Exhibit 10.9

 

Overland Storage PPA 1585-042103

 

***  Confidential portions of this document have been redacted and separately
filed with the Commission.

 

 

PRODUCT PURCHASE AGREEMENT

 

 

NO. 1585-042103

 

1

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TABLE OF CONTENTS

 

 

 

 

1.

SCOPE OF AGREEMENT

 

1.1 General.

 

1.2 Eligible Purchasers

 

1.3 Term of Agreement

 

1.4 Committed Volume

 

 

 

 

2.

DEFINITIONS

 

2.1 Definitions

 

 

 

 

3.

ORDERING AND SHIPMENT OF PRODUCT

 

3.1 In General

 

3.2 Orders

 

3.3 Blanket Purchase Orders

 

3.4 Order Acceptance and Acknowledgment

 

3.5 Emergency Orders

 

3.6 Forecasts

 

3.7 Lead Times

 

3.8 Inventory Requirements

 

3.9 Order Changes

 

3.10 Purchase Reports

 

3.11 Delivery, Shipment and Packaging

 

 

 

 

4.

PRICES AND PAYMENT TERMS

 

4.1  Prices

 

4.2  Payment Terms

 

4.3  Offset

 

4.4  Discounts and Rebates

 

4.5 Sales Taxes and Duties

 

4.6 Financial Condition

 

 

 

 

5.

[***]

 

 

 

 

6.

PRODUCT RETURNS; NON-CONFORMING PRODUCT

 

6.1 Return Materials Authorization

 

6.2 Return Charges

 

6.3 Duty to Remove Marks or Destroy Non-conforming Product

 

6.4 Correction of Non-conforming Product

 

 

 

 

7.

ENGINEERING PROCESS OR DESIGN CHANGES

 

7.1 Supplier Proposed Changes

 

7.2 Notice of Proposed Change

 

7.3 HP Proposed Changes

 

7.4 Safety Standard Changes

 

 

 

 

8.

QUALITY

 

8.1 Quality System

 

 

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8.2 Product Holds

 

8.3 HP’s Right to Inspect Facilities

 

8.4  Reports

 

8.5 SUPPLIER RATING

 

 

 

 

9.

SAFETY

 

 

 

 

10.

WARRANTIES

 

10.1 Product General Warranties

 

10.2 Product Intellectual Property Warranties.

 

10.3 Warranty Periods

 

10.4 Software and Documentation Warranty

 

10.5 Services and Support Warranty

 

10.6 Compliance with Applicable Law

 

10.7 Warranty Exclusions

 

10.8 DISCLAIMER

 

 

 

 

11.

SUPPORT; OTHER SERVICES

 

11.1 General

 

11.2 New HP Products

 

11.3 HP Property

 

11.4 Substitute Products

 

11.5 Survival of Support Obligations

 

 

 

 

12.

DISCONTINUANCE OF PRODUCT

 

12.1 [***] Buy Rights

 

12.2 HP’s Right to Manufacture

 

12.3 Survival of [***] Buy Rights

 

 

 

 

13.

LOSS CONTROL

 

13.1 Business Continuity

 

13.2 Safety, Security and Fire Protection

 

 

 

 

14.

MARKETING AND LICENSING

 

14.1 Marketing Authority

 

14.2 No Rights in Marks

 

14.3 Private Labeling

 

14.4 Software License

 

14.5 Documentation License

 

 

 

 

15.

INTELLECTUAL PROPERTY PROTECTION

 

15.1 Supplier’s Duty to Defend

 

15.2 HP’s Duty to Notify

 

15.3 Actions After Injunction or Order

 

15.4 Limitations

 

15.5 Intellectual Property Developed under this Agreement

 

 

 

 

16.

TRADE REQUIREMENTS

 

17.

CLASSIFICATION AND LICENSING AUTHORITY

 

 

3

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18.

GOVERNMENTAL COMPLIANCE

 

18.1 Duty to Comply

 

18.2 Social and Environmental Responsibility

 

18.3 Environmental Requirements

 

18.4 Procurement Regulations

 

18.5Anti-Terrorism Security Measures

 

 

 

 

19.

FORCE MAJEURE EVENTS

 

19.1 Delaying Causes

 

19.2 Occurrence of a Delaying Cause

 

19.3 Resumption of Performance

 

 

 

 

20.

EVENTS OF DEFAULT AND REMEDIES

 

20.1 Events of Default

 

20.2 Rights and Remedies Upon Default

 

20.3 Cover Costs

 

 

 

 

21.

CONFIDENTIAL INFORMATION

 

21.1 Confidential Information

 

21.2 Exclusions

 

21.3 Personal Data

 

 

 

 

22.

INSURANCE AND INDEMNITY

 

 

 

 

23.

LIMITATION OF LIABILITY

 

23.1 Liability Disclaimers

 

23.2 Liability Limitations

 

23.3 Exceptions to Liability Disclaimers and Limitations

 

23.4 EXCLUDED DAMAGES

 

 

 

 

24.

TERMINATION

 

24.1 Termination for Convenience

 

24.2 Termination for Default

 

24.3 Termination for Assignment

 

24.4 Termination Pursuant to Other Power

 

24.5 Effect of Termination

 

24.6 Termination Claim

 

 

 

 

25.

MISCELLANEOUS

 

25.1 Notices

 

25.2 Exhibits; Other Documents

 

25.3 Independent Contractors

 

25.4 Assignment

 

25.5 No Waiver

 

25.6 No Third Party Beneficiary

 

25.7 Headings; Interpretation

 

25.8 Publicity

 

25.9 Severability

 

 

4

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25.10 Entire Agreement

 

25.11 [***]

 

25.13 Counterparts

 

25.14 Authority of Signatory

 

25.15 Disputes/Escalation Process

 

 

 

 

Signature Authorization

 

 

 

 

EXHIBIT A..PRODUCT DESCRIPTION AND SPECIFICATION

 

 

 

EXHIBIT B..DELIVERY, PACKAGING AND SHIPPING REQUIREMENTS

 

 

 

 

EXHIBIT C..SERVICE AND SUPPORT REQUIREMENTS

 

 

 

EXHIBIT D..CONFIDENTIAL DISCLOSURE AGREEMENT

 

 

 

 

EXHIBIT F..RECIPIENTS FOR NOTICES

 

 

 

EXHIBIT G..MARKETING REQUIREMENTS

 

 

 

 

EXHIBIT H..SOFTWARE AND DOCUMENTATION WARRANTY

 

 

 

 

EXHIBIT I..FLEXIBILITY AGREEMENT

 

 

 

 

EXHIBIT J..QUALITY, WARRANTY and WARRANTY COMPENSATION

 

 

 

 

EXHIBIT K..PRICING

 

 

 

EXHIBIT M..HP REGIONAL TRADE GUIDELINES

 

 

5

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PRODUCT PURCHASE AGREEMENT

 

NO. 1585-042103

 

 

This PRODUCT PURCHASE AGREEMENT (“Agreement”) is entered into as of the 31st day
of July 2003 (the “Effective Date”) by and between HEWLETT-PACKARD COMPANY
(“HP”), a Delaware corporation, having its principal place of business located
at 3000 Hanover Street, Palo Alto, California 94304, and OVERLAND STORAGE, INC.
(“Supplier”), a

 

ý                corporation

 

o            limited liability company

 

other,

 

organized and operating under the laws of California with its principal place of
business at:

 

4820 Overland Avenue

San Diego, California 92123.

 

 

RECITALS

 

WHEREAS, Supplier wishes to sell, and HP wishes to purchase, goods or services,
or both, upon the terms and conditions hereinafter provided; and

 

WHEREAS, Supplier and HP intend to establish mutual understanding concerning
such sales and purchases and, in so doing and in performing hereunder, meet the
parties’ respective needs for a well-defined and stable relationship in an
atmosphere of close cooperation and mutual trust.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained, Supplier and HP hereby agree as follows:

 

1.                                       SCOPE OF AGREEMENT

 

1.1         General. The goods to be provided hereunder are set forth in Exhibit
A (the “Goods”). Goods will meet Specifications and any other requirements which
may be attached hereto or referred to herein. Any services to be provided,
whether primary performance hereunder as set forth in Exhibit C (the “Services”)
or performed in connection with the furnishing of Goods, will meet generally
accepted practices and standards and any other requirements

 

 

--------------------------------------------------------------------------------

***  Confidential portions of this document have been redacted and separately
filed with the Commission.

 

6

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which may be attached hereto or referred to herein. As used herein, “Product”
refers interchangeably to Goods or Services, or both in combination, unless the
context expressly otherwise provides.

 

1.2          Eligible Purchasers. [***] and, as may be mutually agreed in
writing by Supplier and HP, [***] pursuant to the terms of this Agreement;
provided that:

 

1.2.1 [***];

 

1.2.2 [***];and

 

1.2.3 As may reasonably be requested [***].

 

EACH ELIGIBLE PURCHASER WILL, WHEN PURCHASING PRODUCT PURSUANT TO THIS
AGREEMENT, STATE AS MAY BE REASONABLY ACCEPTABLE TO SUPPLIER THAT SUCH ELIGIBLE
PURCHASER IS PURCHASING PRODUCT PURSUANT TO THIS AGREEMENT, [***] WITH RESPECT
TO ANY ACCEPTED ORDER FOR PRODUCT; PROVIDED THAT NOTHING HEREIN RESTRICTS OR
OTHERWISE LIMITS MODIFICATION OR WAIVER OF THIS AGREEMENT, OR PART HEREOF, WITH
RESPECT TO ANY SUCH ORDER UPON MUTUAL AGREEMENT IN WRITING [***].  ANYTHING IN
THIS AGREEMENT TO THE CONTRARY NOTWITHSTANDING, ANY LIABILITY DISCLAIMER OR
LIMITATION IN THIS AGREEMENT APPLICABLE TO HP OR SUPPLIER INTER SE WILL BE
APPLICABLE TO EACH ELIGIBLE PURCHASER AND TO SUPPLIER INTER SE; PROVIDED THAT
[***].

 

1.3 Term of Agreement. This Agreement will be effective upon execution by the
parties and covers a period (the “Term”) which commences as of the Effective
Date and continues for one (1) year and thereafter continues indefinitely unless
terminated earlier under the terms of this Agreement; provided that in no event
will this Agreement continue longer than three (3) years from the Effective Date
unless extended or renewed upon mutual written agreement of the parties.

 

1.4 Committed Volume. [***] nothing in this Agreement obligates HP to purchase
any minimum quantity of Product. This Agreement sets forth the terms and
conditions during the Term which govern Orders and Acknowledgments for Product
or which otherwise apply to any legally binding volume commitment for Product.
Any Order or Acknowledgment or other legally binding volume commitment for
Product which is entered during the Term will remain governed by this Agreement
notwithstanding expiration or termination of this Agreement for any reason.
Unless otherwise agreed, [***] within which to purchase Product at the then
current volume rate and pricing then in effect. [***]. Unless otherwise agreed,
if Supplier is unable, for any reason or no reason, to furnish or delays
furnishing committed volume, [***] with this Agreement.

 

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2.                                       DEFINITIONS

 

2.1 Definitions. As used in this Agreement, and in addition to other terms
elsewhere defined in this Agreement, each of the following terms has the
indicated meanings:

 

“Accepted Order” means an Order as to which Supplier has issued its
Acknowledgment accepting the Order or which is deemed accepted as set forth in
Section 3.4 or which otherwise constitutes a contract under Applicable Law, is
legally binding or legally enforceable.

 

“Acknowledgment” means a written or electronic acknowledgment or confirmation
issued by Supplier in response to and following Supplier’s receipt of an Order
issued by HP or an Eligible Purchaser to Supplier for Delivery of Product.

 

“Affiliate” means an entity whose voting shares are owned less than fifty
percent (50%), but at least ten percent (10%), by a party to this Agreement and
which is not controlled by, or under common control with, a party to this
Agreement as its Subsidiary.

 

“Applicable Law” means all constitutions, laws, statutes, codes, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, permits and legally
binding requirements of all federal, state and local governmental authorities
applicable to any party’s performance under this Agreement.

 

“Backlog” means Orders placed by HP or Eligible Purchasers and not yet shipped
by Supplier to the destination required under the Order.

 

“Business Day” (whether initial letters are capitalized or not) means a Day
other than a Saturday, Sunday or a Day on which U.S. commercial banks in [***],
or, if different, commercial banking institutions in the location at which
performance of an act or obligation under this Agreement is to occur, are closed
or required to close under Applicable Law.

 

“Confidential Information” has the meaning set forth in Section 21.1.

 

“Control” (including the terms “controlling,” “controlled by” and “under common
control with”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a person or entity,
whether through the ownership of voting securities, by contract or otherwise.

 

“Day” (whether initial letter is capitalized or not) means a calendar day and
includes Saturdays, Sundays and holidays, except that, in the event that an
obligation to be performed under this Agreement falls due on a day other than a
Business Day, the obligation will be deemed due on the first Business Day
thereafter.

 

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“Delaying Cause” has the meaning set forth in Section 19. 1.

 

“Delivery” means, in accordance with an Accepted Order and this Agreement,
delivery to common carrier for shipment or shipment and arrival of Product at
the receiving area, as HP or an Eligible Purchaser may designate, and Supplier
may agree, from time to time during the Term. “Deliver” or usage of similar
import refers to a Delivery.

 

“Delivery Date” means the date specified in an Accepted Order for the Delivery
of Product by Supplier to the destination required under the Accepted Order.

 

“Discontinued Product” has the meaning set forth in Section 12. 1.

 

“Documentation” means the technical documentation that Supplier will provide
with Product from time to time during the Term and to the extent HP may
reasonably request and show need for access.

 

“Eligible Purchaser” means [***].

 

“Emergency Order” has the meaning set forth in Section 3.5.

 

“Engineering Change” has the meaning set forth in Section 7. 1.

 

“Epidemic Failure” has the meaning set forth in Exhibit J.

 

“Failure Rate” has the meaning set forth in Exhibit J.

 

“Field Failure” has the meaning set forth in Exhibit J.

 

“Forecast” means HP’s non-binding (except as may be required in Exhibit I with
respect to buffer inventory) estimate of purchases of Product over a [***]
period, or such other period as may be designated by the parties.

 

“HP Contractor” or “Contractor” means any third party which performs work for HP
or HP Subsidiaries or Affiliates and which requires Product from Supplier. HP
Contractors are independent contractors of HP or its Subsidiaries or Affiliates
and are not legally related to HP or its Subsidiaries or Affiliates as agent,
employee, partner, joint venturer or other manner.

 

“HP Products” means the HP products or systems that include or incorporate
Product and that will be marketed and sold to end-user customers by HP or HP
Subsidiaries or Affiliates and its and their resellers.

 

“HP Property” means all property including without limitation models, tools,
equipment, copies of designs and documentation and other materials that may be

 

9

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furnished to Supplier by HP or on HP’s behalf or separately paid for by HP for
use by Supplier in connection with this Agreement or any Order.

 

“HP Warehouse” means any facility which is owned, leased, rented or use of which
is otherwise arranged by HP where HP inventory, including raw material,
components and work-in-process, may be stored.

 

“Hubs” means Supplier or Supplier’s logistic service providers which store,
maintain or handle Supplier Managed Inventory.

 

“Indemnitee” has the meaning set forth in Section 15. 1.

 

“Infringing Product’ has the meaning set forth in Section 15.3.

 

“Intellectual Property Rights” means any ideas, whether or not patentable,
inventions, discoveries, processes, works of authorship, marks, names, know-how,
and any and all rights in such materials on a worldwide basis, including any
rights in patents, inventor’s certificates, utility models, copyrights, moral
rights, trade secrets, mask works, trade names and marks and other analogous
rights.

 

“IP Claim” has the meaning set forth in Section 15. 1.

 

“Lead Time” means the time between the date an Order is issued and the Delivery
Date.

 

“Mark” (whether initial letter is capitalized or not) means any trademark,
service mark, trademark and service mark application, trade dress, trade name,
logo, insignia, symbol, design or other marking identifying a party or its
products.

 

“Month” and “year” mean calendar month and year.

