<PAGE>

                                                                   EXHIBIT 10.54


                                  DEVELOPMENT
                                   AGREEMENT
<PAGE>
 
                                                                    Page 1 of 64

                             DEVELOPMENT AGREEMENT
                             ---------------------

      THIS AGREEMENT having an effective date at the date of the last signature
      hereto and is entered into by and between MICROPOLIS Corporation with an
      office and principal place of business at 21211 Nordhoff Street,
      Chatsworth, California 91311, USA and BTS Broadcast Television Systems
      GmbH, with an office and principal place of business at Im Leuschnerpark
      1, 64347 Griesheim, Germany.

      WHEREAS, MICROPOLIS and BTS want to cooperate in the design, development
      and manufacturing of a family of video disk recorders.

      NOW, THEREFORE, the PARTIES agree that the PRODUCT development activities
      shall be conducted under this AGREEMENT subject to the following terms and
      conditions

1     DEFINITIONS

1.1   MICROPOLIS shall mean MICROPOLIS CORPORATION and its AFFILIATES.

1.2   BTS shall mean BTS BROADCAST TELEVISION SYSTEMS GMBH and its AFFILIATES.

1.3   AFFILIATE shall mean any company. partnership Joint venture, or other 
      entity which is controlled by a PARTY. Control shall mean the possession
      of fifty percent (50%) or more of the voting stock or the power to direct
      or cause the direction of the management and policies of the controlled
      entity, whether through the ownership of voting securities by. contract or
      otherwise.

1.4   PARTY or PARTIES shall mean MICROPOLIS and/or BTS.

1.5   PRODUCT shall mean a family of video disk recorders with SPECIFICATIONS as
      described in Appendices A and B.

1.6   CUSTOMER SPECIFICATION shall mean a written document setting forth the
      customer-observable characteristics of the PRODUCT, including but not
      limited to the performance, interfaces and user features as defined in
      Appendix A.
<PAGE>
 
                                                                    Page 2 of 64

1.7   TECHNICAL SPECIFICATION shall mean a written document setting forth the
      measurable characteristics of the PRODUCT and the SPARE PARTS including
      internal and external interfaces and components as described in the
      Appendix B.

1.8   SPECIFICATION shall mean CUSTOMER and TECHNICAL SPECIFICATION jointly.

1.9   PROGRAM shall mean the development program undertaken pursuant to 
      Article 2 for the purposes of developing a PRODUCT.

1.10  BACKGROUND TECHNOLOGY shall mean any and all patents, know-how, methods
      procedures processes, computer programs, information, designs and data
      which a PARTY owns solely or jointly with any third party and have the
      free right to grant licenses without payment to third parties, which are
      pertinent to the PRODUCT, and have a priority date (or date of first
      written documentation in the case of unpatented know-how and designs) that
      is earlier than the effective date of this AGREEMENT.

1.11  INVENTION shall mean any technological discovery relating to the PRODUCT
      made in the performance of work under the PROGRAM, not being BACKGROUND
      TECHNOLOGY.

1.12  PROGRAM PATENT(S) shall mean all valid or enforceable patents, utility
      models, and patent applications filed in any country by a PARTY, which are
      based on or cover INVENTIONS, including any and all divisions,
      continuations, continuations-in-part, extensions, additions
      substitutions, renewals, or reissues thereof.

1.13  PROGRAM TECHNOLOGY shall mean any and all unpatented know-how, methods,
      procedures, processes, computer programs, information, designs, data,
      materials, compositions, equipment, devices, components and prototypes,
      including unpatented INVENTIONS, which are made or developed by or on
      behalf of either PARTY or jointly by the PARTIES in the performance of
      work under the PROGRAM.

1.14  PURCHASE AND SALE AGREEMENT shall mean an agreement to be concluded 
      between the PARTIES in which the conditions for selling the PRODUCT from
      MICROPOLIS to BTS will be fixed.

1.15  SPARE PARTS shall be the modules, as defined in Appendix B.
<PAGE>
 
                                                                    Page 3 of 64

2     PROGRAM

2.1   The PROGRAM to be performed hereunder shall comprise the activities of the
      PARTIES directed to development of the PRODUCT as described in Appendix D.
      BTS and MICROPOLIS shall share the responsibility to provide the
      technological means to achieve the TECHNICAL SPECIFICATION.

2.2   The PARTIES shall participate in the PROGRAM in accordance with the
      timetable contained in Appendix C and the responsibilities of the PARTIES
      as described in Appendix D.

2.3   Except as otherwise specifically described herein or agreed upon between 
      the PARTIES, each Party shall conduct its own work under the PROGRAM at
      its own facilities. BTS shall provide development funding to MICROPOLIS
      presuming to MICROPOLIS meeting its designated milestones as described in
      Appendix E.

2.4   During the PROGRAM term as described in Article 4 neither PARTY shall 
      enter into any cooperative development agreement regarding video disk
      recorders similar to or identical with the PRODUCT with any third party
      that develops, manufactures or markets such video disk recorders.

2.5   Each PARTY shall make its best efforts to realize the PROGRAM targets
      pursuant to the timetable described in Appendix C. In the event that a
      PARTY foresees a possible delay in its development work, such PARTY shall
      promptly inform the other PARTY. Penalty Clauses as follows will apply:

2.5.1 BTS will be entitled, to withhold

      a) for a delay of more than 2 weeks in meeting any funding development
      milestone, as defined in Appendix E, a sum of 10% of the development
      funding.

      b) for a delay of more than 4 weeks in meeting any funding development
      milestone, as defined in Appendix E, a sum of 20% of the development
      funding.

2.5.2 In case MICROPOLIS will be at least able to avoid a delay in meeting the
      milestone "Acceptance test", (even a delay of meeting a previous milestone
      event occurred) and this milestone will be passed by successfully, BTS
      will be obliged to provide the development funding in total. This means
      that if the last milestone, "Acceptance test" is met, BTS will pay to
      Micropolis the agreed development funds associated with that milestone,
      and the agreed development funds that were earlier withheld due to the
      failure of Micropolis to meet one or several milestones.
<PAGE>
 
                                                                    Page 4 of 64

3     PROGRAM DIRECTION

3.1   The following PROGRAM Directors are hereby appointed to direct the course
      of PROGRAM activities in accordance with Article 2: 

           BTS PROGRAM Director: Adam Schmidt 
           MICROPOLIS PROGRAM Director: Reza Rassool 

      Any change in the designated PROGRAM Directors shall require advance
      written notice to the other PARTY. The PROGRAM Directors shall have no
      authority to modify or amend the terms of this AGREEMENT. All decisions
      with regard to changes in any of the Appendices, including any changes as
      described in Articles 2.1 and 2.2, and any proposals, issues and courses
      of action under the PROGRAM shall be made by agreement of the PROGRAM
      Directors unless otherwise specified herein.

3.2   Subject to the provisions of Article 2, the Program Directors shall be
      responsible for the following: a) Overall guidance of the PROGRAM; b)
      Scheduling and conducting timely reviews of the PROGRAM; c) Reviewing,
      updating and disseminating the SPECIFICATIONS and WORK PLAN in a timely
      manner; and d) Controlling any form of communication between BTS and
      MICROPOLIS regarding the PROGRAM.

3.3   Each PARTY agrees to make its employees and nonemployee consultants
      reasonably available at their respective places of employment to consult
      with the other PARTY during the PROGRAM on issues arising from work
      performed under the PROGRAM.

3.4   Each PARTY agrees to make technical specialists reasonably available for a
      specified period of time to assist in the development of the PRODUCT at
      the other PARTY's facility. The costs for the respective travels will be
      borne by each PARTY itself.

3.5   During the PROGRAM, both PARTIES shall have meetings for the purpose of
      periodic status reviews of the PROGRAM. The costs for the respective
      travels will be borne by each PARTY itself.
<PAGE>
 
                                                                    Page 5 of 64

4     TERM AND TERMINATION OF THE PROGRAM

4.1   The PROGRAM shall commence on the effective date of this AGREEMENT and
      continue until completion of the PROGRAM in accordance with Appendices C
      (Timetable) and D (Responsibilities) unless earlier extended by agreement
      of the PARTIES or terminated as a part of termination of this AGREEMENT as
      provided in Article 11.0 The PROGRAM shall be completed when the PRODUCT
      meets its respective SPECIFICATIONS in accordance with the procedure as
      specified in article 5.

4.2   In the event that technical support is needed during the phase of the
      introduction of the PRODUCT into the market, or if a customer requests a
      PARTY for improvement of the PRODUCT which requires the assistance by the
      other PARTY for the period of two (2) years after termination of this
      AGREEMENT, both PARTIES will discuss in good faith how to cope with such
      request.

4.3   MICROPOLIS agrees that if during the term of this AGREEMENT it develops 
      any new video disk recorders, BTS shall be given the opportunity to
      purchase and/or distribute, with limited exclusivety, such products. In
      such event MICROPOLIS shall give BTS written notice of the availability of
      such a product and shall provide BTS with appropriate and necessary
      product information to make a reasoned decision. On receipt of such
      notice, BTS shall have three (3) months to accept the offer and/or to
      commence contract negotiations with MICROPOLIS and BTS will inform
      MICROPOLIS before expiration of said period of its decision. This time
      period may be extended by the mutual agreement of the PARTIES.
      Notwithstanding any time extensions, if MICROPOLIS and BTS do not agree
      upon reasonable terms and conditions for incorporation of such product
      into this AGREEMENT, MICROPOLIS shall be free to market such products in
      any manner it seems fit, provided an exclusive distributorship is not
      offered to anyone else on terms better than those offered to BTS.
<PAGE>
 
                                                                    Page 6 of 64

5     ACCEPTANCE

5.1   The progress of the development PROGRAM, in terms of functionality and
      deliverables is defined in Appendix D.

