Exhibit 10.4

MASTER SUPPLY AND INTELLECTUAL PROPERTY LICENSE AGREEMENT

        THIS MASTER SUPPLY AGREEMENT ("Agreement") is dated and made effective
this 10th day of  December, 2002 (the "Effective Date") by and between Quantum
Corporation, a Delaware corporation having its principal place of business at
501 Sycamore Street, Milpitas, California 95035, and its wholly-owned
subsidiaries and Affiliates (collectively “Quantum”), and Jabil Circuit, Inc., a
Delaware corporation, having its principal place of business at 10560 Ninth
Street North, St. Petersburg, Florida, 33716 and its wholly-owned subsidiaries
and Affiliates (collectively “Jabil”).

W I T N E S S E T H:

        WHEREAS, Jabil Circuit Sdn. Bhd. (Company No. 336537-M), a corporation
organized under the laws of Malaysia and having its registered office at 56
Hilir Sungai Keluang 1, Bayan Lepas F12 IV 11900 Penang, Malaysia (“JCS”) and
Quantum Peripherals (M) Sdn. Bhd. (Company No. 267908-V) (“QPM”), a company
established under the laws of Malaysia having its principal place of business at
Plot 21 (A), Bayan Lepas, F1Z4, 11900 Penang, Malaysia, (the “Facility”) have
entered into that certain Asset Purchase Agreement (the "Asset Purchase
Agreement") dated August 29, 2002, under which  QPM is selling to JCS, and JCS
is purchasing from QPM, substantially all of the operations located at the
Facility conducted by QPM at the Facility as described on Exhibit A to the Asset
Purchase Agreement (the "Acquired Operations"), which such Acquired Operations
include, but are not limited to, the assembly and fulfillment operations of the
Products set forth in Article 1.14 below and JCS is willing to assume certain
obligations relating to the Acquired Operations, all upon the terms and
conditions set forth in the Asset Purchase Agreement; and

        WHEREAS, Jabil will become a major supplier of products and services
relating to the assembly and fulfillment operations for the Products, as defined
in Article 1.14 hereof; and

        WHEREAS, Quantum and Jabil desire to enter into an agreement under which
Jabil will provide assembly and fulfillment services to Quantum following the
closing of the transactions contemplated by the Asset Purchase Agreement.

        NOW, THEREFORE, in furtherance of the foregoing premises and in
consideration of the mutual covenants and obligations hereinafter set forth, the
parties hereto, intending to be legally bound hereby, do agree as follows:

Article 1.  

DEFINITIONS

 

 

 

 

1.1

“Affiliate” shall mean any entity in which either party owns, directly or
indirectly, more than 50% of the outstanding securities, or can otherwise
exercise direct control.

 

 

 

 

 

1.2

"Applicable Laws" shall mean any federal, state, local or foreign statute, law,
ordinance, rule, administrative interpretation, regulation, order, writ,
injunction, directive, judgment, decree or other requirement of any Governmental
Authority applicable to the parties and their Affiliates or any of their
respective properties, assets, officers, directors, employees, consultants or
agents.

 

 

 

 

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1.3

"Approved Vendor List" or “AVL” shall mean the written list of third party
suppliers or contractors of materials, parts and components utilized by Jabil in
the manufacture and assembly of the Products hereunder, which have been supplied
or approved by Quantum.

 

 

 

 

1.4

“Base Platform” shall mean (i) with respect to the DLT Products (those Products
which are not SSG Products as defined in Article 1.24), that part of the
Products that utilize mechanical subassemblies to pull digital linear tape media
across read/write heads to record and read data for storage purposes; and (ii)
with respect to the SSG Products (as that term is defined in Article 1.24
hereof), that part of the Products that uses a shuttle mechanism for delivery
and retrieval of tape media from the drive.

 

 

 

 

1.5

“Commercially Reasonable Efforts” or "Commercially Reasonable Time" means those
efforts or that period of time, as the case may be, that would be deemed both
commercially practicable and reasonably financially prudent after having taken
into account all relevant commercial considerations.  “Relevant commercial
considerations” shall be deemed to include, without limitation, (i) all
pertinent facts and circumstances; (ii) financial costs; (iii) resource
availability and impact; (iv) probability of success; and (v) other commercial
practicalities.

 

 

 

 

1.6

"Competitive Price" or "Competitive Pricing" shall mean a per-unit price for any
product that is equal to, or less than, the per-unit price offered to Quantum
for the manufacture and assembly of that product in accordance with Quantum’s
Specifications by another person, firm, corporation, or other entity that has
the facilities, personnel, experience and technical expertise to manufacture and
assemble those products to Quantum’s reasonable satisfaction.  *****.

 

 

 

 

1.7

"Confidential Information" shall include both the Jabil and Quantum Confidential
Information and further include all information, other than that which is in the
public domain, relating to the Products, or to the business, assets, finances,
financial condition, suppliers, customers, plans or prospects of any party to
this Agreement.  Quantum’s Confidential Information shall include all of the
Quantum Technology, and may include (by way of illustration and not limitation)
financial information, business plans, pricing information and data regarding
customers, suppliers and employees.  Jabil's Confidential Information shall
include, by way of illustration and not limitation, software, firmware,
hardware, technology and know-how and other proprietary information or
intellectual property embodied therein that is known, owned or licensed by and
proprietary to Jabil and not generally available to the public, including plans,
analyses, trade secrets, patent rights, copyrights, trademarks, inventions,
supplier contracts and information, fees and pricing information, operating
procedures, procedure manuals, processes, methods, computer applications,
programs and designs, and any processed or collected data.  Confidential
Information may be disclosed hereunder from one party to another party hereto
orally, in writing or in any other tangible medium; provided, however, that all
such Confidential Information shall be:  (i) tangible medium and marked
"confidential"; (ii) identified by one of the parties hereto to the other party
orally or in writing as to the confidential nature of such information; or (iii)
information where due to its nature or character, a reasonable person under
similar circumstances would treat such information as confidential.

 

 

 

 

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1.8

"Configuration Requirements" shall mean the unique configuration requirements
for any of the Products to be manufactured and assembled by Jabil hereunder as
specified and communicated by Quantum to Jabil by means of the statement of work
accompanying the Sales Order or MDS for those Products submitted by Quantum
under Article 2.3 hereof.

 

 

 

 

1.9

“Follow-On or Derivative" products shall mean those products that are designed
and/or developed by Quantum during the Term hereof and that (i) incorporate tape
media; (ii) are based upon and incorporate the Quantum Technology and the
Quantum Product IP and any improvements or enhancements thereto; and (iii) use
the same Base Platform as the preceding Product.

 

 

 

 

1.10

“Governmental Authority” means any foreign or domestic federal, territorial,
state or local governmental authority, quasi-governmental authority,
instrumentality, court, government or self-regulatory organization, commission,
tribunal or organization or any regulatory, administrative or other agency, or
any political or other subdivision, department or branch of any of the
foregoing, including, but not limited to, the Malaysian Industrial Development
Authority, the Ministry of International Trade & Industry, Malaysia, Penang
Development Corporation Malaysia and the state authority of the State of Penang,
Malaysia.

 

 

 

 

1.11

"Improvements and Modifications" shall mean and include any and all updates,
changes, engineering changes, adaptations, enhancements and/or modifications
supplied or approved by Quantum that:  (i) correct any errors or defects in any
of the Products; (ii) improve or enhance the existing functions of any of the
Products; (iii) change any of the functions or add new features or functions to
any of the Products; or (iv) reduce the cost of manufacturing and assembling any
of the Products.

 

 

 

 

1.12

"Jabil’s Created Technology" shall mean and include any and all discoveries,
inventions, know-how, technical information, procedures, manufacturing and other
processes, software, firmware and technology created, developed, obtained or
reduced to practice by or for Jabil which are:  (i) incorporated or embodied in
any of the Products, including any Improvements or Modifications thereof; or
(ii) used by Jabil in the manufacture or assembly of any of the Products, or
otherwise used in Jabil’s performance of its obligations under this Agreement.

 

 

 

 

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1.13

"Jabil's Existing Technology" shall mean and include any and all discoveries,
inventions, know-how, technical information, procedures, manufacturing and other
processes, software, firmware and technology owned by, or licensed to, Jabil, or
otherwise known to the Jabil, as of the Effective Date of this Agreement that
are used by Jabil at any time during the Term in the manufacture and assembly of
the Products hereunder.

