRODUCTION PERIOD 7
7.0 FORECAST 8
8.0 PURCHASE ORDERS 8
9.0 PURCHASE ORDER CANCELLATIONS AND 9
RESCHEDULING AND CHANGES
10.0 PURCHASE PRICE 9
11.0 TERMS OF PAYMENT AND TAXES 10
12.0 PACKAGING AND SHIPMENT 10
13.0 ENGINEERING CHANGES 11
14.0 INSPECTION AND ACCEPTANCE 11
15.0 WARRANTY 12
16.0 EPIDEMIC FAILURE 13
17.0 ON-SITE INSPECTION/VISITATION, VENDOR INFORMATION 13
AND AUDITS
18.0 INDEMNIFICATION 14
19.0 INVENTIONS 15
20.0 CONFIDENTIAL INFORMATION 16
21.0 ADMINISTRATIVE AND TECHNICAL COORDINATORS 16
22.0 TERM AND TERMINATION 17
23.0 LIMITATION OF LIABILITY 18
24.0 DISPUTE RESOLUTIONS 18
25.0 GENERAL 18
MANUFACTURING AND PURCHASE AGREEMENT
This Manufacturing and Purchase Agreement (the "Agreement") dated
this 27th day of April, 1995 (the "Effective Date") is entered into by
Maxtor Corporation ("Maxtor"), a Delaware corporation having its
principal place of business at 211 River Oaks Parkway, San Jose,
California 95134, U.S.A., and Hyundai Electronics Industries Co., Ltd.
("Hyundai"), a Korean corporation having its principal place of
business at San 136-1, Ami-ri, Bubal-eub, Ichon-kun, Kyoungki-do, 467-
860 Korea.
RECITALS
A. Maxtor is in the business of designing, manufacturing and
selling hard disk drives and other storage products.
B. Hyundai is in the business of designing, manufacturing and
selling, among other items, certain high technology computer products.
C. Maxtor wishes to contract with Hyundai to manufacture and sell
to Maxtor the Products (as hereinafter defined), and Hyundai wishes to
manufacture and sell to Maxtor the Products.
D. Hyundai and Maxtor are entering into this Agreement for the
purpose of establishing a long-term mutually beneficial business
relationship, and understand that the full cooperation of both parties
is necessary to fully develop this business and maximize the potential
opportunities. If problems should be encountered with respect to any
aspect of this Agreement or if the parties should encounter any
problems not covered by this Agreement, Maxtor and Hyundai shall
discuss them in a cooperative and sincere spirit and attempt to arrive
at a mutually acceptable solution.
NOW, THEREFORE, in consideration of these premises and of the
mutual covenants herein contained, the parties agree as follows:
1.0 DEFINITIONS.
1.1 Day shall mean calendar day unless otherwise specified.
1.2 Hyundai Technology shall mean all information, in whatever
form or medium, whether communicated orally or in tangible form,
including, but not limited to, trade secrets, inventions, patent
rights, designs, drawings, specifications, test information, methods,
procedures, engineering and associated design data and manufacturing
information, relating to the use, manufacture, service and/or sale of
the Products and components thereof to which Hyundai now or hereafter
owns or is authorized to sublicense without payment to third parties.
1.3 Maxtor's Other Manufacturing Sources shall mean Maxtor's
existing manufacturing Subsidiaries listed on Schedule A hereto and
other Subsidiaries established or acquired by Maxtor from time to time
for the purpose of manufacturing the Products or Other Products.
1.4 Maxtor Technology shall mean all information, in whatever form
or medium, whether communicated orally or in tangible form, including,
but not limited to, trade secrets, inventions, patent rights, designs,
drawings, Specifications, Process, test information, methods,
procedures, Quality and Reliability Systems, engineering and
associated design data and manufacturing information, relating to the
use, manufacture, service and/or sale of the Products and components
thereof to which Maxtor now or hereafter owns or is authorized to
sublicense without payment to third parties.
1.5 "Products" shall mean any and all data storage products
(including, but not limited to, hard disk drives (rigid or removable)
and flash memory products) which will be manufactured by Hyundai for
Maxtor hereunder in accordance with the terms of this Agreement.
1.6 "Other Products" shall mean any and all data storage products
(including, but not limited to, hard disk drives (rigid or removable)
and flash memory products) manufactured by Maxtor, or jointly by
Maxtor with a third person, or for Maxtor by a third person, that do
not fall under the definition of Products.
1.7 "Process" shall mean assembly and test methods and procedures
established by Maxtor relating to the manufacture of the Products.
1.8 "Specifications" shall mean the engineering specifications
relating to the Products provided or developed by Maxtor from time to
time.
1.9 "Quality and Reliability Systems" shall mean those methods
and practices provided or developed by Maxtor which (i) prevent
shipment of material which does not meet Specifications, (ii)
provide corrective action to prevent manufacture of additional non-
conforming material, (iii) provide notification and control of all
changes to the Process or Products which may impact the end customers'
use of the Product, (iv) provide resolution for customer perceived
quality or reliability problems with the Products and (v) provide
regular reports of manufacturing data to give assurance that the
Process and Products are within acceptable statistical limits.
1.10 "Subsidiary" shall mean any other corporation, company or
other entity more than fifty percent (50%) of whose outstanding shares
of securities are now or hereafter owned or controlled directly or
indirectly by either party, but only so long as such ownership or
control exists.
2.0 SCOPE; ROLES OF THE PARTIES.
2.1 Maxtor shall have the principal responsibility for designing
the Products and providing to Hyundai working prototypes ready for
volume production. Maxtor shall purchase the Products from Hyundai in
accordance with the terms and conditions of this Agreement and shall
have the responsibility for the worldwide marketing and sale of the
Products. Without making any , Maxtor acknowledges
that it is Maxtor's to have Hyundai manufacture for
Maxtor the defined in Schedule F hereto.
2.2 Hyundai shall have the principal responsibility for the
manufacture of the Products and shall manufacture and assemble the
Products for Maxtor solely in accordance with the Process and
Specifications provided by Maxtor from time to time.
2.3 Maxtor and Hyundai understand that full cooperation is
necessary to fully develop the business relationship contemplated
herein and to achieve the potential opportunities thereof. The
parties, therefore, intend to fully cooperate with each other to
continue and maintain a long-term and mutually beneficial business
relationship.
2.4 (a) Neither party shall be prevented from entering into
similar agreements with third parties for products or
services or for performing such manufacturing
services, provided that the confidential information or Technology of
the other party is not used without obtaining prior written consent
from the other party. At the request of either party,
.
(b) Notwithstanding anything to the contrary contained
herein, it is understood that . In analyzing such overall
costs and other terms, the shall be considered.
In analyzing such overall costs and other terms,
shall be considered. For this analysis, Maxtor will take into
consideration .
2.5 It is the parties' intention to manufacturing
levels at each of Hyundai and Maxtor's Other Manufacturing Sources'
factories. Accordingly, the parties agree to meet and confer at least
once quarterly to review and determine the most efficient and cost
effective utilization of their . Notwithstanding
anything to the contrary, it is agreed and understood that in order to
achieve the intent of this Section,
.
2.6 It is also the parties' intention to conduct Hyundai's
manufacturing operations in the and mutually
beneficial manner, . Accordingly, the parties also agree
to meet and confer at least once per quarter to assess whether the
current Hyundai manufacturing operation is
, and if it is agreed that it is not, to to make
such manufacturing operations .
