JOINT DEVELOPMENT AGREEMENT

***Text Omitted and Filed Separately with the Commission

Confidential Treatment Requested

Under 17 C.F.R. Sec. 200.80(b)(4),

200.83 and 240.24b-2

JOINT DEVELOPMENT AGREEMENT

THIS AGREEMENT (“Joint Development Agreement”) dated this day of June 2004, between Hitachi, Ltd., a corporation having its principal place of business at 6, Kanda-Surugadai 4-chome, Chiyoda-ku, Tokyo, Japan (“Hitachi”), acting through its Digital Media Division Tokai Center, and Exabyte Corporation, a Delaware corporation, having its principal place of business at 2108 55 ^th Street, Boulder, Colorado 80301 (“Exabyte”).

W I T N E S S E T H :

WHEREAS , Exabyte has leading edge electronic design expertise in advanced and proprietary variable speed architecture technology, drive firmware, and head design; and

WHEREAS , Exabyte desires to have certain elements of an 8mm tape drive designed and developed, and the complete drive assembly manufactured; and

WHEREAS , Hitachi has leading edge electronic design expertise in tape drives; and

WHEREAS , Hitachi has facilities, equipment and employees which permit it to undertake certain elements of the design and development of this tape drive; and

WHEREAS , Exabyte and Hitachi are willing to enter into an agreement under which both parties will undertake certain design, development, and possible manufacture roles;

NOW THEREFORE , in consideration of the covenants and agreements contained herein, Exabyte and Hitachi hereby agree as follows:

1.1      “Product(s)” as used herein shall mean an 8mm tape drive with a SCSI interface, as described on the product description attached as Exhibit A and as will be more fully described in the Product Specification to be developed under this Agreement. .

1.2      “Development” as used herein shall mean the design, development and improvements needed for the Product.

1.3      “ Development Units ” as used herein shall mean either, prototype or engineering verification test samples of Products (“EVT”) built with primarily machined or soft tooling using a non-production environment to verify design concepts.

1.4      “Qualification Units” as used herein shall mean design verification test samples of Products (“DVT”) or pre-production samples built using hard tooling and released manufacturing processes to prove out the final design and manufacturing capability respectively.

1.5      “Payment Term” as used herein shall mean the term of payments by Exabyte to Hitachi as set forth in Exhibit B.

1.6.     “ Effective Date ” as used herein shall mean the last date of execution of this Joint Development Agreement by the parties hereto or a date of approval by the competent authorities of the Government of Japan and/or USA, as may be required, whichever comes later. Exabyte will confirm separately whether the execution of this Joint Development Agreement necessitates the governmental authorization or not.

2.1      Performance of Tasks . Subject to the terms and conditions contained in this Joint Development Agreement, Hitachi and Exabyte hereby agree to carry out the activities in accordance with Exhibit C. Exabyte and Hitachi acknowledge that Hitachi will initiate the Development from April of 2004.

2.2      Delivery of Development Prototypes . Hitachi agrees to deliver to Exabyte Development Units and/or Qualification Units in accordance with the schedule set forth in Exhibit D. Exabyte agrees to notify Hitachi within thirty (30) days of delivery if, in Exabyte’s reasonable opinion, the Development Units and/or Qualification Units fail to meet applicable specifications. Failure of Exabyte to so notify Hitachi within such thirty (30) days shall constitute agreement by Exabyte that such Development Units and/or Qualification Units meet all the pertinent requirements. Upon receipt by Hitachi of such written notification that an item delivered does not, in Exabyte’s reasonable opinion, meet the requirements of a Development Units and/or Qualification Unit, Hitachi shall commence diligently and in good faith to verify and rectify any specified deficiencies. Both parties will determine how/when the necessary change will be incorporated into the next deliverable Development Units and/or Qualification Units and whether credit is due for the deficient Development Units and/or Qualification Units that were delivered. Exabyte shall give Hitachi access to all tests and other evaluation data generated by or for Exabyte with respect to Exabyte’s evaluation of Development Units and/or Qualification Units delivered to Exabyte under this Joint Development Agreement.

2.3      Specifications. Exabyte and Hitachi shall act diligently and as expeditiously as possible in reaching an agreement on final specifications, to be mutually agreed upon based on the Product Description as provided in Exhibit A. The final specifications shall replace entirely all previous specifications, including the Product Description defined in Exhibit A.

