Exhibit 10.2


 


[ * ]  =
Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of
1934, as amended.


 


Agreement No.: 
AR-63645


 


Third Amendment


To Product Purchase Agreement


 


 


This Third Amendment (the
“Third Amendment”) to the Product Purchase Agreement that was made on the 22nd
day of May, 2002, as amended (the “PPA”), and the Award Letters executed
thereunder, is made and entered into as of this 22 day of March, 2004 (the
“Third Amendment Effective Date”) by and among Sun Microsystems, Inc., a
Delaware corporation, with an office at 901 San Antonio Road, Palo Alto,
California 94303 and Sun Microsystems International B.V., a Netherlands
corporation, with an office at Computertweg 1, 3821 AA Amersfoot, the
Netherlands (hereafter collectively referred to as “Sun”) and Dot Hill Systems
Corporation, a Delaware corporation, with an office at 6305 El Camino Real,
Carlsbad, California 92009 and Dot Hill Systems B.V., a Netherlands
corporation, with an office at Marssteden 94, 7547 TD Enschede, the Netherlands
(hereafter collectively referred to as “Supplier”).  For purpose of interpretation and construction of this Third
Amendment, capitalized terms included herein shall have the same meaning as
such terms are defined in the PPA. 
Additionally, Sun and Supplier may each be referred to in this Third
Amendment as a “Party” and collectively as the “Parties.”


 


Background


 


Whereas, Sun and Dot Hill desire to amend the
PPA and the Award Letters to make certain additions and modifications to the
PPA and the Award Letters, as described below.


 


Now therefore, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
both Parties, the Parties hereby agree to amend and do amend the PPA and the
Award Letters, as follows:


 


Third Amendment


 


1)     Add the following to the PPA
as Section 2.8.2.6:


 


“2.8.2.6
Supplier will provide to Sun’s product marketing and sales group certain
mutually agreed technical marketing support including, but not limited to,
documents and/or web file content to support the release and ongoing sales of
certain agreed Product(s).  [ * ]  .”


 


2)     Add the following to the PPA
as Section 2.8.4:


 


“2.8.4         [ * ]  .”
 


3)     Add the following to the PPA
as Section 2.8.5:


 


1

















 


“2.8.5     [ * ]


 


4)     Add the following to the PPA
as Section 2.8.6:


 


“2.8.6     The Parties intend to work
together to promote Supplier’s sponsorship, attendance and participation at
internal Sun events, Sun events that include Sun channel partners or Sun end
user events.  In order to participate in
Sun internal events, Supplier must obtain Sun’s prior approval of Supplier’s
proposed space, signage, written and electronic content, product demonstrations
and other elements.  For any approved
events, Sun and Supplier will mutually agree in advance the funding, the
marketing materials to be used and which party will set up and man any booths
used.  Any Supplier Product marketing
materials will only mention Sun Products, instead of any Supplier or third
party products. Should Supplier desire to participate in Sun events that
include Sun channel partners or in Sun end user events, the above process and
requirements will apply, and in addition, Supplier will only support the Sun
Products at those events and not have any signs, collateral or other materials
that mention Supplier’s name or other products.”


 


5)     Add the following to the PPA
as Section 2.11:


 


a)     “2.11               [ * ]


 


6)     Add the following to the PPA as Section 2.12:


 


“2.12      Additional
Qualification Procedures


 


i)      Supplier will perform at least [ * ]  of the NSTE level testing and will exercise best efforts (within
Supplier’s then-current business and operational constraints and resources) to
exceed this minimum level for NSTE level testing.  Sun’s expectations of meeting this goal are as follows: (i) [ * ] , Supplier and Sun will jointly
establish an appropriate test percentage goal and a timeframe in which such
goal may be met.  Notwithstanding the
foregoing, Sun acknowledges that the availability of technology to run tests
may impact Supplier’s ability to meet any goal or objective that is
established.


ii)     For
new Product(s), Supplier will create a test requirement matrix document based
on a Sun-approved product concept design or other official Sun-delivered
marketing document.  This required test
requirement matrix document would be edited jointly, and then submitted to SUN
for final approval.  Upon approval of
this test requirement matrix document by Sun, Supplier will develop a test
plan, and submit it in a timely manner to Sun for review and approval.  Any test schedule within such agreed test
plan will be tracked by Supplier, submitted to Sun on a weekly basis or such
other mutually agreed schedule, and reviewed in various meetings between
Supplier and Sun, [ * ] .


