1
EXHIBIT 10.28
January 31, 1995
Agreement
By and Between
Pont Peripherals Corporation
and JT Storage, Inc.
dated
January 31, 1995
2
January 31, 1995
TABLE OF CONTENTS
RECITALS 1
ARTICLE I DEFINITIONS 2
1.01 "ASIC" 2
1.02 "Affiliate" 2
1.03 "Components" 2
1.04 "Improvements" 2
1.05 "Jointly Developed Products" or Jointly Developed Technology" 2
1.06 "JTS Products" 2
1.07 "JTS I Territory" 3
1.08 "JTS II Territory" 3
1.09 "Know-How" 3
1.10 "Micro Code" 3
1.11 "OEM" 3
1.12 "Patents" 3
1.13 "Point 5" 3
1.14 "Pont Final Product" 3
1.15 "JTS Final Product" 3
1.16 "Pont Products" 3
1.17 "Pont I Territory" 3
1.18 "Pont II Territory" 4
1.19 "Products" 4
1.20 "Technical Information" 4
1.21 "Technology" 4
ARTICLE II MANUFACTURING, PATENT AND KNOW-HOW LICENSES 4
2.01 Licenses From JTS to Pont 4
2.02 Licenses From Pont to JTS 5
2.03 Legal Limitation on Licenses 6
2.04 Certain Agreements and Representations of Grantees of Licenses 6
2.05 Certain Agreements and Representations of JTS 8
2.06 Certain Agreements and Representations of Pont 8
2.07 Territorial Restrictions Applicable to Licenses Granted in Article II 9
ARTICLE III MANUFACTURING AND SALE 9
3.01 JTS and Jointly Developed Products 9
3.02 Servo Writer Prototype 10
ARTICLE IV TECHNICAL INFORMATION AND ASSISTANCE 10
4.01 Technical Information 10
4.02 Technical Assistance 11
4.03 Jointly Developed Products and Technology 12
(i)
3
January 31, 1995
ARTICLE V IMPROVEMENTS 13
5.01 Cooperation 13
5.02 Ownership of Improvements 13
ARTICLE VI SECRECY 14
6.01 Confidentiality 14
6.02 Exceptions to Confidentiality 14
6.03 Exercise of Care 14
6.04 Specific Performance 14
ARTICLE VII ROYALTIES 15
7.01 Royalty Rate 15
7.02 When Sold 15
7.03 Net Sales Revenues 15
7.04 Certain Sales Excluded 15
7.05 Royalty Calculation on Items Used or Leased 16
7.06 Payments 16
7.07 Time of Payment and Period for Which Royalty Paid 16
7.08 Late Payments 16
7.09 Records and Reports 16
7.10 Governmental Approvals to U.S. Currency Payments 17
7.11 Royalties to Survive Contractual Patents or Knowledge of Others
and Termination of License 17
ARTICLE VIII TERMINATION 17
8.01 Bankruptcy of a Licensee 17
8.02 Bankruptcy of a Licensor 17
ARTICLE IX GENERAL PROVISIONS 18
9.01 Notices 18
9.02 Successors and Assigns 18
9.03 Counterparts 18
9.04 Captions and Paragraph Headings 18
9.05 Entirety of Agreement; Amendments 19
9.06 Construction 19
9.07 Waiver 19
9.08 Governing Law 19
9.09 Remedies 19
9.10 Status of Parties 20
9.11 Severability 20
9.12 Payments in U.S. Currency 20
9.13 Consents Not Unreasonably Withheld 20
9.14 Time is of the Essence 21
(ii)
4
January 31, 1995
THIS AGREEMENT is made as of this 31 day of January, 1995, by and
between Pont Peripherals Corporation, a Delaware corporation, formerly known as
DZU Corporation, having its principal place of business at 912 West Maude,
Sunnyvale, California 94086 ("Pont"), and JT Storage, Inc., a Delaware
corporation, having its principal place of business at 1289 Anvilwood Avenue,
Sunnyvale, California 94089 ("JTS").
RECITALS
WHEREAS, pursuant to the Agreed Order Compromising Controversies (the
"Order") entered by the United States Bankruptcy Court, Northern District of
California, on February 4, 1994 in the Chapter 11 reorganization of Kalok
Corporation, a California corporation (No. 93-54027), Pont and Teac
Corporation, a Japanese corporation ("Teac"), acquired certain of the
technology and other intellectual property and certain other assets of Kalok,
subject to the terms and conditions of the Order and certain other documents
referenced in and approved by the Order;
WHEREAS, Pont owns rights to certain products and technology that it
desires to license to JTS, and JTS desires to obtain such license;
WHEREAS, JTS has developed certain products and technology, including
ASIC and Micro Code, for use in hard disk drives and desires to license such
products and technology to Pont, and Pont desires to obtain such license;
WHEREAS, JTS and Pont are each desirous of licensing rights to
improvements to the products and technology licensed hereunder made by each of
them to the other party;
WHEREAS, JTS and Pont desire to cooperate in jointly developing certain
technology and products;
WHEREAS, JTS and Pont are each desirous of Pont's manufacturing and
selling certain products to JTS and to third parties in certain designated
territories, and JTS desires to permit Pont to manufacture such products and to
purchase certain products from Pont;
WHEREAS, JTS desires to sell certain products, including jointly
developed products, in sales territories in which Pont has been given exclusive
rights to make sales pursuant to the Order, and Pont desires to grant such a
license to JTS; and
WHEREAS, JTS desires to engage Pont to design and build one engineering
prototype Servo Write Station and to engage Pont to manufacture additional
Servo Write Stations, and Pont desires to enter into such an arrangement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises herein made, the parties hereto do hereby agree as follows:
1
5
January 31, 1995
ARTICLE I
DEFINITIONS
1.01 "ASIC" shall mean Application Specific Integrated Circuits as
independently developed by JTS at the date of this Agreement, in addition to
any improvements. All such improvements shall be included in the definition of
ASIC and be subject to this Agreement.
1.02 "Affiliate" of an entity shall mean an entity actually
controlling, controlled by, or under common control with, such other entity.
1.03 "Components" shall mean:
(a) Subassemblies and components of a product customarily repaired and
not consumed in the repair and maintenance of the product;
(b) Nonrepairable and disposable goods customarily consumed in
connection with the use, test, maintenance and repair of a product, including
by way of example and not limitation, electrical components as resistors,
capacitors, integrated circuits, and mechanical components such as brackets,
switches, bushings and bearings; and
(c) Consumable items sold for use with a product, including, by way of
example and not limitation, paper goods, ink and the like.
1.04 "Improvements" shall mean any Improvements, variations,
derivative works, refinements, enhancements or other developments, discoveries
or modifications, whether patentable or not, relating directly or indirectly to
a Product or a Technology, including, but not limited to, any Improvements made
with the financial, technical or other support of a third party other than Teac.
