Confidential Treatment Requested




Exhibit 10.1




 




Base Agreement # 4902RL1317




 




This Base Agreement (“Base

Agreement”) dated as of November 1, 2002 (“Effective Date”), between International Business Machines

Corporation  (“Buyer”) and Overland Storage, Inc. (“Supplier”), establishes the basis for a

multinational procurement relationship under which Supplier will provide Buyer

the Products and Services described in SOWs issued under this Base

Agreement.  Products and Services acquired

by Buyer on or after the Effective Date will be covered by this Base

Agreement.  This Base Agreement will

remain in effect until terminated.




 




1.0                               Definitions




 




“Affiliates”

means entities that control, are controlled by, or are under common control

with, a party to this Agreement.




“Agreement”

means this Base Agreement and any relevant Statements of Work (“SOW”), Work Authorizations (“WA”), and other attachments or appendices

specifically referenced in this Agreement.




“Bulk Pull Indicator”

means whether Pull Notifications will be sent to Supplier singly (designated by

an “S”) or in groups such that such Pull Notifications cumulate to a Product

quantity of at least one pallet (designated by a “G”).




“Epidemic Defects”

shall mean Products that experience one of more of the following: (a) the same

or similar defect at a rate of one percent (1%) or more (or other rate that may

be specified in an SOW) in any given sixty (60) day period, (b) the same or

similar defect at a rate of one percent (1%) or more (or other rate that may be

specified in an SOW) of total purchases, (c) recalls, or (d) safety defects.




“Lead Time” means

the minimum length of time prior to a specific delivery date that Supplier must

receive a WA from Buyer to ensure delivery by such date.




“Liability

Horizon” means the period of time as specified in the Pull

Product Profile used to calculate the maximum liability for a given Pull

Product.




“Liability

Horizon Quantity” means the quantity of Pull Products

specified in the Planning Schedule contained within the Liability Horizon.




“Overage”

means the quantity of Pull Products by which the Liability Horizon Quantity

specified in a Planning Schedule exceeds the quantity of Pull Products

committed to in Pull Notifications.




“Participation

Agreement” or “PA”

means an agreement signed by one or more Affiliates which incorporates by

reference the terms and conditions in this Base Agreement, any relevant SOW,

and other attachments or appendices specifically referenced in the PA.




“Personnel”

means agents, employees or subcontractors engaged or

appointed by Buyer or Supplier.




“Planning

Schedule” means Buyer’s most recent forecast of requirements

for Pull Products, as derived from the forecasting process set forth in the

SOW.




“Prices”

means the agreed upon payment and currency for Products and Services, including

all applicable fees, payments and taxes, as specified in the relevant SOW

and/or WA.




“Process Time” means

the time required for Buyer, subject to the Bulk Pull Indicator, to issue a

Pull Notification once Product has been pulled from the hub.




“Products”

means items that Supplier prepares for or provides to Buyer as described in a

SOW.




“Pull

Buffer” means a quantity of Pull Products which is held in

inventory by Supplier.




“Pull

Products” means Products specified in a Pull Product Profile.




“Pull

Product Profile” means the section of the SOW, or other

document provided by Buyer, describing Pull Products.




“Pull

Purchase Order” means a logistical processing document used

for invoicing, receiving and forecasting purposes which does not represent a WA

nor bind Buyer to any quantity or delivery date.




“Pull

Notification” means Buyer’s only authorization (WA) for

Supplier to deliver a specified quantity of Pull Products.




 




THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS

BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.




 




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“Response

Time” means the time required for the Supplier to manufacture

Product.




“Rounding

Indicator” means the minimum quantity of Products that Buyer

may pull at any time.




“Taxes” means any

and all applicable taxes, charges, fees, levies or other assessments imposed or

collected by any governmental entity worldwide or any political subdivision

thereof and however designated or levied on sales of Products or Services, or

sales, use, transfer, goods and services or value added  tax or any other duties or fees related to

any payment made by Buyer to Supplier for Product and/or Service provided by

Supplier to Buyer under or pursuant to this Agreement; exclusive, however, of

taxes imposed upon the net income or capital of Supplier or taxes in lieu of

such net income taxes or such other taxes which are to be borne by the Supplier

under law.  Supplier shall also bear

sole responsibility for all taxes, assessments, or other levies on its own

leased or purchased property, equipment or software.




“Transit Time” means

the Lead Time less the Response Time.




“Services”

means work that Supplier performs for Buyer as described in a SOW.




“Statement

of Work” or “SOW”

means any document that:




1.  identifies itself as a statement of work;




2.  is signed by both parties;




3.  incorporates by reference the terms and

conditions of this Base Agreement; and




4.  describes the Products and Services,

including any requirements, specifications or schedules.




“Upside

Flexibility” means a 

percentage of Pull Products specified in the Pull Product Profile in

excess of the Liability Horizon Quantity.




“Work

Authorization” or “WA”

means Buyer’s authorization in either electronic or tangible form for Supplier

to conduct transactions under this Agreement in accordance with the applicable

SOW (i.e., a purchase order, bill of lading, or other Buyer designated

document).  A SOW is a WA only if

designated as such in writing by Buyer.




 




2.0                               Statement

of Work




 




Supplier will provide the

Products or Services as specified in the relevant SOW only when specified in a

WA.  Supplier will begin work only after

receiving a WA from Buyer.  Buyer may

request changes to a SOW and Supplier will submit to Buyer the impact of such

changes.  Changes accepted by Buyer will

be specified in an amended SOW or change order signed by both parties.  Supplier will maintain the capability to

supply agreed upon Products, including parts of Products, for a period of time

as required by law and any additional periods of time specified in the relevant

SOW.  Supplier will notify Buyer of its

intent to withdraw any Product and will continue to deliver such withdrawn Products

for the periods as specified in the relevant SOW.




 




3.0                               Pricing




 




Supplier will provide

Products and Services to Buyer for the Prices. 

Prices for Products and Services specified in a SOW and/or WA and

accepted by Buyer plus the payment of applicable Taxes will be the only amount

due to Supplier from Buyer. The relevant SOW or WA shall contain Prices for

each country receiving Products and Services under this Agreement.




 




4.0                               Payments

and Acceptance




 




Terms for payment will be

specified in the relevant SOW and/or WA. 

Payment of invoices will not be deemed acceptance of Products or

Services, but rather such Products or Services will be subject to inspection,

test, acceptance or rejection by Buyer until successful integration into

Buyer’s products, or for a period as specified in the relevant SOW, whichever

occurs first.  Buyer may, at its option,

either reject Products or Services that do not comply with the specifications

and requirements for a refund plus any




 




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inspection, test and transportation charges paid by

Buyer, or require prompt correction or replacement of such Products upon

Buyer’s written instruction.  Buyer may

reject entire lots of Products which do not meet quality levels as specified in

the relevant SOW and/or WA.




 




5.0                               Electronic

Commerce




 




To the extent permitted

by local law, the parties will conduct transactions using an electronic

commerce approach under which the parties will electronically transmit and

receive legally binding purchase and sale obligations, including electronic

credit entries transmitted by Buyer to the Supplier account specified in the

relevant SOW and/or WA.  The parties

will enter into a separate agreement governing the transmission of such

electronic transactions and associated responsibilities of the parties.




 




6.0                               Warranties




 




6.1                               Ongoing

Warranties




Supplier makes the

following ongoing representations and warranties:




1.  it has the right to enter into this

Agreement and its performance of this Agreement will comply, at its own

expense, with the terms of any contract, obligation, law, regulation or

ordinance to which it is or becomes subject;




2.  no claim, lien, or action exists or is

threatened against Supplier that would interfere with Buyer’s use or sale of

the Products;




3.  Products and Services do not infringe any

intellectual property right of a third party;




4.  all authors have agreed not to assert their

moral rights (personal rights associated with authorship of a work under

applicable law) in the Products, to the extent permitted by law;




5.  Products are free from defects in material

and workmanship and will conform to the warranties, specifications and

requirements, including but not limited to quality requirements in this

Agreement for the time period as specified in the relevant SOW and/or WA;




6.  Products are free of defects in design

(except for written designs provided by Buyer unless the defects in Buyer’s

designs are based on Supplier’s specifications);




7.  Products are safe for use consistent with

and will comply with the warranties, specifications and requirements in this

Agreement;




8.  Products and Services which interact in any

capacity with monetary data are euro ready such that when used in accordance

with their associated documentation they are capable of correctly processing

monetary data in the euro denomination and respecting the euro currency

formatting conventions (including the euro sign);




9.  none of the Products contain nor are any of

the Products manufactured using ozone depleting substances such as halons,

chlorofluorocarbons, hydrochlorofluorocarbons, methyl chloroform and carbon

tetrachloride as defined by the Montreal Protocol , and as also specified in

the relevant SOW and/or WA;




10.  Products are new and do not contain used or

reconditioned parts, unless otherwise specified in the relevant SOW and/or WA;




11.  to the extent Products include software code

(including without limitation firmware, BIOS, and device drivers), Products

contain no harmful code;




12.  all Products and all parts of Products,

including, but not limited to parts that may be identified as field replacement

units, customer replacement units, spare parts, and/or parts that have any

floppy disk controller functions and other storage devices shall not experience

any measurable loss of data, and shall conform with any other related

requirements specified in the relevant SOW and/or WA;




13.  all Products will process date data

correctly (including, without limitation, correctly processing, providing,

receiving, and displaying date data within and between the twentieth and

twenty-first centuries), and are designed to exchange date data accurately and

correctly with other products (including, without




 




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limitation, hardware, code, other software, and

firmware) when used with products which are designed to exchange date data

accurately and correctly;




14. it is knowledgeable

with, and is and will remain in full compliance with all applicable export and

import laws, regulations, orders, and policies (including, but not limited to,

securing all necessary clearance requirements, export and import licenses and

exemptions from, and making all proper filings with appropriate governmental

bodies and/or disclosures  relating

to the release or transfer  to non U.S.

nationals of technology and software in the U.S., or outside the U.S., release

or transfer of technology and software having U.S. content or derived from

U.S.-origin software or technology);




15. it will not export,

directly or indirectly, any technology, software or commodities of U.S. origin

or having U.S. content provided by Buyer or their direct product to any of the

countries or to nationals of those countries, wherever located,  listed in U.S. Export Administration Regulations, as modified

from time to time, unless authorized by appropriate government license or

regulations;




16. it will not use,

disclose, or transfer across borders any information that is processed for

Buyer that may identify an individual (“Personal Data”), except to the extent

necessary to perform under this Agreement; and




17. it will comply with

all applicable data privacy laws and regulations, will implement and maintain

appropriate technical and other protections for the Personal Data, and will

cooperate fully with Buyer’s requests for access to, correction of, and

destruction of Personal Data in Supplier’s possession.