 

 

 

 

1.14

“Long-Lead Time Components” shall mean a component or material used in the
manufacture and assembly of the Products for which the lead-time is in excess of
twelve (12) weeks.

 

 

 

 

1.15

“Manufacturing Offset” shall mean the time required by Jabil to manufacture,
test and assemble the Products.

 

 

 

 

1.16

“Products” shall mean those Quantum Products as listed on Exhibit B, and any and
all Follow-On or Derivative products; provided, however, that such Follow-On or
Derivative products are subject to Competitive Pricing; and provided further
that the Follow-On or Derivative Products shall not include any product for
which any Quantum Party acquires the right to manufacture, market, distribute
and/or sell at any time after May 20, 2002, pursuant to any merger, acquisition,
joint venture, partnership or license agreement with any other person, firm,
corporation or other entity.

 

 

 

 

1.17

“Quantum Intellectual Property” shall mean and include any and all patents,
copyrights, designs, mask work or semiconductor circuit design rights,
trademarks, service marks, trade names and other proprietary rights, and all
registrations thereof and applications therefor now or hereafter incorporated
in, relating to, or associated with any of the Products and/or the manufacture
thereof.

 

 

 

 

1.18

“Quantum IT Software and Infrastructure” shall mean the software and operational
IT infrastructure currently used by Quantum and QPM in the manufacture and
assembly of the Products.

 

 

 

 

1.19

"Quantum OEM Customer" shall mean any Quantum original equipment manufacture
customer.

 

 

 

 

1.20

"Quantum Process IP" shall mean that subset of the Quantum Technology and
Quantum Intellectual Property that pertains to processes for manufacturing the
Products.

 

 

 

 

1.21

"Quantum Product IP" shall mean that subset of the Quantum Technology and
Quantum Intellectual Property that pertains to, or is incorporated into, any of
the Products.

 

 

 

 

1.22

The "Quantum Technology" shall mean and include all designs, concepts, drawings,
blueprints, models, methods, Specifications, bills of materials, manufacturing
equipment requirements, manufacturing data and procedures, performance data and
criteria, quality assurance standards, computer software and firmware know-how
and other technical information, in whatever form, tangible or intangible,
relating to the design, development, manufacture, production, configuration,
operation, maintenance and/or repair of any or all of the Products.

 

 

 

 

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1.23

“Sales Order” shall mean the binding order for Products (including any Purchase
Order, in the case of the SSG Products) issued by Quantum to Jabil indicating
type of Products, Configuration Requirements, delivery date, quantity of
Products and shipping instructions.

 

 

 

 

1.24

The "Specifications" shall mean Quantum’s specifications for manufacture and
assembly of each of the Products, as supplied or approved by Quantum and
notified to Jabil in writing as of the Effective Date of this Agreement and/or
from time to time during the Term, which shall include, but will not be limited
to,:  (i) Configuration Requirements; (ii) Improvements and Modifications; (iii)
those product requirements for Product packaging and storage detailed in the
then current Quantum Supplier Quality Management Handbook or otherwise specified
in writing; (iv) testing requirements; and (v) written waivers to previously
agreed specifications that are issued by Quantum, or amended in writing, at
their sole discretion from time to time during the Term.

 

 

 

 

1.25

“Strategic Components” are those components of the Products identified in
Exhibit A for which Quantum will retain certain process qualification and direct
vendor relation responsibilities (but not primary procurement or processing
responsibilities), in accordance with the provisions of Article 4.3 hereof.

 

 

 

 

1.26

The "SSG Products" shall mean that subset of the Products including the
Autoloader, Canister Assemblies and M1500 Products.

 

 

 

 

1.27

“Workmanship” shall mean that standard of care used by Jabil to manufacture and
assemble the Products (including, but not limited to, the incoming inspection of
components and materials) in accordance with the Specifications.

 

 

 

Article 2:  

DEFINITIONS

 

 

 

 

2.1

Quantum shall submit quarterly forecasts, which shall set forth the anticipated
requirements of Quantum for each of the Products for the rolling twelve (12)
month period to which each such Forecast pertains (the “Forecast”); provided,
however, that each Forecast submitted by Quantum under this Article 2.1 shall be
in quarterly increments and is intended for planning purposes only, and no such
Forecast shall be binding upon any of the parties hereto, except to the extent
that such Forecast shall be express authorization for Jabil to purchase in
accordance with any applicable component supplier’s minimum order quantity
requirements all Long Lead-Time Components and other components on a lead-time
plus Manufacturing Offset basis required in order to meet the Forecast. From
time to time, the parties shall meet to review, monitor and revise, as
appropriate, the list of Long Lead-Time Components. The requirements for the
manufacture and assembly of the Products shall be set forth in the Master Demand
Schedules ("MDS") submitted by Quantum to Jabil in accordance with Article 2.2
hereof.  The Configuration Requirements for the Products manufactured and
assembled by Jabil shall be set forth in the Sales Orders submitted by Quantum
to Jabil pursuant to Article 2.3 hereof.

 

 

 

 

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2.2

On a weekly basis (except with respect to SSG Products which shall be on a
monthly basis) during the Term, Quantum shall submit to Jabil an MDS for the
Products to be manufactured and assembled by Jabil during the rolling twelve
(12) week period to which each such MDS pertains. Quantum will provide Jabil
with recommended inventory levels for basic drive assemblies, in an unconfigured
format (“BDA”), for safety stock inventory and critical component inventory at
levels to be mutually agreed upon by the parties.  Quantum will also provide
Jabil with recommended inventory levels for BDA surge inventory and critical
component inventory required for final configuration.  Jabil and Quantum will
negotiate these inventory levels in good faith.

 

 

 

 

2.3

During the Term, Quantum shall submit Sales Orders to Jabil for the Products to
be configured by Jabil.  Each such Sales Order submitted by Quantum under this
Article 2.3 shall include a statement of work, which shall set forth any and all
Specifications, including, but not limited to, the Configuration Requirements,
for the Products to be supplied by Jabil pursuant to that Sales Order.

 

 

 

 

2.4

Each MDS submitted by Quantum to Jabil under Article 2.2 hereof, and each Sales
Order submitted by Quantum to Jabil under Article 2.3 hereof, shall constitute a
binding order by Quantum for the Products listed on that MDS or that Sales
Order, as the case may be, subject to the provisions of Article 2.5 hereof
governing the cancellation and rescheduling of orders for the Products.  Jabil
shall accept the orders for all Products set forth on each MDS or Sales Order,
as the case may be, submitted by Quantum hereunder unless the quantity of
Products ordered by Quantum on that MDS or Sales Order for any calendar week
exceeds the quantity of such Products set forth in the applicable Forecast and
is inconsistent with the terms and conditions of Exhibit C, Section 1(b)
("Reschedule, Cancellation, Obsolete, EOL Slow Moving Inventory").

 

 

 

 

2.5

Quantum may cancel or reschedule the delivery date(s) for any or all of the
Products ordered pursuant to any MDS or Sales Order submitted by Quantum to
Jabil subject to the written notice, timetable, and cancellation or rescheduling
fee requirements set forth on Exhibit C hereto ("Reschedule, Cancellation,
Obsolete, EOL Slow Moving Inventory").  All costs incurred by Jabil as a result
of the rescheduling or cancellation of any MDS or Sales Order under this Article
2.5 shall be payable by Quantum within ten (10) days after the date of Jabil's
invoice therefor.  Such costs incurred by Jabil shall be subject to:  (i) the
terms set forth in Exhibit C; and (ii) Jabil's duty of mitigation under Article
2.6.

 

 

 

 

2.6

Jabil will use Commercially Reasonable Efforts to mitigate the costs associated
with the cancellation or rescheduling of any MDS or Sales Order by Quantum as
follows:

 

 

 

 

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(a)   

as soon as commercially practicable, reduce or cancel all pending purchase
orders for materials, parts and components for the Products covered by that MDS
or Sales Order, as the case may be, to the extent that Jabil is contractually
permitted to do so;

 

 

 

 

 

 

 

(b)  

return all unused materials, parts and components for the Products covered by
that MDS or Sales Order, as the case may be, to the suppliers thereof, to the
extent that Jabil is contractually permitted to do so, provided, however, that
Quantum shall be responsible for any approved restocking charges;

 

 

 

 

 

 

 

(c)  

sell any remaining materials, parts and components for the Products covered by
that MDS or Sales Order, as the case may be, to one or more other persons,
firms, corporations or other entities, provided, however, Quantum shall be
responsible for the difference between the sale price  and the actual purchase
price for such materials, parts and components; and

 

 

 

 

 

 

 

(d) 

provide Quantum with all assistance reasonably requested by Quantum in
determining whether the work in process for the Products covered by that MDS or
Sales Order should be completed, scrapped or shipped to Quantum "as is".