3.1      Both parties acknowledge the importance of achieving the lowest possible product cost and both parties agree to use their best efforts to meet and improve on the cost targets, by referring to VXA3 drive cost estimation under the technical MOU proposed by Hitachi dated February 23, 2004, as attached hereto as Exhibit H. List of the cost is set forth below:

3.1.2   Reasonable mark-up on the price to Exabyte for the Product which includes an amount for profit, assembly and test, overhead, and warranty:

3.2      Exabyte will provide a cost target based upon a “should-cost” analysis before the completion of project Phase 4 of Exhibit D.

3.3      Hitachi will deliver a product cost estimate at the end of “EVT build and testing stage” of the project, as stipulated in the project phase 5 of Exhibit D. Exabyte and Hitachi acknowledge that the delivered cost estimation mentioned herein may be increased and/or decreased due to any change of the specification.

3.4      The parties agree 1) to reconcile cost differences between Exabyte’s should-cost and Hitachi’s estimate, as described in project phase 6 of EXHIBIT D and 2) to complete actions necessary to enter project phase 7 of Exhibit D. Exabyte shall, whenever necessary, inform Hitachi of the cost target which Exabyte’s OEM customer(s) are requesting. Exabyte and Hitachi shall make their best effort to meet such cost target to ensure that prices for the Products are reduced on a continual basis and that such price

reductions are equal to the overall market for the Products. Exabyte will be the final decision maker on whether the cost objective has been met. In case the cost difference is irreconcilable, either party shall have the right to terminate this Joint Development Agreement under the condition of Article 5.1.3.

3.5      The parties acknowledge that after mass production has begun, improvements in the design, production, procurement and assembly are expected to be identified and implemented. The parties agree to negotiate in good faith for both Product cost reductions and appropriate sharing of the benefits from all Product cost reductions.

3.6      The table in Exhibit E lists the quantities and estimated costs for prototype of the Product, EVT, and DVT units. Since the design and specifications are still being developed and finalized, such estimated costs are for planning purposes and subject to change as noted in the Exhibit E.

Exabyte agrees to pay Hitachi for Hitachi’s Development activities described in Exhibit C, based on Payment Terms described in Exhibit B. Exabyte acknowledges that Hitachi will initiate the Development from April of 2004 and that the costs relating hereto will incur from such period.

4.1.1   Upon completion of each project phase described in as set forth in Exhibit D, Hitachi will provide Exabyte with the drive assembly, sub-assembly and piece-part drawings, bill of materials, and list of tooling, jigs and equipment which were produced in the course of the Development- all in English. Exabyte will have the right to ask Hitachi to provide additional information so that it can understand the contents of such drive assembly, sub-assembly and piece-part drawings, bill of materials, and list of tooling, jigs and equipment. These documents will be archived in their document control system ( [...***...] ). Starting with project phase 7, Hitachi and Exabyte will store the data of all changes about Development, utilizing established engineering change order process.

*Confidential Treatment Requested

In case Hitachi contemplates additional Development which Hitachi and Exabyte judge necessary for realizing required Product Specification and reliability and in case Hitachi and Exabyte agree to do so in advance in writing, such cost shall be borne and paid by Exabyte.

Engineering Change Requests (ECR) along with supporting documentation are required to be submitted to Exabyte for all proposed parts tooling and production line jigs and equipment. No commitments should be entered into until the ECR is signed by Exabyte.

Hitachi will submit to Exabyte monthly reports for NRE, which will detail Hitachi’s activity regarding certain tasks (e.g. design and test) along with specific deliverables (e.g. design documentation and test reports) regarding Product. Hitachi shall submit to Exabyte NRE invoices together with such reports. Exabyte shall pay NRE within [...***...] ([...***...]) days after the receipt of each invoice. Additional costs incurred due to schedule delay, beyond that outlined in Exhibit D, will be mutually agreed upon by Exabyte and Hitachi. NRE fees are set forth in Exhibit F attached hereto, and Exhibit F may be amended or superseded only by written agreement between Hitachi and Exabyte. Hitachi and Exabyte agree that Hitachi will issue the first report on June 1, 2004.

Hitachi shall submit to Exabyte monthly reports on the thirtieth (30th) day of a month, which will detail Hitachi’s tooling costs regarding Product for such month. Such reports will contain, in addition to other relevant information, details of Hitachi’s confirmation of first article inspection (“FAI”) acceptance. Hitachi shall submit to Exabyte invoices of the tooling charge together with such reports. Exabyte shall pay tooling cost within [...***...] ([...***...]) days after the receipt of each invoice. Exabyte shall own tooling upon payment for such tooling by Exaby