 

“Non-cancelable Order” means an Accepted Order that due to special circumstances
(e.g., ordered quantities or item of Product) or agreement of the parties may
not be rescheduled or canceled by HP, except as set forth in Section 3.9. Any
Accepted Order for Unique Product will be deemed to be a Non-cancelable Order.

 

“Non-conforming Product” means any Product which after Delivery and reasonable
opportunity for inspection and acceptance does not comply with the
Specifications or otherwise does not comply with the requirements of an Accepted
Order or this Agreement.

 

“Non-SMI” has the meaning set forth in Section 3.8.

 

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“Order” means a written or electronic purchase order or release issued by HP or
an Eligible Purchaser to Supplier for Delivery of Product.

 

“Product” has the meaning set forth in Section 1.1 and includes any Goods and
services set forth in Exhibit A, Parts and, as the context may allow, all
related Documentation and other deliverables provided pursuant to this
Agreement. “Parts” means the spares, replacements, components and other items
that may be supplied in conjunction with or as additions to Product.

 

“Return Materials Authorization” or “RMA” has the meaning set forth in Section
6.1.

 

“Schematics” means construction and assembly drawings, photo-tooling for PCBs,
and codes, software or firmware for custom or proprietary components.

 

“Services” has the meaning set forth in Exhibit C.

 

“Shipment” (whether initial letter is capitalized or not) means the date of
shipment from Supplier’s facility, or in the case of Product shipped from a
third party warehouse, the date of shipment from the third party warehouse to HP
or an Eligible Purchaser’s facility.

 

“Software” means one or more programs capable of operating on a controller,
processor or other device or hardware product. Software may be a separate
Product, included with another Product or fixed in a device or hardware product
and not removable in normal operation.

 

“Specifications” means Supplier’s standard specifications for Product, the
technical and functional requirements for Product set forth in Exhibit A, any
Unique Specification and any other requirements which may be attached hereto or
referred to herein or agreed to by the parties or which may be published in
Supplier’s manuals and technical data sheets for Product in effect on the date
Supplier Delivers the corresponding Order.

 

“Subcontractor” means any third party, under contract or other arrangement with
Supplier, with responsibility for supply of components or parts for Product,
Support of Product, or for assembly, storage or configuration of Product.

 

“Subsidiary” means an entity controlled by, or under common control with, a
party to this Agreement, through ownership or control of fifty percent (50%) or
greater of the voting power of the shares or other means of ownership or
control, for as long as such ownership or control continues to exist.

 

“Supplier Managed Inventory” or “SMI” means a program or process for Supplier’s
inventory to be stored at Hubs or within Supplier’s designated area within an HP
Warehouse.

 

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“Support” means technical support and other Services as set forth in Exhibit C,
standard services Supplier customarily provides for Product, or substantial
equivalent, and services for Product mutually agreed to be provided by Supplier
to HP; provided that if Product includes or constitutes Software, Support also
includes fixes, updates and upgrades, unless otherwise agreed.

 

“Technical Information” means Supplier’s manufacturing information and
technology to produce Product and provide Support, including without limitation:
(i) specifications, software, schematics, designs, drawings or other materials
pertinent to the most current revision level of manufacturing of Product; (ii)
copies of all inspection, manufacturing, test and quality control procedures and
any other work processes; (iii) designs relating to jigs, fixtures and tooling;
(iv) Supplier history files; (v) support documentation; and (vi) any additional
technical information or materials that may be agreed to by the parties.

 

“Term” has the meaning set forth in Section 1.3.

 

“Unique Materials” means special parts or components or dedicated raw materials
which are used in the production of HP’s Unique Product and which cannot
reasonably be reused, reworked, returned, sold or otherwise incorporated into
any other products manufactured by Supplier.

 

“Unique Product” means Product that is unique in nature, customer-specific to HP
and cannot be resold by Supplier to customers other than HP without major
modification.

 

“Unique Specification” means a specialized or particularized requirement of HP
which is unique to HP and which does not include industry standards or
conventional requirements or guidelines or Supplier’s own standards,
requirements or guidelines.

 

3.                                       ORDERING AND SHIPMENT OF PRODUCT

 

3.1 In General. HP and Eligible Purchaser may order Product in one or more of
the following ways: (a) by issuing a standard purchase order or Order; (b) by
issuing a Blanket Purchase Order; or (c) according to any applicable SMI
process.  Only an Order which fully complies with the terms of this Agreement
can create a binding obligation to purchase for HP or the Eligible Purchaser.
Each Order must be in writing (which includes electronic form). A binding
obligation to purchase by HP or an Eligible Purchaser and to sell by the
Supplier is created when the Order is Acknowledged and accepted by the Supplier
as provided herein. Such obligation to purchase and sell is limited to the
Products and quantity covered by the applicable Order.

 

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3.2 Orders. Each sale and purchase of Product under this Agreement will be
initiated by an Order issued to Supplier by HP or an Eligible Purchaser. [***].
HP or an eligible Purchaser may schedule regular intervals for Deliveries by an
Order setting forth the intervals. This Agreement applies to all Orders for
Product and all Acknowledgment of Orders whether or not the Order or
Acknowledgment refers to this Agreement.

 

3.3 Blanket Purchase Orders. [***]. Except as may be set forth in Exhibit I,
[***]. Supplier will use its commercially reasonable efforts to fulfill all
Forecasts it receives from HP and/or the Eligible Purchaser that are associated
with Blanket Purchase Orders. .

 

3.4 Order Acceptance and Acknowledgment. [***]; provided that such confirmation
of receipt does not constitute an acceptance of the Order unless it expressly so
states. [***]. Unless otherwise expressly agreed by HP, Delivery must be in
strict conformity with Accepted Orders and time is of the essence.

 

3.5 Emergency Orders. HP or an Eligible Purchaser may issue Orders on an
emergency basis (“Emergency Order”). Subject to availability of Product,
Supplier will use reasonable commercial efforts to fill Emergency Orders upon
acceptance thereof by Supplier.

 

3.6 Forecasts. As Supplier may reasonably request, [***]. Supplier will use all
commercially reasonable efforts to fulfill all Forecasts provided to it by HP.
HP may revise any Forecasts as necessary.

 

3.7 Lead Times. [***]. Either party may request a change in Lead Times at any
time, and any change announced by Supplier will apply unless otherwise agreed;
provided that Lead Times may not be materially lengthened on less than [***]
prior notice.

 

3.8 Inventory Requirements. [***] Use of an SMI process, whether with Hubs, HP
Warehouse or otherwise, may require additional or different terms and conditions
and is subject to mutual agreement. Inventory requirements for an SMI process
may be agreed by the parties. Without limiting any of the obligations or
liabilities of Supplier, Supplier will maintain, at its own expense, as long as
this Agreement is in effect, insurance policies of the kind and limits listed
below

 

3.9 Order Changes. [***] by notice to Supplier as set forth in this Section;
provided that any increase in quantity or any rescheduling to an earlier
Delivery Date is subject to Supplier’s Acknowledgment as set forth in Section
3.4. [***]. At any time prior to Shipment, HP may decrease any Accepted Order;
provided that quantities under a Non-cancelable Order may not be decreased, and
Non-cancelable Orders may not be canceled, to the extent Supplier has commenced
production or acquired special components or dedicated raw materials for
production. Accepted Orders for Product not shipped from Hubs

 

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may be canceled at any time prior to Supplier’s commencement of production, and
those shipped from Hubs may be canceled at any time prior to Shipment. If HP
cancels or modifies any Accepted Order upon less than applicable notice or other
requirement set forth in this Section, Supplier may invoice HP Supplier’s
customary cancellation charge.

 

3.10 Purchase Reports. Within [***] after close of each HP fiscal quarter,
Supplier will provide HP a report which details purchases of Product by HP and
all Eligible Purchasers by item, quantity and purchase location, showing total
quantities shipped, total dollars invoiced, returns, percent of on-time and
on-quality orders and such other information as HP and Supplier may mutually
determine is appropriate. Reports will be sent to HP’s respective purchase
locations, and a report detailing HP’s total purchases will be sent to HP’s
primary contact set forth in Exhibit F.

 

3.11 Delivery, Shipment and Packaging. As set forth in Exhibit B, attached
hereto.

 

4.                                       PRICES AND PAYMENT TERMS. Prices,
payment terms and other pricing terms will be as follows:

 

4.1  Prices. Prices [***] during the Term.

 

4.2  Payment Terms. Payment terms are [***]. No invoice may be dated or
submitted earlier than date of Delivery. Any prompt payment discount will be
calculated from the same date. Payment will be in U.S. currency unless otherwise
stated. Payment terms are firm for the entire Term unless changed by mutual
written agreement of the parties.

 

4.3  Offset. With respect to any payment, reimbursement or other amount owed by
Supplier to HP under this Agreement, [***] by HP to Supplier under this
Agreement or any other agreement.

 

4.4  Discounts and Rebates. Discounts and rebates [***].

 

4.5 Sales Taxes and Duties. Unless otherwise agreed, prices are exclusive of all
taxes or duties (other than taxes levied on Supplier’s income) that Supplier may
be required to collect or pay upon purchase, sale or shipment of Product. Any
such taxes or duties must appear as a separate item on Supplier’s invoice. HP
will pay such taxes or duties unless HP is exempt. Where applicable, HP will
provide Supplier with an exemption resale certificate.

 

4.6 Financial Condition. Any credit line extended to an Eligible Purchaser will
be subject to Supplier’s normal credit standards and approval procedures in
effect from time to time during the Term. [***], and Supplier will make
available to HP, upon written request, information as may be reasonable,
customary and sufficient

 

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[***]. If the financial condition of either party materially and adversely
changes from its financial condition as of the date of this Agreement, then the
other party will have the [***].

 

5.                                       [***]

 

                                               
5.1                                 [***].

 

                                               
5.2                                 [***].

 

                                               
5.3                                 [***].

 

                                               
5.4                                 [***].

 

                                               
5.5                                 [***].

 

6.                                       PRODUCT RETURNS; NON-CONFORMING PRODUCT

 

6.1 Return Materials Authorization. Product may be returned to Supplier by HP
and by Eligible Purchasers as set forth in this Article and in Article 11.0.
Product returned to Supplier will be accompanied by a Return Materials
Authorization (“RMA”). Unless Supplier reasonably requires further verification,
Supplier will provide an RMA within [***] of HP’s request. HP may return Product
without an RMA if Supplier unreasonably refuses or fails to provide an RMA.

 

6.2 Return Charges. All Non-conforming Product returned to Supplier, and all
replacement Product shipped by Supplier, [***].

 

6.3 Duty to Remove Marks or Destroy Non-conforming Product. Supplier will not
sell, transfer or otherwise relinquish possession of Product which bears any HP
Mark, part number or identifier, including any HP packaging, copyright, color or
design scheme or code, other than as may be Ordered for Delivery by HP or
Eligible Purchasers, nor may Supplier sell, transfer or otherwise relinquish
possession or dispose of or reuse or remanufacture Non-conforming Product which
bears any HP Mark, part number or other such identifier unless Supplier removes
same there from, even if such removal would result in destruction of the
affected Product or Non-conforming Product. Supplier will not represent any
Product as built for HP or to HP specifications; provided that nothing herein
limits or otherwise affects Supplier’s right to represent Product as functional
in or compatible with any HP Products or as complying with or conforming to
specifications for HP Products, when such representation is true and correct in
all material respects. All manufacturing overruns of HP branded Product or
defective HP branded Product will be destroyed by Supplier in a secure manner
upon HP’s authorization. At no time may an HP branded Product be sold or
transferred to another party without HP’s prior written authorization.

 

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6.4 Correction of Non-conforming Product. An entire lot of Product may be
returned if a statistically significant sampling of that lot contains
Non-conforming Product. Supplier will, as may be reasonable under the facts and
circumstances and within a reasonable time, [***], and having reviewed its
options with HP, repair or rework Nonconforming Product or replace same and
reship for redelivery, [***], or issue credit therefore or refund the purchase
price if paid.

 

7.                                       ENGINEERING PROCESS OR DESIGN CHANGES

 

7.1 Supplier Proposed Changes. Except as set forth in this Article, Supplier
will not make or incorporate any changes in Product or geographical relocations
affecting electrical performance, mechanical form, fit, function or performance,
environmental compatibility, chemical characteristics, software compatibility or
the life, reliability or quality of Product.

 

7.2 Notice of Proposed Change. Supplier will notify HP in writing of any
proposed Engineering Change and will provide evaluation samples and other
appropriate information as HP may reasonably request a delay of up to [***]
prior to the first proposed shipment of any Product involving an Engineering
Change provided that Supplier may not provide Product involving an Engineering
Change to HP for production usage until HP has notified Supplier, in writing,
that it has completed its qualification testing. If any such change affects
price, component obsolescence, quality performance or delivery schedules of
Product, an impact proposal prepared by Supplier shall be presented to HP for
approval prior to Supplier initiating any change.  If as a result of such an
Engineering Change HP would be unable to utilize Product due to a failure under
HP’s qualifications, Supplier will continue to provide Product without the
Engineering Change until Supplier and HP resolve any qualification issues. If a
resolution mutually recognized as such by both parties is not achieved within a
reasonable time, Supplier may, subject to Sections 11.5 and 12.1, discontinue
supply of Product without the Engineering Change, whereupon HP may cancel all
Accepted Orders for Product without cost or liability or terminate this
Agreement upon written notice to Supplier.

 

7.3 HP Proposed Changes. HP may change HP-supplied drawings or designs or the
Specifications at any time prior to manufacture effective upon notice to
Supplier. If any such change affects price, component obsolescence, quality
performance or delivery schedules of Product, an impact proposal prepared by
Supplier shall be presented to HP for approval prior to Supplier initiating any
change. Supplier may make written claim for any equitable adjustment related to
such change within [***] from the date HP gives notice to Supplier of such
change, or such claim will be deemed untimely and adjustment with respect
thereto will be waived, renounced, released and forever barred.

 

7.4 Safety Standard Changes. Supplier will provide HP oral notice, to be
followed by written notice, or email notice within [***] of Supplier having
knowledge of

 

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the need for any upgrade, substitution or other change required to make Product
meet applicable safety standards or requirements of Applicable Law. HP, in its
discretion, may require that all affected Product be reworked or returned to
Supplier for upgrade to current revisions or be upgraded by Supplier or HP in
the field. If Product met applicable safety standards and requirements of
Applicable Law at time of manufacture, HP and Supplier will share the costs of
any subsequent upgrade, substitution or other required correction as may be
equitable under the circumstances; provided that if mutual agreement on sharing
such costs is not reached within [***] of Supplier’s initial notice hereunder,
the parties will divide costs equally between them. If Product met applicable
safety standards and requirements of Applicable Law at the time of Delivery, HP
will bear all costs of any subsequent upgrade, substitution or other required
correction.

 

8.                                       QUALITY

 

8.1 Quality System. Supplier will maintain a quality system that ensures
compliance with this Agreement and meets at least one (1) of the following:

 

•   Currently certified to the applicable ISO 9000 series of standards for the
Products and/or spare parts provided to HP

 

•  Maintains a quality management system and manual that complies with the
applicable ISO 9000 quality systems series of standards

 

•   Currently executing a plan to achieve ISO 9000 certification within [***]
from the Effective Date

 

•   Has successfully passed HP’s supplier qualification audits

 

Supplier, upon written request from HP, will provide to HP copies of Supplier’s
quality system documentation and supporting test documentation. The parties will
create and maintain a combined team to provide oversight of Supplier’s quality
systems to ensure Supplier’s compliance with this Agreement.

 

8.2  Product Holds. Supplier will, upon HP’s request, hold shipments of Product
until HP’s verification that the Product complies with HP’s specifications.

 

8.3 HP’s Right to Inspect Facilities. With reasonable advance notice (but no
less than [***] notice), during normal business hours and in compliance with
Supplier’s security and safety requirements, HP and/or its designated
representative may inspect Supplier’s production and repair facilities
(including but not limited to Product, raw materials, equipment associated
manufacturing processes, test and inspection data, reliability data, failure
analysis data, corrective action data, and training data) to ensure compliance
with this Agreement. HP’s inspection may be for any reason related to this
Agreement, including assuring Supplier’s compliance with HP’s requirements.
Supplier will use reasonable

 

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efforts to secure for HP similar rights to inspect Supplier’s Subcontractors at
no charge to HP.