1.05 "Jointly Developed Products" or "Jointly Developed Technology"
shall be products and Components thereof or technology jointly developed by JTS
and Pont as set forth in Section 4.04 of this Agreement.
1.06 "JTS Products" shall mean all products developed and all product
developments, of JTS, including, but not limited to, Micro Code and ASIC, and
any Components thereof, provided, however, that such term shall not include any
product or technology licensed by JTS solely from Teac and under terms which
prevent the grant of the license granted hereunder, and provided, further, that
such term shall include any product, whether completed or not, and any
technology, developed with the direct financial or technical support or
assistance of a third party other than Teac or with the assistance of Teac if
the terms of such assistance do not prohibit the grant of the licenses
contained herein. Any Improvements to the JTS Products shall be included in the
term JTS Products and be subject to this Agreement.
2
6
January 31, 1995
1.07 "JTS I Territory'' shall mean the world except for Japan, the
Eastern Bloc countries of Poland, Czech Republic, Slovakia, Hungary, Romania,
Bulgaria and former Yugoslavia and the countries comprising the form Soviet
Union.
1.08 "JTS II Territory" shall mean the world except for Japan.
1.09 "Know-How" shall mean all factual knowledge and information
acquired from time to time concerning the design and manufacture of a product
or the design and development of a technology, whether or not in graphic or
printed form, which may not be capable of precise separate description but
which, in an accumulated form, after being acquired as the result of trial and
error, gives to the one acquiring it an ability to produced and market a
product or use a technology which one otherwise would not have known how to
produce and market or use with the same accuracy, precision, quality or
efficiency necessary for commercial success.
1.10 "Micro Code" shall mean Micro Code as independently developed
by JTS at the date of this Agreement, in addition to any Improvements. All such
Improvements shall be included in the definition of Micro Code and be subject
to this Agreement.
1.11 "OEM" shall mean an original equipment manufacturer who
incorporates a Product in a product of its own bearing its own label for
purposes of resale to an end user.
1.12 "Patents" shall mean any and all patents of any country of the
world and any applications therefor, and patents which may issue on such
applications, which are owned or controlled by a party, or under which a party
has or may acquire the rights to grant a license and which cover inventions
pertaining to a product or technology. The term "Patents" shall include,
without limitation, patents of importation, improvement patents, patents and
certificates of addition and utility, model and design patents, as well as
divisions, reissues, reexainnations, continuations-in-part, renewals and
extension of, any of the foregoing.
1.13 "Point5" means the Kalok Point 5 Series of products (consisting
of Models P-3125, P-3250 and P-3540).
1.14 "Pont Final Product" shall mean a completed Hard Disk Drive
product.
1.15 "JTS Final Product" shall mean a completed Hard Disk Drive
product.
1.16 "Pont Products" shall mean all products developed and all
product developments, whether completed or not, of Pont, including, but not
limited to, Point 5, and any Components thereof.
1.17 "Pont I Territory" shall mean the world except Japan and India.
3
7
January 31, 1995
1.18 "Pont II Territory" shall mean the following:
(a) commencing on January 1, 1998 "Pont II Territory", for JTS non
three and a half inch Disk Drive product, shall mean the world, except for the
Pacific Rim (defined as all countries that border the Pacific Ocean except for
Mexico) and North America except for Mexico.
(b) commencing on June 1, 1998 "Pont II Territory", for JTS non
three and a half inch Disk Drive product, shall mean the world, except for
Japan and India.
1.19 "Products" shall mean JTS Products, Pont Products and Jointly
Developed Products. The singular shall refer to each of the products which
comprise the JTS Products, Pont Products and Jointly Developed Products.
1.20 "Technical Information" shall mean all scientific, technical
and other information, existing in graphic, printed or computer media form, as
may be available from time to time, pertaining to the development, design,
manufacture, testing or use of all Products and Technology, Components,
circuitry's, tooling and testing requirements, including, by way of
illustration and not limitation, all specifications (mechanical and
electrical), computer programs (source and object), circuit diagrams, drawings,
charts, blueprints, vellums, masks, vendor lists, parts layout, parts lists,
automated design programs, design information, object code, source code,
program generation tapes, information embodied in any Patent, component lists,
technical reports, operation descriptions and manufacturing steps, techniques
and processes.
1.21 "Technology" shall mean the principal technology designed and
developed for the Products or a Product, including any Improvements to such
Technology.
ARTICLE II
MANUFACTURING, PATENT AND KNOW-HOW LICENSES
2.01 Licenses From JTS to Pont, Subject to the terms, conditions and
limitations hereinafter set forth, JTS hereby grants to Pont, and Pont hereby
accepts from JTS, a royalty-free, nonexclusive, perpetual license, right and
privilege, under the pertinent Patents and Know-How:
(a) To use and apply JTS Products Technology for the purposes, and
only for the purposes, of making additional Improvements and of manufacturing
and assembling any Pont Final Product in the Pont I Territory, having made and
assembled any Pont Final Product in the Pont I Territory, using any Pont Final
Product in the Pont I Territory and selling any Pont Final Product in the Pont
I Territory.
(b) To sue and apply Jointly Developed Products Technology for the
purposes, and only for the purposes, of making additional Improvements and of
manufacturing and assembling any Pont Product in the Pont I Territory, having
made and assembled any Pont Product in the Pont I Territory, using any Pont
Product in the Pont I Territory and selling any Pont Products in the Pont I
Territory.
4
8
January 31, 1995
(c) To use and apply any Improvements made by JTS for the purposes,
and only for the purposes, of making additional Improvements and of
manufacturing and assembling any Pont Final Product in the Pont I Territory,
having made and assembled any Pont Final Product in the Pont I Territory, using
any Pont Final Product in the Pont I Territory and selling any Pont Final
Products in the Pont I Territory.
(d) To manufacture and assemble any JTS Final Product in the Pont I
Territory, having made and assembled any JTS Final Product in the Pont I
Territory, using any JTS Final Product in the Pont I Territory and selling any
JTS Final Products in the Pont I Territory for the purposes, and only for the
purposes, of sale by Pont of such JTS Final Products to (i) JTS and (ii) to
third party customers located with respect to (a) JTS Final Products which are
or include non-three-and-a-half-inch disk drives, within the Pont II Territory
and (b) all other JTS Final Products within the Pont I Territory.
(e) To manufacture, and assembling any Jointly Developed Product in
the Pont I Territory, having made and assembled any Jointly Developed Product
in the Pont I Territory, using any Jointly Developed Product in the Pont I
Territory and selling any Jointly Developed Product in the Pont I Territory in
the Pont I Territory.
