Confidential
Exhibit 10.4
***Text Omitted and Filed Separately
with the Securities and Exchange Commission.
Confidential Treatment Requested
Under 17 C.F.R. Sections 200.80(b)(4)
and 240.24b-2.
MASTER PURCHASE AGREEMENT
by and between
Dot Hill Systems, B.V.
with a place of business at
Marssteden 95, 7547 TD Enschede, The Netherlands
and Dot Hill Systems Corp.
with a place of business at
6305 El Camino Real, Carlsbad, CA 92009
as well as all its subsidiaries
(-hereinafter collectively “VENDOR”-)
and
Fujitsu Siemens Computers GmbH
with a place of business at
Domagkstrasse 28, 80807 München, Germany
and RELATED COMPANIES
(-hereinafter “FSC”-)
(FSC and VENDOR are also referred to hereinafter singularly as “Party” or
together as “Parties”)
Effective Date: January 13, 2006

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RECITALS

(A)   Whereas, VENDOR owns and manufactures products defined below as CP in
which FSC is interested to buy for its own use and for SELLING PURPOSES.      
(B)   Whereas, VENDOR is willing to deliver such CP to FSC in accordance with
the terms and subject to the conditions stated herein.       (C)   Whereas FSC
shall be entitled to resell such CP to other parties.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged,
THE PARTIES HEREBY AGREE AS FOLLOWS:

1.   DEFINITIONS       “AGREEMENT” shall mean this AGREEMENT and all attached
ANNEXES, all documents or DOCUMENTATION referenced in this AGREEMENT, and all
numbered Amendments to this AGREEMENT that are executed by authorized
representatives of the PARTIES in the future.       “CONFIRMED DELIVERY DATE” is
the date for delivery of CP according to agreed Incoterms that has been
confirmed by VENDOR.       “CONFIDENTIAL INFORMATION” shall mean information and
data of a confidential nature, whether in oral, written or electronic form or
any other form whatsoever, including but not limited to business, commercial,
research, developmental, manufacturing, operating, performance, process, product
and any other technical information, know how, intellectual property rights,
samples, models, apparatus and all data bearing media containing or disclosing
such information and techniques which are made available pursuant to this
Agreement and includes the provisions of this Agreement and the subject matter
relating thereto.       “CP” shall mean the Contractual Product(s) presently
named as stated, described and specified in ANNEX 1 CONTRACTUAL PRODUCTS and
ANNEX 2 DOCUMENTATION, including all future improvements or modifications to
same that are made available by VENDOR to FSC under this AGREEMENT. CP shall
mean complete equipment(s), units, FRUs, Spare Parts, and SOFTWARE incorporated
therein -if any.       “DOCUMENTATION” shall mean any SYSTEM DOCUMENTATION, USER
DOCUMENTATION and other documentation that is related to the CP as listed in
ANNEX 2 DOCUMENTATION.       “EMS” (Electronic Manufacturing Service) /”ODM”
(Original Design Manufacturer) shall mean any third party to this agreement who
manufactures products for FSC.       “EFFECTIVE DATE” shall mean the date stated
on the cover page or — if unspecified — the last-to-occur date of the signing of
this AGREEMENT by the PARTIES.

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    “EPIDEMIC FAILURE” shall mean defects or malfunctions in the CPs exceeding
the failure rates or percentages detailed in ANNEX 7 QUALITY ASSURANCE.      
“FRU” or “Field Replaceable Unit” shall mean a subassembly of a CP, or Spare
Part, which can be replaced at the customer site.       “INVENTORY” shall mean
CPs in stock at the premises of FSC which are in the ownership of FSC.      
“ORDERING PROCEDURE” means the procedure specified in section 2 of this
AGREEMENT.       “REQUESTED DELIVERY DATE” is the date that FSC has requested
for the delivery of an order placed by FSC to VENDOR.       “RELATED COMPANIES”
shall mean subsidiaries of Fujitsu Siemens Computers (Holding) B.V., Netherlands
and its subsidiaries. For the purpose of this definition, “subsidiaries” shall
mean companies in which a parent company has the majority of votes and/or stock.
      “SELLING PURPOSES” in the context of this AGREEMENT shall include the
right of FSC to sell or resell CP on its own or to incorporate CP into other
products of FSC.       “SOFTWARE” –if any- shall mean any computer software
program in machin-readable form made available by VENDOR to FSC.       “SPARE
PARTs” shall mean those are listed in the BASIC SPARE PARTS LIST as attached to
ANNEX 6 SPARE PARTS AND REPAIR.       “SYSTEM DOCUMENTATION” shall mean the
current and updated version(s) of the technical documentation for the
manufacturing, engineering and maintenance of CP as well as packaging and
transportation instructions, as listed in ANNEX 2 DOCUMENTATION.       “USER
DOCUMENTATION” shall mean all User Manuals and/or Reference Guides for the CP as
described in ANNEX 2 DOCUMENTATION as updated upon notification.       “WARRANTY
PERIOD” is the period of time, starting at the date of first delivery from
VENDOR to FSC, during which CPs are warranted by VENDOR and which is specified
in ANNEX 1 CONTRACTUAL PRODUCTS.   2.   ORDERING PROCEDURE   2.1   Purchase
order(s) shall be placed by FSC in accordance with the provisions of this
Section 2 of the AGREEMENT.   2.1.1   FSC written or electronic purchase
order(s) shall be issued in the scope of this AGREEMENT and shall then form the
basis of VENDOR’s delivery obligations.       Each purchase order will include
the following particulars:

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    Purchase Order number and date

  -   CP quantity to be delivered     -   Specification number and revision
level     -   Part number and revision level     -   Item description     -  
Unit price     -   REQUESTED DELIVERY DATE     -   Shipping instructions and
delivery place

    FSC may also issue purchase order(s) under this Agreement for services or
Spare Parts that are to be performed by VENDOR pursuant to the terms and
conditions set forth on ANNEX 6.       All other terms and conditions on any
purchase orders submitted under this Agreement shall be void and of no effect.  
2.1.2   VENDOR shall accept each purchase order in writing or by electronic
means [***] or reject such purchase order within the same time frame, but only
if it is not in conformance with the terms and conditions of this AGREEMENT.  
2.1.3   The confirmation of each purchase order will include the following
particulars:

  -   purchase order number and date     -   CP quantity to be delivered     -  
Item description     -   VENDOR Part number     -   Unit price     -   CONFIRMED
DELIVERY DATE

    In the event that the confirmation does not state a CONFIRMED DELIVERY DATE,
the REQUESTED DELIVERY DATE shall be deemed to be the CONFIRMED DELIVERY DATE.
All orders will be governed by this Agreement regardless of whether an order
references this Agreement.   2.1.4   If the Purchase Order is neither expressly
accepted nor rejected within the period stated in Section 2.1.2 of this
AGREEMENT, it shall be deemed accepted. Acceptance or rejection notices shall be
sent to the respective departments/personnel to be designated by the Parties for
this purpose.   2.1.5   Emergency Orders       FSC may purchase [***] on an
emergency basis and VENDOR [***]. Deliveries of emergency orders shall be
effected separately according to the Lead Times stated in ANNEX 3 FORECAST, LEAD
TIMES. If VENDOR is the party to arrange for shipping, VENDOR will provide the
dispatch data to FSC after shipment (flight number, AWB-number, Bill of Lading
by FAX). FSC shall be notified by VENDOR when shipments have been delivered to
VENDOR’s carrier.   2.1.6   Cancellation or Rescheduling       Even after
acceptance of a purchase order FSC may cancel or reschedule such purchase order
in writing [***] pursuant to the terms in ANNEX 3. Details, in particular
cancellation or rescheduling charges, if any, are specified in ANNEX 3 FORECAST,
LEAD TIMES.

***CONFIDENTIAL TREATMENT REQUESTED

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2.1.7   Forecast       FSC will provide a non-binding rolling forecast regarding
its requirement of CP for VENDOR’s planning purposes only. The details are
stated in ANNEX 3 FORECAST, LEADTIMES.   2.1.8   Lead times       Lead times for
CP are stated in ANNEX 3 FORECAST, LEAD TIMES.   2.2   Drop Shipments       Only
upon expressly written FSC instruction and upon VENDOR’s mutual agreement shall
VENDOR make direct deliveries to FSC customers. Should drop shipments be
requested by FSC, the procedure for the execution of and agreement upon such
shipments is defined in ANNEX 14 DROP SHIPMENT.   2.3   In order to optimize the
supply-chain process, the Parties will co-operate in establishing an e-planning
and e-ordering system. Provided the purchasing volume reaches a reasonable
level, the Parties agree to invest the necessary resources and to review each
others requirements to set up the e-planning and e-ordering process, subject to
mutual agreement on the necessary technical infrastructure and, if necessary,
commercial terms and conditions.   3.   DELIVERY   3.1   VENDOR shall deliver
the CP according to the ORDERING PROCEDURE to the designated delivery place at
the CONFIRMED DELIVERY DATE according to the lead times set out in Annex 3
FORECAST, LEAD TIMES. Delivery shall be affected according to Incoterms as
specified in ANNEX 1 CONTRACTUAL PRODUCTS.   3.2   VENDOR shall comply with FSC
directions concerning carrier(s) and means of transportation or routing. If FSC
fails to indicate a specific carrier, VENDOR shall itself arrange for
appropriate and agreed transportation.   3.3   In those instances where VENDOR
is responsible for arranging for shipment, prior to each shipment VENDOR shall
notify FSC in writing of the dispatch data (e.g. flight number, AWB number, bill
of lading). VENDOR shall notify FSC when a shipment has been delivered to FSC’s
carrier.   3.4   [***], VENDOR shall keep records of the shipment(s) and the
related serial numbers and shall make them available to FSC on request.   3.5  
Each shipment shall be accompanied with the appropriate shipping papers. All
shipping papers and related invoices must inter alia state the correct purchase
order number, and the FSC material number. VENDOR’s shipping containers and
packing slips shall include the serial numbers of CPs shipped.

***CONFIDENTIAL TREATMENT REQUESTED

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3.6   Late Delivery       Should circumstances arise and become recognizable to
VENDOR which may lead to a late delivery, VENDOR shall notify FSC [***].      
If Vendor fails to meet the CONFIRMED DELIVERY DATE for CPs which was not
subsequently rescheduled or reconfigured at the request of FSC, and such failure
is not cured [***], FSC may cancel the shipment.       [***] in meeting a
respective CONFIRMED DELIVERY DATE, then FSC may elect to [***].       If Vendor
fails to meet the CONFIRMED DELIVERY DATE for CPs which was not subsequently
rescheduled or reconfigured at the request of FSC, and FSC informs VENDOR [***]
about existing FSC customer orders which would [***], and if FSC is actually
required [***], then VENDOR agrees to [***].   4.   TITLE, RISK OF LOSS       If
not otherwise agreed, title and risk of loss shall pass per terms and site
specified by the agreed Incoterm.   5.   PRICES   5.1   Prices for CP are set
out in in the Price List (ANNEX 1 CONTRACTUAL PRODUCTS), are quoted in US-$ and
are net prices unless specified otherwise. The prices for CP are on basis of the
respective Incoterm agreed in ANNEX 1 CONTRACTUAL PRODUCTS and include
appropriate packaging suitable for airfreight or seafreight, whichever way of
transportation has been agreed upon or is stated in the purchase order. Prices
do not include, and [***]. Notwithstanding the foregoing, [***].   5.2   The
prices stated in the Price List shall be updated [***]. In the event that there
are major changes in the market conditions and/or prices for such or similar
products or if there are major changes in the market conditions and/or prices of
materials, labor or overhead costs used by VENDOR or otherwise related to the
manufacture of the CP, [***].   5.3   If the PARTIES [***], FSC may [***].
Notwithstanding such [***], VENDOR shall [***]

***CONFIDENTIAL TREATMENT REQUESTED

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    [***].   5.4   VENDOR will provide FSC with a price forecast covering [***]
in advance, which will be updated [***]. The applicable price is the price of
the day upon which ownership of CP is being transferred to FSC according to the
agreed upon Incoterms.   5.5   Omitted.   6.   PAYMENT   6.1   Payment shall be
due [***]. Data bearing material (e.g. tapes, floppies) shall be [***]. If FSC
makes any payment due [***].   6.2   Payment shall not constitute acceptance of
the CP by FSC. FSC reserves the right to deduct any amounts due to FSC.   6.3  
Deleted   6.4   Either Party shall be entitled to set off any amounts due from
the other under this Agreement or any other existing contracts.   6.5  
Withholding of German tax will be handled according to the Double Taxation
Convention if existing- between VENDOR’s country and Germany. In such case
VENDOR may be required to provide a certificate of tax exemption from the German
Tax Authorities with respect to such license fees required to be paid by FSC to
VENDOR in order to avoid the imposition of such German withholding taxes. Unless
such certificate is submitted by VENDOR to FSC, FSC may be obligated to withhold
respective German tax amounts thereon.   7.   TRADENAMES, TRADEMARKS,
IDENTIFICATION, DOCUMENTATION   7.1   FSC shall use and market CP under its own
trade name, trademarks, symbol, logo and shall not use VENDOR’s trade names,
trademarks, symbols, logos without prior written approval of VENDOR.   7.2  
VENDOR grants FSC a limited, personal, non-exclusive, non-transferable license,
to use the SYSTEM DOCUMENTATION for FSC own business purposes according to
this AGREEMENT, including to revise or have revised, to reproduce or have
reproduced or to private label the SYSTEM DOCUMENTATION in unaltered or altered
form. Notwithstanding the foregoing, FSC shall obtain VENDOR’s prior written
consent to revise or alter the substance of the SYSTEM DOCUMENTATION, which
consent shall not be unreasonably withheld.   7.3   VENDOR grants FSC a limited,
personal, non-exclusive license, to reproduce or have reproduced, to use or have
used or to apply an FSC-brand the USER