 

8.4  Reports. Supplier will provide quality-related reports and such other
reports and information as HP may reasonably request.

 

8.5 SUPPLIER RATING. HP PERIODICALLY REVIEWS ITS SUPPLIERS UNDER A RATING SYSTEM
FOR TECHNOLOGY, QUALITY, RESPONSIVENESS, DELIVERY, COST, ENVIRONMENT, REGULATORY
AND SECURITY (TQRDC-RS). SUPPLIER WILL PARTICIPATE IN THE TQRDC-RS REVIEW
PROCESS.

 

9.                                       SAFETY

 

Supplier will designate a representative within its organization to interface
with HP on Product safety issues. Supplier will work with HP to establish a
procedure for reporting real or potential Product safety problems or risks to HP
within [***] of Supplier becoming aware of such problems or risks.

 

10.                                 WARRANTIES

 

10.1 Product General Warranties. Supplier represents and warrants that all
Product is and will:

 

10.1.1                  [***].

 

10.1.2                  [***].

 

10.1.3                  [***].

 

10.1.4                  [***].

 

10.1.5                  [***].

 

10.1.6                  [***].

 

10.2 Product Intellectual Property Warranties. Supplier represents and warrants
with regard to all Product (including Software and Documentation to the extent
included with Product) that:

 

10.2.1 [***].

 

10.2.2 Except as has been disclosed to HP in writing prior to the date of this
Agreement, [***].

 

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[***]. If a U.S. District Court or any court worldwide adjudges that Product, or
any item or part thereof, [***] irrespective of whether further right of appeal
lies available to Supplier, or if Product or use is enjoined at any stage of the
proceedings, [***]. [***].

 

10.3 Warranty Periods. [***]. The warranties set forth in Sections 10.1.2 and
10.1.5 are effective upon Delivery, are continuing and will remain in effect for
the longer of Supplier’s normal warranty period or as stated in Exhibit J
following acceptance of the Product. The warranties set forth in Sections
10.1.1, 10.1.3, 10.1.4 and 10.1.6 are made and effective at Delivery. All
warranties set forth in Section 10.2 are effective at Delivery, are continuing
and will remain in effect in perpetuity.

 

10.4 Software and Documentation Warranty. If Product includes or constitutes
Software, Supplier provides additional warranties, and warrants Software and
related Documentation, as set forth in Exhibit H.

 

10.5 Services and Support Warranty. Supplier warrants that all Services and
Support will be provided in a professional and workmanlike manner by competent,
experienced personnel possessing suitable expertise in the subject matter.

 

10.6 Compliance with Applicable Law. Supplier warrants that it will comply with
Applicable Law in its performance under this Agreement.

 

10.7 Warranty Exclusions. The warranties set forth in this Article 10 will not
apply to any Product to the extent such Product (i) have been improperly
installed, repaired, altered or otherwise modified (other than by Supplier or
Supplier’s authorized Subcontractors), (ii) have been subjected to misuse,
abuse, negligence or accident, (iii) have been used in a manner contrary to
Specifications or Supplier’s written instructions or Documentation, (iv) are
comprised of materials provided or a design stipulated by HP and not approved by
Supplier in writing or (v) are used Product (to the extent HP may have waived
Section 10. 1.3 in a particular instance), and do not cover normal wear and
tear.

 

10.8 DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, SUPPLIER MAKES
NO OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, REGARDING PRODUCT INCLUDING
MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE.

 

11.                                 SUPPORT; OTHER SERVICES

 

11.1 General. Supplier will maintain such number of qualified personnel as is
necessary to provide timely and knowledgeable Support and will provide Support
to HP as set forth in Exhibit C. Supplier may independently offer and provide
maintenance and support services to third parties, including HP’s customers, but

 

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Supplier may not use HP Confidential Information or HP Property to provide such
services.

 

11.2 New HP Products. HP may request that Supplier provide [***]. Supplier will
consider each request on a case-by-case basis. [***].

 

11.3 HP Property. HP may provide to Supplier HP Property solely for use in
providing Services, Support or in Supplier’s manufacturing, testing or adapting
Product. All HP Property will be segregated from Supplier’s property and
identified as the sole property of HP. HP Property may not be transferred,
assigned, loaned or otherwise encumbered by Supplier in any way. HP Property may
be provided to third parties for fulfillment of Supplier’s obligations hereunder
only upon HP’s prior written consent. [***], upon HP’s request or in all events
upon termination or expiration of this Agreement. HP may require Supplier to
enter into further written agreement and execute appropriate documentation as a
condition to Supplier having access to HP Property.

 

11.4 Substitute Products. [***], if compatible with any current version of HP
Products, [***].

 

11.5 Survival of Support Obligations. Unless otherwise stated in Exhibit C,
Supplier’s obligations to provide Support will continue throughout the [***];
provided that as to any Product for which manufacture or supply is discontinued
in accordance with Article 12.0, such obligations may be discontinued when such
Product is discontinued or if later, when Supplier ceases Support for that
Product; and provided further that in the event of any expiration or termination
of this Agreement, except a termination by Supplier pursuant to Section 24.2 for
HP’s default, Supplier may, unless otherwise agreed, charge for providing
Support at the prices mutually agreed upon by HP and Supplier.

 

12.                                 DISCONTINUANCE OF PRODUCT

 

12.1 [***] Buy Rights. In consideration of HP’s purchase of any Product or
Spares hereunder, Supplier grants to HP the option to purchase Products and
Spares [***] for a period of [***], [***]. If thereafter Supplier determines to
discontinue the manufacture, supply of said Product (a “Discontinued Product”),
Supplier will give written notice to HP in no event less than [***] in advance
of the last date the Discontinued Product can be ordered (the “Notice Period”).
After receipt of notice of discontinuance, during the Notice Period, HP may at
its discretion:

 

12.1.1 Purchase from Supplier such commercially reasonable quantity of the
Discontinued Product as HP may reasonably deem necessary for its future
requirements; or

 

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12.1.2 Manufacture and/or Support the Discontinued Product under the
manufacturing rights granted in Section 12.2, [***].

 

12.2 HP’s Right to Manufacture. Subject to Section 12.1, [***].

 

12.2.1 [***] within a reasonable time after HP has notified Supplier of HP’s
exercise of its rights under this Section 12.2. [***]. If HP uses self-help
measures to obtain possession of any such Technical Information, HP may [***].

 

12.2.2 Supplier will furnish to HP within [***] after HP’s written request, the
names and addresses of Supplier’s sources for Parts not manufactured by
Supplier, including the appropriate part numbers for commercially available
equivalents of electronic Parts. Supplier will use reasonable efforts to enable
HP to [***].

 

12.2.3 Supplier will furnish to HP [***] all Parts catalogues, schematics,
design specifications, blueprints, material lists, engineering change orders,
and other servicing documentation deemed necessary by HP to service and support
the Discontinued Product.

 

12.2.4 Supplier [***] license rights it may have with third parties for
software, documentation or any intellectual property used in the manufacture of
the Discontinued Product.

 

12.3 Survival of [***] Buy Rights. Supplier’s obligations to provide [***] buy
rights as set forth in Section 12.1 and manufacturing rights as set forth in
Section 12.2 [***], except a termination by Supplier pursuant to Section 24.2
for HP’s default, for [***] of this Agreement. Notwithstanding any expiration or
termination of this Agreement, Supplier may, at its discretion, provide [***]
buy rights as set forth in Section 12.1 for [***] following any such expiration
or termination.

 

13.                                 LOSS CONTROL

 

13.1 BUSINESS CONTINUITY

 

13.1.1                  Supplier will develop and keep current a formal business
continuity plan that details Supplier’s strategies for response to and recovery
from a broad spectrum of potential disasters that could disrupt operations and
timely delivery of Product, material and services required pursuant to this
Agreement.

 

Supplier’s plan will include a baseline material hazard analysis, a written
recovery plan and documented emergency and incident response procedures, a
mitigation plan to prevent losses or minimize the effects of a disaster, and a
crisis communication plan.

 

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“Hazard” means an existing or unusual occurrence in the natural or the
human-made environment that may adversely affect human life, property, or
activity to the extent of a disaster. Industrial/Technological Hazards include
destruction of data storage, retrieval and processing facilities, hazardous
materials release, loss of data systems integrity from breaches of security,
power failures, structural failures, telecommunications failures, and
transportation failures. Natural Hazards include earthquake, flood, hurricane,
landslide, tornado, tsunami, volcano, wild or forest fire, and windstorm and
winter storm.

 

13.1.2(a)    Supplier will conduct an annual test and evaluation of its business
continuity plan, which upon request by HP may be witnessed by HP, to ensure
expected systemic and process responsiveness from Supplier.

 

13.1.2(b) Upon request, Supplier will make its business continuity plan and the
annual evaluation available to HP or its designated representative for review.

 

13.2 Safety, Security and Fire Protection. Supplier will be responsible for
maintaining the Hubs, SMI and all warehouse and storage facilities and
operations (except HP Warehouses) in accordance with applicable and prudent
safety, security, and fire protection standards. Supplier will allow HP and its
designated representatives to perform on-site audits of such facilities and
operations and will cooperate in the resolution of recommendations for
improvement.

 

14.                                 MARKETING AND LICENSING

 

14.1 Marketing Authority. HP will have the authority worldwide to market Product
and HP Products containing Product to the extent it deems appropriate. Without
limiting the generality of the foregoing sentence, [***] with respect to
marketing Product or HP Products [***] developing, purchasing, licensing or
marketing any product which performs the same or similar function as Product. HP
will have the right to use its own business and license terms for all marketing
and distribution of Product and HP Products.

 

14.2 No Rights in Marks. Except as otherwise set forth in Section 14.3, nothing
in this Agreement grants either party any rights in the Marks of the other
party; provided that HP may use the name of Supplier and the name of any Product
in advertising and marketing Product or HP Products. As Supplier may reasonably
require, Product will be affixed with copyright notices sufficient to give
notice as to the respective rights of the parties.

 

14.3 Private Labeling. If during the Term HP requests Supplier to produce HP
private label versions of Product, Supplier will ensure that Product contains HP
Marks, serial number format and packaging as specified by HP and conforms to HP
specifications for external appearance. Supplier will make commercially
reasonable efforts to fulfill such request, as long as there is no material
change in

 

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form or dimensions of Product and no required commercially unreasonable action.
[***].

 

14.4 [***].

 

14.5 [***]. For purposes of this Agreement, [***]. These rights with respect to
the Documentation will extend to Eligible Purchasers and, to the extent related
to distribution or sale of HP Products, to HP Subsidiaries, Affiliates and third
party channels of distribution as may be authorized by HP.

 

15.                                 INTELLECTUAL PROPERTY PROTECTION

 

15.1 Supplier’s Duty to Defend. Except as provided in Section 15.4 and
conditioned upon HP’s satisfaction of its obligations under Section 15.2,
Supplier will, to the maximum extent permitted by law, [***] (individually, an
“Indemnitee” and collectively, “Indemnitees”) [***]

 

15.2 HP’s Duty to Notify. HP will give Supplier prompt notice of any IP Claim.
If Supplier assumes defense of such IP Claim without reservation of rights, HP
will provide Supplier the authority, information and reasonable assistance (at
Supplier’s expense) necessary to defend. Supplier will control defense, and HP
will not settle such IP Claim without Supplier’s consent, not to be unreasonably
withheld; provided that if Supplier does not diligently pursue resolution of
such IP Claim or fails to provide HP, upon request at any time and from time to
time, with reasonable assurance that it will diligently pursue resolution, then
HP may, without in any way limiting its other rights and remedies, defend the
claim and collect all costs of doing so from Supplier. [***] settlement or
compromise Supplier desires to enter [***]. HP and any other Indemnitee may, in
its or their discretion, participate in the defense of such IP Claim.

 

15.3 Actions After Injunction or Order. If the use or combination of any Product
is enjoined, if the combination of any Product with an HP Product is enjoined
where such combination is intended by Supplier or reasonably inferable from
Specifications, Supplier’s written designs or Documentation or if a court or
government agency enters an injunction or order forbidding the importing of any
Product or preventing the Delivery of any Product to HP (any of which Product
being referred to as “Infringing Product”), Supplier will, as may be reasonable
under the facts and circumstances and within a reasonable time, [***], and
having reviewed its options with HP:

 

15.3.1 [***].

 

15.3.2 [***].

 

15.3.3 [***].

 

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15.3.4 [***].

 

If none of the foregoing options is commercially achievable, [***].

 

In addition to the above,  [***].

 

15.4 Limitations. Nothing in this Article 15 applies to any Products to the
extent such Products (i) have been improperly installed, repaired, altered or
otherwise modified (other than by Supplier or Supplier’s authorized
Subcontractors), (ii) have been subjected to misuse, abuse, negligence or
accident, (iii) have been used in a manner contrary to Specifications or
Supplier’s written instructions or Documentation; (iv) are comprised of
materials provided or a design stipulated by HP or information or instructions
provided by HP and not approved by Supplier in writing to the extent that the
claim arises from Supplier’s compliance with a Unique Specification or result
directly from use of such materials, design or information so provided by HP or
(v) have been (A) modified by HP or a third party or (B) used by HP or a third
party in connection with or in combination with an HP Product or a part or
system not provided by Supplier in an application which in either the case of
(A) or (B) is not expressly intended by or prohibited by Supplier in
Specifications, Supplier’s written designs or Documentation; [***].To the extent
that any of the foregoing limitations would otherwise apply, it will not apply
where the Product is claimed to be an unauthorized use, misappropriation or
infringement on account of a manufacturing, test, upgrade and/or repair process
used by Supplier unless HP has required Supplier to use in manufacture, test,
upgrade and/or repair of such Product the particular manufacturing, test,
upgrade and/or repair steps that resulted in such claim. Notwithstanding
anything else contained in this Agreement, [***].

 

15.5 Intellectual Property Developed under this Agreement. Intellectual Property
Rights developed by Supplier or otherwise arising in the performance of this
Agreement will be owned as provided in this Section. [***].

 

15.5.1 [***]. Either party may proceed on its own if the other party declines to
participate or fund such activities, and any such refusal to participate or fund
will not affect the parties’ joint ownership rights with respect to any affected
Intellectual Property Rights. [***].

 

15.5.2 Notwithstanding the foregoing, [***],  provided that (a) additional
consideration is provided for in a professional services agreement or (b) as the
parties hereto otherwise agree in writing.  In the event Intellectual Property
Rights arising under this agreement (irrespective of who developed those rights,
or whether the rights were jointly developed) are developed by Supplier not as a
result of [***], but where those Intellectual Property Rights have [***] (as
opposed to the products, processes or services of [***] in aggregate), Supplier
agrees [***] for so long as HP is

 

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in an active purchasing relationship with Supplier or an affiliate of the
Supplier on the same terms and conditions.

 

15.5.3 Each party agrees to require its employees and contractors to be subject
to an assignment obligation to such party for any Intellectual Property Rights
arising under this Agreement.

 

16.                                 TRADE REQUIREMENTS

 

16.1 Supplier understands that this Agreement is subject to compliance with U.S.
and other national export, import, customs and trade-related laws and
regulations and that it is responsible for implementing procedures to ensure
compliance with all guidelines outlined in each of HP Regional Trade Guidelines.
Supplier acknowledges that it is knowledgeable about such laws, regulations, and
HP requirements and agrees to comply with same.

 

16.2 Supplier, at each of its sites, is responsible for determining the
appropriate country of origin (“CO”) for the product(s) it
manufactures/assembles for HP and for marking these products in accordance with
the requirements set out in BF Regional Trade Guidelines. Further, Supplier will
cooperate fully with HP in supplying data to facilitate HP’s origin reporting
requirements and qualification for preferential origin programs such as NAFTA,
IFTA, FMF, EXIM and the like including, but not limited to, all requested origin
analysis, certificates of origin, manufacturer’s affidavits, data (e.g. EDI)
transmissions, and special reporting.

