Document:

exv10w1

 

EXHIBIT
10.1
 
***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

MANUFACTURING AGREEMENT

     THIS MANUFACTURING AGREEMENT (the “Agreement”) is entered into by and between Dot Hill
Systems Corporation, a Delaware corporation, with its principal place of business located at 2200
Faraday Avenue, Suite 100, Carlsbad, California, 92008 (“Dot Hill”), MiTAC International
Corporation, an entity organized under the laws of the Republic of China, with its principal place
of business located at No. 200, Wen Hwa 2nd Road, Kwei Shan Hsiang, Taoyuan, Taiwan,
Republic of China (hereinafter referred to as “Mitac”) and SYNNEX Corporation, an entity organized
under the laws of Delaware, with its principal place of business located 44201 Nobel Drive,
Fremont, California 94538 (hereinafter referred to as “Synnex”). For purpose of interpretation of
this Agreement, and in accordance with an interpretation provided in a manner set forth in Section
12.21 below, Mitac and Synnex may collectively or separately be referred to as Supplier, as the
case may be.

RECITALS

     WHEREAS, this Agreement governs Dot Hill’s purchase of parts, materials, components and/or
finished products from Supplier.

     WHEREAS, the general terms and conditions comprising the body of this Agreement shall set
forth the provisions which apply to all purchases of parts, materials, components and/or finished
products by Dot Hill from Supplier; and

     WHEREAS, a separate Award Letter will be executed by the parties for particular parts,
materials, components and/or finished products and set forth any additional provisions that apply
thereto, such as, without limitation, prices, order quantities and lead times, together with any
changes or other revisions to any of the general terms and conditions that they apply to such
particular parts, materials, components and/or finished products.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by each of the parties, the parties hereby agree as follows:

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1.

 

AGREEMENT COMPONENTS

     The parties agree to be bound by this Agreement, which consists of this signature page, the general
terms and conditions and the following exhibits, together with any Product Supplement/Award Letter
that is executed by the parties:

	 	þ	 	Exhibit A (Electronic Data Interchange)
	 
	 	þ	 	Exhibit B (Customer Support)
	 
	 	þ	 	Exhibit B-1 (Supplier’s Repair Facilities)
	 
	 	þ	 	Exhibit B-2 (NTF Charges)
	 
	 	þ	 	Exhibit B-3 (Out of Warranty Repair)
	 
	 	þ	 	Exhibit C  (Supplier’s Quality Program)
	 
	 	þ	 	Exhibit C-1 (Customer Support Quality Requirements)

     IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by and through their
duly authorized representatives to become effective on the last signature date (the “Effective
Date”) set forth below.

	 	 	 	 	 	 	 	 	 
	Dot Hill Systems Corporation	 	MiTAC International Corporation  
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Dana W. Kammersgard	 	By:	 	/s/ Riley J. Ho	 	 
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Dana W. Kammersgard	 	Name:	 	Riley J. Ho	 	 
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	CEO	 	Title:	 	President	 	 
	 

	 	 
	 	 	 	 	 	 
	Date:

	 	2/20/07	 	Date:	 	1.19.2007	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	SYNNEX Corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Simon Y. Leung	 	 
	 

	 	 	 	 	 	Simon Y. Leung	 	 
	 

	 	 	 	Name:	 	Simon Y. Leung	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	General Counsel & Corporate
Secretary	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Date:	 	Jan. 23, 2007	 	 
	 

	 	 	 	 	 	 	 	 

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2.

 

GENERAL TERMS AND CONDITIONS

1. DEFINITIONS. Solely for purposes of this Agreement, the following terms and their
grammatical variations shall have the meanings set forth hereinafter:

     1.1 “Affiliate” means an entity that is controlled by a party hereto, where
“control” means the direct or indirect beneficial ownership of more than fifty percent (50%) of the
outstanding voting interests of such entity by a party hereto, but only for so long as such entity
continues to meet this requirement.

     1.2 “Award Letter” means a document executed by Dot Hill and Supplier that sets out
the particular commitments of the parties with respect to prices and other terms relative to the
purchase of specific Products pursuant to the terms and conditions of this Agreement. The
execution of an Award Letter shall not constitute or imply any commitment to purchase any
particular quantity of Products.

     1.3 “Components” means those components purchased by Supplier for use in Products
that are to be provided to Dot Hill within the Material Leadtimes initially set forth in an
attachment to an Award Letter and updated quarterly, and purchased only in accordance with Dot
Hill’s Approved Vendor Listing (“AVL”), as may be modified at any time and from time to time by Dot
Hill.

     1.4 “Confidential Information” means information of a party, which information is
conspicuously marked with “Confidential” or “Proprietary” or other similar legend. If Confidential
Information is orally disclosed it shall be identified as such at the time of disclosure and a
brief written non-confidential description of the information and confirmation of the confidential
nature of the information shall be sent to the recipient within thirty (30) days after the
disclosure. Quantities and schedules shall be considered Confidential Information of Dot Hill
hereunder regardless of whether disclosed orally or in writing, or whether or not marked
“Confidential” or “Proprietary.” Pricing of Products to Dot Hill shall be considered Confidential
Information of Dot Hill regardless of whether disclosed orally or in writing, or whether or not
marked “Confidential” or “Proprietary” and shall not be disclosed to any third party by Supplier.
Confidential Information does not include information that: (a) was in the possession of, or was
known by, the receiving party prior to its receipt from the disclosing party, without an obligation
to maintain its confidentiality; (b) is or becomes generally known to the public without violation
of this Agreement; (c) is obtained by the receiving party from a third party, without an obligation
to keep such information confidential; or (d) is independently developed by the receiving party
without access to and use of Confidential Information.

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     1.5 “Demand Replenishment Program” means the program agreed to by the parties which provides
for Supplier-owned Product located at Supplier’s facilities or Supplier-designated third party hub
locations to be delivered to Dot Hill designated location(s) within the timeframe(s) such Product
is required by Dot Hill and which shall be provided to Supplier by means of a Demand Trigger.

     1.6 “Demand Trigger” means the mechanism, whether written or by electronic means, by
which Dot Hill communicates to Supplier the required delivery timeframes, quantities, delivery
locations, and delivery timeframes under one or more Dot Hill purchase orders. If Products are
subject to Demand Trigger, the frequency of releases will be specified in an Award Letter.

     1.7 “Dot Hill Contractor” means a third party supplier to Dot Hill, or a limited
number of third party suppliers to Dot Hill, which are authorized by Dot Hill in writing to
purchase Products from Supplier.

     1.8 “Dot Hill Background Intellectual Property” means the following items which have
been authored, conceived, created or developed on or before the Effective Date by or for Dot Hill:
(i) all information, inventions, technology, technical documentation, designs (including circuit
designs and the Dot Hill product specifications), materials and know-how; (ii) all patents, patent
applications, copyrights and other intellectual property rights pertaining to the foregoing, but
excluding any trademarks, trade names, service marks and/or service names of Dot Hill.

     1.9 “Dot Hill-unique Components” means those Components which Supplier has purchased
and is unable to mitigate under the provisions of this Agreement.

     1.10 “Economic Order Quantity” or “EOQ” means a quantity of Dot Hill-unique
Components or Dot Hill-unique raw materials ordered by Supplier and used in the manufacture of the
Products, pursuant to a written document with Dot Hill, as amended from time to time by the
parties, that will allow Supplier to take advantage of cost savings and which quantity exceeds the
normal quantity required to build Products for Dot Hill pursuant to Dot Hill’s proposed delivery
schedules.

     1.11 “Effective Date” means the date of last signature by Supplier and Dot Hill on
the Manufacturing Agreement for which these General Terms and Conditions apply.

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     1.12 “Improvements” shall mean all upgrades, enhancements and improvements to one or more
Product(s) which are derived from or based upon Dot Hill Background Intellectual Property or
Supplier Background Intellectual Property, and authored, conceived, created or developed therefrom
during the term of this Agreement. The term “Improvements” shall, however, not include any Work
Product, Dot Hill Background Intellectual Property and Supplier Background Intellectual Property.

     1.13 “Jointly Developed Intellectual Property” shall mean any intellectual property
rights that are developed, conceived or reduced to practice by one or more employees of Dot Hill
with one or more employees of Supplier as a result of a material contribution by one or more
employees of both Dot Hill and Supplier in connection with the performance of the development
activities under this Agreement.

     1.14 “Long Lead Time Components” or “LLTC” means those Components used in the
manufacture of the Products, whose lead times are longer than the Purchase Order lead time
specified in the applicable Award Letter. If said Purchase Order lead time is not specified in the
applicable Award Letter, Long Lead Time Components shall mean those Components whose lead times are
longer than [...***...].

     1.15 “Material Leadtime” means the number of days from placement of an order for raw
materials to be used in a Product to the time of delivery of such raw materials to Supplier.

     1.16 “Notice” means giving of notice in the manner described in Section 12.2.

     1.17 “NRE” means non-recurring engineering charges.

     1.18 “Pre-Production and/or Prototype” shall mean Product which is manufactured
prior to the beginning of production manufacturing and which may or may not be fully qualified and
tested, as directed by Dot Hill. A Pre-Production and/or Prototype version of a Product includes a
preliminary, unqualified version of a Product under development by Dot Hill that is not intended
for resale.

     1.19 “Product” means a part, materials, component or finished good specifically
described in one or more applicable Award Letters.

     1.20 “Product Leadtime” means the number of hours or days from placement of a
Purchase Order or Demand Trigger to the timeframe of delivery to the specified delivery location.

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     1.21 “Specifications” means the applicable product specifications/assembly drawings for
the Products provided by Dot Hill to Supplier, as amended from time to time by Dot Hill in
accordance with this Agreement, initially set out in the Award Letter.

     1.22 “Statement of Work” means a document that has been executed by the authorized
representatives of Supplier and Dot Hill and which summarizes the scope of design or development
services that are to be provided by Supplier to Dot Hill, any deliverables arising out of such
services which are to be provided by Supplier to Dot Hill, dates and timeframes within which such
services are to be rendered and any deliverables provided by Supplier to Dot Hill, amounts that are
to be paid by Dot Hill to Supplier for such services and when such payments shall be due, and other
supplementary or additional terms and conditions applicable to such services.

     1.23 “Sub-tier Supplier” means a third party who provides parts, materials and/or
components related to Products directly to Supplier.

     1.24 “Supplier Guidelines” means Dot Hill’s document confirmed by Supplier which
includes, without limitation, the areas of quality, qualification, compliance, connectivity, cost,
supply and performance and may include auto-swap, co-planning, demand replenishment certification,
direct ship, resident Supplier program, supplier performance management and other initiatives.

     1.25 “Supplier Background Intellectual Property” means the following items which
have been authored, conceived, created or developed on or before the Effective Date by or for
Supplier: (i) all information, inventions, technology, technical documentation, designs, materials
and know-how; (ii) all patents, patent applications, copyrights and other intellectual property
rights pertaining to the foregoing, but excluding any trademarks, trade names, service marks and/or
service names of Supplier.

     1.26 “Supplier Part” means a part, material or component that is: (a) manufactured
by Supplier or any of its Affiliates for Dot Hill or a third party; and (b) incorporated by
Supplier or any of its Affiliates into the Products.

     1.27 “Upside Support” means the percentage increase in the quantity of Products that
Dot Hill may purchase and Supplier shall sell, manufacture and ship to Dot Hill, without incurring
additional charges, in excess of the quantities in Dot Hill’s outstanding purchase orders or
forecasts, as the case may be.

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     1.28 “Work Product” means all (i) Product designs, inventions or improvements and any and all
discoveries, products, computer programs (including source code and firmware), tooling, procedures,
improvements, developments, drawings, works of authorship, specifications, data, memoranda, notes,
documents, manuals, information and other items identified in a Statement of Work that are made,
authored, conceived or developed for Dot Hill, alone by Supplier or jointly by Supplier with
others, for the Products during the term of this Agreement, to the extent that Supplier has the
right to transfer to Dot Hill ownership rights in such items, and (ii) intellectual property
(excluding Supplier Background Intellectual Property) therefor, to the extent that Supplier has the
right to transfer to Dot Hill ownership rights in such intellectual property. Both parties shall
execute a Statement of Work for respective projects and finalize/amend the respective definition of
Work Product in such Statement of Work for such respective projects.

2. SCOPE OF AGREEMENT

     2.1 Master Agreement Structure. These general terms and conditions cover the
potential purchase by Dot Hill of various Products from Supplier, but do not by themselves
constitute a purchase commitment by Dot Hill or a supply commitment by Supplier. Dot Hill will be
committed to purchase Products only if and when both parties have entered into an Award Letter
covering such Products and a purchase order has been issued by Dot Hill to acquire Products set
forth in such Award Letter. Notwithstanding the foregoing, Dot Hill acknowledges its
responsibility for liability associated with the procurement by Supplier of long-lead time and/or
unique Components necessary to support the manufacture of Products by Supplier, as such liability
is further described in this Agreement. Such Components will be detailed in an Award Letter for
each of the Products, together with their Material Leadtimes and their Dot Hill-approved vendor
list. Any issued and accepted purchase orders shall be subject to all the terms and conditions of
the signature page, these general terms and conditions and exhibits described in the signature
page, the applicable Award Letter for ordered Products and the attachments listed on that Award
Letter.

     2.2 Design and Development Work. In the event that Dot Hill desires for Supplier to
perform any design and development work, the parties will confer on the scope of design or
development services that are to be provided by Supplier to Dot Hill, any deliverables arising out
of such services which are to be provided by Supplier to Dot Hill, dates and timeframes within
which such services are to be rendered and any deliverables provided by Supplier to Dot Hill,
amounts that are to be paid by Dot Hill to Supplier for such services and when such payments shall
be due, and other

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supplementary or additional terms and conditions applicable to such services. If the parties reach
agreement on these items, they will document them in a Statement of Work that will be executed by
the authorized representatives of the parties. Upon such execution, the Statement of Work shall
become a part of this Agreement.

2.3 Applicable Parties

          2.3.1 This Agreement applies with respect to all current and future locations and
operations of Supplier, wherever those may be located, and which are listed in an addendum to this
Agreement. This Agreement shall not apply to any Affiliates of Supplier unless Supplier guarantees
in writing their performance under this Agreement in a separate document prepared by Dot Hill.

          2.3.2 Subject to Dot Hill’s provision to Supplier of a guarantee of performance of
the responsibilities of an applicable Affiliate of Dot Hill under this Manufacturing Agreement,
such Dot Hill Affiliate may issue a written confirmation letter to Supplier stating its willingness
to be bound by this Agreement, and issue purchase orders for the purchase of and also purchase
Products and services pursuant to this Agreement, which in such event the rights and obligations
set forth in this Agreement with respect to such purchase shall be between the Affiliate of Dot
Hill that has purchased such Products and services and either Supplier or the Affiliate of Supplier
that has provided such Products and services.

          2.3.3 Upon written request of Dot Hill, Supplier also agrees to sell Products to Dot
Hill Contractors provided, however, that such Dot Hill Contractors shall issue written confirmation
letters to Supplier stating its willingness to be bound by this Agreement, and have credit that is
reasonably acceptable to Supplier, which credit approval shall not be unreasonably withheld,
delayed or conditioned. Supplier shall use commercially reasonable efforts to enter into an
agreement with Dot Hill Contractor(s) that extends the same or substantially similar terms and
conditions to Dot Hill Contractors as set forth herein and the corresponding sections of any Award
Letter(s) with respect to pricing, Product Leadtimes, on-time delivery, allocation, Upside Support,
shipping point, rescheduling, cancellation, forecasting, warranties, indemnity, acceptance and
Product quality, but which agreement will include, without limitation, that Dot Hill Contractor(s)
shall [...***...]. Supplier shall extend to such Dot Hill Contractor(s) payment terms that are
customary and reasonable. Any such agreement shall be subject to approval by Supplier of
reasonable credit limits. All purchases made by Dot Hill Contractors shall be added to Dot Hill’s
cumulative volume of Products purchased for the purpose of determining any applicable volume

*** Confidential Treatment Requested

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discounts. Dot Hill shall be liable to pay only for Products ordered by and invoiced directly
to Dot Hill and shall not be liable to pay for any Products ordered by Dot Hill Contractors.