iii)    If changes are made to the product requirements [ * ]  after the test plan and schedule that has been proposed by the
Supplier has been approved by Sun, and Sun clearly documents a request for
change to Supplier, then the underlying test requirement matrix document will
be updated by Supplier and provided promptly to Sun for further review and
approval.  Any changes made to an
underlying test requirement matrix document will be clearly documented with the
date it was changed, and communicated by a party to the other.  Supplier will also promptly provide to Sun
an updated test plan that will result from any changes made to such test matrix
requirement


 


2

















 


document, and advise Sun whether there may or may not be any impact on
scheduling for the Product(s).  If
changes are made by Sun to the product requirements [ * ] .


iv)   Either before or after testing has begun, any
additions or modifications to test requirements or cases requested by Sun will
be negotiated in good faith between Supplier and Sun and, if appropriate, the
schedule may be adjusted based on such agreed additions and modifications.


v)    If there is an inconsistency or conflict between
the provisions of this Section 5.12, including its subsections, and those
provisions included elsewhere in this  [ * ], Supplier’s Quality Program, then the
provisions of this Section 5.12, including its subsections, shall govern and
prevail over such other inconsistent or conflicting provisions.”


 


7)     Replace the sentence in Section 4.2 of the PPA that begins with
“Supplier will provide to Sun the agreed upon percentage....” with the following:


 


[ * ]


 


8)     Replace in their entirety Sections 4.3.1 and 4.3.2 of the PPA with the
following:


 


“4.3.1
Cost Reductions. Supplier
will work actively to achieve cost reductions on all materials/processes
associated with Product.  Supplier will provide
to Sun an anticipated [ * ]  Product costs and Supplier is encouraged to
suggest to Sun changes to materials/processes, however small, that will result
in improved performance, reliability or yield of Products.


 


“4.3.2   Price Reductions.    Supplier and Sun will [ * ]. 
Except as otherwise provided in Section 4.2 or as otherwise agreed by
the Parties in writing, Sun will receive [ *
] .


 


9)     Replace Section 14.7.1 of the
PPA with the following:


 


“14.7.1     Supplier agrees to loan to Sun [
* ]  a total of between [ * ]  and [ * ]  Product units for the following geographies:
(i) North America, (ii) Europe the Middle East and Africa, and (iii) Asia
Pacific.  The maximum period of any loan
for such Product(s) will be for [ * ]  days (the “Loan Term”).  All such loaned Product(s) will be returned
by Sun to Supplier prior to the expiration of the Loan Term [ * ] . 
If Sun fails to return any such Products prior to the expiration of the
Loan Term, Supplier will notify Sun of such failure and if the Products have
not been returned within [ * ],
then such applicable Product(s) [ * ]
by Supplier to Sun and, Supplier may invoice Sun for such Product(s) at Sun’s
then current Product cost.  Supplier and
Sun will each act in a cooperative manner to help to develop the above loan
process, including logistics associated with the return of Product(s).  With respect to such loan activities,
Supplier will loan to Sun the following Product(s): [ * ] , until such time as Supplier has met its loan
obligations as set forth above; provided however, that the Parties may agree at
any time to accelerate this schedule.  [ * ] .”


 


10)     Replace Section 19 of the PPA with the
following:


 


“19. Sun Unique Features.
Supplier shall not use, sell, distribute or otherwise transfer the customized
configuration of the Products, [ * ]
.”


 


3

















 


11)    Replace Section 2 of
the Award Letters executed prior to the Third Amendment Effective Date with the
following: “PRODUCT DESCRIPTIONS AND PRICING:  Product
descriptions and pricing are set forth in Exhibit A to this Award Letter.”


 


12)   
Replace Exhibits B (Sun-Unique Turnkey Components), F (External Manufacturers)
and G (Business Continuity Plan) in all Award Letters executed prior to the
Second Amendment Effective Date with the Exhibits attached hereto as Appendices
1, 2 and 3.  The Parties may update
Exhibit B from time to time by mutual written agreement.


 


13)    Add the following as Section
5.24 to Exhibit B, Customer Support Provisions, of the PPA:


 


“5.24      Upon request by either party, [ * ] .”