 

16.3 The following trade data elements must be able to be printed out or be
capable of being transferred electronically on each commercial invoice prior to
shipment of Product and must be sent to HP via the standard electronic/EDI
shipping confirmation signal:

 

•                  Country of Origin (line item level)

•                  Import Country HTS Classification (line item level)

•                  ECCN (line item level)

•                  License (line item level)

•                  Destination Control Statement

•                  HP Part Number

•                  Appropriate INCOTERM

 

Further, Supplier must maintain, and reproduce upon demand, all documentation
relating to the international transport of HP goods for a period of not less
than six (6) calendar years from the date of each shipment. All such record
keeping system will comport with the legal requirements of the U.S. and other
nations including, but not limited to, requirements set out in Parts 762 and
772, U.S. Department of Commerce, Export Administration Regulations and the U.S.
Customs Record-Keeping Regulations, 19 C.F.R. 163.

 

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Supplier will provide immediate notice to HP (via the site’s appointed HP
representative) in the event of an action by the U.S. or other national
government customs/export authorities that relates specifically to goods or
services provided to HP by Supplier’s sites.

 

Supplier will afford HP, and HP’s duly appointed agents, reasonable access to
the sites for trade compliance audit purposes and further agrees to respond in a
timely manner to HP’s requests for production of trade control records and to
comply with all remedial or corrective actions that HP may specify.

 

16.4 Supplier must be capable of producing accurate and complete shipping
documentation for each Supplier site and each shipment from such site. Supplier
is responsible for knowing and understanding shipping documentation standards
applied in the normal course of international business and for knowing and
understanding additional requirements outlined in HP Regional Trade Guidelines.
Supplier acknowledges that each of its sites is staffed with personnel
knowledgeable about such standards and HP requirements and agrees to comply with
same.

 

16.5 Supplier is responsible for knowing and understanding the terms of sale
governing its agreement(s) with HP. Supplier is responsible for understanding
the scope of its responsibilities under the applicable sales term(s), for
ensuring that all of the site’s employees and agents are likewise educated, and
for implementing procedures to ensure that the site, the site’s employees and
the site’s agents fulfill the Supplier’s responsibilities under the applicable
term(s).

 

16.6 For each transaction where HP is to be importer of record, the Supplier is
responsible for ensuring that commercial documentation accurately reflects the
actual price paid or payable between HP and Supplier’s site. It is Supplier’s
responsibility that each of its sites reconciles its financial records against
commercial documentation in order to validate HP’s use of transaction value,
whenever possible, for declarations to Customs. When transaction value cannot be
applied, Supplier will apply sequentially the World Trade Organization (“WTO”)
valuation rules for HP transactions. Supplier acknowledges that it is
knowledgeable about the requirements for transaction value declarations and
agrees to comply with same.

 

16.7 Duty Drawback. Unless otherwise requested, Supplier will allow HP to be the
importer of record for all Deliveries. If HP is not importer of record and
Supplier obtains duty drawback rights to Product, Supplier will, upon HP’s
request, provide HP with documents required by the customs authorities of the
country of receipt to prove importation and to transfer duty drawback rights to
HP if HP has paid or arranged deposit of the subject duties.

 

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17.                                 CLASSIFICATION AND LICENSING AUTHORITY

 

17.1 Where Products are of HP’s design, technology or software or are
manufactured to HP’s functional specification, HP will assist the Supplier in
the export of the commodities by providing Export Control Commodity Numbers
(“ECCN”) and Harmonized Tariff Code Numbers (“HTS”) on behalf of HP’s subsidiary
Hewlett-Packard International GmbH (“HPIG”). Supplier will comply with
Applicable Law governing import or export of Product and will be solely
responsible for obtaining all requisite licenses and other authorizations.
Supplier will not export, re-export or otherwise disclose, directly or
indirectly, technical data or the direct product of such technical data received
from HP without HP’s prior knowledge and written consent.

 

17.2 Supplier’s Declaration. Where Products are of Supplier’s design, technology
or software or are manufactured to the Supplier’s functional specification; the
Supplier will provide HP with the correct ECCN or with sufficient technical
information to determine classification. Additionally, the Supplier must provide
any additional information that it knows will affect the determination of
license authority. The information will be supplied via trade’s supplier’s
declaration at: [***].

 

17.3 Country of Origin Marking. The Supplier will mark the containers, in
English, as well as all Products with the Country of Origin, in compliance with
Section 304 of the United States Tariff Act. If the Product itself cannot be
marked legibly due to size, then its immediate container must be marked with a
signed certificate stating Country of Origin (manufacture) by quantity and part
number (HP’s and Supplier’s).

 

18.                                 GOVERNMENTAL COMPLIANCE

 

18.1 Duty to Comply. Supplier, its agents, employees and Subcontractors will
comply with all Applicable Law in its performance of this Agreement. Upon
request, Supplier agrees to certify compliance with any applicable law or
regulations. HP is neither responsible for monitoring Supplier’s nor Supplier’s
Subcontractor’s compliance with any Applicable Law.

 

18.2 Social and Environmental Responsibility. Supplier warrants that in all
countries in which Supplier and, to Supplier’s knowledge, information and
belief, Supplier’s authorized Subcontractors do business, its and their
operations comply with all applicable laws and regulations governing protection
of the environment, employee health and safety, and labor and employment
practices, including but not limited to, laws and regulations relating to
working hours, working conditions, wages, benefits, child labor, forced labor,
freedom of association and equal employment opportunity. [***].

 

18.2.1                  Supplier warrants that its U.S. operations comply with
the requirements of Executive Order 11246, the Vocational

 

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Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act.

 

18.2.2                  Accessibility. Supplier is in compliance with all
applicable laws and regulations governing the accessibility of information
technology for people with disabilities.  Supplier will provide HP with
information about accessibility features of Products.

 

18.3 Environmental Requirements. Without limiting the generality of Sections
18.1 and 18.2 above, Supplier warrants and agrees that:

 

18.3.1 Product Content. All Products and their packaging will comply with HP’s
General Specifications for Environment, DWG No. A-5951-1745-1 [***] and, for
purposes of this Agreement, such specifications are part of the Specifications
for the Product.

 

18.3.2 Shipment. All Products will be shipped in conformance with all applicable
national and international transportation regulations including, where
applicable, regulations regarding chemicals and hazardous materials, dangerous
goods, or fumigation and aeration. All packaging materials, including pallets,
will be free of pests and comply with national and international regulations
regarding Solid Wood Packing Materials (SWPM) where applicable.

 

18.3.3 Chemical Substances. Each chemical substance contained in the Product is
on the inventory of chemical substances compiled and published by the United
States Environmental Protection Agency pursuant to the Toxic Substances Control
Act.

 

18.3.4 Supplier will provide complete and accurate Material Safety Data Sheets
(MSDS) for Product to HP prior to shipment.

 

18.3.5 Environmental Information. Supplier will furnish HP any information
reasonably requested by HP to confirm compliance with Applicable Law or to
determine the environmental effects of materials included in the Products or in
the packaging.

 

18.3.6 Disposition of Excess Materials. Supplier will recycle or dispose of any
excess or waste materials generated from manufacture, test, upgrade or repair of
Product (including damaged or nonconforming product or materials) in compliance
with the provisions of this Agreement, Applicable Law and any specific
instructions received from HP.

 

18.3.7 Manufacturer will continuously implement and maintain processes and
policies designed to protect the environment at any facility at which

 

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Product manufacturing, test, upgrade or repair operations are performed under
this Agreement.

 

18.3.8 Ozone Depleting Substances. Supplier hereby certifies that neither
Product, nor any part, piece or component of any Product:

 

18.3.8.1 Contains any “Class I Substance” or “Class II Substance” as those terms
are defined in 42 U.S.C. Section 7671 and implementing regulations of the United
States Environmental Protection Agency at 40 C.F.R. Part 82, as now in existence
or hereafter amended; or

 

18.3.8.2 Has been manufactured, tested, upgraded, or repaired with a process
that uses any “Class I or Class II Substance.”

 

18.4 Procurement Regulations. HP is a commercial corporation that is also a
contractor and subcontractor for the U.S. government. All of the Products to be
purchased from Subcontractor by HP pursuant to a subcontract/purchase order in
the United States, its territories, possessions, the District of Columbia and
the Commonwealth of Puerto Rico are deemed to be “Commercial Items” as defined
in Federal Acquisition Regulation (“FAR”) 2. 10 1, Part 12 and 52.202 1(c).
Notwithstanding any other clause in HP’s contract with the U.S. government, only
those clauses identified in the clause at FAR 52.244-6 are required to be in
agreements (subcontracts) for commercial items or commercial components. In
addition, and in accordance with determinations made as a result of U.S.
government audits, HP is required to flow down FAR 52.219-9, Small Business
Subcontracting Plan, on all subcontracts/purchase orders with large business
concerns that exceed $500,000 in value.

 

Pursuant to FAR 52.212-5(e) and/or FAR 44.402(b), subcontractor, meaning any
supplier, distributor, vendor or firm that furnishes supplies or services to or
for a prime contractor or another subcontractor in support of U.S. government
business, will accept the following FAR clauses, which are hereby incorporated
by reference into this Agreement, with the same force and effect as if they were
presented in full:

 

FAR 52.222-26, Equal Opportunity (February 1999)

FAR 52.219-8, Utilization of Small Business Concerns (October 2000)

 

APPLICABLE IF THE SUBCONTRACT/PURCHASE ORDER EXCEEDS $2,500: FAR 52.222-41,
Service Contract Act of 1965, as Amended (May 1989) if the purchase order is
principally for the furnishing of services through the use of service employees.

 

APPLICABLE IF THE SUBCONTRACT/PURCHASE ORDER IS FOR $10,000 OR MORE:

 

29

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FAR 52.222-35, Affirmative Action for Disabled Veterans and Veterans of the
Vietnam Era (April 1998)

FAR 52.222-36, Affirmative Action for Workers with Disabilities (June 1998)

 

APPLICABLE IF THE SUBCONTRACT/PURCHASE ORDER EXCEEDS $500,000 AND SUBCONTRACTOR
IS NOT A SMALL BUSINESS:

FAR 52.219-9, Small Business Subcontracting Plan (October 2000)

 

18.5 Anti-Terrorism Security Measures. Supplier acknowledges that its failure to
comply with the laws, or regulations of any applicable governmental authority,
U.S. CTPAT or equivalent security guidelines or TAPA/HP security requirements
will be considered by HP as negligence and failure on the part of Supplier to
provide due care for HP shipments. Supplier will be liable for all fines and
penalties imposed on HP, and other damages incurred by HP, relating to
Supplier’s noncompliance with any such security regulations, guidelines or
requirements.

 

19.                                 FORCE MAJEURE EVENTS

 

19.1 Delaying Causes. Neither party will be liable for any delay in performance
under this Agreement caused by any act of God or other cause beyond Supplier’s
reasonable control and without Supplier’s fault or negligence including but not
limited to fire, flood, war, embargo, riot or an unforeseeable intervention of
any government authority, which causes complete business interruption (a
“Delaying Cause”). A Delaying Cause does not include delays in transportation,
shortages of materials, delays by manufacturers or Subcontractors or economic
considerations or inefficiencies. No Delaying Cause will suspend or excuse
either party’s obligations as set forth in Articles 15, 21 and 22.

 

19.2 Occurrence of a Delaying Cause. Any party whose performance is affected by
a Delaying Cause will notify the other party promptly upon commencement of a
Delaying Cause and will provide its best estimate of the expected duration of
such occurrence. Upon notice to Supplier during pendency of a Delaying Cause, HP
may terminate any unfilled Accepted Orders without liability. Any party whose
performance is affected by a Delaying Cause will exercise reasonable diligence
to overcome and effect cessation of the Delaying Cause and to mitigate effects
thereof. Performance of the parties’ respective obligations to purchase and sell
Product will be suspended to the extent affected by, and for the duration of, a
Delaying Cause, and during pendency of a Delaying Cause affecting Supplier’s
ability to make timely Delivery, [***].

 

19.3 Resumption of Performance. The parties will resume performance under this
Agreement once the Delaying Cause ceases, and HP may, upon written notice not

 

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later than [***] following such cessation, extend the Term up to the length of
time the Delaying Cause endured.

 

20.                                 EVENTS OF DEFAULT AND REMEDIES

 

20.1 Events of Default. A party will be in default under this Agreement upon the

occurrence of any of the following events (each an “Event of Default”):

 

20.1.1 Said party fails to pay or perform any payment obligation when and as due
under this Agreement or any Accepted Order after ten (10) days written notice
from the other party;

 

20.1.2 Said party fails to perform any obligation under this Agreement or any
Accepted Order, other than as set forth in Section 20.1.1, when such failure
continues for [***] after written notice thereof is given or, if such failure
cannot reasonably be cured within said [***], but is capable of cure within a
longer period not exceeding [***] and said party commences to cure such failure
promptly upon receipt of such written notice and thereafter proceeds with
reasonable diligence to cure such failure, for such longer period as may be
necessary for said party to cure the same with reasonable diligence;

 

20.1.3 Any representation or warranty made by said party in connection with this
Agreement proves to be false in any material respect; provided that if such
representation or warranty is capable of being cured, then said party may cure
such misrepresentation or breach of warranty within [***] after written notice
thereof is given or, if such misrepresentation or breach of warranty cannot
reasonably be cured within said [***], but is capable of cure within a longer
period not exceeding [***] and said party commences to cure same promptly and
thereafter proceeds with reasonable diligence to cure same, for such longer
period as may be necessary for said party to cure the same with reasonable
diligence;

 

20.1.4 Said party makes an assignment for the benefit of creditors, admits in
writing its inability to pay its debts as they mature, applies to any court for
the appointment of a trustee or receiver for any of its properties, or commences
any voluntary proceeding under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution, liquidation or other similar law
of any. jurisdiction; or any such application or any such proceeding is filed or
commenced against said party and said party indicates its approval, consent or
acquiescence thereto; or there is filed or commenced against said party an
involuntary proceeding under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution, liquidation or other similar law
of any jurisdiction and such proceeding is not dismissed, and remains

 

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in effect, for [***] or more; or an order is entered adjudicating said party
bankrupt or insolvent; or

 

20.1.5 Except as may be permitted under Section 25.4, said party transfers all
or substantially all of its properties or merges with or into any other entity
or there is otherwise any change in controlling interest or ownership of said
party, without the prior written consent of the other party.

 

20.2 Rights and Remedies Upon Default. Upon the occurrence and during the
continuation of any Event of Default, the party not in default will have, in
addition to all other rights and remedies provided herein, all of the rights and
remedies under the Uniform Commercial Code, as may be limited or otherwise
affected by this Agreement. [***]. All rights and remedies will be cumulative
and may be exercised singularly or concurrently.

 

20.3 Cover Costs. In the event of default by Supplier, Supplier and HP agree to
discuss [***] of certain premium costs (“Cover Costs”) reasonably incurred by HP
to remedy Supplier’s default. [***].

 

21.                                 CONFIDENTIAL INFORMATION

 

21.1 Confidential Information. During the Term, a party (the “Recipient”) may
receive or have access to certain information of the other party (the
“Discloser”) that is marked as “Confidential Information,” including, though not
limited to, information or data concerning the Discloser’s products or product
plans, business operations, strategies, customers and related business
information. The Recipient will protect the confidentiality of Confidential
Information with the same degree of care as the Recipient uses for its own
similar information, but not less than reasonable care. Confidential Information
may only be used by those employees of the Recipient who have a need to know
such information for purposes related to this Agreement. Supplier will, upon
HP’s written request, use commercially reasonable efforts to cause any entity or
person designated by HP to enter into a nondisclosure agreement which affords
materially comparable protections for HP’s Confidential Information as the
Confidential Disclosure Agreement referenced in Exhibit D. [***].

 

21.2 Exclusions. The foregoing confidentiality obligations will not apply to any
information that (a) is known by the Recipient prior to disclosure, (b) was
developed by the Recipient prior to disclosure or is subsequently developed
independently and without reference to the disclosure, (c) is or becomes
publicly available through no fault of the Recipient, (d) is rightfully received
from a third party with no duty of confidentiality, (e) is disclosed by the
Recipient with the Discloser’s written approval or (f) is disclosed under
operation of law.

