OR Technology finalizes manufacturing agreement with Kaifa Group.

CAMPBELL, Calif.--(BUSINESS WIRE)--Oct. 17, 1996--OR Technology Inc. and Kaifa Group on Thursday announced a strategic alliance between the two companies whereby Kaifa will mass-produce OR Technology's slim-line LS-120 floppy disk drive.

A letter of agreement details a cooperative relationship that will combine the strength of both companies in design, engineering and manufacturing.

Kaifa Group, with headquarters in the People's Republic of China and offices in Hong Kong, Singapore and the United States, is an expert in the manufacturing of innovative, high quality computer, electronic and telecommunications products. With 1996 revenues forecast to be greater than $250 million, it is one of the largest computer product companies in mainland China.

Kaifa is also one of the world's largest manufacturers of head stack assemblies (HSA) for hard disk drives with a capacity of 8 million units per year -- equivalent to 24 million sliders per year. Kaifa's customers include leading disk drive manufacturer Seagate Technology Inc.

"We selected Kaifa because of their reputation for producing high quality assemblies as well as their ability to ramp to volume production quickly," said John Haughey, president and chief executive officer, OR Technology.

"Kaifa's vertical integration provides greater flexibility and allows us to control quality and cost more closely."

"We are delighted to be participating in this exciting new market as OR Technology's key supplier of slim-line LS-120 floppy disk drives," said M.C. Tam, president, Kaifa Group.

"Production will begin in the second quarter of 1997 with volumes reaching 10,000 units per day within 60 days -- establishing OR Technology as the leading supplier of slim-line LS-120 floppy disk drives."

"LS-120 technology has already had a significant impact on the PC industry," said Anthony Soohoo, product manager, portable computer systems marketing at NEC Technologies Inc. "We are actively investigating its application in both notebook and desktop systems."

"With its increased capacity, low power consumption and backward compatibility, the LS-120 drive is ideally suited to the needs of portable computer users," said Ray Meifert, director, Imation PC Market Segment.

"The strategic alliance between Kaifa and OR Technology establishes another high-volume, independent LS-120 manufacturing source and is an important milestone in establishing LS-120 technology as the new standard for high-capacity diskette storage."

LS-120 technology was developed by OR Technology, Compaq Computer Corp., Imation (formerly 3M) and Matsushita-Kotobuki Electronics Ltd. (MKE). OR Technology's agreement with Kaifa brings the number of manufacturers able to provide production volumes of LS-120 floppy disk drives to three.

Sold under the a:drive(tm) brand name, OR Technology's LS-120 drive replaces current floppy disk drives in portable and desktop computers. It offers 120MB capacity per LS-120 diskette and is compatible with conventional 720K and 1.44MB floppy diskettes.

Unlike alternative technologies, the compact form factor of the a:drive meets current industry standards established for floppy disk drives and floppy diskette factors. The a:drive is available through an international network of distributors. In the United States, Ingram Micro is supplying the a:drive to resellers and systems integrators. End-users should contact their local reseller for assistance.

OR Technology, with headquarters in Campbell, sells, designs and manufactures data storage products using laser servo technology for which it holds significant patents. OR Technology markets the a:drive, a product compatible with current floppy diskettes that stores up to 120MB of data on a single diskette.

For additional information on OR Technology and its products, contact OR Technology, 42 W. Campbell Ave., Campbell, Calif. 95008; phone [phone]; fax [phone]. A fax back service is also available with information about the company, its products and developments in LS-120 technology: local or international, 213/253-5640; toll-free 888/286-6422. World Wide Web: www.ortechnology.com. -0-

NOTE: Imation Corp. (IMN), Matsushita-Kotobuki Electronics Industries Ltd. (6783 JP), Compaq Computer, Houston, (CPQ), Ingram Micro Inc. (IM)

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