 




6.2                               Warranty

Redemption




If Products or Services

do not comply with the warranties in this Agreement, Supplier will repair or

replace Products (at the latest revision level) or re-perform Services, or

credit or refund the Price of Products or Services, such remedy at Buyer’s

reasonable discretion (provided that any remedy requested by Buyer in the

interests of maximizing customer satisfaction will always be deemed

reasonable).  For such Products,

Supplier will issue to Buyer a Return Material Authorization (“RMA”) within

five (5) days of Buyer’s notice.  If

Supplier fails to repair or replace Products or re-perform Services in a timely

manner, Buyer may do so and Supplier will reimburse Buyer for actual and

reasonable expenses.  Buyer may return

Products which do not conform to the warranties in this Agreement from any

Buyer location to the nearest authorized Supplier location at cost of Supplier

and Supplier will, at cost of Supplier, return any repaired or replaced Product

in a timely manner. SECTIONS 6.2, 6.4, AND 9.0 OF THE BASE AGREMENT, STATE

BUYER’S SOLE REMEDIES FOR ANY BREACH OF WARRANTY IN SECTION 6.1 OF THE BASE

AGREEMENT.




 




6.3                               Post

Warranty Service




Supplier will offer post

warranty Services as specified in the relevant SOW or identify a third party

which will provide such Services.  In

the event a third party or Buyer will provide such Services, Supplier will provide

the designated party with the information required for the performance of the

Services.




 




6.4                               Epidemic

Defects




For Epidemic Defects,

Supplier will, at Buyer’s discretion: (a) refund or credit the Product Price,

or replace or repair the Products at no charge in a timely manner, and (b)

reimburse Buyer for all actual and reasonable expenses incurred by Buyer

related to Epidemic Defects, including, without limitation, costs associated

with repair or replacement, field costs, problem diagnosis, and field and

finished goods inventory related costs.  

Supplier will commence such performance within five (5) calendar days of

Buyer’s notice to Supplier of an Epidemic Defect. SECTIONS 6.2, 6.4, AND 9.0 OF

THE BASE AGREMENT, STATE BUYER’S SOLE REMEDIES FOR ANY BREACH OF WARRANTY IN

SECTION 6.1 OF THE BASE AGREEMENT.




 




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7.0                               Delivery




 




7.1                               Delivery

Logistics




Delivery under this

Agreement means delivery to the Buyer location and delivery point as specified

in the relevant SOW and/or WA.  Buyer

may cancel or reschedule the delivery date or change the delivery point as

specified in the relevant SOW and/or WA. 

The term of sale will be specified in a SOW or WA.  Buyer may issue a twelve (12) month rolling

forecast for quantities of Products that may be required, and Supplier’s

obligations of maintaining sufficient inventory to satisfy Buyer’s requirements

for the Product are conditioned upon Buyer providing such forecast to

Supplier.  Supplier will only deliver

the Products specified in a WA.  ANY PRODUCT QUANTITIES CITED IN OR PURSUANT TO THIS

AGREEMENT, EXCEPT FOR QUANTITIES CITED IN A WA AS FIRM, ARE PRELIMINARY AND

NON-BINDING ONLY.  BUYER MAKES NO

REPRESENTATION OR WARRANTY AS TO THE QUANTITY OF PRODUCTS THAT IT WILL

PURCHASE, IF ANY.




 




7.2                               On-Time

Delivery




The Lead Time for Buyer

to issue a WA prior to delivery will be specified in a SOW.  Products specified in a WA for delivery with

such Lead Time will be delivered on time. 

Supplier will use reasonable efforts when Buyer requests delivery with a

shorter Lead Time.  If Supplier cannot

comply with a delivery commitment, Supplier will promptly notify Buyer of a

revised delivery date and Buyer may:




1.  cancel without charge Products or Services

not yet delivered;




2. ***; and




3.  exercise all other remedies provided at law,

in equity and in this Agreement.




 




7.3                               Replenishment




Buyer will issue a Pull

Purchase Order for any Pull Products that it may include in Pull Notifications.

Notwithstanding the Pull Purchase Order, Supplier will only deliver Pull

Products that are specified in a Pull Notification, and will make such delivery

on the delivery date(s) specified in the relevant Pull Notification. Other than

the Liability Horizon Quantity, Buyer makes no representation or warranty and

assumes no liability regarding the quantity of Pull Products that it will

purchase.  Buyer assumes no liability

for materials procured or products built in excess of the Liability Horizon

Quantity.  Supplier will apply Overages

towards future Pull Notifications and the parties will agree to a

reconciliation amount and a disposition of Overages, if any.  Such reconciliation amount will be reduced

by any amount realized by Supplier for Pull Products (including raw materials

or works-in-progress) used, returned or sold to any party other than Buyer, and

any other reductions agreed to by the parties.




 




8.0                               Intellectual

Property




 




Supplier grants Buyer all

intellectual property rights licensable by Supplier which are necessary for

Buyer to use and sell the Products. 

This Agreement does not grant either party the right to use the other

party’s or their Affiliates’ trademarks, trade names or service marks.




 




9.0                               Supplier

Liability for Third Party Claims




 




***




 




10.0                        Limitation

of Liability




 




***




 




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11.0                        Supplier

and Supplier Personnel




 




Supplier is an

independent contractor and this Agreement does not create an agency

relationship between Buyer and Supplier or Buyer and Supplier Personnel.  Buyer assumes no liability or responsibility

for Supplier Personnel.  Supplier will:




1.  ensure it and Supplier Personnel are in

compliance with all laws, regulations, ordinances, and licensing requirements;




2.  be responsible for the supervision, control,

compensation, withholdings, health and safety of Supplier Personnel;




3.  inform Buyer if a former employee of Buyer

will be assigned work under this Agreement, such assignment subject to Buyer

approval; and




4.  ensure Supplier Personnel performing

Services on Buyer’s premises comply with the On Premises Guidelines and upon

request, provide Buyer, for export evaluation purposes, the country of

citizenship and permanent residence and immigration status of  those persons.  Buyer retains the right to refuse to accept persons made

available by Supplier for export control reasons.




 




12.0                        Insurance




 




Supplier will maintain at

its expense:




1.  commercial general or public liability

insurance with a minimum limit per occurrence or accident of  1,000,000 USD (or local currency

equivalent); and,




2.  workers’ compensation or employer’s

liability insurance as required by local law, such policies waiving any

subrogation rights against Buyer; and,




Insurance required under

clause (1) will name Buyer as an additional insured with respect to Buyer’s

insurable interest, will be primary or non-contributory regarding insured

damages or expenses, and will be purchased from insurers with an AM Best Rating

of B+ or better and a financial class rating of 11 or better.




 




13.0                        Term and

Termination




 




13.1                        Termination

of this Base Agreement




Either party may

terminate this Base Agreement, without any cancellation charge, for a material

breach of this Agreement by the other party or if the other party becomes

insolvent or files or has filed against it a petition in bankruptcy (“Cause”),

to the extent permitted by law.  Such

termination will be effective at the end of a thirty (30) day written notice

period if the Cause remains uncured.  Either party may terminate this

Base Agreement without Cause when there are no outstanding SOWs or WAs.




 




13.2                        Termination

of a SOW or WA




Buyer

may, upon written notice to Supplier, terminate a SOW or WA with Cause

effective thirty (30) days after such written notice or a period of time as

specified in such notice, provided the Cause remains uncured on the effective

date of such termination. Buyer may, upon written notice to Supplier, terminate

a SOW or WA without Cause effective sixty (60) days after such written notice

or a period of time as specified in such notice. In the event Buyer terminates

a SOW or WA without Cause, Buyer will compensate Supplier for the actual and

reasonable costs incurred by Supplier for work in process up to and including

the date of termination, provided that Supplier uses reasonable efforts to

mitigate Buyer’s liability under this subsection by, among other actions,

accepting the return of, returning to its suppliers, selling to others, or

otherwise using the canceled Products (including raw materials or works in

process), and provided that such expenses do not exceed the Prices. Upon

termination, in accordance with Buyer’s written direction, Supplier will

immediately:  (i) cease work; (ii)

prepare and submit to Buyer an




 




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itemization

of all completed and partially completed Products and Services; (iii) deliver

to Buyer Products satisfactorily completed up to the date of termination at the

agreed upon Prices in the relevant SOW and/or WA; and (iv) deliver upon Buyer’s

request any work in process.




 




14.0                        General




 




14.1                        Amendments




This Agreement may only

be amended by a writing specifically referencing this Agreement which has been

signed by authorized representatives of the parties.




 




14.2                        Assignment




Neither party will assign

their rights or delegate or subcontract their duties under this Agreement to third

parties or Affiliates without the prior written consent of the other party,

such consent not to be withheld unreasonably, except that either party may

assign this Agreement in conjunction with the sale of a substantial part of its

business utilizing this Agreement.  Any

unauthorized assignment of this Agreement is void.