     2.4 Tooling. Dot Hill shall [...***...]. Additional terms and conditions related to
such tooling will be set forth in a separate Tooling Agreement that is to be executed by the
parties.

3. ENGAGEMENT PROCESS

     3.1 Award Letters. Supplier will provide manufacturing services and Products to Dot
Hill under the terms and conditions of this Agreement and the applicable Award Letter. From time
to time Dot Hill may issue a request for quotation, request for proposal or otherwise initiate
discussions regarding a potential Product. Supplier agrees to respond to such requests and engage
in any follow-up discussions reasonably requested by Dot Hill. Unless otherwise agreed in writing,
[...***...]. In the event that Dot Hill, at its sole discretion, believes that it may, at some time in
the future, desire to purchase such a Product from Supplier, Dot Hill will issue and deliver to
Supplier for execution a separate Award Letter incorporating the terms and conditions governing any
such purchase. Supplier shall review the Award Letter and, if it is acceptable, execute it.

     3.2 Purchase Orders. If Dot Hill elects to purchase Products from Supplier, Dot Hill
shall issue and deliver purchase orders for such Products to Supplier. Supplier shall accept Dot
Hill’s purchase orders to the extent that such purchase orders are consistent with Dot Hill’s
then-current forecast that has been accepted by Supplier in accordance with the provisions of
Section 3.6 below. The parties agree that purchase orders may be issued and shall be deemed
received in the manner provided in Exhibit A.

     3.3 Pricing. All prices in each Award Letter and purchase orders shall be in U.S.
Dollars and determined in accordance with the following provisions:

          3.3.1 Product Pricing and Elements. The initial pricing for the Products shall be
set forth in the Award Letter. The itemized pricing elements of Products (including [...***...]) and
estimates for the following

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six (6) quarters shall be provided by Supplier to Dot Hill on the Effective Date, and updated
by Supplier and provided to Dot Hill on a quarterly basis, or more frequently if reasonably
requested in writing by Dot Hill. Notwithstanding anything to the contrary, Supplier shall not
[...***...] provided to Dot Hill under this Agreement for [...***...] after its first customer shipment
date by Dot Hill provided that (i) there are no significant changes in the actual volumes purchased
by Dot Hill from Supplier as compared to the volumes for which prices had been previously quoted to
Dot Hill by Supplier, or (ii) the [...***...], which in such event, through mutual discussions and
understanding, both parties will find the way to solve this issue; for example, [...***...] Also,
Supplier shall, upon mutual agreement, [...***...] in its sales of Products to Dot Hill’s third party
customers.

          3.3.2 Non-approved Charges. Dot Hill shall not be liable to Supplier for any
overtime charges, freight charges or component product price variances incurred by Supplier, or its
employees, agents, subcontractors or Sub-tier Suppliers, due to component purges and stop-shipments
if the cause of the component purge or stop-shipment is attributable to Supplier and/or its
employees, agents, subcontractors and/or Sub-tier Suppliers. The provision in the immediately
preceding sentence shall not apply to any circumstance beyond the reasonable control of Supplier
and/or its employees, agents, subcontractors and/or Sub-tier Suppliers. If the component purge or
stop-shipment is the result of a Dot Hill design change or otherwise due to Supplier’s conformance
with Dot Hill’s requirements, then Dot Hill will bear the replacement costs of scrapped or unusable
components and materials and will reimburse Supplier for all other costs incurred. Supplier will
use all commercially reasonable efforts to provide an estimate of costs to be incurred due to a
component purge or stop-shipment to Dot Hill prior to the purge or stop-shipment. Each party will
use commercially reasonable efforts to work together with each other to minimize costs which may be
incurred due to any component purges and stop-shipments.

          3.3.3 Cost Reductions. Supplier will work actively and aggressively to achieve cost
reductions on all materials, labor, overhead and processes (including, without limitation, costs
associated with assembly and test) associated with Products. Supplier will provide on an ongoing
basis, but no less than on a quarterly basis, to Dot Hill an anticipated six (6)-quarter cost
reduction profile and a value chain analysis for each of the Products. This analysis shall include
the existing and anticipated bill of materials during the upcoming six (6) quarters for each of the
Products, together with

*** Confidential Treatment Requested

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all other costs, such as labor and overhead, which are associated with the manufacture,
delivery, service and support thereof. Supplier will suggest to Dot Hill changes to
materials/processes, however small, if Supplier believes they will result in improved performance,
reliability or yield of Products. Supplier will pass through (i) [...***...] of the benefits of all
cost reductions achieved to the Products during the first six (6) months after their implementation
and (ii) [...***...] at all times thereafter. Notwithstanding anything to the contrary in this
Agreement, all cost reductions which are either (a) achieved through the efforts of Dot Hill or any
of its customers or (b) received by Supplier based on pricing that is established by Dot Hill or
any of its customers with third party suppliers of any materials, parts, labor, services or
components (including, without limitation, drives, controllers and/or power suppliers), shall be
passed through [...***...] by Supplier to Dot Hill for those units of Products for which such cost
reductions have been implemented.

          3.3.4 [...***...] Prices. Supplier represents and warrants that the [...***...].
Notwithstanding the foregoing, the parties agree that differences in [...***...] by Supplier to Dot
Hill pursuant to this Section 3.3.4.

          3.3.5 Documentation and Other Information. Promptly upon request by Dot Hill,
Supplier will provide to Dot Hill a full-costed bill of materials, including, without limitation,
complete regarding overhead, assembly, test, profit and non-recurring engineering costs, for each
Product (“BOM”). This BOM will include all [...***...]. Upon request from Dot Hill, and to the extent
not prevented by any confidentiality obligations that Supplier has to any third party, Supplier
will provide to Dot Hill: [...***...]. To the extent not prevented by any confidentiality obligations
that Supplier has to any third party, Supplier will disclose all

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[...***...].

          3.3.6 Dot Hill Changes. Dot Hill may [...***...]. If Dot Hill desires to make any such
change, it will be documented in and provided to Supplier through Dot Hill’s Agile system. This
notification shall include documentation to effectively support an investigation of the impact of
the engineering change. Supplier will review the engineering change and provide initial evaluation
to Dot Hill within [...***...]. Such changes may include changes to applicable drawings, designs or
specifications; required method of shipment or packing; or place of delivery. If the change causes
an increase or decrease in the cost or the time required by Supplier for performance of any
purchase order issued under an Award Letter and Supplier so notifies Dot Hill in writing within
[...***...] of Supplier’s receipt of the change order notice, then, if Dot Hill still wishes such
change to be made, the parties shall negotiate a reasonable adjustment to the price or delivery
schedule or both. Any such change must be (i) agreed upon in writing by an authorized
representative(s) of Dot Hill and (ii) documented in Dot Hill’s Agile system. Promptly after
execution of this Agreement, Dot Hill will notify Supplier in writing of the names of such
authorized representative(s), which names may be changed by Dot Hill at any time and from time to
time upon written notice to Supplier that is provided in accordance with the provisions of Section
12.2 of this Agreement. In the event Dot Hill requests through its Agile system that a change be
implemented by Supplier prior to Supplier’s evaluation of pricing and schedule impact, Supplier
will undertake commercially reasonable efforts to perform as directed and Dot Hill will be liable
for all actual costs associated with such implementation, including excess and obsolete components,
unless the change was required due to Supplier’s failure to manufacture Product according to
Specifications. Dot Hill shall not be responsible for any changes made to Products that are not
documented and approved through the use of Dot Hill’s Agile system.

          3.3.7 Packaging. All prices must include packaging in accordance with Dot Hill’s
packaging specifications provided to Supplier. Dot Hill encourages the use of reusable packaging
to reduce waste and therefore cost to the Product.

          3.3.8 Labeling. All pricing will includes the costs of labeling to be implemented
in accordance with Dot Hill’s labeling specifications (system level labels, FRU labels, packaging
labels, customer information sheets, etc.) provided to Supplier.

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          3.3.9 Taxes, Duties and Tariffs. [...***...], this Agreement or any purchase order issued
thereunder. The term “Delivery Point” shall mean the location to which Products are transported to
Dot Hill (or location otherwise agreed by both parties) by Supplier or a common carrier. The
Delivery Point and related logistics for delivery of Products to Dot Hill shall be set forth in an
attachment to an Award Letter that applies to such Products.

          3.3.10 NRE Charges. [...***...] for non-recurring engineering costs and expenses
[...***...]. If not otherwise agreed in writing by an authorized representative of [...***...].

     3.4 Payment Terms; Extension of Credit; Payment Disputes

          3.4.1 Payment Terms. All payments will be made in U.S. dollars (unless otherwise
specified in the Award Letter) and be due within [...***...] after the date of invoice (“Payment Due
Date”). For this purpose, the date of invoice shall not be earlier than the date of delivery of
Products to Dot Hill (unless Dot Hill agrees in writing otherwise).

          3.4.2 Extension of Credit. Provided that there is no material adverse change in Dot
Hill’s ability to make payments due to Supplier under this Agreement, Supplier shall extend,
without charge to Dot Hill and throughout the term of this Agreement, credit to Dot Hill to the
extent reasonably necessary for Dot Hill to purchase Products and services under this Agreement and
to fulfill orders for Products and services from Dot Hill’s customers.

          3.4.3 Payment Disputes. Dot Hill shall not be required to pay the disputed portion
of any invoice which arises out of or results from an invoice discrepancy or a breach of the RMA
process provisions with respect to the Products or services to be provided by Supplier to Dot Hill
under this Agreement, pending resolution of such invoice discrepancy or breach; provided, however
that notice of the invoice discrepancy or breach has been forwarded to Supplier prior to the
Payment Due Date. Payment of an invoice does not constitute acceptance of Products or services.
Upon prior written agreement by Supplier, which will not be unreasonably withheld, delayed or
conditioned, invoices will be subject to adjustment for errors, shortages and/or rejected Products.

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          3.4.4 Return for Credit. Supplier will provide Dot Hill with a credit memo within [...***...]
after Dot Hill’s return of Products that have been returned for re-certification and inclusion in
new or equivalent-to-new finished goods inventory. Those Products returned for credit at the
current purchase price will be subject to a reasonable mutually agreed service fee in those
circumstances where such Products need to be repackaged and reworked by Supplier to a different
sku, due to no fault of Supplier.

          3.4.5 Invoices. Information on Supplier’s invoices shall include, without
limitation, the following: purchase order number, Dot Hill Product or part numbers, quantities,
unit value and freight charges (if applicable), each stated separately. Invoices will be addressed
to Dot Hill’s Accounts Payable Department at 2200 Faraday Avenue, Suite 100, Carlsbad, California
92008, or at such other address as Dot Hill may designate to Supplier. For U.S. imports, the
information on Supplier’s invoice shall conform to the requirements in the U.S. Code of Federal
Regulations.

     3.5 Delivery and Logistics

          3.5.1 Delivery Point. Supplier will deliver Products to the Delivery Point (as
defined in Section 3.3.9 above).

          3.5.2 Risk of Loss or Damage. Supplier shall be responsible for any loss or damage
to Products due to Supplier’s failure to preserve, package or handle Products in accordance with
Dot Hill’s specifications. Notwithstanding any prior inspection, Supplier will bear all risk of
loss, damage or destruction to Products [...***...].

          3.5.3 Transportation for Late Deliveries. If it should reasonably be expected that
a shipment of Products will not be delivered on an agreed delivery date, Supplier shall notify Dot
Hill of such delay. Upon Dot Hill’s request, Supplier shall, [...***...] use commercially reasonable
means of transportation to deliver Products at the earliest possible date to a Dot Hill-designated
delivery location. The provision in the immediately preceding sentence shall not apply to any
circumstance beyond the reasonable control of Supplier and/or its employees, agents, subcontractors
and/or Sub-tier Suppliers.

          3.5.4 Delivery Performance

          
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               3.5.4.1.1 Supplier shall ensure that units of Products in Purchase Orders are available for
delivery to Dot Hill upon the issuance by Dot Hill of Demand Triggers in accordance with the
provisions of the applicable Award Letter and any Attachments thereto. Supplier shall also ensure
that units of Products maintained for Upside Support are available for delivery to Dot Hill in
accordance with the provisions of the applicable Award Letter and any Attachments thereto.

               3.5.4.1.2 If Supplier anticipates that it will be unable to deliver the total
quantity of Products ordered on the scheduled delivery date, Supplier shall notify Dot Hill
promptly. Dot Hill may, at its sole option, accept partial delivery of the total quantity of
Products ordered. If Dot Hill chooses to accept partial delivery, Dot Hill may, at its sole option
and discretion (i) reschedule the delivery of other units not included in Supplier’s delivery or
(ii) if such partial delivery is due to fault of Supplier and Dot Hill loses customer orders as a
result of such delay, cancel the affected portion of the order without any further obligation to
Supplier. Subsection (ii) in the immediately preceding sentence shall not apply to any
circumstance beyond the reasonable control of Supplier. Any partial deliveries shall be separately
invoiced by Supplier.

               3.5.4.1.3 In the event that Supplier fails to meet Dot Hill’s delivery requirements
contained in any Purchase Orders or fails to deliver committed Upside Support that Supplier is
obligated to maintain for Dot Hill under the applicable Award Letter due to causes attributable to
any acts or omissions by Supplier, its employees or any of its direct or indirect subcontractors or
suppliers, then Supplier agrees to take measures, [...***...].

     3.6 Forecasts. Dot Hill shall provide Supplier with a four (4)-quarter, monthly
rolling forecast of its intended purchases under each Award Letter in the form of a Dot Hill supply
plan, updated at least monthly and subsequent updates as needed. Each such forecast shall be
reviewed by Supplier and, if acceptable, accepted in writing by Supplier no later than [...***...]
after its receipt. Such forecast is for Supplier’s convenience only and will in no way create an
obligation on Dot Hill’s part to acquire any Products.

          3.6.1 On a monthly basis, Dot Hill will provide a forecast so as to maintain a minimum of
four (4) quarter, monthly rolling forecast of its projected orders

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for Products. Such forecasts are made as an accommodation for planning purposes and authorization
for Supplier’s purchase of long lead materials as identified in the costed BOMs which accompany
Supplier’s price quotation. Dot Hill’s liability for such Components and other non-cancelable and
non-returnable materials is as stated in the Award Letter.

          3.6.2 Purchase Orders and Releases. Dot Hill shall issue purchase orders to
Supplier for Products that are to be released for shipment. Supplier shall also build Products to
finished goods pursuant to specified quantities or otherwise based on individual purchase orders.
Dot Hill shall use commercially reasonable efforts to issue purchase orders on a daily basis to
Supplier for individual orders of Products which are to be shipped within agreed leadtimes for such
Products. Dot Hill may transmit purchase orders and releases in writing by facsimile or other
means of electronic transfer agreed to by the parties.

     3.7 Certain Manufacturing Obligations. In accordance with the applicable Award
Letter and purchase order, Supplier shall do the following:

          3.7.1 Manufacture, assemble, debug and test each Pre-Production version of Product,
pursuant to and in accordance with the Specifications and applicable schedules;

          3.7.2 Manufacture, assemble, debug, test and deliver Products in accordance with the
Agreement;

          3.7.3 Provide all necessary process design technology, labor, material, tooling,
facilities and other resources for the timely and satisfactory completion and delivery of the
Product and any Pre-Production version;

          3.7.4 Commit and use sufficient and qualified personnel to support the requirements
of this Agreement;

          3.7.5 Provide sufficient resources for testing the Product to ensure compliance with
the Specifications;

          3.7.6 Provide Dot Hill with reasonably detailed written progress reports as
reasonably requested by Dot Hill and mutually agreed to by Dot Hill and Supplier;

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          3.7.7 Notify Dot Hill promptly (not to exceed [...***...] after its awareness) of any factor,
occurrence or event coming to its attention that may materially adversely affect Supplier’s ability
to meet any of its obligations hereunder or that is likely to occasion any material delay in
delivery of any of the deliverables due hereunder. For example, but not by way of limitation, such
notice shall be given in the event of any loss or reassignment of key personnel, threat of strike,
or major material equipment failure;

          3.7.8 Deliver to Dot Hill packaged and tested Pre-Production versions of each
Product in the quantity agreed, tested by Supplier. The goal shall be to provide Pre-Production
versions that conform to all aspects of the finally agreed upon test requirements; and

          3.7.9 Promptly repair or replace all pre-production Products returned for rework
after notice from Dot Hill. All returned pre-production Products which are not repaired and
delivered to Dot Hill within [...***...] after Supplier’s receipt (or such other timeframe that may be
agreed to in writing by the parties) must be delivered to Dot Hill as the then most-current version
of such Products. [...***...] unless otherwise agreed to in writing by Dot Hill.