Patents existing as of the date of this Agreement related to the licenses set
forth in Section 2.01 are set forth in Exhibit 2.01 hereto, which also sets
forth information regarding the pertinent patent or application number, the
party which is the owner or controller of the patent or application and the
invention to which such patent or invention relates.
2.02 Licenses From Pont to JTS. Subject to the terms, conditions and
limitations hereinafter set forth, Pont hereby grants to JTS, and JTS hereby
accepts from Pont, a royalty-free, nonexclusive, perpetual license, right and
privilege, under the pertinent Patents and Know-How:
(a) To use and apply the Pont Products Technology for the purposes,
and only for the purposes, of (i) making additional Improvements, (ii)
manufacturing and assembling any JTS Final Product in the JTS I Territory, and
(iii) having manufactured and assembled any JTS Final Product in the JTS I
Territory (iv) using any JTS Final Product in the JTS I Territory and (v)
selling any JTS Final Product in the JTS II Territory.
(b) To use and apply Jointly Developed Products Technology for the
purposes, and only for the purposes, of (i) making additional Improvements,
(ii) manufacturing and assembling any JTS Product or Jointly Developed Product
in the JTS I Territory, and (iii) having manufactured and assembled any JTS
Product or Jointly Developed Product in the JTS I Territory, (iv) using any JTS
Product or Jointly Developed Product in the JTS I Territory, and (v) selling
JTS Products and Jointly Developed Products in the JTS II Territory.
(c) To use and apply any Improvements made by Pont for the purposes,
and only for the purposes, of (i) making additional improvements, (ii)
manufacturing and assembling any JTS Final Product in the JTS I Territory, and
(iii) having manufactured and assembled any JTS Final Product in the JTS I
Territory, (iv) using any JTS Final Product in the JTS Territory and (v)
selling any JTS Final Product in the JTS II Territory.
5
9
January 31, 1995
Patents existing as of the date of this Agreement related to the licenses set
forth in Section 2.02 are set forth in Exhibit 2.02 hereto, which also sets
forth information regarding the pertinent patent or application number, the
party which is the owner or controller of the patent or application and the
invention to which such patent or invention relates.
2.03 Legal Limitation on Licenses.
(a) Each of the licenses granted under Section 2.01 and 2.02 above is
granted only to the extent that the rights granted are owned by the grantor
free and clear of any legal incapacity to make such grant or only to the extent
that the grantor otherwise has the legal right and capacity to grant such
rights without thereby breaching or unlawfully interfering with any contract,
or incurring any obligation or liability to pay, grant or transfer any money,
property, or right to, any third party. Without limiting the generality of
the foregoing, the grant of a license under Section 2.01 and 2.02 above shall
be subject to any and all legal obligations and requirements with which the
grantor is bound by law to comply.
(b) None of the licenses granted under Section 2.01 by JTS to Pont may
be sublicensed by Pont without the express prior written consent of JTS which
may be withheld in the sole and absolute discretion of JTS except that Pont may
sublicense such licenses in connection with the manufacturing of Components
for use in the manufacture or assembly of Pont Final Product by Pont. All of
the licenses granted under Section 2.02 by Pont to JTS may be sublicensed to a
third party without the consent of Pont. Other than as permitted in the two
preceding sentences, the Products and Technology and the rights thereto
conveyed in this Agreement shall not be assigned or transferred to another
party, including, but not limited to, an Affiliate of either party, without the
express prior written consent of the other party, which may be withheld in such
party's sole and absolute discretion, provided, however, that this provision
shall not apply to a change in ownership of either party as permitted under
the Order.
(c) None of the licenses granted under this Article II conveys any
right in the grantee to use or to register any trademarks or trade names of the
grantor or to use the name of the grantor in any manner whatsoever.
(d) Nothing in this Agreement shall be construed as conveying to the
grantee of a license, either expressly or by implication, any right under any
letters patent of the grantor, other than the pertinent Patents, or any right
to use the Patents or Know-How under which a license is granted, except as
expressly set forth in this Article II. The proprietary rights in the Patents
and in the Know-How under which a license is granted herein shall remain
exclusively with the grantor of such license, and nothing in this Agreement
shall be interpreted or construed as conferring upon the grantee of such
license any proprietary right in such Patents or in such Know-How.
(e) NEITHER JTS OR PONT, NOR ANY OF THEIR RESPECTIVE AFFILIATES, MAKES
ANY WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY PARTICULAR PURPOSE OR
USE AND/OR ANY OTHER WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, OR OTHERWISE,
CONCERNING ANY PRODUCT OR TECHNOLOGY LICENSED BY THIS AGREEMENT.
2.04 Certain Agreements and Representations of Grantees of Licenses.
Pont and JTS each agree with and represent to the other that:
6
10
January 31, 1995
(a) It (i) accepts the licenses, rights and privileges granted to it
under this Article II and admits the validity of the Patents under which such
licenses, rights and privileges are granted to it, corresponding Patents of the
grantor of such licenses granted or applied for in any country of the world,
and corresponding Patents of the grantor of such licenses to be granted or to
be applied for in any country of the world by the grantor during the term of
this Agreement, (ii) agrees not to attach or question the validity of the
Patents under which such licenses, rights and privileges are granted to it, and
corresponding Patents of the grantor now existing, applied for or to be applied
for anywhere in the world during the term of this Agreement or thereafter, and
(iii) acknowledges that the Know-How under which such licenses are granted to
it constitutes one of more trade secrets of the grantor.
(b) It shall file as a registered licensee under the Patents held or
owned by the other party if such registration is considered necessary or
desirable by the other party and shall mark any product manufactured by it
under a license granted herein to use a Patent of the other party with "Patent
Pending or Patent No." designations identifying such patents or applications
of the other party or any other markings with respect to copyrights, mask
rights and/or trademarks to the extent required by applicable law or considered
desirable by the other party.
(c) It agrees that it will give prompt notice in writing to the
licensor of a license granted to it hereunder of (i) all acts of any third
person of which it obtains knowledge which in any way might constitute
infringement of the Patents of such licensor or misappropriation of such
licensor's rights in Know-How or any of such licensor's rights under this
Agreement and of any information which may assist such licensor in dealing with
such infringement or otherwise, and (ii) any action for infringement of the
legal rights of others by reason of its alleged or actual use of such license
or institution of any proceedings for the revocation of any of the Patents of
such licensor. Whether or not such notification is given or received, such
licensor shall have the right (but not the obligation) at its own expense and
in its own name to institute proceedings against such infringer or
misappropriate or to defend such actions brought by third parties or such
revocation proceedings, as the case may be. If requested by such licensor, it
further agrees to furnish to such licensor all necessary information and
assistance relating to such actions or proceedings instituted or defended by
such licensor including lending its name thereto if considered necessary or
desirable by such licensor, and each of the parties shall pay all costs and
expenses including legal expenses which it may incur in connection with such
actions or proceedings; provided, however, that the licensee under a license
granted hereunder shall pay all such costs and expenses including those of the
licensor of such license if any such action or proceeding shall arise by reason
of a use by such licensee of the Patents or Know-How which such license is
granted in violation of, or in a manner inconsistent with, the provisions of
this Agreement, and such licensee shall indemnify such licensor against and
hold such licensor harmless from any and all losses, damages or expenses
arising directly or indirectly out of or in any way relating to such violation
or inconsistent use.