 

21.3 Personal Data. Both parties agree to comply with the applicable data
protection rules when collecting, storing, transferring, sharing and/or
otherwise

 

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processing any personal data in connection with this Agreement. Unless expressly
agreed otherwise, any HP employee personal data HP discloses to Supplier may
only be used by Supplier in accordance with the then current HP Privacy Policy
(available on request) for administering the relationship between Supplier and
HP. Unless expressly agreed otherwise, any personal data customer discloses to
HP may be used by HP in accordance with the then current HP Privacy Policy for
administering the relationship between the customer and HP and for providing
customer with information about HP’s products, services and programs. HP may
share such personal data with other HP entities and business partners who are
providing services on behalf of HP (whether established in Europe or elsewhere)
that are bound by appropriate confidentiality obligations. HP will secure
customer’s consent before sharing such personal data with any other third party.

 

22.                                 INSURANCE AND INDEMNITY

 

22.1 Without limiting any of the obligations or liabilities of Supplier,
Supplier will maintain, at its own expense, as long as this Agreement is in
effect, insurance policies of the kind and limits listed below:

 

Worker’s Compensation Insurance: Supplier will maintain Workers Compensation
Insurance as required by Applicable Law having jurisdiction over Supplier’s
employees wherever work is to be performed under this Agreement.

 

Employer’s Liability Insurance: Supplier will maintain Employer’s Liability
Insurance in an amount keeping with the law of the nation, state, territory or
province having jurisdiction over Supplier’s employees wherever work is to be
performed under this Agreement [***].

 

General Liability Insurance: Supplier will maintain Comprehensive or Commercial
General Liability Insurance (including but not limited to premises and
operations, products and completed operations, broad form contractual liability,
broad form property damage and personal injury liability) with a minimum limit
of [***] claims of bodily injury, including death, and property damage that may
arise from use of the Products or acts or omissions of Supplier under this
Agreement. Each policy obtained by Supplier will name HP, its officers,
subsidiaries, directors and employees as additional insureds. Such insurance
will apply as primary insurance and no other insurance will be called upon to
contribute to a loss covered thereunder.

 

Claims Made Coverage. If any policies have “claims made” coverage, Supplier will
maintain such coverages with HP named as an additional insured for a minimum of
three years after termination of this Agreement. Any such coverage must have a
retroactive date no later than the date upon which work commenced under this
Agreement.

 

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Additional Requirements. All deductibles on policies providing coverage will be
paid by Supplier. In the event Supplier is self insured for matters described in
Section 13.0, Supplier agrees to respond to any claims or losses made against or
incurred by HP in the same fashion as if insurance had been purchased with the
same or broader coverage terms than what is generally available to similar
Supplier’s. In no event will the coverages or limits of any insurance required
under this Article, or the lack or unavailability of any other insurance, be
deemed to limit or diminish Supplier’s obligations or liability to HP under this
Agreement. In addition, where allowed by law, such policies will permit Supplier
to waive, on its own behalf and on behalf of its insurers, any rights of
subrogation against HP, its subsidiaries, officer directors and employee.

 

All insurance policies will be written by a company authorized to do business in
the territory and jurisdiction where the project is located. In no event will
the coverage or limits of any insurance maintained by Supplier under this
Article, or the lack or unavailability of any other insurance, limit or diminish
in any way Supplier’s obligations or liability to HP under this Agreement. All
insurance policies will be written with appropriately licensed and financially
responsible insurers

 

Certificate of Insurance. Supplier will furnish Certificates of Insurance
acceptable to HP before any Work is commenced hereunder by Supplier. The
Certificate of Insurance will provide that there will be no cancellation or
reduction of coverage without [***] prior written notice to HP.

 

22.2 Indemnity. Supplier will, to the maximum extent permitted by law,
indemnify, defend and hold harmless HP and HP’s directors, officers, employees
and agents from and against any and all claims, liability, loss or damage for
bodily injury, occupational sickness or disease or death of any person,
including any employee of Supplier or any Subcontractor, or for any physical
damage to property, or loss of use thereof, (i) to the extent proximately caused
by Product or Non-conforming Product or (ii) which is proximately caused by the
negligence, strict liability or other fault of, or breach of this Agreement or
any Accepted Order by, Supplier, including its Subcontractors and its and their
employees, agents and suppliers, in whole or in part or jointly with HP. Nothing
in this Article 22.0 applies to any Products to the extent such Products have
been installed, repaired, altered, modified or used by HP in a manner contrary
to Specifications or Supplier’s written instructions or Documentation. In the
event any claim, liability, loss or damage is caused by the joint or concurrent
negligence, strict liability or other fault of Supplier and HP, except to the
extent due to HP’s passive negligence or HP’s failure to manage or supervise
Supplier, including its Subcontractors and its and their employees, agents and
suppliers, or HP’s failure to oversee or control Supplier’s performance under
this Agreement or any Accepted Order, including performance of Supplier’s
Subcontractors and its and their employees, agents and suppliers, then such
claim, liability, loss or damage will be borne by Supplier and HP in proportion
to its respective degree of

 

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fault. Conditioned upon HP’s satisfaction of its obligations under Section 22.3,
Supplier will at its own expense defend any suit, action or other proceeding
asserting a claim covered hereunder, and Supplier will pay all costs, including
attorneys’ fees and litigation costs, incurred in enforcement. Supplier will not
have any obligation to defend, indemnify or hold harmless hereunder when the
occurrence giving rise to such claim, charge, liability, loss or damage is
caused solely by the negligence, strict liability or other fault of HP.
Supplier’s obligations to defend, indemnify and hold harmless hereunder will not
be limited or otherwise affected by any insurance, self-insurance or retention
of risk which it may carry or assume.

 

22.3 HP’s Duty to Notify. HP will give Supplier prompt notice of any such claim
or action for which Supplier is obligated to indemnify under Section 22.2. If
Supplier assumes defense of such claim or action without reservation of rights,
[***], upon request at any time and from time to time, with reasonable assurance
that it will diligently pursue resolution, HP may, without in any way limiting
its other rights and remedies, defend the claim and collect all costs of doing
so from Supplier. [***]. HP and any other Indemnitee may, in its or their
discretion, participate in the defense of such claim or action.

 

23.                                 LIMITATION OF LIABILITY

 

23.1 Liability Disclaimers. TO THE FULLEST EXTENT PERMITTED BY LAW, NEITHER
PARTY WILL BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL
DAMAGES OF THE OTHER (INCLUDING LOSS OF PROFITS OR REVENUE, COST OF CAPITAL OR
DOWNTIME COSTS) ARISING OUT OF ANY PERFORMANCE OF THIS AGREEMENT OR ANY ORDER,
REGARDLESS OF WHETHER SUCH DAMAGES ARE BASED IN TORT, WARRANTY, CONTRACT OR ANY
OTHER LEGAL THEORY, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; [***].

 

23.2 Liability Limitations. The respective liability of Supplier and HP to each
other for any claim whether in contract, warranty, negligence, tort, strict
liability, or otherwise for loss or damage arising out of, connected with, or
resulting from this Agreement or any Order or the performance or breach hereof,
or from the design, manufacture, sale, delivery, resale, repair, replacement,
installation, technical direction, inspection, operation or use of any Goods
covered by or furnished under this Agreement or any Order, or from any Services
rendered in connection herewith, [***].

 

23.3 Exceptions to Liability Disclaimers and Limitations. NOTHING IN THIS
ARTICLE 23 OR OTHERWISE EXCLUDES, DISCLAIMS, LIMITS OR OTHERWISE AFFECTS EITHER
PARTY’S LIABILITY FOR CLAIMS OF ANY THIRD PARTY, CLAIMS FOR PERSONAL INJURY OR
DEATH OR

 

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CLAIMS FOR PHYSICAL DAMAGE TO PROPERTY. EXCLUDED DAMAGES. NEITHER PARTY WILL BE
LIABLE TO THE OTHER FOR ANY PENAL, EXEMPLARY OR PUNITIVE DAMAGES OR FOR ANY
MULTIPLE DAMAGES.

 

24.                                 TERMINATION

 

24.1 Termination for Convenience. HP may terminate this Agreement at any time
without liability for damages and without need to show cause upon [***] Supplier
may terminate this Agreement at any time without liability for damages and
without need to show cause upon 180 days prior written notice. Except for any
obligations to purchase Products in inventory as [***], upon termination
pursuant to this Section, HP’s entire payment liability will be limited to all
Products for which HP has received and accepted delivery.

 

24.2 Termination for Default. Either party may terminate this Agreement or any
Accepted Order in accordance with Article 20.0.

 

24.3 Termination for Assignment. Either party may, upon reasonable prior written
notice, terminate this Agreement or any Accepted Order in case of an assignment
or attempted assignment of this Agreement or any Accepted Order to a competing
entity or in case of an assumption or delegation of performance of this
Agreement or any Accepted Order by a competing entity, if in the party’s
reasonable determination such assignment or performance would be detrimental to
the performance of this Agreement or any Accepted Order or to its business
interests or prospects.

 

24.4 Termination Pursuant to Other Power. Either party may terminate this
Agreement or any Accepted Order pursuant to any other right granted to or
reserved in that party under this Agreement or any Accepted Order or as may
exist at law or in equity, as may be limited or otherwise affected by this
Agreement.

 

24.5 Effect of Termination. [***].

 

24.6 Termination Claim. Upon the occurrence of a termination event, failure of
either party to submit it’s termination claim in writing within [***] unless
extended by the other party in writing prior to the expiration of said period,
will constitute a waiver and release of such claim, and neither party will be
required to notify the other party or make any determination thereof. [***].

 

25.                                 MISCELLANEOUS

 

25.1 Notices. All notices that are required to be given under this Agreement
will be in writing and will be sent to the respective address as set forth in
Exhibit F, or such other address as each party may designate by notice given in
accordance

 

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with this Section. Any such notice may be delivered by hand, by overnight
courier, by first class pre-paid letter or by facsimile or electronic mail
transmission, and will be deemed to have been received: (a) by hand delivery, at
the time of delivery; (b) by overnight courier, on the succeeding business day;
(c) by first class mail, two (2) business days after day of mailing; and (d) by
facsimile or electronic mail, immediately upon confirmation of transmission,
provided a confirmatory copy is sent pre-paid by first class mail or overnight
courier or is hand delivered by the end of the next business day.

 

25.2 Exhibits; Other Documents. The Exhibits and Schedules attached to this
Agreement and all other documents referred to herein are hereby incorporated
herein by this reference and made part of this Agreement. In the event of any
conflict between a provision contained in any Exhibit, Schedule or other
document and a provision of this Agreement, then the provisions of the Exhibit
will govern.

 

25.3 Independent Contractors. The relationship of the parties established under
this Agreement is that of independent contractors, and neither party is a
partner, employee, agent or joint venturer of or with the other. Nothing in this
Agreement precludes either party from independently developing, manufacturing,
selling or supporting products similar to Product.

 

25.4 Assignment. Subject to the exception set forth in the following sentence,
neither this Agreement nor any right, license, privilege or obligation provided
herein or in any Accepted Order may be assigned, transferred or shared by either
party without the other party’s prior written consent, not to be unreasonably
withheld, and any attempted assignment, transfer or sharing without consent is
void; provided that Supplier may perform its obligations hereunder through any
Subsidiary or Affiliate for whose performance Supplier will be responsible and
remains liable. [***]  The assigning party must ensure that the assignee assumes
in writing or by operation of law the assigning party’s obligations, and no
assignment will relieve the assigning party of its obligations, under this
Agreement and any assigned Accepted Orders. This Agreement will inure to the
benefit of and will be binding on the permitted successors and assigns of the
parties.

 

25.5 No Waiver. No modification or waiver of or amendment to or release from any
provision of this Agreement or any Accepted Order and no waiver of or release
from any breach or default hereunder will be of any force or effect unless
contained in a writing which is signed by the party which is sought to be bound
thereby, nor may same be held or considered to be a modification or waiver of or
amendment to or release from any other provision, nor be a waiver of or release
from any other breach or default. No modification or waiver of or amendment to
or release from any provision of this Agreement and no waiver of or release from
any breach or default hereunder will result from any conflicting, different or
printed provisions of any subsequently dated sales or purchase order, order

 

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acknowledgment, or a confirmation thereof, for Product, unless such subsequent
provision is stated conspicuously on the face of any such order, acknowledgment
or confirmation and such order, acknowledgment or confirmation is agreed in a
writing signed by an authorized representative of the party to be bound thereby.
The parties contemplate that from time to time such order, acknowledgment and
confirmation forms may be utilized, and the provisions of this Agreement will
govern and control such forms except to the extent of any such subsequent
provision as aforesaid. The failure of any party to enforce any provision of
this Agreement, or to exercise any right, will not be considered a waiver of
that provision or right.

 

25.6 No Third Party Beneficiary. This Agreement does not confer any right or
remedy other than to the parties hereto and their respective permitted
successors and assigns, and no action may be brought against any party hereto by
any third party claiming as a third party beneficiary to this Agreement or any
Accepted Order. Nothing in this Agreement is intended to relieve or discharge
any obligation or liability of any third party to any party to this Agreement,
and nothing herein confers, or is intended to give any third party, any right of
subrogation or action over.

 

25.7 Headings; Interpretation. The Article and Section headings used in this
Agreement are for convenience of reference only and do not limit or extend the
meaning of any provision of this Agreement, and will not be used in
interpretation of any provision of this Agreement. All terms defined in this
Agreement in the singular form will have comparable meanings when used in the
plural form and vice versa. References in this Agreement to “Articles,”
“Sections,” “Exhibits” and “Schedules” are to articles, sections, exhibits and
schedules herein or hereto unless otherwise indicated. The words “include” and
“including” and words of similar import when used in this Agreement will not be
construed to be limiting or exclusive.

 

25.8 Publicity. Subject to the terms and conditions of Article 19 above, neither
party may publicize or disclose to any third party, without the written consent
of the other party, the existence or terms of this Agreement except as required
under applicable federal securities laws. In the event that Supplier becomes
aware that disclosure is likely to be required by operation of law, Supplier
shall promptly provide HP with ample notice and opportunity to seek a protective
order. Supplier agrees that in the event that disclosure to the SEC is likely,
Supplier shall promptly file a request for confidential treatment. Without
limiting the generality of the foregoing sentence, no press releases regarding
the subject matter, content, or existence of this Agreement may be made without
the prior mutual consent of each party.

 

25.9 Severability. If any provision in this Agreement is held invalid or
unenforceable by a body of competent jurisdiction, such provision will be
construed limited or, if necessary, severed only to the extent necessary to

 

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eliminate such invalidity or unenforceability. The parties will negotiate a
valid, enforceable substitute provision that most nearly effects the parties’
original intent in entering into this Agreement or to provide an equitable
adjustment in the event no such provision can be added. The other provisions of
this Agreement will remain in full force and effect.

 

25.10 Entire Agreement. This Agreement, together with the Exhibits and
Schedules, comprise the entire understanding between the parties with respect to
the subject matter hereof and supersede any previous communications,
representations or agreements, whether oral or written, with respect thereto;
provided that any separate non-disclosure agreement between the parties will
continue unchanged and in full force and effect according to its terms. For
purposes of construction and interpretation, this Agreement will be deemed to
have been drafted by both parties, and no ambiguity will be construed in favor
of or against either party.

 

25.11 [***]

 

25.12 Governing Law. This Agreement and each Order and Acknowledgment will be
governed in all respects by California law without reference to any choice or
conflict of laws provisions of California or the law of any other jurisdiction.
The parties hereby submit to the jurisdiction of the courts of California or any
court of the United States sitting in California with subject matter
jurisdiction, and waive any venue objections against the United States District
Court for the Northern District of California, San Jose Branch and the Superior
and Municipal Courts of the State of California, Santa Clara County, in any
litigation arising under this Agreement. The parties exclude application of the
1980 United Nations Convention on Contracts for the International Sale of Goods,
if applicable.

 

25.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument. If this Agreement is
executed in counterparts, no signatory hereto will be bound until all parties
have duly executed, or caused to be duly executed, a counterpart of this
Agreement.