     3.8 Compliance with Supplier Guidelines. Dot Hill shall make the most current
version of the applicable Supplier Guidelines available to Supplier for Supplier’s confirmation
during the term hereof. Supplier acknowledges that from time to time Dot Hill may issue and
revise such Supplier Guidelines and further provide it to Supplier for Supplier’s confirmation, and
Supplier will review each revision of the Supplier Guidelines provided by Dot Hill within [...***...]
of receipt. If Supplier has reason to believe it may not be able to comply with the then most
current version, Supplier shall immediately notify Dot Hill and the parties will negotiate in good
faith to promptly resolve any reasonable objections that Supplier raised regarding its compliance
with the Supplier Guidelines.

     3.9 Additional Obligations of Supplier

          3.9.1 Material Procurement and Inventory Management. Supplier will ensure that the
amount of finished goods inventory, work in process, and Dot Hill-unique raw materials
(“Inventory”) is limited to that amount required to support the agreed upon lead times and Upside,
unless otherwise agreed to in writing by Dot Hill.

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The costs associated with any excess Inventory not purchased by Supplier under provisions within
this Agreement or otherwise authorized in writing by Dot Hill will be borne by Supplier. Within
ninety (90) days after the Effective Date and a quarterly basis thereafter, Supplier will provide a
detailed list by Product of ABC components included in each Product and a plan to require vendors
that supply components to Supplier for the Products to be part of a vendor managed inventory
program. Supplier will use commercially reasonable efforts to drive key suppliers into a vendor
managed inventory program, and Dot Hill will provide reasonable cooperation and appropriate
involvement in such efforts. In order to meet Dot Hill forecasted requirements, purchase orders,
and the flexibility requirements agreed upon by the parties, Supplier is authorized to purchase
materials and make commitments to vendors on the Approved Vendor List (“AVL”) and other Dot Hill
approved suppliers using standard purchasing practices including, but not limited to, acquisition
of material recognizing supplier lead times, ABC order policy, supplier-imposed minimum order
quantities (“MOQ”), minimum build quantities, economic order quantities, component overfill policy,
and agreed to inventory buffers. Supplier may maintain at Dot Hill’s request a buffer of raw
components and/or finished goods, which will be utilized to support Upside Support flexibility.
Buffers may be maintained at Dot Hill’s request by Supplier or suppliers. Buffer stock levels may
be reviewed periodically.

          3.9.2 Sub-tier Supplier Management. Supplier will manage its Sub-tier Suppliers in
accordance with the guidelines provided in Supplier Guidelines.

          3.9.3 Co-Planning. Supplier agrees to use its commercially reasonable efforts to
participate at an early stage in Dot Hill’s planning cycle, to the extent that Dot Hill requests
such participation in writing. Without limiting the generality of the foregoing, such participation
may include jointly developing supply plans with Dot Hill and refining forecasts.

          3.9.4 Direct Ship. Supplier agrees to support processes that provide for shipment
of Product from Supplier’s point of manufacture directly to Dot Hill’s point of consumption, e.g.,
Dot Hill manufacturing sites, channels, consolidation points and direct end-users.

          3.9.5 Demand Replenishment Program. Supplier agrees to support and implement a
Demand Replenishment Program for each Product. The terms and conditions related to each Demand
Replenishment Program for a Product shall be set forth as an Attachment to the applicable Award
Letter for such Product.

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          3.9.6 Supplier Performance Management. Supplier agrees to support Dot Hill’s Supplier
Performance Management process which is used to measure Supplier’s ongoing performance.

          3.9.7 Testing and Qualification Activities. Supplier certifies that it will perform
all system-level qualification and safety agency testing which is applicable to Products sold to
Dot Hill as provided in the Specifications. Dot Hill may request at any time, and Supplier shall
provide, evidence of such testing within three (3) days after Dot Hill’s written request.

          3.9.8 Recordkeeping. Supplier will implement and maintain recordkeeping practices
consistent with Supplier’s then-current practices. Upon reasonable notice, Dot Hill shall be
allowed to audit Supplier’s manufacturing process.

          3.9.9 Audit Rights. In addition to any audit rights set forth elsewhere in this
Agreement or in any Award Letter, Dot Hill reserves the right, for itself and its customers where
Dot Hill has contractual requirements from its customers, to enter Supplier’s premises or other
facilities where the Products are being manufactured, upon reasonable notice and during normal
working hours, to: (i) audit and inspect the quality of the manufacturing and testing procedures
utilized and the resulting Products, (ii) verify that the Products conform to the requirements of
the Specification, (iii) audit and inspect the use by Supplier of any Confidential Information that
Dot Hill provides to Supplier under the provisions of this Agreement, and (iv) audit Supplier’s
adherence to its obligations under Section 3.3.4 relating to [...***...] Prices, Section 3.3.1 relating
to Product Pricing and Elements, and/or Section 3.3.5 relating to Documentation and Other
Information. In performing an audit, Dot Hill acknowledges and agrees that Supplier may choose not
to provide confidential information of third parties. Supplier will use commercially reasonable
efforts to close actions raised, together with any concerns raised with Supplier’s suppliers. Upon
request by Dot Hill, Supplier will also facilitate inquiries by Dot Hill or customers of Dot Hill
into the Supplier’s supply chain.

          3.9.10 Certifications. All shipping containers will list the country of origin for
all Products supplied, and must be in both text and scanned bar code formats. Upon request,
Supplier will also provide promptly to Dot Hill all reasonably requested information to enable Dot
Hill to determine the country of origin by part number.

          3.9.11 Initiatives. Supplier will negotiate in good faith with Dot Hill regarding
all Dot Hill Breakthrough Supply Chain (“BTSC”) initiatives, including without limitation, Advanced
Material Planning (“AMP”), Product Change Notification (“PCN”) process and score-carding. If
Supplier has reason to believe it may not be able

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19.

 

to comply with Dot Hill’s initiatives, Supplier shall immediately notify Dot Hill and the
parties will negotiate in good faith to promptly resolve any reasonable objections that Supplier
raised regarding its compliance with the initiative.

          3.9.12 Dot Hill-Unique Features. [...***...] without Dot Hill’s written consent.

          3.9.13 Compliance with Certain Standards

               3.9.13.1 [...***...] Supplier shall develop and make available to Dot Hill manufacturing
processes to produce Products which comply with Directive 2002/95/EC of the European Parliament and
of the Council of 27 January 2003 on the restriction of the use of certain hazardous substances in
electrical and electronic equipment (“RoHS Directive”) to the extent applicable to the
manufacturing process materials selected and used by Supplier in its manufacturing processes for
the Products. Supplier acknowledges and agrees that compliance to the RoHS Directive to the extent
applicable to the manufacturing process materials selected and used by Supplier in its
manufacturing processes for the Products shall form a part of the Specifications for Products
supplied or to be supplied to Dot Hill.

               3.9.13.2 [...***...] Supplier will also implement processes for the disposal of
Products that are returned by Dot Hill to Supplier for disposal in connection with Supplier’s
warranty, service or epidemic failure responsibilities, and in accordance with those instructions
provided by Dot Hill. These instructions will comply, where applicable, with Directive 2002/96/EC
of the European Parliament and of the Council of 27 January 2003 on waste electrical and electronic
equipment (“WEEE Directive”). Supplier acknowledges and agrees that compliance to the WEEE
Directive shall form a part of the Specification relative to disposal activities by Supplier in
connection with Supplier’s warranty, service or Epidemic Failure responsibilities for Products
supplied or to be supplied to Dot Hill.

               3.9.13.3 [...***...] Supplier will develop and make available to Dot Hill manufacturing
processes to produce Products which comply with federal and state laws and regulations in the U.S.
and other non-RoHS Directive countries where the Products are supplied by Supplier to the extent
applicable to the manufacturing process materials selected and used by Supplier in its
manufacturing processes for the Product. Supplier acknowledges and agrees that compliance to the
such laws and regulations shall form a part of the Specification relative to manufacturing
processes used by Supplier to produce Products supplied or to be supplied to Dot Hill.

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20.

 

               3.9.13.4 [...***...] Supplier shall develop and implement manufacturing processes to produce Products
that comply with any new environmental standards prior to the mandatory compliance date of such
standards and a mutually agreed implementation plan for any such new environmental standards.
Supplier acknowledges and agrees that compliance to any mutually agreed implementation plan for any
such new environmental standards shall form a part of the Specification relative to manufacturing
processes used by Supplier to produce Products supplied or to be supplied to Dot Hill.

     3.10 Stop Production Notices and End of Life

          3.10.1 Stop Production Notices. Dot Hill may in writing direct Supplier to stop the
production of Products during any stage of the manufacturing process (a “Stop Production Notice”).
Dot Hill has the right to direct Supplier to prepare Products up through a particular level of the
manufacturing process and to hold such partially completed Products pending modifications to be
implemented as a result of error correction activities. If such a Stop Production Notice from Dot
Hill is not due to Supplier’s negligence or failure to perform its obligations under this
Agreement, Dot Hill shall be responsible for all actual and reasonable costs incurred by Supplier
resulting from a Stop Production Notice and for all actual and reasonable costs associated with the
holding of partially completed Products. If Pre-Production units of Product ordered are not
accepted by Dot Hill for commercial shipment due to a fault attributable to Supplier as provided in
section 6.1 below, Supplier will make every reasonable effort to correct the non-compliance as
provided in section 6.2 below. If Supplier is unable to repair or replace the rejected Product
within a mutually agreed turnaround time, Dot Hill shall not be required to pay any amount for such
rejected Product.

          3.10.2 End of Life. Dot Hill shall use commercially reasonable efforts to notify
Supplier in writing at least [...***...] prior to Dot Hill ceasing to purchase any Product or service
parts due to a planned discontinuance of sale thereof. Such Notice shall include Dot Hill’s
purchase and schedule requirements for such Product or service parts during an anticipated end of
life (“EOL”) period. Dot Hill shall have the EOL period specified in the Notice to take delivery
of EOL quantities or remaining quantities of the Product and/or service parts, as the case may be.

     3.11 Purchase Order Cancellations. Dot Hill may, from time to time, cancel all or
any part of a purchase order prior to shipment of the Products which is the subject of the purchase
order. Dot Hill’s liability for cancellation charges under Subsection 3.12.9

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21.

 

which are associated with such cancellations shall not exceed: [...***...].

     3.12 Mitigation Efforts. In the event of a cancellation of a purchase order in
accordance with Section 3.11, Stop Production Notice in accordance with Section 3.10.1, engineering
change orders, purges, AVL disqualification, EOL notice in accordance with Section 3.10.2 or
forecast reduction, except as otherwise specified in writing by Dot Hill to Supplier, Supplier
shall take the actions indicated in Sections 3.12.1 through 3.12.8 below:

          3.12.1 Immediately reduce/cancel its outstanding purchase orders for components and
raw materials by the quantities in excess of those needed to meet Dot Hill’s requirements.

          3.12.2 Discontinue Upside Support positioning.

          3.12.3 Perform or have performed a physical inventory of materials that Supplier may
reasonably claim were required to comply with Dot Hill’s delivery requirements and in-line with the
appropriate quantity of Dot Hill-unique Components, EOQs and LLTCs (“Supplier Inventory”). Dot
Hill reserves the right, at its option, to perform an audit of Supplier Inventory. Dot Hill’s
liability to pay, reimburse, or otherwise compensate Supplier for Supplier Inventory shall not
exceed the minimum Supplier Inventory that was reasonably required to comply with the forecasted
delivery schedule(s) and lead times applicable to Dot Hill’s purchase orders.

          3.12.4 Use commercially reasonable efforts to return the components to the
supplier(s) at the same price at which they were purchased.

          3.12.5 Use commercially reasonable efforts to sell or transfer the components to a
third party subject to written approval by Dot Hill, at a price acceptable to Dot Hill. Dot Hill
shall reimburse Supplier for the difference between Supplier’s purchase price and the Dot
Hill-approved price at which it sold the component to a third party. If the sales price exceeds
Supplier’s component purchase price, then the excess shall first be applied to offset any
obligation of Dot Hill under this paragraph and any excess thereafter shall be retained by
Supplier. Except as mutually agreed otherwise, Dot Hill agrees that Supplier is not required to
continue mitigation of

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Dot Hill material liabilities beyond a [...***...] period from the date of the initial written
notification from Supplier to Dot Hill of the potential material liability.

          3.12.6 Rework Supplier Inventory, at Dot Hill’s request, at a mutually agreed upon
price and schedule.

          3.12.7 Perform a physical inventory of the remaining Supplier Inventory within
[...***...] after completion of Sections 3.12.1 through 3.12.6 above.

          3.12.8 Use commercially reasonable efforts to provide Dot Hill documentation,
reasonably satisfactory to Dot Hill, within [...***...] after completion of mitigation activities
indicating the quantities and kind of Supplier Inventory that Supplier has not resold, reused or
redirected to other use, or is not able to resell or otherwise use. Such documentation shall
include mitigation activities undertaken by Supplier.

          3.12.9 Subsequent to Supplier’s efforts under Sections 3.12.1 through 3.12.8 above
Dot Hill shall respond in detail regarding to Supplier’s claim for reimbursement or compensation
within [...***...] after receipt of the documentation. Dot Hill shall pay any undisputed portion of
Supplier’s claim within [...***...] of receipt of the claim.

     3.13 Rescheduling. Dot Hill may, from time to time, reschedule for later shipment
those quantities of Products contained in previously submitted forecasts or purchase orders and raw
materials that are to be used to produce Products. The impact of rescheduling is covered in one or
more of three ways, (1) rework charges associated with reworking configured product, (2) quarterly
PPV adjustments or (3) inventory holding charges relating to the agreement to hold all inventory
provided, however, Dot Hill shall not be assessed any inventory holding charges for the first
[...***...] after one or more originally scheduled delivery dates.

     3.14 Allocation. Supplier will notify Dot Hill promptly whenever Supplier identifies
a reasonable likelihood that there is or will be a materials or capacity constraint that may
negatively or adversely affect Supplier’s ability to meet Dot Hill’s then-existing or forecasted
needs for Products (“Supply Constraint”). During any period of Supply Constraint, Supplier agrees,
at a minimum, to allocate materials and capacity to Dot Hill under whichever of the following
formulas [...***...]

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[...***...].

     3.15 Business Continuity Plan. Supplier agrees to provide to Dot Hill, prior to
becoming a sole source for one or more Products, documented evidence of a business continuity plan
to ensure Supplier’s capability to provide the Products in the agreed upon timeframe after an event
which may materially and adversely affect Supplier’s ability to deliver Products to Dot Hill as
scheduled. Supplier shall perform the responsibilities assigned to it in the agreed business
continuity plan for the Products. Dot Hill may provide a copy of the business continuity plan to
its customers.

     3.16 Right of Access. For any finished storage products that are or will become
ready for sale by Supplier to third party customers and for which Supplier develops independently
such products without access to or use of Confidential Information of Dot Hill (the
“Supplier-developed Storage Products”), Supplier agrees, to the extent Supplier is legally entitled
to do so, to disclose promptly all reasonably requested information for such Supplier-developed
Storage Products to Dot Hill prior to the performance of any manufacturing. Upon written request
by Dot Hill, Supplier shall [...***...].

     3.17 Alternative Sources of Supply. Notwithstanding anything to the contrary, Dot
Hill shall have the right to establish, without any restrictions or limitations, alternative or
additional sources of supply for all Products at any time and from time to time, and without any
required notice to Supplier.

     3.18 Dedicated Personnel. At all times during the term of this Agreement, Supplier
shall dedicate toward servicing the Dot Hill account various experienced, full-time, senior-level
employees which are experienced in the manufacturing and new product introduction of products. In
this regard, Supplier shall dedicate to service the Dot Hill account the following resources:
Program Manager, Project Engineer, Quality Engineer and Material Planner. Additional personnel may
be added toward servicing the Dot Hill account upon mutual agreement by the parties.