(d) With respect to products manufactured by it or Patents or Know-How
used by it under a license granted hereby, and with respect to Technical
Information or other information obtained by it from the licensor respecting
the subject matter of such license, it will not knowingly, directly or
indirectly, use, sell or otherwise dispose of such products, Patents, Know-How
or information (including any direct product thereof) to persons or countries
or for purposes prohibited by the laws or regulations of the government of the
country, or any agency or instrumentality thereof, in which the licensor is
domiciled which are applicable to such transactions, including, by way of
example and not limitation, the Export Control Regulations of the United States
Department of Commerce and the Foreign Asset Control Regulations of the United
States Department of the Treasury, or knowingly do any other act which would be
in violation of any law or regulation of the government of the country, or any
agency or instrumentality thereof, in which the licensor is domiciled.
7
11
January 31, 1995
(e) It will otherwise comply with, and assist the other party in
obtaining any licenses or other approvals required by, the laws and regulation
of the government, or any agency or instrumentality thereof, pertinent to the
transactions contemplated hereby, and each party agrees to make all
certifications and keep all records required to obtain or retain such licenses
or approvals.
2.05 Certain Agreements and Representations of JTS. JTS represents and
warrants to Pont that (i) it is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has fill power
and authority to carry on its business as it is currently being conducted and
to own or lease the properties and assets it now owns or leases, and is duly
qualified to do business and is in good standing as a foreign corporation under
the laws of the State of California; (ii) it has all necessary right, power and
authority to enter into and perform this Agreement; (iii) the execution and
delivery of this Agreement and the performance by JTS of its terms do not
conflict with or result in a violation of JTS's certificate of incorporation or
bylaws or any judgment, order or decree of any court or arbitrator to which JTS
is a party or is subject and do not conflict with and will not constitute a
material breach of the terms, conditions or provisions of or constitute a
default under any contract, agreement, commitment, indenture, mortgage, note,
bond, license or other instrument or obligation to which JTS is a party or to
which it, its properties or assets are bound; (iv) this Agreement has been duly
and validly executed by JTS and constitutes the valid and binding obligation of
JTS enforceable in accordance with its terms; (v) it is the valid owner of the
rights which are licensed to JTS pursuant to Section 2.02 of this Agreement;
and (vi) no consent, approval or authorization of, or declaration, filing or
registration with, any foreign, federal, state or local governmental or
regulatory authority, or any other party, is required to be made by JTS in
connection with the execution and performance of this Agreement and the
transactions contemplated hereby.
2.06 Certain Agreements and Representations of Pont. Pont represents
and warrants to JTS that (i) it is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
fill power and authority to carry on its business as it is now being conducted
and to own or lease the properties and assets it currently owns or leases and
is duly qualified to do business and is in good standing as a foreign
corporation under the laws of the State of California; (ii) it has all
necessary right, power and authority to enter into and perform this Agreement;
(iii) the execution and delivery of this Agreement and the performance by Pont
of its terms do not conflict with or result in a violation of Pont's
certificate of incorporation or bylaws or any judgment, order or decree of any
court or arbitrator to which Pont is a party or is subject and do not conflict
with and will not constitute a material breach of the terms, conditions or
provisions of or constitute a default under any contract, agreement,
commitment, indenture, mortgage, note, bond, license or other instrument or
obligation to which Pont is a party or to which it, its properties or assets are
bound; (iv) this Agreement has been duly and validly executed by Pont and
constitutes the valid and binding obligation of Pont enforceable in accordance
with its terms; (v) it is the valid owner of the rights which are licensed to
JTS pursuant to Section 2.02 of this Agreement; and (vi) no consent, approval
or authorization of, or declaration, filing or registration with, any foreign,
federal, state or local governmental or regulatory authority, or any other
party, is required to be made by Pont in connection with the execution and
performance of this Agreement and the transactions contemplated hereby.
8
12
January 31, 1995
2.07 Territorial Restrictions Applicable to Licenses Granted in
Article II.
(a) Pont will not in the case of each license granted in Section
2.01, use any license outside the territory specified in such grant, provided,
however, that nothing herein shall prevent Pont or any of its assignees,
licensees or sublicensees, if any, from selling, having sold, leasing or having
leased such products to any OEM customer located within the specified territory
for incorporation as an integral part of systems assembled within the specified
territory by such OEM customer for sale or lease within or outside the specified
territory.
(b) JTS will not in the case of each license granted in Section
2.02, use any license outside the territory specified in such grant, provided,
however that nothing herein shall prevent JTS or any of its assignees,
licensees or sublicensees, if any, from selling, having sold, leasing or having
leased such products to any OEM customer located within the specified territory
for incorporation as an integral part of systems assembled within the specified
territory by such OEM customer for sale or lease within or outside the
specified territory.
(c) Each of the parties will exercise their best efforts and take
such actions as permitted by law to prevent any circumvention of the intent of
this Section by any distributor of products manufactured by them.
ARTICLE III
MANUFACTURING AND SALE
3.01 JTS and Jointly Developed Products.
Subject to the terms, conditions and limitations as set forth in a
manufacturing and marketing agreement to be negotiated between the parties, Pont
hereby agrees to manufacture and to sell JTS Products and Jointly Developed
Products to JTS. The parties agree to negotiate in good faith a marketing and
manufacturing agreement that will provide for a standard form purchase order to
be used to order any such products. Such purchase order shall contain, at a
minimum, in each case:
(1) the model number, configuration and description of the JTS
Product or Jointly Developed Product requested;
(2) the quantity of each such requested product;
(3) the delivery date of each such requested product;
(4) the delivery destination of each such requested product; and
(5) the unit price of each such requested product.
9
13
January 31, 1995
3.02 Servo Writer Prototype
(a) Pont shall deliver to JTS by February 28, 1995 one fully tested
and integrated engineering Servo Write Station (the "Servo Writer"), which
Servo Writer shall be designed for use with Point 5 disk drives and the
mounting hardware for JTS Products. For thirty days after delivery of the Servo
Writer, JTS may request that Pont make changes to the Servo Writer, provided
that Pont shall have no obligation to make such changes and JTS shall be
required to accept such Servo Writer, if the technical performance is of a
quality that should be reasonably satisfactory to JTS. The software developed
for the Servo Writer shall also be adaptable to other disk drives, including
JTS Products.