***CONFIDENTIAL TREATMENT REQUESTED

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7.4   DOCUMENTATION in unaltered or altered form and to revise or have revised
and to translate or have translated such USER DOCUMENTATION. FSC shall be
entitled to grant its customers or distributors the non-exclusive,
non-transferable right to use the USER DOCUMENTATION. Notwithstanding the
foregoing, FSC shall obtain VENDOR’s prior written consent to revise or alter
the substance of the USER DOCUMENTATION, which consent shall not be unreasonably
withheld.   7.5   VENDOR shall permanently affix its serial number on CP for
identification purposes at a location mutually agreed to.   8.   QUALITY
ASSURANCE; TEST REQUIREMENTS; INTELLECTUAL PROPERTY RIGHTS; MARKETING FUNDS  
8.1   Each Party agrees to comply with its obligations relating to quality
assurance as set out in ANNEX 2 DOCUMENTATION and ANNEX 7 QUALITY ASSURANCE.  
8.2   Each Party agrees to comply with its testing obligations as set out in
ANNEX 15 TEST REQUIREMENTS.   8.3   Each Party agrees to comply with packaging
and labeling obligations of CP as set out in ANNEX 16 PACKAGING AND LABELING.  
8.4   The Parties agree that the terms and conditions set forth in ANNEX 18
INTELLECTUAL PROPERTY RIGHTS shall govern ownership and other rights regarding
intellectual property created under this AGREEMENT.   8.5   The Parties agree to
be bound by the terms and conditions set forth in ANNEX 19 MARKETING FUNDS
regarding the provision of marketing funds by VENDOR to FSC.   9.   DEAD ON
ARRIVAL   9.1   FSC may perform inspection/test at a FSC facility or the place
of destination or in FSC customer field based on random samples.   9.2   In the
event that

  a)   FSC finds out in such inspection/test that CP does not fully conform in
all material respects to the specification stated in ANNEX 1 CONTRACTUAL
PRODUCTS, the standards and criteria stated in ANNEX 7 QUALITY ASSURANCE and
VENDOR’s USER DOCUMENTATION, and VENDOR’s feature description -if any-, attached
to or made part of ANNEX 2 DOCUMENTATION, or     b)   CP cannot be put into
initial operation within the time frame defined in Appendix 1 to ANNEX 7 QUALITY
ASSURANCE.

    FSC will notify VENDOR without undue delay, in order to accelerate the
correction.   9.3   Furthermore, in a Dead On Arrival situation, FSC may – in
addition to its rights under Section 16 Product Warranty:

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  1)   after prior written agreement: [***] or     2)   return such CP to VENDOR
[***], or     3)   request VENDOR to replace affected CP, or     4)   If the DOA
defect rates exceed the values (dpm) as specified in Appendix 1 to ANNEX 7
QUALITY ASSURANCE, VENDOR will [***].

10.   SPARE PARTS, REPAIR       VENDOR shall deliver SPARE PARTS to FSC and
carry out a Repair Service for the CPs and SPARE PARTS according to the terms
and conditions stipulated under ANNEX 6 SPARE PARTS & REPAIR.   11.   SOFTWARE  
11.1   The provisions relating to SOFTWARE as specified in ANNNEX 5 SOFTWARE
shall apply.   11.2   VENDOR warrants that none of the SOFTWARE supplied to FSC
–if any- is or includes open source software.   12.   EMERGENCY MANUFACTURING
RIGHTS       VENDOR agrees to grant FSC Emergency Manufacturing Rights as
specified in and according to the terms and conditions stated in ANNEX 8
EMERGENCY MANUFACTURING RIGHT.   13.   INFRINGEMENT OF THIRD PARTY INTELLECTUAL
PROPERTY RIGHTS   13.1   VENDOR warrants that VENDOR is the owner of or has the
right to license to FSC all rights, title, and interest in and to the CP listed
in ANNEX 1 CONTRACTUAL PRODUCTS and to the DOCUMENTATION listed in ANNEX 2
DOCUMENTATION and any other documentation provided by VENDOR under this
Agreement, and that there are no infringement claims, disputes, or proceedings
pending or anticipated which may detrimentally affect either the rights granted
to FSC hereunder or the warranties and representation made to FSC under this
Section 13.1. Notwithstanding the foregoing, [***]. The Parties acknowledge and
agree that the sole and exclusive remedy for FSC, and sole and exclusive
obligation of VENDOR, with respect to a breach of this warranty is the
infringement indemnification provisions that are set forth below in
Section 13.2.   13.2   VENDOR agrees to defend, indemnify and hold FSC and its
RELATED COMPANIES its distributors and its/their customers harmless from any and
all claims, proceedings, cost, expenses, damages, penalties, and losses
(including

***CONFIDENTIAL TREATMENT REQUESTED

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    reasonable attorneys’ fees) resulting from any breach of the above warranty
in section 13.1, provided that FSC:

  1)   notifies VENDOR in writing of all such claims, disputes or and/or
proceedings [***];     2)   provides VENDOR with [***]; and     3)   [***].

13.2(a)  To the extent that VENDOR may do so without violating an obligation of
confidentiality or other similar obligation to a third party, VENDOR shall give
FSC prompt written notice of any and all claims, disputes, proceedings or
threats of the same, involving the infringement by the CPs or Spare Parts of any
third party intellectual property rights Without prejudice to the indemnity
obligations of VENDOR as set forth in Section 13.2, the parties will promptly
confer regarding any such claims, disputes, proceedings or threats, and mutually
agree upon a reasonable plan of action with respect to the circumstances.   13.3
Independent of the foregoing, in the event that VENDOR is enjoined by a court
from distributing or marketing any CP, VENDOR shall use its best reasonable
efforts to, at VENDOR’s option:

  1)   acquire from such third party a license grant for the intellectual
property right in question at VENDOR’s cost; or     2)   replace such infringing
CP by non-infringing CP; or     3)   take back such enjoined CP and reimburse
the related purchase price to FSC [***].

13.4   VENDOR shall not be responsible for solving any infringement of CP
concerning third party’s intellectual property right(s) caused by or resulting
from FSC or FSC customer(s)´ modification of CP or caused by the combination of
the CP with other equipment but only where the combination of the CP with other
equipment renders the CP to be a component of a different type of equipment and
it is the new or different type of the equipment that is infringing.   14.  
NECESSARY LICENSE FOR IMPORTATION   14.1   VENDOR warrants that it has all
necessary licenses (including without limitation patent, trademark, logo and any
other intellectual property rights of whatsoever nature and however existing)
with the relevant third party licensors required for the import of the CP and
DOCUMENTATION to deliver within the EU (“Necessary Licenses”).   14.2   VENDOR
agrees to provide FSC with written proof which is reasonably satisfactory to FSC
of all Necessary Licenses or written confirmation that

***CONFIDENTIAL TREATMENT REQUESTED

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    Necessary Licenses are not required [***]. For the avoidance of doubt,
failure to provide such information shall be deemed to be a severe breach of
this Agreement under 27.2 allowing FSC to terminate this Agreement pursuant to
the provisions as set out in section 27.   14.3   VENDOR agrees to defend,
indemnify and hold FSC and its RELATED COMPANIES, its distributors and its/their
customers harmless from any and all claims, proceedings, costs, expenses,
damages, penalties and losses including without limitation reasonable attorney’s
fees, costs arising from disruptions at FSC’s factory sites, additional
transportation charges, costs of securing replacement goods and other losses
resulting from a breach of the above warranty in section 14.1 provided that FSC:

  1)   notifies VENDOR of any such claim, dispute or proceeding [***]; and    
2)   [***]

15.   [***]   15.1   VENDOR acknowledges, that FSC is [***]

a)   CP that are [***] and   b)   [***].

15.2   VENDOR warrants, that all CPs are [***]. VENDOR shall deliver the related
[***]. VENDOR agrees to indemnify FSC for all damages that result from CP [***].
  16.   PRODUCT WARRANTY   16.1   VENDOR warrants that the New CPs (as opposed
to refurbished) when first delivered by VENDOR to FSC are new, that they meet in
all material respects all of the specifications and standards agreed upon by
VENDOR and FSC hereunder as set forth in ANNEX 1 CONTRACTUAL PRODUCTS, ANNEX 2
DOCUMENTATION, ANNEX 7 QUALITY ASSURANCE, ANNEX 9 STANDARDS and ENVIRONMENTAL
PROTECTION and that they are free from defects in design, material and
workmanship.   16.2   FSC will use its reasonable efforts to identify the
defects prior to advising VENDOR of the defects and requiring VENDOR’s technical
involvement to correct such defects. In the event any defect in the CPs is
discovered and reported by FSC to VENDOR within the WARRANTY PERIOD, VENDOR
agrees to correct such defects at VENDOR’s costs and expense following receipt
of notice thereof.

***CONFIDENTIAL TREATMENT REQUESTED

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    In particular, during the WARRANTY PERIOD, FSC may return

  a)   defective CP for RMA handling. VENDOR shall choose one of the following
options at its sole discretion, whereas the provisions and processes described
in Attachment 2 to ANNEX 6 shall apply accordingly :

  •   VENDOR shall repair such defective CP or     •   VENDOR shall deliver to
FSC an equivalent CP to replace such defective CP or     •   VENDOR shall
deliver to FSC the FRU(s) or Spare Part(s) necessary to repair the CP or     •  
VENDOR shall refund the purchase price FSC paid for the defective CP

    or

  b)   defective parts which FSC has removed from warranted CP. VENDOR shall
choose one of the following options at its sole discretion, whereas the
provisions and processes described in Attachment 2 to ANNEX 6 shall apply
accordingly:

  •   repair the defective parts which FSC has removed from warranted CP or    
•   replace/exchange defective parts or     •   refund the purchase price for a
respective new parts

    The Parties understand and agree that when appropriate, VENDOR will require
that FSC return and VENDOR repair or replace a defective Spare Part or FRU as
opposed to the return of an entire CP.   16.3   Replaced or repaired CP and
replaced or repaired parts thereof are warranted for [***].   16.4   Warranty
handling shall be within the lead times defined in ANNEX 3 FORECAST, LEAD TIMES.
  16.5   OMITTED.   16.6   Notwithstanding anything to the contrary, the
foregoing warranty does not apply to any CP or Spare Part that: (i) has been
damaged by accident, misuse, negligence or external factors such as failure or
fluctuation of electrical power, fire or flood; (ii) for defects caused by or
resulting from unauthorized modification of CP; or (iii) for defects that are
directly caused by VENDOR’s adherence to specifications provided to VENDOR by
FSC.   16.7   Upon written request by FSC VENDOR agrees, when it is legally
able, to provide to FSC [***] as stated in the respective section of ANNEX 6
SPARE PARTS & REPAIR.   16.8   In case a reseller of the CPs supplied under this
Agreement is liable to any other reseller or directly to the end user customer
(consumer) because of the CP’s lack

***CONFIDENTIAL TREATMENT REQUESTED

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    of conformity to a publicly advertised certification or compatability that
VENDOR has agreed to meet under this AGREEMENT, VENDOR will accept the return of
the CPs and refund any amounts paid to VENDOR for the CPs, provided, however,
that VENDOR is notified of the issue [***]. This section is not intended to
conflict with or supercede any warranty provisions for technical issues; this
section is meant to cover instances where a CP is technically sound, but does
not comply with published certifications or other similar representations that
VENDOR has agreed upon in its provision of the CPs to FSC under this AGREEMENT.
Notwithstanding the foregoing, this shall not apply where the CP has been
modified and the lack of conformity is based on or arises or results from such
modification.   16.9   If FSC makes any warranties to customers or other third
parties that are contrary to, inconsistent with, or greater than the warranties
given by VENDOR herein, VENDOR shall not be bound by such warranties and FSC
shall indemnify and hold harmless VENDOR from any claims brought against VENDOR
based on such FSC warranties.   16.10   The foregoing warranties extend to FCS
only. [***].   17.   EPIDEMIC FAILURES AND MISLEADING STATEMENTS       EACH
PARTY SHALL BE RESPONSIBLE TO PERFORM ITS OBLIGATIONS FOR EPIDEMIC FAILURES IN
ACCORDANCE WITH THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH IN ANNEX 7
QUALITY ASSURANCE.   18.   MISLEADING PUBLIC STATEMENTS       In case of public
statements by VENDOR or any of his partners, such as — but not limited to —
marketing and advertising statements concerning the CPs supplied to FSC, VENDOR
shall indemnify FSC for all damages and liabilities, which customers of FSC are
able to recover against FSC, in the event such public statements turn out to be
false or misleading.   19.   PRODUCT LIABILITY INDEMNIFICATION   19.1   Subject
to limitations of liability and other terms and conditions set forth herein,
VENDOR agrees to defend, indemnify and hold FSC and its RELATED COMPANIES
harmless from any and all claims, proceedings, cost, expenses, damages and
losses (including reasonable attorneys’ fees) to the extent based upon design or
manufacturing defects in the CPs that result in bodily injury, death or damage
to tangible or real property (“Product Liability”).   19.2   VENDOR shall not be
liable if, and to the extent, CPs have been improperly installed, operated, used
or maintained by FSC or FSC’s customers or any third party other than VENDOR.