5.2   The acceptance of the first regular production PRODUCT will take place at
      the site of BTS at the date specified in Appendix E. The acceptance to be
      carried out jointly by MICROPOLIS' and BTS' inspection personnel will
      cover the SPECIFICATION.

5.3   The results of the acceptance shall be laid down in an acceptance
      certificate which is to be signed by both parties.

5.4   In case the PRODUCT does not meet SPECIFICATION, the responsible PARTY
      shall correct such defects without delay. Upon completion of the
      corrective measures the acceptance procedure to be applied shall be the
      same as described above.

5.5   If no defects should be discovered during the acceptance, the PRODUCT 
      shall be deemed to be successfully accepted at the date of acceptance
      inspection.

5.6   Once the PRODUCT is accepted by BTS as evident of article 5 above,
      MICROPOLIS shall not make any changes or modifications in the PRODUCT
      without prior written consent of BTS. This requirement, however, does not
      preclude MICROPOLIS from using equivalent components and parts that do not
      affect form, fit, function or interchangeability of SPARE PARTS. In the
      event MICROPOLIS uses such equivalent components and/or parts, MICROPOLIS
      shall immediately inform BTS thereof and provide BTS with an updated
      version of the Documentation as soon as possible and at MICROPOLIS' costs.

      Each successor model of the PRODUCT or any other model agreed upon between
      the PARTIES to be incorporated herein shall be subject to the procedure
      set forth in this Article 5.
<PAGE>
 
                                                                    Page 7 of 64

6     TRANSFER OF TECHNOLOGY

6.1   During the term of this PROGRAM, both PARTIES will, if necessary for the
                                                          --
      continuation of the PROGRAM, disclose and exchange INVENTIONS, PROGRAM
      PATENTS and PROGRAM TECHNOLOGY.

6.2   During the term of the Purchase and Sale Agreement MICROPOLIS will 
      disclose all information, documentation and PROGRAM TECHNOLOGY sufficient
      to enable BTS to independently develop enhancements of the PRODUCT.
      Micropolis will, upon the request from BTS, support BTS in its
      development of such enhancements, over and above, the SPECIFICATION and
      disclosure according to article 6.1 and 6.2 above, to the PRODUCT.
      Micropolis will then, at its sole discretion, charge BTS industry standard
      rates for this support. Any disclosure of such information do not
      constitute any guarantee that BTS developed enhancements will perform
      according to BTS's expectations.
<PAGE>
 
                                                                    Page 8 of 64

7     INVENTIONS AND PATENTS ON INVENTIONS

7.1   Although it is expected that the ownership of most, if not all, INVENTIONS
      shall be governed by the following provisions of this Article, both
      PARTIES agree to discuss in good faith the ownership of those INVENTIONS
      which arise under unusual and unforeseen circumstances, such ownership to
      be governed by applicable patent law.

7.2   INVENTIONS and any patents, copyrights, know-how and designs based on
      INVENTIONS, shall be owned as follows:

a)    if invented solely by MICROPOLIS, ownership shall vest in MICROPOLIS, 
      and, MICROPOLIS hereby grants BTS a paid-up, worldwide, unrestricted,
      nonexclusive license (without sublicensing rights) to undertake
      manufacturing as agreed in Appendix F, and to use and sell or otherwise
      dispose of product incorporating such INVENTION and PROGRAM PATENTS
      relating thereto.

b)    if invented solely by BTS, on request and accepted, in writing by 
      MICROPOLIS, ownership shall vest in BTS, and BTS hereby grants MICROPOLIS
      a paid-up, worldwide unrestricted, non-exclusive license (without
      sublicensing rights) to undertake manufacturing, use and sell products
      incorporating such INVENTION and PROGRAM PATENTS relating thereto, all in
      accordance with Appendix F.

c)    if invented jointly by both PARTIES of which the respective contributions 
      cannot be separately filed (hereinafter called JOINT INVENTIONS), any
      patent applications and patents issued thereon shall be in the name of
      both PARTIES and be jointly owned by both PARTIES. Each PARTY is free to
      grant a license to any third party without obtaining a consent of the
      other PARTY and without assuming any obligation to the other PARTY.

d)    In each case of such a JOINT INVENTION, the PARTIES will promptly agree
      which of them shall file the first patent application and further decide
      in mutual consultation in which country or countries such applications are
      to be made.

7.3   Patent and copyright procurement activity in regard to INVENTIONS shall be
      pursued at the discretion and expense of the owner set forth in Article
      7.2.

      The costs and expenses for filing and prosecuting patent applications on
      Joint INVENTIONS and for the issuance of the respective patents, except
      for the internal cost of the patent department filing the first patent
      application shall be borne equally by the PARTIES.

      Each PARTY will notify the other upon the preparation of any written
      report based on a JOINT INVENTION and upon the filing of any patent or
      copyright application based on a JOINT INVENTION, furnish the filing PARTY
      with all documents or other assistance that may be necessary for the
      filing and prosecution of each application provide the other with a copy
      of any such INVENTION report or patent or copyright application and any
      issued patent or statutory copyright granted thereon and on request update
      the other as to the status of any such patent or copyright application.
      Each PARTY further agrees to sign documents to vest or maintain title to
      patents and/or copyrights in the owner designated in Article 7.2 and
      to provide reasonable assistance to the other with respect to preparation
      and prosecution of such patents copyrights.
<PAGE>
 
                                                                    Page 9 of 64

7.4   In case a PARTY is not or no more interested in participating in a 
      patent or patent application on JOINT INVENTIONS or the maintenance
      thereof, then this PARTY shall give written notice to the other PARTY. The
      other PARTY shall be entitled to file or maintain said patent or patent
      applications in its name and at its costs. The first PARTY shall have the
      right to receive against reasonable royalties mutually to be agreed
      between the PARTIES, a worldwide, unrestricted, non-exclusive license
      (with sublicensing rights) under said applications and patents.
<PAGE>
 
                                                                   Page 10 of 64

8     PROPRIETARY RIGHTS OTHER THAN INVENTIONS

8.1   MICROPOLIS hereby grants to BTS a paid-up, worldwide, nonexclusive license
      (without sublicensing rights) to undertake manufacturing as agreed in
      Appendix F, and to use and sell or otherwise dispose of PRODUCT
      incorporating (i) MICROPOLIS' rights to the extent that they do not relate
      to INVENTIONS, and (ii) BACKGROUND TECHNOLOGY.

8.2   BTS hereby grants to MICROPOLIS a paid-up, worldwide, non-exclusive 
      license (without sublicensing rights) to undertake manufacturing and to
      use and sell-all in accordance with Appendix F-the PRODUCTS incorporating
      (i) BTS' proprietary rights, to the extent that they do not relate to
      INVENTIONS, and (ii) BACKGROUND TECHNOLOGY.
<PAGE>
 
                                                                   Page 11 of 64

9     CONFIDENTIAL INFORMATION

9.1   The PARTIES recognize that the conduct of the PROGRAM may require the
      transfer of confidential information between them. As used herein,
      "confidential" or "proprietary" information shall include only
      information, data or samples relating to the PROGRAM. Disclosures of
      confidential or proprietary information hereunder by either PARTY will be
      made in writing (or promptly confirmed in writing if made in another
      form), and will be clearly marked confidential. Such confidential
      information will be safeguarded by the recipient and will not be disclosed
      to third parties. This mutual obligation of confidentiality will apply
      until three (3) years after termination of this AGREEMENT, but will not
      apply to any information to the extent that such information: 

a)    is or hereafter becomes generally available to the public other than by 
      reason of any default under this AGREEMENT; or 

b)    was already known to the recipient as evidenced by prior written 
      documents in its possession; or 

c)    is disclosed to the recipient by a third party who is not in default of 
      any confidentiality obligation to the disclosing PARTY hereunder; or 

d)    is developed by or on behalf of the receiving PARTY, without reliance on
      confidential information received hereunder; or 

e)    is disclosed with the permission of the disclosure to any third party on 
      a non-confidential basis; 

f)    is submitted to governmental or non-governmental agencies to facilitate 
      the issuance of marketing or safety approvals for PRODUCT; or

g)    is disclosed in patents filed under the terms of this AGREEMENT on
      INVENTIONS related to PRODUCT or to the manufacture or use of such
      PRODUCT; or 

h)    has been approved for publication by the PROGRAM Directors; or

i)    is in furtherance of the licenses and rights granted herein for the
      manufacture and marketing of PRODUCTS, provided that a) the other PARTY
      prior to such disclosure will be informed hereof and b) declares its
      consent in written form.
<PAGE>
 
                                                                   Page 12 of 64

10    GENERAL TERMS AND CONDITIONS

10.1  Notices

      All notices required or permitted hereunder shall be in writing and shall
      be deemed duly given when personally delivered or sent by registered or
      certified mail return receipt requested, postage prepaid, or by cable
      confirmed by letter as aforesaid, as follows:

      Notice to MICROPOLIS:                 
      for technical matters:                Program Director
      MICROPOLIS Corporation
      21211 Nordhoff Street
      Chatsworth, California 91311
      USA

      for other matters:                    General Manager of the System
                                            Business Unit 
      MICROPOLIS Corporation                
      21211 Nordhoff Street                 
      Chatsworth, California 91311
      USA

      Notice to BTS                         
      for technical matters:                Program Director
      Business Unit Griesheim
      Broadcast Television Systems GmbH 
      Im Leuschnerpark 1
      64347 Griesheim
      Germany

      for other matters:                    General Manager of BTS-ICC 
                                            Weiterstadt
      Business Unit Griesheim               
      Broadcast Television Systems GmbH
      Im Leuschnerpark 1
      64347 Griesheim
      Germany


      or to such other address as either PARTY may hereafter designate in
      writing by like notice.
<PAGE>
 
                                                                   Page 13 of 64

10.2  Publicity

      Neither PARTY will issue any press release or make any public statement in
      regard to this AGREEMENT without the prior written approval of the other
      PARTY.