 

25.14 Authority of Signatory. If HP or Supplier executes this Agreement by agent
or representative, such agent or representative by his/her act of signing this
Agreement individually warrants and represents to the parties, and HP and
Supplier warrant and represent respectively to each other, that he/she is
authorized to execute, acknowledge and deliver this Agreement on behalf of HP or
Supplier, as the case may be, and thereby to bind the respective party to the
same.

 

25.15 Disputes/Escalation Process. Supplier and HP will attempt in good faith to
resolve all disputes under this Agreement by mutual agreement before initiating
any legal action or attempting to enforce any rights or remedies hereunder;
provided that nothing herein will prevent either party from giving notice at any

 

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time of default as set forth in Article 20.0 or termination as set forth in
Article 24.0. [***] both parties may pursue any or all rights and remedies as
may exist at law or in equity, as may be limited or otherwise affected by this
Agreement. [***]. Nothing herein will prevent either party, at any time, from
suggesting referral of any dispute to mediation before a mutually acceptable
mediator under mutually acceptable rules and procedures.

 

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IN WITNESS WHEREOF, the parties, intending to be legally bound, have executed
this Agreement by their respective authorized representatives as of the
Effective Date.

 

OVERLAND STORAGE

 

HEWLETT-PACKARD COMPANY

 

Supplier

 

HP

 

 

 

 

 

By

 

 

 

By

 

 

 

 

 

 

 

Print Name: Vernon A. LoForti

 

Print Name:  Richard Gentilini

 

 

 

 

 

Title:

Vice President and Chief
Financial Officer

 

Title: Director NSS Procurement

 

 

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EXHIBIT A

 

TO PRODUCT PURCHASE AGREEMENT

BETWEEN HP AND OVERLAND STORAGE

 

 

PRODUCT DESCRIPTION AND SPECIFICATIONS

 

 

1.  Product Description

 

Storage tape libraries, related accessories, options and spares

 

2.  Product Specifications

 

Product will conform to Specifications.  Specifications include without
limitation:

 

a)              HP Product and Spares specifications and all industry standard
specifications included within the Product and Spares specification.

b)             HP Safety and regulatory agency requirements

c)              HP’s Packing and Shipping Requirements specified in Exhibit B

d)             HP’s General Specification for Environment

e)              Technical requirements specified in Accepted Orders

 

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EXHIBIT B

 

TO PRODUCT PURCHASE AGREEMENT

BETWEEN HP AND OVERLAND STORAGE

 

DELIVERY, PACKING AND SHIPPING REQUIREMENTS

 

1.0                     General Shipping Terms

 

1.1                       Shipment Requirements.  All Accepted Orders are to be
shipped complete.  Supplier will give HP immediate notice if it learns or has
reason to believe that it cannot meet a Delivery Date or that only a portion of
the Accepted Order will be available for Delivery to meet a Delivery Date.  For
partial shipments, Supplier will ship the available quantities unless directed
by HP to reschedule Delivery.  If Supplier ships by a method other than as
specified in the corresponding Accepted Order, Supplier will pay any resulting
increase in the cost of shipment.  HP may utilize drop shipment options to any
destination; provided that if HP drop ships outside the country in which the
Accepted Order is placed, HP will pay all resulting additional costs. The
failure of Supplier to comply with these shipping requirements will be
considered a material breach of the Agreement.

 

1.2                       Right to Accept Over Shipments.  If Supplier ships
more Product than is covered by the corresponding Accepted Order, the amount of
the over shipment may be either retained by HP for application against future
Orders or returned to Supplier at Supplier’s risk and expense, as HP may
determine in its discretion.

 

1.3                       [***]

 

1.4                       Freight Terms; Passage of Title; and Risk of Loss. 
Freight terms will be negotiated by the parties from time to time during the
Term.  [***].

 

1.5                       Packing List.  Each Delivery will include a packing
list that satisfies the requirements, including as to country of origin, set
forth in Article 16 and Exhibit B.

 

1.6                       Packaging.  Supplier will preserve, package, handle
and pack all items of Product so as to protect same from loss, damage,
electrostatic discharge or otherwise in conformance with good commercial
practice, Exhibit B, Specifications, Applicable Law and other applicable
standards as may be mutually agreed from time to time.

 

1.7                       Responsibility for Damage.  Supplier will select the
common carrier to be used for shipment of Product.  Supplier is responsible and
liable for any loss or damage due to its failure to properly preserve, package,
handle or pack Product.  Neither HP nor any Eligible Purchaser will be required
to assert any claim for such loss or damage

 

43

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against the common carrier involved, nor will either be liable for any loss or
damage due to a release of chemicals or other hazardous materials to the
environment by reason of improper Delivery or Non-conforming Product.

 

1.8                       Off-Premises Inspection.  [***].  HP will bear its
expenses of pre-inspection, and will indemnify and hold Supplier harmless from
any damage or injury caused by HP’s personnel at such facility.

 

1.9                     Inspection.  HP will inspect Product upon Delivery to
verify whether HP has received the number of boxes of Product shown on
Supplier’s packing list and to detect any visible damage or any apparent damage
from transportation to the boxes or packaging of Product.  HP will promptly
notify Supplier of any such damage to the boxes or external packaging as
delivered and will make a notation on the common carrier’s waybill of such
damage and/or of any shipment shortages.  HP will also promptly notify Supplier
of any shortage in the number of boxes delivered.

 

1.10               Changes to delivery dates may only be made by HP’s authorized
purchasing representatives, as specified by HP.  HP may, [***], issue Change
Orders for Product quantities and schedule dates. If any Change Order is made
orally, Supplier will send HP a written confirmation thereof within [***]
Business Days of Supplier’s receipt of said Change Order and HP will provide
Supplier with an Order confirming such change within [***] Business Days of
receiving Supplier’s confirmation.

 

1.11               If Supplier does not deliver Product in accordance with an
Accepted Order or such Product does not meet the Specifications, then HP shall
have the right to receive remedies specified herein.  Supplier is not
responsible for delays caused by a Delaying Cause as defined in Section 19.1.
Supplier acknowledges the importance of HP receiving Product in a timely
manner.  [***].

 

2.0                     Outbound Logistics Operational Requirements

 

Supplier is required to meet the following outbound logistics requirements in
order to ship products from their facility/shipping site to HP specified
destinations.  [***].

 

A.           Customs & Legal Requirements

 

1.               [***].  [***].  [***].  Requirements will vary based on
shipping origin, shipping destination, financial flow, customs regulations, and
Supplier’s legal registration within origin/ destinations countries.

 

2.               Legal Registration - The Supplier will be responsible for
obtaining appropriate registrations to legally conduct outbound logistics as
specified by HP.

 

44

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B.             Physical Shipping Requirements

 

1.               Documents and Labeling – The Supplier must be able to produce
and support all required shipping documentation required to meet customs (export
and import), transportation, and customer requirements.  Specific requirements
will vary based on shipping origin, shipping destination, transportation lane,
delivery tracking, and customer.  Supported documents include the following.

•                  Commercial Invoice – multiple type

•                  International Packing list

•                  Bill of Lading/ Airway Bill

•                  Shipping labels

 

2.               Packing and Marking – The Supplier must prepare and pack all
Products in a manner (i) [***], that is consistent with practices customary in
the computer component industry, (ii) necessary to meet a designated carrier’s
requirements, and (iii) that conforms with the laws and regulations of any
applicable country (including, but not limited to, the United States of America)
and any applicable subdivision thereof.

 

3.               Palletizing — The Supplier is required to palletize products
for shipments when required based on transportation mode.  The Supplier will
need to provide documented pallet specifications for HP approval based on
product dimensions.  Palletizing of products will need to be sufficient to
adequately protect the products during shipment, provide necessary security
measures, support shipment load optimization, and meet customer requirements.

 

4.               [***]

 

5.               Serial Number Scanning — The Supplier will need to support
serial number scanning for product shipments requiring serial number tracking as
defined by HP.  Scanned product serial numbers will be required on shipping
documentation and will need to be systemically provided to HP or other sites as
defined within the IM requirements.

 

6.               Additional Requirements — HP may request additional outbound
logistics requirements of the Supplier either during implementation or post
implementation.  These requirements could include, but are not limited, to the
following:

 

•                  New customer requirements

•                  Trade laws (customs)

•                  Process integration and improvements

 

45

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C.             Security Requirements

 

The Supplier will be required to meet HP security requirements to effectively
minimize product damages and losses from shipment point of origin to
destination.

 

D.            Carrier/ Freight Forwarder Requirements

 

1.               Delivery Service Level — The Supplier will need to support HP
specified transportation modes and delivery service levels.

 

2.               Use of HP Carriers – In the case that HP is responsible for the
outbound transportation, the Supplier will be required to schedule shipments via
specific HP carriers.  Carrier assignments will vary based on shipping origin,
shipping destination, customer, shipment size, product type, and other factors. 
In the case that HP carriers need to be used, HP will provide the Supplier a
Routing Guide with routing parameters and specific carrier preferences.

 

3.               Carrier Scheduling – The Supplier will be responsible for
arranging carrier pick up and providing required shipment documentation.

 

4.               Reporting – In some cases the Supplier will be required to
support outbound logistics reporting needs beyond those established in the IM
requirements.

 

E.              IM SYSTEM REQUIREMENTS

 

The Supplier will be required to support all IM system requirements directly
related to meeting the outbound logistics requirements as defined in the IM
system requirements.  Outbound logistics operations processes will be required
to be automated in the areas of producing shipping documentation and capturing
and sending logistics required information.

 

F.              Compliance & Audits

 

The Supplier will be required to support logistics process and IM system audits
related to the outbound logistics requirements.  This will include [***].  Audit
findings and observations will be shared with the Supplier as a means of
improving logistics execution to ensure all customs and customer requirements
are successfully supported.

 

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3.0                                 Duties Minimization

 

a)              Supplier will enclose a “Form A” document in every shipment to
Europe or the United States of America to comply with “General System of
Preferences” (“GSP”) requirements each time this benefit can be applied to
shipments.

 

b)             Supplier will also make all reasonable effort to minimize freight
and duties and keep the Product eligible for the GSP by choosing suitable
components and manufacturing site(s) for Product.

 

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EXHIBIT C

 

TO PRODUCT PURCHASE AGREEMENT
BETWEEN HP AND OVERLAND STORAGE

 

SERVICE & SUPPORT REQUIREMENTS

 

This Service and Support Requirements Exhibit (“SSR”) is part of the Purchase
Agreement between HP and Supplier (“Agreement”) and provides additional terms
and conditions for maintenance Parts as set forth on the attached list of spares
(“Spares”) and associated services defined below (“Services”) to be provided to
HP’s services organization.  Terms used have the same definitions as in the
Agreement.  In the case of conflict with the Agreement, the terms of this SSR
will take precedence as regards service and support but will not otherwise
modify the Agreement.

 

A.  SPARES AVAILABILITY: Supplier will provide Spares and associated Services to
HP as requested by HP. Spares are identified on the attached Schedule of Spares.
[***].  Spares will take priority over HP’s production units (first builds) and
will ship first.

 

B. DELIVERY: Supplier will ship Spares from a Supplier hub located in San Diego,
CA.  Supplier will maintain a sufficient inventory of spares at each hub in
order to ship orders and repair/exchange Products within [***].  Supplier will
use product failure data available to it as the manufacturer, product failure
trend data provided by HP, and HP Forecasts and any other information available
to Supplier to maintain adequate inventory. Any other changes/additions to
Supplier’s hub facilities will need to be negotiated and mutually agreed.

 

C.  PRIORITY DELIVERY: If HP is experiencing a critical support situation,
Supplier will use its best efforts to ship same day, [***].

 

D.  RMA PROCEDURE: At least weekly, HP will return to Supplier any Products to
be returned, and HP will request an RMA# prior to return of any material to
Supplier.  HP will provide quantity and part numbers of materials to be
returned. Products will be returned to Supplier’s designated hubs.  [***].  If
Supplier cannot repair/exchange parts in [***], then Supplier will use its best
efforts [***] to repair/exchange Products and the lead-time for such
repair/exhchange will not exceed [***].  Supplier will provide the RMA# within
[***].

 

E.  WARRANTY SUPPORT:  Upon receipt of Supplier’s RMA, HP will return in
warranty Spares to Supplier for repair/exchange.   From time to time to manage
unusual situations, [***].  Supplier will notify HP [***] of receipt if the
failure of any Spare is attributable to obvious end user negligence or abuse and
is not the warranty responsibility of Supplier; unless HP is notified [***].  HP
may audit any Spare Supplier claims has been subjected to obvious end user abuse
and will provide disposition, [***], instructing Supplier to return to HP,
repair at HP’s expense or other.

 

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F.  WARRANTY: Supplier warrants replacement Spares for the remaining Product
warranty term or [***] calendar days from the date of shipment to HP, whichever
is greater. Supplier is responsible to track Spares warranty by item serial
number and will provide to HP or HP’s designated third party upon request
information about repair dates for specific units.

 

G.  POST WARRANTY SUPPORT: HP may return out of warranty Spares for repair. 
Repair pricing for out of warranty Spares returned is identified on the attached
Spares and Repairs Pricing Exhibit.  Supplier will notify HP [***] of receipt if
any returned Spare has been damaged and not repairable.  Supplier will not be
obligated to replace or repair such damaged returns because repair pricing is
based on HP returning repairable units.  HP may audit the damaged Spare and will
provide disposition, [***], instructing Supplier to return to HP, scrap at
Supplier site or similar disposition.  Unless Supplier reports damage with five
business days, Supplier will be obligated to replace the returned Spare at the
pricing agreed upon in this Exhibit.

 

I.  TERM OF AVAILABILITY: HP may purchase Spares and return defective spares for
repair/exchange during the “Term of Availability”. The Term of Availability, for
each Spare, is a period of time continuing for (i) [***] from the date Supplier
last ships HP volume shipments of any Product during the Term, which the Spare
is used to support and (ii) which ends upon written notification from Supplier.
Supplier’s notification, discontinuing Product support (see Section 12 of PPA),
must provide [***] notice to HP and identify the affected Spares. Supplier will
support HP’s non-cancelable order, received a minimum [***] in advance of the
end of the Term of Availability, requesting delivery for “last buy” quantities
with shipment on or before the end of the Term of Availability.

 

J.  SUBSTITUTION:  Supplier may request HP approval to deliver a one-time or
permanent replacement for any Spare.   The replacement Spare must meet or exceed
all contract specifications that were applicable to the item(s) being replaced
and must be priced equivalent to the item(s) being replaced.  [***].  Once a
permanent replacement parts has been approved, the remaining Term of
Availability applicable to the item being replaced shall apply to the
replacement Spare.

 

K.  PRICING: The purchase price for Spares, are identified in the Schedule of
Spares.  HP and Supplier agree to [***], as necessary. Pricing changes are
subject to mutual agreement and must be documented in writing.  For warranty
repairs/replacements, HP or its designated third party will be responsible for
the return of the material to Supplier’s designated repair center.  [***].

 

[***]

 

L.  RIGHTS AND ASSISTANCE TO REPAIR: In the event that Supplier affects the
end-of-service (EOS) of a Spare not superceded by a compatible alternative,
Supplier grants to HP the right to repair and have repaired Spares for as long
as HP chooses to support Products. [***]

 

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M.  QUALITY: [***].  Spares, if repaired and not new, will have functionality at
least equivalent to the current shippable revision, will be functionally
compatible and suitable for replacement in all Products which the Spare
supports, and externally visible portions of the Product will meet the attached
cosmetic specifications.  Upon request by HP, Supplier will provide information
reasonably needed by HP to understand quality and reliability issues such as
failure analysis data, reliability testing data, inspection histories, and
specifications as well as provide access to facilities and repair processes. 
Supplier agrees to share all support documentation by giving HP read access to
their knowledge repository when appropriate.  Also, requests for support related
information will be delivered to HP within 14 days of request except that
Supplier agrees to deliver priorities requests for escalation support within one
business day.

 

Quality Reporting

 

See Exhibit J; “Reporting Requirements”.

HP and supplier will agree to work together, to use supplier data for mutually
agreed upon goals and metrics.  Key Process Indicators may include, but are not
limited to-DOA, NTF/NFF, MROC, and TTF.  Collection of data, metric goals,
frequency and submission of quality data will be finalized no later then August
31st 2003.