***CONFIDENTIAL TREATMENT REQUESTED

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19.3   Vendor shall secure and maintain a product liability insurance policy,
providing for levels of coverage that are reasonable and in keeping with those
typically provided for in the industry, for Product Liability exposure to third
parties resulting from defective CP supplied by VENDOR to FSC. At FSC’s request,
VENDOR shall provide FSC a copy of the insurance policy.   20.   LIMITATION OF
LIABILITY   20.1   THE WARRANTIES OF VENDOR AS EXPRESSED IN THIS AGREEMENT AND
ANNEXES ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE AND ALL SERVICES, CPS, SPARE PARTS, OTHER MATERIALS OR
INFORMATION ARE PROVIDED “AS IS.” THE SAME APPLIES MUTATIS MUTANDIS FOR FSC.  
20.2   WITH THE EXCLUSION OF WILLFUL OR GROSS NEGLIGENT CONDUCT, PERSONAL
INJURY, DEATH, REAL PROPERTY DAMAGE, LIABILITY THAT IS MANDATORY UNDER
APPLICABLE LAW OR INDEMNIFICATION OBLIGATIONS ACCORDING TO SECTION 13
(INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS), VENDOR AND FSC
EXCLUDE VIS-à-VIS EACH OTHER ANY AND ALL LIABILITY FOR ALL INDIRECT, INCIDENTAL,
EXEMPLARY AND CONSEQUENTIAL DAMAGES (SUCH AS LOSS OF PROFIT; LOSS OF DATA; LOSS
OF REVENUES; LOSS OF GOOD WILL; AND VALUE ASSOCIATED WITH LOSS OF REPUTATION
and; LOSS OF CONTRACT).   20.3   The Parties acknowledge and agree that the
amounts payable under this AGREEMENT have been established based upon the
liability limitations set forth herein, and further agree that these limitations
shall apply notwithstanding any failure of essential purpose or of any limited
remedy.   21.   TECHNICAL AND ENGINEERING CHANGES   21.1   Technical and
engineering changes to CP may only be performed by VENDOR in accordance with the
procedures detailed in ANNEX 10 TECHNICAL CHANGES.   21.2   VENDOR must supply
quantities of changed CPs necessary for testing or qualification as mutually
agreed upon free of charge to FSC.   22.   NON-DISCLOSURE   22.1   FSC agrees to
maintain in confidence any and all CONFIDENTIAL INFORMATION delivered by VENDOR
to FSC. Such information required to be held in confidence shall, if in writing,
be marked “Confidential”. Oral information that is confidential shall be reduced
to writing and marked “Confidential”, and forwarded to FSC [***]. FSC may
disclose CONFIDENTIAL INFORMATION to such employees of FSC or third parties
contracting with FSC as may be necessary in the design, manufacture, service,
distribution, and licensing -if any-, of the CP, but only, if they are bound by
confidentiality obligations at least as stringent as stated herein.

***CONFIDENTIAL TREATMENT REQUESTED

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22.2   The obligations hereunder shall not apply to information which is or
becomes public domain; or is received by FSC from a third party without
confidentiality obligation to VENDOR; is known by FSC without use of VENDOR’s
CONFIDENTIAL INFORMATION; is independently developed by FSC without use of
VENDOR’s CONFIDENTIAL INFORMATION; or that must be disclosed by law so long as
FSC gives VENDOR prompt notice of such legal requirement.   22.3   The
obligations in SECTION 22.1 shall apply mutatis mutandis to CONFIDENTIAL
INFORMATION delivered or made available by FSC to VENDOR.   22.4   The
non-disclosure obligations in SECTIONS 22.1 and 22.2 shall expire [***].
Notwithstanding the foregoing, any obligations of confidentiality with respect
to information disclosed to FSC pursuant to [***].   22.5   Press releases or
other information on the conclusion/content of this AGREEMENT shall only be made
available to third parties/press agencies with the prior written consent of the
other PARTY hereto. Notwithstanding the foregoing, each Party may make
disclosures regarding this AGREEMENT without the prior written consent of the
other Party to the extent that such disclosures are legally required by the
party (including any requirements imposed by the United States Securities and
Exchange Commission regarding the disclosure of information) but only if the
disclosing Party has given the other party notice of the requirement and an
opportunity to discuss the circumstances and depth of disclosure with the
disclosing Party. The Parties acknowledge that often such legally required
disclosures must be made quickly, and the time period between notification and
the need to disclose may be limited.   23.   TECHNICAL SUPPORT AND TRAINING  
23.1   VENDOR agrees to provide training and technical support to FSC according
to the provisions of ANNEX 12 TECHNICAL SUPPORT AND TRAINING.   23.2  
Maintenance for CP may be performed by FSC and VENDOR shall give support for
REPAIR as stated in ANNEX 6 SPARE PARTS AND REPAIR. FSC shall be entitled to buy
SPARE PARTS according to the terms and conditions stated in ANNEX 6 SPARE PARTS
& REPAIR and resell them to FSC service partners, e.g. to third party repairers.
  24.   GOVERNING LAW AND ARBITRATION   24.1   This AGREEMENT shall be governed
by and construed in accordance with the laws of the State of New York, USA. The
United Nations Convention on the International Sale of Goods (CISG) shall not
apply. With regard to the validity and scope of intellectual property rights the
law of the country shall apply, where such intellectual property rights have
been originated and/or registered.   24.2   All disputes arising out of or in
connection with the present agreement, including any questions regarding its
existence, validity or termination, shall be finally settled by binding
arbitration under the American Arbitration Association (the “Rules”) by three
arbitrators in accordance with said Rules.

***CONFIDENTIAL TREATMENT REQUESTED

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24.3   Each Party shall nominate one arbitrator for confirmation by the
competent authority under the applicable Rules (Appointing Authority). The two
appointed arbitrators shall agree on the third arbitrator [***]. Should the two
arbitrators fail, within the above time-limit, to reach agreement on the third
arbitrator, he shall be appointed by the Appointing Authority. If there are two
or more defendants, any nomination of an arbitrator by or on behalf of such
defendants must be by joint agreement between them. If such defendants fail,
within the time-limit fixed by the Appointing Authority, to agree on such joint
arbitrators the Appointing Authority may appoint such joint arbitrator. The
arbitrators must have sufficient experience in the IT industry and in
international business transactions   24.4   Notwithstanding the Rules (i) each
Party shall have no more than 2 days to present its case and (ii) the
arbitrators shall be instructed to render their decision [***] following the
conclusion of each Party’s presentation.   24.5   The arbitrators shall specify
the basis for their decision. The arbitrators shall not award any punitive
damages. The decision of the arbitrators shall be considered as a final and
binding resolution of the dispute, shall not be subject of appeal and may be
entered as a judgment in any court of competent jurisdiction.   24.6   The seat
of arbitration shall be New York, New York, USA. The procedural law of this
place shall apply where the Rules are silent, however no pre-trial discovery
procedure or jury trial shall be allowed in the arbitration proceedings.   24.7
  The language to be used in the arbitration proceedings shall be English. The
whole arbitration procedure shall be executed pursuant to a strict non
disclosure agreement signed by the Parties and the arbitrators agreeing to
conduct such proceedings and maintaining in confidence all confidential
information or trade secrets disclosed or produced in the course thereof. All
press releases or public statements regarding the status of such proceedings
shall be prepared jointly and only by the Parties.   25   EXPORT LICENSE,
ADMINISTRATION REGULATIONS CONCERNING US-ORIGIN CP   25.1   FSC shall comply
fully with all applicable laws, rules and regulations relating to the export of
VENDOR’s hardware and technical data, including, but not limited to, any
regulations of the United States Office of Export Administration and other
applicable governmental agencies. VENDOR agrees to cooperate in providing
information requested by FSC as necessary to obtain any required licenses and
approvals.   25.2   VENDOR will provide a written declaration that VENDOR has
duly classified hardware in accordance with the United States Export
Administration Act and the United States Export Administration Regulations.
VENDOR’s written declaration shall contain the applicable CN-Class, Country of
Origin, State of Origin, ALNR, Export Control Classification Number (“ECCN”) in
accordance with the Commerce Control List (“CCL”), weight, net weight,
dimensions as well as any and all applicable License Exceptions. VENDOR is
obliged to deliver such declaration as soon as possible but no later than the
general availability date of the CPs. If the scope of the contract is extended
at a later date, VENDOR likewise undertakes to

***CONFIDENTIAL TREATMENT REQUESTED

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    provide the relevant export control details pertinent to the additional
products/services, subject to these same conditions.”   26.   CONTACTS   26.1  
Any notices to be sent hereunder shall be in writing and delivered personally or
sent by fax or mail according to ANNEX 12 CONTACTS.   26.2   Notices sent by fax
shall be sent to the respective fax numbers set forth in ANNEX 12 CONTACTS and
such notices shall be deemed given as of the date sent by fax if properly
addressed and transmitted. Notices concerning issues important for the
contractual relationship shall be sent either (i) by commercial express mail, or
otherwise (ii) by certified or registered mail or any other means giving sender
proof of receipt.   26.3   Notices sent by mail shall be addressed as set forth
in ANNEX 12 CONTACTS, postage prepaid, certified or registered mail, and shall
be deemed given at the date of receipt.   26.4   During the term hereof VENDOR
and/or FSC may designate other addresses or numbers to which such notices shall
further on be sent or delivered.   27.   TERM AND TERMINATION   27.1   The term
of this AGREEMENT shall commence on the EFFECTIVE DATE, continue thereafter for
a period of five (5) years and shall automatically be prolongated in one
(1) year increments, unless one of the Parties notifies the other [***] prior to
any prolongation of its intent not to prolongate.   27.2   Either PARTY may
elect to terminate this AGREEMENT for a breach of a material term or provision
of this AGREEMENT by the other PARTY upon delivery of [***] prior written notice
to the other PARTY; provided, however, if such breach is cured by the other
PARTY within said [***], such election and notice shall be of no further force
and effect and this AGREEMENT shall not be terminated thereby.   27.3  
Termination of this AGREEMENT shall not affect those provisions of this
AGREEMENT that are intended, by their nature, to survive termination.   27.4  
In case either Party merges with another company or is acquired by a third Party
being a competitor of the other Party in the field of information systems or
comes otherwise under an excessive influence of a third party of same nature,
either Party will inform the other Party in writing without delay and either
Party is entitled within [***] of receipt of such notice to terminate this
AGREEMENT.   27.5   For a [***], VENDOR shall offer support to FSC in respect to
service and maintenance purposes. In particular, Vendor shall maintain the
support for repair and the repair service described in ANNEX 6 SPARE PARTS AND
REAPAIR.

***CONFIDENTIAL TREATMENT REQUESTED

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27.6   For a [***], and subject to the payment by VENDOR fo all applicable fees
and other charges, VENDOR shall make available to FSC SPARE PARTs. [***] the
PARTIES will mutually agree upon any continuing obligations of VENDOR to deliver
SPARE PARTS or provide support beyond the aforementioned [***] period.   28.  
END OF LIFE OR DISCONTINUATION BY VENDOR OF CP   28.1   Should VENDOR request
the discontinuation of CP, VENDOR shall so notify FSC in writing explaining the
reasons and the PARTIES shall negotiate in good faith an adequate solution,
which may include i.e. the transfer of the manufacturing rights for CP and SPARE
PARTs according to ANNEX 8 EMERGENCY MANUFACTURING RIGHTS or a last time order
of CP.VENDOR shall not request such discontinuation [***].   28.2   VENDOR
agrees to provide a written notice to FSC [***] prior to the effective end of
life of any CP, which notice shall consist of:

–   date of the notice   –   the specific CP affected   –   last possible date
for receipt of an order   –   last possible shipment date of the relevant CP(s)

29.   INVENTORY MANAGEMENT   29.1   Due to un-predictable customer decisions,
excess inventory held and owned by FSC may occur. Inventory shall be deemed to
be excess inventory if the then current manufacturing plan of FSC requires a
lesser volume of the respective inventory than the current inventory level
shows.   29.2   FSC shall be entitled to resell the excess inventory to third
parties in compliance with the requirements specified in ANNEX 14 EXCESS
INVENTORY.   30.   SUB-MANUFACTURERS   30.1   VENDOR may require the use of
certain sub-manufacturers for whatever task is deemed necessary. VENDOR shall
ensure that sub-manufacturers comply with the FSC standards and requirements
contained in this AGREEMENT.   30.2   VENDOR shall provide FSC with [***] prior
written notice of its intent to change its manufacturing location or transfer of
manufacturing plant. Unless FSC approves of the change, VENDOR will [***].
VENDOR will use best efforts to ensure smooth transition. FSC may not
unreasonably withhold, delay or condition its approval.