(b) JTS has previously advanced the sum of $25,000 and agrees to
pay Pont $25,000 upon the execution of this Agreement and $25,000 upon the
satisfaction of the condition as to satisfaction described in subsection (a).
(c) Upon JTS's acceptance of the Servo Writer, the parties shall
negotiate in good faith a purchase order pursuant to which JTS will agree to
purchase up to fifty (50) additional Servo Writers at a price of no more than
$45,000 per unit.
ARTICLE IV
TECHNICAL INFORMATION AND ASSISTANCE
4.01 Technical Information. JTS and Pont shall each have the
following rights and obligations respecting Technical information of the other.
(a) Within thirty (30) days of the date of this Agreement, JTS
shall delivery to Pont, free of charge, one reproducible copy of all material
constituting Technical Information concerning the JTS Products and Pont shall
deliver to JTS, free of charge, one reproducible copy of all material
constituting Technical Information concerning the Pont Products.
(b) Said Technical Information shall comprise, but not necessarily
be limited to, the following:
(1) Manufacturing blueprints and vellums in reproducible
form and specifications of all parts;
(2) Full details of all manufacturing, assembly and testing
processes, special tools and equipment, software and procedures then currently
used;
(3) A description of all parts for use in such manufacture
in manufacturer's catalogue form, if available;
10
14
January 31, 1995
(4) Details of all tests and inspection procedures currently
being carried out in connection with such manufacture; and
(5) Current filed instructions with respect to the item.
(c) Each of the parties agrees to deliver promptly to the other, free
of charge, one reproducible copy of all Technical Information which it shall
generate or which it shall acquire from third parties other than Teac, and
which relates to the Products or Products Technology, including, but not
limited to, any Improvements thereto.
(d) All Technical Information referred to herein shall be delivered in
the English language and in the form in which such information is used by the
originator, provided that any translation into English of such Technical
Information shall be at the originator's sole expense.
(e) Neither JTS nor Pont guarantees that the design, engineering,
techniques and information related thereto to be furnished by them under this
Section is or will in the future be free from defects or that products built or
activities undertaken in accordance therewith will perform in the field to the
satisfaction or so as to meet the requirements of any particular purchaser or
user thereof.
(f) Each of the parties specifically agrees that any and all Technical
Information described herein and reproductions thereof is and shall remain, the
exclusive and sole property of the party who first generated the Technical
Information or first acquired it from another party. It is further agreed by
the parties that money damages for unauthorized use of any Technical
Information or reproductions thereof of which it is not the owner designated by
this paragraph will be inadequate, and that the owner of such Technical
Information and reproductions designated by this paragraph, shall be entitled,
in addition to money damages, to such legal process as would require the other
party hereto to cease and desist from such breach of this Agreement and to
perform such acts as are necessary to carry out the terms of this paragraph.
4.02 Technical Assistance.
(a) For a period not to exceed one year from the start date of the
consulting engagement which start date shall be in the sole and absolute
discretion of Pont, but in no event may start later than ninety (90) days from
the date of this Agreement, JTS shall provide the technical assistance,
engineering services, scientific assistance or similar services and advice
reasonably necessary to assist Pont with the conversion of ASIC, including, but
not limited to, the design, code and documentation related to ASIC, for use
with a current, industry supported development platform or platforms and
environment or environments. JTS agrees to make Stephen J. Harris available for
part-time consultation in connection with such technical assistance, provided
that if Mr. Harris is no longer an employee or consultant to JTS. JTS shall
provide a replacement of approximately the same experience and knowledge in
ASIC to provide such technical assistance.
11
15
January 31, 1995
(b) For a period not to exceed one year from the start date of the
consulting engagement which start date shall be in the sole and absolute
discretion of Pont, but in no event may start later than ninety (90) days from
the date of this Agreement, JTS shall provide the technical assistance,
engineering services, scientific assistance or similar services and advice
reasonably necessary to assist Pont with the conversion of Micro Code,
including, but not limited to, the design, code and documentation related to
Micro Code, for use with development platform or platforms and environment or
environments to be specified by Pont. JTS agrees to make one suitably qualified
employee or consultant available for part-time consultation in connection with
such technical assistance.
(c) Pont shall reimburse JTS for all reasonable travel expenses of the
persons identified in Section 4.02 (a) and (b) to and from Pont's offices, or
such other place as Pont shall designate for rendering such technical
assistance, including lodging, food and transportation. Pont shall not be
responsible for any consulting fee or salary of any employee of JTS or
consultant hired by JTS.
(d) Except for liability arising out of gross negligence or willful
misconduct of Pont, Pont shall assume no liability and shall be indemnified and
held harmless by JTS against all claims, liabilities and expenses with respect
to all injury, damage and loss to persons and property which may occur to or be
caused by or to the personnel rendering technical assistance pursuant to this
Article.
4.03 Jointly Developed Products and Technology.
(a) Within thirty (30) days after execution of this Agreement, JTS
shall deliver data sheets to Pont setting forth the specifications of all JTS
Products and JTS Products Technology and the target specifications for all JTS
Products and JTS Products Technology, in the detail that would be common in the
industry (the "JTS Specifications"), and Pont shall deliver data sheets to JTS
setting forth the specifications of all Pont Products and Pont Products
Technology and the target specifications of all Pont Products and Pont Products
Technology, in the detail that would be common in the industry (the "Pont
Specifications"). The Specifications shall be attached hereto as Exhibit B.
(b) JTS and Pont may undertake to jointly develop a Product or
Technology by so agreeing in a writing executed by both parties and attaching
specifications and target specifications for such Jointly Developed Product or
Technology, provided such Jointly Developed Product or Technology is not
already the subject of JTS or Pont Specifications, in which case such JTS or
Pont Specifications shall become the specifications for the Jointly Developed
Product or Technology (the "Jointly Developed Specifications," together with
the JTS and Pont Specifications, the "Specifications"). Until such agreement to
develop a Jointly Developed Product or Technology is terminated in writing or
by operation of Section 4.03(c), each party shall own a half-interest in all
rights to the Jointly Developed Product or Technology.
12
16
January 31, 1995
(c) Upon ninety days' notice (or such shorter notice as may be agreed
to by either party), JTS or Pont may make changes to Jointly Developed
Specifications subsequent to the engineering final release of any Jointly
Developed Product or Technology. If such changes are not agreed to in writing
by the other party, then the party requesting the change may proceed with the
proposed change by documenting a new bill of material containing the change and
may proceed with that change and sole technical support of Jointly Developed
Products or Technology incorporating such change shall be the sole
responsibility of the party making the change. The party not agreeing with the
change is not required to provide technical support for Jointly Developed
Products or Technology incorporating such change. A change in the Specification
shall not affect the designation of a Jointly Developed Product or Technology.