 




14.3                        Choice of

Law and Forum; Waiver of Jury Trial; Limitation of Action




This Agreement and the

performance of transactions under this Agreement will be governed by the laws

of the country where the Buyer entering into the relevant agreement or PA is

located, except that the laws of the State of New York applicable to contracts

executed in and performed entirely within that State will apply if any part of

the transaction is performed within the United States.  The United Nations Convention on Contracts

for the International Sale of Goods does not apply.  The parties expressly waive any right to a jury trial regarding

disputes related to this Agreement. 

Unless otherwise provided by local law without the possibility of

contractual waiver or limitation, any legal or other action related to this

Agreement must be commenced no later than two (2) years from the date on which

the cause of action arose.




 




14.4                        Communications




All communications between

the parties regarding this Agreement will be conducted through the parties’

representatives as specified in the relevant SOW, or other Personnel as

specified by the parties.




 




14.5                        Counterparts




This Agreement may be

signed in one or more counterparts, each of which will be deemed to be an

original and all of which when taken together will constitute the same

agreement.  Any copy of this Agreement

made by reliable means (for example, photocopy or facsimile) is considered an

original.




 




14.6                        Exchange

of Information




All information exchanged

is non confidential.  If either party

requires the exchange of confidential information, it will be made under a

separate signed confidentiality agreement between the parties.  The parties will not publicize the terms of

this Agreement, or the relationship, in any advertising, marketing or

promotional materials without prior written consent of the other party except

as may be required by law, provided the party publicizing obtains any

confidentiality treatment available.  Supplier will use information regarding this Agreement only in the

performance of this Agreement.  For

any business personal information relating to Supplier Personnel that Supplier

provides to Buyer, Supplier has obtained the agreement of the Supplier Personnel

to release the information to Buyer and to allow Buyer to use such information

in connection with this Agreement.




 




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14.7                        Freedom of

Action




This Agreement is

nonexclusive and either party may design, develop, manufacture, acquire or

market competitive products or services. 

Buyer will independently establish prices for resale of Products or

Services and is not obligated to announce or market any Products or Services

and does not guarantee the success of its marketing efforts, if any.




 




14.8                        Force

Majeure




Neither party will be in

default or liable for any delay or failure to comply with this Agreement due to

any act beyond the control of the affected party, excluding labor disputes,

provided such party immediately notifies the other.




 




14.9                        Obligations

of Affiliates




Affiliates will

acknowledge acceptance of the terms of this Agreement through the signing of a

PA before conducting any transaction under this Agreement.




 




14.10                 Prior

Communications and Order of Precedence




This Agreement replaces

any prior oral or written agreements or other communication between the parties

with respect to the subject matter of this Agreement, excluding any

confidential disclosure agreements.  In

the event of any conflict in these documents, the order of precedence will be:




1.  the Pull Product Profile

contained in the relevant SOW;




2.  the quantity, payment and

delivery terms of the relevant WA;




3.  the remaining provisions of

the relevant SOW;




4.  this Base Agreement; and




5.  the remaining terms of the relevant WA.




 




14.11                 Record Keeping

and Audit Rights




Supplier will maintain

(and provide to Buyer upon request) relevant business and accounting records to

support invoices under this Agreement and proof of required permits and professional

licenses, for a period of time as required by local law, but not for less than

three (3) years following completion or termination of the relevant SOW and/or

WA.  All accounting records will be

maintained in accordance with generally accepted accounting principles.




 




14.12                 Severability




If any term in this

Agreement is found by competent judicial authority to be unenforceable in any

respect, the validity of the remainder of this Agreement will be unaffected,

provided that such unenforceability does not materially affect the parties’

rights under this Agreement.




 




14.13                 Survival




The provisions set forth

in the following Sections and Subsections of this Base Agreement will survive

after termination or expiration of this Agreement and will remain in effect

until fulfilled:  “Ongoing Warranties”,

“Epidemic Defects”, “Warranty Redemption”, “Intellectual Property”, “Supplier

Liability for Third Party Claims”, “Limitation of Liability”, “Record Keeping

and Audit Rights”, “Choice of Law and Forum; Waiver of Jury Trial; Limitation

of Action”, “Exchange of Information”, and “Prior Communications and Order of

Precedence”.




 




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14.14                 Waiver




An effective waiver under

this Agreement must be in writing signed by the party waiving its right.  A waiver by either party of any instance of

the other party’s noncompliance with any obligation or responsibility under

this Agreement will not be deemed a waiver of subsequent instances.




 




 




	

  ACCEPTED

  AND AGREED TO:


  	

   


  	

  ACCEPTED

  AND AGREED TO:


  
	

  BUYER


  	

   


  	

  SUPPLIER


  
	

  By:  /s/ Kevin J. Beichner


  	

  11/20/02


  	

   


  	

  By:  /s/ Robert J. Scroop


  	

  11/25/02


  
	

  Buyer Signature


  	

  Date


  	

   


  	

  Supplier Signature


  	

  Date


  
	

  Kevin J. Beichner


  	

   


  	

  Robert J. Scroop


  
	

  Printed Name


  	

   


  	

  Printed Name


  
	

  GCM Removable Storage


  	

   


  	

  VP & GM Storage Resource Business Unit


  
	

  Title &

  Organization


  	

   


  	

  Title &

  Organization


  





 




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Confidential Treatment Requested




 




STATEMENT OF WORK # 4902RL1340




 




This Statement of Work  #

4902RL1340 (“SOW”) adopts and incorporates by reference the terms and

conditions of the Base Agreement  #

4902RL1317 (“BA”) between International Business Machines Corporation (“Buyer”)

and Overland Storage, Inc. (“Supplier”). 

This SOW is effective beginning on November 1, 2002 and will remain in

effect until November 1, 2005. 

Transactions performed under this SOW will be conducted in accordance

with and be subject to the terms and conditions of this SOW, the BA and any

applicable Work Authorizations (“WAs”). 

Any provisions of this SOW that by their nature extend beyond its

termination or expiration will remain in effect until fulfilled, and apply to

respective successors and assignees. This SOW is not a WA. Product Unique

Attachments (as defined below) must be signed by both parties or incorporated

by reference into a document signed by both parties, and the terms of a Product

Unique Attachment will apply only to the Products identified in such Product

Unique Attachment. The initial Product Unique Attachment is attached hereto as

“Product Unique Attachment # 1” and incorporated herein by reference.

Subsequent Product Unique Attachments or changes to existing Product Unique

Attachments will take effect on the effective date provided therein and will be

incorporated herein upon execution by the parties.




 




1.0                               DEFINITIONS




 




“APAR”

means the form used to report suspected Problems to

Supplier, and to request their resolution.




“APAR Closing Codes” means the established

set of codes used to denote the final resolution of an APAR.




“APAR Correction Times” means the objectives

that Supplier will achieve for resolution of Problems.




•                  “Severity 1”

Problems will be resolved by Supplier within *** days of its receipt of

the APAR, and Supplier will use best efforts to provide relief to affected

Customers within *** hours of Supplier’s receipt of the APAR.




•                  “Severity 2”

Problem will be resolved by Supplier within *** days of its receipt of

the APAR;




•                  “Severity 3”

Problem will be resolved by Supplier within *** days of its receipt of

the APAR; and




•                  “Severity 4”

Problem will be resolved by Supplier within *** days of its receipt of

the APAR.




“Certified

Service Product” or “CSP” means Repaired

Products. Notwithstanding the relevant “Ongoing Warranties” provision in the

BA, CSP may contain used or reconditioned part(s), provided that such part(s)

are properly marked as “SERVICEABLE USED PART(S)” as further described in this

SOW.




“Consigned

Material” means materials that Buyer owns and

continues to own that are entrusted to Supplier.




“Customer(s)”

mean Buyer’s customer(s).




“Developer Test Systems” means a

configuration of installed hardware and software that Supplier maintains which

is representative of typical Customer installations for the Product and, at a

minimum, contains current and current minus 1 level of the Product and any

prerequisite and co-requisite hardware and software specified by Buyer.




“Emergency

Order” or “EO” means a WA placed by Buyer for FRUs

with a Lead Time not to exceed ***.




“End

of Service” or “EOS” means date when Buyer officially

discontinues Customer service and support for a Product. EOS dates are only

addressed for the purposes of defining the date through which Supplier will

make Repair Services available for Products, and do not affect Supplier’s

obligations with respect to FRU or other Product availability.




“Engineering Change”

or “EC”

means any change(s) to Product.




“Field

Replaceable Unit” or “FRU” means a Product,

Product component, Product subassembly, Product documentation, Product code, or

other Product part used to service a Customer system.




“Lead Time”

means the minimum length of time prior to a specific delivery date that

Supplier must receive a WA from Buyer to ensure delivery by such date.




 




THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS

BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.




 




1





























 




“Maintenance Level Service” means the

service provided, as set forth below, when a Customer identifies a Problem:




•                  “Level 1” is initial service in response to

Customer’s request for support in connection with a suspected Problem;




•                  “Level 2” is service provided to diagnose

and resolve or assist Level 3 in resolving Problems identified by Level 1; and,




•                  “Level 3” is service provided to develop

final resolutions for Problems not resolved by Level 1 and Level 2.




“Problem” means any Product defect,

including, without limitation, any defects arising as a result of the failure

of the Products to function in accordance with their specifications and other

requirements, or other failures or errors.




“Problem Management Record” or “PMR”

means a record documenting support actions taken in response to a Customer’s

request for support in connection with a suspected Problem.




“Product Unique Attachment”  is a document entitled Product Unique

Attachment which contains the terms and conditions unique to a specific

Product.




“Repair” or “Repaired” means all required

repair activity including, disassembly, failure analysis, testing, component

recovery, rework, warranty process, packaging, final testing, and all other

processes necessary to ensure Products, which are sent to Supplier for repair

within or outside of the relevant Product warranty, meet all the functional

performance requirements applicable to newly manufactured Products in

accordance with this SOW or relevant WA.