***CONFIDENTIAL TREATMENT REQUESTED

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31.   EMS/ODM   31.1   Subject to each EMS/ODM being credit worthy to order CPS
and services from VENDOR under the provisions of this Agreement, as reasonably
determined by VENDOR, VENDOR agrees to supply CPs and provide services to the
EMS/ODM according to the terms and conditions of the AGREEMENT concluded between
FSC and VENDOR for the sole purpose of the incorporation of the CPS supplied
under this AGREEMENT into the products to be manufactured for FSC by the EMS/ODM
and based on the condition, that any deliveries for such purpose shall be
governed by a direct business relationship based on the respective POs between
VENDOR and the EMS/ODM.   31.2   As part of the agreement between FSC and the
EMS/ODM, FSC shall contractually bind the EMS/ODM to use the CPS and provided
services supplied by VENDOR according to the terms of the AGREEMENT concluded
between FSC and VENDOR exclusively for the manufacture of FSC’s products and for
no other purpose.   31.3   FSC shall be entitled to revoke such supply rights
granted by VENDOR to the EMS/ODM in its own discretion at any time, especially
but not limited to in case the EMS/ODM uses the CP and provided services for
other purposes as described in the preceding section. In case FSC revokes such
supply rights, VENDOR shall terminate any deliveries or any support to the
EMS/ODM, coming from the agreement, within [***] following the receipt of a
revocation note provided by FSC.   32.   ETHICAL STANDARDS   32.1   VENDOR
agrees to comply with the ethical standards detailed in ANNNEX 17 ETHICAL
STANDARDS.   33.   MISCELLANEOUS   33.1   ASSIGNMENT. Neither PARTY may delegate
its obligations or assign its rights hereunder without the prior written consent
and approval of the other PARTY which consent will not be unreasonably withheld;
provided, however: i) a Party hereto may assign this AGREEMENT upon written
notice to the other Party, to a successor-in-interest of all or a majority of
its outstanding stock or voting securities or to a purchaser of all or
substantially all of its assets, and; (ii) upon written notice to VENDOR, FSC
may assign, delegate or transfer its obligations and rights hereunder to any
RELATED COMPANY which is capable of performing all of FSC’s obligations under
this AGREEMENT (as reasonably demonstrated to VENDOR) without the prior written
consent of VENDOR. Even if the AGREEMENT has not been formally assigned, any
RELATED COMPANY shall be entitled to issue purchase orders according to the
terms and conditions of this AGREEMENT. In this case the RELATED COMPANY and
VENDOR shall become direct contractual partners. If this AGREEMENT is assigned
pursuant to section 33.1(i), above, the other Party shall have the right to
terminate the AGREEMENT by giving [***] prior written notice.   33.2   ANNEXES.
The Annexes attached to this AGREEMENT form an integral part hereof. In case of
a contradiction between the AGREEMENT and the Annexes,

***CONFIDENTIAL TREATMENT REQUESTED

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    the AGREEMENT shall prevail, unless explicitly specified otherwise in the
Annexes.   33.3   AMENDMENT. This AGREEMENT may not be modified or amended
except by a written amendment consecutively numbered and executed by the duly
authorized officers of the PARTIES hereto. This requirement can only be waived
in a written document that is executed by the duly authorized officers of the
Parties hereto. In case of any contradiction between the AGREEMENT wording and
the wording of the Annexes, the AGREEMENT shall prevail.   33.4   SEVERABILITY.
If a provisions of this AGREEMENT is held invalid, unenforceable or contrary to
law then the validity of the remaining provisions of this Agreement shall remain
in full force. In such instance, the Parties shall use their best efforts to
replace the invalid provision(s) with legally valid provisions approximating to
the extent possible the original intent of the Parties.   33.5   FORCE MAJEURE.
Neither PARTY shall be liable to the other for failure or inability to perform
its obligations hereunder to the extent such failure or inability is due to
Force Majeure. For the purpose of this section, “Force Majeure” means all acts
of God and Government and general labor disputes beyond the reasonable control
of a PARTY. Should the period of Force Majeure exceed six months, each PARTY is
entitled to terminate this AGREEMENT.   33.6   PARENT RESPONSIBILITY. Dot Hill
Systems Corp. hereby agrees to be a Party to this AGREEMENT and shall be jointly
and severally liable together with Dot Hill Systems B.V. for all of the
obligations and liabilities of Dot Hill Systems B.V., and all of Dot Hill’s
related companies and subsidiaries, arising hereunder.

      Dot Hill Systems, B.V.   Dot Hill Systems Corp.                  /s/
PRESTON ROMM              /s/ DANA W. KAMMERSGARD       signature   signature  
               Preston Romm              Dana W. Kammersgard       name   name  
               Director              President and CEO       title   title      
           3/3/06              3/2/06       date   date       Fujitsu Siemens
Computers GmbH                      /s/ HARALD ROBATZEK              /s/
[ILLEGIBLE]       signature   signature                  Harald Robatzek  
           [ILLEGIBLE]       name   name                  Director Golbal
Sourcing              Director Storage Systems       title   title      
           13.01.2006              13.01.2006       date   date

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ANNEX  1 CONTRACTUAL PRODUCTS
ANNEX  2 DOCUMENTATION
ANNEX  3 FORECAST, LEADTIMES
ANNEX  4 OMITTED
ANNEX  5 SOFTWARE
ANNEX  6 SPARE PARTS AND REPAIR
ANNEX  7 QUALITY ASSURANCE
ANNEX  8 EMERGENCY MANUFACTURING RIGHTS
ANNEX  9 STANDARDS, ENVIRONMENTAL REQUIREMENTS
ANNEX 10 TECHNICAL CHANGES
ANNEX 11 TECHNICAL SUPPORT & TRAINING
ANNEX 12 CONTACTS
ANNEX 13 EXCESS INVENTORY
ANNEX 14 DROP SHIPMENT
ANNEX 15 TEST REQUIREMENTS
ANNEX 16 PACKAGING AND LABELING
ANNEX 17 ETHICAL STANDARDS
ANNEX 18 INTELLECTUAL PROPERTY RIGHTS
ANNEX 19 MARKETING FUNDS

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Confidential
ANNEX 1 CONTRACTUAL PRODUCTS

1.   The following information is contained on the most current version of the
price list (“PRICE LIST”) and product specifications (“SPECIFICATIONS”) that
have been formally issued by VENDOR under this AGREEMENT and accepted by FSC
(“ACTIVE PRICE LIST” or “ACTIVE SPECIFICATION”). Such documents are made a part
hereto by reference. Updated PRICE LISTS and SPECIFICATIONS may be issued,
accepted and thereby made a part of this AGREEMENT from time to time throughout
the term of this AGREEMENT without the need to formally amend the AGREEMENT.

•   Contractual Product(s) (CP)       To be found on most recent ACTIVE DH PRICE
LIST for FSC.

•   Specification of CP(s)       To be found on most recent ACTIVE SPECIFICATION

•   Configuration of CP(s)       To be found on most recent ACTIVE PRICE LIST  
•   Price of CP(s)       To be found on most recent ACTIVE PRICE LIST.   •  
Package weight and dimensions       To be found on most recent ACTIVE
SPECIFICATION   2.   Warranty Period for CP(s)       [***] commencing on the
date that VENDOR first delivers the CP.   3.   Incoterm for CP(s) and for Spare
Parts       FCA VENDOR’s shipping dock at VENDOR’s designated facility. Title
and risk of loss shall pass to FSC [***].

          ***CONFIDENTIAL TREATMENT REQUESTED         GS   1/1

 

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Confidential
ANNEX 2 DOCUMENTATION
[***]

          ***CONFIDENTIAL TREATMENT REQUESTED         Quality  1/1

 

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Confidential
ANNEX 3 FORECAST, LEAD TIMES, ORDER MANAGEMENT, INVENTORY MANAGEMENT

1. FORECAST
FSC shall issue, [***], a rolling [***] forecast in the same form as that set
forth at Appendix 1 to this ANNEX 6 (“Forecast”).
The forecast assumes [***], and VENDOR will be obligated to deliver at a certain
point in each month only that amount of CPs or Spare Parts that are equivalent
to [***]. For example, if the [***].
The forecast will be updated [***]. Upon issuing a new forecast, FSC will
request that VENDOR confirm that it can meet the forecast, including the “Upside
Flexibility” requirements [***] of the forecast. The parties will strive to
speak on a weekly or bi-weekly basis regarding the forecast and expected timing
of shipments during the month.
FSC will be committed to the Upside Flexibility ranges as first and initially
forecasted. In other words, VENDOR will not be required to deliver, within
“in-forecast” lead times, any amount of CPs or Spare Parts that are greater than
the amount of CP or Spare Parts originally (first) forecast by FSC for that
month.
FSC’S FORECAST IS NOT A PURCHASE ORDER FOR THE FORECASTED AMOUNTS AND DOES NOT
GUARANTEE FSC WILL ISSUE PURCHASE ORDERS AS SET FORTH IN THE FORECAST.
2. LEAD TIMES
Lead times shall be as follows. All lead time periods for delivery of orders
start from the time of receipt of the Purchase Order for the applicable CPs or
Spare Parts and ends when VENDOR makes the CPs or Spare Parts available [***].
All lead time periods for warranty handling start from the date upon which
VENDOR receives the returned CP or Spare Part from FSC and ends when VENDOR
makes the CPs or Spare Parts available [***].
   Delivery:

         
-
  CP   for amounts “in-forecast” – [***];
 
       
 
      for amounts greater than forecast –VENDOR to use commercially reasonable
efforts to meet the [***] lead time, but not greater than [***]
 
       
-
  SPARE PARTS   for new Spare Parts (not refurbished) “in-forecast” – [***]

          ***CONFIDENTIAL TREATMENT REQUESTED         GS  1/7

 

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      for new Spare Parts (not refurbished) greater than forecast – VENDOR will
use commercially reasonable efforts to meet the [***] lead time, but not greater
than [***].
 
       
-
  Emergency Orders
([***] units or less)   [***], but such Orders may effect the. delivery dates of
existing Orders

In-Warranty Handling (turn around time):

         
-
  CP   [***]
 
       
-
  Spare Parts   new parts (not refurbished) – [***]
 
       
-
  Emergency /DOA
([***] units or less   [***], but such Orders may effect the delivery dates of
existing Orders.

Out of Warranty Repair or Replace (turn around time):

         
-
  General   [***]
 
       
-
  Emergency   Using commercially reasonable efforts [***] units or less) [***]
 
       
-
  Refurbishments of specific returned unit   [***], although VENDOR will use
non-binding best efforts to complete within [***].

unless a shorter period of time has been agreed upon in writing.
3. Cancellation or Rescheduling of Purchase Orders and Returns
Even after acceptance of a Purchase Order FSC is entitled to cancel, reschedule
or return such Order in writing with regard to the total or partial quantity of
CP or Spare Parts ordered according to the following conditions:
a) Rescheduling:
FSC is entitled up to [***] to request a rescheduling [***], to a date within
[***].
FSC is entitled within [***] to request a rescheduling [***] to a date within
[***], but such rescheduling may be [***].
FSC may not reschedule an Order if it has already been [***].

          ***CONFIDENTIAL TREATMENT REQUESTED         GS  2/7

 

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b) Cancellation:
FSC is entitled up to [***] to cancel respective Purchase Orders [***].
FSC is entitled within [***] to cancel a Purchase Order, but such cancellation
may be [***].
FSC may not cancel an Order if it has already been [***].
c) Returns:
FSC may return CPs or Spare Parts for a credit at the then-current price for
said CP or Spare Parts, but only if all of the following conditions are met:
(i) the CP or Spare Part has not been used and is “as new;”
(ii) the CP or Spare Part is in its original packaging and is unopened;
(iii) the CP or Spare Part is in the same condition as it was when delivered to
FSC;
(iv) the CP or Spare Part is at the current revision level;
(v) the CP or Spare Part was delivered to FSC within [***]; and
(v) the amount of CP or Spare Part returned [***]. VENDOR, in its discretion,
will consider returns [***].
No Returns may be made during the [***].
Any CP or Spare Part returned to VENDOR shall be designated within VENDOR as the
first CP or Spare Part of its type to be shipped back to FSC against any new
Purchase Order received for that configuration; this will ensure prompt turnover
of all returned product.
Each return shall be [***].
d) [***]
Cancellation, Rescheduling or Return [***].
4. Excess and Obsolete Inventory Unique to FSC
4.1 FSC acknowledges its financial responsibility for the materials purchased by
VENDOR that are unique to FSC-branded Products in order to support the agreed
upon lead times for the forecasted amounts (including Upside Flexibility
requirements) (“Chargeable Materials”). Unique materials are set forth on
Appendix 2 to this ANNEX 3. It is assumed that VENDOR’s lead times to purchase
Chargeable Materials is [***] unless VENDOR receives FSC’s approval to purchase
Chargeable Materials with greater lead times.