 

N.  THIRD PARTY REPAIR SERVICES: HP may use a third party to manage aspects of
its repair processes.  Upon HP’s request and subject to mutual agreement with
Supplier, Supplier will provide HP’s third party repair center with the same
support it provides to HP.  [***].

 

O.  SUPPLIER MANAGEMENT PROGRAM: Supplier agrees to participate in HP’s Supplier
Management Program applicable to Services and Support and meet with HP, as
requested up to twice per year, in order to review Supplier’s performance,
establish performance metrics to drive continuous improvements, and discuss
other areas of mutual concern.  Supplier agrees to designate a Supplier
Representative who shall act as HP’s primary contact for any service issues,
parts purchases, exchange, repair, quality or customer escalated issues.
Supplier must provide an internal written escalation process and said
Representative or designated backup(s) must be available to HP during normal
business hours.

 

P.  TECHNICAL SUPPORT:  Overland shall provide technical Support to HP for the
duration set forth in and subject to Section 11.5 of the Purchase Agreement. 
[***].

 

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SCHEDULE OF SPARES

 

 

[***]

 

51

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EXHIBIT D

 

TO PRODUCT PURCHASE AGREEMENT
BETWEEN HP AND OVERLAND STORAGE

 

 

CONFIDENTIAL DISCLOSURE AGREEMENT

 

 

Supplier and HP are parties to a certain non-disclosure agreement [***] dated
June 2003.

 

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EXHIBIT F

 

TO PRODUCT PURCHASE AGREEMENT
BETWEEN HP AND OVERLAND STORAGE

 

 

RECIPIENTS FOR NOTICES

 

 

For HP:

 

Name

 

[***]

Title

 

Commodity Manager

Address

 

Hewlett Packard Company

 

 

200 Forest Street

 

 

Marlboro, MA 01752

Phone
Number

 

[***]

FAX Number

 

[***]

Email

 

[***]

 

For Supplier:

 

Name

 

[***]

Title

 

Account Manager

Address

 

4820 Overland Ave

 

 

San Diego, CA 92123

Phone
Number

 

[***]

FAX Number

 

[***]

Email

 

[***]

 

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RELATIONSHIP MANAGERS

 

The Agreement will be facilitated by a management sponsor from each party.

 

The sponsors will conduct quarterly reviews concerning status of the Agreement
and outlook for the future.  Each sponsor will act, respectively, as an
escalation path for issues arising under the Agreement during the Term with the
objective of timely resolution.

 

The individuals indicated in this Exhibit may be re-designated at any time by
their respective employers with appropriate information to the other party.

 

HP TITLE

 

HP Name, Address,
Phone, Fax, E-Mail

 

SUPPLIER
Equivalent
TITLE

 

SUPPLIER Name, Address,
Phone, Fax, E-Mail

Commodity
Manager

 

[***]

 

HP Account
Manager

 

[***]

Quality
Engineer

 

[***]

 

Quality
Engineer

 

[***]

Engineering
Program
Manager

 

[***]

 

Program
Manager

 

[***]

Marketing
Manager

 

[***]

 

Director
Marketing
Programs

 

[***]

Service
Commodity
Manager

 

[***]

 

Customer
Service
Supervisor

 

[***]

Product Safety
Representative

 

[***]

 

Product
Safety
Representative

 

[***]

Procurement
Manager

 

[***]

 

Director OEM
Sales

 

[***]

Business
Segment
Manager

 

[***]

 

VP WW Sales

 

[***]

 

54

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EXHIBIT G

 

TO PRODUCT PURCHASE AGREEMENT
BETWEEN HP AND OVERLAND STORAGE

 

 

MARKETING SUPPORT AND DEVELOPMENT FUNDS
NEW PRODUCT REQUIREMENTS

 

1.               [***]

 

2.               Supplier agrees to the exclusive use of HP Ultrium drives on
all NEO based library products provided there are no supply contraints, that the
quality and reliability meet or exceed competitive products and that the pricing
is less than or equal to competitor drive pricing and except for OEM or major
account opportunities as defined by the customer.

 

3.               Supplier agrees to Marketing Development Funds (MDF) equal to
[***] of [***].

 

4.               Supplier agrees to buy/sell HP branded media products provided
there are no supply constraints, that the quality and reliability meet or exceed
competitive products and that pricing for the media is less than or equal to
other competitive media products.

 

5.               Supplier agrees to provide an HP focused worldwide account
team, to support high level sales management engagement, general sales force
engagement, sales training and managing sales process issues and conflict
resolution.

 

6.               Supplier agrees to provide an HP focused marketing support
person responsible for, but not limited to, creating and delivering HP sales
tools, marketing promotions, collateral, event coordination and advertising
support

 

7                [***].

 

8.               Supplier agrees to provide training support, including, but not
limited to, quarterly training events, technical support for product
configuration and call center training.

 

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9.               As it relates to any joint new product development, Supplier
will support a [***] providing [***].  Supplier agrees to support HP with
exclusivity on any unique features where HP has invested financially such as
with NRE in the development of the feature or where both parties have mutually
agreed on exclusivity prior to the implementation of the feature...

 

10.         [***].

 

11.         Supplier will perform, as mutually agreed by the parties, reasonable
agency compliance testing per HP’s requirements and provide HP certifications
from agencies as required by HP.

 

12.         [***].

 

13.         [***].

 

14.         Supplier will provide source code for all learning product materials
but not limited to; installation guides, user guides and service guides.

 

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EXHIBIT H

 

TO PRODUCT PURCHASE AGREEMENT
BETWEEN HP AND OVERLAND STORAGE

 

 

SOFTWARE AND DOCUMENTATION WARRANTY

 

 

To the extent Product includes or constitutes Software and with respect to
related Documentation, Supplier warrants and represents to HP, in addition to
the warranties set forth in Article 9 of the Agreement:

 

1.               That Supplier has, as of date of delivery, and perpetually
thereafter, clear title for sufficient proprietary rights in and to the Software
and Documentation to grant HP any license, lease or other non-ownership rights
granted in and to the Software and Documentation and that the Software and
Documentation are free of any and all restrictions, settlements, judgments or
adverse claims that might adversely affect any such right granted HP.

 

2.               That the Software will conform to Specifications and will
operate substantially in accordance with the Specifications and Documentation.

 

3.               That the Software will not (1) contain lock out devices or have
any virus, disabling device, time bomb, Trojan horse, back door or any other
harmful component, (2) replicate, transmit or activate itself without control of
a person operating the computing equipment on which it resides, (3) alter,
damage or erase any data or other computer programs without control of a person
operating the computing equipment on which it resides or (4) contain any code,
key, node lock, time-out or other function whether implemented by electronic,
mechanical or other means which restricts or may restrict use or access to
programs or data based on residency on a specific hardware configuration,
frequency or duration of use, or other limiting criteria.

 

4.               That the Software and Documentation, including accompanying
trademarks, copyrights and trade names, do not violate or infringe any patent,
copyright, trademark, trade secret or other proprietary right of any third
party, that Supplier is not aware of any facts upon which such a claim for
infringement could be based and that Supplier will promptly notify HP if it
becomes aware of any claim or any facts upon which a claim could be based.

 

[***]

 

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EXHIBIT I

 

TO PRODUCT PURCHASE AGREEMENT
BETWEEN HP AND OVERLAND STORAGE

 

 

FLEX / BUFFER MODEL

 

Supplier shall develop and implement internal processes to provide HP maximum
flexibility and shall maintain buffer inventory as directed. Subject to and in
accordance with Section 5.4 of the Product Purchase Agreement, [***]

 

Flex is defined as ability to accept incremental demand.

 

Buffer is defined as ability to pull-in existing demand.

 

HP’s flex requirements are:

 

Number of Calendar
Days Prior to Scheduled
Demand Date

 

HP’s Maximum
% Increase

 

HP’s Maximum
% Decrease

 

Maximum USD
liability for
Decreases of HP
Unique Product **

0 – 30

 

[***]

 

[***]

 

[***]

31 – 60

 

[***]

 

[***]

 

[***]

61 – 90

 

[***]

 

[***]

 

[***]

91 +

 

[***]

 

[***]

 

[***]

 

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* Any weekly incremental upside above these percentages will be responded to
with best reasonable efforts in the areas of number of units and replenishment
cycle time.

 

[***]

 

In addition to the weekly EDI transmission, HP also agrees to chair a weekly
interlock meeting with Supplier to review short and long term Forecast updates.

 

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EXHIBIT J

 

TO PRODUCT PURCHASE AGREEMENT
BETWEEN HP AND OVERLAND STORAGE

 

 

QUALITY ASSURANCE REQUIREMENTS AND
ADDITIONAL PRODUCT WARRANTIES

 

 

This exhibit specifies the Quality agreement that has been reached between
Supplier and HP.  This exhibit applies to all automated tape libraries purchased
from Supplier unless otherwise specified.

 

1.                                      Warranty

 

Supplier hereby warrants that for [***] months from the date of Delivery of
Product(s) to Buyer or to Buyer’s customers, that (i) all Product(s), shall be
free from defects in material, workmanship, and design; and (ii) shall conform
to applicable specifications drawings, samples, and descriptions which
references this agreement; and (iii) shall be suitable for the purpose for which
they were intended.

 

2.                                      Supplier’s Annualized Return Rate (SRR)
/ Supplier’s Annual Field Rate (SFR)

 

Supplier shall incorporate sufficient design margin, quality control, and
reliability tests on tape libraries purchased by HP to ensure that the agreed to
SRR/SFR is not exceeded.  The SRR/SFR for the individual tape drive family will
be referenced in the HP Product Specification.  SRR performance goals will be
communicated via the QBR.  Supplier shall support Field Performance Analysis
initiatives and other related activities as needed to reduce SRR/SFR.

 

[***]

 

3.                                      Epidemic Failure

 

a. “Epidemic Failure” shall have either of the following two meanings:

 

1.               The occurrence of multiple failures of the same component(s),
for the same cause, to the extent that the annualized failure rate exceeds [***]
the agreed upon failure rate in the HP Product Specification. This annualized
failure rate shall be based on a [***], and Supplier and HP must agree that the
failures have been properly diagnosed and that the failure count for that cause
is accurate.

 

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2.               Random supplier attributable failures for multiple causes to
the extent that the annualized failure rate exceeds [***] the agreed upon
failure rate in the HP Product Specification. This annualized failure rate shall
be based on a [***], and supplier and HP must agree that the failures have been
properly diagnosed and the failure count for that cause is accurate.

 

b. Epidemic failure process definition and compensation

 

1.               In the event HP believes there has been an Epidemic Failure, HP
shall immediately provide written notice to Supplier.

 

2.               No later than [***] following receipt of such notice, Supplier
shall use its reasonable efforts to (a) stop production until containment and/or
corrective action is in place, (b) provide a plan for conducting complete root
cause failure analysis, and (c) begin implementing a corrective action plan as
soon as is reasonably practical.

 

3.               [***]

 

4.               [***]

 

5.               [***]

 

4.                                      FIRMWARE CONTROLS

 

Supplier shall control distribution and use of diagnostics and Firmware shipping
with the Product.  Firmware revision shall be traceable to the serial number of
the units.  For firmware not created by HP, this information shall be conveyed
to HP for field tracking purposes.

 

Supplier shall back up all HP-supplied test software on media that will allow
testing of individual products.  [***].

 

5.                                      PRODUCT TRACEABILITY

 

Supplier shall maintain traceability records for all regulatory-controlled
products listed in agency reports.  Such products must be traceable from the
source of manufacture by lot or date code through the manufacturing process, and
to their final destination via serialization.  Traceability information shall be
provided to HP upon request.  Traceability must be in place by date code or
serial number for all returned FRU’s.

 

6.                                      SAFETY AND REGULATORY AGENCY REPORTS

 

Supplier shall provide copies of all regulatory and safety agency submittal
reports and approvals as defined in the Supplier Management Process.

 

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7.                                      New Material Requirements

 

HP will not purchase, or accept delivery, of Product that has been shipped to
any of Supplier’s customers.  Supplier shall notify HP in writing:  A)  if such
Product was mistakenly shipped to HP or B)  to request approval prior to
shipment of such Product to HP in order for Supplier to meet obligations to HP.

 

8.                                      Supply Interruptions

 

Supplier will not intentionally ship any Product to HP with a potential problem
that could result in a channel purge or Product hold.  Supplier’ goal is to have
zero Product purges or Product holds in HP’ process.

 

9.                                      Supplier Management Process (formally
the Supplier Development Process)

 

Supplier will adhere to all aspects of HP’ Supplier Management Process.  All
data requested by HP will be provided by Supplier during the 5 Step
qualification process.  Supplier will implement an agreed to Process Management
Plan (PMP) prior to Step 3 release.

 

10.                               Final Audit / Out of box Audit Quality (OBA)

 

Supplier will perform “Out of Box Audit” (OBA), [***].

 

Upon failure, a clearance will be completed of both finished goods Product of
the same part number, and WIP. If repeated failures are found, all potentially
impacted inventory within Supplier control will be screened/corrected, an
estimate of exposure to HP calculated and communicated to HP Procurement
Engineering [***] of the original failure.

 

All OBA failures will require the immediate generation of an 8D and
communication to HP per the 8D response guidelines detailed below in the “closed
loop corrective action process”.

 

11.                               Ongoing Reliability Testing

 

Supplier will be responsible for demonstrating Product reliability meets
specified goals both prior to Step 2 via RDT (Reliability Demonstration Testing)
and thereafter on ongoing revenue shipments by conducting an On-Going
Reliability Test (ORT) on Product supplied to HP.  The ORT plan will be modeled
in accordance with MIL STD 781, Probability Ratio Sequential Test (PRST). ORT
testing is the process whereby the Product MTBF is verified [***].  In addition
ORT is to, monitor the outgoing quality level from production, assure HP the
process is in manufacturing control, and minimize the potential for “early life
or field” failures.

 

The conditions and criteria for the continuous On-Going Reliability Test shall
be mutually defined and agreed to by HP and the Supplier.  Failures causing test
to enter the failure zone will be reported to HP Procurement Engineering [***]
and will require an 8D for closure.  Test results will be reported [***].

 

12.                               Failure Analysis

 

Supplier will be responsible for performing [***] led failure analysis in
conjunction with the HP Procurement Engineering Team.  The preliminary failure
analysis results will be

 

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communicated to HP [***].  For any library or library FRU that is returned to
Supplier for detailed failure analysis, the closed loop corrective action
process will be used.

 

13.                               Closed Loop Corrective Action Process

 

In the event that HP encounters problems of any nature that affect the ability
to sustain full manufacturing needs (late Product shipment, Product shortage,
receiving inspection failures, in-line manufacturing failures, material purges,
etc.), HP will notify the Supplier and generate a Supplier Corrective Action
Request (SCAR) using the Compaq 8-D process or equivalent.

 

The Supplier is required to acknowledge receipt of the Request for Corrective
Action within [***] Supplier [***].  Furthermore, the Supplier is required to
define and implement an effective containment [***] of receipt of the SCAR.  A
long term, corrective action plan should be available [***] working days of root
cause identification.  The proposed timeframes should be considered general
guidelines.  Each SCAR should be assessed for its criticality and urgency and
action taken appropriately.

 

The Supplier is expected to respond with the following information:

 

[***]

 

[***]

 

[***]

 

[***]

 

Furthermore, the Supplier will report internal problem issues including failure
to meet agreed upon quality goals (Purges, OBA, and ORT. etc).  The Supplier
will adhere to the aforementioned response times.