      Neither PARTY shall use in advertising, publicity or other promotional
      activities any name, trade name, trademark, or other designation of the
      other PARTY without the express written approval of the other PARTY, which
      shall not be unreasonably withheld.

10.3  Export License

      This AGREEMENT and any technical information provided under this AGREEMENT
      may be subject to restrictions concerning the export of PRODUCT or SPARE
      PARTS or technical information from the Federal Republic of Germany or USA
      which may be imposed by the respective Government or any other competent
      authority. Accordingly, the PARTIES agree that they shall not export or 
      re-export, directly or indirectly, any technical information acquired
      under this AGREEMENT or any PRODUCT utilizing any such technical
      information to any country for which the Government or other competent
      authority at the time of export requires an export license or other
      approval, without first obtaining the written consent to do so from the
      competent authority when required by an applicable statute or regulation.

10.4  Force Majeure

      Neither MICROPOLIS nor BTS shall be liable for delay or failure in the
      performance of the obligations contained in this AGREEMENT arising solely
      from any one or more of the following matters:

a)    acts of God, or public enemy or war (declared or undeclared);

b)    acts of governmental or quasi-governmental authorities or regulations or
      restrictions imposed by law or by court action, except as they may result
      from the unreasonable failure of MICROPOLIS or BTS to perform as required
      hereunder;

c)    acts of persons engaged in subversive activities or sabotage; 

d)    fires, floods, explosions or other catastrophes; 

e)    epidemics or quarantine restrictions;

f)    strikes, lockouts or similar labour disruptions; 

g)    freight embargoes, or interruption of transportation; 

h)    unusually severe weather; 

i)    delays of a supplier of one PARTY due to any of the above causes or 
      events; or 

j)    any other extraordinary event beyond the control of the PARTY concerned; 
      and provided that due diligence is exercised to cure such cause and resume
      performance, and the time for performance by such PARTY shall be extended
      by a period of any such delay.
<PAGE>
 
                                                                   Page 14 of 64

10.5  Conflicts in Obligations

      MICROPOLIS warrants to BTS that this AGREEMENT does not conflict with
      MICROPOLIS' obligations under any other agreement to which MICROPOLIS is
      or was a party, and that MICROPOLIS is free to fulfill all obligations
      stated herein.

      BTS warrants to MICROPOLIS that this AGREEMENT does not conflict with BTS'
      obligations under any other agreement to which BTS is or was a party and
      that BTS is free to fulfill all obligations stated herein.

10.6  Conflicts in Documentation

      In case of any conflicts between this AGREEMENT and any prior agreements
      on the same subject correspondence, and other documents during the term of
      this AGREEMENT, this AGREEMENT shall govern and prevail, and the
      conflicting terms and conditions of any such documents shall be deemed
      deleted and shall not be binding upon either PARTY.

      In the event the provisions of this AGREEMENT conflict with provisions of
      the Appendices, this AGREEMENT shall prevail unless otherwise specifically
      agreed upon.

10.7  Amendments

      No addition to, deletion from or modification of any of the provisions of
      this AGREEMENT shall be binding upon the PARTIES unless made in writing
      and signed by a duly authorized representative of each PARTY. Any such
      additions, deletions or modifications shall refer specifically to this
      AGREEMENT.

10.8  Severability

      If one or more of the provisions of this AGREEMENT is held invalid,
      illegal or unenforceable by a competent court of law, the remaining
      provisions shall not in any way be affected or impaired thereby. In the
      event any provision is held invalid illegal or unenforceable, the PARTIES
      shall use reasonable efforts to substitute a valid, legal and enforceable
      provision which, insofar as is practical, implements purposes of the
      article held invalid, illegal and unenforceable.

10.9  Assignment

      The rights of either PARTY under this AGREEMENT shall not be assigned, in
      whole or in part, by either PARTY (whether by operation of law or
      otherwise) without the prior written consent of the other, except that
      either PARTY may assign its rights hereunder to a successor, subsidiary or
      affiliated corporation
<PAGE>
 
                                                                   Page 15 of 64

      without releasing the assignor from liability hereunder. Any assignment
      contrary to the terms hereof shall be null and void and of no force or
      effect.

10.10 Applicable Law

      This AGREEMENT shall be governed by and construed and enforced in
      accordance with the laws of Germany.

10.11 Arbitration

      All disputes, controversies or differences which may arise between the
      PARTIES in relation to or in connection with this AGREEMENT may be settled
      by amicable negotiation by both PARTIES if the PARTIES so agree. If both
      PARTIES are unable to settle such disputes, then such disputes shall be
      referred to and finally settled by arbitration under the Rules of
      Conciliation and Arbitration of the International Chamber of Commerce in
      Paris. The Arbitration shall be conducted in the English Language and take
      place in USA if it is initiated by BTS or in Germany if it is initiated by
      MICROPOLIS. The award of arbitration shall bind both PARTIES.

10.12 Entire Agreement

      This AGREEMENT constitutes the entire understanding of the PARTIES with
      regard to the development of PRODUCT and supersedes all prior discussions,
      representations and understandings.

10.13 Limitation of Liability

      Neither PARTY shall be liable to the other for any indirect, special or
      consequential damages whether grounded in tort, strict liability or
      contract, and under no circumstances shall either PARTY's liability to the
      other PARTY exceed the obligations described herein.
<PAGE>
 
                                                                   Page 16 of 64

11    TERM AND TERMINATION OF THE AGREEMENT

11.1  This AGREEMENT shall become effective at the date of the last signature
      hereto or the date on which this AGREEMENT is approved by the USA or
      German Government if such approval is required, whichever is later, and
      shall continue in effect until the PROGRAM has been completed, unless
      sooner terminated by a PARTY in accordance with this Article 10.

11.2  This AGREEMENT may be terminated by either PARTY in the event that the 
      other PARTY, despite its best efforts, provides cause for termination due
      to material lack of performance in the PROGRAM, such termination to be
      effective not less than sixty (60) days after written notice to the other
      PARTY citing alleged deficiencies and failure of the other PARTY to
      remedy, such termination shall be effective not less than sixty (60) days
      after written notice to the other PARTY and failure of the PARTIES to
      agree on any such revision.

11.3  This AGREEMENT may be terminated by either PARTY upon written notice to 
      the other (without prejudice to either PARTY'S rights to claim direct
      damages or seek other equitable relief).

a)    in the event of a material breach by the other PARTY of any terms or
      conditions of this AGREEMENT and the failure to cure such breach within
      sixty (60) days after written notice or

b)    in the event that MICROPOLIS fails to meet any milestone event as per 
      Appendix E for more than eight weeks.

c)    if, at any time during the term of this AGREEMENT, the other PARTY shall 
      become a voluntary debtor party to any bankruptcy, insolvency, or
      reorganisation proceeding, or shall be declared bankrupt or reorganised by
      a court of competent jurisdiction, or enter into any composition with its
      creditors, or shall begin any proceeding for the liquidation or winding up
      of its business or for termination of its corporate charter.

11.4  If MICROPOLIS stops production of PRODUCTS or terminates this Agreement
      which is disputed by BTS or if MICROPOLIS is found in breach of this
      Agreement, BTS is hereby granted by MICROPOLIS an unconditional, non-
      exclusive, worldwide, unrestricted license under its know-how, patents,
      etc. to develop and/or manufacture and/or sell and/or license and/or
      dispose of products. These consequences shall also apply in case of
      Article 11.3 a), b) and c) hereof.

11.5  Termination of this AGREEMENT shall not relieve BTS or MICROPOLIS of any
      rights and obligations then accrued hereunder or which extend beyond the
      date of termination or expiration by the terms of this AGREEMENT,
      including but not limited to rights and obligations contained in Articles
      4.4, 4.5, 6, 7, 8, and 11.
<PAGE>
 
                                                                   Page 17 of 64

12    APPENDICES

      The following appendices. as referred to in this AGREEMENT. form an
      integral part of the AGREEMENT:

      Appendix A:   Customer Specifications
      Appendix B:   Technical Specifications
      Appendix C:   Project Timetable
      Appendix D:   Responsibilities of the Parties
      Appendix E:   Milestones and development funding
      Appendix F:   Manufacturing Conditions


UNDERSTOOD AND AGREED:                      UNDERSTOOD AND AGREED:



BTS Broadcast Television                    MICROPOLIS Corporation
Systems GmbH



By:  /s/ H. Hock     /s/ H.D. Geise         By:   /s/ Per Sjofors

Title: CFO           General Manager        Title: Director Marketing VSD

Date:  9/15/95                              Date:  15 Sept 1995
<PAGE>
 
                                                                   Page 63 of 64

APPENDIX E:  MILESTONES AND DEVELOPMENT FUNDING

<TABLE>
<CAPTION>
     Mini-Pool milestones                                  When        Funding
<C>  <S>                                                <C>           <C>
1    Memorandum of Agreement (MoA) signed               31. Jul 95    100.000 $
2    Kick off Meeting                                   10. Aug 95    
3    BTS supply serial digital interface (SDI) design   30. Aug 95
4    Joint Development Agreement signed with 
       appendices                                       30. Aug 95
5    Supply BTS with Luigi Board and files              07. Sep 95
6    Brand Name Reseller's Agreement signed             15. Sep 95    200.000 $
7    Design Review AV CODEC in Chatsworth               02. Okt 95    
8    Spec finalized Poolnet VDCP UI functionality       13. Okt 95
9    Supply VMC and Devlib spec                         15. Okt 95
10   VDRx40 and VDRx40F full design review and 
       sign-off                                         10. Nov 95    150.000 $
11   MC3000 Ctl Panel ready                             01. Dez 95
12   VDR110 prototype sign off in Chatsworth            20. Dez 95    200.000 $
13   VDR110 prototype delivered to Weiterstadt          15. Jan 96
14   VDR110 beta units                                  05. Feb 96
15   VDRx40 lab model to Weiterstadt                    15. Feb 96    150.000 $
16   VDR110 Acceptance test                             15. Mar 96    
17   NAB                                                01. Apr 96
18   VDRx40 prototype                                   01. Apr 96    
19   VDR110 ships                                       01. Apr 96
20   VDRx40 BTS-W Release to manufacturing              15. Apr 96
21   VDRx40 betasite release                            01. Mai 96
22   VDRx40 Acceptance test                             15. Jun 96
23   VDRx40 deliveries to customer                      28. Jun 96    200.000 $
24   Data link integration begins                       01. Aug 96

                                                           TOTAL    1.000.000 $
</TABLE>
<PAGE>
 
                                                                   Page 64 of 64

      APPENDIX F:  MANUFACTURING CONDITIONS

      BTS has the option to buy on an exclusive basis from Micropolis complete
      units, VDR110 and VDRX40, as specified in appendix A and B;

      or,

      at BTS' own discretion BTS may buy from Micropolis VDR sub-assemblies as
      defined in Appendix B for BTS's own manufacturing, further development,
      final testing, assembly and for re-sale.

      MICROPOLIS is granted the BTS licenses for the purpose of manufacturing
      and selling PRODUCTS and similar PRODUCTS to BTS and a low-cost MICROPOLIS
      version of the VDR110 to Tyrell corporation
<PAGE>
 
                              PURCHASE AND SALES
                                   AGREEMENT
<PAGE>
 
                                                                    Page 1 of 22

                          PURCHASE AND SALE AGREEMENT

      This Purchase and Sale Agreement ("Agreement") having an effective date at
      the date of the last signature is made by and between Micropolis
      Corporation ("COMPANY"), a Delaware corporation, and BTS Broadcast
      Television Systems GmbH ("BTS"), a German corporation.

      WHEREAS, the Parties have entered into a product development agreement on
      the basis of which the COMPANY intends to develop PRODUCT for Professional
      Broadcast Industry for exclusive sale to BTS.

      WHEREAS, BTS desires to have said PRODUCT, key components and other
      PRODUCT sold to BTS on the terms and conditions set forth in this
      Agreement:

      NOW THEREFORE, the parties hereto agree as follows:

1     Certain Definitions

1.1   All terms defined in the Development Agreement shall have the same meaning
      when used in this Agreement.

1.2   "PRODUCT Software" means any computer software that is a component or part
      of a PRODUCT, regardless of whether such software is embedded in
      semiconductors.

1.3   "Distributor" means a dealer, distributor, reseller, brand name reseller,
      original equipment manufacturer, value added reseller, systems integrator,
      independent sales representative or agent.

1.4   Similar PRODUCTs shall mean a PRODUCT which in view of the average 
      customer of PRODUCT would compete with the PRODUCT respectively, taking
      only price and performance into account.
<PAGE>
 
                                                                    Page 2 of 22

2     Exclusivity

2.1   Subject to the terms and conditions of this Agreement, COMPANY hereby 
      agrees to sell on an exclusive basis to BTS the PRODUCT worldwide, and
      grants worldwide license to BTS to sublicense the PRODUCT Software in
      connection with the sale of other BTS Products. The only exception to this
      exclusivity shall be that COMPANY is allowed to conduct business for the
      sale of a low cost COMPANY's version of the VDR110 to Tyrell Corporation,
      50 Malborough Street, London, U.K.

2.2   COMPANY agrees that if during the term of this Agreement it develops any
      video disk recorder, BTS shall be given the opportunity to exclusively
      purchase and/or exclusively distribute such Products on the basis of the
      same terms and conditions (same for pricing) as laid down in this
      Agreement. In such event COMPANY shall give BTS written notice of the
      availability of such a product and shall provide BTS with appropriate and
      necessary product information to make a reasoned decision. On receipt of
      such notice, BTS shall have three (3) months to accept the offer and/or to
      commence price negotiations with COMPANY and BTS will inform COMPANY
      before expiration of said period of its decision. This time period may be
      extended by the mutual agreement of the parties. Notwithstanding any time
      extensions, if COMPANY and BTS do not agree upon reasonable pricing for
      incorporation of such product into this Agreement, COMPANY shall be free
      to market such products in any manner it seems fit, provided an exclusive
      Distributorship is not offered to anyone else on comparable terms better
      than those offered to BTS.

2.3   Exclusive Appointments. The PRODUCT for the purpose of clause 2.1 includes
      any upgrades, updates, documentation, accessories, spare parts and PRODUCT
      Software.
<PAGE>
 
                                                                    Page 3 of 22

3     Terms of Sale and Payment.

3.1   Price. COMPANY shall supply PRODUCT to BTS at prices which, including 
      their period of validity, are specified in Exhibit A In the event of
      unforeseen circumstances affecting COMPANY or BTS or both and/or in the
      event the price/performance ratio of PRODUCT deteriorates as compared to
      competitive products, the parties hereto will jointly review the situation
      and attempt to find a solution reasonably acceptable to both parties.

3.2   Prices will be reviewed when deemed necessary by any PARTY, but at least
      on a quarterly bases. The PARTIES will make best effort to review and
      agree any changes in prices, depending on, but not limited to expected
      order volume, changes in component prices etc. Price decreases will
      become effective immediately upon the written mutual agreement, price
      increases will only apply 60 days after the written mutual agreement.
      Price increases or decreases will only apply to all orders placed after
      such written agreement period.

      In case after serious negotiations the parties remain unable to reach
      agreement on new prices, taking the parameters of section 3.1 into
      account, the following procedure shall apply: The prices will be set by a
      committee of three (3) members. COMPANY and BTS each will appoint one
      member ('Party-Arbitrator'), a senior manager from the respective
      organizations, who jointly will appoint an independent third member
      (hereinafter the 'Chairman'). The committee starts working not later than
      3 months after the expiration of the quarterly period. The Party-
      arbitrators will submit to the Chairman the proposed prices along with
      their justifications. The Chairman will inform the parties of the
      proposals so submitted, after which the Party-Arbitrators must submit
      their final pricing proposal within seven (7) days. The Chairman must then
      choose between the two proposals within fourteen (14) days. The prices
      announced are binding for both parties. The prices announced will be
      effective from the first day of the new month following on the day of the
      announcement, even for orders in the pipeline. The prices valid for the
      previous period will remain valid during the arbitration period. Costs of
      arbitration will be shared by COMPANY and BTS.

3.3   Price increases are not applicable to PRODUCT for which a binding orders 
      are placed. COMPANY undertakes to grant BTS its best prices and discounts
      for PRODUCT. In the event BTS looses exclusivity, as of article 4.1
      hereof, COMPANY would not grant one or more of its other customers more
      favorable prices, discounts, delivery terms, payment terms and/or
      guarantees than those applicable to BTS for PRODUCT.

3.4   Payment conditions are forty-five (45) days after invoice date and receipt
      of PRODUCT and invoice. Payment shall be made in U.S. Dollars. All prices
      for shipments to BTS shall be FOB Chatsworth, California.

3.5   PRODUCT shall be supplied in suitable packing in a form to be approved by
      BTS and as specified in the SPECIFICATION. Changes in approved packing
<PAGE>
 
                                                                    Page 4 of 22

      may be introduced only on BTS' written request or after BTS' prior written
      approval.

      Packing and PRODUCT shall be labeled by COMPANY in accordance with BTS'
      instructions and as specified in the SPECIFICATION.

3.6   BTS is entitled to have any of the BTS MSS and/or ICC Companies and 
      Graner COMPANY, Port Chester, N.Y. execute logistic procedures, such as,
      without limitation, placing Purchase Orders, payment of invoices,
      transport arrangements, shipping instructions and handling of return
      shipments for repair or replacement on behalf of BTS.

3.7   PRODUCT Software. PRODUCT Software is licensed for distribution only and 
      not sold. Each sale of the PRODUCT to BTS shall be deemed also to include
      the granting of an exclusive license to use the PRODUCT Software in the
      PRODUCT so purchased and to sublicense the same with the resell of
      PRODUCT.

3.8   PRODUCT hardware and software that forms an integrated part of the 
      PRODUCT, and is originated by BTS, shall be subject to a royalty fee, to
      be paid by Micropolis to BTS for PRODUCT, including the version of the
      PRODUCT sold to Tyrell Corporation and sold to other 3d parties, as
      described in Exhibit B herein.

3.9   Spare Inventory. During the duration of this Agreement and six (6) years
      thereafter COMPANY shall supply BTS with such Spare Parts and at prices as
      specified in Exhibit A. During the 6th year, BTS will issue to COMPANY a
      Spare Part order to meet customer demands for access to spares in excess
      of 6 years, and COMPANY will accept such order and delivery same during
      the 6th year.