          ***CONFIDENTIAL TREATMENT REQUESTED         GS  3/7

 

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4.2 [***] Chargeable Materials. After [***] of remaining in inventory, FSC will
[***], but only those purchased or created in order to support the agreed upon
lead times for the forecasted amounts, [***].
4.3 [***] Chargeable Materials. After [***] of remaining in inventory, FSC will
[***], but only those Chargeable Materials purchased or created in order to
support the agreed upon lead times for the forecasted amounts. [***].
4.4 [***] Chargeable Materials. FSC shall [***], but only those Chargeable
Materials purchased or created in order to support the agreed upon lead times
for the forecasted amounts,[***].
4.5 Expiration or Earlier Termination. In the event that FSC terminates the
AGREEMENT for convenience, Dot Hill terminates the AGREEMENT based on FSC’s
breach of the AGREEMENT which is not cured, or the AGREEMENT expires and FSC
chooses not to renew, then FSC shall[***], but only those Chargeable Materials
purchased or created in order to support the agreed upon lead times for the
forecasted amounts,[***].
4.6 [***].
4.7 As of the signing of this AGREEMENT, the CPs contain unique materials that
are easily removed from FRUs or CPs. If the nature of the CPs change such that
VENDOR is required to integrate FSC unique materials into FRUs or CPs and such
unique materials are more difficult to strip from the FRUs or CPs, such FRUs or
CPs may also be considered Chargeable Materials and the[***]. The[***]. VENDOR
will notify FSC of changes to the CPs that trigger this provision.

          ***CONFIDENTIAL TREATMENT REQUESTED         GS  4/7

 

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APPENDIX 1 to ANNEX 3. SAMPLE FORECAST
[***]

                  ***CONFIDENTIAL TREATMENT REQUESTED               GS    5/7

 

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APPENDIX 2, to ANNEX 3: LIST OF UNIQUE PARTS
[***]
[***]

                  ***CONFIDENTIAL TREATMENT REQUESTED               GS    6/7

 

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ANNEX 4                                                                omitted
GS

 

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ANNEX 5                                                    SOFTWARE
1. Where the CP contains SOFTWARE that is provided as part of and incorporated
into a CP at no additional charge to FSC, subject to the payment by FSC of
applicable charges and fees for the CP, FSC and its customers shall receive a
paid-up perpetual, non-exclusive and non-transferable right to use the SOFTWARE
on the single CP upon which the SOFTWARE was originally incorporated and loaded,
in an unchanged form, and for the sole purpose stated in the accompanying
software documentation.
2. VENDOR warrants to FSC that:
     a) VENDOR has the right to grant the license to SOFTWARE as per Section 1;
     b) SOFTWARE conforms in all material respects to its specifications and is
substantially free in all material respects from programming errors;
     c) SOFTWARE performs on the configuration of the CP with/ for which it was
ordered and/or supplied;
     d) SOFTWARE performs in all material respects the functions and features
defined in the accompanying documentation;
      e) as of the date of delivery, SOFTWARE is the most current, fully-tested
release version offered by VENDOR, and is no ”alpha”, “beta” or equivalent test
version (as such terms are commonly understood in the computer software
industry), unless the parties otherwise expressly agree;
     f) SOFTWARE does not contain any lock, clock, timer, counter, copy
protection feature or other device, which, after initial installation of
SOFTWARE, prevents FSC or its customers from fully utilizing SOFTWARE in
accordance with this Agreement without intervention by VENDOR.
3. Title to all SOFTWARE supplied to FSC by VENDOR under this Agreement will
remain with VENDOR or its licensor. FSC and its customers obtain no rights to
SOFTWARE except for the limited license rights set forth herein.
4. Except as expressly permitted under applicable law, FSC or its customers
shall not reverse engineer, decode, decompile, modify, translate, disassemble or
attempt to reduce to source code form the CP or SOFTWARE, or cause or help any
third party to do the same.
5. SOFTWARE shall be considered the CONFIDENTIAL INFORMATION of VENDOR as that
term is defined in the AGREEMENT, regardless of whether it is marked as such.
GS/L+C

 

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ANNEX 6                                                   SPARE PARTS AND REPAIR

1.   SUBJECT MATTER OF ANNEX 6       The subject matter of this Annex is to
define the SPARE PARTS procurement for the Contractual Product (CP) described in
ANNEX 1 to the AGREEMENT and the REPAIR procedure for such SPARE PARTS as well
as for the Contractual Product (CP) described in ANNEX 1 to AGREEMENT.      
Even if not explicitly referenced, the terms and conditions of the AGREEMENT
(including its ANNEXES) shall apply accordingly. However, provisions of the
AGREEMENT shall in no event supersede provisions of this Annex 6 in case of
deviation.   2.   SPARE PARTS

  2.1   Definitions

[***]

  2.2   SPARE PARTs Lists

2.2.1 Contents of the SPARE PARTs Lists (for Level 0 and 1)
The SPARE PARTs Lists as following shall contain the following and shall be
revised immediately if any mutually agreed changes occur. The SPARE PARTS list
shall only be compiled with respect to Level 0 and Level 1 SPARE PARTS; they
shall not be compiled with respect to Level 2 SPARE PARTS
a) [***]

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[***]
b) [***]
c) [***]
2.2.2 Availability of SPARE PARTs information
The BASIC SPARE PARTs List, recommended by VENDOR, shall be made available by
VENDOR latest [***] prior to begin of mass production of the applicable CP. At
the same time VENDOR shall provide FSC with applicable storage guidelines, in
case any special or unusual treatment is necessary.
The Purchase SPARE PARTs List and Planning SPARE PARTS List shall be made
available at the latest [***]. FSC may require additional SPARE PARTs to be
added to the SPARE PARTs Lists.

3.   SPARE PARTS PROCUREMENT PROCEDURE       During the term of the AGREEMENT
and for the period stated in Clause 27.6 of the AGREEMENT, VENDOR will accept
and carry out all purchase orders for SPARE PARTS placed by FSC in accordance
with the terms of this Annex 6.

  3.1   Purchase Orders

3.1.1 Ordering
FSC will place purchase orders providing VENDOR with the following information:
§ Purchase Order number and date
§ SPARE PART quantity to be delivered
§ Part number and revision level
§ Item description
§ Unit price
§ Date of delivery

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3.1.2 Initial order
VENDOR shall deliver the initial SPARE PARTs to FSC at the latest[***].
FSC will stock approximately [***] of SPARE PARTs at the initial stage.
Initial stock quantities will be determined by either of the following:
[***]
3.1.3 Order Confirmation
Within [***] after receipt of order, VENDOR will send an order confirmation
including delivery date for information purposes to FSC. The holidays of the
country from which confirmation is issued shall be taken into consideration when
determining “working day.”
3.1.4 Cancellation procedure
FSC may cancel or reschedule purchase orders for Spare Parts under the same
terms and conditions as those stipulated in ANNEX 3 of the AGREEMENT with
respect to CPs.
3.1.5 Lead-time
The lead time for delivery from date of purchase order shall be as stipulated in
ANNEX 3 of the AGREEMENT.
VENDOR will confirm the delivery of SPARE PARTs to FSC’s carrier upon Spare
Parts leaving VENDOR’s facility dock.
3.1.6 Terms
Terms of delivery: According to Section 3 of the AGREEMENT
Terms of payment: According to Section 6 of the AGREEMENT
3.1.7 Prices
Prices for the SPARE PARTs Procurement (including prices for accelerated orders)
are stated in Attachment 1 (SPARE PARTS and REPAIR Prices) to this ANNEX 6 and
include appropriate packaging.[***] Section 4 of the AGREEMENT shall apply
accordingly. VENDOR agrees[***].

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3.2 Discontinuation of SPARE PARTs
3.2.1 Discontinuation
Prior to the EOL of the applicable CP in which a SPARE PART is used, in case of
the discontinuation of a SPARE PART, VENDOR will inform FSC in writing,
including the effective date of discontinuation, and offer a substitute or
alternative SPARE PART. If the substitute or alternative SPARE PART affects the
form, fit, function or compatibility of the CP, then it must be approved by FSC
as per ANNEX 10 of the AGREEMENT.
Upon the EOL of a CP, availability of SPARE PARTS for that CP shall be governed
by Section 27.6 of the AGREEMENT.
3.2.2 Tooling
VENDOR shall inform FSC before scrapping or changing any tool that is used to
create Spare Parts that are unique to FSC and FSC reserves the right to buy such
FSC-unique tooling from VENDOR.
3.3 Changes and Upgrades
VENDOR shall notify FSC without undue delay of intended Engineering Changes in
SPARE PARTs, which do not result in a discontinuation of SPARE Parts. All such
changes that affect the form, fit, function or compatibility of the SPARE PARTs
are subject to FSC ´ s approval as per ANNEX 10 of the AGREEMENT.
If any such changes are not Mandatory Changes and are not caused by FSC, the
parties will design a program of backward consumption by which the new SPARE
PARTs will be phased-in and/or the old SPARE PARTs upgraded in a manner that
avoids the purging and/or scraping of the old SPARE PARTs.
In the event that any such changes are Mandatory Changes and are not caused by
FSC, VENDOR will [***]
[***]
For purposes of this section, a Mandatory Change is a change that is required to
allow the CP to function as per its original specification (prior to the change)
and in a safe and legal manner. All other changes are not Mandatory Changes.
VENDOR shall only be required to upgrade to the current revision level those
SPARE PARTs that [***]

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For purposes of this ANNEX 6, the MAL (or Minimum Acceptance Level) is the
[***].
3.4 Warranty
3.4.1 Warranty Period
VENDOR warrants that newly purchased SPARE PARTS (as opposed to refurbished
SPARE PARTS) are new, that they meet all specifications agreed upon by VENDOR
and FSC hereunder as set forth in the SPARE PARTS Lists, ANNEX 1, ANNEX 9
(Standards) and ANNEX 7 (Quality Assurance) to AGREEMENT, and that they are free
from defects in design, material and workmanship for a period of [***] from
receipt of SPARE PARTS by FSC. Refurbished SPARE PARTs are not new, but VENDOR
warrants that they otherwise meet the aforementioned specifications and
warranties for a period of [***].
3.4.2 Serial number and warranty validation
VENDOR will operate an online warranty tracking system for validation and RMA
procedure as well as for product safety purposes.
VENDOR shall provide a serial number on each serial number-controlled SPARE PART
and a mechanism of serial number coding online, which allows FSC to determine
the beginning of the applicable warranty period.
3.4.3 DOA (Dead on Arrival)
The DOA period is [***] from date of receipt of new SPARE PARTS by FSC.
FSC will request RMA marked as DOA with respect to New (and not refurbished)
Spare Parts, whereas the process as described under Clause 3.4.4 shall apply
accordingly.
The DOA rate as confirmed by VENDOR (and not just based on FSC’s observations)
shall not exceed [***].
3.4.4 In - Warranty Options
In the event a defect is discovered in a SPARE PART and VENDOR is notified of
the defect within the warranty period, VENDOR shall execute one of the following
warranty actions, in VENDOR’s discretion, within the TAT (Turn Around Time) set
out in ANNEX 3 from VENDOR’s receipt of the defect SPARE PART:

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a) VENDOR will provide and ship a replacement/exchange SPARE PART with the same
part number or a replacement SPARE PART which part number is explicitly
authorised and approved by FSC or
b) VENDOR will issue a credit note and refund the purchase price that FSC paid
for the defective SPARE PART or
c) VENDOR will repair the SPARE PART, and if the SPARE PART meets the Minimum
Accepted Level, will upgrade the SPARE PART to the latest revision level.
The provisions and processes applicable for In-Warranty Handling are described
in Attachment 2 (In-Warranty Handling Process Description) of this ANNEX 6 in
detail.
3.5 Failure to comply with contractual obligations
3.5.1 Shipping / Delivery
If VENDOR exceeds the agreed Lead Times (Clause 3.1.5) as stipulated in ANNEX 3
for shipping new or refurbished SPARE PARTS to FSC, or if VENDOR exceeds the
confirmed delivery date (Clause 3.1.3), or if VENDOR exceeds the agreed TAT for
RMA activity, Clause 3.6 of the AGREEMENT shall apply accordingly.
3.5.2 Response to RMA requests
If VENDOR does not respond to FSC‘s RMA request within [***].
3.5.3 Warranty Handling
If VENDOR exceeds the agreed TAT for warranty handling as stipulated in ANNEX 3,
VENDOR shall [***].
3.5.4 DOA Rate
If the DOA Rate measured [***] figure set forth in Section 3.4.3, VENDOR shall
[***].
FSC reserves the right to claim further damages resulting from all Dead on
Arrivals occurring. VENDOR’s right to prove that FSC has incurred a lower damage
shall remain unaffected.
3.5.5 General

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The claiming of contractual penalties or liquidated damages or compensation for
damages by FSC shall not affect FSC` s rights to demand performance. An
acceptance of VENDOR`s performance by FSC will not affect FSC‘s right to claim
contractual penalty, liquidated damages or compensation for damages, even if no
objection is made upon acceptance of any such performance.
In case of default and/or non–performance by VENDOR, FSC may grant an
appropriate period of grace to enable performance. Once however this period of
grace has expired without VENDOR bringing about the contractually agreed
performance and /or results, FSC is entitled to withdraw from the respective
order and demand damages for default and/or non-performance.
4. SUPPORT FOR REPAIR
4.1 Documentation
During the term of the AGREEMENT and for the period stated in 27.5 of the
AGREEMENT), in order to enable FSC or FSC’s third party repairers to effectively
test and screen returns to reduce “No Trouble Found” rates, VENDOR will, in its
reasonable discretion, provide to FSC [***] the documentation necessary to allow
FSC to accomplish such limited screening and testing. VENDOR may require that
FSC or FSC’s third party repairers enter into non-disclosure agreements prior to
being provided access to such information
VENDOR will provide the documentation in the English language.
4.2 Technical assistance
VENDOR shall give FSC Level 4 technical assistance pursuant to the terms and
conditions set forth on ANNEX 11 of the AGREEMENT.
4.3 Third party repairers
FSC reserves the right to select and authorize [***] third party [***]. VENDOR
reserves the right to qualify and approve of the third party repairer. After
such approval by VENDOR and the third party repairer’s entering into appropriate
non-disclosure agreement(s) protecting VENDOR’s information, VENDOR shall
provide the above-mentioned repair documentation and technical assistance
directly to third party repairer.
After the third party repairer has entered into the required non-disclosure
agreement, FSC shall be allowed to provide documentation referred to Clause 4.1
to such third party repairers for purposes of carrying out repairs on the CPs.
To the extent that FSC wishes VENDOR to take direct orders from the third party
repairers, VENDOR may conduct a credit analysis of the third party repairer and
impose reasonable credit limits or payment terms upon the third party repairer.
5. SPARE PARTS AND CP REPAIR SERVICE
5.1 General

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During the term of the AGREEMENT and for the period stated in 27.5 of the
AGREEMENT, VENDOR will provide to FSC, upon FSC ´ s request, Out of Warranty
REPAIR service for SPARE PARTS listed in the SPARE PARTS List as well as for CP
at prices mutually agreed upon by the parties.
5.2 Service Deliverables
FSC will issue repair orders (or, in other words, a request for RMA activity)
which orders will include the following particulars:

  -   Repair Order Number     -   Counter Number     -   Part Number     -  
Serial Number for serial controlled items     -   Failure Mode (reason for
failure)     -   An indication if a return is only for an upgrade to current
levels     -   An indication if the item was DOA     -   A Request for failure
analysis, if appropriate and desired by FSC.