 

14.                               Process/Product Change Notification Process

 

The Supplier must notify HP of any significant changes to the manufacturing
process, Product, test or critical components [***].  Significant changes
include, but are not limited to the following:

 

•                  Changes affecting Form, Fit, or Functionality of the Product

•                  Changes in the primary manufacturing site/location

•                  Changes in Supplier’s final acceptance test process

•                  Changes in critical components

 

During the development phase, all proposed SCR/PCN’s should be forward to the
appropriate Design Engineer.  During the production phase, proposed all
SCR/PCN’s should be forwarded to the appropriate Procurement Engineer.  The
notification must be received at HP no later than [***] to the Supplier’s
planned implementation date.  At a minimum, the notification must contain the
following information:

 

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•                  [***]

•                  [***]

•                  [***]

•                  [***]

•                  [***]

•                  [***]

•                  [***]

•                  [***]

 

Final approval is granted by HP, based on successful Product analysis and
qualification [***]), and is subject to audit by HP.  The Supplier and all
affected departments shall be notified in writing of the final status.  HP will
make every effort to shorten the qualification timeframe whenever possible. 
[***].

 

Although timeframes for SCR/PCN notification and qualification have been
defined, it is understood that each SCR/PCN should be reviewed for criticality
and urgency and action taken appropriately.

 

15.                               Reporting Requirements

 

Supplier will adhere to the following reporting timelines.

 

Any critical problems on which HP has issued an 8D will be responded to per the
timeline above.

 

Supplier will inform HP within [***] of any incident whereby a violation of a
critical parameter in the Process Management Plan (PMP) has occurred.

 

Supplier will inform HP within [***] of any ORT or OBA failures.

 

Reaction guidelines and stop ship criteria will be established around “Out of
Box Audit”, in accordance with the aforementioned sampling plans.

 

The following information will be provided by Supplier on a [***] basis on the
due dates mutually agreed as follows:

 

•                  Summary of all [***] led F/A libraries analyzed for HP.

•                  Summary of all libraries / library FRU’s returned to Supplier
where root cause failure analysis was specifically requested.

•                  [***] summary of all failure analysis performed on failing
libraries from any HP factory integration testing.

•                  [***] by defect description for Total fallout.

•                  Product/Process Change Notification Log (SCR)

•                  8D’s on top [***] problems by defect.

•                  SRR and SFR data

•                  Process Management Plan (if changed from current released
version)

 

63

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•                  Updated 8D for the following if required:

• Purges/Product Hold

• OBA failures

• ORT failures

 

16.                                 [***]

 

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EXHIBIT K

 

TO PRODUCT PURCHASE AGREEMENT
BETWEEN HP AND OVERLAND STORAGE

 

 

PRICING

 

 

Supplier will provide a Product and Spares pricing schedule to HP [***] which is
incorporated into this Agreement by reference. It will include Supplier’s part
number and description, HP’s part number and current quarter pricing plus [***].
The terms and conditions of this Agreement shall apply to those Products and
Spares purchased by HP.

 

Supplier agrees that pricing [***].

 

65

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EXHIBIT M

 

TO PRODUCT PURCHASE AGREEMENT

BETWEEN HP AND OVERLAND STORAGE

 

HP REGIONAL TRADE GUIDELINES

TABLE OF CONTENT

 

SECTION 1

HP Trade Basics (Overview)

 

 

 

 

 

1.1

Compliance

 

 

 

 

 

 

1.2

Terms of Sale

 

 

 

 

 

 

1.3

Country of Origin

 

 

 

 

 

 

1.4

Valuation

 

 

 

 

 

 

1.5

Shipping Documentation

 

 

 

 

 

 

1.6

Records

 

 

 

 

SECTION 2

COO Marking/Labeling

 

 

 

 

 

2.1

COUNTRY OF ORIGIN

 

 

 

 

 

 

2.2

Marking

 

 

 

 

 

 

2.3

COO Checklist

 

 

 

 

SECTION 3

SHIPPING DOCUMENTATION

 

 

 

 

 

3.1

Documentation Requirements

 

 

 

 

 

 

3.2

Commercial Invoice

 

 

 

 

SECTION 4

REPORTING/RECORDKEEPING

 

 

 

 

 

4.1

Reporting/Data Transmissions

 

 

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4.2

Records

 

 

 

 

 

 

4.3

Trade Incidents

 

 

 

 

 

 

4.4

Audit

 

 

SECTION 1                                   HP Trade Basics

 

1.1                               Trade Compliance

Each Supplier shipping location bears ultimate responsibility for ensuring its
own import/export compliance; however, HP is responsible for setting baseline
policies and guidelines for Supplier operations.  The following is distributed
in order to clearly convey HP’s minimum trade compliance expectations and to
provide an operations reference tool for Supplier locations; responsibility for
developing and implementing procedures to comply with the following belongs
solely to the Supplier .

 

1.2                               Terms of Sale

SUPPLIER IS RESPONSIBLE FOR IMPLEMENTING THE SALES TERM (EG. FOB, FCA, DDP,
ETC.) NEGOTIATED WITH HP.  SUPPLIER’S RESPONSIBILITIES MAY INCLUDE, BUT ARE NOT
LIMITED TO, THE FOLLOWING:

•                  Warehouse storage at point of origin

•                  Warehouse labor at point of origin

•                  Export packing

•                  Loading at point of origin

•                  Inland freight to origin port

•                  Port receiving

•                  Loading on vessel

•                  International freight/transport

•                  Customs clearance at destination port

•                  Delivery to final destination

 

1.3                               Country of Origin

Each Supplier site is responsible for determining the appropriate country of
origin (“COO”) for the product(s) it manufactures/assembles and for marking the
products accordingly.  Further, each site must ensure that shipping
documentation and EDI confirmation signals accurately convey shipment-level COO
data; Country of Origin is a mandatory line-item data element for all HP EDI
shipping confirmation (eg. 856/4010) signals.  Finally, each site must cooperate
fully with HP in supplying data to facilitate HP’s origin reporting requirements
and qualification for preferential origin programs such as NAFTA, IFTA, FMF,
EXIM and the like including, but not limited to, all requested origin analysis,
certificates of origin, manufacturer’s affidavits, data transmissions, and
special reporting.

 

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Additional HP COO marking/labeling guidelines are set out in Section 2 of this
Exhibit.

 

1.4                               Valuation

For each and every transaction where HP is to be importer of record into the US,
the Supplier site is responsible for ensuring that commercial documentation
accurately reflects the actual price paid or payable between HP and the site. 
It is Supplier’s responsibility to reconcile its financial records against
commercial documentation in order to validate HP’s use of Transaction Value for
declarations to US Customs under Section 402(b)(1) of the Trade Agreements Act
of 1979 (TAA; 19 U.S.C. 1401a); no alternate valuation methodologies are used or
approved for HP transactions.

 

Zero dollar values are unacceptable for US Customs purposes.  Where items are
provided “free of charge,” the commercial invoice must reflect fair market value
for the products; the nomenclature “Value for Customs Purposes Only,” may be
used in these instances.

 

1.5                               Shipping Documentation

All Supplier sites must be capable of producing accurate and complete shipping
documentation for each shipment.  Supplier is responsible for knowing and
understanding shipping standards applied in the normal course of international
business and for knowing and understanding additional HP requirements outlined
in this Exhibit.

 

1.6                               Recordkeeping/Reporting

Each Supplier site must comply with record-keeping, data-transmission,
incident-reporting, and audit requirements set out in Section 4 of this Exhibit.

 

SECTION 2                                   Labeling/ Marking

 

2.1                               Country of Origin

A Product’s country of origin is where the Product is wholly manufactured or the
final location where a substantial transformation occurs.  A Product is
substantially transformed if the end product functions in a significantly
different manner than the individual components. As a practical matter, Customs
looks to whether the final assembly has a new “name, character, and use” from
the component level parts.

 

[***]

 

2.2                               Marking

Every article of foreign origin entering the United States must be marked with
the English name of the country of origin preceded by the HP standard
nomenclature: “PRODUCT OF.”  This marking must appear in a conspicuous, legible,
indelible

 

68

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and permanent form on the outermost packaging (e.g. pallet), on the consumer
packaging (box in which the item will arrive to the ultimate consumer), and on
the Product itself.

 

For the human readable portion of HP’s standard label, COO must be indicated by
the complete country name; abbreviations are unacceptable.  For the barcode scan
area, COO should be represented by the 2-digit ISO country code; one digit codes
(eg. A = US) are NO LONGER ACCEPTABLE nor supported by HP.  Material with
multiple COOs must be segregated, separately palletized (if applicable) and
separately scanned so as to be represented on the commercial invoice as
individual invoice line items with individual COOs.

 

COO Product markings/labels must ALWAYS match COO indicated on the commercial
invoice and reported to HP via the shipping confirmation signal.  Supplier is
responsible for implementing procedures to ensure that labels are checked for
accuracy and audited against shipping documentation/data transmissions.

 

Further clarification regarding HP marking standards is provided in HP’s COO
Marking Policy, as well as HP’s Country of Origin Encoding spec [***]

 

2.3.1                     COO Checklist

Supplier must adhere to the following COO requirements:

 

•                  Must implement processes to determine correct COO for
Products.

 

•                  Must ensure that COO is labeled on outermost packaging
conspicuously, legibly, indelibly, and permanently.

 

•                  Must ensure that COO is labeled on consumer packaging (box in
which the item will arrive to the last person in the US who will receive it in
its imported form) conspicuously, legibly, indelibly, and permanently.

 

•                  Must ensure that COO is labeled directly on the Product
conspicuously, legibly, indelibly, and permanently.

 

•                  Must ensure that the accurate COO prints in the designated
field on the commercial invoice.

 

•                  Must ensure that COO designated for a particular Product to
be shipped is consistent across all labels and documentation.

 

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SECTION 3                                   Shipping Documentation

 

3.1                               Documentation Requirements

Supplier must adhere to the following trade requirements:

 

•                    Must produce accurate and complete shipping documentation
for each and every shipment.  All text must be in English; all monetary amounts
must be represented in US dollars.

 

•                  Must be able to reproduce shipping document on demand (with
or without requested modifications and/or corrections) for a minimum of [***]
after shipment.

 

•                  Must have internal audit procedures in place for
verification/correction of all outbound documentation issues including, but not
limited to, proper print alignment.  Where data is printed more than 1/16” off
assigned documentation fields, the documentation must be discarded and reprinted
before shipment release.

 

3.2                               Commercial Invoice

 

The following fields are required for each and every commercial invoice:

 

•

Ship To Address

Address to which the Goods are being shipped.
Provided by EDI feed from HP.*

 

 

 

•

Bill To Address

Address to which billing information will be sent.
Provided by EDI feed from HP.*

 

 

 

•

Ship To ID #

Specific ID # assigned to each Ship To address.
Provided by EDI feed from HP.*

 

 

 

•

Bill To ID #

Specific ID # assigned to each Bill To address.
Provided by EDI feed from HP.*

 

 

 

•

Ship ID/Invoice No.

Unique number assigned at the time of shipment to each outbound shipment.  This
number should never be repeated and should appear on the shipping label tying
the freight to the commercial invoice for a given shipment.
Assigned by the Supplier site.

 

 

 

•

Date

Actual shipment date.
Assigned by the Supplier site.

 

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•

Page

Commercial invoice page number.  Multi-page invoices will follow the format eg.
1/4, 2/4, etc.
Assigned by the Supplier site.

 

 

 

•

Bill of Lading No.

Air waybill number utilized for transport.
Assigned by the Supplier site.

 

 

 

•

Shipped Via

HP-approved courier/freight forwarder handling the transport.
Provided by EDI feed from HP.*

 

 

 

•

Freight Terms

Party responsible for freight charges.
(Eg. “Pre-paid,”  “collect”)
Provided by EDI feed from HP.*

 

 

 

•

Terms of Sale

Incoterm designating responsibilities of the parties.
(Eg. EXW, FCA, DDP)
Provided by EDI feed from HP.*

 

 

 

•

Terms of Payment

Agreed upon payment terms.
[***]
Provided by EDI feed from HP.*

 

 

 

•

Customer P.O. No.

Purchase order number assigned to the transaction
Provided by EDI feed from HP.*

 

 

 

•

Sales Order No.

Sales Order number under which the shipment is placed.
Provided by EDI feed from HP.*

 

 

 

•

Line Item

Sales Order line item fulfilled by the item shipped.

 

 

Provided by EDI feed from HP.*

 

 

 

•

Product No.

HP part number assigned to the Product.

 

 

Provided by EDI feed from HP.

 

 

 

•

Description

Description of the Good(s).

 

 

Provided by EDI feed from HP.*

 

 

 

•

Quantity

Number of units of the particular part shipped.

 

 

Provided by EDI feed from HP.*

 

 

 

•

Unit Price
shipper

Actual dollar value to be paid to the Supplier for one unit of the particular
part number.
Provided by EDI feed from HP.*

 

71

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•

Extended Price

Sum of quantity field multiplied by unit price.
Provided by EDI feed from HP.*

 

 

 

•

Total Value

Sum of extended values for all line items.
Provided by EDI feed from HP.*

 

 

 

•

Country of Origin

The country in which the Goods were manufactured.
DETERMINED AND APPLIED BY THE SUPPLIER SITE.

 

 

 

•

License

Export License exception determined by HP trade.
Provided by EDI feed from HP.*

 

 

 

•

ECCN

Export Commodity Control # determined by HP.
Provided by EDI feed from HP.*

 

 

 

•

HTS

Harmonized tariff scheduleclassification determined by HP.
Provided by EDI feed from HP.*

 

 

 

•

Destination Control

Statement required to be printed on all commercial invoices per the US Export
Administration Regulations.
Provided by EDI feed from HP.*

 

In accordance with controlling customs requirements, HP also requires line level
itemization of the following:

•                  Desktop computers necessitate separate itemization of the
CPU, mouse, and keyboard.

•                  All items shipped with “dropped-in-the-box” (uninstalled)
software necessitate separate software itemization.  Software country of origin
is the location where programming/recording is installed on the media.  Software
value is to be indicated per the media (unrecorded CD, diskette, or tape) value
only.

 

--------------------------------------------------------------------------------

* ALL data transmitted from HP must be verified for accuracy.  Supplier is
responsible for implementing procedures demonstrating reasonable care in the
verification of all data received from HP.

 

72

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SECTION 4                                   Reporting/ Recordkeeping

 

4.1                               Reporting/Data Transmissions

The following trade data elements must be printed on each commercial invoice and
must be returned to HP via the standard electronic/EDI Shipping Confirmation
signal:

•                  Country of Origin (line item level)

•                  HTS Classification (line item level)

•                  ECCN (line item level)

•                  License (line item level)

•                  Destination Control Statement

These are HP-required data elements for the Shipping Confirmation signal. 
Failure to transmit these items will result in signal rejection.

 

4.2                               Records

Each Supplier site must maintain a system for retention, retrieval and
reproduction (for a period of not less than six calendar years from the date of
each shipment) of original shipping, export, customs, import and other
trade-related documentation (“Trade Control Records”), pertaining to the
international transport of HP Goods.  Such record keeping system will comport
with the legal requirements of the U.S. and other nations including, but not
limited to, requirements set out in Parts 762 and 772, U.S. Department of
Commerce, Export Administration Regulations and the U.S. Customs Record-Keeping
Regulations, 19 C.F.R. 163.

 

Supplier, upon receipt of written notice from HP, will collect, reproduce if
required, and provide to HP (at Supplier’s expense) originals and/or
satisfactory copies of 100% of the Trade Control Records as HP may request from
time to time.  All HP requests for Trade Control Records must be fulfilled
within 15 business days of HP’s written request, or the response date required
by an official government record production request or subpoena, whichever is
the lesser time for response.  Supplier will not destroy or render inaccessible
any of the Trade Control Records relating to HP transactions, without having
first obtained the express written permission from HP.

 

4.3                               Trade Incidents

Supplier will provide immediate notice to HP in the event of an action by U.S.
or other national government customs/export authorities which relates
specifically to Goods or Services provided to HP by Supplier. Such government
communications and actions may include, but are not limited to, cargo
detentions, cargo seizures, subpoenas, record production requests and search
warrants.  Issues, questions, or incidents arising pursuant to this section
should be escalated to HP via the

 

[***]

 

4.4                               Audit

Supplier will afford HP, and HP’s duly appointed agents, reasonable access to
Supplier’s premises for trade compliance audit purposes.  Supplier further
agrees

 

73

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to fully cooperate with HP in this regard, to respond in a timely manner to HP’s
requests for production of Trade Control Records, and to comply with all
remedial or corrective actions that HP may specify.

 

74

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