3.10  It is agreed that if during the duration of this Agreement, but not sooner
      then 3 years from effective date, COMPANY wishes to stop production of
      PRODUCT, COMPANY shall inform BTS thereof no later than 12 month prior to
      the date of envisage production stop.

3.11  If a vendor or subcompany stops production of one or more components that
      might affect availability of PRODUCT, COMPANY shall immediately inform BTS
      thereof in writing. Such information shall preferable be passed to BTS
      within six (6) month of any expected availability disruption.

3.12  Pursuant to Article 3,8,3,9 and/or 3.10 hereof, BTS shall have an
      opportunity to place a Purchase Order for PRODUCT and/or Spare Parts in
      such quantity as BTS may reasonably require and COMPANY shall accept such
      Purchase Order at the then prevailing price.

3.13  Prices for Spare Parts shall not be considerably higher than the prices 
      for the equivalent modules in PRODUCT. In no event may the sum of the
      individual
<PAGE>
 
                                                                    Page 5 of 22

      Spare Parts making one (1) PRODUCT exceed one hundred and ten percent
      (110%) of the PRODUCT price for said PRODUCT as charged to BTS.

3.14  Training. COMPANY shall provide appropriate PRODUCT training and service
      training courses for up to ten (10) BTS personnel with respect to PRODUCT
      purchased by BTS for up to five (5) days, and at locations to be mutually
      agreed upon by BTS and COMPANY. BTS shall bear transportation, food and
      lodging expenses, if any, of its participants, and/or the companies
      participants and COMPANY shall bear all other costs of such training. BTS
      may purchase additional training at a rate of $800.00 per day, per
      instructor, plus pre-approved expenses.

3.15  Engineering control:

      During the term of this Agreement and the continuing Spare Parts supply
      period the PRODUCT shall be under COMPANY's engineering control and
      COMPANY undertakes to sustain PRODUCT as such, as well as Software parts
      thereof.

3.16  Engineering Changes.

      COMPANY will inform BTS in writing by means of the Standard Engineering
      Change Notice of any and all engineering changes to both hardware,
      firmware and software if applicable, that result from its continuing
      engineering activities as they occur.

      Any changes proposed by COMPANY which affect form, fit, function,
      SPECIFICATION and/or use, including interfacing, of PRODUCTs and/or Spare
      Parts will be subject to the prior written consent of BTS. BTS will within
      thirty (30) days after receipt of notification inform COMPANY by means of
      the Standard Form for Decision of Change Request or otherwise of the
      proposed change. Failure to react within said 30 days period will
      constitute acceptance by BTS and COMPANY will proceed with the change.

3.17  In the event BTS requests an engineering change e.g. in order to meet
      SPECIFICATION, in any of the PRODUCT or parts thereof, such as, without
      limitation, in the Software, the provision of article 3.15 hereof shall
      apply mutatis mutandis.

3.18  In case of changes proposed by BTS and implemented by COMPANY, in the
      PRODUCTs and/or the production process which affect the manufacturing
      costs of the PRODUCTs and which result in a decrease of said manufacturing
      and PRODUCT's costs, COMPANY shall share the profit of said decrease by
      offering to BTS a price reduction equal to half the actual cost reduction
      the change will make. Similarly, any change proposed by COMPANY and
      implemented by BTS which result in a reduction of BTS's manufacturing cost
      will render COMPANY a more favorable position in price negotiations.
<PAGE>
 
                                                                    Page 6 of 22

4     BTS and COMPANY Obligations

4.1   At the COMPANY's option and subject to the terms hereof, Section 2.1 shall
      cease to be of force and effect in the event that BTS fails to purchase an
      aggregate dollar amount of PRODUCT as specified in Exhibit C ("Minimum
      Orders"), as amended. During the term of the agreement, BTS and
      Micropolis shall, during the fourth quarter 1997, in good faith negotiate
      minimum purchase requirements for the 12 month period starting 24 months
      after the first delivery of PRODUCT, however, such minimum purchase
      requirement will not be lower then the amount as specified in Exhibit C.
      The loss of BTS' rights under Section 2.1 shall be the sole and exclusive
      remedy and result for any failure by BTS to make the minimum dollar amount
      negotiated. In the event that BTS is unable to obtain or is delayed in
      obtaining export authorizations or licenses to export the PRODUCT, the
      parties agree to review in good faith the amount agreed to as specified in
      Exhibit C, as amended, to determine what reductions, if any, should be
      made in light of such inability or delay in obtaining such authorizations
      or licenses.

4.2   Purchase Orders shall be submitted on separate Purchase Order forms and 
      each Purchase Order shall specify the quantity, items, and agreed upon
      delivery dates Purchase Orders may include additional terms relating to
      the purchase, shipment and other conditions if previously agreed upon
      between BTS and COMPANY.

4.3   As soon as feasible, but no later than delivery of the first PRODUCT, BTS
      shall provide COMPANY with twelve (12) months rolling forecast of its
      needs for PRODUCT to be renewed every month and issued to COMPANY at the
      beginning of each month according to the following schedule: 
      
      a) a firm commitment for the first 2 full calendar months;
      b) a non-binding orientation for the 3 up to and including the
         twelfth calendar month.

4.4   BTS agrees to confirm before the 5th working day of each month the above
      mentioned firm commitment by means of a Purchase Order to cover the second
      month (e.g. the 5th December ultimately a Purchase Order will be issued
      for deliveries equally divided over the month of February). Delivery lead
      time is normally sixty (60) calendar days after receipt of order. From
      time to time, on BTS request, COMPANY agrees to make every effort to meet
      shorter delivery times and to meet BTS request.

      Purchase Orders so placed by BTS shall be acknowledged by COMPANY within
      one (1) week after receipt by issuing a Purchase Order confirmation and
      such Purchase Orders may be canceled by BTS only if COMPANY defaults its
      execution.

4.5   If for any reason not attributable to BTS, COMPANY does not deliver the
      ordered PRODUCT 10 working days later than confirmed delivery date in
      accordance with the agreed upon delivery dates set forth in the applicable
      Purchase Order(s), and order confirmation, COMPANY shall reduce it's price
      to BTS one percent (1%) of the purchase price of the applicable delayed
      PRODUCTs per week of delay or part thereof. BTS has the right to claim
<PAGE>
 
                                                                    Page 7 of 22

      indemnification of damages only if delivery of PRODUCT is more than 8
      weeks delayed from the confirmed delivery thereof.

4.6   BTS may require for additional deliveries outside the tolerance ranges as
      specified in Exhibit C and COMPANY shall use its best efforts to supply
      such additional quantities.

4.7   In the event of a change in laws or a case of force majeure, BTS is unable
      to obtain permission to export or import PRODUCTs into any country of the
      world where previously they have been selling such, upon BTS' request the
      Purchase Orders then placed with COMPANY shall be reduced proportionally
      by the percentage which the expected sales in such countries bear to the
      total of such Purchase Orders.

4.8   In the event COMPANY wishes to stop production of the PRODUCT, COMPANY 
      shall inform BTS thereof as early as possible in writing, but at least
      twelve (12) month prior to the date of envisaged Production stop and BTS
      shall then have an opportunity to place a Purchase Order for PRODUCTs in
      such quantity as BTS may require and COMPANY shall accept such Purchase
      Order at the then prevailing price. Notwithstanding the foregoing COMPANY
      guarantees to produce and supply to BTS PRODUCTs during a period of at
      least three (3) years starting as from the signing date of this Agreement.

4.9   In the event COMPANY is no longer able to or envisages that it shall not 
      (at short notice) be able to supply PRODUCTs to BTS due to shortage or
      lack of components and/or Spare Parts, COMPANY shall immediately inform
      BTS thereof and COMPANY shall then be fully responsible for a proper re-
      design of the PRODUCT without affecting form, fit or function thereof, all
      at COMPANY's costs. The re-designed PRODUCT shall be subject to the
      procedure set forth in Article 4 of the Development Agreement and be
      subject to the terms and conditions of this Agreement.

4.10  BTS shall endeavor to successfully market and support (including
      installation, and other support) PRODUCTs on a continuing basis and to
      comply with good business practices and all laws and regulations relevant
      to this Agreement or the subject matter hereof. COMPANY shall provide BTS
      with the documentation and the necessary technical service.

4.11  BTS will do all field service of PRODUCT. Such service can be defined as
      replacement of SPARE PARTS and updating PRODUCT software. BTS will send
      said faulty SPARE PARTS to MICROPOLIS for its repair, and MICROPOLIS
      shall supply to BTS repaired SPARE PARTS and new released and updated
      software.

4.12  All PRODUCTs to be supplied by COMPANY to BTS pursuant to this Agreement
      shall be checked and tested by COMPANY in accordance with the
      SPECIFICATION and COMPANY shall deliver such written test result with
      PRODUCT. COMPANY shall only supply PRODUCTs which comply with the agreed
      Specifications and other agreed requirements and which have
<PAGE>
 
                                                                    Page 8 of 22

      successfully passed the agreed tests. BTS is entitled to have its
      representatives present at these tests.

      It is explicitly understood by COMPANY that BTS is not obligated to
      execute any incoming inspection or other inspection concerning non-
      compliance with the Specification of PRODUCTs delivered hereunder by
      COMPANY and COMPANY shall be fully responsible for and hold BTS and the
      BTS Associated Companies harmless from any claims for whatever damages
      resulting from any such non-compliance.

4.13  BTS shall inform the COMPANY as to any material problems encountered by 
      its customers with PRODUCT and to communicate to COMPANY any and all
      material modifications, design changes or improvements of PRODUCT
      suggested by any customer. BTS will also promptly notify COMPANY of any
      claims of infringement of any trademarks or other proprietary rights
      relating to PRODUCT that are brought to the attention to an officer of
      BTS.