 

 

 

 

Article 3:  

Manufacturing Services

 

 

 

 

3.1

Subject to the terms and conditions of this Agreement, Jabil shall manufacture,
assemble and supply to Quantum one hundred percent (100%) of Quantum’s
requirements for the Products and, subject to Article 3.9, Follow-On or
Derivative Products throughout the Term, unless this Agreement is altered or
terminated as to certain Products only in accordance with the provisions of
Article 9 hereof.  All of the Products manufactured and assembled by Jabil
hereunder shall conform to the Specifications and to the Configuration
Requirements set forth on any statement of work, and shall be delivered to
Quantum, in accordance with the applicable MDS or Sales Order, as the case may
be, as submitted by Quantum to Jabil in accordance with the provisions of
Article 2.2 or Article 2.3 hereof.

 

 

 

 

3.2

All Products to be supplied by Jabil under this Agreement shall be tested by
Jabil in accordance with testing procedures and quality assurance standards
supplied or approved by Quantum, the Specifications, under the Quantum Quality
Assurance Plan and under ISO 9002 quality assurance standards, and/or as
otherwise notified in writing by Quantum to Jabil (the “Quantum Tests”).  Jabil
shall not ship any Product that has not passed the Quantum Tests specified for
such Product, unless otherwise agreed to in writing by Quantum. Jabil and
Quantum shall negotiate in good faith and come to mutual agreement on a method
for determining the amount of any costs and expenses for initial ISO
certification and any additional certifications which the Parties mutually
determine to obtain that will be reimbursed by Quantum to Jabil.

 

 

 

 

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3.3

*****.

 

 

 

 

3.4

All Products to be supplied by Jabil under this Agreement shall be packaged for
international shipment and shipped by Jabil to Quantum or their respective
customers in accordance with the packing and shipping Specifications supplied or
approved in writing by Quantum to Jabil under Article 7.3 hereof.  Quantum shall
be solely responsible for the sufficiency and adequacy of any packing and
shipping Specifications and instructions as well as delivery dates and ship to
locations.

 

 

 

 

3.5

Prior to the Effective Date of this Agreement, Quantum shall deliver to Jabil
the Specifications for the Products, documents and materials that contain or
embody all of the Quantum Technology and such of Quantum’s Confidential
Information as Quantum reasonably determines to be necessary or appropriate for
Jabil to manufacture, assemble and supply the Products in accordance with this
Agreement.  Jabil shall use the Specifications, the Quantum Product IP and such
Quantum Confidential Information, which does not include the Quantum Process IP,
solely for the performance of its obligations under this Agreement, and for no
other purpose whatsoever, except as otherwise authorized in writing by Quantum.

 

 

 

 

3.6

Quantum warrants that the Specifications, the Quantum Technology, ISO
procedures, calibration and maintenance records for all equipment involved in
the manufacture of the Products and Quantum’s Confidential Information delivered
by Quantum or QPM, to Jabil under Article 3.5 hereof, constitute all of the
Specifications, Quantum Technology and Quantum Confidential Information used by
Quantum or QPM in the manufacture, assembly and supply of the Products
immediately prior to the Effective Date of this Agreement.

 

 

 

 

3.7

 

 

 

(a)   

Subject to the provisions of Article 3.7(b), Jabil shall be solely responsible
for furnishing all facilities, machinery and equipment, labor, manufacturing
processes (including basic specifications, ISO procedures and calibration and
maintenance of all equipment involved in the manufacture of the Products in
accordance with the equipment manufacturers' specifications), manufacturing
technology (other than the Quantum Technology), systems, transportation
logistics and, subject to the provisions of Article 4 hereof, materials, parts
and components for the performance of Jabil's obligations under this Agreement. 
The parties agree to perform a joint qualification of the lines for the
manufacturing and assembly of the Product for the purpose of verifying the
adequacy of the facilities, machinery and equipment, labor, manufacturing
processes and technology and systems sufficient to fulfill Quantum’s
requirements of the Products, as set forth in Exhibit B.

 

 

 

 

 

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(b)  

The parties hereby acknowledge that Quantum or QPM has used:  (i) certain
tooling owned by Quantum or QPM suppliers or customers and consigned to Quantum
or QPM ("Supplier and Customer Tooling"); and (ii) certain test equipment owned
by Quantum (the "Quantum Owned Test Equipment"), in the manufacture and assembly
of the Products prior to the Effective Date of this Agreement.  Quantum shall
make all such Quantum Owned Test Equipment heretofore consigned to, or owned by,
Quantum or QPM available to Jabil, at no charge to Jabil, for use by Jabil
solely in the manufacture and assembly of the Products in accordance with the
provisions of this Agreement.  Quantum shall be solely responsible for the
maintenance of all such Quantum Owned Test Equipment throughout the Term in
accordance with the maintenance Specifications provided by Quantum.  Quantum
shall also make all of the Supplier and Customer Tooling available for use by
Jabil solely in the manufacture and assembly of the Products in accordance with
the written Specifications of the Quantum Parities.

 

 

 

 

 

3.8

Quantum shall have the right, upon reasonable prior written notice, during
normal business hours, to inspect and review Jabil's manufacture and assembly of
the Products.  Upon reasonable prior written notice from Quantum, subject to
execution of a non-disclosure agreement in a form acceptable to Jabil prior to
such inspection, Quantum’s OEM Customers shall also have access to inspect and
review the manufacturing and assembly of the Products provided that the Quantum
OEM Customer is accompanied at all times by both a Quantum employee and Jabil
employee.  Any and all of Jabil's Confidential Information disclosed, revealed
or otherwise made available to Quantum shall be subject to the confidentiality
provisions of this Agreement.    Any inspection by Quantum or by any Quantum OEM
Customer of Jabil's manufacture and assembly of the Products hereunder shall not
be deemed to (i) constitute the acceptance by Quantum or by that Quantum OEM
Customer, as the case may be, of any such Products; or (ii) affect or impair
Jabil's warranty with respect to such Products, as set forth in Article 11.2
hereof.

 

 

 

 

3.9

Subject to the terms and conditions of this Agreement, Jabil shall manufacture,
assemble and supply to Quantum one hundred percent (100%) of Quantum’s
requirements for the Follow-On or Derivative Products throughout the Term
provided that Jabil maintains Competitive Pricing for such Follow-On or
Derivative Products.

 

 

 

 

3.10

*****.

 

 

 

 

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3.11

Attached to this Agreement as Exhibit B are the parties' mutually agreed goals
and schedule for the reduction in Jabil's cost of manufacturing, assembling and
supplying the Products to Quantum hereunder.  *****. The cost reduction goals
set forth in Exhibit B hereof are based on the forecast of Quantum’s
requirements of the Products set forth in Exhibit B.  The Parties further agree
that they shall implement the quarterly meeting scheme set forth in Exhibit B.

 

 

 

 

3.12

*****.

 

 

 

 

3.13

As soon as reasonably practicable after the Effective Date of this Agreement,
the parties shall implement an electronic interface (EI) between Quantum and
Jabil in order to facilitate the ordering and production planning of the
Products and other communications between and among the parties hereto.  This EI
system will include, at a minimum, the ability of Quantum to obtain real-time
data on manufacturing processes and procedures, as well as accurate estimates of
delivery dates.

 

 

 

Article 4:  

Procurement of Parts, Components and Materials

 

 

 

 

 

4.1

Subject to the provisions of Article 4.3 hereof, Jabil shall procure all
materials, parts and components required for the manufacture and assembly of the
Products throughout the Term from the suppliers on the Approved Vendor List. 
Quantum shall use Commercially Reasonable Efforts to make Jabil the beneficiary
of any and all existing Quantum supplier contracts for the procurement and
supply of all such materials, parts and components.