2.7 The parties understand that the assurance of continued
production of quality and low-cost Products is critical to Maxtor's
business and that Maxtor is relying on Hyundai as the sole source of
certain Products. The parties recognize that the laws existing in
certain countries may require the manufacture of products in the
country in order for the products to be sold in such country and that
unforeseen events, including political conditions within the United
States, or other circumstances, may arise which would either limit or
prevent Hyundai from manufacturing Products or Other Products in Korea
or other countries, or from satisfying Maxtor's purchase requirements
for Products necessary to meet the demands of the market. In
addition, the economics associated with the manufacture of the
Products, or some portion thereof, may be such that it is clearly
appropriate to have such Product, or component or portion thereof,
manufactured outside of Korea. In the event that legal, political or
governmentally imposed economic restrictions or other conditions, or
if any event described in Section 25.4, or if a material breach of
this Agreement by Hyundai shall occur, or the parties are unable to
resolve a material dispute in accordance with Section 24, which
prevent or limit, or make more unfavorable, the delivery of Products
from Hyundai to Maxtor or its customers, Maxtor and Hyundai will
immediately cooperate in good faith and sincere spirit to find a
mutually acceptable solution to allow Hyundai to continue supplying
the Products to Maxtor. Nothing set forth in this Section shall
affect the understandings and obligations set forth in Section 2.4(b),
above.
3.0 OBLIGATIONS OF THE PARTIES DURING TRANSITION; PAYMENT OF
EXPENSES; ON-GOING SUPPORT.
3.1 Hyundai's Obligations. Hyundai shall be responsible to
purchase, own, lease or otherwise acquire and continually make
available, the facilities and capital equipment needed to manufacture
the Products and shall provide all parts, labor, materials and other
items necessary to perform Hyundai's obligations hereunder.
3.2 Maxtor's Obligations.
(a) To enable Hyundai to manufacture the Products, Maxtor shall
(i) provide Hyundai (through Maxtor or a Maxtor subcontractor) with
the necessary in accordance with the Transition
Plan described in Schedule B attached hereto, as will be modified from
time to time by the parties, (ii) assist Hyundai in procuring the
necessary to allow Hyundai to perform
its obligations hereunder, and (iii) with respect to the Products,
produce and compile for Hyundai and deliver to Hyundai, on a schedule
mutually agreed to by the parties, the Product design, Process,
technical specifications, and test information relating to the
Products, and the Product manufacturability, fabrication, operation,
performance, interfaces, and reliability of the Products in sufficient
detail so as to enable Hyundai to thoroughly understand the Products
to be manufactured by Hyundai.
(b) Subsequent to the initial transition period for each Product
as described in the Transition Plan for each such Products, upon
Hyundai's reasonable request, Maxtor shall promptly provide additional
to Hyundai at facilities designated by
Hyundai relating to the services performed or Products delivered
hereunder. The period of time is required shall be
mutually agreed upon by the parties. The parties agree to periodically
assess the continued provision of such Maxtor support in terms of
reasonableness relating to, among other items, expense, time, manpower
required, and .
3.3 Allocation of Expenses. All expenses incurred by the parties
during the initial transition period shall be allocated as specified
in the Transition Plan in accordance with the terms of this Agreement.
It is anticipated that the parties will continue to incur expenses as
part of the ongoing technology exchange under Section 4.3 and
continual refinement of their business relationship. Unless otherwise
agreed to by mutual agreement, the parties agree to
incurred pursuant to this Agreement in accordance with the
following guidelines:
(a) Maxtor agrees to assume all expenditures associated with
Product and Process design and development, including costs of
component design and selection and prototype manufacture.
(b) During and subsequent to the initial transition period,
issued by Maxtor
and shipping Products to Maxtor.
(c) Maxtor agrees to assume all costs incurred in the sale and
marketing of the Products.
(d) agrees to assume associated with the
after the initial transition period.
(e) agrees to assume , including
or other technical information developed or
provided by Maxtor, and assisting Hyundai in establishing and
operating Hyundai's manufacturing facility.
(f) Except as otherwise provided, will be borne by
the .
4.0 GRANT OF LICENSE; TRANSFER OF TECHNOLOGY.
To enable the parties to fulfill their respective obligations under
this Agreement, Maxtor and Hyundai shall grant to the other a non-
exclusive license pursuant to the terms described below.
4.1 Grant of License by Maxtor.
(a) Subject to the provisions of Section 22, Maxtor hereby grants
to Hyundai:
(i) a non-exclusive, personal, nontransferable, royalty-free
license, without the right to sublicense (except as provided below),
to use the Maxtor Technology solely in connection with the
development, assembly, manufacturing and/or testing of the Products
solely for Maxtor in accordance with the terms of this Agreement; and
(ii) the right to sublicense to third party contractors, with no
right to resublicense, in accordance with certain minimum terms and
conditions established by Maxtor and subject to Maxtor's prior written
approval, the right to use the Maxtor Technology solely for the
purpose of having such third party subcontractors make the Products
for Maxtor.
(b) Maxtor will deliver to Hyundai in a timely manner the Maxtor
Technology as determined necessary by Maxtor in order to permit
Hyundai to meet its obligations hereunder. The schedule and manner of
delivery of information shall be mutually agreed to by Maxtor and
Hyundai with respect to each Product.
(c) The rights granted to Hyundai pursuant to Section 4.1(a)
(including all sublicenses granted by Hyundai under Section
4.1(a)(ii)) shall terminate upon termination or expiration of this
Agreement, whenever and for whatever reasons, and Hyundai agrees to
immediately cease using the Maxtor Technology or any other information
supplied by Maxtor or obtained by Hyundai under this Agreement in any
manner upon such termination or expiration.
4.2 Grant of License by Hyundai.
(a) Subject to the provisions of Section 22, Hyundai hereby
grants to Maxtor and its Subsidiaries:
(i) a non-exclusive, personal, nontransferable, royalty-free
license, without the right to sublicense (except as provided below),
to use the Hyundai Technology solely in connection with the
development, assembly, manufacturing, distribution, sales and/or
testing of the Products and hard disk drive Other Products developed
by or for Maxtor provided that the license to Hyundai technology as
aforesaid for such hard disk drive Other Products is limited solely to
Maxtor and Maxtor's Other Manufacturing Sources; and
(ii) the right to sublicense to third party subcontractors, with
no right to resublicense, in accordance with certain minimum terms and
conditions established by Hyundai and subject to Hyundai's prior
written approval, the right to use the Hyundai Technology solely for
the purpose of having such third party subcontractors make the
Products.
(b) The rights granted to Maxtor pursuant to Section 4.2(a)
(including all sublicenses granted by Maxtor under Section 4.2(a)(ii))
shall terminate upon termination or expiration of this Agreement,
whenever and for whatever reasons, and Maxtor agrees to immediately
cease using the Hyundai Technology or any other information supplied
by Hyundai or obtained by Maxtor under this Agreement in any manner
upon such termination or expiration.
4.3 Technology Transfer and Technical Information Exchange. It
is agreed that technical information exchange will be an ongoing
process during the term of the Agreement. Each party shall have
, subject to the provisions of Section 20, to the
other's facilities and production processes for the Products and shall
provide of technical information.
To the extent feasible, the parties agree to each other
information relating to a Product design or manufacturing, as it is
developed or becomes available.