4.14  BTS shall comply to the extent applicable with all export laws and
      restrictions and regulations of the Department of Commerce or other United
      States or foreign agency or authority, and agrees not to export, or allow
      the export or re-export of any PRODUCT in violation of any such
      restrictions, laws or regulations. BTS shall obtain any necessary licenses
      and/or exemptions with respect to the export from the U.S. of any PRODUCTs
      by BTS and upon request by the COMPANY shall demonstrate to COMPANY
      compliance with all applicable laws and regulations. COMPANY shall certify
      that no export licenses are required; however, if such export licenses are
      required, COMPANY shall assist BTS to acquire such licenses

4.15  As additional consideration for Micropolis' contribution to the joint
      development of the PRODUCT, upon certification by the BTS International
      Competence Center (ICC) in Salt Lake City, Utah, of Micropolis' disk
      drives, BTS intends to utilize Micropolis as its primary COMPANY of disk
      drives for the BTS "Media Pool Video Server." This primary COMPANY status
      shall only remain in effect as long as Micropolis supplies a PRODUCT equal
      in performance and price to units available from other Companies.

      A nonbinding forecast for these drives are included as Exhibit D.
<PAGE>
 
                                                                    Page 9 of 22

5     Private Label.

5.1   Brand name. BTS shall market the PRODUCT under a BTS brand name ("Brand
      Name") selected by BTS. The COMPANY shall label (without additional
      charge) all PRODUCT sold to BTS with the BTS name, the Brand Name and/or
      any logos specified by BTS. Such labeling shall comply with specifications
      provided by BTS in writing and approved by the COMPANY, the approval of
      which shall not be unreasonably withheld. The PRODUCT sold to BTS shall
      include (without charge to BTS) an electronic version of the Technical
      Reference and Maintenance Manual, including but not be limited to
      electrical schematics, mechanical drawings and maintenance procedures. BTS
      at its cost, with the assistance of the COMPANY, shall develop its own
      operator and installation manual and any other marketing and sales
      materials. BTS shall own all right, title and interest in the Brand Name
      and any tradenames, trademarks or copyrights relating thereto. The COMPANY
      shall not use the Brand Name without BTS' consent.
<PAGE>
 
                                                                   Page 10 of 22

6     Warranty; Disclaimer; Indemnity.

6.1   Warranty. COMPANY guarantees the good quality and the good performance in
      accordance with the SPECIFICATION of each PRODUCT supplied pursuant to
      this Agreement during a period of eighteen (18) months from date of
      delivery by COMPANY to BTS or twelve (12) months from delivery by BTS or
      any of the BTS Associated Companies to its/their ultimate customers,
      whichever is sooner. Under this guarantee COMPANY shall provide BTS free
      of charge with replacement parts or PRODUCTs, or shall repair PRODUCTs at
      COMPANIES option. It is explicitly understood that BTS bear all
      transportation and labour costs in connection with returning said parts or
      PRODUCTs to COMPANY's site, and that COMPANY bear all transportation and
      labour costs in connection with repairing and returning said parts or
      PRODUCTs to BTS or to the pertaining BTS Associated Company(ies). The
      above warranty does not extend to any PRODUCT that is modified or altered
      or operated in a manner other than that specified by COMPANY, has its
      serial number removed or altered or is treated with abuse, negligence or
      other improper treatment by BTS, any of BTS Associated Companies or
      its/their customer.

      COMPANY MAKES NO OTHER WARRANTIES WITH RESPECT TO THE PRODUCT OR ANY OTHER
      SERVICES AND DISCLAIMS ANY OTHER WARRANTIES, INCLUDING WARRANTIES FOR
      FITNESS FOR A PARTICULAR PURPOSE.

6.2   In the event of epidemic faults (faults which appear in more than 10% 
      out of sequentially delivered PRODUCT during a 12 month period, and which
      faults are either the same or similar or have the same or similar cause)
      BTS will inform COMPANY as soon as possible about the event. COMPANY and
      BTS shall after consultation in order to find the cheapest solution decide
      in joint consultation, it being understood that all costs connected with
      the transportation of such replacements and the building in thereof and
      the building out of the defective part(s) shall be for the account of
      COMPANY:

      a)  which corrections and repairs can be made by BTS against the
          reimbursement by COMPANY for labour another expenses incurred by BTS 
          in correcting and repairing PRODUCTs;

      b)  which parts and/or PRODUCTs shall be replaced free of charge by
          COMPANY and within which period of time such replacement shall be 
          effected.

      The warranty with respect to epidemic faults shall terminate eighteen (18)
      months after delivery by COMPANY of the last PRODUCTs delivered to BTS
      hereunder.

6.3   Notwithstanding any references in this Agreement to the purchase of 
      PRODUCTs by BTS hereunder, the parties agree that the Software is not
      being sold by COMPANY or purchased by BTS.
<PAGE>
 
                                                                   Page 11 of 22

6.4   In the event of any non-compliance with the Specifications of the
      Software, notified by BTS to COMPANY in writing, COMPANY shall respond as
      follows: 

      a)  In the event of a Major Defect, as defined by BTS, COMPANY
          shall within 24 hours acknowledge receipt of such notification from
          BTS, and make best effort to provide a permanent solution for such
          defect or at least a workaround within 5 days, or, if a permanent
          solution or workaround can not be found, in good faith together with
          BTS negotiate with the ultimate customer how to solve such defect
          COMPANY shall provide BTS and the applicable BTS Associated Companies
          with a corrected version of the Software as soon as possible
          thereafter, free of charge.

      b)  In the event of a Minor Defect, a defect that, in the opinion of BTS 
          is a defect that is not likely to reduce materially the usability of
          the applicable PRODUCT for its intended purpose, or is a departure
          from established standards having little bearing on the effective use
          or operation of the PRODUCT, COMPANY shall correct same and implement
          said correction in the following new release of the Software. Said new
          releases shall be provided by COMPANY at most twice per calendar year.
          However, if required and notwithstanding the foregoing, COMPANY shall
          provide BTS and the applicable BTS Associated Companies with a work-
          around within ultimately ten (10) days after receipt of notification
          of such request.

6.5   Indemnification. COMPANY shall indemnify and hold BTS and its officers,
      directors, shareholders, agents and employees harmless from and against
      liability resulting from infringement by a PRODUCT of any United States or
      other patent, any United States or other copyright or any trademark,
      tradename or other intellectual property right provided COMPANY is
      promptly notified of any and all threats, claims and proceedings related
      thereto and given reasonable assistance and the opportunity to assume
      control over the defense and negotiations for a settlement or compromise
      (if the COMPANY assumes control, the COMPANY shall however permit BTS to
      participate in such defense and negotiations, at BTS' expense if BTS so
      requests); COMPANY will not be responsible for any settlement it does not
      approve in writing. The foregoing obligation of COMPANY does not apply
      with respect to a PRODUCT or portions or components thereof (i) not
      supplied by COMPANY, (ii) labeling made in whole or in part in accordance
      to specifications provided by BTS, or (iii) which are modified by BTS, any
      of BTS Associated Companies or its/their customer after shipment by
      COMPANY, if the alleged infringement relates to such modification.

6.6   In case a PRODUCT is held to constitute infringement, as defined in 
      Article 6.6 hereof, and the use thereof is enjoined, COMPANY shall, at its
      option and expense, either procure for BTS, the BTS Associated COMPANY and
      its/their customer(s) the right to continue using said PRODUCT, or replace
      same, or a part thereof with a non-infringing modification in a manner
      such that performance of the PRODUCT is not degraded.

6.7   COMPANY shall be responsible for and it shall defend, indemnify and hold
      harmless BTS, all of the BTS Associated Companies and their respective
      customers from and against any losses, expenses and liability to third
      parties resulting from injuries and/or damages arising out of the use of
      PRODUCTs, if such injuries and/or damages are attributable to any part of
      the PRODUCT(s), not meeting SPECIFICATION, and being
<PAGE>
 
                                                                   Page 12 of 22

      delivered by COMPANY. In connection with this obligation, it shall be BTS'
      responsibility that COMPANY is promptly notified of any and all claims
      made against it, the BTS Associated Companies or any of their customers
      for any such personal injuries and/or damages alleged to be the result of
      defective parts of PRODUCT manufactured by or for COMPANY hereunder.

7     Limited Liability. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR
      OTHERWISE, NEITHER PARTY WILL BE LIABLE WITH RESPECT TO ANY SUBJECT
      MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY
      OR OTHER LEGAL OR EQUITABLE THEORY FOR (I) ANY INCIDENTAL OR CONSEQUENTIAL
      DAMAGES, LOST PROFITS OR LOST DATA OR (II) COST OF PROCUREMENT OF
      SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES. NEITHER PARTY SHALL BE LIABLE
      FOR ANY FAILURE OR DELAY DUE TO MATTERS BEYOND ITS REASONABLE CONTROL.
<PAGE>
 
                                                                   Page 13 of 22

8     Proprietary Rights

8.1   Without limiting COMPANY's liability to BTS hereunder in any way 
      whatsoever, it has been agreed that in case COMPANY:

      a)  intends to enter or actually enters liquidation procedures (either
          voluntarily or forced); or

      b)  has entered bankruptcy procedures (either voluntarily or forced); or

      c)  notifies BTS in writing that it desires to stop production of the
          PRODUCTs, after the agreed upon period; or

      d)  within sixty (60) days of notification by BTS has not remedied any 
          material breach of this Agreement, 

      e)  in the event of a change of control of COMPANY.