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OWNERSHIP RIGHTS

     4.1 Work Product. Dot Hill will inform Supplier if Dot Hill desires for Supplier to
create or develop Work Product for Dot Hill. If Supplier is willing to create or develop Work
Product for Dot Hill, then a Statement of Work shall be prepared detailing the scope of the work
efforts to be performed, the scope of Work Product, the NRE due from Dot Hill for such work
efforts, any license rights that Dot Hill may be willing to grant back to Supplier (subject,
however, to Supplier’s payment of any applicable fees or reduction in NRE due from Dot Hill) and
any other relevant terms. In determining upfront whether Supplier is willing to create or develop
Work Product for Dot Hill and funding that may be required to be paid by Dot Hill for such Work
Product, Supplier may consider factors such as whether such Work Product is capable of being used
generally within planned products or may be developed as an industry standard. If Supplier does
not wish for an item to be deemed to constitute Work Product, then prior to the performance of
development work and the payment to Supplier by Dot Hill of any funding, Supplier can choose
upfront to negotiate with Dot Hill to exclude such portion from the scope of Work Product. Upon
execution by the Parties of any agreed Statement of Work detailing such Work Product and subject to
[...***...]. However, if Supplier determines that such Work Product is capable of being used generally
within planned products, or may be developed as an industry standard, and agrees to [...***...].
Notwithstanding anything to the contrary, any intellectual property of Supplier that: (1) is or was
independently conceived, created and developed by Supplier without the use of any technical
Confidential Information of Dot Hill and funding received from Dot Hill pursuant to a Statement of
Work or (2) is independently conceived, created and developed by Supplier without the use of
technical Confidential Information of Dot Hill and independent of any work required to be performed
under this Agreement (including, without limitation, any Award Letter to this Agreement or a
Statement of Work), shall remain the property of Supplier. [...***...]

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[...***...], as the parties may reasonably determine. Dot Hill shall have the sole right to
obtain and hold in its own name any copyrights, patents, patent applications, mask work rights,
trademark registrations, or other protections as may be appropriate to the exclusive or joint
ownership rights that it obtains in such Work Product and any derivatives thereof. Dot Hill shall
also have the sole right to determine the method of protection for the exclusive or joint ownership
rights that it obtains in such Work Product, including the right to protect the same as trade
secrets, to use and disclose the same without the filing of any patent applications, or to file any
applications or registrations for copyright, patents, mask work rights or trademarks in its own
name, as Dot Hill deems appropriate in its sole and absolute discretion.

     4.2 Dot Hill Background Intellectual Property. Supplier acknowledges and agrees
that, as between the parties and notwithstanding anything to the contrary, Dot Hill is and will be
the sole and exclusive owner of all right, title, and interest in and to any Dot Hill Background
Intellectual Property, and that Supplier acquires no rights or interests under this Agreement to
such Dot Hill Background Intellectual Property or any intellectual property rights therein, other
than the limited rights and licenses granted to Supplier in Section 9 of this Agreement.

     4.3 Supplier Background Intellectual Property. Dot Hill acknowledges and agrees
that, as between the parties and notwithstanding anything to the contrary, Supplier is and will be
the sole and exclusive owner of all right, title, and interest in and to any Supplier Background
Intellectual Property, and that Dot Hill acquires no rights or interests under this Agreement to
such Supplier Background Intellectual Property or any intellectual property rights therein, other
than the limited rights and licenses granted to Dot Hill in Section 9 of this Agreement.

     4.4 Improvements

          4.4.1 Supplier Improvements. Dot Hill acknowledges and agrees that, as between the
parties and subject, however, to any underlying ownership rights of Dot Hill in any Dot Hill
Background Intellectual Property, all Improvements that are authored, conceived, created or
developed by or for Supplier and without any material contribution thereto from Dot Hill, shall be
[...***...].

          4.4.2 Dot Hill Improvements. Supplier acknowledges and agrees that, as between the
parties and subject, however, to any underlying ownership rights of

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Supplier in any Supplier Background Intellectual Property, all Improvements that are authored,
conceived or developed by or for Dot Hill, and without any material contribution thereto from
Supplier, shall be [...***...].

     4.5 Further Assurances. Supplier shall do the following: (i) disclose promptly in
writing and deliver to Dot Hill all Work Product; and (ii) execute, cooperate with and assist Dot
Hill or Dot Hill’s designee to apply for any applications and/or assignments reasonably necessary
to obtain or perfect any patent rights, mask work rights, copyrights, or other statutory
protection, anywhere in the world, for such Work Product in Dot Hill’s name, as Dot Hill deems
appropriate.

     4.6 Jointly Developed Intellectual Property. As between Supplier and Dot Hill, [...***...] of (i)
Supplier in and to any Supplier Background Intellectual Property and Supplier Improvements
described in Section 4.4.1, and (ii) Dot Hill in and to any Dot Hill Background Intellectual
Property and Dot Hill Improvements described in Section 4.4.2. Notwithstanding the foregoing, the
authorized representatives of both of the parties may mutually agree during the term of this
Agreement that certain item(s) of Jointly Developed Intellectual Property should be [...***...], as
applicable, subject, however, to the condition that such item(s) will be treated as a Supplier
Improvement described in Section 4.4.1 or a Dot Hill Improvement described in Section 4.4.2, as the
authorized representatives of the parties shall so designate and agree upon in a written
assignment, [...***...]. For Jointly Developed Intellectual Property, neither party will have a duty
to account to the other party, or to pay any share of any revenue or compensation earned or
received, as to its use or exploitation; provided, however, if such Jointly Developed Intellectual
Property: [...***...]

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[...***...].

5. SUPPORT

     5.1 Technical Support. Supplier will provide Dot Hill with technical and operations
support for trouble-shooting quality and operational issues. Upon request by Dot Hill, Supplier
will also provide technical support, as needed, during the development of new products. For those
quality or operational issues for Products that arise or result from a defect or problem in
workmanship of the Products, all reasonable costs associated with such technical support will be
borne by Supplier. Notwithstanding the foregoing, in no event shall Supplier be obligated to
provide any software related support to Dot Hill.

     5.2 Customer Support; Quality. Supplier will provide in-warranty and out-of-warranty
customer service and support in accordance with Exhibit B attached hereto. Supplier shall
comply with Supplier’s Quality Program attached as Exhibit C to this Agreement and Customer
Support Quality Requirements attached hereto as Exhibit C-1. Dot Hill shall not be required
to accept any Product which is not in compliance with specifications provided by Dot Hill and
accepted by Supplier.

6. WARRANTIES

     6.1 General Warranties. Supplier represents and warrants that (i) it has the right
to enter into this Agreement; (ii) there are no prior commitments or other obligations that prevent
Supplier or Supplier’s Affiliates from fully performing all its obligations in this Agreement;
(iii) the services to be provided by Supplier or Supplier’s Affiliates in connection with the
manufacture and sale of Products and Supplier Parts shall be performed in a first class,
professional and workmanlike manner by competent and qualified personnel; (iv) at the time of
delivery to Dot Hill and for a period of [...***...] (or such lesser period for a Product that is set
forth in an Award Letter) from the date of delivery to Dot Hill, each Product (including each
Supplier Part included in Product, but excluding any consigned parts, components or materials
provided by Dot Hill to Supplier for use in the Products) will be free from defects (excluding
customer-induced damages, as mutually defined and agreed by the parties) in materials and
workmanship, conform in all respects to all of Dot Hill’s specifications set forth in the
applicable Award Letter and/or purchase order (the “Specifications”) and be manufactured and
provided in compliance with all applicable laws, including, without limitation, any applicable
environmental laws and regulations, such as those European Directives relating to the restriction
on the use of hazardous substances in electrical and electronic equipment, and collection,
treatment, recycling

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and disposal of waste electrical and electronic equipment; and (v) Dot Hill will receive good
and marketable title to each Product free from liens or encumbrances of any nature (except for any
liens or encumbrances that may exist on materials supplied by Dot Hill or Dot Hill’s agents).
Supplier represents and warrants to Dot Hill that to Supplier’s knowledge the Products (including,
each Supplier Part included in Products) do not contain any virus, worm, or other harmful code.
For parts that Dot Hill requests Supplier to acquire from certain designated vendors (“Designated
Parts”), Supplier will inform Dot Hill if it turns out that the vendors of the Designated Parts
cannot meet Dot Hill quality specifications, in which event the parties will discuss in good faith
regarding an alternative source for the Designated Parts.

     6.2 Warranty Obligations. Upon identification that any Product (including any
Supplier Part) is non-compliant with any warranty set forth in Section 6.1 above, Supplier shall
make every reasonable effort to immediately correct the non-compliance. During the warranty period
Supplier shall [...***...]. Dot Hill shall [...***...]. If the parties have agreed that a particular
Products or a particular Supplier Part will be replaced in lieu of repair during the warranty
period, Supplier further agrees, for a period of not less than [...***...] after the last delivery of
production Products to Dot Hill, (the “Service Period”), at Dot Hill’s option, to provide out of
warranty repair services to Dot Hill and Dot Hill’s authorized contractors during the Service
Period.

6.3 Epidemic Failures

          6.3.1 For purposes of this Agreement, “Epidemic Failure” shall mean an actual or
potential Product failure (including any Supplier Part failure, but excluding any failure caused by
consigned parts, components, materials and/or technical instructional requirements provided by Dot
Hill to Supplier for use in the Products) occurring in Products covered under the warranty above
that (i) is based on a root cause that is the same or substantially the same, (ii) impair the use
of the Products, (iii) is not based on a defect in a design or test procedure that has been
provided to Supplier by Dot Hill for use in the manufacture of Products and (iv) is equal to or in
excess of [...***...] of the total units of Products (or any Supplier Part) obtained from any
production lot or delivered to Dot Hill during any [...***...] period (the “Epidemic Failure Rate”).
The then-current Epidemic Failure Rate for the Products

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will be reviewed by the parties at each quarterly business review. This Epidemic Failure Rate
may be adjusted downward at such quarterly business review to a lower agreed rate based upon
demonstrated product reliability and/or volume.

          6.3.2 In the event of a suspected Epidemic Failure, Dot Hill shall notify Supplier,
and Supplier shall provide the following information, if known and as may then exist: (i) a
description of the defect, (ii) the suspected lot numbers, (iii) serial numbers or other
identifiers, and (iv) the delivery dates of defective Products (including any defective Supplier
Parts). Dot Hill may deliver or make available to Supplier, samples of the defective Products or
defective Supplier Parts for testing and analysis.

          6.3.3 Within [...***...] of receipt of notice from Dot Hill, Supplier shall provide its
preliminary findings regarding the cause of the failures. Thereafter, Supplier shall promptly
provide the results of its root cause corrective analysis, its proposed plan for the identification
of and the repair and/or replacement of the affected Products (including any affected Supplier
Parts), and such other appropriate or desirable information. The parties shall also cooperate and
work together to expeditiously devise and implement a corrective action program which identifies
the defective units for repair or replacement, and which minimizes disruption to the end users and
Dot Hill’s direct and indirect distribution channels.

          6.3.4 In the event of an Epidemic Failure, Supplier shall be responsible for (a) as
agreed in the corrective action plan or at Supplier’s option, if not agreed in the corrective
action plan: [...***...]. Supplier’s foregoing obligations shall also extend to the larger product in
which the Product or the Supplier Part is incorporated if the Product or Supplier Part cannot be
separated without undue inconvenience or disruption to the end user. Other costs not identified
herein may be incurred by either party. The reimbursement, if any, of these costs will be agreed by
the parties.

     6.4 Warranty Pass Through. Supplier will be responsible for and provide to Dot Hill
the benefits of any and all warranties (including any protection obtained for

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epidemic or unexpected failures or other quality failures of components included in Products)
obtained from its component or other suppliers for all parts, components, materials and services
included in or furnished for the Products. Supplier shall provide, upon request by Dot Hill and to
the extent not prevented by any confidentiality obligations to a third party, all relevant
information regarding the third party, scope and terms of all such warranties. [...***...] To the
extent that Supplier may do so, Supplier hereby grants the right to Dot Hill to enforce the
warranties which are received by Supplier from other parties for those parts, components and/or raw
materials and included in the Products that are supplied to Dot Hill under this Agreement if the
Supplier fails to do so in a prompt and reasonable manner.

     6.5 Warranty Disclaimer. EXCEPT FOR THE EXPRESS WARRANTIES STATED IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY OTHER WARRANTIES, EXPRESS OR IMPLIED, AND, TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW, THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE
ARE EXPRESSLY DISCLAIMED, EVEN IF THE APPLICABLE PARTY HAS BEEN ADVISED THEREOF.

     6.6 Disqualification of Providers. Supplier reserves the right to disqualify any
provider of any key parts, components or materials that both (A) Dot Hill requires Supplier to
acquire such key parts, components or materials from such provider for inclusion in the Products
and (B) who does not provide to Supplier protection against epidemic failures based on the use of
terms that are substantially similar or equivalent in all material respects to those reflected in
this Agreement, but applicable only to such key parts, components or materials (the “Terms”). In
such circumstance, Supplier shall: (1) inform Dot Hill immediately in writing of any such situation
and provide all relevant details of the issues that Supplier has encountered with such provider,
including the name, part number, and a description of the key part, component or material at issue
and name of provider, and (2) to the extent that Supplier is able to do so without violating any
then-existing confidentiality obligations in place with any such provider, provide all relevant
details of the epidemic failure terms extended by such provider to Supplier for such key part,
component or material at issue, and involve Dot Hill in any negotiations with such provider over
the details of such epidemic failure terms. If Supplier is operating under a then-existing
confidentiality obligation with a provider that prevents the disclosure of such epidemic failure
terms to Dot Hill, then Supplier shall seek written approval from the provider for the disclosure
of such terms

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to Dot Hill. If the provider refuses to provide its written approval to Supplier for this
disclosure where a confidentiality obligation of Supplier exists, then Supplier shall inform
immediately Dot Hill of such refusal by such provider and such provider shall be deemed to be
disqualified to provide to Supplier the applicable key part, component or material at issue for use
in the Product to be supplied by Supplier to Dot Hill under this Agreement. Notwithstanding
anything to the contrary, the provisions of this Section 6.6 shall not apply to any parts,
components or materials that Supplier recommends or requires Dot Hill to use in or incorporate into
the Products based on or as a result of any design, development or other engineering work for the
Products that Supplier has performed for Dot Hill under this Agreement.

7. INDEMNIFICATION

     7.1 Supplier Obligations

          7.1.1 Supplier shall defend, indemnify and hold Dot Hill and Dot Hill’s Affiliates,
and each of their respective customers, agents, officers, directors, employees, successors and
assigns (collectively, the “Dot Hill Indemnified Parties”), harmless for any losses, damage,
expense, cost (including, but not limited to, attorneys’ fees incurred in the enforcement of this
indemnity) or liabilities based upon: (A) any claim that Supplier’s manufacturing process, process
technology or methodology, and/or any parts, components or materials purchased by Supplier for use
or inclusion in the Products (but excluding any consigned parts, components or materials provided
by Dot Hill to Supplier for use in the Products): (1) infringe or misappropriate any patent,
copyright, trade secret or other intellectual property right of any third party, and/or (2) has
caused personal injury (including bodily injury or death) or damage to tangible or real property;
(B) any violation of any environmental or other applicable laws or regulations, including, without
limitation, RoHS and WEEE with respect to the manufacture of Products by Supplier (but excluding
any violation arising thereof based on any consigned parts, components or materials provided by Dot
Hill to Supplier for use in the Products); and/or (C) any losses experienced by Dot Hill and/or its
Affiliates to the extent arising or resulting from errors and omissions of Supplier or Product
recall and/or Product liability that is due to the fault of Supplier, but solely to the extent that
Supplier receives sufficient protection against such losses under any of its then-existing errors
and omissions, product recall and/or product liability insurance policies. Dot Hill will (i) give
Supplier prompt written notice of any third party claim that is covered under the scope of the
foregoing indemnity and made to Dot Hill in writing, (ii) cooperate with Supplier, at Supplier’s
expense, in the defense of such claim, and (iii) give Supplier the right to control the defense and
settlement of any such claim to the extent covered by the indemnification provided herein.
Supplier will: (a) defend or

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settle, at its own expense, any such claim; (b) keep Dot Hill advised of the status of any
such claim and of its defense and/or negotiation efforts; and (c) afford Dot Hill reasonable
opportunity to review and comment on all significant actions planned to be taken by Supplier on
behalf of Dot Hill. Supplier shall not enter into any settlement that materially adversely affects
Dot Hill’s rights or interests, without Dot Hill’s prior written approval. Further, to the extent
that Supplier may be able to do so, Supplier shall pass through to Dot Hill all indemnification
coverage provided by all parts, component or materials vendors.