“Turn

Around Time” or “TAT” means the elapsed time from the date

of receipt acknowledgement of a Product arriving at Supplier’s location for

Repair until shipment notice of Repaired Product back to Buyer.




“Yield” means the relationship between

Product sent to Supplier for Repair and the CSP returned to Buyer.




 




2.0                               PRODUCT

DEFINITION




 




2.1                               Product Description.




The Products are described in the Product Unique Attachment(s).

Products also include all FRUs, CSPs, Product code, and Product documentation.




 




2.2                               Product Specifications & Certifications.




Products will comply with all the requirements set forth

below:




•                  CS1-1121-015, IBM Corporate Standard

“Automatic Identification (AI) for Packaging, Distribution and Manufacturing —

Bar Coded Labels”




•                  GA21-9261-11a, “Packaging and

Handling - Supplier and Interplant Requirements”




•                  ISO 2859,

Sampling Procedures for Inspection by Attributes




•                  ISO 3951,

Sampling Procedures for Inspection by Variables




•                  EIA - 599 - A,

Continuous Improvement




•                  EIA - 659 - A,

Failure, Mechanism, Driven Reliability Monitoring




•                  EIA - 670,

Quality System Assessment




•                  EIA - 671- A,

Problem Analysis and Corrective Actions




•                  EIA - JESD - 38,

Standard for Failure Analysis Report Format




•                  EIA - JESD - 46,

Product Change Notice




•                  EIA - JESD - 50,

Maverick Product Elimination




•                  Supplier’s published specifications,

catalogs, marketing materials, and other documentation, including references in

such materials to future upgrades or performance




•                  FAA Certification, Supplier certifies

that Products and their packages do not contain explosives, hazardous

materials, incendiaries and/or destructive devices as defined by the FAA




 




2





























 




•                  All Product claims, descriptions,

specifications, and other requirements described in the Product bill of

material, elsewhere in this Agreement, and via other written or electronic

communications sent from or approved by Buyer.




 




2.3                               COO Product Certification.




Supplier certifies that the Products have the

country(ies) of origin specified in the Product Unique Attachment(s) to this

SOW.  If there are any changes to this

information, Supplier will notify Buyer by providing a new country of origin

certification signed by an authorized Supplier representative before shipping

any affected Products.  If any part

number has more than one country of origin, Supplier certifies that each

country of origin is specified in the Product Unique Attachment(s), and

Supplier will deliver to Buyer, instructions regarding how Buyer can

distinguish each country of origin for part numbers with more than one country

of origin prior to shipping the affected Products.




 




2.4                               Product

Modifications.




ECs submitted by Buyer will be implemented by Supplier

in a manner consistent with the Product’s original design (e.g., a missing “caution”

label will be replaced by the same type of label and in the same location as

originally specified).  Supplier will

provide documentation illustrating its performance of ECs upon Buyer’s request.

If Buyer places requirements or limitations on a particular Product that result

in an increase in Price as compared to the prices of similar products offered

without such requirements, then Supplier shall notify Buyer of the opportunity

to lower Price, and Buyer shall have the option of modifying the requirements

so that its Products can be purchased at this lower price.  Supplier will not make any changes (including

any changes affecting form, fit, function and safety) to the Products or to

processes supporting Products that have been certified by Buyer, without

Buyer’s prior written consent, such consent not to be withheld

unreasonably.  In the event such changes

are made without Buyer’s prior written consent, Supplier will, at Buyer’s

discretion, either:  (i) replace all

such products with products approved by Buyer and reimburse Buyer for all

actual and reasonable expenses incurred that are associated with such products

replacement (including expenses associated with problem diagnosis, testing, and

replacement of products in normal inventory, finished goods inventory,

distributors inventories, and with Customers); or (ii) credit or refund Buyer

the Price of the products. If Supplier improves the safety, function, cost, or

reliability of products that it builds for itself or for its other customers by

changing a design, component, part, supplier, or production process that may

also be used in or in connection with a Product that Supplier builds for Buyer,

then Supplier will inform Buyer of such improvement and implement changes to

Product as approved by Buyer to incorporate such improvement in Products.




 




2.5                               Product Software and Documentation.  




Supplier will

deliver, at the earlier of a date requested by Buyer or prior to its first

shipment of Product, (i) a fully completed and signed certificate of

originality (in a form to be specified by Buyer) for all Product code and

documentation, and (ii) all Product code (including all code in, or provided for

use with, Products), publications, and documentation in a format and media as

specified by Buyer.  Additionally,

Supplier will promptly deliver to Buyer all updates (hereinafter “Updates”,

such Updates to include, without limitation, all error corrections,

enhancements and new versions) to such Product code, publications, and

documentation in the same format and media as specified by Buyer. Supplier

grants Buyer a nonexclusive, worldwide, perpetual, irrevocable, fully paid up,

license to prepare and have prepared derivative works of Product code and

documentation and their Updates, and to use, have used, execute, reproduce,

transmit, display, perform, transfer, distribute and sublicense Product code

and documentation and their Updates and such derivative works, in any medium or

distribution technology, and to grant others the rights granted herein.  Buyer will not be obligated to preserve any

copyright management information included in the Product code or documentation,

or Updates.




 




3





























 




2.6                               Tamper Evident

Protection.




To the extent that

Supplier ships new Product in its final Customer ready form, Supplier shall

apply tamper evident protection on the finished Product packaging in the form

of an “IBM” logo tape in such a manner that if removed or tampered with, it

would be evident that the finished Product packaging has been opened. Supplier

will have controls to prevent unauthorized use or dissemination of “IBM” logo

tape (including tracking the purchase, internal use, application, and

destruction), and to limit access to such materials to only those responsible

for the tamper evident sealing on the Products.  Supplier will only use the “IBM” logo tape in connection with new

Product.




 




3.0                               PURCHASHING




 




3.1                               Electronic

Commerce.




Buyer may issue scheduling documents (“Blanket Purchase Orders”) which

may have the appearance of a normal WA, but do not include a delivery date.

Such Blanket Purchase Orders are issued only as a logistical processing

document to enable the use of electronic purchase order communications and are

not binding in any manner and shall not be considered as WAs by the parties,

regardless of quantities or prices that may be included in such Blanket

Purchase Orders. Unless previously submitted by Supplier, in order to initiate

electronic transfer of payments associated with this SOW, Supplier will

complete the form entitled “Authorization for Electronic Funds Transfer” as

provided to Supplier by Buyer and fax the completed form to Accounts Payable at

the number included on the form.




 




3.2                               WA

Issuance.




Buyer is under no obligation to purchase any Products

and/or Services, except as ordered in WAs and within the liability limits

addressed elsewhere in the Agreement, including those addressed in the Product

Unique Attachment(s) to this SOW. 

Supplier will comply with Buyer’s requested changes to delivery of

Products specified in a WA as described in the Product Unique Attachment(s) to

this SOW, without additional charge to Buyer. 

If Buyer decreases Product quantities specified in a WA outside of

allowances described in the Product Unique Attachment(s) to this SOW, Supplier

will use all efforts to mitigate Buyer’s liability.  The parties acknowledge that WAs may be placed on Supplier under

this SOW by entities other than the Buyer, but only to the extent expressly

authorized by Buyer and Supplier in writing, and Supplier agrees that for such

purchases that (a) the Buyer authorized third party purchaser under this SOW

shall have extended to it all the protections, rights, and other benefits of

the Agreement; (b) Buyer is a third party beneficiary and has the right to

enforce the terms of this Agreement on such purchases on a joint and several

basis; and (c) Buyer shall not be liable to either party with regard to such

purchase transactions.




 




3.3                               Invoices.




Terms for payment on all Supplier invoices will be net

***

days from receipt of an acceptable invoice by Buyer.  Supplier will not invoice Buyer, until after Product

delivery.  Invoices to Buyer must

include, at a minimum, the following: (i) applicable WA line item numbers; (ii)

SOW and WA numbers; (iii) terms of payment as provided herein; (iv) billing

period dates; (v) applicable Product unit Prices; (vi) total amount invoiced;

(vii) the Harmonized Tariff Code of the importing country for every Product;

and, (viii) Product descriptions with sufficient detail to enable verification

of associated Product categorical classifications.




 




3.4                               Acceptance

or Rejection




Buyer may inspect and

test all Product at Buyer’s facility prior to acceptance or rejection, and may

refuse to accept Product which does not conform to the specifications,

certifications, and other requirements referenced in the Agreement.  If Buyer rejects Product and requests a

replacement Product, Supplier shall replace the rejected Product within seven

(7) calendar days of Buyer’s request, and shall pay for the ***,

if required by Buyer, and all other expenses associated with the return of the

rejected Product.




 




4





























 




4.0                               SUPPLY

RESPONSIBILITIES




 




4.1                               Taxes and Duties




Supplier warrants that

the Prices do not include sales, use or similar taxes that do not apply to

Buyer as a reseller of Products and/or Services. In accordance with the

applicable delivery terms, Supplier will be responsible for all applicable

legal, regulatory and administrative requirements, in addition to all

associated duties and fees, associated with importation of Products (where

applicable) into the country where the Product is received by Buyer from

Supplier.




 




4.2                               Spare

Parts Availability.




Supplier will maintain the capability to supply, and shall provide

Product spare parts (i.e., the entire Product or portions of the Product as

described herein or as may be subsequently described by Buyer, including,

without limitation all FRUs) technical support for the Product as described in

this SOW during the term of this SOW and for a period of *** years

thereafter (or longer period as may be required by law upon Buyer or Supplier)

under the terms and conditions of the Agreement. Supplier will give Buyer a

last time buy option at the end of such *** year

period, and shall also offer any follow on products that are compatible with

Products herein. Supplier will notify Buyer prior to Supplier’s withdrawal of

any Product(s), and such withdrawal will not occur during the term of the SOW

and will not affect Supplier’s responsibilities under this section related to

spare parts availability or technical support.