      BTS itself, any of the BTS Associated Companies or a third party to be
      agreed upon between the parties hereto, shall have immediate access to all
      manufacturing know-how and documentation related to the PRODUCT and the
      Spare Parts and as soon as possible thereafter shall acquire all relating
      know-how and inventory of Spare Parts needed for the production of
      PRODUCTs, if and to the extent required by BTS, against compensation for
      COMPANY's purchase price therefor.

8.2   Know-how according to this Article 8 shall mean all the information 
      relating to the design, development, production, testing, and servicing of
      PRODUCTs as manufactured by or for COMPANY, which is in its possession or
      under its control and as will be sufficient to enable BTS, a BTS
      Associated COMPANY or said third party to manufacture and service
      PRODUCTs. All such know-how shall be in a legible and reproducible form.

8.3   Accordingly, COMPANY hereby grants to BTS the option upon occurrence of 
      any of the cases referred to under a, b, c, d and/or e of Article 8.1
      above to receive against a royalty of 2% of BTS sales price of PRODUCT, a
      perpetual worldwide irrevocable license with the right to sublicense under
      any and all patent and other proprietary rights relating to the PRODUCTs,
      and know-how (as specified above) to make, have made, use, lease, sell or
      otherwise dispose of PRODUCTs or other video disk recorders or parts
      thereof by making use of COMPANY's proprietary rights and know-how as
      specified above.

8.4   In order to secure BTS' rights set forth above the parties agree to the
      following: COMPANY undertakes to deposit not later than 4 (four) weeks
      from date of signature of this Agreement a copy of all drawings and other
      technical information needed for the production and servicing of PRODUCT
      with the firm of Nauta Dutilh, notary public, Eindhoven, the Netherlands,
      ("the Escrow Agent") and COMPANY undertakes to, during the term of this
      agreement, supply Escrow Agent with quarterly updates of such PRODUCT
      information, and that all present and future drawings of PRODUCT and other
      information of PRODUCT will remain with the Escrow Agent during the term
      of this Agreement and ten (10) years thereafter. COMPANY represents that
      it has instructed the Escrow Agent to make available to BTS copies of the
      drawings and other technical information without any charges, provided BTS
      informs
<PAGE>
 
                                                                   Page 14 of 22

      the Escrow Agent that COMPANY has entered liquidation procedures (either
      voluntary or forced) or, has entered bankruptcy procedures (either
      voluntary or forced) or that COMPANY is in breach of a contractual
      obligation hereunder towards BTS, or that COMPANY has stopped production
      of the PRODUCTs a in case of a change of control of COMPANY.

9     Assignment. This Agreement and the rights hereunder are not transferable 
      or assignable without the prior written consent of the parties hereto,
      except for rights to payment and except to a person or entity who acquires
      all or substantially all of the assets or business of a party, whether by
      sale, merger or otherwise.
<PAGE>
 
                                                                   Page 15 of 22

10    Term and Termination.

10.1  Term. Unless terminated earlier as provided herein, this Agreement shall
      have a term of thirty-six (36) months, extending from the date of this
      Agreement. The term of this Agreement shall automatically be renewed for
      consecutive twelve (12) month periods unless a party gives written notice
      of termination to the other not less than 120 days prior to the expiration
      of the term of the Agreement. In such case, article 4.8 applies. If the
      parties continue to do business with each other after such termination
      without full documentation, the relevant terms hereof will continue to
      govern the relationship unless otherwise expressly agreed in writing.

10.2  Termination. This Agreement may be terminated by a party for cause
      immediately by written notice upon the occurrence of any of the following
      events:

      a)  If the other materially breaches any material provision of this 
          Agreement and fails to fully cure such breach within 30 days of
          written notice describing the breach; or

      b)  If the other becomes insolvent or enters into bankruptcy
          procedures. This Agreement may be terminated at any time with the
          mutual consent of the parties hereto.

10.3  Effect of Termination. Each party understands that the rights of 
      termination hereunder are absolute. Neither party shall incur any
      liability whatsoever for any damage (including, but not limited to,
      incidental or consequential damage), loss or expenses of any kind suffered
      or incurred by the other (or for any compensation to the other) arising
      from or incident to any termination of this Agreement by such party which
      complies with the terms of the Agreement whether or not such party is
      aware of any such damage, loss or expenses. Termination is not the sole
      remedy under this Agreement and, whether or not termination is effected,
      all other remedies will remain available. The provisions of Sections 6,
      7, 8, 10.2 and 10.3 shall survive any termination of this Agreement.
<PAGE>
 
                                                                   Page 16 of 22

11    General

11.1  General Conditions

      Neither BTS' general conditions of purchase nor COMPANY's general
      conditions of sales are applicable to this Agreement or to any Purchase
      Orders and Purchase Order confirmations.

11.2  Relationship of Parties. The parties hereto are independent contractors 
      with respect to each other. Nothing in this Agreement shall be construed
      as constituting BTS as a joint venture, partner or agent of the COMPANY
      and BTS shall have no authority to bind the COMPANY (except pursuant to
      Section 6 relating to the COMPANY's warranties). The COMPANY shall have no
      right to exercise any control whatsoever over the activities or operations
      of BTS, other then defined in the Memo of Agreement, attached hereto,
      including the prices at which BTS may resell PRODUCTs.

11.3  Amendment and Waiver. Except as otherwise expressly provided herein, any
      provision of this Agreement may be amended and the observance of any
      provision of this Agreement may be waived (either generally or any
      particular instance and either retroactively or prospectively) only with
      the written consent of the parties. However, it is the intention of the
      parties that this Agreement be controlling over additional or different
      terms of any order, confirmation, invoice or similar document, even if
      accepted in writing by both parties, and that waivers and amendments shall
      be effective only if made by non-pre-printed agreements clearly understood
      by both parties to be an amendment or waiver.

11.4  Governing Law and Legal Actions. This Agreement shall be governed by and
      construed and enforced in accordance with the laws of Germany. All
      disputes, controversies or differences which may arise between the Parties
      in relation to or in connection with this Agreement may be settled by
      amicable negotiation by both Parties if the Parties so agree. If both
      Parties are unable to settle such disputes, then such disputes shall be
      referred to and finally settled by arbitration under the Rules of
      Conciliation and Arbitration of the International Chamber of Commerce in
      Paris. The Arbitration shall be conducted in the English Language and take
      place in USA if it is initiated by BTS or in Germany if it is initiated by
      COMPANY. The award of arbitration shall bind both Parties. No waiver by a
      party of a right or remedy under this Agreement shall constitute a waiver
      of any other right or remedy under this Agreement. No waiver of a right or
      remedy shall be effective unless made in writing.

11.5  Headings. Headings and captions are for convenience only and are not to be
      used in the interpretation of this Agreement.

11.6  Notices. Notices under this Agreement shall be sufficient only if 
      personally delivered, delivered by a major commercial rapid delivery
      courier service or mailed by certified or registered mail, return receipt
      requested to a party at its addresses set forth below or as amended by
      notice pursuant to this
<PAGE>
 
                                                                   Page 17 of 22

      subsection. If not received sooner, notice by mail shall be deemed
      received five (5) days after deposit in the U.S. mails.

           If to BTS:

           Brunnenweg 9
           64331 Weiterstadt
           Germany
           Attn.: General Manager

           If to COMPANY:

           21211 Nordhoff Street 
           Chatsworth, CA 91311 
           USA
           Attn.:  VP and General Manager 
                   Systems Business Unit

11.7  Entire Agreement. This Agreement supersedes all proposals, oral or 
      written, all negotiations, conversations, or discussions between or among
      parties relating to the subject matter of this Agreement and all past
      dealing or industry custom.

11.8  Confidentiality. Neither party shall disclose the terms of this 
      Agreement or any attachment to any third party without the prior written
      consent of the other party. Article 9 of the Development Agreement
      continues to govern any possible exchange of confidential information.

11.9  Severability. If any provision of this Agreement is held by a court of
      competent jurisdiction to be illegal, invalid or unenforceable, that
      provision shall be limited or eliminated to the minimum extent necessary
      so that this Agreement shall otherwise remain in full force and effect and
      enforceable.

11.10 Force Majeure: Neither MICROPOLIS nor BTS shall be liable for delay or
      failure in the performance of the obligations contained in this AGREEMENT
      arising solely from any one or more of the following matters:

      a)  acts of God, or public enemy or war (declared or undeclared);

      b)  acts of governmental or quasi-governmental authorities or 
          regulations or restrictions imposed by law or by court action, 
          except as they may result from the unreasonable failure of 
          MICROPOLIS or BTS to perform as required hereunder;

      c)  acts of persons engaged in subversive activities or sabotage;

      d)  fires, floods, explosions or other catastrophes;

      e)  epidemics or quarantine restrictions;

      f)  strikes, lockouts or similar labour disruptions;

      g)  freight embargoes, or interruption of transportation;

      h)  unusually severe weather;

      i)  delays of a supplier of one PARTY due to any of the above causes or
          events; or
<PAGE>
 
                                                                   Page 18 of 22

      j)  any other extraordinary event beyond the control of the PARTY
          concerned; and provided that due diligence is exercised to cure such
          cause and resume performance, and the time for performance by such
          PARTY shall be extended by a period of any such delay.

11.11 Advertisements: COMPANY shall not without BTS' prior written consent use
      BTS' name or trademark as such and/or use same in connection with any
      advertisement or sales literature nor advertise that it is a COMPANY of
      BTS and/or that this Agreement between COMPANY and BTS has been concluded.