          7.1.2 Notwithstanding the foregoing provisions in Section 7.1.1, Supplier will have
no obligation to indemnify the Dot Hill Indemnified Parties for claims that the Products infringe
the intellectual property rights of a third party to the extent such claims arise as a result of:
(1) Dot Hill’s combination of Products with other products (including devices, parts and software)
and such infringement claim would have been avoided in the absence of such combination; (2)
Supplier’s implementation of a Dot Hill-originated electrical, mechanical, hardware (including
firmware) and/or software specifications or design, or manufacturing process requirement, that is
required by Dot Hill to be implemented in order to make Products, and such infringement claim would
have been avoided in the absence of such implementation; (3) Dot Hill’s modification of the
Products, except for modifications required for use of the Products, and such infringement claim
would have been avoided in the absence of such modification; (4) any modification or addition made
to the Products by anyone other than Supplier or its subcontractors or Sub-tier Suppliers; (5)
except for combination infringement claims not excluded under subsection (1) of this section, the
use of such Products to practice any method or process which does not occur wholly within the
Products; or (6) any components of such Products which are provided on a consignment basis by Dot
Hill to Supplier for inclusion in the Products.

          7.1.3 Disqualification of Providers. Supplier reserves the right to disqualify
any provider of any key parts, components or materials that both (A) Dot Hill requires Supplier to
acquire such key parts, components or materials from such provider for inclusion in the Products
and (B) who does not provide indemnification protection to Supplier against third party claims of
intellectual property infringement for, or personal injury (including bodily injury or death) or
damage to tangible or real property which are caused by, such key parts, components or materials,
based on the use of terms that are substantially similar or equivalent in all material respects to
those indemnification obligations of Supplier to Dot Hill in Subsection 7.1.1(A) (as modified by
Section 7.1.2) for such key parts, components or materials (the “Provisions”). In such
circumstance, Supplier shall: (1) inform Dot Hill immediately in writing of any such situation and
provide all relevant details of the issues that Supplier has

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encountered with such provider, including the name, part number, and a description of the key
part, component or material at issue and name of provider, and (2) to the extent that Supplier is
able to do so without violating any then-existing confidentiality obligations in place with any
such provider, provide all relevant details of the indemnification terms, if any, extended by such
provider to Supplier for such key part, component or material at issue, and involve Dot Hill in any
negotiations with such provider over such indemnification terms. If Supplier is operating under a
then-existing confidentiality obligation with a provider that prevents the disclosure of such
indemnification terms to Dot Hill, then Supplier shall seek written approval from the provider for
the disclosure of such terms to Dot Hill. If the provider refuses to provide its written approval
to Supplier for this disclosure where a confidentiality obligation of Supplier exists, then
Supplier shall inform immediately Dot Hill of such refusal by such provider and such provider shall
be deemed to be disqualified to provide to Supplier the applicable key part, component or material
at issue for use in the Product to be supplied by Supplier to Dot Hill under this Agreement.
Notwithstanding anything to the contrary, the provisions of this Section 7.1.3 shall not apply to
any parts, components or materials that Supplier recommends or requires Dot Hill to use in or
incorporate into the Products based on or as a result of any design, development or other
engineering work for Products that Supplier performs for Dot Hill under this Agreement.

     7.2 Dot Hill Obligations

          7.2.1 Dot Hill shall defend, indemnify and hold Supplier and Supplier’s Affiliates,
and each of their respective agents, officers, directors, employees, successors and assigns
(collectively, the “Supplier Indemnified Parties”), harmless for any losses, damage, expense, cost
(including, but not limited to, attorneys’ fees incurred in the enforcement of this indemnity) or
liabilities based upon any claim that: (i) any consigned parts, components or materials provided by
Dot Hill to Supplier (the “Consigned Parts”) for use in the Products (A)(1) infringe or
misappropriate any patent, copyright, trade secret or other intellectual property right of any
third party and/or (2) has caused personal injury (including bodily injury or death) or damage to
tangible or real property, and/or (B) violate any environmental or other applicable laws or
regulations, including, without limitation, RoHS and WEEE; and/or (ii) the Products, to the extent
manufactured by Supplier in compliance with Product design specifications provided by Dot Hill to
Supplier, infringe any third party intellectual property right. Supplier will (1) give Dot Hill
prompt written notice of any third party claim that is covered under the scope of the foregoing
indemnity and made to Supplier in writing, (2) cooperate with Dot Hill, at Dot Hill’s expense, in
the defense of such claim, and (3) give Dot Hill the right to control the defense and settlement of
any such

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claim to the extent covered by the indemnification provided herein. Dot Hill will: (a) defend or
settle, at its own expense, any such claim; (b) keep Supplier advised of the status of any such
claim and of its defense and/or negotiation efforts; and (c) afford Supplier reasonable opportunity
to review and comment on all significant actions planned to be taken by Dot Hill on behalf of
Supplier. Dot Hill shall not enter into any settlement that materially adversely affects
Supplier’s rights or interests, without Supplier’s prior written approval.

          7.2.2 Notwithstanding the foregoing provisions in Section 7.2.1, Dot Hill will have
no obligation thereunder to indemnify the Supplier Indemnified Parties for claims that the
Consigned Parts infringe the intellectual property rights of a third party to the extent that such
claims arise as a result of Supplier’s combination of Consigned Parts with other products in a
manner that is inconsistent with Dot Hill’s specifications for the Products.

     7.3 Injunctions. Should the manufacture, use, distribution or sale of the Products,
or any part thereof, or Supplier’s manufacturing process, process technology or methodology be
enjoined or become the subject of a claim of infringement for which indemnity is provided under
Section 7.1.1, Supplier shall, [...***...].

8. LIMITATION OF LIABILITY. EXCEPT FOR ANY DAMAGES ARISING OR RESULTING FROM ALL
BREACHES AND VIOLATIONS OF ANY OF THE PROVISIONS OF THIS AGREEMENT RELATING TO CONFIDENTIAL
INFORMATION, LICENSE RESTRICTIONS, TOGETHER WITH ANY LIABILITIES ARISING UNDER OR RESULTING FROM A
PARTY’S INDEMNIFICATION OBLIGATIONS WHICH ARE SET FORTH IN THIS AGREEMENT, NEITHER PARTY SHALL BE
LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR SPECIAL DAMAGES WHICH
ARISE OR RESULT FROM THIS AGREEMENT, DETERMINED REGARDLESS OF WHETHER SUCH PARTY WAS MADE AWARE OR
HAD KNOWLEDGE OF THE POSSIBILITY OF SUCH DAMAGES.

9. LICENSE RIGHTS

     9.1 Supplier License Grant. Subject to [...***...] that are set forth in an Award

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Letter or Statement of Work, respectively, Supplier hereby grants, on behalf of itself and its
Affiliates, to Dot Hill a worldwide, irrevocable for those items for which Dot Hill has paid to
Supplier all such agreed amounts due, perpetual, nontransferable and non-assignable (except as
otherwise permitted under Section 12.13), nonexclusive license, without the right to sublicense
except to Dot Hill’s Affiliates, under the Supplier Background Intellectual Property Rights and
Improvements created by or for Supplier to:

	 	(i)	 	[...***...];
	 
	 	(ii)	 	[...***...]; and
	 
	 	(iii)	 	[...***...]; and
	 
	 	(iv)	 	[...***...].

     9.2 Dot Hill License Grant. Dot Hill hereby grants, on behalf of itself and its
Affiliates, to Supplier a worldwide, revocable upon the expiration or earlier termination of this
Agreement, nontransferable and non-assignable (except as otherwise permitted under Section 12.13),
nonexclusive license, without the right to sublicense except to Supplier’s Affiliates:

          (a) under the [...***...]:

               (i) [...***...]

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[...***...], and

               (ii) [...***...]; and

          (b) to affix the trademarks, trade names, service marks and service names of Dot Hill and its
customers to the Products and Product user documentation to be supplied under this Agreement to Dot
Hill, its Affiliates and/or one or more Dot Hill-designated third party customers or partners that
an authorized representative of Dot Hill may direct in writing to so deliver Products and Product
user documentation to, in the manner and as directed by Dot Hill and in accordance with the
then-current trademark usage guidelines and policies of Dot Hill and/or Dot Hill’s third party
customers or partners, as the case may be.

9.3 License Restrictions and Other Obligations

          9.3.1 No other, further or different license rights are hereby granted or implied
to any party beyond the license rights expressly provided for in Sections 9.1 and 9.2 of this
Agreement. The parties hereby acknowledge and agree that the license rights granted herein are
only for the limited scope specified in Sections 9.1 and 9.2, and shall not include any other
rights under any other intellectual property rights.

          9.3.2 Supplier acknowledges the rights of Dot Hill and its customers and partners in
the trademarks, trade names, service marks and service names of Dot Hill and its customers and
partners, and agrees that any use of (i) the trademarks, trade names, service marks and service
names of Dot Hill by Supplier shall inure to the sole benefit of Dot Hill, and (ii) use of the
trademarks, trade names, service marks and service names of Dot Hill’s customers and partners shall
inure to the sole benefit of such of Dot Hill’s customers and partners that own such trademarks,
trade names, service marks and service names. Supplier agrees [...***...]

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[...***...]. Supplier agrees to attribute all trademarks, trade names, service marks and service
names of Dot Hill and its customers and partners to their underlying source of the Products in a
proper manner and as directed by Dot Hill; provided, however, Dot Hill shall provided an
authorization letter to Supplier fully authorizing Supplier to do the above. Supplier also
acknowledges and agrees that Dot Hill and its customers and partners shall have the unilateral
right to establish such quality standards as they believe appropriate and reasonably necessary
concerning the use of their trademarks, trade names, service marks and service names.

          9.3.3 Supplier will properly mark each Product and any accompanying documentation
with Dot Hill’s copyright and other proprietary rights notice, as directed by Dot Hill, to indicate
Dot Hill’s intellectual property ownership rights in such Products.

     9.4 Future Desired Rights. If Supplier desires to obtain from Dot Hill certain
license rights to any Work Product that Supplier has developed for Dot Hill, then Supplier will
advise Dot Hill in writing of its desire to obtain the same. Upon receipt of any such written
request, Dot Hill will assess whether it is willing to grant such license rights, subject to the
payment by Supplier of applicable royalties or fees for the use therefor. If Dot Hill is willing
to grant certain license rights to Supplier, then Dot Hill will advise Supplier as to the specific
license rights that Dot Hill is willing to grant and the license limitations, restrictions,
royalties and fees that would apply thereto. If Supplier accepts Dot Hill’s proposal, then the
parties will amend this Agreement to reflect their agreement with respect to the license rights,
license limitations and restrictions, and the royalties and fees that apply to the grant of license
rights to Supplier for such Work Product. Unless and until this Agreement has been amended to
reflect such agreement, no license rights shall be deemed to have been granted by Dot Hill to
Supplier for such Work Product.

10. CONFIDENTIALITY

     10.1 Confidentiality Obligations. Each party shall protect the confidentiality and
secrecy of the other party’s Confidential Information and shall prevent any improper disclosure or
use thereof inconsistent with the rights granted in this Agreement, by its employees, agents,
contractors or consultants, in the same manner

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and with the same degree of care (but in no event less than a reasonable degree of care) as it
uses in protecting its own information of a confidential nature for a period of [...***...] from the
date of such disclosure. Each party (the “Recipient”) shall use all commercially reasonable efforts
to enter into a confidential disclosure agreement with its agents, contractors and/or consultants
which is at least as restrictive as this Article 10 to protect any Confidential Information
provided by the other party (the “Discloser”) to Recipient in accordance with this Article 10 that
is also provided to any such third parties.

     10.2 Acknowledgment of Confidentiality Obligations. Each party must inform its
employees having access to the other’s Confidential Information of restrictions required to comply
with this Section. Each party agrees to provide notice to the other immediately after learning of
or having reason to suspect a breach of any of the restrictions of this Article 10.

     10.3 Retention of Rights. Discloser retains for itself all proprietary rights it
possesses in and to all Discloser’s Confidential Information. Accordingly, Discloser’s Confidential
Information which Discloser may furnish to Recipient will be in Recipient’s possession pursuant
only to a restrictive, nontransferable, nonexclusive license under which Recipient may use such
Discloser’s Confidential Information under the terms of this Agreement, solely for the purposes of
performing its obligations or exercising rights granted under this Agreement.

     10.4 Independent Development. Each party understands that the party receiving
Confidential Information may now or in the future be developing proprietary information internally,
or receiving proprietary information from third parties in confidence that may be similar to
disclosed Confidential Information. Nothing in this Agreement shall be construed as a
representation or inference that the receiving party will not develop products independently for
itself which may compete with the products, processes or systems contemplated by disclosed
Confidential Information.

     10.5 Return of Confidential Information. Within [...***...] following the expiration or
earlier termination of this Agreement, both parties shall, at the option of the disclosing party,
either return to the disclosing party or destroy the other party’s Confidential Information and
certify the same.

     10.6 Injunctive Relief. Each party acknowledges that any material violation of the
rights and obligations provided in this Article 10 may result in immediate and irreparable injury
to the other party, and hereby agrees that the other party shall be entitled to seek immediate
temporary, preliminary, and permanent injunctive relief

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against any such continued violations upon adequate proof, as required by applicable law.

11. TERM AND TERMINATION

     11.1 Term. This term of this Agreement shall commence upon the Effective Date and,
unless terminated earlier in accordance with Section 11.2, shall continue in effect for a period of
two (2) years. The term of this Agreement shall automatically renew for additional twelve
(12)-month terms (each, a “Renewal Term”) unless either party has provided written notice to the
other of its planned non-renewal of this Agreement at least one (1)-year prior to the commencement
of any such Renewal Term. If any Award Letter is still in effect at the time this Agreement
terminates or expires, then this Agreement shall continue in effect solely as to such Award Letter
until such time as the Award Letter is terminated or expires.

     11.2 Termination

          11.2.1 A party may, by written notice, terminate and/or suspend its performance
under this Agreement, or cancel any purchase order hereunder without penalty, if:

                         (i) the other party fails to comply with any of the material provisions of this
Agreement and such condition is not remedied within [...***...] after written Notice thereof; or

                         (ii) the other party becomes bankrupt or insolvent, suffers a receiver to be
appointed or makes an assignment for the benefit of creditors.

          11.2.2 Intentionally left blank.

          11.2.3 Upon the expiration or earlier termination of this Agreement by either party,
Supplier shall take the following actions as soon as commercially practicable upon being requested
in writing to do so by Dot Hill: (i) return freight collect, all equipment loaned from Dot Hill;
(ii) return all copies of Dot Hill-supplied Confidential Information; (iii) assign to Dot Hill all
purchase orders of Components and other components; and (iv) assign to Dot Hill all Supplier
purchase orders for repair service parts. Upon expiration or earlier termination of this Agreement
for any reason Dot Hill shall return all copies of Supplier-supplied Confidential Information that
are not necessary for Dot Hill to continue to test, support, maintain, make, have made, produce
and/or have produced Products covered under this Agreement.

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          11.2.4 Upon expiration or earlier termination of this Agreement by either party, Dot Hill shall
purchase: (a) all conforming Components in Supplier’s inventory at Supplier’s cost, provided that
the quantity of such Components does not exceed (i) the quantity required to produce the Products
forecasted or ordered by Dot Hill, and (ii) the quantity of LLTCs required to fulfill Dot Hill’s
forecasts, and (b) completed conforming Products not yet delivered, or any partially completed
Products (which conform to the extent completed) at a price not to exceed the Product price that
Supplier has acquired for the performance of this Agreement in accordance with Dot Hill’s purchase
orders. In addition, at Dot Hill’s option upon termination, Dot Hill may purchase any or all
additional conforming Components which are in Supplier’s inventory, in which event such inventory
will be delivered to Dot Hill within [...***...] after Supplier’s receipt of payment. Upon Dot Hill’s
request, Supplier will complete any or all partially completed Products and deliver the same to Dot
Hill within [...***...] after termination. Payment by Dot Hill to Supplier will be made in accordance
with the payment terms above.