Within [***] after receipt of order, VENDOR will accept order and send an order
confirmation including delivery date for information purposes to FSC. VENDOR may
only reject an order if it is not in conformance with the terms and conditions
of this ANNEX 6 or the AGREEMENT, or it is beyond the period stated in 27.4 of
the AGREEMENT and VENDOR does not choose to accept the order. [***]
VENDOR shall carry out the REPAIRS according to the principle “first in first
out”, unless requested differently for a specific order by FSC. Furthermore
VENDOR is obliged to carry out REPAIRs due to the latest agreed upon revision
level as long as the SPARE PART or CP is at or above a Minimum Accepted Revision
Level (“MAL”).
Details of all processes between FSC and VENDOR, the scope of services,
definition of control processes, definition of technical changes and description
of the quality features are defined in Attachment 3 to ANNEX 6.
5.3 Transportation Charges
With respect to repair orders,[***].
5.4 [***]
[***]

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[***]
[***]
5.5 REPAIR Prices
Prices for the REPAIR of CPs and SPARE PARTs (including prices for accelerated
orders) are stated in Attachment 1 (SPARE PARTS and REPAIR Prices) to ANNEX 6
and include appropriate packaging.[***] Section 4 of the AGREEMENT shall apply
accordingly.
5.6 Turn Around Time (TAT)
Turn around Time (TAT) for the REPAIRS of SPARE PARTS/CPs from the date of
receipt until the date of dispatch by VENDOR shall not exceed the period
stipulated in ANNEX 3 to AGREEMENT.
For urgent deliveries, FSC may request accelerated REPAIRS to be carried out. In
this case, a special request will be transmitted by FSC to VENDOR by electronic
media. In such cases VENDOR will [***].
5.7 Dead on Arrival
The Dead on Arrival Rate, as verified by VENDOR and not just based on FSC’s
observations, for repaired SPARE PARTs/CPs shall not exceed [***]. All such
SPARE PARTs/ CPs shall be qualified “Dead on Arrival” which are still defective
after REPAIR within [***].
5.9 Warranty
VENDOR warrants that the repaired SPARE PARTS/CPs will be free from defects that
were subject of the REPAIR order, for a period of [***].
If VENDOR fails to carry out REPAIR successfully, in particular if a SPARE
PART/CP remains defective even after REPAIR, VENDOR shall [***]
5.10 Quality and Environmental Management
VENDOR guarantees to comply with any applicable environmental laws or
regulations that apply to its performance under this AGREEMENT.

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VENDOR guarantees that it will apply — through a recognized certification
institution (i.e. DQS) — for quality and environmental certification for the
REPAIRS in question in accordance with ISO 9001 and ISO 14001. VENDOR is to
obtain certification and to maintain this for the period stated in 27.5 of the
AGREEMENT.
VENDOR is responsible for the proper disposal (recycling or removal) for CPs
returned under warranty according to the legal requirements on site of all waste
and/or irreparable equipment and removed parts returned to VENDOR in executing
REPAIRs commissioned by FSC. In particular, all legal requirements regarding
waste of electrical and electronic equipment, batteries as well as other
hazardous waste are to be considered.
VENDOR will keep supporting documentation of all disposal processes in
accordance with legal requirements. FSC is entitled to perform audits in order
to prove the compliance with the quality and environmental standards.
To maintain the high quality and reliability of SPARE PARTS/CPs VENDOR shall
ensure that it adopts any and all necessary precautions while handling ESD
parts.
5.11 Data protection
VENDOR shall treat customer data or information about the customer in form of
stored data on SPARE PARTs/CPs (DATA), if any, as follows:
DATA will not be copied and will be physically erased completely. The erase
procedure is done in such a way that a recovery of the DATA is not possible
according technical state of the art.
If VENDOR has access to DATA, VENDOR will ensure that this information is
handled confidentially for an unlimited duration: VENDOR will ensure that such
DATA will neither be used for business nor for private purposes and that it will
not be stored or made accessible to third parties (including employees).
In case that SPARE PARTs/CPs are handled by subcontractors, VENDOR will ensure
that the subcontractors will comply with the provisions above.
6. MISCELLANEOUS
6.1 Logistics and Operations Specifications
General Logistics and Operations Specifications, applicable for SPARE PARTS
Procurement (Clause 3) as well as for SPARE PARTS/CP REPAIR (Clause 5) are
described in Attachment 4 to Annex 6 (Logistics and Operations Specifications).
6.2 RMA Process/Repairs Processing — Handling by Third Party Service Partner
[***]

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[***]
6.3 Quality Manager
Notwithstanding FSC` s further rights under this Annex 6, FSC shall have the
same rights set forth in ANNEX 7 to the AGREEMENT regarding source assessments
and audits with respect to SPARE PARTS as it does for CPs.
6.4 Measurement / Score Card
FSC will measure VENDOR’s performance and quality of service in various
categories, particularly the following:
[***]
The results of these VENDOR’s KPI measurements will be combined and listed on a
scorecard and may be communicated to VENDOR.
6.5 Communication and Interfaces
The responsible interfaces on FSC’s side are named in Attachment 5 to this Annex
6 (Communication List FSC). All invoicing documents and credit notes have to be
sent to the contact as set out in Attachment 5.
7. ATTACHMENTS TO ANNEX 6
Attachment 1 — SPARE PARTs and REPAIR PRICES
Attachment 2 — IN-WARRANTY HANDLING PROCESS DESCRIPTION
Attachment 3 — REPAIR PROCESS AND SERVICE DESCRIPTION
Attachment 4 — Logistics and Operations Specification
Attachment 5 — Communication List FSC PRS

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Attachment 1 — SPARE PARTs and REPAIR PRICES
Has to be attached case by case.

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Attachment 2 — HANDLING PROCESS DESCRIPTION

1.   General Rules Governing REPAIR and RMA   1.1   For purposes of this ANNEX
6, communications through ELECTRONIC MEDIA shall mean VENDOR’s making available
information to FSC through a web-based portal, or through basic email.   1.2  
For purposes of this ANNEX 6, where VENDOR is required to confirm an RMA order
within [***], the holidays of the country from which the confirmation is issued
shall be take into consideration. For example, if RMA confirmation is occurring
from the United States, United States holidays shall be taken into
consideration.   1.3   When a Failure Analysis is requested, FSC will agree to
waive the applicable Turn Around Time for that REPAIR.   1.4   If VENDOR
determines that returned CPs or SPARE PARTS satisfy the applicable specification
and warranties and there is No Trouble Found (“NTF”), VENDOR will return the
item to FSC [***].   1.5   VENDOR shall provide reports to FSC by granting FSC
access to a secure, web-based portal and posting the reports to the portal. FSC
may then pull reports from the portal in its discretion.

2. In-Warranty Process Description

      Responsibility   Action/Process
FSC
  Requests RMA from VENDOR.
 
   
VENDOR
  Confirms if SPARE PART is within warranty and issues a RMA number latest the
working day following FSC’s request using the same method of communication.
 
   
FSC
  Issues a RMA Order and sends it per ELECTRONIC MEDIA. Returns defective SPARE
PARTS to VENDOR.
 
   
VENDOR
  Acknowledges RMA Order per ELECTRONIC MEDIA for information purposes.
Acknowledgment will include the RMA number which FSC is to use with respect to
that RMA situation, as well as directions as to where to return the defective
SPARE PART.
 
   
 
  VENDOR chooses among the following ways to execute RMA action upon receipt of
defective SPARE PART :
 
   
 
  1. replace/exchange and send SPARE PART to FSC

or

2. release a Credit Note amounting to the purchase price of the defective SPARE
PART

or

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      Responsibility   Action/Process
 
  3. repair and send SPARE PART to FSC

The above described processes can be changed upon mutual agreement of the
PARTIES.

3. Transportation Charges       Transportation charges in case of In-Warranty
shall be [***]. Transportation charges for DOA (Dead on Arrival) SPARE PARTS
shall be [***]. Transportation charges in case of Out-Of-Warranty Spare Parts or
CPs, or NTF situations, shall be [***].

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Attachment 3 — REPAIR PROCESS AND SERVICE DESCRIPTION
1. Out of Warranty REPAIR— Process Description
     1.1 Out of Warranty Status is clear

      Responsibility   Action/Process
FSC
  Issues a REPAIR Order per ELECTRONIC MEDIA.
 
   
VENDOR
  Acknowledges REPAIR Order for information purposes, provides to FSC
information regarding the REPAIR price applicable to such REPAIR ORDER and
issues a RMA number for REPAIR latest the working day following receipt of FSC’
s order using the same method of communication.
 
   
FSC
  Sends faulty SPARE PART/CP to VENDOR along with a purchase order indicating
the amount of the repair price.
 
   
VENDOR
  Repairs and returns SPARE PART/CP to FSC.
 
   
 
  VENDOR will mark all repaired SPARE PARTs/CPs with a repair notice (placed on
the container of the SPARE PART). VENDOR sends an invoice to FSC.

     1.2 Out of Warranty Status is unclear

      Responsibility   Action/Process
FSC
  Requests RMA from VENDOR.
 
   
VENDOR
  Confirms the warranty status. Should SPARE PART/CP be out of warranty, it will
offer a REPAIR, and column O.O.W should be filled with the REPAIR price
applicable to this SPARE PART/CP, using the same method of communication
 
   
FSC
  If it decides to repair out of warranty SPARE PART/CP:
 
   
 
  - Issues a REPAIR Order per ELECTRONIC MEDIA.
 
   
 
  - Issues a Purchase Order indicating the REPAIR price.
 
   
 
  - Sends faulty SPARE PART/CP to VENDOR.
 
   
VENDOR
  Acknowledges REPAIR Order for information purposes and issues a RMA number for
REPAIR latest the working day following receipt of FSC’ s order using the same
method of communication.
 
   
 
  - Repairs and returns SPARE PART/CP to FSC.
 
   
 
  VENDOR will mark all repaired SPARE PARTs/CPs with a repair notice including
the date of REPAIR (placed on the container of the Spare Part). VENDOR sends an
invoice to FSC.

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2.   INCOMING INSPECTION / Reporting

2.1 Incoming Inspection
VENDOR shall carry out an incoming inspection, in particular a logistic
inspection as well as an optical control on SPARE PARTS/CPs immediately after
receipt.
2.2 Wrong Part in Box
If VENDOR receives a SPARE PART/CP that deviates from the declared one, the
procedure as described under Clause 1 of Attachment 4 to this ANNEX 6 shall
apply.
2.3 Reporting
VENDOR will provide the following reports as joined in Appendixes 1 to this
Attachments 3 (REPORTS):
Service Logistics Reports
[***]
Monthly Service Quality Report
[***]

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[***]

    VENDOR will provide FSC with the above-mentioned reports by ELECTRONIC MEDIA
as mentioned above or upon request. Depending on REPAIR volumes the parties may
agree upon a change in the frequency of reports.       [***]   3.  Service
Description (Scope of Services, Control Processes, Technical Changes and Quality
Features)

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Appendix 1 to Attachment 3 — REPORTS
1. Service Logistics Reports
[***]
2. Service Quality Report
[***]

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Attachment 4 — Logistics and Operations Specifications
1. Wrong part in box
If VENDOR receives a SPARE PART/CP that deviates from the declared one, VENDOR
has to inform FSC by email at time of finding differences.
VENDOR can distinguish between the following possibilities:
  [***]

2. Packaging specifications for SPARE PARTs delivery, In-warranty handling and
OOW-REPAIR       SPARE PARTs shall be packed separately from complete CP and
shall be specifically labelled as SPARE PARTs in line with the Basic SPARE PARTs
List. Any delivery of SPARE PARTs and CP shall identify the content of each
package and shall indicate the respective revision level.   2.1 Definitions    
  Logistic Units Individual package: shall mean the single carton/box of one
single product original or similar to original package, identified by one part
number.       Master carton: shall mean the carton that holds the individual
shipping cartons for a same part number.       Bulk-shipping carton: shall mean
the carton that holds parts in bulk identified by different part number.      
P/N The SPARE PART number consists of the prefix ,,XXX:” followed by the
supplier part’s number as listed in the BASIC SPARE PARTs List.