 




4.3                               Use

of Subcontractors.




Supplier’s use of subcontractors will not relieve Supplier of the

responsibility for the subcontractor’s performance, and Supplier’s

responsibilities assumed under this SOW will be equally applicable to such

subcontractors, as must be agreed upon between Supplier and such subcontractors.

Buyer reserves the right to review both the Supplier’s management system for

the operations of its subcontractors and to review with Supplier, their

subcontractor’s management system for operations for the purposes of this SOW.

Buyer reserves the right to reject Supplier’s use of a subcontractor in

performance of this SOW for any reason.




 




5.0                               TECHNICAL

SUPPORT




 




Technical support

includes the Level 1, Level 2, and Level 3 responsibilities defined below,

Product code, documentation and updates arising out of technical support

responsibilities, and all Updates created or made available by Supplier.




 




5.1                               Level

1.




Supplier will provide

assistance by phone to Buyer, as required by Buyer, in performing the following

Level 1 support responsibilities:




•                  create the PMR;




•                  obtain from Customer a description of

the Problem;




•                  search for any known resolution(s)

relevant to the Problem;




•                  if a resolution to the Problem is

known, specify such resolution to Customer;




•                  if no resolution

to Problem is known, generate APAR, assign APAR Correction Time, forward APAR

to Level 2; and




•                  pass the PMR to Level 2, and update

the PMR documenting Level 1 actions.




 




5.2                               Level

2.




Supplier will provide

assistance by phone to Buyer, as required by Buyer, in performing the following

Level 2 support responsibilities:




•                  receive the PMR/APAR from Level 1;




 




5





























 




•                  analyze Problem symptoms and gather

additional data from Customer as required;




•                  recreate Problem on the Developer

Test System;




•                  determine if Problem is due to

improper installation of the Product by Customer;




•                  determine if Problem is due to

operationally related hardware or software at the Customer location;




•                  attempt a bypass or circumvention for

high impact Problems (i.e., Severity 1 and 2);




•                  create APAR record if no resolution

to Problem is attained; and




•                  update the PMR documenting Level 2

actions.




 




5.3                               Level

3.




Supplier will perform the

following Level 3 support responsibilities:




•                  receive the

APAR/PMR and supporting documentation and materials from Level 2;




•                  analyze Problem

symptoms and diagnose Problem;




•                  notify Level 2

if additional information, materials or documentation are required;




•                  attempt to

recreate Problem on the Developer Test System;




•                  assist Level 2

in developing a bypass or circumvention for high impact Problem (i.e., Severity

1 and 2);




•                  deliver

corrections to the Product and/or Product code to Buyer within the applicable

APAR Correction Times to fix Problems identified by Buyer;




•                  return all APARs

to Buyer with an APAR Closing Code assigned, including text describing the

resolution of Problem;




•                  confirm

resolution of Problem with Customer, and update PMR documenting Level 3

actions; and,




•                  answer any

questions from Buyer and/or Customer concerning the operation and use of

Products.




 




5.4                               Other

Technical Support Responsibilities.




Supplier will provide to

Buyer the name and phone numbers of Supplier Personnel to contact for all

technical support matters related to the Product. Supplier will provide all

training and tools required by Buyer to enable Buyer to perform technical

support functions for the Product and will keep Buyer informed of any known

Problems and their associated solutions. Supplier agrees to make such services

and support available during normal business hours in the form specified by

Buyer. At Buyer’s request, Supplier agrees to provide technical Supplier

Personnel at Customer sites. Notwithstanding anything to the contrary, Supplier

will not contact or work directly with Customers except as directed by Buyer.




 




6.0                               QUALITY




 




6.1                               Nonconforming

Product.




Supplier shall have

established, documented, and maintained procedures to ensure that Product,

which does not conform to the requirements of the Agreement, is prevented from

unintended use or shipment to the Buyer. Supplier must immediately notify Buyer

of any factors affecting Product quality. Supplier will not ship affected

Products to Buyer without prior written approval from Buyer. Within twenty-four

(24) hours of Supplier’s notification to Buyer pursuant to this section,

Supplier will provide Buyer a resolution plan including a description of the

factor affecting Product quality, documentation of the root cause analysis

performed by Supplier in response, a schedule of all actions for the containment

and correction of all affected Products, relevant traceability data for the

affected Products, and a process ensuring the effectiveness of the actions to

be taken hereunder.  If Buyer expressly

instructs Supplier to ship nonconforming Product to the Buyer, then Supplier

will describe the extent of such Product’s non-conformance in writing and

secure Buyer’s written agreement prior to any shipment of any such

non-conforming Product.




 




6.2                               ISO

Requirements.




For ISO compliance, the

Supplier represents and warrants that the Supplier is ISO 9001 compliant.

Compliance hereunder may be either by means of external accreditation or

self-declaration. For external




 




6





























 




accreditation,

Supplier will provide to Buyer, upon Buyer’s request, a copy of the Supplier’s

current registration, including the scope, Standard Industrial Classification

code or equivalent, all locations involved, and any restrictions or

exclusions.  For self-declaration,

Supplier will provide to Buyer, upon Buyer’s request, a letter from Supplier’s

chief executive officer, chief operating officer, or other executive assuring

that self-declaration was performed with due diligence based upon a previously

executed internal audit report, and that such self-declaration has had

executive management review and approval.




 




6.3                               Document

Control and Records.




Supplier shall ensure

that all documents such as software/firmware, engineering drawings,

specifications, contracts, policies, procedures, manufacturing process flow

chart, and work instructions (including test procedures) are under revision

control and are available to all necessary Buyer and/or Supplier Personnel in

the manufacturing environment. Supplier shall a have a system for the effective

updating/removal of any obsolete documentation from all manufacturing areas.

Supplier will establish and maintain procedures for identification, collection,

indexing, filing, storage, maintenance, and disposition of all Product related

records, including but not limited to, Statistical Process Control data, test

and inspection records, customer pricing records, and all other records

required by Buyer. Supplier shall maintain a history file for all Products, by

part number, that tracks changes to the Product or Product component designs,

materials, and/or manufacturing source. Supplier shall track and retain, for at

least four (4) years after termination of this SOW, records which reflect,

among other things, any certificates required by law or under this Agreement,

all necessary and pertinent documentation that may substantiate pricing, as

well as, any other obligation hereunder, such as, not by way of limitation, the

date of Supplier’s purchase from a third party supplier, if any, quality test

data and Supplier’s source selection process documentation.




 




6.4                               Audits.




Upon prior written notice

to Supplier, Buyer or Buyer’s representative may conduct audits of any or all

Product and Product component facilities and any or all sites where work is

being performed or materials are being delivered to Supplier in performance of

Supplier’s work for Buyer. Supplier shall, at Buyer’s request and during normal

business hours, permit access to Buyer or Buyer’s representative to all

manufacturing operations for the Products. Such audits may relate to process

control, quality inspection test data, internal audit reports, and any other

information related to the Product being manufactured and sold to Buyer in

compliance with all the requirements of the Agreement. At Buyer’s request,

Supplier shall provide Buyer Product samples together with Product labels,

code, documentation, agency certifications, test results, packaging, carton

labels, and other items, as required by Buyer to conduct a thorough review of

the Product’s conformance with the requirements in the Agreement.




 




6.5                               Product

Traceability Requirements.




Supplier shall establish

and maintain procedures and processes for the identification and lot

traceability of critical Product items during all stages of production,

delivery, and installation per applicable ISO & EIA standards. Supplier

will maintain both forward and backward traceability capabilities and ensure

that its response time for traceability requests from Buyer does not exceed

twenty-four (24) hours.




 




6.6                               Periodic

Quality Reviews.




Supplier shall develop

and implement a process for continuous Product improvement. Buyer may conduct

reviews and/or hold meetings related to Supplier’s performance under the SOW,

including but not limited to the following respects, and may compare Supplier’s

performance with that of similarly situated suppliers:




•                  Supplier’s compliance with delivery

dates in support of WAs issued by Buyer;




•                  Supplier’s compliance with Emergency

Orders issued by Buyer hereunder;




•                  Supplier’s

compliance with the targeted Shipped Product Quality Level (SPQL) as set by the

parties on a monthly basis;




•                  Supplier’s

compliance with the targeted Incoming Product Quality Level (IPQL) as set by

the parties on a monthly basis;




 




7





























 




•                  Supplier’s compliance with the

targeted Field Replace Action Level (FRAL) as set by parties on a monthly

basis;




•                  Percentage of Products failing to

function properly upon delivery (also known as the Product DOA rate);




•                  Supplier’s speed in taking corrective

actions for any problems with Product identified by Buyer;




•                  Supplier’s implementation of lessons

learned in previous periodic quality reviews.




In any calendar month in

which Supplier shows poor performance with respect to the criteria set forth

above, Buyer may notify Supplier of such poor performance.  In such case, Supplier will respond to Buyer

with an agreed upon action plan within five (5) business days of notification

by Buyer demonstrating its ability to achieve the required measurements.

Supplier’s failure to successfully execute an action plan within an agreed upon

time frame shall be a material breach of the Agreement. Satisfying any or all

criteria and /or requirements of this section 5.0 shall not relieve Supplier of

its warranties or other obligations of the Agreement.




 




7.0                               EMERGENCY

ORDERS




 




7.1                               Emergency

Order Placement Process.




If or when buffer stock of Product is not available to Buyer from a

Supplier hub, Supplier will accept and respond to EOs from Buyer during normal

business hours (i.e., 7:00 AM to 5:00PM PST), each business day of the

year.  Supplier will provide contact

information for EO coverage at all times. 