(d) Ownership of any and all rights to Jointly Developed Products and
Technology, including Improvements while a product is designated a Jointly
Developed Product or Technology, shall be joint between the parties. Any
patents, trade marks or copyrights shall be applied for and owned jointly by
the parties and each party will cooperate in the preparation and filing of
applications for patents, trademarks and copyrights.
(e) Each party shall be responsible for its own expenses and costs in
connection with the development of any Jointly Developed Product or Technology.
ARTICLE V
IMPROVEMENTS
5.01 Cooperation. JTS and Pont shall cooperate closely with one another
within the field Covered by this Agreement. Each will from time to time inform
the other of their lines of development within the said field and will promptly
communicate with one another of all Improvements related to any Product and
Technology, in each instance accompanied by all Technical Information.
5.02 Ownership of Improvements. The parties agree that all
Improvements are and shall remain the exclusive and sole property of the party
discovering or making such Improvements, except for Improvements related to
Jointly Developed Products or Technology as provided in Section 4.04 which will
be jointly owned. Each of the parties hereby understands that the provisions of
Article II includes a license of such Improvements from the party discovering
or making such Improvements to the other party. Without in anyway limiting the
generality of the foregoing and in furtherance thereof, each of the parties
hereby agrees with the other that:
(a) It will not, and its Affiliates will not, apply for any patents,
or permit its or their employees, directors, officers, or agents to apply for
any patents, covering Improvements designated in this Section as being the sole
and exclusive property of the other party.
(b) It will cooperate with the other party in the preparation and
filing, in the name and at the expense of such other party, of applications for
patents, trademarks, and copyrights which may be obtainable in all countries
covering Improvements which are designated as the sole and exclusive property
of such other party under this Section.
13
17
January 31, 1995
ARTICLE VI
SECRECY
6.01 Confidentiality. Each of the parties hereto shall treat and
maintain as confidential all Know-How under which such party is a licensee
hereunder and all Technical Information provided by a party to the other party.
Each party shall not, and shall cause its Affiliates to not, disclose any
aspect of such Know-How or Technical Information to any person, including any
association, corporation or governmental or quasi-governmental agency, except
as may be specifically contemplated by this Agreement or as required by law;
provided, however, that each party shall have the right, during the terms of
this Agreement, to disclose such Know-How or Technical Information to its
directors, officers, employees, agents or Affiliates to the extent, and only to
the extent, necessary to accomplish the objectives of this Agreement and to
customers only to the extent necessary to permit satisfactory operation of any
products.
6.02 Exceptions to Confidentiality. The parties further agree that the
provisions of Section 6.01 shall not apply to information which is first
acquired from a third party after the date of this Agreement, if there is no
obligation to keep the information from such third party confidential, or
information which is or becomes generally available to the public through no
act or omission on the part of the party who would otherwise be required to
keep such information confidential pursuant to Section 6.01.
6.03 Exercise of Care. With respect to the Know-How and Technical
Information which a party is required to keep confidential under Section 6.01,
and without limiting the generality of Section 6.01, each party agrees to
exercise at least such degree of care and take at least such precautions to
maintain such confidentiality as such party would exercise and take to maintain
the confidentiality of what such party regards as its most valuable and
confidential trade secrets, Know-How, processes and practices. Each party shall
be absolutely liable to the other for the non permitted disclosure directly or
indirectly of any details of the Know-How or Technical Information which it is
required to keep confidential hereunder by its directors, officers, employees,
agents or Affiliates.
6.04 Specific Performance. Each party agrees with the other that money
damages for breaches of this Article VI will be inadequate and that the
nonbreaching party shall, with respect to such breach, be entitled, in addition
to money damages, to such legal process as would required the breaching party
to cease the breach and to perform such further acts as are necessary to carry
out the terms of this Article.
14
18
January 31, 1995
ARTICLE VI
ROYALTIES
7.01 Royalty Rate. Pont agrees to pay to JTS, in accordance with the
terms of this Article, in addition to all other sums due or which may become
due under this Agreement, a royalty rate of: (a) for the first [*] beginning
on the date that Pont begins to produce and sell non-three-and-a-half-inch disk
drive JTS Products, [*] of the net sales revenues from sales during the [*]
period of 2500 or more of such non-three-and-a-half-inch disk drive JTS
Products to an OEM or into the distribution or end user markets; and (b) for
the following [*] , [*] of the net sales revenues from sales during the
[*] period of 2500 or more of such non-three-and-a-half-inch disk drive JTS
Products to an OEM or into the distribution or end user markets; provided, in
each instance, such royalty rate shall be due on the sale of the first 2499
such products upon the sale of the 2500th such product during the period
specified.
7.02 When Sold. For purposes of Section 7.01 and 7.07, an item shall be
considered sold by Pont when first invoiced or shipped, whichever is sooner, to
a third party,
7.03 Net Sales Revenues. The net sales revenue shall be calculated by
deducting from the gross sales price the following items to the extent they are
included in the gross sales price:
(a) Sales, turnover or other taxes on the sale or use;
(b) Transportation and insurance charges payable by the seller on
shipments to the destination specified by the purchaser or user;
(c) Trade or quantity discounts (but not cash discounts or agents'
commissions to the purchaser, user, representatives or Affiliates);
(d) Credits allowed for items returned or not accepted by the purchaser
or user.
7.04 Certain Sales Excluded. No royalty shall be charged on direct
sales to JTS, or on the use of an item by Pont or its Affiliates for
experimental, testing or sales demonstration purposes only.
15
19
January 31, 1995
7.05 Royalty Calculation on Items Used or Leased. For the purpose of
computing royalties on items used by Pont or its Affiliates (except for items
used for experimental testing or sales demonstration purposes only), such items
shall be deemed sold at Pont's quoted F.O.B. factory (based upon the location
at which such items are principally manufactured) sales price for such in
effect as of the time the royalty on such items accrues under Section 7.02, or
if no such items are so quoted, at the quoted price for the most similar item
then being so quoted by Pont.
7.06 Payments. All payments hereunder by Pont to JTS shall be made in
United States currency at a bank to be designated by JTS net of any deductions
or withholdings for taxes or charges of any kind which Pont is required to
withhold or deduct by law, provided that nothing in this Agreement shall be
construed or deemed as imposing upon Pont the obligation to make any such
deduction or withholding. To the extent any such deduction or withholding is
made by Pont, Pont agrees promptly to forward such amount withheld or deducted
to the pertinent agencies or entities imposing such charges. To compute net
sales and to determine amounts payable pursuant to this Article, any currency
other than United States legal tender shall be converted into United States
legal tender in accordance with Section 9.10 hereof.