5.0 OBLIGATIONS DURING PRE-PRODUCTION PERIOD.
5.1 Maxtor's Obligations.
(a) For each Product proposed by Maxtor, Maxtor shall be
responsible for and shall bear all expenses related to the following:
(i) the development of the Product design (including
Specifications thereof) and component design;
(ii) the selection and qualification of
and ;
(iii) the development of the by
Hyundai;
(iv) the performance of ;
(v) the of the Quality and Reliability
Systems; and
(vi) the of technology, technical
information and documentation relating to the foregoing to Hyundai in
an manner.
(b) Maxtor shall Hyundai's
manufacturing facilities and each of the Products to be manufactured
by Hyundai hereunder.
(c) Maxtor shall assist and cooperate with Hyundai in resolving
any pre-production issues.
5.2 Hyundai's Obligations.
(a) Hyundai agrees that it will complete, as provided in the
Transition Plan, the establishment of a manufacturing facility fully
equipped to manufacture the Products in volume for Maxtor pursuant to
Section 8.
(b) Hyundai shall relating to
required to perform its obligations
under this Agreement.
(c) Hyundai shall comply with the qualification plan developed by
Maxtor for the qualification of Hyundai's manufacturing facility and
the Products to be produced by Hyundai. It is understood that the
qualification plan may be modified from time to time as new Products
are being introduced.
(d) Hyundai shall perform all Quality and Reliability testing in
accordance with the Quality and Reliability Systems that are developed
and provided by Maxtor and attached hereto as Schedule D.
(e) Hyundai may not move any portion of the manufacturing process
or Product to any new facility or move from the original manufacturing
facility qualified by Maxtor, except with the prior written consent of
Maxtor.
(f) At Maxtor's request, Hyundai will assist Maxtor in qualifying
used in the Products. It is understood, however,
that Maxtor will select and qualify , including
components manufactured by Hyundai. Hyundai agrees that it will
purchase components and parts for the manufacture or assembly of the
Products from provided to Hyundai
from time to time by Maxtor. The parties, however, agree to cooperate
and use reasonable efforts to in order to reduce
material or manufacturing costs.
6.0 OBLIGATIONS DURING PRODUCTION PERIOD.
6.1 Maxtor's Obligations.
(a) Maxtor shall use its best efforts to use
of Hyundai's factory as contemplated under Section 2.5.
(b) Maxtor shall promptly assist and cooperate with Hyundai in
resolving any production problems to allow Hyundai to resume
production .
(c) Maxtor shall work with Hyundai on an ongoing basis to address
issues and to improve yield.
(d) Maxtor shall keep in place, at , a mutually agreed
upon dedicated to assist Hyundai with the ongoing
technology exchange and shall promptly .
(e) Maxtor shall promptly qualify, at in
order to reduce the materials and manufacturing cost of the Product.
(f) Maxtor will develop and
to ensure effective and efficient continuity of supply for all
components used in the Products. Hyundai shall assist Maxtor in the
development and .
(g) Maxtor shall inspect Products within
from the date of receipt and use the data obtained to independently
determine whether the have been maintained.
Maxtor shall promptly make such to assist Hyundai in
meeting its reliability and quality goals.
(h) Maxtor shall promote the sale of the Products.
6.2 Hyundai's Obligations.
(a) Hyundai will be responsible for processing sufficient Product
starts and procuring sufficient inventory to provide Maxtor with the
required number of Products.
(b) Hyundai acknowledges that due to the of certain
Products manufactured by Hyundai for Maxtor, it is critical that
Hyundai maintain the its manufacturing capacity upon
Maxtor's request. Hyundai and Maxtor therefore agree to develop
Hyundai's manufacturing capacity to meet customer
demand.
(c) Hyundai shall assist Maxtor in the development
of plans to ensure effective and efficient continuity of supply for
all components used in the Products.
(d) Hyundai shall maintain and supply on
Products pursuant to the Quality and Reliability Systems.
(e) Hyundai shall comply with the Change Control Policy set forth
in Schedule C and the Quality and Reliability Systems Procedure set
forth in Schedule D.
(f) Hyundai may not move to any new
facility or move from the original manufacturing facility qualified by
Maxtor, except with the prior written consent of Maxtor.
(g) Hyundai will comply with the provisions set forth in Section
5.2(f) above.
7.0 FORECAST.
7.1 At least , Maxtor will provide to Hyundai a
forecast of Maxtor's
requirement for the Products in accordance with Maxtor's Product
Requirement Forecast (PRF) process. This forecast is provided solely
for Hyundai's ; the forecast shall not be
construed as an authorization by Maxtor to order any materials for, or
to allocate any labor or equipment for the manufacture of the
Products. Maxtor will not be responsible for any of
for materials, supplies, labor, or other commitments or expenses,
other than as authorized by a written Maxtor Purchase Order in
Hyundai's possession as provided in Section 8 below.
7.2 Hyundai will submit to Maxtor, on a basis, a
plan for in accordance with Maxtor's
Response to Forecast (RTF) process. This will consist
of the current quantity ordered by Maxtor for each of the forthcoming
and any additional capacity in excess of what Maxtor
has ordered for each of the forthcoming . Maxtor may
place orders for the quantity, or any portion thereof, specified in
the excess capacity part of the , up to and
including Hyundai's entire output for the ,
with a minimum of lead time. In the event Maxtor's
requirements exceed Hyundai' plant capacity, the parties agree to meet
and attempt to a resolution that will meet
Maxtor's customer's needs.
8.0 PURCHASE ORDERS
8.1 This Agreement, together with all Schedules and other
documents referred to herein, will apply to all purchases,
notwithstanding any acknowledgment or other business forms transmitted
by either party. All purchase orders, acknowledgments and
transmittals must reference this Agreement. The terms and conditions
of this Agreement, together with all Schedules and other documents
referred to herein, shall prevail notwithstanding any variance with
the terms and conditions of any other document submitted by either
party.
8.2 This Agreement does not constitute a purchase order.
Procurements made under this Agreement shall be made in accordance
with written purchase order issued by Maxtor (in the form attached
hereto as Schedule E). Hyundai may not perform any services or expend
any monies for which Maxtor is responsible hereunder without prior
receipt of a Maxtor purchase order therefor.
8.3 The purchase order shall show the quantity, description, unit
price, required ship date, method of shipment, destination, and any
negotiated special charges. All purchase orders shall provide a lead
time of . Maxtor may, from time to time, request
Hyundai to make shipments in less than the standard lead time. Such
requests will be negotiated by the parties to arrive at mutually
agreeable dates of delivery.
8.4 Hyundai agrees to accept purchase orders issued by Maxtor or
its Subsidiaries in accordance with the terms and conditions of this
Agreement. Within working days of its receipt of each
purchase order, Hyundai will provide written order acknowledgment. If
Hyundai's order acknowledgment is not received by Maxtor with said
period, the purchase order will be deemed to have been accepted by
Hyundai.
8.5 (a) Hyundai shall timely deliver all Products according to
schedule. If Hyundai's performance falls below ,
Hyundai shall immediately implement a mutually agreed upon corrective
action plan which brings compliance.
The parties agree to cooperate in the development and implementation
of such corrective action plan.
(b) The parties agree to further cooperate in identifying the
cause of any delay in scheduled Product delivery, and to
. In the event that either party
is damaged or suffers a loss as a result of the delay, the parties
shall work together to such loss or damage.
8.6 Should Maxtor request Hyundai to stop shipment of Products
for quality reasons, Hyundai's obligations to meet delivery
commitments shall thereafter be suspended until such time as Maxtor
thereafter requests Hyundai to recommence shipment of Products.