Supplier will respond to all EOs via fax, EDI (or other electronic

commerce approach) and/or telephone, such EOs to be confirmed by Buyer with a

written WA mailed, faxed, or electronically transmitted to Supplier within two

(2) business days of EO placement.  EOs

may include Buyer’s WA number, Buyer’s part number, part number description,

quantity, unit Price, relevant EO code (A-Alert, A, B, S, and X), delivery date

and ship to address. Supplier will acknowledge all EOs back to Buyer via fax or

telephone within two (2) hours of receipt for EOs with an A-Alert EO code and

within four (4) hours of receipt for EOs with an A, B, S, or X EO code. Buyer

may cancel EOs without cost at any time prior to Supplier’s acknowledgement of

such EO. Supplier will deliver EO Products directly to the address specified in

the EO and in accordance with this SOW.




 




7.2                               Emergency

Order Shipment Responsibilities.




Supplier will ship all FRUs required pursuant to an EO, using it’s best

commercial efforts for same day shipment to arrive on the next business day at

the Buyer specified receiving location, subject to receipt of the EO from Buyer

within a period reasonably allowing Supplier to meet cutoff times established

by the transportation carriers. Supplier will ensure that FRUs that are not

shipped on the same day the Supplier receives an EO will be shipped on the next

business day after EO receipt.




 




8.0                               WARRANTY SUPPORT




 




8.1                               Epidemic Defects.




Epidemic Defects shall mean Products that experience

one of more of the following: (a) the same or similar defect at a rate of *** or

more in any given sixty (60) day period, (b) the same or similar defect at a

rate of ***

or more of total purchases, (c) recalls, or (d) safety defects.




 




8.2                               Warranty

Period.




The warranty redemption set forth in the section of the BA entitled,

“Warranty Redemption” as it applies to subsection five of the section of the BA

entitled, “Ongoing Warranties” will be available to Buyer for all Product

hereunder for the longer of the relevant warranty period set forth in the

applicable Product Unique Attachment (as calculated from the date Buyer takes

title of Product). Such warranty redemption for Repaired Product shall be the

longer of the above period for the original Product or one hundred eighty




 




8





























 




(180) days after the date of Repair. In no case, will said warranty be

for a period less than that provided by Supplier to its most favored customers.




 




8.3                               Warranty

Redemption Logistics.




Supplier will provide Buyer with information and processes by which

Buyer is able to verify Product warranty entitlement. Where Supplier is

required to ship Product pursuant to its warranty redemption responsibilities

under the Agreement, Supplier will ship such Product to Buyer’s designated

“ship to” location via Buyer’s designated carrier.  Unless specified otherwise by Buyer, Supplier will provide

locations for Buyer to redeem Product warranty in the following four geographic

areas: United States, Western Europe, Pacific Rim and Brazil.




 




8.4                               Data

Integrity.




In addition to all the

other warranties in the Agreement, Supplier warrants that all Products shall be

tested comprehensively, prior to any delivery, to ensure that all such Products

conform to these warranties, and that Supplier shall provide these test results

to Buyer upon Buyer’s request.




 




9.0                               REPAIR




 




9.1                               Required

Replacement.




All components of Products sent to Supplier for Repair that exhibit

unsafe conditions (including but not limited to cracking, chafing, and/or other

unsafe conditions) will be replaced with an identical (same manufacturer, part

or model number, electrical/thermal rating, physical dimensions and agency

approval) or an approved alternate component (identical mechanical,

electrical/thermal, physical, compositional and performance characteristics but

different manufacturer). Compliance with this section will not relieve Supplier

of its other obligations under the Agreement.




 




9.2                               Scope

of Repair Services.




Supplier will make Repair Services available to Buyer up through and

including the relevant EOS date, as specified by Buyer in writing. Products

sent to Supplier for Repair during the applicable warranty period will be

Repaired at no cost to Buyer and returned to Buyer at Supplier’s cost. Products

sent to Supplier for Repair outside of the applicable warranty period will be

Repaired and returned to Buyer freight prepaid in accordance with the delivery

date specified by Buyer in the WA for such Repair and at the Repair Prices set

forth in the SOW. All Repaired Products must meet the requirements regarding

CSPs set forth in this SOW. Repair Services will not be performed on Products

sent for Repair a second time.  In such

event, Supplier will, at Buyer’s discretion, provide Buyer a replacement

Product, or credit or refund Buyer an amount equal to the Price paid by Buyer

for the initial Repair (including associated shipping cost) and return the units

to Buyer for scrapping.  Supplier must

maintain a history of Repair activities and provide a monthly report to Buyer

in the format of the attachment to this SOW that is entitled “Monthly Warranty

Analysis Report.”




 




9.3                               CSP

Requirements.




Products will only be classified as CSP with Buyer’s written

approval.  Products classified as CSP

may be used for field service only and may not be used in the manufacturing of

a new Product. CSPs will meet the following criteria: (i) the functional

performance of such Products will comply with all current and applicable

engineering drawings, specifications, and other Product requirements; (ii) the

appearance of such Products will be equivalent to that of a new counterpart;

(iii) manufacturer warning labels will remain intact and legible or will be

replaced, and protective covers (e.g., guards or shields) will be securely

mounted as originally designed or will be replaced; and (iv) the Repair of such

Products (including EC related Repairs) will be in compliance with all agreed

upon listings and certifications issued by National Certification Body (NCB).

If Supplier is not able to meet specified criteria, then Product will be deemed

non-repairable and Buyer will be notified accordingly. Suppliers will place on

all CSPs, a “SERVICEABLE USED 


PART(S)” label meeting the following criteria: (i) printed using high quality

paper with a shelf life of ten (10) years; 

(ii) using permanent pressure sensitive and tamper evident




 




9





























 




adhesive

(black printing on orange background); (iii) which do not contain any voids,

ink specks, ink fill-ins or edge-roughness; (iv) which are applied in a manner

that provides durable and wrinkle free labels that permanently and securely

bonds to the Product and container under variable environmental conditions; (v)

which are clearly visible; and (vi) which will not adversely affect the

functionality or aesthetics of the Product. The original manufacture date will

be preserved or restored as needed at the time of Repair. Product labels

(labels applied directly to the Product) will comply with the following

dimensions:  (i) large labels will

measure 3.0448 cm x 0.9615 cm (1.1875 in x 0.3750 in); (ii) small labels will

measure 2.2435 cm x 0.6410 cm (0.8750 in x 0.2500 in).  Container labels (labels applied to the

container) will comply with the following dimensions:  (i) 9.2948 cm x 4.4871 cm (3.6250 in x 1.7500 in).




 




9.4                               Engineering

Deliverables.




Supplier will provide

Buyer, upon Buyer’s request, all the information (in the English language)

required to enable Buyer to procure alternate Repair source(s), including but

not limited to the following:




•                  Product drawings




•                  Schematics / diagrams




•                  Engineering specifications




•                  Performance specifications




•                  Component placement listings




•                  Certified component source listings

(IEC / UC / CSA 950)




•                  Debug / fault isolation test

procedures




•                  Special tooling drawings /

specifications if applicable




•                  Rework / upgrade instructions




•                  Test procedures / software  / equipment




•                  Repair verification procedures / test

software / equipment




•                  Hazardous

materials listings




 




10.0                        CONSIGNED

MATERIALS




 




10.1                        Handling

of Consigned Materials.




In instances where Buyer sends Product to Supplier for Repair, and/or

provides to Supplier tooling and/or other items, Buyer may, but is not

obligated to, entrust such Products, tooling, and/or other items to Supplier as

Consigned Materials.  Buyer will retain

title to Consigned Material at all times. Supplier will: (i) use Consigned

Materials only in the performance of this SOW and will not reuse or resell nor

allow to be reused or resold any Consigned Material without Buyer’s prior

written authorization; (ii) acknowledge receipt of Consigned Materials within

five (5) business days of receipt to the Buyer’s Business Coordinator via

e-mail or fax, and such acknowledgement will include a detailed report of any

quantity shortages or overages (any shortages not reported to Buyer’s

Coordinator in such acknowledgement will be deemed received by Supplier), all

relevant part numbers, and the relevant WA (if applicable) and quantity; (iii)

immediately notify carrier and Buyer’s Business Coordinator of any Consigned

Materials that exhibit external damage at the time of delivery from Buyer to

Supplier, document on carrier’s freight bill such damage, and receive either an

inspection report or a letter from carrier stating that such inspection has

been waived; (iv) ensure that Consigned Materials are not pledged, mortgaged,

assigned, borrowed or encumbered by security interests or otherwise and are not

be removed from Supplier’s location without Buyer’s prior written

authorization, unless provided to Buyer in accordance with the terms and

conditions of this SOW; (v) provide monthly reports of all transactions made by

Supplier involving Consigned Materials, together with the quantities remaining

in Supplier’s custody as of the date of such report, and will make due

settlement and payment on a monthly basis, if not already made, for any and all

Consigned Materials in accordance with this SOW; (vi) maintain account books

and records providing complete information as to all such transactions

involving Consigned Materials, and such books and records will be available to

Buyer during normal business hours, upon forty eight (48) hours prior notice to

Supplier; (vii) permit Buyer to inspect Consigned Materials at any time during

normal business hours, at Supplier’s location and to remove any or all of the

same if Buyer so desires; (viii) maintain replacement cost insurance




 




10





























 




on Consigned

Materials; (ix) upon Buyer’s written request, or upon termination or expiration

of this SOW, return Consigned Materials to Buyer pursuant to Buyer’s

instructions and in the same condition as received by Supplier; (x) upon Buyer

request, mark Consigned Material in a manner acceptable to Buyer to indicate

Buyer’s ownership; (xi) control Consigned Materials in a secure and separate

area so as to not commingle Consigned Materials with other materials, parts, or

other assets of Supplier or of any third party; and (xii) notify Buyer

immediately in writing of any personal property taxes or assessments that may

be levied on Consigned Materials. 

Supplier shall not charge inventory fees or any other costs to Buyer regarding

Consigned Materials.




 




10.2                        Return

of Consigned Materials.