 


14)    Replace Section 4.2 of Exhibit D-1, Training, of
the PPA with the following:


 


“4.2 For sales and
services training, Supplier and Sun will develop training courses with a Sun
look and feel for the following audiences and for delivery in the following
formats: [ * ] . Sun and Supplier
acknowledge and agree that such training courses, training materials or
training manuals will be [ * ]  and otherwise in accordance with the rights
and subject to the conditions of use set forth in Amendment No. 1 to this
Agreement. Upon Sun’s acceptance of the course, materials or manuals, which
acceptance will not be unreasonably withheld, delayed or conditioned, [ * ] for each major release of new
Product(s) that are developed by Supplier and Sun pursuant to the foregoing
provisions in this Section 4.2: (a) [ * ]  and any major updates that Supplier chooses
to undertake thereto, plus reasonable and pre-approved travel related costs
that Supplier actually incurs.


However, if a major release of new Product(s) only [ * ] . Any revenue-generating and/or
custom courses, lab training materials or training manuals that Sun desires for
Supplier to develop which are outside of the list above must be agreed to in
writing by Sun and Supplier. [ * ] .
Any charges for such development  and/or
delivery shall be reasonable in nature and agreed to in writing prior to the
commencement of any such development and/or delivery.


 


15)    Replace Section 4.3 of Exhibit D-1, Training, of
the PPA with the following:


 


“4.3 Supplier will
deliver, upon Sun’s request, a minimum of [ *
] . Subject to Section 4.15 of this Exhibit D-1, [ * ]  or course delivery will be quoted at time of request.
Additionally, Supplier will deliver [ * ]  for any new Product(s) that is (are) made
available by Supplier to Sun after January 31, 2004. The delivery to Sun of [ * ] will be addressed by the Parties  . Additional charges may apply to the
development and delivery of any such training courses.”


 


16)    Replace Section 4.4 of Exhibit
D-1, Training, of the PPA with the following:


 


“4.4        [ * ] .  Such training [ * ] if any, will be determined by the Parties and set forth
in a training plan that will be agreed to by Supplier and Sun before any such
training occurs.  Supplier will make such
agreed training available to Sun within a reasonable agreed time frame after


 


4

















 


receipt of
Notice and [ * ] for a period of
one (1) year commencing from the first day on which any such training is made available
by Supplier.”


 


This Third Amendment shall have prospective force and effect as of the
Third Amendment Effective Date.  Except
as specifically set forth above, the terms and conditions of the PPA, including
any Exhibits thereto, and any Award Letters issued under the PPA shall remain
unchanged and in full force and effect. 
The PPA, as amended by this Third Amendment, together with any Award
Letters, constitutes the entire agreement by and between the Parties relating
to its subject matter.  Such documents
shall supersede all prior and contemporaneous oral or written communications,
proposals, conditions, representations and warranties and prevail over any
conflicting or additional terms and conditions between the Parties relating to
its subject matter.


 


In Witness Whereof,
the Parties have caused this Third Amendment to the PPA to be signed by their
duly authorized representatives effective as of the Third Amendment Effective
Date.


 


 


	
  Sun Microsystems, Inc.

  	
  Dot Hill Systems Corporation

  
	
   

  	
   

  
	
  By:

  	
  /s/ Marcy Alstott

  	
   

  	
  By:

  	
  /s/ Jim Lambert

  
	
   

  	
   

  
	
  Printed Name:

  	
  Marcy Alstott

  	
   

  	
  Printed Name:

  	
  Jim Lambert

  
	
   

  	
   

  
	
  Date:

  	
  19 March 2004

  	
   

  	
  Date:

  	
  16 Mar 2004

  
	
   

  	
   

  
	
  Title:

  	
  VP, Worldwide Operations

  	
   

  	
  Title:

  	
  President & CEO

  
	
   

  	
   

  
	
  Sun Microsystems, International B.V.

  	
  Dot Hill Systems B.V.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Tymen Kos

  	
   

  	
  By:

  	
  /s/ B. H. M. van der Woning

  
	
   

  	
   

  
	
  Printed Name:

  	
  Tymen Kos

  	
   

  	
  Printed Name:

  	
  BHM van der Woning

  
	
   

  	
   

  
	
  Date:

  	
  Director

  	
   

  	
  Date:

  	
  22 March 2004

  
	
   

  	
   

  
	
  Title:

  	
  22 March 2004

  	
   

  	
  Title:

  	
  Managing Director

  
																								



 












[ * ] 
= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of
1934, as amended.


 


5