 

 

 

 

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4.2

Jabil shall obtain all materials, parts and components for the Products under
Article 4.1 hereof solely from those suppliers listed on the Approved Vendor
List. In the event that Jabil reasonably determines that the procurement of one
or more materials, parts or components from suppliers on the most current AVL:
(i) is inconsistent with Jabil’s cost reduction goals, as set forth on Exhibit B
hereof; (ii) will not meet Quantum’s quality assurance standards, as specified
in Article 3.2 hereof; or (iii) is otherwise inconsistent with the parties'
objectives hereunder, Jabil shall give written notice to Quantum of a proposed
change to the AVL.  Upon receipt of any written notice of a proposed change to
the AVL, Quantum shall use Commercially Reasonable Efforts to work with Jabil to
qualify and approve the materials, parts or components to be supplied by the new
supplier for use in the manufacture and assembly of the Products, subject to
Quantum’s quality assurance standards and commitments to their respective
customers with respect to the notification, qualification and approval of
sources of supply of materials, parts and components for the Products and the
requirements of all Quantum OEM Customers; provided, however, that Jabil shall
not implement any change to the AVL until the supplier has been approved in
writing by Quantum for addition to the AVL.

 

 

 

 

 

4.3

During the Term, Quantum shall retain certain process qualification and direct
vendor relation responsibilities (but not primary procurement or processing
responsibilities) for the Strategic Components.  Quantum shall provide a list of
qualified vendors of the Strategic Components to Jabil, so as to permit Jabil to
procure those Strategic Components in order to manufacture and assemble the
Products for Quantum.  All such Strategic Components procured exclusively for
Quantum under this Article 4.3 shall be used by Jabil solely in the manufacture
and assembly of the Products hereunder unless otherwise approved by Quantum in
writing, and Jabil shall use Quantum Intellectual Property solely for the
manufacture and assembly of the Products hereunder, with the exception of the
Quantum Process IP as set forth in Article 5.2.

 

 

 

Article 5:  

Intellectual Property Licenses

 

 

 

 

 

5.1

License to Jabil:  Quantum hereby grants to Jabil a limited, non-exclusive,
non-transferable, royalty-free license to use Quantum’s Intellectual Property,
the Quantum Product IP and Quantum’s Confidential Information solely and
exclusively for the manufacture, assembly and supply of the Products in
accordance with the terms and conditions of this Agreement.  Except as
specifically provided in Article 5.2 hereof, Jabil shall not utilize any of
Quantum’s Intellectual Property, the Quantum Product IP or Quantum’s
Confidential Information for any other purpose whatsoever, and Jabil
acknowledges and agrees that except as specifically provided in Articles 5.1 and
5.2, Jabil shall acquire no right, title or interest whatsoever in or to any of
the Quantum Intellectual Property, the Quantum Product IP or Quantum’s
Confidential Information.

 

 

 

 

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5.2

Additional License Rights to Quantum Process IP:  Quantum hereby grants to Jabil
a worldwide, non-exclusive, non-transferable (except for the transfer to a Jabil
affiliate or its embodiment in any manufactured products), fully paid-up,
royalty-free right and license to utilize the Quantum Process IP and Quantum IT
Software and Infrastructure in connection with the manufacture and assembly of
products for Quantum and any other persons, firms, corporations and other
entities.

 

 

 

 

 

5.3

License to Quantum Parties:  Jabil hereby grants to Quantum a worldwide,
limited, non-exclusive, fully paid-up, royalty-free right and license to use
Jabil's Existing Technology and Jabil's Confidential Information insofar as is
required for Quantum to use, sell or distribute the Product provided by Jabil
pursuant to this Agreement.  Quantum shall not utilize any of Jabil's Existing
Technology or Jabil's Confidential Information for any other purposes, and
Quantum acknowledges and agrees that, except as specifically provided in this
Agreement, Quantum shall acquire no right, title or interest in or to any of
Jabil's Existing Technology or Jabil's Confidential Information.

 

 

 

 

 

5.4

Without limiting the generality of Article 5.3 hereof, except with respect to a
termination of this Agreement for a material breach arising from nonpayment by
Quantum, upon the expiration or termination of this Agreement, Quantum shall
have the right to use, or to permit another person, firm, corporation or other
entity to use such portion of Jabil's Existing Technology and Jabil’s
Confidential Information as is required to produce, manufacture, and assemble
those Products in production at the time of termination of this Agreement.

 

 

 

 

 

5.5

Subject to the provisions of Article 6 hereof, the parties agree that any and
all Improvements and Modifications to the Quantum Product IP, even if derived
from, or through the use of, Jabil's Existing Technology and/or Jabil's
Confidential Information, shall be the sole and exclusive property of Quantum.

 

 

 

Article 6:  

Improvements and Modifications

 

 

 

 

 

6.1

Quantum’s Improvements and Modifications:  In the event that Quantum develops
any Improvements or Modifications to the Products, Quantum shall provide written
notice of such Improvements and Modifications to Jabil, which written notice
shall include appropriate amendments to the Specifications to incorporate those
Improvements or Modifications into the Products.  Within five (5) days after
receipt of any written notice from Quantum under this Article 6.1, Jabil shall
provide Quantum with written notice of the cost implications (either addition or
reduction), if any, of incorporating such Improvements and Modifications into
the Products.  In the event that Quantum elects to have those Improvements or
Modifications incorporated into the Products, Quantum shall give written notice
thereof within a Commercially Reasonable Time after receipt of Jabil’s written
notice hereunder, and shall furnish Jabil with the Specifications and other
appropriate documents and materials, in an acceptable format, containing or
embodying the Quantum Product IP and Quantum’s Confidential Information relating
to those Improvements and Modifications.  Jabil’s use of all of the Quantum
Technology and Quantum’s Confidential Information relating to all such
Improvements and Modifications, as furnished by Quantum under this Article 6.1,
shall be in accordance with, and subject to the terms and conditions of, Article
5.1 hereof.

 

 

 

 

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6.2

Jabil’s Improvements and Modifications:  In the event that Jabil develops any
Improvements or Modifications to the Products, Jabil shall give timely written
notice thereof to Quantum, including the cost implications (either addition or
reduction), if any, of incorporating such Improvements and Modifications into
the Products.  Quantum shall give written notice to Jabil of its acceptance of
such Improvements and Modifications within a Commercially Reasonable Time after
receipt of any written notice of such Improvements and Modifications from Jabil
under this Article 6.2.  Following the date of Quantum’s written notice of
acceptance of such Improvements and Modifications under this Article 6.2 which
shall include amended Specifications incorporating the Improvement or
Modification, Jabil shall use Commercially Reasonable Efforts to implement the
revised Specifications including such Improvements and Modifications on the
mutually agreed upon implementation date.

 

 

 

 

 

6.3

Jabil will assign to Quantum all right, title and interest in and to the
Improvements or Modifications developed by Jabil.  Quantum hereby grants to
Jabil a worldwide, non-exclusive, fully paid-up, royalty-free right and license
in and to the Improvements and Modifications.

 

 

 

 

 

6.4

Jabil's Created Technology:  Jabil shall disclose in a timely manner to Quantum
all of Jabil’s Created Technology pertaining to the Products, any Improvements
and Modifications and/or the manufacture and assembly of the Products, created,
developed, obtained or reduced to practice by Jabil during the Term.  Quantum
shall have the following rights in and to all of Jabil's Created Technology
disclosed to Quantum under this Article 6.4:

 

 

 

 

 

 

(a)   

Jabil shall assign, transfer and convey to Quantum all rights, title and
interests in and to that portion of Jabil's Created Technology that relates
directly to the Products or any Improvements and Modifications thereof.  Quantum
hereby grants to Jabil a worldwide, non-exclusive, fully paid-up, royalty-free
right and license in and to the Jabil Created Technology relating directly to
the Products.

 

 

 

 

 

 

 

(b)  

.Jabil shall grant to Quantum a limited, non-exclusive, transferable, perpetual,
worldwide, royalty-free right and license to use that portion of Jabil’s Created
Technology that relates to the processes and procedures used by Jabil Malaysia
in the manufacture and assembly of the Products.  Quantum shall have the rights
to use, and to authorize one or more other persons, firms, corporations, or
other entities to use the Jabil Created Technology licensed to Quantum under
this Article 6.4(b) in the production, manufacture and assembly of Quantum
products.

 

 

 

 

 

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Article 7:  

Pricing, Delivery and Payment Terms

 

 

 

 

 

7.1

The parties expressly agree that the prices to be charged for the Products sold
to Quantum hereunder shall be those set forth on Exhibit B.