         
 
      e.g. ABC:12345678
 
       
 
  Description         The part description on the label has to be identical to
that in the BASIC SPARE PARTs List.
 
       
 
  Revision        If a revision is applicable for a part it should be printed on
the label. This is mainly for M/Bs (motherboards) or similar products.

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  PO Number   FSC ’s Purchase Order Number
 
       
 
  RMA Number   Return Material Authorisation Number, issued by VENDOR

2.2   Labelling       VENDOR’s SPARE PART number must be printed on every part,
except small metal and plastic parts. Only the small parts, that are bulk
packed, can have a label attached to their packaging. The labels have to be
machine printed.

  •   Individual package must be labelled as follows:              P/N,
Description, Revision, Serial Number (if serial controlled)     •   Master
Carton carton must be labelled as follows:              P/N, Description,
Quantity units inside the box     •   Bulk-shipping carton must be labeled in
respect of its contents:              PO Number or RMA Number     •   Pallets
must at least be labeled as follows:              PO Number or RMA Number     •
  Delivery note must show the content of the pallet. Each Delivery note (packing
slip) will include the Part Number, Description, Revision, PO Number or RMA
Number.

2.3   Seal       All packaging is supplied with a seal of originality in order
to allow documented opening of the packaging (e.g. seal, adhesive tape imprint,
wet adhesive tape strengthened with string).

3.   Delivery note       The delivery note for return of the handled (in
warranty) or repaired SPARE PARTs/CPs must contain the following specifications
for each delivery position:       P/N, RMA Number and/or Repair Order Number,
Serial Number.

When providing exchange/replacement SPARE PARTs/CPs, VENDOR has to mention the
new replacement serial number on the delivery note.

4.   Packaging constituents after the In-Warranty Handling or OOW REPAIR

  •   Individual packaging     •   Padding material (Bubble Wrap and Foam)     •
  Delivery note bag     •   Delivery note     •   Repairer’s package label     •
  Product label

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VENDOR has to return each repaired or exchanged SPARE PART/CP, single packed, in
new individual authorized packaging.
Attachment 5 — Communication List FSC PRS (SE PRS SO MM)
1. Spares Operation Material Management
[***]
2. Invoicing
Please send all invoicing documents and credit notes to:
[***]

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ANNEX 7    QUALITY ASSURANCE
This ANNEX 7 QUALITY ASSURANCE sets forth and defines the processes to be used
by VENDOR in the development and manufacture of Contractual Product(s)
(CP) covered by this AGREEMENT and certain quality requirements pertaining to
said CP(s).

          Abbreviations and Definitions

1.1   Abbreviations

         
 
  AFR   Annual Failure Rate
 
  AQL   Acceptance Quality Level
 
  ATP   Acceptance Test Procedure
 
  CAR   Corrective Action Report
 
  CP   Contracted Product
 
  DCL   Defect Classification List
 
  DOA   Dead On Arrival
 
  DPM   Defect Per Million
 
  DVT   Design Verification Test
 
  EC   Engineering Change
 
  ECN   Engineering Change Notice
 
  ECR   Engineering Change Request
 
  EF   Epidemic Failure
 
  EOL   End of Life
 
  EVT   Engineering Verification Test
 
  fit   failure in time
 
  FOB   Free On Board
 
  IPC   In Process Control
 
  IQC   Incomming Quality Control
 
  MTBF   Mean Time Between Failure
 
  NDF   No Defect Found
 
  NTF   No Trouble Found
 
  OoBT   Out of Box Test
 
  OQC   Outgoing Quality Control
 
  ORT   Ongoing Reliablity Test
 
  PVT   Production Validation Test
 
  SA   Source Assessment

1.2   Definitions

“Defect(s)” shall mean a defect in a CP that creates hazard, prevents the
intended operation (functionality) of the CP or requires part addition,
replacement, repair or adjustment not normally encountered during installation.

  •   Critical Defect:         A Critical Defect is a defect that judgment and
experience indicate is likely to result in hazardous or unsafe conditions (e.g.
endanger human health or life, cause fire,..) for individuals using,
maintaining, or depending upon CP.     •   Major Defect:         A Major Defect
is a defect that is likely to result in failure, or to reduce the usability of
CP for its intended purpose.

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  •   Minor Defect:         A Minor Defect is a defect that is not likely to
reduce the usability of CP for its intended purpose, or is a deviation from
established standards according ANNEX 1 CONTRACTUAL PRODUCTS and ANNEX 2
DOCUMENTATION, having minor influence on the effective use, operation of CP or
appearance.

“DOA” shall mean a CP that does not comply with the applicable product warranty
within the [***].
Quality Statement
VENDOR will establish and maintain an effective Quality Assurance system for all
processes relating to the manufacture of CP, including design, material
procurement, manufacturing, inspection, storage, and transportation of CP in
order to achieve lower failure rates than specified in Appendix 1 to ANNEX 7
QUALITY ASSURANCE.
Quality and technical related documents
Prior to the first general availability shipment of CP to FSC, VENDOR shall use
best efforts to submit to FSC in a machine readable format all documents listed
in ANNEX 2 DOCUMENTATION and shall implement respective standards.
General Inspection System
VENDOR shall provide and maintain an inspection system reasonably acceptable to
FSC covering CP. Records of all inspections performed shall be kept complete and
be made available for review by FSC Quality Assurance Representative.
FSC and its subcontractors reserve the right to have access to CP related
production facilities at any time on request prior to one day notice in order to
inspect CP and CP production process and environment.
Design Verification Test
Different portions of CP DVT will be performed by the applicable party based on
and in compliance with the CP design verification test plan mutually agreed upon
by the parties. Any obligations of VENDOR to perform DVT will be contingent upon
FSC’s providing to VENDOR any assistance, tools or equipment as agreed upon and
set forth in the DVT test plan.
Design verification test goals:
The calculated mean time between failure (MTBF) of the CP (as specified in the
product specification in ANNEX 1 CONTRACTUAL PRODUCTS and ANNEX 2 DOCUMENTATION)
should be confirmed by VENDOR’s DVT. FSC reserves the right to have access to
data generated during DVT.
Product Validation Test
The CP PVT will be performed by VENDOR based on and in compliance with VENDOR’ s
standard reliability and environment test plan.
Product Validation test goals:

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The PVT shall be designed to prove, that the CP fully conforms to the agreed
specification, the drawings, the functionality and the ATP. FSC reserves the
right to have access to applicable data generated during PVT.
Run In / Burn In
Upon the reasonable and mutual agreement of the parties, VENDOR will subject the
CPs to a Run In / Burn In period, at VENDOR’s facility. The parties understand
that such Run In/Burn In period may increase lead times for the CPs or
applicable Spare parts.
Manufacturing Process Controls
8.1 Prior to the first general availability shipment of CPs, VENDOR will
establish control on processes according to the requirements of ANNEX 2
DOCUMENTATION.
8.2 VENDOR will continue to provide to FSC for review a written plan covering
the major phases of manufacturing process control including but not limited to
the following:
     [***]
8.3 VENDOR shall continue to develop, implement and maintain, as necessary,
appropriate procedures and/or documentation which will define the methods to be
used for process control including but not limited to the following:
     [***]
Mass Production Standard
Mass production has to be done by using common workmanship standards (e.g. ANSI
/ IPC A-610, Rev C: Class 2) and according to the general state of the art.
Ongoing Reliability Test (ORT)
10.1 VENDOR shall conduct ongoing Mean Time Between Failure (MTBF) verification
testing in accordance with Vendor’s standard ORT plan. In addition to this, the
conformance of the CP to the ATP (Acceptance Test Procedure) shall be verified
ongoing.
10.2 VENDOR will inform FSC of significant changes to the above referenced plan
which decrease the quality and/or quantity of data gathered during this test.
[***]
10.3 [***]

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[***]
10.4 [***]
10.5 [***]
Source Assessment
11.1 For the term of the Agreement FSC shall [***]
VENDOR acknowledges and agrees that Source Assessment by FSC will not relieve
VENDOR from its obligation to establish and maintain an effective quality
assurance system and from its full and sole responsibility for the manufacturing
and delivery of the CPs in agreed quality.
FSC will notify VENDOR of [***]
11.2 In the event FSC informed VENDOR about [***]
VENDOR shall inform [***]
11.3 Source Assessment includes the following activities:
     [***]

 

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Source Assessment will be conducted in accordance with ATP, Workmanship Standard
and the DCL, which are mutually agreed for each CP. The ATP includes the level
of inspection, AQL and/or sampling plan and the overall testing procedure where
applicable.
11.4 Sampling for the Source Assessment will be done according to the following
principles (“Sampling Plan”):
[***]
Unless otherwise defined in the ATP, sampling type shall be “normal” and
inspection level shall be “II”.
11.5 Source Assessment Testing Results
[***]
11.6 For the avoidance of doubt FSC’s [***].
12. Epidemic Failures
12.1 If EPIDEMIC FAILURES occur, VENDOR shall take immediate and appropriate
actions to come up with a strategy for dealing with the EPIDEMIC FAILURE with
respect to all affected CPs (and not just those outside of agreed upon quality
levels) in agreement with FSC, and subject to the provisions below.
12.2 EPIDEMIC FAILURE and periods of applicability are defined as either of the
following:
(a) An EPIDEMIC FAILURE shall mean failures of a CP [***] that meet ALL of the
following conditions:
     [***]

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     [***]
OR
(b) An EPIDEMIC FAILURE shall mean the failure of a type of CP module as set
forth on Appendix 1 of this ANNEX 7 (“Appendix 1”), [***] that meet ALL of the
following conditions:
     [***]
[***]
12.4 EPIDEMIC FAILUREs Removal
In the event of an EPIDEMIC FAILURE, VENDOR shall have the discretion to repair
or replace the affected CPs according to a reasonable plan of action designed by
VENDOR and reasonably approved by FSC. VENDOR agrees to [***]
13. On-Site Audit Requirements
VENDOR shall grant FSC access to VENDOR’s engineering, production and test
facilities of CP for on site audits. FSC may audit the engineering, production
and test processes on a scheduled basis and with reasonable advance notification
[***] to VENDOR.
FSC may, for purposes of periodic monitoring or for lot acceptance, select and
test samples at its own expense of completed CP within the area allotted to FSC
for such purposes. FSC and

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VENDOR will mutually agree to sample selection methods and quantities. On-site
audits will occur as necessary to insure product quality prior to shipment to
FSC.
If VENDOR changes the CP manufacturing location, FSC’s quality assurance
organization may conduct a production and process audit.
14. Traceability
VENDOR shall keep records of manufacturing data (date of manufacture,
manufacturing lines, serial numbers of parts used, and other mutually agreed
items required to ensure the ability to trace defects in quality or errors
occurring in the CP, and promptly disclose this data upon request from FSC for
[***]

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Appendix 1 to Annex 7
[***]

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ANNEX 8    EMERGENCY MANUFACTURING RIGHT
1. If VENDOR is [***], then FSC may send written notice to VENDOR that it wishes
to exercise its manufacturing rights hereunder (“Manufacturing Rights”). If
within [***] of receiving such notice from FSC VENDOR does not begin [***], then
VENDOR hereby grants to FSC [***].
Notwithstanding the foregoing, the right of FSC to exercise such Manufacturing
Rights is subject to the following conditions, exclusions and limitations:
     (i) FSC must manage all such manufacture and any related documentation and
materials in a confidential manner;
     (ii) The CPs and Spare Parts manufactured by FSC must be used, sold, and
distributed to FSC’s customers in FSC’s normal course of business, and not for
any other purpose such as (but not limited to) the purpose of [***];
     (iii) If, in exercising the Emergency Manufacturing Rights, FSC uses the
same contract manufacturer as VENDOR used just prior to the trigger of the
Emergency Manufacturing Rights (and therefore the investment of FSC in
exercising the rights is minimal), then the Manufacturing Rights shall terminate
upon the earlier of: [***];
     (iv) If, in exercising the Emergency Manufacturing Rights, FSC uses a
different contract manufacturer as VENDOR used just prior to the trigger of the
Emergency Manufacturing Rights (and therefore the investment of FSC in
exercising the rights is more significant), then the Manufacturing Rights shall
terminate upon the earlier of: [***].
     (v) Upon the termination of the Manufacturing Rights, FSC shall cease
manufacture of CPs and return to VENDOR all documents and materials that were
provided to FSC by VENDOR to enable FSC to exercise its manufacturing rights.
2. Upon FSC’s proper exercise of the manufacturing rights set forth herein,
VENDOR shall:
(i) submit without delay to FSC an updated and reproducible set of the complete
manufacturing and testing documentation in respect of the CP, such documentation
to be in the English language and in the metric system;

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(ii) render to FSC in respect of the CP reasonable technical assistance, [***],
by training of FSC’s experts and explanation of the above mentioned
documentation; and
(iii) provide to FSC those [***].
3. FSC may at any time request that VENDOR will deposit one set of the above
mentioned manufacturing and testing documentation with a neutral escrow agent in
the United States of America, to be nominated by VENDOR and reasonably approved
by FSC and to keep up to date such documentation. In such case FSC shall bear
all costs associated with the selection, deposition and maintenance of the
deposit.