Maxtor and Hyundai shall work together to allow Hyundai to resume
production , and to attributable to the
stop shipment. All requests pursuant to this Section shall be in
writing.
8.7 Hyundai shall always use its best efforts to maintain the
ability to supply all Products that Maxtor orders from Hyundai.
Hyundai shall immediately notify Maxtor of any event or circumstance
that might affect Hyundai's ability to fully perform its obligations
under this Agreement.
9.0 PURCHASE ORDER CANCELLATIONS, RESCHEDULING AND CHANGES.
9.1 Cancellation. Maxtor may cancel purchase order(s) or any
portions thereof for any reason by notifying Hyundai in writing at
least date on the purchase orders.
Cancellation will be effective upon Hyundai's receipt of the written
cancellation notice from Maxtor, or such later date as specified in
the cancellation notice. Hyundai will cease work on affected purchase
order(s) in accordance with the cancellation notice. Maxtor will (i)
purchase and pay for any units of Products that have been completed as
of the effective date of the cancellation, (ii) will pay Hyundai the
incurred by Hyundai in connection with the
assembly of any goods that are as of the effective date
of cancellation under the canceled order(s), (iii)
pay the costs of components and other materials procured by Hyundai
specifically on account of the canceled order(s)
specified in Section 8.3, (iv) pay the costs of components and other
materials that Hyundai has ordered and is with
longer than lead time, and (v) pay any cancellation or
restocking charges imposed by vendors on account of any canceled
orders pursuant to clauses (iii) and (iv) above. Hyundai will use its
best efforts to return components and other materials to its vendors
and/or use them in other activities at Hyundai. Hyundai will in any
event use its best efforts to mitigate the cancellation charges
hereunder. In the event any such cancellation causes underutilization
of Hyundai's manufacturing capacity, Maxtor and Hyundai will
expeditiously meet to discuss mutually acceptable solutions for
optimizing such capacity in a manner consistent with Section 2.5.
9.2 Rescheduling.
(a) Maxtor may upon prior written notice to Hyundai reschedule
without penalty delivery of the following quantities of the Products
for which purchase orders have been submitted:
Percentage of the units
If Rescheduling occurs of the Products which
(days prior to delivery) may be rescheduled
It is agreed that the new ship date(s) must not be more than
beyond the original ship date(s) shown on the affected
purchase order.
(b) If Maxtor's reschedule request represents an acceleration or
increase, Hyundai will use its best efforts to meet the requested
delivery dates.
9.3 Product Mix Changes. It is understood that market
conditions or requirements by Maxtor's customers may require changes
in the Product mix within an HDA family and it is anticipated that
such changes may . Hyundai, therefore, grants to Maxtor
the right to to the Product mix that do not change
the of the Products ordered . Maxtor
and Hyundai agree to work together to respond to such changes in a
timely manner.
10.0 PURCHASE PRICE.
10.1 The initial unit price to be paid by Maxtor for Products
hereunder shall be calculated as set forth in Schedule F.
10.2 All prices are expressed and all payments will be made in
U.S. dollars.
10.3 Pricing. If at any time the purchase price
charged by Hyundai for the Products ,
Maxtor and Hyundai shall meet to discuss .
10.4 Benefits. If Maxtor purchases
components manufactured by Hyundai from Hyundai, Hyundai shall use its
best efforts to ensure Maxtor that the
; and that if, during the term of this Agreement (or any
extension thereof), Hyundai shall sell such products for
to any other customers, thereupon and thereafter Maxtor shall
be .
11.0 TERMS OF PAYMENT AND TAXES.
11.1 Hyundai will invoice Maxtor upon delivery of the Product in
accordance with Section 12. Maxtor shall pay within
after the relevant invoice date or delivery of the Products, whichever
is later. Payment shall be made by wire transfer, check or other
instrument approved by Hyundai. At Maxtor's request, Hyundai will
grant to Maxtor an extension of time beyond , at which time
the parties agree to meet to reach an agreement regarding the interest
to be paid for extending such payment term.
from the Effective Date of this Agreement , or as otherwise requested
by a party.
11.2 shall bear all applicable federal, state,
municipal, and foreign jurisdiction taxes (such as sales, use or
similar taxes), all customs duties, imposts, and similar charges, and
all personal property taxes assessable on the Products which are
imposed after delivery to .
11.3 Maxtor shall invoice Hyundai for all expenses incurred by
Maxtor and charged to Hyundai in accordance with the Transition Plan.
All invoices will be paid within from the date thereof, except
as otherwise set forth in the Transition Plan, or as otherwise agreed
by the parties. The parties agree to specifically address payment by
Hyundai of made or to be made by Maxtor for
Hyundai at Hyundai's request. The contemplated are
set forth in the Transition Plan
11.4 All payments hereunder shall be expressed and made in U.S.
dollars.
12.0 PACKAGING AND SHIPMENT.
12.1 All Products are to be packed in accordance with Maxtor
specifications, unless otherwise provided by Maxtor.
.
12.2 Hyundai shall deliver the Products to Maxtor
(as defined by the International Chamber of Commerce).
shall pay all duties, taxes, shipping, customs, insurance,
and handling charges to the , which is the point at
which title shall pass from Hyundai to Maxtor. shall pay all
duties, taxes, shipping, customs, insurance and handling charges after
the goods are aboard the exporting vessel. Delivery shall not occur
until Hyundai has obtained any export license or other official
authorization necessary for export of Products. Korean export
licensing is the sole responsibility and at the sole expense of
Hyundai.
13.0 ENGINEERING CHANGES.
13.1 Definition. The term Engineering Change(s) shall mean those
mechanical, electrical, firmware or software design changes or
specification changes, piece part or subassembly design or
specification changes, made to the Products or Process, or, which, if
made, could affect the schedule, performance, reliability,
availability, serviceability, appearance, dimensions, tolerances,
safety or costs, such determination to be made .
13.2 Hyundai Change(s). Hyundai will notify Maxtor of any
Engineering Change proposed to be made by Hyundai to the Products or
Process, and will supply a written description of the expected effect
of the Engineering Change on the Products, including its effect on
price, performance, reliability and serviceability. Maxtor may elect
to evaluate the prototype, parts and/or designs specified as part of
the proposed change and Hyundai shall provide the prototype, parts
and/or design to Maxtor at no charge for such evaluation. Maxtor
agrees to make to approve or disapprove Hyundai's
proposed changes within after receipt of
Hyundai request for changes, and within for
changes. Hyundai will not change or modify the Products or Process
by implementation of such Engineering Change without Maxtor's prior
written approval.
13.3 Maxtor Change(s). Maxtor may request, in writing and in a
manner similar to Hyundai's request as set forth in Article 13.2, that
Hyundai incorporate any Engineering Change into the
Products, and Hyundai will provide to Maxtor its written response
after receipt of Maxtor's request. For
Engineering Changes, as determined by Maxtor, Hyundai will respond
within of Maxtor's written request. Hyundai's response
will state the cost savings or increase, if any, expected to be
created by the Engineering Change, and the effect on the schedule,
performance, reliability, availability, safety, serviceability,
appearance, dimensions, tolerances, composition of bills of material,
and of the Products. If Maxtor requests Hyundai to incorporate an
Engineering Change into the Products, the applicable Specifications
will be amended as required. Hyundai will not unreasonably refuse to
incorporate Maxtor's Engineering Changes into the Products.
13.4 Unforeseen Changes. In the event of a serious and
unforeseen safety or technical problem with the Products provided
hereunder, an emergency Engineering Change may be required. Such
problem may or may not result in the Products failing to meet the
applicable Specifications. Maxtor and Hyundai shall mutually expend
all necessary resources in order to correct such problems immediately
upon their discovery by either party.