      Exhibit. The following Exhibit, as referred to in this Agreement, form an
      integral part of the Agreement:

           Exhibit A: Prices of PRODUCT/Modules
           Exhibit B: BTS software license fee
           Exhibit C: Minimum order quantity and order forecast
           Exhibit D: Purchasing forcast of Micropolis drives to be used in the
                      Media Pool Video server.

      IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
      date first set forth above.

           Micropolis Corporation 

           By:    /s/ Per Sjofors

           Name:  Per Sjofors

           Title: Director Marketing VSD


           BTS BROADCAST TELEVISION SYSTEMS GmbH

           By:    /s/ H. Hock                /s/ H.D. Geise

           Name:  H. HOCK                    H.D. GEISE

           Title: CFO                        Gen. Manager

                                             15. Sept. 1995
<PAGE>

                            MEMORANDUM OF AGREEMENT

This memorandum of agreement (MoA) is made between Micropolis Corporation
(Micropolis) of

          21211 Nordhoff Street 
          Chatsworth, CA 91311
          USA

and BTS Broadcast Television Systems GmbH (BTS) of 

          Im Leuschnerpark 1
          D-64347 Griesheim 
          Germany 

Whereby Micropolis and BTS (hereafter the "Parties") agree to collaborate in
accordance with the following terms and conditions.

SCOPE

The Parties shall together define and Micropolis and BTS (Weiderstadt) shall
jointly develop a family of video disk recorders for sale worldwide by BTS.
For purpose of this agreement these products shall be called "Mini-Pools".

The parties agree that they participate in this collaboration on a
non-exclusive basis in accordance with the conditions described below.

PRINCIPLES

The Mini-Pools shall be branded with the BTS logo and product name.

The Mini-Pool family shall consist of a family of products as outlined on the
attached preliminary specifications identified as exhibit "A".

The Parties agree to make a best effort for completion of the Mini-Pools as
follows:

     VDR110    Prototypes completed by Dec. 31, 1995
               Beta site deliveries to BTS customers by Feb. 1, 1996
               Production deliveries to BTS customers starting April 1, 1996

     VDRx40    Prototypes completed by March 31, 1996
               Beta site deliveries to BTS customers by May 1, 1996
               Production deliveries to BTS customers starting July 1, 1996

A development plan called the "Joint Development Agreement" detailing the
tasks and identifying the resources will be developed within 30 days of signing
this MoA.

A business agreement called the "Brand Name Reseller's Agreement" detailing the
pricing and sales volumes will be developed by Oct. 15, 1995.

BTS International Competence Center (Wiederstadt) and Micropolis will jointly
develop the Mini-Pool according to the "Joint Development Agreement".

The Parties agree that the total development cost of Mini-Pool will not exceed 
$2M.

BTS agrees to cover a percentage of Micropolis's development cost in cash and 
through contribution of engineering resources.

Micropolis shall deliver to BTS various VDR related sub-assemblies for BTS to 
configure and make final test.
<PAGE>

Payment to Micropolis is of the BTS contribution to development shall be as
follows:

<TABLE>
<CAPTION>
LATEST DATE           AMOUNT     PURPOSE
<C>                  <C>         <S>
AUG 7, 1995          $100,000    This amount is intended to allow development
10 working days                  to continue while the terms of the "Joint 
after execution of               Development Agreement" are being completed. If 
this MoA.                        for any reason, the parties are unable to 
                                 reach agreement within 30 days of the 
                                 execution of the MoA, the parties must 
                                 mutually agree to continue negotiations or 
                                 they shall cease and Micropolis may keep this 
                                 payment.
 
SEPT 25, 1995        $200,000    This amount is part payment of the total 
10 working days                  payment by BTS to Micropolis, as further 
after execution of               detailed in the "Brand Name Reseller's 
the "Brand Name                  Agreement". If for any reason, the parties 
Reseller's                       are unable to reach agreement by September 15,
Agreement"                       1995, the parties must mutually agree to 
                                 continue negotiations and payment is then due 
                                 on execution of the "Brand Name Resellers 
                                 Agreement".
</TABLE>
  
The schedule of the balance of the BTS contribution to Micropolis of $700,000
cash and engineering resources shall be as defined in the "Joint Development
Agreement".

The Parties shall exchange monthly reports, in a form to be mutually agreed,
detailing the technical progress achieved. Further to this reporting process,
each party shall allow the other party's Project Manager to inspect
development work at intervals longer than 15 days apart.

The Parties shall share the intellectual property acquired in the development
of the "MiniPools", exclusive of property previously developed by either
party, which shall remain the property of the initial developing company. The
"Joint Development Agreement" shall outline the extent of the previously
developed intellectual property of each party.

Subject to the terms and conditions of the Brand Name Reseller's Agreement,
Micropolis shall appoint BTS as the worldwide exclusive reseller of the
"Mini-Pools". Micropolis grants BTS the right to sub-license the Mini-Pool
system software. The only exception to this exclusivity shall be that BTS shall
allow Micropolis to conduct business for the sale of a Micropolis version of the
VDR110 to the following company:

      Tyrell Corporation

Although there may be other differentiating features, this version will
utilize analog I/O for video and will incorporate a 'flat' file system. This
version could also be sold by BTS.

It is to be understood that if the version of the VDR110 sold to the above
company incorporates any BTS developed technology, Micropolis agrees to pay BTS
a royalty based upon standard industry practices.

If additional sales opportunities are identified by Micropolis, BTS agrees to
sell the "Mini-Pools" to other companies for their resale, provided they operate
outside the professional television industry or such companies are acceptable
to BTS. In these cases, BTS must make a minimum of 15% gross margin on the 
sale.

As additional consideration for Micropolis contribution to the joint
development of the "Mini-Pools", upon certification by the BTS International
Competence Center (ICC) in Salt Lake City of Micropolis disk drives, BTS intend
to utilize Micropolis as their primary supplier of disk drives for the BTS
Media Pool Video Server. This primary supplier status shall only remain in
effect as long as Micropolis supplies a product equal in performance and price 
to units available from other suppliers. The reseller's agreement shall include
projected quantities for Micropolis manufacturing forecast purposes and will not
constitute any firm order commitments.
<PAGE>
 
This MoA shall come into force at the date of signatures of both Parties.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date 
indicated below.

MICROPOLIS CORPORATION                      BTS BROADCAST TELEVISION SYSTEMS

By:    /s/ Larry Smart                      By:    /s/ Ruttger Keienburg

Name:  Larry Smart                          Name:  Ruttger Keienburg

Title: President and CEO                    Title: CEO and President

Date:  July 25, 1995                        Date:  July 31, 1995
<PAGE>
 
                                                                   Page 20 of 22

      Exhibit B:  BTS license fee

      Hardware and Software that is independently developed by BTS, and where
      the development is not paid by Micropolis, and that forms an integral part
      of PRODUCT shall, in the event that PRODUCT is sold by Micropolis to other
      3d parties, be subject to a license fee.

      This license fee shall be subject to good faith negotiations.

      In case after serious negotiations the parties remain unable to reach
      agreement on the license fee, the following procedure shall apply: The
      license fee will be set by a committee of three (3) members. COMPANY and
      BTS each will appoint one member ('Party-Arbitrator'), a senior manager
      from the respective organizations, who jointly will appoint an independent
      third member (hereinafter the 'Chairman'). The committee starts working
      not later than 1 month before Micropolis sells PRODUCT to 3d parties. The
      Party-arbitrators will submit to the Chairman the proposed license fee
      along with their justifications. The Chairman will inform the parties of
      the proposals so submitted, after which the Party-Arbitrators must submit
      their final license fee proposal within seven (7) days. The Chairman must
      then choose between the two proposals within fourteen (14) days. The
      license fee announced are binding for both parties. Cost of arbitration
      will be shared by MICROPOLIS and BTS.
<PAGE>
 
                                                                   Page 21 of 22

      Exhibit C:  Minimum order quantity and order forecast

      In order to enjoy it's limited exclusivity, as defined in Article 2.1
      herein, BTS agrees to order a minimum volume of PRODUCT from MICROPOLIS.
      The order volume is based on the prices as agreed in Exhibit A, as
      amended, hereto.

<TABLE>
<CAPTION>
      Period, number of month from first      Minimum purchase agreement,
      production shipment of VDR110           in US dollars 
      <S>                                     <C>
      0 - 12 month                            $4m
      12 - 24 month                           $12m
      24 - 36 month                           $14m
</TABLE>

      Notes:

      1)  The above Minimum purchase agreement, in US dollars, is based on the
      assumption that the VDR110 product will have an actual performance that is
      in excess of the SPECIFICATION in one respect that the minimum compression
      ratio is 4:1 rather than the 8:1 as per the SPECIFICATION.

      2)  The minimum order volume per period and for the duration of the
      AGREEMENT is accumulative; if BTS orders in excess of it's minimum order
      quantity in any period, the excess amount will be counted into the next
      period.

      BTS will provide COMPANY with a 12 month rolling forecast. In any given 12
      month period the forecast can not be changed more than

<TABLE>
<CAPTION>
      Month    May Change
      <S>      <C>
      1,2      No change as Purchase Orders are issued
      3-6      No more than plus or minus 20%
      7-12     No more than plus or minus 30%
</TABLE>
<PAGE>
 
                                                                   Page 22 of 22
  
      Exhibit D:  Purchasing forecast of Micropolis drives to be used in the 
                  Media Pool Video server.

      The purchasing forecast of Micropolis drives to be used in the Media Pool
      Video server will be supplied by BTS to MICROPOLIS and attached to this
      agreement no later then 30 days after execution.