Supplier will provide a packing slip with all return shipments of

Consigned Materials to Buyer which specifies Supplier’s name, Buyer part

number(s) of Consigned Materials being returned, quantity of Consigned

Materials, by Buyer part number, being returned, and the relevant WA

number.  Consigned Materials which

Supplier is unable to Repair will be returned to Buyer with a packing slip

which additionally references a return authorization number, obtained from

Buyer, and provide a reason for why Supplier is unable to Repair such Consigned

Materials.  Supplier will reimburse

Buyer for Consigned Materials that are not returned to Buyer in accordance with

the terms of this SOW, including, without limitation, any Consigned Materials

that have been stripped, stolen, lost, damaged, or unaccounted for.  The calculations for reimbursement of

Consigned Materials is as follows: (i) for new Consigned Materials, Supplier

will reimburse Buyer an amount equal to Buyer’s then current price for the

Consigned Materials; or (ii) for used Consigned Materials, Supplier will

reimburse Buyer an amount equal to *** of Buyer’s weighted average cost

per piece.




 




11.0                        LIMITATION

OF SUPPLIER LIABILITY UNDER THE SOW




 




Supplier’s

liability for Buyer damages arising under this SOW, shall be limited to the

greater of *** or the total amount of money paid for Products and Services

during the term of the SOW, provided that this limitation shall not apply and

have no effect on any Supplier liability arising under section 9.0 of the BA.




 




 




	

  ACCEPTED AND AGREED

  TO:


  	

   


  	

  ACCEPTED AND AGREED

  TO:


  	

   


  
	

  BUYER


  	

  SUPPLIER


  
	

   


  	

   


  
	

  By: 


  	

  /s/ Paul Pitarra for Ron Clarke


  	

   


  	

  3/14/03


  	

   


  	

  By: 


  	

  /s/ Vernon A. LoForti


  	

   


  	

  3/17/03


  	

   


  
	

  Buyer Signature


  	

  Date


  	

  Supplier Signature


  	

  Date


  
	

   


  	

   


  
	

  Paul Pitarra for Ron Clarke


  	

   


  	

  Vernon A. LoForti


  	

   


  
	

  Printed Name


  	

  Printed Name


  
	

   


  	

   


  
	

  Procurement Director


  	

   


  	

  VP and CFO


  	

   


  
	

  Title


  	

  Title


  
													





 




11





























 




PRODUCT UNIQUE ATTACHMENT #1 EFFECTIVE BEGINNING NOVEMBER 1,

2002




 




1.0                               PRODUCT DESCRIPTION




The Product is an SDLT/LTO Library with associated options.

The Product (including Product code and documentation) will be available in the

following languages: English




 




2.0                               PART NUMBER UNIQUE TERMS




 




	

  Buyer P/N


  	

   


  	

  Description


  	

   


  	

  ***


  	

   


  	

  Delivery

  Term


  	

   


  	

  ***


  	

   


  	

  Country of

  Origin and


  Complete Street Address


  	

   


  	

  ***


  	

   


  	

  Repair

  Price


  (USD)*


  	

   


  	

  TAT


  	

   


  	

  Yield


  
	

  4560SLX


  	

   


  	

  BASE EXPANDER UNIT


  	

   


  	

  ***


  	

   


  	

  FOB KINGSTON US LOCAL WAREHOUSE


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6656


  	

   


  	

  BASE EXPANDER UNIT


  	

   


  	

  ***


  	

   


  	

  DDU Greenock Hub


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6657


  	

   


  	

  FIBER CHANNEL CARD


  	

   


  	

  ***


  	

   


  	

  FOB KINGSTON US LOCAL WAREHOUSE DDU Greenock Hub


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6658


  	

   


  	

  LTO UPGRADE DRIVE


  	

   


  	

  ***


  	

   


  	

  FOB KINGSTON US LOCAL WAREHOUSE DDU Greenock Hub


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6659


  	

   


  	

  LTO MAGAZINE


  	

   


  	

  ***


  	

   


  	

  FOB KINGSTON US LOCAL WAREHOUSE DDU Greenock Hub


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6660


  	

   


  	

  SDLT UPGRADE DRIVE


  	

   


  	

  ***


  	

   


  	

  FOB KINGSTON US LOCAL WAREHOUSE DDU Greenock Hub


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6661


  	

   


  	

  SDLT MAGAZINE


  	

   


  	

  ***


  	

   


  	

  FOB KINGSTON US LOCAL WAREHOUSE DDU Greenock Hub


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6662


  	

   


  	

  EXPRESS CHANNEL 1


  	

   


  	

  ***


  	

   


  	

  FOB KINGSTON US LOCAL WAREHOUSE DDU Greenock Hub


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6663


  	

   


  	

  EXPRESS CHANNEL 2


  	

   


  	

  ***


  	

   


  	

  FOB KINGSTON US LOCAL WAREHOUSE DDU Greenock Hub


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6698


  	

   


  	

  LTO DRIVE SLED FRU


  	

   


  	

  ***


  	

   


  	

  FOB Overland Storage, San Diego


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  





 




12





























 




	

  59P6699


  	

   


  	

  SDLT DRIVE SLED FRU


  	

   


  	

  ***


  	

   


  	

  FOB Overland Storage, San Diego


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6703


  	

   


  	

  LEFT LTO LIBRARY MAGAZINE FRU


  	

   


  	

  ***


  	

   


  	

  FOB Overland Storage, San Diego


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6704


  	

   


  	

  RIGHT LTO LIBRARY MAGAZINE FRU


  	

   


  	

  ***


  	

   


  	

  FOB Overland Storage, San Diego


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6705


  	

   


  	

  LEFT SDLT LIBRARY MAGAZINE FRU


  	

   


  	

  ***


  	

   


  	

  FOB Overland Storage, San Diego


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6706


  	

   


  	

  RIGHT SDLT LIBRARY MAGAZINE FRU


  	

   


  	

  ***


  	

   


  	

  FOB Overland Storage, San Diego


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6707


  	

   


  	

  ROBOT BARCODE READER FRU


  	

   


  	

  ***


  	

   


  	

  FOB Overland Storage, San Diego


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6708


  	

   


  	

  LIBRARY CNTRLLR FRU


  	

   


  	

  ***


  	

   


  	

  FOB Overland Storage, San Diego


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6709


  	

   


  	

  POWER SUPPLY FRU


  	

   


  	

  ***


  	

   


  	

  FOB Overland Storage, San Diego


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6713


  	

   


  	

  LCD DISPLAY ASSEMBLY FRU


  	

   


  	

  ***


  	

   


  	

  FOB Overland Storage, San Diego


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  59P6715


  	

   


  	

  FIBER CARD FRU


  	

   


  	

  ***


  	

   


  	

  FOB Overland Storage, San Diego


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  71P9121


  	

   


  	

  CARTRIDGE ELEVATOR


  	

   


  	

  ***


  	

   


  	

  Overland Storage, San Diego


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  
	

  71P9122


  	

   


  	

  CARTRIDGE ELEVATOR


  	

   


  	

  ***


  	

   


  	

  FOB Overland Storage, San Diego


  	

   


  	

  ***


  	

   


  	

  USA 4820 OVERLAND AVENUE, SAN DIEGO, CA 92123


  	

   


  	

  ***


  	

   


  	

  TBD


  	

   


  	

  30 days


  	

   


  	

  100%


  





 






















* Repair Price applies only to Products Repairs not covered by Product

warranty.




 




3.0                               WA

FLEXIBILITY




 




	

  Number of

  Days prior to a 


  WA


  Scheduled Delivery Date


  	

   


  	

  Increase of Product Quantity to a WA


  Scheduled Delivery Date


  (% of WA Quantity)


  	

   


  	

  Cancellation of Product Quantity to a WA


  Scheduled Delivery Date


  (% of WA Quantity)


  	

   


  	

  Rescheduling of Product Quantity to a


  WA Scheduled Delivery Date


  (% of WA Quantity)


  	

   


  
	

  Less than 15 days


  	

   


  	

  0


  	

  %


  	

  0


  	

  %


  	

  0


  	

  %


  
	

  From 15 days to 30 days


  	

   


  	

  50


  	

  %


  	

  50


  	

  %


  	

  50


  	

  %


  
	

  From 30 days to 45 days


  	

   


  	

  100


  	

  %


  	

  100


  	

  %


  	

  100


  	

  %


  
	

  More than 45 days


  	

   


  	

  Unlimited


  	

   


  	

  100


  	

  %


  	

  100


  	

  %


  





 




While the above flexibility terms also apply to Pull Products, in the

event the relevant Pull Profile has more favorable terms, then such more

favorable terms shall take precedence.




 




13





























 




4.0                               REPLENISHMENT




4.1                               Product

Pull Profile.