13.5 In the event such Maxtor required Engineering Change
directly causes a negative financial impact to Hyundai due to
incorporation of such change into a Product, the parties agree to
promptly meet to discuss of such financial impact.
Hyundai agrees to use its best efforts to notify Maxtor of such
financial impact prior to incorporation of such Engineering Change,
and in any event, notify Maxtor as soon as Hyundai becomes aware of
such impact.
14.0 INSPECTION AND ACCEPTANCE.
14.1 Hyundai will ensure all Products are tested in accordance
with the requirements set forth in Schedule D. Maxtor may, subject to
mutual agreement, update or modify Schedule D during the term of this
Agreement, or any extension thereof. Hyundai will provide only those
Products conforming to the Specifications described in this Agreement,
unless Hyundai has obtained prior written approval from the Maxtor
technical coordinator for any deviation from such Specifications.
14.2 Maxtor may inspect and test all Products. If nonconformance
to the Specifications occurs, Maxtor and Hyundai will
to identify and find a way to correct the causes of the problem(s).
Maxtor may refuse to accept Products which do not conform to the
Specifications. Maxtor may reject if lot acceptance
criteria established in the Specifications are not fulfilled. Maxtor
may of Products until the cause(s) for non-
conformity, as mutually determined by parties, has been corrected.
Maxtor will use its best efforts to in identifying
the cause(s) for rejection through a . If
the cause(s) identified by the relate to Maxtor's
design of the Products or Process, Maxtor will promptly take
to allow Hyundai to resume production as soon as
possible.
14.3 Subject to the Section 14.2, if Maxtor rejects any defective
Products, from the date of receipt of such rejected
units at Hyundai's facility. If the failure is unrelated to Maxtor's
design or Process as provided in Section 14.2, and Hyundai is unable
to correct such failure within a reasonable time, Maxtor may cancel
the affected order(s) and all pending orders for those Products at no
cost or obligation to Maxtor. agrees to pay for
incurred by Maxtor or its customers arising out
of or relating to the return to Hyundai of all the units that did not
meet the Specifications of this Agreement as a result of manufacturing
errors by Hyundai.
14.4 If, after from the date of receipt by
Maxtor, Maxtor has not rejected a Product, it will be deemed to have
been accepted by Maxtor. The act of inspection or payment by Maxtor
for the Products will not be construed as Maxtor's acceptance of such
Products.
15.0 WARRANTY.
15.1 Hyundai warrants that the Products delivered by Hyundai to
Maxtor shall meet the . The parties agree to
establish warranty terms which are so as to permit
the Products to remain .
15.2 At
the defective Products. The parties agree to establish warranty terms
for Products repaired or replaced under this Section which are
so as to permit the Products to remain .
15.3 All Products repaired by Hyundai will exhibit an identifying
mark to indicate that the Products have been reworked or repaired and
the latest date of delivery. shall pay for
relating to the return of the defective Products to Hyundai and
shall pay for relating to the subsequent return
of the repaired or replaced Products to Maxtor.
15.4 Hyundai agrees to collect and send to Maxtor
on basis in a mutually agreed to format.
15.5 (a) Hyundai agrees to provide out-of-warranty repair
service to Maxtor until the end of after the last
purchase of each Product. The prices charged by Hyundai will be
Hyundai's which Hyundai will try, in good faith,
not to have . The foregoing
notwithstanding, Maxtor will have to have any Product
repaired by Hyundai. In the event Maxtor chooses not to have a
Product repaired by Hyundai, Maxtor shall notify Hyundai in writing.
In such situation, Maxtor and Hyundai agree to meet .
(b) Regarding out-of-warranty repair services, the parties
agree:
(i) that Maxtor and Hyundai will work together to support
customer requirements for out-of-warranty repair;
(ii) where possible, Maxtor and Hyundai will work together
to alleviate the need for extended out-of-warranty repair by helping
customers find other options; and
(iii) that Maxtor and Hyundai will work together to
requirements and minimize exposure on obsolete material.
15.6 EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH ABOVE, HYUNDAI
GRANTS NO OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, FOR THE
PRODUCTS, AND DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. THE ABOVE EXPRESS WARRANTIES SHALL
BE THE SOLE AND EXCLUSIVE REMEDY FOR DEFECTIVE PRODUCTS, UNLESS
OTHERWISE SET FORTH IN THIS AGREEMENT.
16.0 EPIDEMIC FAILURE.
16.1 In the event of an epidemic failure of the Product, whether
occurring inside or outside of the warranty period, the parties shall
work together to identify the nature of the failure and
to determine whether the failure results from the design or
manufacture of the Products.
16.2 Maxtor and Hyundai shall agree on an of
the cost of resolving the problem which shall depend on whether the
primary source of the problem is Maxtor's design of the Products or
Hyundai's manufacture of the Products.
16.3 Maxtor and Hyundai shall cooperate in to
identify the cost-effective solution to the problem.
16.4 For purposes of this Section 16, "epidemic failure" shall
mean .
17.0 ON-SITE INSPECTION/VISITATION, VENDOR INFORMATION AND
AUDITS.
17.1 Maxtor's representatives, including Maxtor customers as
designated by Maxtor, shall be allowed a reasonable number of visits
to Hyundai's manufacturing and test facilities (including access to
the manufacturing areas) for purposes of qualification and monitoring
production processes. Maxtor or Maxtor's customers
for travel and living during their visit.
17.2 Maxtor shall be entitled to conduct , periodic
audits of Hyundai's quality, reliability, vendor control and process
control procedures as they affect the Products produced by Hyundai for
Maxtor. Such audits may be conducted as often as reasonably necessary
to ensure compliance with this Agreement. Such audits may be
conducted by Maxtor personnel or by contractors hired on behalf of
Maxtor. In the event contractors are hired, Maxtor will ensure that
they are bound by a nondisclosure provision equivalent to the
provisions of Section 20. Hyundai agrees to provide reasonable access
to its facilities, including manufacturing areas, and reasonable
assistance in understanding such procedures to such auditors.
17.3 Hyundai shall keep throughout the term of this Agreement all
. Hyundai will advise Maxtor when these records
are about to be destroyed and will allow Maxtor the opportunity to
reproduce the information.
17.4 A reasonable number of duly authorized and technically
qualified employees of Hyundai shall be given access from time to time
during the term of this Agreement to those offices of Maxtor or its
Subsidiaries. Hyundai shall be responsible for travel and living
expenses for its employees during their visit.
17.5 Visits made by either party pursuant to this Section shall
be subject to reasonable conditions and regulations which may be
necessary in order to not interfere with normal operations and
administration of the other party. Prior to any visit, the visiting
party shall notify the other of such intended visit and state the
number of visiting employees (or customers, in Maxtor's case) and the
purpose of the visit. The representatives of the parties shall obey
all pertinent rules and regulations of the other party while of the
premises of the other party, including but not limited to those
relating to safeguarding of confidential information.
17.6 Each party agrees that it will not disclose to any third
parties any identified confidential information of the other party
which becomes known as a result of such on-site inspections or
visitations and any such confidential information shall be handled in
accordance with Section 20.