 

 

 

 

 

7.2

The prices set forth for each of the Products on Exhibit B shall include all
relevant charges associated with the selected shipping terms.  The parties agree
to allocate responsibility for shipping, transportation, risk of loss,
insurance, and freight forwarding charges applicable to the shipment of the
products per the relevant INCOTERMS 2000 notation set forth in Exhibit B, and
which party will serve as importer and exporter of record, as defined by the
selected terms.  Transfer of title shall occur at the time that risk of loss
shifts under the relevant INCOTERM. The parties may agree in writing on other
shipping and pricing terms provided that such agreement is approved in writing
by a Program Manager or officer of each of the Parties.  With respect to any
Products shipped by Jabil to a third-party warehouse or hub to which Jabil
retains title and risk of loss, the additional terms in Exhibit D shall apply.

 

 

 

 

 

7.3

Quantum shall pay the purchase price for all Products supplied by Jabil
hereunder within *****after the later of (i) the date of shipment of those
Products by Jabil; or (ii) the date of Jabil's invoice for those Products.  All
payments made hereunder shall be in United States Dollars.  Jabil shall have the
right to charge Quantum a late fee of 1.5% per month or the maximum amount
allowed by law, whichever is less, for any overdue or unpaid invoices that are
not subject to a good faith dispute provided that the parties have attempted in
good faith to resolve the dispute by escalating the issue to the appropriate
financial management of each of the parties.

 

 

 

 

 

7.4

In the event Jabil fails to conform to the written shipping instructions
furnished by Quantum and such failure causes a material delay in the shipment or
delivery of the affected order of Products, Jabil shall immediately work with
Quantum and do some or all of the following to rectify such failure at Jabil's
sole expense: *****, work necessary overtime, recall the shipment or replace the
shipment.  Costs incurred by Jabil pursuant to this Article 7.4 shall not be
included in any discussions of cost allocations between the Parties. Jabil's
Chronic Failure (defined as more than one failure that causes economic loss to
Quantum within a calendar quarter) to conform to written shipping instructions
shall be considered a material breach of this Agreement.  Notwithstanding the
foregoing, this Article 7.4 shall not apply to the extent such failure by Jabil
arises under Article 15.2 (Force Majeure).

 

 

 

 

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Article 8:  

Legal Compliance and Export Control

 

 

 

 

 

8.1

In the exercise of their respective rights and the performance of their
respective obligations, all parties to this Agreement shall comply with all
Applicable Laws.  Without limiting the generality of this Article 8.1, each
party:

 

 

 

 

 

 

(a)   

Shall assist the other in obtaining all licenses, permits, approvals and other
governmental authorizations needed to allow shipment of the Products.  Each
party agrees that it shall not export, re-export, resell or transfer, or
otherwise require the other to ship or deliver any Product, assembly, component
or any technical data or software which violate any export controls or
limitations imposed by the United States or any other governmental authority, or
to any country for which an export license or other governmental approval is
required at the time of export without first obtaining all necessary licenses
and approvals and paying all duties and fees. Each party shall provide the other
with all licenses, certifications, approvals and authorizations in order to
permit the parties to comply with all import and export laws, rules and
regulations for the shipment and delivery of the Product. Each party shall also
be responsible for complying with any legislation or regulations governing the
importation of the Product into the country of destination and for payment of
any duties thereon on those shipments for which it is the importer of record.

 

 

 

 

 

 

 

(b)  

Agrees that, at all times during the Term, subject to timely notification of any
changes in the Products or relevant changes in the laws, it shall maintain all
such required licenses, permits, approvals, governmental authorizations,
notifications, filings and registrations in full force and effect.

 

 

 

 

 

 

8.2

Without limiting the generality of the foregoing, the parties further
acknowledge that all of the Quantum Intellectual Property, the Quantum
Technology, Quantum’s Confidential Information, Quantum’s IT Software and
Infrastructure, Jabil Existing Technology, Jabil Created Technology and Jabil
Confidential Information  (collectively the " Technical Data") are subject to
export controls under the laws and regulations of the United States, including,
but not limited to the Export Administration Regulations, 15 C.F.R. Parts
730-774.  Jabil and Quantum further acknowledge that all Products manufactured
under this Agreement are also subject to such United States export controls.

 

 

 

 

 

8.3

In the exercise of its rights, and the performance of its obligations under this
Agreement, each party shall comply with all United States export control laws
pertaining to the Technical Data and the Products.  Without limiting the
generality of this Article 8, neither party shall:

 

 

 

 

 

 

(a)   

export, reexport, divert, transfer or disclose any of the Technical Data
directly or indirectly to any destination to which the export or reexport of
such Technical Data is restricted or prohibited by those United States export
control laws and regulations, or to any national or resident thereof; or

 

 

 

 

 

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(b)  

.export any of the Products except in accordance with Quantum’s written
instructions.

 

 

 

 

 

 

8.4

Each party shall prepare all export and shipping documentation for each shipment
of any of the Products hereunder in accordance with its status as exporter
and/or importer of record as set forth in Article 7.

 

 

 

 

 

8.5

During the Term and thereafter, upon written request by either party, each party
shall make records available to the other so as to permit each party to verify
the Parties’ compliance with the export control and compliance obligations under
this Article 8.

 

 

 

 

 

8.6

In the event Jabil fails to comply with all Applicable Laws and such failure
causes a material delay in the shipment or delivery of the affected order of
Products, Jabil shall immediately work with Quantum and do some or all of the
following to rectify such failure at Jabil's sole expense: expedite freight,
work necessary overtime, recall the shipment or replace the shipment and/or
resolve (where such Products are under Jabil's control pursuant to the
applicable INCOTERMS 2000) or otherwise provide assistance to Quantum in
resolving any compliance problems with regulatory authorities caused by Jabil. 
Costs incurred by Jabil pursuant to this Article 8.6 shall not be included in
any discussions of cost allocations between the Parties. Jabil's Chronic Failure
(defined as more than one failure that causes economic loss to Quantum within a
calendar quarter) to comply with all Applicable Laws shall be considered a
material breach of this Agreement.  Notwithstanding the foregoing, this Article
8.6 shall not apply to the extent such failure by Jabil arises under Article
15.2 (Force Majeure).

 

 

 

Article 9:  

Term and Termination

 

 

 

 

 

9.1

The term of this Agreement shall be for three (3) years from the Effective Date,
unless earlier terminated in accordance with the provisions of this Agreement.

 

 

 

 

 

9.2

*****. The original three (3) year term and any extension(s) thereto shall be
referred to herein as the "Term" of this Agreement.

 

 

 

 

 

9.3

This Agreement may be terminated by a party hereto in accordance with the
following terms and conditions:

 

 

 

 

 

 

(a)   

either party may terminate this Agreement by giving notice in writing to the
other party, which notice shall be effective upon dispatch, should the other
party file, or have filed against it, a petition of any type as to its
bankruptcy; be declared bankrupt; become insolvent; make an assignment for the
benefit of creditors; go into liquidation or receivership;

 

 

 

 

 

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(b)  

subject to compliance with the terms and conditions of Article 9.6, either party
may terminate this Agreement by giving notice in writing to the other party in
the event the other party is in material breach of this Agreement and shall have
failed to cure such breach within twenty (20) business days (including cases of
non-payment of undisputed invoices to Jabil) of receipt of written notice
thereof from the first party; or

 

 

 

 

 

 

 

(c)  

*****.

 

 

 

 

 

 

9.4

In the event of termination of this Agreement under Article 9.3 hereof, the
parties shall have the following rights and obligations:

 

 

 

 

 

 

(a)   

Terminationof this Agreement shall not release either party from the obligation
to make payment of all amounts due to the other Party, including, but not
limited to, all amounts that have accrued and remain outstanding as of the date
of termination, including, subject to the terms and conditions of Article 2.6,
Quantum’s obligation to pay for all materials, parts, components and work in
process procured, on order or manufactured by Jabil pursuant to a quarterly
Forecast, MDS or Sales Order submitted by Quantum under Article 2 hereof, but
not yet fully incorporated into finished Products as of the effective date of
termination.  The parties' liability on termination of this Agreement shall also
be subject to Article 15.8.

 

 

 

 

 

 

 

(b)  

.Jabil shall fill all MDSs and Sales Orders for the Products submitted by
Quantum prior to the effective date of termination, and shall supply the
Products covered by those MDSs and Sales Orders to Quantum in accordance with
the terms and conditions: of those MDSs and Sales Orders.  Notwithstanding the
foregoing, in the event of a material breach due to nonpayment, and after
following the dispute resolution procedure set forth in Article 9.6, Jabil shall
have the right to suspend all shipments on MDSs and Sales Orders pending at
termination until such material breach is cured.