 




	

  Buyer P/N


  	

   


  	

  Package


  Quantity


  	

   


  	

  Pallet


  Quantity


  	

   


  	

  Container


  Quantity


  	

   


  	

  Bulk


  Pull


  	

   


  	

  Rounding


  Indicator


  	

   


  	

  Pull Start


  Date


  	

   


  	

  ***


  	

   


  	

  Transit


  Time


  	

   


  	

  Process


  Time


  	

   


  	

  ***


  	

   


  	

  Upside


  Flexibility


  	

   


  	

  Liability


  Horizon


  
	

  4560SLX


  	

   


  	

  1


  	

   


  	

  6


  	

   


  	

  NA


  	

   


  	

  G


  	

   


  	

  6


  	

   


  	

  11/22/02


  	

   


  	

  ***


  	

   


  	

  7days


  	

   


  	

  1 DAY


  	

   


  	

  ***


  	

   


  	

  Sec 3.0


  	

   


  	

  2 WEEKS


  
	

  59P6657


  	

   


  	

  1


  	

   


  	

  10


  	

   


  	

  NA


  	

   


  	

  G


  	

   


  	

  10


  	

   


  	

  11/22/02


  	

   


  	

  ***


  	

   


  	

  7days


  	

   


  	

  1 DAY


  	

   


  	

  ***


  	

   


  	

  Sec 3.0


  	

   


  	

  2 WEEKS


  
	

  59P6658


  	

   


  	

  1


  	

   


  	

  10


  	

   


  	

  NA


  	

   


  	

  G


  	

   


  	

  10


  	

   


  	

  11/22/02


  	

   


  	

  ***


  	

   


  	

  7days


  	

   


  	

  1 DAY


  	

   


  	

  ***


  	

   


  	

  Sec 3.0


  	

   


  	

  2 WEEKS


  
	

  59P6659


  	

   


  	

  1


  	

   


  	

  25


  	

   


  	

  NA


  	

   


  	

  G


  	

   


  	

  25


  	

   


  	

  11/22/02


  	

   


  	

  ***


  	

   


  	

  7days


  	

   


  	

  1 DAY


  	

   


  	

  ***


  	

   


  	

  Sec 3.0


  	

   


  	

  2 WEEKS


  
	

  59P6660


  	

   


  	

  1


  	

   


  	

  10


  	

   


  	

  NA


  	

   


  	

  G


  	

   


  	

  10


  	

   


  	

  11/22/02


  	

   


  	

  ***


  	

   


  	

  7days


  	

   


  	

  1 DAY


  	

   


  	

  ***


  	

   


  	

  Sec 3.0


  	

   


  	

  2 WEEKS


  
	

  59P6661


  	

   


  	

  1


  	

   


  	

  25


  	

   


  	

  NA


  	

   


  	

  G


  	

   


  	

  25


  	

   


  	

  11/22/02


  	

   


  	

  ***


  	

   


  	

  7days


  	

   


  	

  1 DAY


  	

   


  	

  ***


  	

   


  	

  Sec 3.0


  	

   


  	

  2 WEEKS


  
	

  59P6662


  	

   


  	

  1


  	

   


  	

  24


  	

   


  	

  NA


  	

   


  	

  G


  	

   


  	

  24


  	

   


  	

  11/22/02


  	

   


  	

  ***


  	

   


  	

  7days


  	

   


  	

  1 DAY


  	

   


  	

  ***


  	

   


  	

  Sec 3.0


  	

   


  	

  2 WEEKS


  
	

  59P6663


  	

   


  	

  1


  	

   


  	

  10


  	

   


  	

  NA


  	

   


  	

  G


  	

   


  	

  10


  	

   


  	

  11/22/02


  	

   


  	

  ***


  	

   


  	

  7days


  	

   


  	

  1 DAY


  	

   


  	

  ***


  	

   


  	

  Sec 3.0


  	

   


  	

  2 WEEKS


  





 




4.2                               Transaction Documents.




 




	

  TRANSACTION

  DOCUMENT


  	

   


  	

  EDI/ANSI  EDIFACT


  	

   


  	

  E-Mail


  	

   


  	

  Fax


  	

   


  	

  Frequency


  
	

  Invoice (810/INVOIC)


  	

   


  	

  X


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  AS REQUIRED


  
	

  Remittance Advice (820/REMADV)


  	

   


  	

  X


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  AS REQUIRED


  
	

  Planning Schedule (830/DELFOR)


  	

   


  	

  X


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  AS REQUIRED


  
	

  Forecast Response (830/DELFOR)


  	

   


  	

  X


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  AS REQUIRED


  
	

  Purchase Order (850/ORDERS)


  	

   


  	

  X


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  AS REQUIRED


  
	

  PO Acknowledgment (855/ORDRSP)


  	

   


  	

  X


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  AS REQUIRED


  
	

  Advance Ship Notice (856/DESADV)


  	

   


  	

  X


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  AS REQUIRED


  
	

  PO Change (860/ORDCHG)


  	

   


  	

  X


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  AS REQUIRED


  
	

  Pull Notification (862/DELJIT)


  	

   


  	

  X


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  AS REQUIRED


  
	

  Product Transfer & Resale Report (867)


  	

   


  	

  X


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  AS REQUIRED


  
	

  Functional Acknowledgment (997/CONTRL)


  	

   


  	

  X


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  AS REQUIRED


  
	

  Inventory Inquiry/Advice (846/INVRPT)


  	

   


  	

  X


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  AS REQUIRED


  





 




5.0                               COMMUNICATIONS




Each party may change its designated coordinators and/or addresses any

time by a written notification to the relevant coordinator.




 




5.1                               Business

Coordinators.




 




	

  SUPPLIER


  	

   


  	

   


  	

   


  	

  BUYER


  	

   


  	

   


  
	

  Name


  	

   


  	

  ***


  	

   


  	

  Name


  	

   


  	

  ***


  
	

  Title


  	

   


  	

  IBM Account Manager


  	

   


  	

  Title


  	

   


  	

  X Series Tape Commodity

  Manager


  
	

  Address


  	

   


  	

  4820 Overland Avenue


  San Diego, CA 92123


  	

   


  	

  Address


  	

   


  	

  3093 Cornwallis Road


  Research Triangle Park, NC 27709


  
	

  Phone


  	

   


  	

  ***


  	

   


  	

  Phone


  	

   


  	

  ***


  
	

  Fax


  	

   


  	

  ***


  	

   


  	

  Fax


  	

   


  	

  ***


  
	

  E-mail


  	

   


  	

  ***


  	

   


  	

  E-mail


  	

   


  	

  ***


  





 




5.2                               Technical

Coordinators.




 




	

  SUPPLIER


  	

   


  	

   


  	

   


  	

  BUYER


  	

   


  	

   


  
	

  Name


  	

   


  	

  ***


  	

   


  	

  Name


  	

   


  	

  ***


  
	

  Title


  	

   


  	

  IBM Account

  Manager


  	

   


  	

  Title


  	

   


  	

  X Series

  Procurement Engineer


  
	

  Address


  	

   


  	

  4820

  Overland Avenue


  San Diego, CA 92123


  	

   


  	

  Address


  	

   


  	

  3093

  Cornwallis Road


  Research Triangle Park, NC 27709


  
	

  Phone


  	

   


  	

  ***


  	

   


  	

  Phone


  	

   


  	

  ***


  
	

  Fax


  	

   


  	

  ***


  	

   


  	

  Fax


  	

   


  	

  ***


  
	

  E-mail


  	

   


  	

  ***


  	

   


  	

  E-mail


  	

   


  	

  ***


  





 




14





























 




MONTHLY WARRANTY ANALYSIS REPORT




 




	

  Supplier Name:


  	

   


  	

   


  
	

  Month: 


  	

   


  	

   


  
				





 




 




	

  Buyer P/N


  	

   


  	

  Description


  	

   


  	

  Barcode


  	

   


  	

  Symptoms


  	

   


  	

  Actual


  Finding


  	

   


  	

  Explanation


  Code


  	

   


  	

  Root Cause Analysis Action Taken to Fix


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  





 




	

  SUMMARY REPORT


  
	

  Total Units

  Repaired in Current Month


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Total

  Warranty Claims Received


  	

   


  	

   


  
	

  Actual

  Warranty Accepted


  	

   


  	

   


  
	

  Warranty %


  	

   


  	

   


  
	

  High Flyers

  (more than       %)


  	

   


  	

  High Flyers

  Require a Corrective Action Plan and Date of Implementation.


  
	

   


  	

   


  	

   


  





 




	

  EXPLANATION

  CODE


  	

   


  	

  DESCRIPTION


  
	

  Code 03


  	

   


  	

  Warranty

  Expired


  
	

  Code 04


  	

   


  	

  Missort


  
	

  Code 07


  	

   


  	

  Cannibalized

  or Missing Parts


  
	

  Code 08


  	

   


  	

  Warranty

  Product Received


  
	

  Code 09


  	

   


  	

  Physical

  Damage


  
	

  Code 10


  	

   


  	

  No Defect

  Found


  
	

  Code 11


  	

   


  	

  Other


  





 




15





























 




	

  International Business Machines Corporation


  	

   


  	

  Fax completed form to Accounts Payable:


  
	

  1701 North

  Street


  	

   


  	

  (607)

  755-6124


  
	

  Endicott, NY

  13760


  	

   


  	

   


  





 




AUTHORIZATION FOR ELECTRONIC FUNDS TRANSFER




 




You hereby authorize

International Business Machines Corporation to initiate credit entries to the

account listed below in connection with agreed upon Electronic Data Interchange

(EDI) transactions between our companies. 

You agree that such transactions will be governed by the National

Automated Clearing House Association rules. 

This authority is to remain in effect until International Business

Machines Corporation has received written notification of termination in such

time and such manner as to afford International Business Machines Corporation a

reasonable opportunity to act on it.  IN

NO EVENT SHALL IBM BE LIABLE FOR ANY SPECIAL, INCIDENTAL, EXEMPLARY OR

CONSEQUENTIAL DAMAGES AS A RESULT OF THE DELAY, OMISSION OR ERROR OF AN

ELECTRONIC CREDIT ENTRY, EVEN IF INTERNATIONAL BUSINESS MACHINES CORPORATIONS

HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.




 




	

  Trading

  Partner Name


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Payment

  Remit Address


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Account

  Payee


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Payee

  Address


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  EFT Domestic

  Banking Institution


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Contact Name

  / Title


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Contact

  Phone Number


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Bank Address


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Account

  Number


  	

   


  	

   


  	

  (MAX 17)


  
	

   


  	

   


  	

   


  	

   


  
	

  Bank Routing

  / Transit CD


  	

   


  	

   


  	

  (MAX 9)


  
	

   


  	

   


  	

   


  	

   


  
	

  Remit Advice

  Option


  	

   


  	

   


  	

  1


  	

   


  	

  2


  	

   


  
	

   


  	

   


  	

  DUNS Number / User ID / Account Number


  
	

  Tax ID

  Number


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  By


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Name


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Title


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Phone Number


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Date


  	

   


  	

   


  
								





 




16