7.07 Time of Payment and Period for Which Royalty Paid. Royalties
shall accrue during each quarterly-yearly period (or shorter period for the
first and last periods for which royalties shall accrue) ending on March 31st,
June 30th, September 30th, and December 31st of each year, and the
corresponding payments shall be made thirty days after each quarterly period,
respectively.
7.08 Late Payments. Any royalty payments made after the due date shall
include interest from the due date of payment until the actual date of payment
at the prime rate of interest in New York City publicly quoted by Chase
Manhattan Bank N.A. for unsecured commercial loans to its more favored
commercial customers ("Prime Rate") in effect on the due date, or the last
business day prior to the due date if the due date is a bank holiday ("the
Initial Prime Rate"), plus one and one-half percent (1.5%); if any such
payments shall remain unpaid for more than 60 days after the due date, the
Initial Prime Rate shall continue in effect until the first business day of the
month next occurring after the month in which such sixty (60) day period shall
end, where upon the Prime Rate to be used in computing interest hereunder for
the month beginning on such first day and ending on the first business day of
the next succeeding month shall be the Prime Rate in effect on that first
business day and for each such monthly period occurring thereafter the Prime
Rate in effect on the first business day of each such month. If Chase
Manhattan Bank N.A. shall not be quoting such Prime Rate at any time, then the
Prime Rate of any other United States Bank reasonably desiganted by JTS shall
be used.
7.09 Records and Reports. Royalty payments under this Article shall be
supported by a reasonably detailed statement of account for all transactions
subject to royalty showing the basis for calculating the royalty due and the
detail and purpose of the sums paid, and certified as accurate by Pont's chief
financial officer or its representatives. Pont shall keep, at its usual place
of business, and require its Affiliates to likewise keep, all books of
account relating to the manufacture and sale, lease or use of items subject
to royalties under this Article and shall produce such books for inspection by
any authorized certified auditor or financial officer of JTS at reasonable
times during normal business hours for the purpose of verifying the accuracy
and adequacy of royalties due hereunder. If any audit shall find an error
greater than 10% not in favor of JTS, then Pont shall pay the reasonable costs
of such audit.
16
20
January 31, 1995
7.10 Governmental Approvals to U.S. Currency Payments. Pont agrees to
obtain the approval of any foreign country authorities, if necessary, and to
take whatever steps may be required, to remit to JTS in United States Dollars
the royalties payable hereunder.
7.11 Royalties to Survive Contractual Patents or Knowledge of Others
and Termination of License. Pont specifically acknowledges that notwithstanding
JTS' proprietary rights in the Patents and Know-How under which Pont is being
licensed to manufacture the items subject to royalty hereunder, it is agreeing
to pay the royalties due hereunder in lieu of significant initial charges in
return for JTS facilitating Pont's manufacture of the items subject to royalty
and thereby permitting Pont to commence the manufacture of such items earlier
than it would have otherwise been able to engage in such manufacture even if
JTS had no proprietary rights in such Patents and Know-How. Accordingly, Pont
agrees to pay the royalties due under this Article irrespective of the validity
or term of the Patents, or whether patent applications presently pending fail
to issue, or whether patent applications first made in the future covering JTS
Products or Technology or Components thereof or Improvements thereto fail to
issue, or whether third parties acquire knowledge of the Know-How.
Additionally, Pont agrees that the provisions of this Article VII shall
survive any termination of this Agreement or the license granted under Section
2.01 or any determination that the license granted under Section 2.01 is
invalid for any reason and shall apply to any sales by Pont and its Affiliates
following such termination or determination, whether or not such sales are
consistent with the terms of this Agreement, as though such termination had not
occurred or such determination had not been made.
ARTICLE VIII
TERMINATION
8.01 Bankruptcy of a Licensee. If a licensee under this Agreement
shall be adjudicated insolvent, or files a petition in bankruptcy, or for
reorganization, or if a licensee shall take advantage of any insolvency act, or
make an assignment for the benefit of creditors, then, and in any such event,
the licensee's rights but not its obligations under this Agreement shall
forthwith terminate and the license herein granted shall not constitute an
asset in reorganization, bankruptcy or insolvency which may be assigned or
which may accrue to any court- or creditor-appointed referee, receiver or
committee. Such licensee shall also promptly deliver to the licensor all
materials embodying information or data transferred pursuant to this Agreement,
including, but not limited to, all Technical information.
8.02 Bankruptcy of a Licensor. If a licensor under this Agreement
shall be adjudicated insolvent, or files a petition in bankruptcy, or for
reorganization, or if a licensor shall take advantage of any insolvency act, or
make an assignment for the benefit of creditors, then, and in any such event,
the licensor's rights but not its obligations under this Agreement shall
forthwith terminate.
17
21
January 31, 1995
ARTICLE IX
GENERAL PROVISIONS
9.01 Notices. All notices, requests demands, waivers, consents and
other communications hereunder shall be in writing, shall be delivered either
in person, by telegraphic, facsimile or other electronic means, by overnight
air courier or by mail, and shall be deemed to have been duly given and to have
become effective (a) upon receipt if delivered in person or by telegraphic,
facsimile or other electronic means (b) one business day after having been
delivered to an air courier for overnight delivery or (c) three business days
after having been deposited in the mails as certified or registered mail,
return receipt requested, all fees prepaid, directed to the parties or their
permitted assignees at the following addresses (or at such other address as
shall be given in writing by a party hereto):
If to JTS, addressed to:
JT Storage, Inc.
1289 Anvilwood Avenue
Sunnyvale, California 94089
Attn: President
Facsimile: (408)-747-0849
If to Pont, addressed to:
Pont Peripherals Corporation
912 West Maude
Sunnyvale, California 94086
Attn: President
Facsimile: (408)-749-9499
9.02 Successors and Assigns. The rights under this Agreement shall not
be assignable or transferable nor the duties delegable by either party without
the prior written consent of the other; and nothing contained in this
Agreement, express or implied, is intended to confer upon any person or entity,
other than the parties hereto and their permitted successors-in-interest and
permitted assignees, any rights or remedies under or by reason of this
Agreement unless so stated to the contrary.
9.03 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.04 Captions and Paragraph Headings. Captions and paragraph headings
used herein are for convenience only and are not a part of this Agreement and
shall not be used in construing it.