     11.3 No Damages Solely for Expiration or Termination. In the event of the
expiration or termination of this Agreement in accordance with its provisions, neither party shall
be liable to the other, solely because of such expiration or termination, for any compensation,
reimbursement or damages on account of the loss of prospective profits or anticipated sales or for
any expenditures, inventory, investments, leases or commitments made in connection with the
business or goodwill of either party. The expiration or termination of this Agreement shall not
relieve either party of any obligations incurred under this Agreement prior to such expiration or
termination, including without limitation any obligation to make payment.

     11.4 Survival. The provisions of Articles 1, 2, 4, 6, 7, 8, 9.1, 9.3, 10, 11.2,
11.3, 11.4, 12.2 through 12.22, Exhibit A, Exhibit B, Exhibit C and
Exhibit C-1, shall survive the expiration or earlier termination of this Agreement, and the
enforcement thereof shall not be subject to any condition precedent.

12. MISCELLANEOUS

     12.1 Insurance

          12.1.1 Mitac Commitment. At all times during the term of this Agreement, Mitac,
[...***...] shall carry and maintain the following insurance coverage issued by insurance companies
which are (a) licensed to conduct

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business where the Products and services are provided and (b) major providers of insurance in the
jurisdictions within subsection (a) above.

                         12.1.1.1 Comprehensive commercial general liability insurance covering all
operations of the Mitac, including, but not limited to, Products/completed operations, broad form
property damage and blanket contractual liability against claims for personal and bodily injury and
property damage liability with a limit of not less than five million U.S. dollars (U.S. $5,000,000)
per occurrence/aggregate, and shall contain cross liability and severability of interest
provisions. This policy shall name Dot Hill, its officers, directors and employees as additional
insured’s and shall stipulate that such insurance shall apply as primary and non-contributory to
any insurance placed by Dot Hill.

                         12.1.1.2 All insurance coverage required by Mitac’s country’s local laws or
statutes, including workers compensation insurance to cover full liability under workers
compensation laws of any jurisdiction in which the work is performed. This insurance must (a)
provide coverage for all of Mitac’s employees who perform work or provide services under this
Agreement and (b) include a Waiver of Subrogation for the benefit of Dot Hill, Dot Hill’s
Affiliates, and their respective successors and assigns, to the extent covering matters under such
coverage where Mitac is at fault.

                         12.1.1.3 Cargo transit insurance providing all risk style coverage for all goods,
merchandise, machinery, equipment, inventory, and supplies incidental to Mitac’s business, moving
at the risk of Mitac, subject to a minimum limitation of one million U.S. dollars (U.S. $1,000,000)
per incident.

                         12.1.1.4 All risk style property insurance covering all real and personal property
and inventory, including Dot Hill’s Products in the care, custody and/or control of Mitac, for all
risks of physical loss, theft or damage, subject to a minimum limitation of actual value of the
property at risk. This insurance must cover (a) equipment owned, leased or used by Mitac to
perform work or provide services under this Agreement and (b) property in the care, custody and/or
control of Mitac that is owned by Dot Hill or its customers. This insurance must provide coverage
on a replacement cost basis.

                         12.1.1.5 Mitac will provide protection for its facilities under the applicable insurance
policies above in accordance with contemporary highly protected risk and business standards as
defined by the local laws and regulations of the country where such facilities are located.
Mitac will permit Dot Hill and its

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insurance company or insurance consultants to visit and inspect Mitac’s facilities on a periodic
basis, and will reasonably rectify any material deficiencies that may be found in security and
protection systems.

                         12.1.1.6 Each of the insurance policies required to be maintained by Mitac under
this Agreement shall name Dot Hill as a loss payee with respect to any loss or damage to Dot Hill
property. Mitac shall provide Dot Hill with a certificate of insurance prior to or at inception of
this Agreement evidencing that the above insurance policies are in full force and effect, and also
within five (5) days after the annual renewal of each insurance policy. Mitac shall require each
insurer to give Dot Hill thirty (30) days written notice before any of the coverages under the
foregoing insurance policies are canceled or materially altered. The foregoing requirements
concerning the types and limits of insurance coverage to be maintained by Mitac, and any approval
or waiver of said insurance by Dot Hill, is not intended to and shall not in any manner limit or
qualify Mitac’s liabilities and obligations whether imposed by law or assumed pursuant to this
Agreement, including but not limited to the provisions concerning indemnification.

          12.1.2 Synnex Commitment. At all times during the term of this Agreement, Synnex,
at its sole cost and expense, shall carry and maintain the following insurance coverage issued by
insurance companies which are (a) licensed to conduct business where the Products or services are
provided and (b) rated no lower than A-, VII (i.e., A minus, 7) by International A.M. Best.

                         12.1.2.1 Comprehensive commercial general liability insurance covering all
operations of Synnex, including, but not limited to, Products/completed operations, broad form
property damage and blanket contractual liability against claims for personal and bodily injury and
property damage liability with a limit of not less than ten million U.S. dollars (U.S. $10,000,000)
per occurrence/aggregate, and shall contain cross liability and severability of interest
provisions. This policy shall name Dot Hill, its officers, directors and employees as additional
insured’s and shall stipulate that such insurance shall apply as primary and non-contributory to
any insurance placed by Dot Hill.

                         12.1.2.2 All insurance coverage required by Synnex’s country’s local laws or
statutes, including workers compensation insurance to cover full liability under workers
compensation laws of any jurisdiction in which the work is performed. This insurance must (a)
provide coverage for all of Synnex’s employees who perform work or provide services under this
Agreement and (b) include a Waiver of Subrogation for the benefit of Dot Hill and Dot Hill’s
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respective directors, officers, employees, agents, successors and assigns, with respect to for
the benefit of Dot Hill, Dot Hill’s Affiliates, and their respective successors and assigns, to the
extent covering matters under such coverage where Synnex is at fault.

                         12.1.2.3 Automobile liability insurance covering bodily injury and property damage
liability arising out of the use by or on behalf of the Synnex, its agents and employees of any
owned, non-owned or hired automobile with combined single limit of not less than one million U.S.
dollars (U.S. $1,000,000) per occurrence.

                         12.1.2.4 Cargo transit insurance providing all risk style coverage for all goods,
merchandise, machinery, equipment, inventory, and supplies incidental to Synnex’s business, moving
at the risk of Synnex, subject to a minimum limitation of one million U.S. dollars (U.S.
$1,000,000) per incident.

                         12.1.2.5 All risk style property insurance covering all real and personal property
and inventory, including Dot Hill’s Products in the care, custody and/or control of Synnex, for all
risks of physical loss, theft or damage, including Synnex’s business interruption and boiler and
machinery breakdown, subject to a minimum limitation of actual value of the property at risk. This
insurance must cover (a) equipment owned, leased or used by Synnex to perform work or provide
services under this Agreement and (b) property in the care, custody and/or control of Synnex that
is owned by Dot Hill or its customers. This insurance must provide coverage on a replacement cost
basis.

                         12.1.2.6 Synnex will provide protection for its facilities under the applicable
insurance policies above in accordance with contemporary highly protected risk and business
standards as defined by federal, state and local laws and regulations where such facilities are
located. Synnex will permit Dot Hill and its insurance company or insurance consultants to visit
and inspect Synnex’s facilities on a periodic basis, and will reasonably rectify any material
deficiencies that may be found in security and protection systems.

                         12.1.2.7 Each of the insurance policies required to be maintained by Synnex under
this Agreement shall name Dot Hill as a loss payee with respect to any loss or damage to Dot Hill
property. Synnex shall provide Dot Hill with a certificate of insurance prior to or at inception
of this Agreement evidencing that the above insurance policies are in full force and effect, and
also within five (5) days after the annual renewal of each insurance policy. Mitac shall require
each insurer to give Dot Hill thirty (30) days written notice before any of the coverages under the
foregoing insurance policies are canceled or materially altered. The foregoing requirements

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concerning the types and limits of insurance coverage to be maintained by Synnex, and any
approval or waiver of said insurance by Dot Hill, is not intended to and shall not in any manner
limit or qualify Synnex’s liabilities and obligations whether imposed by law or assumed pursuant to
this Agreement, including but not limited to the provisions concerning indemnification.

     12.2 Notice. All written Notices required by this Agreement must be delivered in
person or by means evidenced by a delivery receipt or acknowledgement to the address specified in
the Award Letter and will be effective upon receipt.

     12.3 Governmental Compliance. Supplier and Dot Hill shall comply with all laws and
regulations applicable to the manufacture and sale of the Products, including, by way of example
and not limitation, Executive Order 11246 as amended by Executive Order 11375 (non-discrimination
in employment), the U.S. Clean Air Act of 1990. Supplier shall not use any ozone depleting
substances listed in annexes A and B of the Montreal Protocol, including but not limited to
chlorofluorocarbons, in the manufacture of Products. Dot Hill reserves the right to reject any
Products manufactured by Supplier using such materials if Dot Hill has not previously been notified
in writing of the same. Supplier shall also, without limitation, comply with (i) the Directive
2002/95/EC of the European Parliament and of the Council on the restriction on the use of hazardous
substances in electrical and electronic equipment, (ii) any Directive of the European Parliament
and of the Council on the collection, treatment, recycling and disposal of waste electrical and
electronic equipment, and (iii) any U.S. Federal, state, foreign and local environmental laws and
regulations, to the extent that they are applicable to the Products manufactured by Supplier under
this Agreement.

     12.4 Import and Export Control. All technical data, services and products delivered
under this Agreement are subject to U.S. export control laws and may be subject to export or import
regulations in other countries. Supplier and Dot Hill agree to comply strictly with all such laws
and regulations and acknowledges that they have the responsibility to obtain such license to
export, re-export or import as may be required and as may be permitted under the scope of this
Agreement. Supplier shall provide all information under its control which is necessary or useful
for Dot Hill to obtain any export or import licenses required for Dot Hill to ship or receive
Products, including, but not limited to, U.S. Customs Certificates of Delivery, Certificates of
Origin and U.S. Federal Communications Commissions (“FCC”) identifier. When requested by Dot Hill,
Supplier shall provide the following Import-related documentation to Dot Hill by certified mail
within fifteen (15) days after shipment of Product to Dot Hill: (i) Manufacturer’s Certificate of
Origin and FCC identifier, DHHS/FDA Accession Number to permit Dot Hill to import Product; (ii)
U.S. Customs

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Certificates of Delivery, attention: Dot Hill’s Import Administration Department, Dot Hill Systems
Corporation, 2200 Faraday Avenue, Suite 100, Carlsbad, California 92008. The parties agree not to
export or re-export, or cause to be exported or re-exported, the Product, any technical data of any
kind received hereunder, or the direct product of such technical data, without complying with the
laws of the United States, regulating the same.

     12.5 Publicity. Neither party shall publicize nor disclose the existence of or the
terms and conditions of this Agreement, without the prior written consent of the other party;
provided, however, that each party may, without obtaining the other party’s written consent,
disclose terms and conditions of this Agreement (i) as required by law, statute or regulation, or
any court or other governmental body, (ii) in confidence to legal counsel of a party, (iii) in
confidence to a the accountants, banks and financing sources of a party, and its advisors, (iv) to
the extent necessary to enforce a party’s rights under this Agreement, and (v) in confidence in
connection with an actual or proposed merger, acquisition or other similar transaction. In
connection with any filing of this Agreement with the Securities and Exchange Commission or other
regulatory body pursuant to the provisions in Subsection 12.5(i) above, the parties will work
together and in good faith to request promptly, and in a manner consistent with a party’s
then-existing filing obligations to permit such filing to occur on a timely basis, confidential
treatment for appropriate sections of this Agreement that qualify for such confidential treatment.
Prohibited publicity shall include, without limitation, any identification of the other party in
client lists, press releases, promotional materials, sales presentations and advertisements.

     12.6 Relationship of the Parties. This Agreement is not intended to create a
partnership, franchise, joint venture, agency, or a fiduciary or employment relationship. Neither
party may bind the other party or act in a manner which expresses or implies a relationship other
than that of independent contractor.

     12.7 Governing Law. This Agreement will be governed by, interpreted and construed
in all respects solely and exclusively in accordance with the laws of [...***...]. The parties
specifically agree that the United Nations Convention on Contracts for the International Sale of
Goods shall not apply to this Agreement.

     12.8 Dispute Escalation. The parties shall attempt in good faith to resolve any
dispute, controversy or claim (a “Dispute”) arising under or relating to this Agreement informally
according to the following procedure. If any such Dispute is not resolved

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within [...***...] by the parties, then either party may escalate the Dispute to the Chief
Executive Officers of the parties for potential resolution. Upon any such escalation, the Chief
Executive Officers of the parties shall gather all relevant information and then meet or confer,
either in person, by phone or by email, in an effort to attempt to resolve such Dispute. If the
Chief Executive Officers of the parties fail to resolve such Dispute within [...***...] after its
initial escalation to them, then such Dispute shall, upon the written request of a party, be
submitted to arbitration that is to be conducted in accordance with the provisions of Section 12.9
below. By agreeing to the foregoing dispute resolution provisions, the parties do not intend to
(i) deprive any party from seeking any pre-dispute resolution injunction or other equitable remedy
or (ii) prevent either party from exercising any termination rights it may have under this
Agreement.

     12.9 Arbitration. If the parties fail to resolve a Dispute in accordance with the
provisions of Section 12.8 above, a Dispute (including but not limited a dispute or controversy
over the scope of the agreement to arbitrate) shall, upon request of a party, be submitted to and
finally settled by arbitration in accordance with the International Commercial Arbitration Rules of
the United Nations Commission on International Trade Law (“UNCITRAL”) that are applicable at the
time of submission of the Dispute to arbitration. Promptly upon any request for arbitration that
is made by a party under this Agreement, the representatives of the parties shall attempt to agree
immediately upon the appointment of a single arbitrator. If the parties can not agree upon such
appointment within one (1) week after a request for arbitration is made, then the American
Arbitration Association (the “AAA”) shall appoint the single arbitrator. The arbitration
proceeding shall be administered by the AAA in accordance with its “Procedures for Cases Under the
UNCITRAL Rules.” (the “Rules”). Any and all arbitration proceedings shall be held in [...***...]. The
decision of the arbitrator shall be final and binding on the parties, be the exclusive remedy
between the parties for the Dispute presented to the arbitration tribunal to the extent fully
enforceable against the losing party to a Dispute, and be non-appealable by either party to the
fullest extent allowed by law. Judgment on any award may be entered into any court having
jurisdiction thereof, and for the purpose of enforcing any such arbitration award made pursuant to
the provisions of this Agreement, each party irrevocably and unconditionally submits to the
jurisdiction of any court sitting where any of such party’s material assets may be found. By
agreeing to these arbitration provisions, the parties do not intend to (i) deprive either party
from seeking any pre-dispute resolution injunction or other equitable remedy or (ii) prevent either
party from exercising any termination rights it may have under this Agreement. Without prejudice
to any provisional remedies in aid of arbitration as may be available under the

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jurisdiction of a court, the arbitration tribunal shall have full authority to request a court to
grant provisional remedies and to award damages for any failure of a party to respect the
arbitration tribunal’s orders to that effect. Any amounts subject to a Dispute that are ultimately
awarded to a party shall bear interest at a rate determined by the arbitrator and will be set forth
in any arbitration award.

     12.10 Attorney’s Fees. The prevailing party in any arbitration or legal proceeding
to enforce an arbitration award shall be entitled to recover its reasonable attorneys’ fees and
costs incurred therewith.

     12.11 Severability. If any provision, or part thereof, in this Agreement, is held to
be invalid, void or illegal, it shall be severed from the Agreement or any Award Letter, and shall
not affect, impair, or invalidate any other provision, or part thereof, and it shall be replaced by
a provision which comes closest to such severed provision, or part thereof, in language and intent,
without being invalid, void or illegal.

     12.12 Construction. The headings and titles of the sections of this Agreement are
for convenience only and will not in any way affect the interpretation of any section or of the
Agreement itself. As used in this Agreement, the word “including” means “including but not limited
to.” Each party represents that it has had an opportunity to participate in the preparation of
this Agreement, and any rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not be applied in connection with the construction or
interpretation of this Agreement. For purposes of this Agreement, the word “will” shall be
equivalent in meaning to the word “shall,” both of which describe an act or forbearance that is
mandatory under this Agreement. The word “may” describes an act or forbearance that is optional
under this Agreement.