 

 

 

 

 

 

 

(c)  

In the event that the dispute resolution procedure set forth in Article 9.6 does
not lead to a satisfactory resolution of a material breach due to nonpayment by
Quantum, Jabil shall be entitled to seek post-termination relief that includes
the suspension of the licenses to Jabil’s Created Technology, Jabil's Existing
Technology, and Jabil’s Confidential Information set forth in this Agreement
without the necessity to post a bond.  Upon Quantum posting a bond covering the
disputed amount due to Jabil, any such license suspension shall be lifted and
Quantum shall have the full rights to use Jabil’s Created Technology, Jabil’s
Existing Technology, and Jabil’s Confidential Information consistent with the
license granted herein.  Inclusion of this explicit right of Jabil shall not
restrict Quantum’s remedies for any breach by Jabil affecting the Quantum
Intellectual Property licensed to Jabil herein.

 

 

 

 

 

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(d)  

Each party's rights and obligations underArticles 8, 10, 11, 12, 14 and 15 shall
survive the expiration or termination of this Agreement for any reason
whatsoever.

 

 

 

 

 

 

9.5

*****.

 

 

 

 

 

9.6

Notwithstanding anything to the contrary contained in this Agreement, except for
any material breach by either party of Article 10, each party agrees that,
unless otherwise required in order to comply with deadlines under Applicable
Laws, it will not terminate this Agreement, file an action or institute legal
proceedings with respect to any dispute, controversy, or claim arising out of,
relating to, or in connection with this Agreement until:  (a) the other party
has failed to provide a prompt and effective remedy within the cure period set
forth in Article 9.3(b); (b) it has given a senior executive of the other party
written notice of its grievance; and (c) it has requested that senior executives
for both parties to meet and discuss the matter in order to consider informal
and amicable means of resolution; and (d) either such meeting failed to occur
within five (5) days after such request or the meeting did not produce a
mutually satisfactory resolution of the matter.

 

 

 

Article 10:  

Confidentiality

 

 

 

 

 

10.1

Each party agrees that it will not use in any way for its own account, or for
the account of any third party, nor disclose to any other person, firm,
corporation or other entity, except as authorized in this Agreement, any
Confidential Information disclosed or revealed to it by another party to this
Agreement.  Each party shall take every reasonable precaution to protect the
confidentiality of all such Confidential Information.  Each party shall use the
same standard of care in protecting the Confidential Information of the other
party hereto as it normally uses in protecting its own trade secrets and
proprietary information.

 

 

 

 

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10.2

Notwithstanding any other provision of this Agreement, no information disclosed
or revealed to a party hereunder shall be Confidential Information if that
information is or becomes:

 

 

 

 

 

 

(a)   

published or otherwise made available to the public other than by a breach of
this Agreement;

 

 

 

 

 

 

 

(b)  

.furnished to a party by a third party without restriction on its dissemination;

 

 

 

 

 

 

 

(c)  

approved for release in writing by the party designating said information as
Confidential Information; or

 

 

 

 

 

 

 

(d)  

disclosed to a third party by the party transferring said information hereunder
without restricting its subsequent disclosure and use by said third party.

 

 

 

 

 

 

10.3

Disclosure of any Confidential Information by a party hereto shall not be
precluded if such disclosure is in response to the requirements of Applicable
Law or any valid order of a court or other governmental body, provided that the
receiving party promptly notifies the other Parties of such order and makes a
good faith effort, at the expense of the other party, to assist such Party in
obtaining a protective order requiring the Confidential Information so disclosed
be kept in confidence and used only for the purpose for which such order was
issued

 

 

 

 

 

10.4

Disclosure of any Confidential Information by a party hereto other than under
the provisions of Article 10.3 is agreed by the parties to constitute
“irreparable harm” for the purposes of determining whether an injunction shall
issue in any court action alleging breach of this Article 10.

 

 

 

Article 11:  

Product Acceptance and Warranty

 

 

 

 

 

11.1

Product Acceptance:  All Products supplied by Jabil to Quantum hereunder shall
be subject to acceptance by Quantum.  Upon delivery of the Products by Jabil, in
accordance with Article 7.2 hereof, Quantum or the Quantum OEM Customer shall
conduct such inspections and acceptance testing as is reasonably necessary or
appropriate to confirm that the Products conform to the Specifications therefor.
In the event that Quantum or a Quantum OEM Customer reasonably determines that
any Product fails to conform to the Specifications therefor, Quantum shall give
written notice of rejection of that Product, including a detailed and complete
description of Quantum's basis for asserting that the Product does not conform
to the Specifications ("Specification Notice"), to Jabil within 10 business days
after delivery of that Product by Jabil.  In the event that Quantum provides a
Specification Notice under this Article 11.1 and Jabil does not dispute such
Specification Notice by delivering to Quantum a detailed and complete
description of its claim that the Product does in fact conform to the
Specifications within 10 business days of receipt of the Specification Notice,
Jabil shall repair or replace that Product in accordance with the RMA procedure
set forth in Article 11.3 hereof.  Any specified times for delivery of Products
shall be tolled during the resolution of a good faith dispute over whether a
product conforms to the Specifications. In the event that Quantum fails to give
written notice of rejection of any Product or deliver a Specification Notice
within 10 business days after delivery of that Product by Jabil hereunder, that
Product shall be deemed accepted by Quantum; provided, however, that acceptance
of any Product by Quantum shall not affect or impair Quantum’s rights under
Jabil’s warranty with respect to that Product, as set forth in Article 11.2
hereof.

 

 

 

 

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11.2

Jabil Parties' Workmanship Warranty:  Jabil warrants that all of the Products
supplied to Quantum hereunder shall conform to all applicable Specifications,
and shall be free from defects in Workmanship for a period *****. This warranty
is extended to, and may only be enforced by, Quantum.  In addition, Jabil shall
use Commercially Reasonable Efforts to assure that vendor warranties with
respect to all materials, parts and components used in the Products extend for
the benefit of Quantum, regardless of the length of any such warranty. For the
avoidance of doubt, this warranty shall not apply to defects resulting from the
design of the Products, or from materials, parts, or components, provided that
such materials, parts or components have been purchased by Jabil pursuant to the
AVL, or as otherwise approved in writing by Quantum.

 

 

 

 

 

11.3

Repair or Replacement of Defective Product:  In accordance with Jabil’s standard
return material authorization process and procedure ("RMA"), Jabil shall either
repair or replace, in its sole discretion, any Product that contains a defect
caused by a breach of the warranty set forth in Article 11.2 provided that the
Product is received within thirty (30) days following the end of any applicable
Warranty Period (“RMA Product”).  If Quantum desires to return a Product based
on a claim of breach of the warranty set forth in Article 11.2, Quantum shall
request an RMA number from Jabil. *****. Quantum shall pay all shipping,
transportation, insurance, freight forwarding and other costs relevant to DDP
shipments incurred in connection with the shipment of all such defective
Products to Jabil’s repair facility.  Jabil shall analyze any such RMA Product
and:

 

 

 

 

 

 

(a)   

in the event a breach of warranty in Article 11.2 is found (“Defect”), then
Jabil shall:

 

 

 

 

 

 

 

(i)  repair or replace the RMA Product within twenty (20) business days of
receipt by Jabil of the RMA Product and all required associated documentation;

 

 

 

 

 

 

 

(ii)  reimburse Quantum for the reasonable cost of transporting the RMA Product
to the designated repair facility;

 

 

 

 

 

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(iii)  deliver the repaired RMA Product or its replacement, DDP (INCOTERMS 2000)
to Quantum’s designated destination; and

 

 

 

 

 

 

 

(iv)  bear all shipping, transportation, insurance and freight forwarding costs
incurred in connection with the shipment of all repaired RMA Products, or their
replacements, to Quantum’s designated destination.

 

 

 

 

 

 

 

(b)   

if no such Defect is found, then Quantum shall:

 

 

 

 

 

 

 

(i)  reimburse Jabil for all fees, costs and expenses incurred to attempt a
repair or replacement of the non-Defective RMA Product; and

 

 

 

 

 

 

 

(ii)  bear responsibility for all transportation costs to and from Jabil’s
designated repair facility.

 

 

 

 

 

 

The estimates of expected Defect repair costs are set forth on Exhibit B, and
any proposed changes thereto shall be addressed in the quarterly true-up
meetings mentioned therein.

