exv10w2






Exhibit 10.2




***Text Omitted and Filed Separately

with the Securities and Exchange Commission.

Confidential Treatment Requested

Under 17 C.F.R. Sections 200.80(b)(4) and 240.24b-2.




			
		 	 
	 
	 	HP CONFIDENTIAL
	 
	 	FOR DOT HILL ONLY






AMENDMENT EIGHT

TO PRODUCT PURCHASE AGREEMENT NO. PRO02542-060507



This Amendment Eight to the Product Purchase Agreement No. PRO02542-060507 dated September 10,
2007, (the “Amendment Eight”) dated September 26, 2008, (the “Amendment Eight Effective Date”) is
between DOT HILL SYSTEMS CORP. (“DOT HILL”), a Delaware corporation, with offices at 2200 Faraday
Avenue, Suite 100, Carlsbad, CA 92008, and Hewlett-Packard Company (“HP”), a Delaware corporation,
with offices at 3000 Hanover Street, Palo Alto, California 94304. DOT HILL and HP may be referred
to individually as a “Party” and collectively as “Parties.”



WHEREAS, DOT HILL and HP have entered into that certain Product Purchase Agreement dated as of
September 10, 2007 including all exhibits and amendments thereto, (collectively, the “Agreement”),
whereby DOT HILL authorized HP to distribute and promote certain products and services pursuant to
the terms and conditions contained therein;



WHEREAS, DOT HILL and HP each desires to amend the Agreement to include the production, associated
maintenance, support, sale and distribution of additional Product as specified herein;



NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:





	 	1.	 	§4.6 Material Cost Reductions. Section 4.6 is hereby deleted in its entirety. In its
place, the following shall be inserted.
	 
	 	 	 	 4.6 Material Cost Reductions.
	 
	 	 	 	 4.6.1. Price Decreases during [...***...]. Price reductions will first be passed to
HP at the start of the [...***...]. For the period from [...***...], Supplier has provided
an automatic, [...***...], which price decrease is already reflected in the pricing tables
set forth at Exhibit E-7 (“Pricing Tables”). (The Pricing Tables also include [...***...].)
For the period from [...***...], Supplier has automatically provided [...***...], which is
already reflected in the Pricing Tables. These pricing decreases shall take effect on the
aforementioned dates, and shall not be delayed based on [...***...] by Supplier. Such price
reductions for [...***...].
	 
	 	 	 	 4.6.2. Price Decreases [...***...]. From [...***...], HP shall enjoy the benefit of
[...***...] irrespective of when during the [...***...] period the cost





					
	 	 	 	 	 
	 
	 	Page 1 of 5
	 	DOT HILL/
OEM-IN/AMENDMENT//11/04/08
	 
	 	 	 	***Confidential Treatment Requested






 









 






			
	 	 	 
		 	 
	 
	 	HP CONFIDENTIAL
	 
	 	FOR DOT HILL ONLY







	 	 	 	reduction was implemented. The determination of which [...***...] shall be made every
[...***...] and performed as follows: [...***...]. A price decrease based on the [...***...]
shall be applied to the pricing for the following [...***...], but shall take effect
[...***...] into the following [...***...]. The [...***...] period has been granted to allow
Supplier time to properly calculate the cost reduction achieved. Such price reductions for
[...***...].
	 
	 	 	 	 4.6.3. Example of Calculating [...***...]. For example, the first [...***...]
calculation shall be made at the beginning of [...***...], shall compare the [...***...], and
shall be applied to pricing for the period of [...***...] if the calculation yields a price
decrease [...***...].
	 
	 	 	 	 4.6.4. Dot Hill’s Retention of Cost Reduction Benefits and Efforts to Achieve Cost
Reduction Benefits. Other than the two automatic rounds of price decreases described in
Section 4.6.1 [...***...]. Effective [...***...], all achieved cost reduction benefits will
be [...***...] described in Sections 4.6.2 and 4.6.3. The parties will periodically engage
in additional Joint Cost Reduction Efforts, from time to time, upon mutual agreement.
	 
	 	 	 	4.6.5. Approval for Cost Reduction Actions. To the extent that any cost reduction
action requires HP’s approval as per Exhibit F (Engineering Process Or Design Changes), such
approval shall be secured by Supplier prior to implementation of the cost reduction action.
	 
	 	2.	 	Exhibit (E) (Pricing) attached to the Agreement shall be amended by inclusion at the end
of the current Exhibit (E) Exhibit (E-8) attached hereto.




Except as expressly set forth herein, all other terms and conditions of the Agreement shall
continue in full force and effect. Capitalized terms used but not defined herein shall have the
meanings given thereto in the Agreement.




					
	 	 	 	 	 
	 
	 	Page 2 of 5
	 	DOT HILL/
OEM-IN/AMENDMENT//11/04/08
	 
	 	 	 	***Confidential Treatment Requested






 









 





			
	 	 	 
		 	 
	 	 	HP CONFIDENTIAL
	 	 	FOR DOT HILL ONLY





IN WITNESS WHEREOF, the parties have caused this Amendment One to be executed by their duly
authorized representatives on the dates indicated below.




