Exhibit
10.3


 


 


[ * ] = 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-63645-04


 


PRODUCT SUPPLEMENT/AWARD LETTER
(SATA)


 


This Product Supplement/Award Letter (this “Award
Letter”) is made on and as of the        
day of March, 2004 (“Effective Date”) by and between Sun Microsystems, Inc.
(“Sun”) and Dot Hill Systems Corporation (“Supplier”), pursuant to the Product
Purchase Agreement, dated as of May 22, 2002, Agreement No. AR-63645, as
amended, made between the parties (the “Agreement”).  Capitalized terms not defined in this Award Letter have the meanings
set forth in the Agreement.  The parties
agree as follows:


 


1 
SCOPE:  Neither this
Award Letter nor the Agreement constitutes a commitment by Sun to purchase
Products unless Sun, in its sole discretion, issues one or more P.O.’s in the
manner described in the Agreement.  The
terms and conditions of the Agreement are incorporated herein by reference as
if set forth in full.


 


2 
PRODUCT DESCRIPTIONS AND PRICING/COST REDUCTIONS:  Product descriptions and pricing are set
forth in Exhibit A to this Award Letter.


 


3 
MINIMUM PURCHASE RIGHTS PERIOD:  Pursuant to the terms of Section 2.1 of the Agreement, the
Minimum Purchase Rights Period (as defined therein) is [ * ].


 


4 
UPSIDE SUPPORT:  Sun
may request all or any part of Upside Support quantities at  anytime during the
applicable quarter  up to the maximum amount indicated
beginning with Sun’s GA of the Sun product or system that incorporates the
Product(s).  Requests for Upside
Support, above the percentages listed below or within less Days Advance Notice
for the listed percentage below, may be subject to additional charges actually
incurred by Supplier and other requirements related to manufacturing and
materials cycle lead time, availability of personnel and manufacturing
capacity.  Supplier will inform Sun in
writing of any additional charges and requirements that apply to delivery of
Product for this additional Upside Support and obtain approval from Sun to such
additional charges and requirements prior to implementing such Upside Support.
Supplier shall use commercially reasonable efforts to sell,  manufacture and ship such
Upside Support quantities  to Sun on a “first-in, first-out” basis
within five (5) business days after Sun’s written request.


 


	
  Timeframe

  	
   

  	
  Days
  Advance Notice

  	
   

  	
  Upside
  Max. Percentage Increase

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [
  * ]

  	
   

  	
   

  	
   

  	
   

  



 


Supplier shall  use
reasonable efforts to accommodate any request from Sun  to accelerate delivery of
Upside quantities of Products  within  the timeframes indicated above.  With respect to any request for quantities
in excess of Upside Support described above, the parties shall  negotiate
in good faith acceptable  delivery dates.


 


5    SUN-UNIQUE
COMPONENTS:  The
initial List of Sun-unique Components, Leadtimes and MOQs is set forth as
Exhibit B.


 


6  SPECIFICATION:  The Product Specification is set
forth as Exhibit C.


 


7 
EXTERNAL MANUFACTURERS: 
The list of External Manufacturers, if any, is set forth in Exhibit D.


 


8 BUSINESS CONTINUITY PLAN:
Supplier’s business continuity plan for the Product is set forth in Exhibit E.


 


9 LICENSED SOFTWARE: The
Licensed Software shall mean the most current version of [ * ].


 


10 QUALITY:  In addition to the quality requirements in
Exhibit C of the Agreement, Exhibit F of this Award Letter, which is attached
hereto and incorporated by reference, contains component-specific requirements.


 


11 
AWARD LETTER COMPONENTS: 
The parties agree to be bound by these terms and conditions which
consists of the Award Letter and the Exhibits indicated below:


 


	
  ý

  	
   

  	
  Exhibit A (Product
  Descriptions and Pricing)

  
	
  ý

  	
   

  	
  Exhibit B (Sun-unique
  Components, Leadtimes and MOQs)

  
	
  ý

  	
   

  	
  Exhibit C (Specification)

  



 


1

















 


	
  ý

  	
   

  	
  Exhibit D (External Manufacturers)

  
	
  ý

  	
   

  	
  Exhibit E (Business Continuity Plan)

  
	
  ý

  	
   

  	
  Exhibit F (Component Quality Requirements)

  



 


The undersigned duly authorized representatives of the
parties have executed and delivered this Award Letter as of the Effective Date.


 


	
  Sun Microsystems, Inc.

  	
  Dot Hill Systems Corporation

  
	
   

  	
   

  
	
  By:

  	
  /s/ Marcy Alstott

  	
   

  	
  By:

  	
  /s/ Jim Lambert

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Marcy Alstott

  	
   

  	
  Name:

  	
  Jim Lambert

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  VP, Worldwide Operations

  	
   

  	
  Title:

  	
  President & CEO

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  19 March 2004

  	
   

  	
  Date:

  	
  17 Mar 2004

  	
   

  
																	



 


	
  Sun Microsystems International B.V.

  	
  Dot Hill Systems BV

  
	
   

  	
   

  
	
  By:

  	
  /s/ Tymen Kos

  	
   

  	
  By:

  	
  /s/ BHM van der Woning

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Tymen Kos

  	
   

  	
  Name:

  	
  BHM van der Woning

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Director 

  	
   

  	
  Title:

  	
  Managing
  Director 

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  22 March 2004

  	
   

  	
  Date:

  	
  14 March 2004

  	
   

  
																



 


[ * ] = 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.


 


2

















 


EXHIBIT A


 


PRODUCT DESCRIPTIONS AND
PRICING


 


[ * ]


 


[ * ] = 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.


 


3

















 


EXHIBIT B


SUN-UNIQUE COMPONENTS,
LEADTIMES AND MOQs


 


[ * ]


 


[ * ] = 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.


 


4

















 


EXHIBIT C


SPECIFICATION


 


(To be attached)


 


5

















 


EXHIBIT D


 


EXTERNAL MANUFACTURERS


Solectron Corporation


847 Gibraltar Drive


Building 5


Milpitas, CA 95035


 


Solectron Technology Sdn. Blvd.


Plot 13 Phase IV


Prai Industrial Estate


13600 Prai


Penang.  Malaysia


 


Solectron Hungary
 Hangár Utca 5-37

H-1183 Budapest


 Hungary




6

















 


[ * ] = 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.


 


EXHIBIT E


 


BUSINESS CONTINUITY PLAN


 


DOT HILL
SYSTEMS CORP.


DISASTER
RECOVERY AN BUSINESS CONTINUITY PLAN


 


January 19, 2004


 


This package is to document Dot Hill’s current disaster recovery and
business continuity plan.  This package
will be updated periodically on an as needed basis.  This package contemplates that products will be manufactured at
Solectron Corporation, and therefore, includes Solectron’s Corporate Disaster
Response and Recovery Document as part of the overall plan.


 


[ * ]


 


 


[ * ] = 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.


 


7

















 


[ * ] = 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.


 


EXHIBIT F


 


[ * ]


 


8