 

 

 

 

 

11.4

LIMITATION OF JABIL’S  WARRANTY:  THE REMEDY SET FORTH IN THIS ARTICLE 11.3
SHALL BE QUANTUM’S SOLE AND EXCLUSIVE REMEDY FOR A BREACH OF JABIL’S WARRANTY
SET FORTH IN ARTICLE 11.2 HEREOF.  THE WARRANTY SET FORTH IN ARTICLE 11.2 IS IN
LIEU OF AND JABIL EXPRESSLY DISCLAIMS, AND QUANTUM EXPRESSLY WAIVES ALL OTHER
PRODUCT WARRANTIES OF ANY KIND WHATSOEVER WHETHER EXPRESS, IMPLIED, STATUTORY,
ARISING BY COURSE OF DEALING OR PERFORMANCE, CUSTOM, USAGE IN THE TRADE
OTHERWISE OR PURSUANT TO ANY OTHER PROVISION OF THIS AGREEMENT OR ANY OTHER
COMMUNICATION, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OR MISAPPROPRIATION OR INFRINGEMENT OF ANY RIGHT, TITLE OR
INTEREST OF QUANTUM OR ANY THIRD PARTY (INCLUDING, WITHOUT LIMITATION ANY
INTELLECTUAL PROPERTY INTEREST), *****. QUANTUM UNDERSTANDS AND AGREES THAT IT
SHALL HAVE FULL AND EXCLUSIVE LIABILITY WITH RESPECT TO ANY PRODUCT DESIGN
LIABILITY, AND DAMAGE TO PERSON OR PROPERTY OWING TO IMPROPER DESIGN.  NO ORAL
OR WRITTEN STATEMENT OR REPRESENTATION BY JABIL, ITS AGENTS OR EMPLOYEES SHALL
CONSTITUTE OR CREATE A WARRANTY OR EXPAND THE SCOPE OF ANY WARRANTY HEREUNDER.

QUANTUM ACKNOWLEDGES THAT JABIL'S PRODUCT WARRANTY, AS SET FORTH IN ARTICLE 11.2
HEREOF, IS EXPRESSLY CONTINGENT UPON THE USE OF THE PRODUCT IN A MANNER FOR
WHICH THE PRODUCT WAS INTENDED, AND DOES NOT COVER A PRODUCT IF ANY OF THE
FOLLOWING CONDITIONS APPLY:  (I) THE PRODUCT IS MODIFIED WITHOUT THE PRIOR
WRITTEN APPROVAL OF JABIL; (II) THE PRODUCT IS SUBJECTED TO OPERATING AND/OR
ENVIRONMENTAL CONDITIONS IN EXCESS OF THE MAXIMUM VALUES ESTABLISHED IN
APPLICABLE SPECIFICATIONS, OR TO HAVE BEEN THE SUBJECT OF MISHANDLING, ACCIDENT,
MISUSE, NEGLECT, IMPROPER TESTING, IMPROPER OR UNAUTHORIZED REPAIR, ALTERATION,
DAMAGE, ASSEMBLY, PROCESSING OR ANY ACTION OR INACTION THAT ALTERS PHYSICAL OR
ELECTRICAL PROPERTIES, OR PHYSICAL, ENVIRONMENTAL OR ELECTRICAL STRESS; OR (III)
THE SERIAL NUMBER LABEL IS REMOVED OR DAMAGED TO THE EXTENT THAT THE WARRANTY
STATUS OF THE PRODUCT CANNOT BE DETERMINED.  THIS WARRANTY SHALL NOT APPLY TO
ANY DEFECT IN THE PRODUCT ARISING FROM THE SPECIFICATIONS, OR (1) DESIGN
ELEMENTS OF THE PRODUCTS SUPPLIED OR CONTROLLED BY QUANTUM; (2)TESTING SUPPLIED
OR CONTROLLED BY QUANTUM; OR (3) MANUFACTURING PROCESSES FOR THE PRODUCTS
SUPPLIED OR CONTROLLED BY QUANTUM, OR ANY MATERIALS, PARTS OR COMPONENTS
INCLUDED BY QUANTUM IN THE SPECIFICATIONS.

 

 

 

 

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11.5

Warranty Reports:  Jabil shall provide Quantum with a written report of all
warranty claims submitted by Quantum and its customers, on a monthly basis, no
later than 15 days after the close of the calendar month to which each such
monthly report pertains.

 

 

 

Article 12:  

Indemnification *****.

 

 

 

 

 

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Article 13:  

Reports and Communications

 

 

 

 

 

13.1

During the Term and thereafter, Jabil shall maintain complete records of all
transactions hereunder, including, but not limited to, records pertaining to the
manufacture, assembly and supply of all Products hereunder, including product
yields, import/export documentation, shipping records, legal documents and
notices, contracts for the supply of all materials, parts and components and all
correspondence thereunder, purchase orders, sales orders, manufacturing process
changes, engineering change notices and engineering changes and all other
documents and materials created or used by Jabil in the performance of their
obligations under this Agreement.  All records required to be maintained by
Jabil with respect to any Products manufactured, assembled and supplied by Jabil
hereunder shall be retained for a period of at least seven (7) years after the
announced end of life of that Product, and all other records required to be
maintained by Jabil hereunder shall be retained for at least seven (7) years
from the completion of the transaction to which those records pertain, unless
Quantum shall give written notice to Jabil of a longer record retention
requirement required by law or regulation.  Subject to the terms and conditions
of Article 10 and Jabil’s obligations under third party confidentiality
agreements, upon reasonable written notice from Quantum, Jabil shall make such
relevant records available to Quantum for inspection and copying from time to
time, during the Term and/or thereafter during the retention period.

 

 

 

 

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13.2

Quantum and Jabil shall each appoint a program manager whose primary
responsibility shall be to act as a focal point for discussions between the
parties (the “Program Manager”).  Such discussions shall include, but not be
limited to, pricing and delivery reviews, the volume requirements of Quantum,
analyses of orders made against such volume requirements, and such other
technical and commercial issues as are related to the subject matter of this
Agreement.  The Program Managers shall also be responsible for maintaining
pertinent records as are necessary to fulfill the terms and conditions of this
Agreement.  Unless otherwise specified by one of the parties hereto, all
operational written notices and other communications hereunder shall be sent to
the parties' respective Program Managers as designated under this Article 13.2. 
Unless otherwise agreed by the parties, the Program Managers will meet no less
frequently than every six (6) months.  The names, addresses and contact
information of the Program Managers of the parties are as follows:

Quantum:           Quantum Corporation
                     10125 Federal Drive
                     Colorado Springs, CO 80908-4508
                     Attn: *****.

                     Quantum Corporation
                     10125 Federal Drive
                     Colorado Springs, CO 80908-4508
                     Attn: *****.

Jabil:                Jabil Circuit, Inc.
                     10560 9th Street North
                     St. Petersburg, FL 33716
                     Attn: *****.

 

 

 

 

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13.3

The Parties mutually agree to a Monthly Business Review with a before-hand
mutually agreed upon agenda.  The Parties will hold a Quarterly Business Review
(“QBR”) using the existing Quantum QBR format.

 

 

 

 

 

13.4

The Quantum Program Manager shall receive regularly from the Jabil Program
Manager, or from any appropriate Jabil employee or authorized representative,
such reports relating to the manufacture, assembly and supply of the Products as
Quantum reasonably requests.  Such reports may come through the Jabil Supplier
Interface System, Customer Interface System, or any other system that provides
equivalent access or functionality.

 

 

 

 

 

13.5

The terms and conditions under which the parties will operate, support and
maintain the Quantum IT Software and Infrastructure, EI systems specified in
Article 3.12, the Jabil MES system, their reporting infrastructure, and/or other
Jabil owned IT Software and Infrastructure are set forth in the Transition
Services Agreement attached tothe Asset Purchase Agreement.

 

 

 

Article 14:  

Insurance

 

 

 

 

 

14.1

Insurance Requirements:  Jabil shall, at its own expense, maintain throughout
the Term at least the forms and amounts of insurance set forth below.  All
coverage shall be placed with an insurance carrier licensed to do business in
the state(s) or country(ies) of Jabil’s operations.

 

 

 

 

 

 

(a)   

Commercial General Liability Insurance – including products/completed operations
and broad form property damage, personal injury liability, contractual
liability, and fire legal liability and/or tenant’s legal liability.  Minimum
Limits -- $1,000,000 each occurrence and $2,000,000 general aggregate combined
single limit for bodily injury and property damage.  Coverage must also include
a $1,000,000 Products/Completed Operations Aggregate.