	 	 	 	 	 	 	 	 	 
	DOT HILL SYSTEMS CORP.
 	 	 	 	HEWLETT-PACKARD COMPANY
	 
	 	 	 	 	 	 	 	 
	By:
	 	/s/ Hanif Jamal	 	 	 	By:	 	/s/ Robin Hensley
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:
	 	Hanif Jamal	 	 	 	Name:	 	Robin Hensley
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:
	 	CFO	 	 	 	Title:	 	VP & General Manager,
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	Entry Storage Division
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:
	 	September 30, 2008	 	 	 	Date:	 	September 30, 2008
	 
	 	 	 	 	 	 	 	 





					
	 	 	 	 	 
	 	 	Page 3 of 5	 	DOT HILL/
OEM-IN/AMENDMENT//11/04/08






 









 






			
	 	 	 
		 	 
	 
	 	HP CONFIDENTIAL
	 
	 	FOR DOT HILL ONLY






EXHIBIT (E-8)



1.0 Product Pricing. Subject to the provisions of Section 4.6 of the Agreement, prices for certain
Products are set forth in the pricing table attached to this Exhibit (the “Pricing Tables”). If a
Product’s price is listed on the Pricing Tables, such pricing supersedes any previous pricing for
that Product. However, if a Product is not listed on the Pricing Tables [...***...], this Exhibit
does not supersede previous pricing, and the pricing shall be as last agreed to by the parties, in
writing.





	2.0	 	Agreements Regarding [...***...] Pricing [...***...] Supply Chain Issues.






	 	2.1	 	Lump Sum Payments to Supplier. Per the agreement between Supplier and HP
effective January 4, 2008, among other things Supplier agreed to provide HP with a
product price reduction effective July 1, 2008. Supplier agrees to adhere to the terms
in the agreement and offer HP their price reduction. [...***...], at HP’s sole
discretion. In order to partially compensate Supplier, HP will pay Supplier a maximum
of $1.7 million for the third calendar quarter of 2008 and a maximum of $1.3 million
for the fourth calendar quarter of 2008 to reimburse Supplier for the price reductions
provided to HP, effective July 1, 2008. If the actual amount of the total price
reduction, as calculated by the number of units shipped during the third calendar
quarter multiplied by the price of the units shipped multiplied by the total price
reduction percentage, [...***...]. If the actual amount of the total price reduction,
as calculated by the number of units shipped during the fourth calendar quarter
multiplied by the price of the units shipped multiplied by the total price reduction
percentage[...***...].
	 
	 	2.2	 	[...***...] Payments Made by HP. Prior to July 1, 2008, shipping charges were
included in the Product pricing supplied to HP. There are instances where [...***...].
For [...***...] incurred by HP prior to July 1, 2008, HP hereby [...***...]. Pricing
supplied to HP and effective July 1, 2008 and beyond (including the Pricing Tables)
[...***...] unless otherwise agreed to by the parties in writing. To the extent that
HP paid (or in the future pays) [...***...] made after July 1, 2008 or, conversely, HP
was not charged [...***...] made after July 1, 2008 [...***...].
	 
	 	2.3	 	PPV and [...***...]. Prior to the Amendment Eight Effective Date, Supplier
[...***...] and Supplier’s [...***...]. Supplier hereby [...***...] experienced prior
to the Amendment Eight Effective Date.





					
	 	 	 	 	 
	 
	 	Page 4 of 5
	 	DOT HILL/
OEM-IN/AMENDMENT//11/04/08
	 
	 	 	 	***Confidential Treatment Requested






 









 






			
	 	 	 
		 	 
	 
	 	HP CONFIDENTIAL
	 
	 	FOR DOT HILL ONLY







	 	2.4	 	Future Supplier Requests Regarding [...***...]. The [...***...] payments
described in Section 2.1, [...***...] described in Section 2.2, and other provisions in
this Amendment Eight have been agreed upon by HP [...***...] with respect to past
shipments of Products and future Products that are purchased and shipped using the
pricing set forth on the Pricing Tables. Supplier will not request any further action
from HP to [...***...] for past shipments of Products or future shipments purchased
using pricing set forth on the Pricing Tables through the end of calendar year 2010.
	 
	 	2.5	 	Reconciliation of Pricing Effective July 1, 2008. The parties agree that the
Pricing Tables set forth in this Exhibit E-8 shall apply [...***...] to shipments of
Products as of July 1, 2008. However, for a period of time during the third calendar
quarter 2008, such pricing [...***...]. Promptly after the Effective Date of this
Amendment Eight, the parties agree [...***...], whichever is appropriate.






	3.0	 	Further Explanation of the Pricing Tables






	 	3.1	 	Supplier hereby states that the Pricing Tables for the period of Q4 2008
reflect an additional [...***...].
	 
	 	3.2	 	Supplier hereby states that the Pricing Tables do not include any premium or
additional amounts [...***...]. Therefore, the price of [...***...] is the same as the
December 2007 Pricing, except that charges for [...***...] have been removed.
	 
	 	3.3	 	Supplier hereby states that the Pricing Tables already include and reflect the two,
automatic, [...***...] in pricing, discussed in Section 4.6 of the Agreement, one of
which takes effect [...***...] and one of which takes effect [...***...]. Such
automatic decreases shall take effect on the days noted, above and shall not be delayed
due to any [...***...] made by Supplier.





					
	 	 	 	 	 
	 
	 	Page 5 of 5
	 	DOT HILL/
OEM-IN/AMENDMENT//11/04/08
	 
	 	 	 	***Confidential Treatment Requested