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ANNEX 9    STANDARDS, ENVIRONMENTAL REQUIREMENTS
[***]

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ANNEX 10    TECHNICAL CHANGES
1. Forms of Communication and Notification.
The parties will set up a Change Control Board (“CCB”) with representatives of
both parties, which will meet telephonically on a periodic basis to discuss
pending changes that are expected to affect the CPs and Spare Parts. The parties
will mutually agree upon the frequency of such CCB meetings. The parties expect
that much of the information to be exchanged between the parties regarding
engineering changes (“EC”) will be exchanged during the CCB meetings. Further,
FSC will be granted access to VENDOR’s AGILE database through which FSC can
initiate, track and approve ECs (“Agile”). Any notification that must be made
pursuant to this ANNEX by either party to the other regarding ECs may be made by
regular email, through Agile or verbally during a CCB meeting.
2. ENGINEERING CHANGES TO CP
Vendor shall use best efforts to give FSC prompt notice, but at least [***]
notice, prior to each technical change VENDOR intends to make to the CPs during
the term of this Agreement (“EC”). Such notices shall in particular include the
article numbers of the relevant CPs, the date of alteration and a complete
description of the change. At FSC’s request, VENDOR shall furnish FSC with the
information which FSC reasonably considers necessary in connection with these
alterations to the CPs. Notwithstanding the foregoing, FSC understands that in
certain emergency situations, VENDOR may not be able to give FSC [***] notice of
an EC.
3. Conditions Governing Changes

  a)   VENDOR is entitled to execute changes, which do not affect the form, fit
or functionof the applicable CP or Spare Part without the approval of FSC.
VENDOR shall use best efforts to inform FSC of such technical changes [***]
prior to delivery of the changed CP or Spare Part. FSC understands that in
certain emergency situations, VENDOR may not be able to comply with such notice
period.     b)   VENDOR may execute technical changes which do affect the form,
fit, or function, but only with the prior consent of FSC. FSC shall grant or
refuse its consent through [***] following the receipt of the notification. FSC
shall not unreasonably withhold its consent.     c)   Vendor shall use best
efforts to give FSC prompt notice but at least [***] prior to making any other
types of changes VENDOR intends to make concerning the CPs or Spare Parts, e.g.
regarding tooling, processes, procedures, locations, and sub-vendors.
Notwithstanding the foregoing, FSC understands that in emergency certain
situations, VENDOR may not be able to give FSC [***] notice of such a change.  
  d)   Even after EOL, VENDOR shall comply with the EC processes stated in this
ANNEX 10 TECHNICAL CHANGES.     e)   If FSC does not respond to requests for
approval of EC orders within the aforementioned [***], FSC’s consent shall be
considered granted to VENDOR.

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  f)   If FSC receives CPs or Spare Parts with changes of which it should have
been informed but was not, FSC may refuse acceptance of the CP or Spare Part and
VENDOR shall be liable for all shipping charges with respect to the return of
the units.

4. Modifications to the Specifications of CPs

      VENDOR shall use best efforts to provide to FSC with [***] prior notice of
VENDOR’s planned intention to modify the specifications for a CP.        
Modification by VENDOR of a FSC-custom component [***]. Modification by VENDOR
of the specification for a CP which affects the form, fit, or function, may only
be made with the prior consent of FSC. FSC shall grant or refuse its consent
within [***]. FSC shall not unreasonably withhold its consent. If FSC’s consent
is required, FSC and VENDOR will agree on a starting point (e.g. cut in serial
number, cut in date etc.) from which the modified CP will be delivered. Up to
this point only unmodified CP may be delivered to FSC.         Even after the
starting point of modification VENDOR is obliged to supply FSC with SPARE PARTS
for a period of [***], corresponding to the earlier specifications, unless the
modified specifications do not affect the use of the modified SPARE PARTS for CP
with earlier specifications. Further VENDOR shall mark CPs affected by such
modifications of the specifications by way of a new part number or other
notation.         Proposals submitted by FSC for modifying the CP specifications
shall be given due consideration by VENDOR. [***] VENDOR shall communicate its
opinion of the proposed modifications to the specifications within [***]
following communication of the same by FSC. If VENDOR agrees to modify the CP
according to such specifications it shall inform FSC of the resultant price
adjustments and of the time necessary to carry out the modifications. Such
modifications shall be made only with FSC’s approval.

5. Engineering Change Procedure

      Notification of product modifications shall be done by means of an ECR /
ECN (Engineering Change Request / Notice) reflecting the new revision level and
the reason for the modification according Appendix 1 to ANNEX 10. FSC shall use
reasonable efforts to evaluate an ECR as soon as possible.

The EC process is described in Appendix 1 to ANNEX 10. FSC shall respond to an
EC request [***]. If an EC requires FSC’s approval and FSC rejects an ECR,
VENDOR shall not implement that specific modification.

6. Request for Action due to Technical Issue

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    A modification request by FSC due to a technical failure of a CP or other
issue that impacts a CP’s compliance with the applicable specification will be
made [***].       VENDOR shall notify FSC of its acceptance or rejection of the
RFA [***]. VENDOR shall not unreasonably withhold its consent to an RFA.
Mandatory or urgent modifications should be marked accordingly.       Mutually
accepted changes may be implemented. The implementation can be notified by an
ECN (Engineering Change Notice). The Cut In Date / Cut in Serial Number shall be
mutually agreed upon in writing.

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Appendix 1 to ANNEX 10
1. EC Process
[***]

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[***]

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ANNEX 11    TECHNICAL SUPPORT, TRAINING
1. Training
Upon FSC’s request, VENDOR shall hold [***] an initial training course, [***],
as specified below to be conducted in the English language on FSC’s premises in
Germany in order to instruct employees of FSC and its designated service
partners that are bound by standard non-disclosure agreements (“Designated
Service Providers”) in the operation, maintenance and technical features of CPs.
VENDOR shall provide appropriate training documents which may be in the form of
CDs and other electronic formats.
FSC may reproduce the training documents for FSC’s internal use only (including
FSC’s Designated Service Partners).
For additional training courses which may be requested by FSC, dates and actual
costs will be mutually agreed upon for each such additional course.
2. Technical Support
FSC will be responsible for working directly with FSC’s end users and customers,
and VENDOR will work directly with FSC, as necessary, to provide technical
support with respect to CPs during the Warranty Period. [***] FSC and VENDOR
will mutually agree upon terms pursuant to which VENDOR will provide support on
CPs beyond the Warranty Period.
FSC represents and warrants that it (or its agents) is experienced in, capable
of, and staffed to provide Level 1 Level 2 and Level 3 support (as defined
below) for its own products and the CPs. FSC must ensure that its technical
support personnel have attended training courses with respect to the CPs to
enable such support, including the initial training described in section 1,
above. VENDOR will accept calls for technical assistance only from FSC Level 3
engineers who have attended such training.
VENDOR will provide Level 4 support with respect to the CPs during the Warranty
Period, as defined below.
3. Support Level Definitions

  (a)   Level 1 Support

[***]

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[***]

(b)   Level 2 Support

[***]

  (b)   Level 3 Support

[***]

  (c)   Level 4 Support

[***]
4. On-Site Technical Supp
The parties both understand that VENDOR personnel will be requested to visit
end-user customer sites only in extraordinary circumstances, where resolution of
an issue is shown to be impossible without such a visit. In such instances,
[***] When VENDOR personnel are required to make direct telephone or field
contact with FSC’s end-user customer, FSC will designate a customer
representative of FSC to be present for the duration of the customer contact.

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ANNEX 12    CONTACTS
Notices and communications to be transmitted according to Section 26 of the
AGREEMENT between VENDOR and FSC shall be given in writing or by fax to the
following addresses of the parties or to such other address as the party
concerned may subsequently notify in writing to the other party.
VENDOR:
[***]

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[***]

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FSC:
[***]

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[***]

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ANNEX 13    EXCESS INVENTORY
FSC has to give notice to VENDOR [***].
During the [***].
The [***]
Should the [***]
Should FSC receive no timely instructions within the [***] period, FSC is [***]

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ANNEX 14    DROPSHIPMENT
[***]

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ANNEX 15    TEST REQUIREMENTS
[***]

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ANNEX 16    PACKAGING AND LABELING
[***]

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ANNEX 17    ETHICAL STANDARDS

1.   FSC is committed to ethical and responsible conduct in its business
operations which respects the rights of the individuals and the environment. At
a minimum FSC requires the VENDOR to comply with the following standards and all
applicable laws relating to such matters. The VENDOR shall:

  1.1   not use child labour or forced or involuntary labour of any kind;    
1.2   not discriminate in hiring and employment practices whether based upon
race, religion, age, nationality, social or ethnic origin, sexual orientation,
gender, disability or political opinion;     1.3   treat all its employees with
dignity and respect and not use corporal punishment or threats of violence or
other physical or mental abuse;     1.4   provide its employees with a safe and
healthy workplace (and where applicable any housing provided for employees) in
compliance with applicable laws and standards and ensure reasonable access to
drinkable water and sanitary facilities, adequate lighting and ventilation and
fire safety; and     1.5   comply with applicable laws and regulations relating
to wages, working hours and environmental matters.

2.   VENDOR shall take adequate measures to ensure that the provisions of this
clause are communicated to its employees.   3.   VENDOR hereby authorises FSC
and its designated agents to engage in monitoring activities to verify
compliance with the provisions of this clause including conducting unannounced
on-site inspections and review of books and records relating to the above
matters.

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ANNEX 18    INTELLECTUAL PROPERTY RIGHTS

1.   Definitions

  1.1   “VENDOR Background IP” shall mean any pre-existing Intellectual Property
that VENDOR owns or has the right to license. Unless a certain component or
feature is otherwise specifically indicated, the CP and the Spare Parts are
VENDOR Background IP.     1.2   “VENDOR Foreground IP” shall mean any
Intellectual Property which is developed, conceived or reduced to practice by
the employees or contractors of VENDOR as a result of the performance of any
development activities under the AGREEMENT or with respect to the CPs or Spare
Parts. Except for FSC NEW Ideas that are specifically identified as Jointly
Owned IP as per this ANNEX, VENDOR Foreground IP shall include the Intellectual
Property developed, conceived or reduced to practice by one or more employees or
agents of VENDOR with the aid or contributions of one or more employees or
agents of FSC in connection with development activities taken under the
AGREEMENT which relates to the CP and Spare Parts.     1.3   “Jointly Owned IP”
shall mean FSC New Ideas, but only those that are incorporated into a CP or
Spare Part and which are identified and agreed in writing by the Parties.
Jointly Owned IP shall not include any underlying or accompanying Background IP
or Foreground IP of either party.     1.4   “Intellectual Property” or “IP”
shall mean all rights worldwide in Patents, copyrights, trade secrets,
Confidential Information or any other Intellectual Property rights, but
excluding rights in trademarks, service marks, trade names, service names and
Internet domain names and other similar designations.     1.5   “FSC Background
IP” shall mean any pre-existing Intellectual Property that FSC owns or has the
right to license.     1.6   “FSC New Ideas” shall mean new concepts or other
forms of Intellectual Property such as, for example, new features for the CPs,
which is conceived of solely by FSC’s employees or agents without the
contribution of VENDOR. FSC must follow the guidelines regarding the disclosure
of FSC New Ideas as set forth below in this ANNEX 18 in order to take advantage
of any applicable exclusive sales period with respect to the FSC New Idea.    
1.7   “Patents” shall mean patents, patent applications, design patents and
registrations and utility models, along with any reissues, re-examinations,
continuations, continuations-in-part, divisions and renewals thereof.

2.   FSC and its licensors shall retain title to and all ownership rights and
interests in and to the FSC Background IP.

3.   VENDOR and its licensors shall retain title to and all ownership rights and
interests in and to the VENDOR Background IP and VENDOR Foreground IP.

4.   FSC NEW Ideas

              GS   1/2

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Confidential

  4.1   In the event FSC would like to share with VENDOR an FSC New Idea for
purposes of having VENDOR include the FSC New Idea in the CPs or Spare Parts,
FSC shall [***].     4.2   If, upon disclosing the FSC New Idea to VENDOR,
VENDOR [***].     4.3   If, upon disclosing the FSC New Idea to VENDOR, VENDOR
[***].     4.4   FSC New Ideas which are identified and agreed by the Parties in
writing will be Jointly Owned IP, subject to VENDOR’s underlying ownership
rights and interests to VENDOR Background IP and VENDOR Foreground IP and
subject to FSC’s rights in Background IP.

5.   With respect to Jointly Owned IP which has been identified and agreed by
the Parties in writing, neither party will have a duty to [***].

                  ***CONFIDENTIAL TREATMENT REQUESTED               GS   2/2

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Confidential
ANNEX 19    MARKETING FUNDS

1.   VENDOR shall provide [***].   2.   The MDF is expected to be used to pay
for, among other things, [***].   3.   FSC shall be required to provide [***].  
4.   For the calendar year 2006, the total amount of the MDF shall be [***].

For the calendar year 2007, the total amount of the MDF shall be [***]

6.   For the year 2008 and beyond, the parties will negotiate the amount of the
MDF in good faith.

                  ***CONFIDENTIAL TREATMENT REQUESTED               GS   1/1