 

 

 

 

 

 

 

(b)  

Auto Liability Insurance – including coverage for all owned, non-owned, and
hired autos, including loading/unloading coverage.  Minimum Limits -- $1,000,000
combined single limit per occurrence for bodily injury and property damage.

 

 

 

 

 

 

 

(c)  

Worker’s Compensation and Employers’ Liability Insurance - Minimum Limits –
Workers’ Compensation limits as required in the state(s) or country(ies) of
Contractor’s operations, and $1,000,000 Employers’ Liability coverage per injury
or illness.

 

 

 

 

 

 

 

(d)  

Errors & Omissions Liability Insurance - $2,000,000 per occurrence and in the
aggregate.  Coverage territory must be worldwide.

 

 

 

 

 

 

 

(e)   

Umbrella and/or Excess Liability Insurance - $2,000,000 per occurrence and in
the aggregate.

 

 

 

 

 

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(f)  

Property Insurance – “All Risk” property insurance in an amount sufficient to
cover improvements, contents, personal property, and other possessions
(including third party property) located at or in any Jabil facility, including,
but not limited to, the Facility.

Coverage must extend to any Quantum property in the care, custody, or control of
Jabil.

 

 

 

 

 

 

 

(g)  

Crime/Employee Dishonesty - $1,000,000 per occurrence.

 

 

 

 

 

 

14.2

Ten (10) Day Notice of Cancellation or Material Change in Insurance:  All
insurance policies provided pursuant to Article 14.1 hereof shall provide for a
ten (10) day advance written notice to Quantum in the event of termination,
cancellation or material change in insurance.

 

 

 

 

 

14.3

Certificate of Insurance:  Upon Request by Quantum, Jabil shall furnish Quantum
with certificates of insurance evidencing the coverage required in this Article
14.  Quantum’s mailing address, to which each certificate of insurance and
required endorsement(s) shall be sent, is:

Quantum Corporation
Risk Management Department
501 Sycamore Drive
Milpitas, CA  95035

 

 

 

Article 15:  

General

 

 

 

 

 

15.1

Amendment:  This Agreement may be modified only by a written document signed by
duly authorized officers of the parties.

 

 

 

 

 

15.2

Force Majeure:  A party shall not be liable for a failure or delay in the
performance of any of its obligations under this Agreement (other than the
payment of money) where such failure or delay is the result of fire, flood,
typhoons, earthquakes, tornadoes, or other natural disaster, sabotage,
destruction of production facilities, power failures, Act of God, war,
terrorism, embargo, riot, labor dispute, strike or the intervention or acts of
any government authority, including changes in law or regulations that
materially and adversely impact the party, providing that the party failing in
or delaying its performance immediately notifies the other party of its
inability to perform and states the reason for such inability.

 

 

 

 

 

15.3

Assignment:  Neither party shall have the right or the power to assign, transfer
or sublicense any of its rights, or delegate or subcontract the performance of
any of its obligations, under this Agreement without the prior written
authorization of the other party, except that each party (the "assigning party")
shall have the right to assign this Agreement or any of the rights or
obligations hereunder to any of its Affiliates without the prior written consent
of the other party; provided, however, that (a) the assigning party shall remain
subject to all obligations under this Agreement; and (b) any such assignment
shall not result in any violation of any Applicable Laws.  Notwithstanding the
provisions of this Article 15.3, upon written notice to Quantum, Jabil shall
have the right to assign their rights to receive monies due and payable to Jabil
hereunder without the prior written authorization of Quantum, subject to
compliance with Applicable Laws.

 

 

 

 

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15.4

Counterparts:  This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.

 

 

 

 

 

15.5

Governing Law and Dispute Resolution:  This Agreement, shall be governed by, and
interpreted in accordance with, the laws of the State of Delaware, excluding
conflicts of laws principles and any application of the U.N. Convention on
Contracts for the International Sale of Goods.  Any dispute between the parties
relating to the validity, performance, interpretation or construction of this
Agreement shall be resolved in accordance with Delaware law and in the federal
or state courts of Delaware.  The parties to this Agreement hereby irrevocably
consent to the personal jurisdiction of the federal and state courts in Delaware
for the resolution of all disputes hereunder.  Notwithstanding the provisions of
this Article 15.5, the Parties shall have the right to seek relief, including
preliminary and permanent injunctive relief, in any court of competent
jurisdiction to prevent the unauthorized use, misappropriation, disclosure or
infringement of any of intellectual property of the Parties or Confidential
Information.

 

 

 

 

 

15.6

Waiver:  Should any party hereto fail to exercise or enforce any provision of
this Agreement, or waive any right in respect thereto, such failure or waiver
shall not be construed as constituting a waiver or a continuing waiver of its
rights to enforce such other provision or right or any other provision or right.

 

 

 

 

 

15.7

Severability:  If any provision of this Agreement or the application thereof to
any situation or circumstance shall be invalid or unenforceable, the remainder
of this Agreement shall not be affected, and each remaining provision shall be
valid and enforceable to the fullest extent.

 

 

 

 

 

15.8

Limitation of Liability:  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER
PARTY OR TO ANY OTHER PERSON OR ENTITY FOR ANY INDIRECT, SPECIAL, INCIDENTAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, LOSS OF GOODWILL OR BUSINESS
PROFITS, LOST REVENUE, WORK STOPPAGE,    WHETHER DUE TO BREACH OF CONTRACT,
BREACH OF WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE AND WHETHER SUCH
PARTY WAS INFORMED OR WAS AWARE OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE; *****
OR LIMIT THE LIABILITY OF QUANTUM WITH RESPECT to a breach of the terms and
conditions of article 3.1 and any related provisions of this agreement.

 

 

 

 

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15.9

Effect of Headings:  The headings and sub-headings contained herein are for
information purposes only and shall have no effect upon the intended purpose or
interpretation of the provisions of this Agreement.

 

 

 

 

 

15.10

Integration:  This Agreement constitutes the entire agreement and understanding
between the parties with respect to the subject matter of this Agreement and
integrates all prior discussions, proposals, and agreements (whether oral or
written) between them related to the subject matter hereof.

 

 

 

 

 

15.11

Publicity:  Neither party shall publicize or otherwise disclose the terms of
this Agreement without the prior written approval of the other party.

 

 

 

 

 

15.12

No Partnership or Agency Created:  The relationship of Quantum and Jabil shall
be that of independent contractors only.  Nothing in this Agreement shall be
construed as making Jabil the agent or legal representative of Quantum or
Quantum the agent or legal representative of Jabil or otherwise as giving either
party the power or authority to bind the other party in any manner.

 

 

 

 

 

15.13

Binding Effect:  This Agreement and the rights and obligations hereunder shall
be binding upon and inure to the benefit of the parties hereto and to their
respective successors and assigns.

 

 

 

 

 

15.14

Notices:  Any legal notice to be made in connection with any right or obligation
arising under this Agreement, shall be provided by registered or certified mail,
reputable domestic or international air courier or facsimile (with a
confirmation copy sent by registered or certified mail or reputable domestic or
international air courier) by one party to the other at the following
addresses.  All notices shall be deemed to be effective upon receipt by the
receiving party thereof:

Quantum:             Quantum Corporation
                        501 Sycamore Drive
                        Milpitas, CA  95035
                        Attention: *****.

Jabil: :                  Jabil Circuit, Inc.
                        10560 Ninth Street North
                        St. Petersburg, FL 33716
                        Attention: *****.

 

 

 

 

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          IN WITNESS WHEREOF, the parties have had this Agreement executed by
their respective duly authorized officers on the day and date first written
above.

                                                                                               

Quantum Corporation

By: /s/Michael J. Lambert
Name:Michael J. Lambert
Title: Executive Vice President and CFO

Quantum Peripherals Europe, S.A.

By:/s/Franco Mazullo
Name: Franco Mazzullo,
Title:Vice President

Jabil Circuit Inc.

By: /s/ Chis A. Lewis
Name:Chris A. Lewis,
Title:Chief Financial Officer

[SIGNATURE PAGE TO THE MASTER SUPPLY AND INTELLECTUAL PROPERTY LICENSE
AGREEMENT]

 

 

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Exhibit A*****.

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Exhibit B *****.

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Exhibit C*****.

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Exhibit D*****.

 

 

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