18.0 INDEMNIFICATION.
18.1 Hyundai Infringement Indemnification. If an infringement
arises exclusively from a process or Technology that is proprietary to
Hyundai and used in the manufacture of Products or provision of
services for Maxtor, Hyundai shall defend Maxtor, its customers, and
all persons claiming under Maxtor, at Hyundai's expense against any
claim or suit for the infringement of any patent, trade secret,
copyright, trademark or any other intellectual property or proprietary
right of a third person; and Hyundai shall pay all costs, claims and
other liabilities incurred and settlements and damages finally awarded
as a result of such claim or suit against the aforesaid parties
provided: (a) Hyundai shall have the right to control the defense and
settlement of all such actions or claims; (b) Maxtor agrees to take
all lawful actions that may be reasonably requested by Hyundai in
connection with such settlement or defense at the expense of Hyundai;
and (c) Maxtor promptly notifies Hyundai in writing of such claim. If
a preliminary or final judgment shall be obtained against any of the
aforesaid parties use of the Product, materials or services to be
provided by Hyundai hereunder, or if, in Hyundai's reasonable
opinion, such Product, process, Technology, materials or services are
likely to become the subject of a claim for infringement, Hyundai
shall, at its expense and option, either: (a) substitute fully
equivalent non-infringing items; (b) modify the infringing item so
that it no longer infringes but remains functionally equivalent; or
(c) obtain for Maxtor or its customers, at Hyundai's expense, the
right to continue use of such item. If none of the foregoing is
feasible, .
18.2 Maxtor Infringement Indemnification. If an infringement
arises exclusively from a design, Process, Technology or
Specifications that are proprietary to Maxtor and provided by Maxtor
to Hyundai and used in the manufacture of the Products or provision of
services for Maxtor, Maxtor shall defend Hyundai at Maxtor's expense
against any claim or suit brought against Hyundai for the infringement
of any patent, trade secret, copyright, trademark or any other
intellectual property or proprietary right of a third person, and
Maxtor shall pay all costs, claims and other liabilities incurred and
settlements and damages finally awarded as a result of such claim or
suit against Hyundai provided: (a) Maxtor shall have the right to
control the defense and settlement of all such actions or claims; (b)
Hyundai agrees to take all lawful actions that may be reasonably
requested by Maxtor in connection with such settlement or defense at
the expense of Maxtor; and (c) Hyundai promptly notifies Maxtor in
writing of such claim. If a preliminary or final judgment shall be
obtained against Hyundai's use of the Maxtor Technology, design,
Process or Specifications, which were provided by Maxtor hereunder,
Maxtor, at its expense and option, will either : (a) substitute
fully equivalent non-infringing items; (b) modify the infringing item
so that it no longer infringes but remains functionally equivalent; or
(c) obtain for Hyundai, at Maxtor's expense, the right to continue to
use such item. If none of the above is feasible,
.
18.3 Cross Indemnification. As between the parties hereto, the
above are the sole and exclusive remedies for intellectual property
infringement by a party of a third persons' intellectual property
rights. Each party will indemnify the other against and hold it
harmless from any loss, cost, liability or expense (including court
costs and reasonable fees of attorneys and other professionals) to the
extent it arises out of or in connection with, in whole or in part,
any negligence or willful act or omission of it or its employees or
agents including but not limited to any such act or omission that
contributes to: (a) any bodily injury, sickness, disease or death; (b)
any injury or destruction to tangible or intangible property of the
other or any loss of use resulting therefrom; or (c) any violation of
any statute, ordinance or regulation.
19.0 INVENTIONS.
19.1 As used herein, "Invention" shall mean any idea, design,
concept, technique, discovery, enhancement, modification, or
improvement, whether or not patentable, conceived, or reduced to
practice during the term of this Agreement by one or more employees of
Hyundai or Maxtor independently of the other (such party making such
independent Invention is herein referred to as the "Inventing Party"),
or jointly by one or more employees of Maxtor and Hyundai, or
subcontractors thereof, (such Invention is herein referred to as
"Joint Invention") in conjunction with or as a result of work done
hereunder.
19.2 For Inventions made by one party to the other party's
Technology, and for Joint Inventions made by jointly by parties to one
party's Technology, such Inventions and Joint Inventions shall be
jointly owned by the parties including ownership to all patents, that
may be issued thereon and in all copyrightable material. The Inventing
party shall promptly inform the other party of such Invention. The
parties agree that for such Inventions and Joint Inventions, each
party may exercise all rights available as an owner of such Inventions
and Joint Inventions for any lawful purpose without accounting to the
other party, provided, and notwithstanding the foregoing, (i) if
Hyundai made the Inventions to Maxtor Technology or if the Joint
Invention was made to Maxtor Technology, Hyundai agrees that it may
not use, nor allow others to use such Invention or Joint Invention for
any purpose(s), which compete, at any time, with Maxtor's business
interests, and Hyundai further agrees that its joint ownership of such
Inventions and such Joint Inventions does not grant or bestow on
Hyundai expressly, by implication or otherwise, any license to use
Maxtor Technology which is encompassed or embodied in such Inventions
or Joint Inventions, or, upon which such Inventions or Joint
Inventions were based, and Hyundai may only use such Maxtor Technology
as permitted in Section 4.1(a) above unless otherwise agreed in
writing by Maxtor and (ii) if Maxtor made the Invention to Hyundai
Technology, or if the Joint Invention was made to Hyundai Technology,
Maxtor agrees that it may not use, nor allow others to use such
Inventions or Joint Inventions for any purpose, which compete, at any
time, with Hyundai's business interests, and Maxtor further agrees
that its joint ownership of such Inventions and such Joint Inventions
does not grant or bestow on Maxtor expressly, by implication or
otherwise, any license to use Hyundai Technology which is encompassed
or embodied in such Inventions or Joint Inventions, or, upon which
such Inventions or Joint Inventions were based, and Maxtor may only
use such Hyundai Technology as permitted in Section 4.2(a) above
unless otherwise agreed in writing by Hyundai. Such Inventions and
Joint Inventions shall be deemed the information of the party who owns
the underlying Technology and the other party shall treat such
Invention and Joint Invention in accordance with Section 20.
19.3 Inventions made by one party to its Technology shall be the
sole property of such Inventing Party, shall be deemed confidential
information of such Inventing Party and treated in accordance with the
terms of this Agreement, and the other party is hereby granted by the
Inventing Party the same rights such party is granted hereunder to use
the Technology of such Inventing Party.
19.4 Joint Inventions made by the parties to other than the
Technology of a particular party, shall be jointly owned including
ownership to all patents that may be issued thereon and in all
copyrightable material. The parties agree that for such Joint
Inventions, each party may exercise all rights of
such Joint Invention, for any lawful purpose . The
parties further agree that all expenses associated with protecting
each such Joint Invention, e.g., patent protection or the like, shall
be ; however, if one party elects not to
in such expenses, the shall have the right to seek or
maintain such protection and shall have
over the prosecution and maintenance thereof, even though
of any patent or copyright and any rights granted or allowed
thereunder shall, in all cases, with the
.
19.5 Neither party shall be liable for any payments to employees
of the other whose services may have contributed, in any manner, to
the conception or reduction to practice of any Invention, including a
Joint Invention.
19.6 Nothing contained in this Agreement shall be deemed to
grant, either directly or by implication, estoppel or otherwise, any
license on the patents, patent applications, copyrights or proprietary
information arising out of any other inventions of either party
provided, that notwithstanding the foregoing, the parties confirm the
grant of rights made to the other party hereunder to use such party's
Technology as allowed hereunder.
19.7 For purposes of Sections 19.2 and 19.3, Technology belonging
to Hyundai and Maxtor shall have the meanings set forth in Sections
1.2 and 1.4, respectively.