18
22
January 31, 1995
9.05 Entirety of Agreement: Amendments. This Agreement (including any
schedules and exhibits hereto) contains the entire understanding between the
parties concerning the subject matter of this Agreement and supersedes all
prior understandings and agreements, whether oral or written, between them with
respect to the subject matter hereof and thereof. There are no representations,
warranties, agreements, arrangements or understandings, oral or written,
between the parties hereto relating to the subject matter of this Agreement and
such other documents and instruments which are not fully expressed herein or
therein. This Agreement may be amended or modified only by an agreement in
writing signed by each of the parties hereto. All exhibits and schedules
attached to or delivered in connection with this Agreement are integral parts
of this Agreement as If fully set forth herein.
9.06 Construction. This Agreement and any documents or instruments
delivered pursuant hereto shall be construed without regard to the identity of
the person who drafted the various provisions of the same. Each and every
provision of this Agreement and such other documents and instruments shall be
construed as though the parties participated equally in the drafting of the
same. Consequently, the parties acknowledge and agree that any rule of
construction that a document is to be construed against the drafting party shall
not be applicable either to this agreement or such other documents and
instruments.
9.07 Waiver. The failure of a party to insist, in any one or more
instances, on performance of any of the terms, covenants and conditions of this
Agreement shall not be construed as a waiver or relinquishment of any rights
granted hereunder or of the future performance of any such term, covenant or
condition, but the obligations of the parties with respect thereto shall
continue in full force and effect. No waiver of any provision or condition of
this Agreement by a party shall be valid unless in writing signed by such party
or operational by the terms of this Agreement. A waiver by one party of the
performance of any covenant, condition, representation or warranty of the other
party shall not invalidate this Agreement, nor shall such waiver be construed
as a waiver of any other covenant, condition, representation or warranty. A
waiver by any party of the time for performing any act shall not constitute a
waiver of the time for performing any other act or the time for performing an
identical act required to be performed at a later time.
9.08 Governing Law. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
California, without regard to the principles of conflicts of law thereof.
9.09 Remedies.
(a) All disputes, controversies or claims arising out of, or relating
to this Agreement, or the making, validity, interpretation, performance or
breach of this Agreement, shall be settled by arbitration in San Jose,
California under the commercial arbitration rules of the American Arbitration
Association in effect on the date of this Agreement. The arbitration shall be
conducted by one arbitrator selected in accordance with Section 12 of the
Rules. The arbitrator shall render a written decision, stating the reasons
therefor, and shall render his award within 12 months of the request for
arbitration. The award shall be final, binding and enforceable, and may be
entered in any court of competent jurisdiction. The successful or prevailing
party shall be entitled to recover reasonable attorneys' fees and other costs
incurred in the arbitration or any court proceeding, in addition to any other
relief to which such party is entitled. Such arbitration proceedings shall
constitute a condition precedent to any actions brought in the courts of any
jurisdiction which may have cognizance of this Agreement.
19
23
January 31, 1995
(b) Each party's obligation under this Agreement is unique. If any
party should default in its obligations under the Agreement, the parties each
acknowledge that it would be extremely impractical to measure the resulting
damages; accordingly, the nondefaulting party, in addition to any other
available rights or remedies, may sue in equity for specific performance, and
the parties each expressly waive the defense that a remedy in damages will be
adequate. Nothing contained herein is intended to, nor shall limit or affect,
any rights at common law or by statute or otherwise of any party aggrieved as
against any other party for breach or threatened breach of any provision of
this Agreement, it being the intention by this provision to make clear the
agreement of the parties that the respective rights and obligations of the
parties shall be enforceable in equity as well as at law or otherwise.
(c) NOTWITHSTANDING ANY OTHER TERM OF THIS AGREEMENT, NEITHER
PARTY HEREUNDER NOR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES OR
AGENTS SHALL BE LIABLE TO THE OTHER PARTY HEREUNDER OR TO ANY THIRD PARTY FOR
ANY LOSS OF USE, LOSS OF GOODWILL, INTERRUPTION OF BUSINESS, OR FOR INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOST REVENUES OR
PROFITS) OR SIMILAR DAMAGES, WHETHER BASED ON TORT (INCLUDING, WITHOUT
LIMITATION, NEGLIGENCE OR STRICT LIABILITY), CONTRACT OR OTHER LEGAL OR
EQUITABLE GROUNDS, EVEN IF SUCH PARTY HAS BEEN ADVISED OR HAD REASON TO KNOW OF
THE POSSIBILITY OF SUCH DAMAGES.
9.10 Status of Parties. JTS and Pont are and intend to remain
independent contractors, and this Agreement shall not constitute, create or be
interpreted as a joint venture, partnership or formal business organization of
any kind. Nothing in this Agreement shall be construed to constitute either
party the agent of the other for the purpose of accepting service of legal
process or binding either party as principal to any representation, commitments
or agreements made by the other in connection with the manufacture, sale,
distribution, use or application of the Products or Technology referred to
herein or otherwise.
9.11 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be valid, binding and
enforceable under applicable law, but if any provision of this Agreement is
held to be invalid, void (or voidable) or unenforceable under applicable law,
such provision shall be ineffective only to the extent held to be invalid,
void (or voidable) or unenforceable, without affecting the remainder of such
provision or the remaining provisions of this Agreement.
9.12 Payments in U.S. Currency. All payments from one party to the
other and the calculation of all amounts due will be in United States dollars.
Any conversions to United States dollars shall be based upon the midpoint
between the official banking buying and selling rate of United States dollars
at the close of business on the business day immediately preceding the day on
which such conversion is to be calculated for purposes of carrying out the
terms of this Agreement.
9.13 Consents Not Unreasonably Withheld. Wherever the consent or
approval of any party is required under this Agreement, such consent or
approval shall not be unreasonably withheld, unless such consent or approval is
to be given by such party at the sole or absolute discretion of such party or
is otherwise similarly qualified.
20
24
January 31, 1995
9.14 Time Is of the Essence. Time is hereby expressly made of the
essence with respect to each and every term and provision of this Agreement.
The parties acknowledge that each will be relying upon the timely performance
by the other of its obligations hereunder as a material inducement to each
party's execution of this Agreement. Neither party shall be liable for any
delay or failure in its performance of any of the acts required by this
Agreement when such delay or failure arises beyond the control and without the
fault or negligence of such party. Such causes may include, without limitation,
acts of God or public enemies, labor disputes, material or component shortages,
embargoes, rationing, acts of local, State or national governments or public
agencies, utility or communication failures or delays, fire, flood, epidemics,
riots or strikes. The time for performance of any act delayed by such events
may be postponed for a period equal to the delay.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the date first above written.
JTS
JT STORAGE, INC.
By: /s/ Sirjang L. Tandon
-------------------------
Its: Chairman & CEO
------------------------
Pont
PONT PERIPHERALS CORPORATION
By: /s/ Daniel Dooley
-------------------------
Its: President
------------------------
21