     12.13 No Assignment. This Agreement and the rights, duties and obligations of either
party under this Agreement may not be assigned or transferred, in whole or in part or by operation
of law or otherwise, without the express prior written consent of the other party, which consent
will not be unreasonably withheld, delayed or conditioned in connection with a request made by a
party for an assignment of the Agreement as part of a merger, purchase, sale or other
reorganization with a potential successor-in-interest with respect to all or substantially all of
such party’s assets or voting securities. Any attempted assignment or transfer of any rights,
duties or obligations hereunder in derogation of the foregoing provision shall be null and void ab
initio. This Agreement shall be binding on the parties and their respective permitted successors
and assigns.

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     12.14 Force Majeure. Neither party shall be liable for any delay or failure in performance
hereunder which is caused by acts of God, worldwide component shortages not within a party’s
reasonable control or any other causes which are beyond a party’s reasonable control, if the party
gives prompt Notice and makes all commercially reasonable efforts to mitigate its effects and also
to perform. Any such excuse from performance shall continue in effect only for the period during
which such delay or failure exists.

     12.15 Amendments and Waivers. No modification of this Agreement will be binding,
unless in writing and signed by an authorized representative of each party. Any waiver or failure
to exercise promptly any right under this Agreement will not create any continuing waiver or
expectation of non-enforcement.

     12.16 Order of Precedence. If there is any conflict or inconsistency between the
documents comprising this Agreement, the order of precedence as to any such conflicting or
inconsistent provisions shall be as follows: (i) the provisions in an Award Letter for the Products
covered under such Award Letter, including any Attachments incorporated therein; (ii) the
provisions in the base terms of this Agreement; and (iii) the provisions in any Exhibits to the
base terms of this Agreement.

     12.17 Counterparts; Execution. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which when taken together shall
constitute one instrument. The parties agree that signature pages of this Agreement may be
delivered by a party via facsimile transmission or electronically in a pdf file, and such delivery
shall have the same force and effect as if such pages had been delivered manually by such party.

     12.18 Advice of Legal Counsel. Each party acknowledges and represents that, in
executing this Agreement, it has had the opportunity to seek advice regarding its legal rights from
counsel and that the person signing on its behalf has read and understood the terms and conditions
in this Agreement. The terms and conditions in this Agreement shall not be construed against any
party be reason of its drafting or preparation thereof.

     12.19 Government Approvals. Supplier shall obtain promptly all approvals and make
all filings (other than intellectual property filings and registrations) which are required by any
national and local governments or agencies with respect to the Supplier’s performance under this
Agreement. Prior to making any such filings, Supplier shall provide copies of thereof to Dot Hill
for its review and comment.

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Supplier will incorporate such filings any such reasonably requested edits that Dot Hill suggests
be made to any such filings that are to be made by Supplier.

     12.20 Enforceability. Each party represents and warrants, to its best knowledge,
that (i) the terms and conditions of this Agreement, and the rights and obligations of the parties
hereunder, are fully enforceable against it within the jurisdictions in which it does business
under this Agreement; and (ii) any arbitration award obtained by the other party pursuant to the
provisions of this Agreement shall be fully enforceable against it within the jurisdictions in
which it does business under this Agreement.

     12.21 Applicability to Supplier. In entering into this Agreement, the parties
acknowledge and agree that wherever there are clauses referring to rights and/or obligations of
Supplier (the “Supplier Clauses”) under this Agreement, such clauses shall, in accordance with
below general rules in this Section 12.21, apply to either Mitac or Synnex, or both Mitac and
Synnex. In determining whether the Supplier Clauses shall apply to Mitac or Synnex, or both Mitac
and Synnex, the following general rules of construction and interpretation shall be used: (i)
Supplier Clauses related to the fabrication of tooling and the performance of development and NRE
shall apply to Mitac and Synnex; (ii) Supplier Clauses related to order acceptance, materials
procurement, manufacturing, fulfillment, upside support, allocation, delivery, indemnification
shall apply to the entity that receives a purchase order from Dot Hill under this Agreement, i.e.,
Mitac or Synnex as the case may be; (iii) Supplier Clauses related to warranty (including epidemic
failure obligations) and warranty support for such purchase order placed by Dot Hill shall apply to
Mitac, except for return for credit matters specified in this Agreement which will apply to Synnex;
and (iv) unless otherwise provided for in this Agreement, Supplier Clauses within Sections 3.3.1
(Product Pricing and Elements), 3.3.4 ([...***...] Pricing), 3.3.5 (Documentation and Other
Information), 3.9.8 (Recordkeeping), 3.9.9 (Audit Rights), 3.15 (Business Continuity Plan), 3.16
(Right of Access), 4 (Ownership Rights), 8 (Limitation of Liability), 9 (License Rights), 10
(Confidentiality), 11 (Term and Termination) and 12 (Miscellaneous) shall apply to both Mitac and
Synnex; (v) Supplier Clauses within Exhibit A (Electronic Data Interchange), Exhibit
C (Supplier’s Quality Program) shall apply to both Mitac and Synnex; and (vi) Supplier Clauses
within Exhibit B (Customer Support), Exhibit B-1 (Supplier’s Repair Facilities),
Exhibit B-2 (NTF Charges), Exhibit B-3 (Out-of-warranty Repair), Exhibit
C-1 (Customer Support Quality Requirements), out-of-warranty service work for the Products
shall apply to Mitac only. The parties shall define further the rights and obligations of Mitac
and Synnex in each Award Letter to be entered into for a Product.

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     12.22 Entire Agreement and Modification. This Agreement, together with any executed
Award Letters, constitutes the entire agreement between Supplier and Dot Hill relating to its
subject matter, supersedes all prior or contemporaneous oral or written communications, proposals,
term sheets and other correspondence and prevails over any conflicting or additional terms or
communications between the parties relating to its subject matter. The preprinted terms of any
purchase orders and any terms in any purchase order acknowledgement shall be deemed deleted and of
no force or effect.

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EXHIBIT A

ELECTRONIC DATA INTERCHANGE

1. Definitions

     1.1. “EDI” means electronic data interchange.

     1.2. “Adopted Format” is the accepted method for the interchange of Documents under this
Agreement based on the EDIFACT or ANSI ASC X12 standards for the presentation and structuring of
the electronic transmission of Documents, or other such format as may be agreed to in writing by
the parties.

     1.3. “Document” is data structured in accordance with the Adopted Format and transmitted
electronically between the parties.

     1.4. “Test” means transmission of a Document during a testing period to verify set ups in
EDI-related software, network transmission and technical support processes.

     1.5. “Provider” is a party or business entity that provides the service of moving and routing
EDI transmissions between parties.

2. Prerequisites

     2.1. Documents, Standards. Each party may electronically transmit to or receive from the
other party any Document which the parties have mutually agreed to Test. The content of Test
Documents will be considered dummy data unless otherwise agreed to by the parties. All Documents
which are intended to evidence a transaction shall be transmitted in accordance with the Adopted
Format.

     2.2. Providers. Documents will be transmitted electronically to each party through any
Provider with which either party may contract and/or the Internet. The Provider for each party
shall be communicated to the other party. Either party may change its designated Provider upon
thirty (30) days prior written notice to the other party. Each party shall be responsible for the
costs of any Provider with which it contracts.

     2.3. System Operations. Each party, at its own expense, shall provide and maintain the
equipment, software, services and testing necessary to effectively and reliably transmit and
receive Documents. If Provider’s network is down and this

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prevents either party from meeting the pickup or delivery frequency agreed to, that party must
notify the other party the [...***...].

     2.4. Security Procedures. Each party shall use security procedures which are reasonably
anticipated to: [...***...].

     2.5. Signatures. Each party may adopt as [...***...] (“Signatures”). Each party agrees that any
Signature of such party [...***...]. Each party will transmit data using currently accepted
transmission standards, which may or may not involve Signatures.

3. Transmissions

     3.1. Proper Receipt. Documents shall not be deemed to have been properly received, and no
Document shall give rise to any obligation, until accessible to the receiving party at such party’s
electronic mailbox.

     3.2. Verification. Upon receipt of any Document, the receiving party shall promptly and
properly transmit a functional acknowledgement in return within [...***...] after receipt of a
Document.

     3.3. Acceptance. If a transmitted Document requires acceptance by the receiving party, any
such Document which has been properly received shall not give rise to any obligation unless and
until the party initially transmitting such Document has properly received in return an acceptance
Document.

     3.4. Garbled Transmissions. If any Document is received in an unintelligible or garbled form,
or otherwise contains evidence of faulty transmission, the receiving party shall promptly notify
the originating party (if identifiable from the received Document) in a reasonable manner. In the
absence of such notice, the originating party’s records of the contents of such Document shall
control.

     3.5. Erroneous Transmissions. If either party receives a Document from the other party which
differs from the applicable terms and conditions, (e.g., an order with a price, quantity or
schedule different than that mutually agreed upon), the receiving

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party shall promptly contact the sending party to confirm the accuracy of the Document.

4. Transaction Terms

     4.1. Order Placement. Each Purchase Release electronically transmitted shall reference the
[...***...].

     4.2. Validity, Enforceability

          4.2.1 The parties acknowledge their mutual intent to create binding purchase, sale and payment
obligations by means of electronic transmission and receipt of Documents specifying certain of the
applicable terms. During the term of the Agreement, all obligations concerning the delivery of
such Documents in written form may be satisfied by a transmission pursuant to the terms of this
exhibit.

          4.2.2 Either party shall have the option, at its discretion, to transmit Documents in written
form to the other party. Any Document properly transmitted pursuant to these terms shall be deemed
(“Signed Documents”) and shall be considered, in connection with any transaction, to be a “writing”
or “in writing” and to have been “signed” and to constitute an “original” when printed from
electronic files or records established and maintained in the normal course of business.

          4.2.3 The parties agree that the provisions of the Uniform Commercial Code, Section 2-201
(“Formal Requirements: Statute of Frauds”), shall not apply to Documents covered by this
Exhibit since hard copies of Documents will not be issued and the parties further agree
that said Documents shall be deemed to satisfy any statutory or legal formalities requiring that
agreements be in writing, including, but not limited to the Statute of Frauds. The conduct of the
parties pursuant to this exhibit, including the use of Signed Documents properly transmitted,
shall, for all legal purposes, evidence a course of dealing and a course of performance accepted by
the parties in furtherance of this Agreement and Document.

          4.2.4 The parties agree not to contest the validity or enforceability of Signed Documents
under the provisions of any applicable law relating to whether certain agreements are to be in
writing or signed by the party to be bound thereby. Signed Documents, if introduced as evidence on
paper, in any judicial, arbitration, mediation or administrative proceedings, will be admissible as
between the parties to the same extent and under the same conditions as other business records
originated and maintained in documentary form. Neither party shall contest the admissibility of

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copies of Signed Documents under the business records exception to the hearsay rule or the
best evidence rule on the basis that the Signed Documents were not originated or maintained in
documentary form.

     5. Implementation. The parties will use commercially reasonable efforts to implement EDI as soon
as possible so as to permit the electronic interchange of Documents and other information.
Notwithstanding anything to the contrary, to the extent said EDI implementation will not require
material changes to Supplier’s current IT system, [...***...] to the other party’s information systems
that are either necessary or useful to enable transmission of Documents and other information to
each other.

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EXHIBIT B

CUSTOMER SUPPORT

1.0 Purpose. To define Supplier’s responsibilities to Dot Hill for in-warranty and out-of-warranty
repair and support. This document shall be used in conjunction with Exhibit C and
Exhibit C-1.

2.0 Scope. This exhibit, in conjunction with Exhibit C and Exhibit C-1, describes
Dot Hill Enterprise Services’ requirements for worldwide Product support either by Supplier or by
any of Supplier’s authorized third parties. Dot Hill’s goal is to receive Product 100% on time and
that such Product meets the quality requirements defined in Exhibit C-1.

3.0 Definitions

     3.1 Bill of Material (“BOM”) shall mean a list of parts or sub-assemblies used to manufacture
a Product.

     3.2 Depot Repairable Unit (“DRU”) shall mean a subassembly of Product sent by a Dot Hill Third
Party Repair Supplier (“TPRS”) to a Supplier’s depot for repair and/or replacement.

     3.3 Distribution Center (“DC”) shall mean a third party designated by Dot Hill who processes
Product returns on Dot Hill’s behalf. The DC’s consist of 2 types:

          Type A: Performs various services for Dot Hill but does not have a financial relationship with
Supplier.

          Type B: Performs various services for Dot Hill, issues purchase orders and pays invoices for
materials purchased for use in the maintenance of Dot Hill Products. A ‘Type B’ DC has a financial
relationship with Supplier.

     3.4 Engineering Change Order (“ECO”) shall mean the mechanism by which a party notifies the
other party of a change to the Product.

     3.5 Field Replaceable Unit (“FRU”) shall mean a Product or subassemblies thereof which can be
replaced at the customer site.

     3.6 First Customer Ship (“FCS”) shall mean the initial production shipment of Product by
Supplier to Dot Hill.

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     3.7 No Trouble Found (“NTF”) shall mean Product which Dot Hill has returned as defective but
which passes Supplier’s standard test process (as approved by Dot Hill). NTF does not include
Product which incurred any ECO upgrades and/or adjustments by Supplier.

     3.8 Product shall mean the Products and FRUs/DRUs, including any third party products
incorporated therein, as well as new Product later released and confirmed in writing by Supplier
via electronic mail or updated price list.

     3.9 Product Specification shall mean the written performance representations, mechanical
dimensions and descriptions, electrical and timing requirements, component information, and
configuration for the Product purchased by Dot Hill, whether generated by Dot Hill or Supplier,
which have been agreed to in writing by the parties.

     3.10 Regional Stocking Location (“RSL”) shall mean Dot Hill or third party facilities
designated by Dot Hill which are responsible for storing and processing FRUs.

     3.11 Repair Service shall mean minor adjustments to Product, repair of defective Product, or
provision of Repair or Replacement Product.

     3.12 Repaired or Replacement Product shall mean Product of the same model and part number, but
not necessarily the same serial number, used to replace defective Products. This Product can be
either new or of a like new condition.

     3.13 Return Material Authorization (“RMA”) shall mean the formal authorization from Supplier
under which Dot Hill returns Product for repair or replacement.

     3.14 Dot Hill Office shall mean a Dot Hill facility.

     3.15 Dot Hill shall mean Dot Hill Enterprise Services for the purpose of this Exhibit
B.

     3.16 Supplier Corrective Action Request (“SCAR”) shall mean Dot Hill’s formal request
mechanism for corrective action issued to Supplier.

     3.17 Third Party Repair Supplier shall mean a third party who performs repair services for Dot
Hill designated by Dot Hill.

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4.0 Repair Services and Requirements

     4.1 At a minimum, Supplier shall use its best efforts to maintain, directly or through agents,
the fully equipped and staffed facilities specified in Exhibit B-1 to a level sufficient to
meet the agreed performance targets as provided in Dot Hill’s four (4)-quarter, monthly rolling FRU
forecast. On at least a monthly basis, Dot Hill and Supplier shall review the management of the
FRU pool, and make any appropriate agreed upon changes thereto. Notwithstanding anything to the
contrary, [...***...].

     4.2 Supplier will provide FRU support as follows:

          4.2.1 Supplier must [...***...] of the Effective Date.

          4.2.2 Supplier agrees that all of its Product FRUs meet Dot Hill’s requirements for the Dot
Hill FRU ID program.

          4.2.3 FRUs are required on a worldwide basis, with volumes dependent on Dot Hill’s four
(4)-quarter, monthly rolling FRU forecast.

     4.3 After receipt of Dot Hill’s RMA request Supplier shall ship a Repaired or Replacement
Product FRU to Dot Hill no later than the next business day (the “Next Day Shipment Obligation”).
In situations where the RMA requests exceed the then-existing mutually agreed upon FRU pool, then
Supplier shall not be bound by Next Day Shipment Obligation; however, Supplier shall use its best
efforts to cause Replacement Product FRU’s to be delivered to Supplier on an expedited basis from
its suppliers utilizing overnight carriers. Supplier shall take all necessary and reasonable
actions to ensure replenishment of the FRU pool and reestablishment of the next day RMA performance
requirements set forth herein. In the event that such RMA performance requirements can not be met
due to the potential or actual depletion of the FRU pool, Supplier shall immediately notify Dot
Hill in writing by an agreed upon method (i.e., email, fax, etc.). In performing its
responsibilities hereunder, Supplier may provide FRUs from an exchange pool which meet the Product
Specifications provided, however, that they are free from defects.