20.0 CONFIDENTIAL INFORMATION.
20.1 All confidential information disclosed by either party to
the other in connection with this Agreement shall be subject to the
provisions of the Confidentiality Agreement dated effective May 1,
1993 between Maxtor and Hyundai, which is attached hereto as Schedule
G.
20.2 Any and all information provided by either party to the
other, including, respectively, Maxtor Technology or Hyundai
Technology, shall be considered to be confidential information of the
providing party for purposes of this Agreement and will be subject to
the confidentiality obligations set forth in Schedule G.
21.0 ADMINISTRATIVE AND TECHNICAL COORDINATORS.
21.1 Each party will appoint an individual to serve as its
administrative coordinator. Either party may appoint a new
administrative coordinator at any time upon prior written notice to
the other party. The administrative coordinators will be responsible
for maintaining liaison between parties and monitoring production
schedules.
The administrative coordinators for the parties as of the Effective
Date will be as follows:
For Maxtor:
For Hyundai:
21.2 In addition, each party will appoint a qualified individual
to serve as its technical coordinator. Either party may appoint a new
technical coordinator at any time upon prior written notice to the
other party. The technical coordinators will be authorized to:
(a) Maintain technical liaison between the parties;
(b) Submit and receive proposals of Engineering Changes, and give
responses and/or approvals thereto as specified in Section 13.0;
(c) Coordinate the warranty processes set forth in Section 15.0;
and
(d) Approve deviations from the Specifications. Any deviation
approval must be in writing between the parties and will include the
specific deviation and the length of time such deviation is valid.
The technical coordinators for the parties as of the Effective Date
will be as follows:
For Maxtor: Larry Freeman
For Hyundai:
21.3 The administrative coordinators must be included on copy of
all correspondence between the technical coordinators.
22.0 TERM AND TERMINATION.
22.1 Term. The initial term of this Agreement shall commence on
the date of this Agreement and continue for five (5) years from the
Effective Date. Thereafter, this Agreement shall be automatically
renewed for successive two-year periods, unless either party gives the
other party at least one year prior written notice of its intent not
to renew the Agreement.
22.2 Termination by Either Party for Cause.
(a) Subject to the other terms and procedures stated herein, the
Agreement may be terminated by either party if the other party (i)
breaches any material provision and does not remedy such breach as
provided below or (ii) files a petition in bankruptcy or such a
petition is filed for the party. Except for late delivery pursuant to
Section 8.5, for which there is no cure, in the event of breach of a
material provision of this Agreement by a party, the non-breaching
party shall notify the other party in writing of such breach and
provide a detailed description of the breach as well as any available
information reasonably useful or necessary to enable a cure of the
claimed breach. If the breach is not corrected by the breaching party
within thirty (30) days of the date such notice is given, this
Agreement may be immediately terminated by the non-breaching party, by
giving written notice of such termination; provided, however, that
such 30-day period shall be reasonably extended if such breach
requires more than thirty (30) days to correct and the breaching party
begins to cure promptly within such period and thereafter diligently
completes the correction.
(b) The obligations of the breaching party for such termination
are as follows:
(i) In the event Maxtor terminates, Hyundai shall (i)
. Hyundai's obligations shall also be as stated in
Section 4.1(c), above.
(ii) In the event Hyundai terminates, Maxtor's obligations are as
stated in Section 4.2(b) and 9.1, above.
(iii) In addition to the obligations set forth in (b)(i) and (ii)
above, the parties agree that the breaching party shall also
responsible for any damages and losses incurred by the non-breaching
party. The parties commit to meet in good faith in an attempt to agree
upon the amount of damages owed to the injured party and to decide
upon a mutually acceptable method for payment of such damages. The
parties further agree that this commitment to meet in good faith shall
survive termination of this Agreement. In the event that the parties
are unable to revolve such damages issues, such dispute shall be by
means of arbitration in accordance with the arbitration provision set
forth in Section 24 herein.
(iv) Notwithstanding anything to the contrary herein, the parties
agree that the total liability of a party and its affiliates to the
other party, for any causes of action, whether or not the Agreement
has been breached and/or terminated, shall not in the aggregate
(collectively for all causes of action) exceed, for Hyundai, the cost
of the obligations in (b)(i) above plus , and shall
not exceed for Maxtor, the cost of the obligations in (b)(ii) above
plus . This limitation of liability shall not apply to
damages incurred due to breach of the provisions of Sections 4.1 (a)
and (c), 4.2(a) and (b), and Section 20.
22.3 Limitation of Liability for Termination. All of the above
charges shall be invoiced within sixty (60) days following the
termination date of this Agreement. Charges not invoiced within sixty
(60) days shall be waived. The charges provided in this Section 22
are the complete statement of costs related to termination. EXCEPT AS
OTHERWISE SET FORTH ABOVE, ALL OTHER DIRECT, INDIRECT, CONSEQUENTIAL,
INCIDENTAL, OR OTHER DAMAGES (INCLUDING LOSS OF PROFITS) FOR
TERMINATION ARE HEREBY WAIVED, EVEN IF THE OTHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
23.0 LIMITATION OF LIABILITY.
EXCEPT AS OTHERWISE SET FORTH ABOVE, IN NO EVENT SHALL EITHER PARTY
BE LIABLE TO THE OTHER FOR INCIDENTAL, CONSEQUENTIAL, EXEMPLARY,
PUNITIVE OR SPECIAL DAMAGES ARISING UNDER OR IN ANY WAY RELATING TO
THIS AGREEMENT, INCLUDING ANY LOSS OF USE, LOSS OF PROFITS OR
REVENUES. THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO BREACH OF
THE OBLIGATIONS SET FORTH IN SECTIONS 4(1)(a), AND (c), 4(2)(a) AND
(b), AND 20 OR TO THE OBLIGATIONS DESCRIBED IN SECTIONS 16, 18, AND 22
AS SPECIFIED THEREIN.
24.0 DISPUTE RESOLUTIONS.
The parties agree that any material dispute between the parties
relating to this Agreement will be submitted to a panel of two senior
executives of Maxtor and Hyundai. Either party may initiate this
proceeding by notifying the other party pursuant to the notice
provision under Section 25.15. Within five (5) days from the date of
receipt of the notice, the parties' executives shall confer (via
telephone or in person) in an effort to resolve such dispute. The
decision of the executives will be final and binding on the parties.
In the event the executives are unable to resolve such dispute within
twenty (20) days after submission to them, such dispute shall be
settled by means of arbitration in accordance with the Rules of
Arbitration of the International Chamber of Commerce. If Maxtor
demands arbitration, such arbitration shall be conducted in Seoul,
Korea and if Hyundai demands arbitration, it shall be conducted in
Denver, Colorado, U.S.A.. The decision rendered by arbitration shall
be final and binding upon the parties. Nothing in this Section shall
prevent either party from providing the appropriate notice of breach
allowed under Section 22.5 prior to initiating the proceeding set
forth above. The cure period set forth in Section 22.5 shall continue
to run pending resolution by the parties' executives, unless otherwise
agreed to by the parties. Each party's executives shall be identified
by notice to the other party, and may be changed at any time
thereafter also by notice to the other.
25.0 GENERAL.
25.1 Management Review. The senior management of the parties
shall meet each quarter to discuss performance under this Agreement
and to resolve any problem issues. The discussion shall include, at a
minimum, product quality, delivery of Products, production levels,
current plant capacity, field performance of the Products, pricing,
cost reduction and payment.
25.2 Independent Contractors. Persons furnished by each party
shall be solely the employees or agent of such party and shall be
under the sole and exclusive direction and control of such party.
They shall not be considered employees of the other party for any
purpose. Each party shall remain an independent contractor and shall
be responsible for compliance with all laws, rules and regulations
involving, but not limited to, employment of labor, hours of labor,
health and safety, working conditions and payment of wages. Each
party shall also be solely responsible for payment of taxes, including
federal, state and municipal taxes, chargeable or assessed with
respect to its employees, such as social security, unemployment,
worker's compensation, liability insurance and federal and state
withholding. Each party shall indemnify the other for any loss,
damage, liability, claim, demand or penalty including costs, expenses,
and reasonable attorneys' fees assessed against one party that may be
sustained by reasons of the other party's failure to comply with the
provisions of this Section.
25.3 Trademarks. Nothing contained in this Agreement shall be
construed as conferring any license, right to use or other right with
respect to any trademark or trade name of either Party.
25.4 Force Majeure. Neither party shall be liable to the other
for any alleged loss or damages resulting from non-performance or
delays of performance hereunder caused by acts of God, natural
disasters, acts of civil or military authority, government priorities,
fire, floods, epidemics, quarantine, energy crises, labor strikes,
war, riots, or any other act or condition beyond the reasonable
control of the parties. The affected party shall notify the other
party within two (2) business days of discovery of any such event, or
when such party knows or has reasonable anticipation that such event
will occur, whichever is earlier. The parties agree to immediately
meet to agree upon a mutually acceptable plan of action to address the
effects of such situation.
25.5 Compliance with Laws. Each party shall comply with all
applicable federal, state and local laws and regulations governing the
manufacture or sale of the Products or the performance of services
covered by this Agreement.
25.6 Export Controls. The export of commodities or technical
data from the United States of America and/or the re-export from
foreign countries of commodities or technical data or direct products
of technical data of United States of America origin, may be
conditioned upon the issuance of an export license by the government
of the United States of America. Each party represents that it will
not export or re-export any commodities or technical data or direct
products of technical data in furtherance of this Agreement unless and
until it has complied, in all respects with the United States of
America Export Control Regulations. Neither party makes any warranty
that an export license will be granted for such export or re-export,
and neither party shall have any liability for its inability to obtain
such a license.
25.7 Publicity. Neither party shall disclose, advertise or
publish the existence or terms and conditions of this Agreement,
without prior written consent of the other party, except as may be
required by law (including SEC regulations).
25.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California,
without reference to its conflict of laws rules.
25.9 Severability. In the event any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, provided that a provision of similar
economic effect shall be substituted for the illegal, invalid or
unenforceable provision.
25.10 Waiver or Delay. A waiver of any default hereunder or of
any terms and conditions of this Agreement shall not be deemed to be a
continuing waiver or a waiver of any other default or any other term
or condition, but shall apply solely to the instance to which such
waiver is directed.
25.11 Assignment. Except as otherwise provided herein,
assignment of this Agreement shall be prohibited without the express
written consent of the other party and any attempted assignment
prohibited hereunder shall be null and void, provided, however, that
either party may assign this Agreement to any present or future parent
or successor interest without having to obtain prior consent of the
other party as long as such assignee agrees, in writing, to comply
with all of the terms and conditions of this Agreement.
25.12 Paragraph Headings. The paragraph headings and captions of
this Agreement are intended for reference and for convenience only and
shall not be construed as limiting or affecting any of the contents of
this Agreement.
25.13 Additional Property. Title to all property not otherwise
specifically addressed herein owned by one party (the "Furnishing
Party") and furnished to the other party (the "Receiving Party"),
shall remain with the Furnishing Party. Any such property owned by
one party and in the Receiving Party's possession or control shall be
used only in the performance of this Agreement unless otherwise
authorized in writing by the Furnishing Party. The Receiving Party
shall adequately protect such property and shall return it to the
Furnishing Party after use or upon termination of this Agreement or
upon this request.
25.14 Attorneys' Fees. In the event any action is brought with
respect to the interpretation or enforcement of this Agreement, the
prevailing party in such action shall be entitled to receive from the
losing party(s) a reasonable sum as attorneys' fees and costs of such
action.
25.15 Notice. All legal notices required or permitted hereunder
shall be in writing, and shall be addressed to the parties hereto at
their respective addresses, set forth below and shall be considered
given when (a) delivered personally, (b) sent by confirmed telex, (c)
two days after having been sent by commercial overnight courier with
written verification receipt, (d) five (5) days after having been
sent, postage prepaid, by first class or registered mail, or (e)
transmitted by confirmed telephone facsimile.
To Maxtor: With a copy to:
Maxtor Corporation Maxtor Corporation
2190 Miller Drive 2190 Miller Drive
Longmont, Colorado 80501 Longmont, Colorado 80501
Attn: Glenn H. Stevens Attn:
Vice President, General Counsel
To Hyundai: With a copy to:
Hyundai Storage Division Hyundai Storage Division
San 136-1 Ami-ri, Boobal-eub San 136-1 Ami-ri, Boobal-eub
I-chon, Kyungki-do, Korea I-chon, Kyungki-do, Korea
Attn: Attn:
25.16 Limitation of Action. No action, regardless of form,
arising out of this Agreement, may be brought by either party more
than two years after the cause of action has arisen, or in the case of
nonpayment, two years from the date the last payment was due.
25.17 Order of Precedence. In the event of any inconsistency
between the terms and conditions of this Agreement, and the terms and
conditions of purchase order(s) issued pursuant to this Agreement, the
terms and conditions of this Agreement shall prevail. In the event of
any inconsistency between the Schedules to this Agreement and the
terms and conditions of this Agreement, the provisions of the
Schedules will prevail.
25.18 Joint Work Product. This Agreement is the joint work
product of representatives of Maxtor and Hyundai. For convenience it
has been drafted in final form by one of the parties. Accordingly, in
the event of ambiguities, no inferences will be drawn against either
party solely on the basis of authorship of this Agreement.
25.19 English Language. The official language of this Agreement
is English. All correspondence, communications, agreements and
requests shall be in English.
25.20 Survival of Obligations. The provisions contained in
Sections 4.1(c), 4.2(b), 15, 16, 17.6, 18, 19, 20, 22.3, 22.6, 23,
25.7, 25.16 shall survive expiration or termination of this Agreement.
25.21 Entire Agreement. This Agreement with Schedules,
Attachments, other documents referred to herein, are intended as the
complete, final and exclusive statement of the terms of the agreement
between the parties and supersede any and all other agreements between
them relating to the subject matter hereof (including the Memorandum
of Understanding dated January 24, 1995 between the parties). This
Agreement may not be modified except in writing signed by both
parties. This Agreement as set forth in this writing shall not be
modified or altered by any subsequent course of performance by and
between the parties. It is agreed that the parties may from time to
time make changes to certain Schedules without executing a formal
amendment to this Agreement so long as both parties mutually agree to
such changes in writing.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement on the date first above
written.
HYUNDAI ELECTRONICS
MAXTOR CORPORATION INDUSTRIES CO., LTD.
By /s/ Katherine Curtin Young By /s/ Byoung Doo, Choi
-------------------------- ---------------------
Name Katherine Curtin Young Name Byoung Doo, Choi
---------------------- -----------------
Sr. Vice President, General Manager & Vice President
Title Worldwide Operations Title Storage Business Division
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