     4.4 If Supplier has not received a Product back from Dot Hill for in-warranty

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repair within [...***...] after receipt of a fulfillment RMA request for such Product, Supplier
will notify Dot Hill in writing that Supplier has not received such applicable Product. If Dot
Hill fails to return such Product to Supplier within [...***...] after receipt of written notification
thereof from Supplier, then Supplier may generate an invoice and charge Dot Hill the applicable
sales price for a Product if Supplier has previously provided to Dot Hill a comparable Product
without charge as part of in-warranty repair service. This Section 4.4 shall not affect the
provisions of Section 4.3 in any manner.

     4.5 Dot Hill goal is [...***...]. Such goal shall be verified and confirmed by Supplier.
Supplier agrees to meet these goals for FRUs and all repairs. To ensure accurate field data
tracking all returned FRUs will be tested and results documented within one (1) month after
receipt.

          4.5.1 For purposes of this exhibit, “Epidemic Failure” shall have the same meaning as set
forth in the base terms of the Agreement; however, the application thereof shall occur at the FRU
level as opposed to at a higher level.

          4.5.2 In the event of a suspected Epidemic Failure, Dot Hill shall promptly notify Supplier,
and shall provide the following information, if known and as may then exist: a description of the
defect, and the suspected lot numbers, FRU IDs or other identifiers, and delivery dates of the
defective FRUs. Dot Hill shall also deliver or make available to Supplier, samples of the
defective Products for testing and analysis. Within [...***...] of receipt of Notice from Dot Hill,
Supplier shall provide its preliminary findings regarding the cause of the failures. Thereafter,
Supplier shall promptly provide the results of its root cause corrective analysis, its proposed
plan for the identification of and the repair and/or replacement of the affected FRUs, and such
other appropriate or desirable information.

          4.5.3 The parties shall also cooperate and work together to expeditiously devise and implement
a corrective action program which identifies the defective units for repair or replacement, and
which minimizes disruption to the end user.

          4.5.4 In the event of an Epidemic Failure, Supplier shall be responsible for (a) (i) [...***...]

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[...***...].

     4.6 For a period of [...***...] after the last delivery of each production Product to Dot Hill,
(the “Service Period”) Supplier agrees to provide Repair Services to Dot Hill, Dot Hill authorized
TPRS’s and DC’s during the entire Service Period.

     4.7 If Supplier elects to discontinue Repair Service after the expiration of the Service
Period, Supplier agrees to provide Dot Hill a minimum of [...***...] advance written notice of
Supplier’s intent to discontinue Repair Service.

     4.8 Product will be shipped to Dot Hill in a configuration defined by the Product
Specifications and BOMs.

     4.9 Repaired or Replacement Product will be upgraded by Supplier to the then current Product
revision level or to a revision level as documented and agreed upon by Dot Hill and Supplier and at
the price set forth in Appendix B-4.

     4.10 Replacement in Lieu of Return. During the warranty period of disk drives included in
Products, in the event that Dot Hill is not permitted to return such defective disk drives for
repair that are located within restricted government facilities, Supplier will provide replacement
disk drives to Dot Hill, as required, at no charge to Dot Hill and without a demand for the return
of such defective disk drives by Dot Hill provided that the applicable end user of such defective
disk drives complies with the then-current “black hole” policy of Dot Hill. If a hard drive vendor
does not have a “black hole” policy, then Supplier will invoice Dot Hill for the costs of
replacement disk drives.

5.0 Intentionally left blank.

6.0 Price

     6.1 Unless otherwise provided in the Manufacturing Agreement, there shall [...***...].

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     6.2 All costs for out of warranty repair prices, including but not limited to labor, material,
testing and packaging, are as shown in

 Exhibit B-3.

     6.3 The out-of-warranty repair price will be reviewed annually and remain constant for a
[...***...] period after such review. Any subsequent change in pricing shall require written
notification to Dot Hill. Any increase will require notification at least [...***...] prior to the
effective date thereof and can only be made if Supplier provides a reasonable justification for the
increase.

7.0 Payment

     7.1 Dot Hill shall be liable to pay only for Repair Services, FRUs and DRUs ordered by and
invoiced directly to Dot Hill. Dot Hill shall not be liable to pay for any Repair Services, FRUs
and DRUs ordered by DC’s or TPRS’s. Supplier shall determine the creditworthiness of any named DC
or TPRS and, with price, quality, warranty and Leadtimes determined by this Agreement, shall
arrange credit and other terms directly with such DC’s or TPRS’s. Repair Services ordered by DC’s
or TPRS’s for Products shall be added to Dot Hill’s cumulative volume of Repair Services.

     7.2 [...***...] or other required reference numbers shall be clearly identified on all
correspondence, shipment, and invoice documentation associated with Repair Services.

8.0 Freight and Import/Export Fees

     8.1 Freight and Import/Export Fees for all In-Warranty and Out-of-Warranty Products. [...***...]
shall pay all freight charges, duty, taxes, customs and/or brokerage fees for shipment of the
defective Product to Supplier. [...***...] is responsible for freight charges associated with shipment
of repaired or Replacement Products to Dot Hill. Repaired Product will be shipped by the method
indicated in Exhibit C.

     8.2 Expedited Transportation. All Product, whether in or out of warranty, which is past due
(to the extent attributable to Supplier’s delay) from the date established by the RMA and tracked
in the purchase order shall be shipped by the most expeditious method at [...***...] expense.

9.0 Repair Warranty

     9.1 Supplier agrees to provide repairs on all Products and FRUs, for at least [...***...] after
the last delivery of production Products.

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     9.2 All Repaired or Replacement Products and FRUs shall be warranted by Supplier to perform in
accordance with the applicable Product Specification or portion thereof, and shall be free from
occurrence of same failure/defect in materials and workmanship with same symptom and root cause for
a period of [...***...] from the date shipped from Supplier to Dot Hill (or for Repaired or Replacement
Products and FRUs to be delivered to Dot Hill for sale or distribution to Sun, [...***...] from the
date shipped from Supplier to Dot Hill) or for [...***...], whichever period is longer. Dot Hill shall
inform Supplier by FRU number of those Repaired or Replacement Products and FRUs that are to be
provided to Sun Microsystems, Inc. or Sun Microsystems International B.V.

     9.3 Repairs on Products or FRUs shall be handled in accordance with the terms of this
Exhibit B.

     9.4 Supplier shall provide Dot Hill with applicable repair costs, replacement costs, lead
times, changes in MTBF data and other pertinent data points.

10.0 NTF’s

     10.1 No Trouble Found (“NTF”) — In Warranty and Out of Warranty. NTF charges will be set
forth in Exhibit B-2. NTF charges set forth in Exhibit B-2 will apply only in the
event that the number of units determined to be NTF exceeds [...***...] of the total units returned to
Supplier for repair each month that are found to be NTF for a specific Product.

     10.2 Regardless of whether or not a Product is determined to be NTF or repaired, it must be
upgraded to a revision level accepted by Dot Hill. NTF charges do not include [...***...].

11.0 Inventory Management

     11.1 Supplier shall follow adequate procedures for the proper control of Dot Hill inventory.
Record keeping shall include, but not be limited to, the maintenance of accurate, updated records
of the Dot Hill inventory and the use of an inventory tracking system that measures physical
inventories, cycle counting, and other adjustments to maintain accuracy.

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     11.2 Cycle count results shall be reported by Supplier to Dot Hill within [...***...] after Dot
Hill’s initial request.

     11.3 Supplier shall be responsible for all Dot Hill owned Product inventory variances in
Suppliers’ possession. If Supplier is unable to reconcile any inventory variance for Products in
Supplier’s possession, Supplier shall be [...***...].

     11.4 Supplier shall be responsible and bear the risk of loss for [...***...]. Supplier shall use
its best efforts to provide Dot Hill with a list of all its requirements for equipment unique to
Dot Hill’s Products [...***...] prior to initiating Product repair support.

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EXHIBIT B-1

SUPPLIER’S REPAIR FACILITIES

MiTAC US Service Center info.:

[...***...]

MiTAC UK Service Center info.:

[...***...]

MiTAC Taiwan Service Center Info. ( project management )

[...***...]

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EXHIBIT B-2

NTF CHARGES

The NTF per unit charge is: [...***...].

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EXHIBIT B-3

OUT OF WARRANTY REPAIR

The charge for out-of-warranty repair services performed under this Agreement is: [...***...]. The
TBD labor charge to Dot Hill for any out-of-warranty repair services which are requested to be
performed by Dot Hill [...***...].

If Supplier offers or makes available [...***...], then Supplier shall immediately [...***...].

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EXHIBIT C

SUPPLIER’S QUALITY PROGRAM

1.0 Purpose. This exhibit defines Dot Hill’s requirements for Supplier’s quality program (“Quality
Program”) and Supplier’s responsibilities for manufacturing, inspecting, testing and supplying
production Products to Dot Hill. Additional Customer Support quality requirements are set forth in
Exhibit C-1 attached hereto.

2.0 Scope. This exhibit describes Dot Hill’s requirements for the Quality Program for the
manufacture of Products for Dot Hill. Products covered under this Exhibit C are fabricated
materials and assemblies and electrical-mechanical turnkey assemblies (“Enclosure Products”). The
term “quality” as used herein means conformance to the Specification for the Product (Dot Hill’s
Engineering document) and all other applicable Dot Hill process and Product specifications as they
may be amended from time to time by Dot Hill Engineering Change Orders (“ECOs”). Specification
shall mean the applicable Product specification for the Products, which may be changed from time to
time by written agreement of the parties.

     2.1 Objective. Dot Hill’s objective is to achieve ship to stock status for all Products
shipped to Dot Hill as a result of Supplier consistently meeting the Quality Program defined in
this exhibit.

     2.2 Applicable Documents

	 	•	 	Dot Hill’s process and Product specifications
	 
	 	•	 	Supplier’s Product Specification
	 
	 	•	 	Supplier Scorecard Procedure
	 
	 	•	 	ISO 9000
	 
	 	•	 	Supplier Engineering: Mass Storage Group Supplier Certification Process
	 
	 	•	 	Additional Documents (applicable to Enclosure Products):
	 
	 	•	 	Dot Hill’s Color Specifications
	 
	 	•	 	Dot Hill’s Paint Specifications
	 
	 	•	 	Dot Hill’s Global Cosmetics Quality and Workmanship Standards
	 
	 	•	 	First Article Procedure

3.0 Precedence of Documents. In the event of a conflict between the terms and conditions of this
Agreement, Dot Hill’s Specification, Dot Hill’s process and Product specifications, and this
Exhibit C, the order of precedence shall be as follows: (1) this Agreement, (2) Dot Hill’s
Specification, (3) Dot Hill’s process and Product specifications, (4) this Exhibit C.

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4.0 Supplier Process Requirements. Supplier shall adhere to a quality/manufacturing plan (including
a data collection/tracking/reporting system) (the “Process”) that will ensure compliance with the
requirements and terms and conditions of this Exhibit C, the Agreement, and ISO 9000. The
Process and procedures developed by Supplier shall be documented. Dot Hill will review this
Process during the Process Certification period (see Section 5.5 of this exhibit). Supplier is
responsible for the quality of Products and/or components procured or manufactured for Dot Hill.
Approval of Supplier’s Process by Dot Hill does not relieve Supplier of this responsibility.
Supplier shall develop and implement a process for initial and ongoing/periodic process
certification of internal and external suppliers for components and all major subassemblies.
Supplier will provide copies of certification results/reports to Dot Hill upon request.

     4.1 Process Flow Charts. Supplier shall provide a general process flowchart for the Products
and major subassemblies as agreed to by Dot Hill and Supplier and shall identify all assembly,
test, and inspection sub-processes.

     4.2 Data Collection Systems. Supplier shall implement a Weekly Value Chain Quality Chain
Reporting System. The Data Collection System will show where failure data is collected and
detailed process yield targets. Supplier shall provide on-going reports (via electronic or
web-based method) of current yields, the top [...***...] pareto failures per critical process, failure
analysis (“FA”) and corrective action (“CA”) documenting continuous improvement and Ongoing
Reliability Testing (“ORT”), at Dot Hill’s option. This will be reviewed by Dot Hill during the
Process Certification. Dot Hill will provide to Supplier an ORT plan for every Product covered by
an Award Letter.

     4.3 Configuration Control. Supplier must develop and implement a Dot Hill Configuration DPM
Goal Quality Assurance Plan prior to production start, as mutually agreed upon by the parties,
which will include, but not be limited to, the following DPM, which means “Defects Per Million.”

	 	•	 	FA plan
	 
	 	•	 	Reporting methodology/format
	 
	 	•	 	Closed loop CA plan
	 
	 	•	 	Individuals and/or team identified as owners of the plan
	 
	 	•	 	Process to include alert levels and trigger points
	 
	 	•	 	Specifications required maximum time for actions to be completed, escalation and
review process.

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	 	•	 	Statistical DPM measurement method
	 
	 	•	 	Dot Hill Supplier Engineering: Quality Demonstration Test Plan

     4.4 Quality Assurance Plan. Supplier must develop and implement a Dot Hill Configuration DPM
Quality Assurance Plan prior to production start, as mutually agreed upon by the parties, which
will include, but not be limited to, the following:

	 	•	 	FA plan
	 
	 	•	 	Reporting methodology/format

[...***...] unless agreed otherwise:

	 	•	 	Yield/DPM report (all critical stations, including pareto with FA/CA for the top
[...***...] pareto items with targets);
	 
	 	•	 	Outgoing Quality Test/Audit DPM report with FA/CA for all failures;
	 
	 	•	 	DPM Improvement Plan if greater than Dot Hill goal (updates [...***...]);
	 
	 	•	 	Corrective Action Report (“CAR”) Tracking Log;
	 
	 	•	 	Dot Hill site first level FA reports;
	 
	 	•	 	FA/CA reports; and
	 
	 	•	 	CAR tracking report.

Frequency of the reports below will be [...***...]:

	 	1.	 	Quality Demonstration Test (“QDT”) DPM report with FA/CA for all failures;
	 
	 	2.	 	ORT/Periodic Reliability Sequential Test (“PRST”) chart with FA/CA for all
failures;
	 
	 	3.	 	Test Demo/QDT reports for beginning of program (one time — reference Process
Certification Test);
	 
	 	4.	 	Annualized Failure Rate (“AFR”) report (Dot Hill’s and other comparable
customers’ monthly data and 5 month rolling average) ([...***...]); and
	 
	 	5.	 	Turn-around time (“TAT”) tracking reports:

	 	•	 	Closed loop CA plan,
	 
	 	•	 	Individuals and/or team identified as owners of the plan,
	 
	 	•	 	Process to include alert levels and trigger points,
	 
	 	•	 	Specifications required, maximum time for actions to be completed,
escalation and review process,
	 

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	 	•	 	Statistical DPM measurement methodology process to proactively
inform Dot Hill of any Products suspect of not meeting Dot Hill’s quality or
reliability requirements along with risk assessment, and
	 
	 	•	 	Dot Hill Supplier Engineering: Quality Demonstration Test Plan.

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     4.5 Control of Purchases. Supplier will have a Quality Program that provides a reliable means
of determining the quality and reliability levels of all purchased supplies, material, and
components used in the manufacture of Products. In the event Supplier desires to change the
vendor or selected source of a component used in the manufacturing of Products, Supplier shall
collect quality/evaluation data to support and justify the change ([...***...]). The quality data will
be made available to Dot Hill at least [...***...] prior to implementation by Supplier. Section 4.8
below details what source changes require prior notification. In the event that a problem is
identified in the availability or quality of purchased supplies, materials or components used in
the manufacture of Products, upon Dot Hill’s request, Supplier agrees to permit Dot Hill to
participate in the development of a Corrective Action plan, which may include Dot Hill personnel
accompanying Supplier’s personnel to vendor sites to perform process and design audits and view
CAs. Supplier is responsible for all inspections/tests of Sub-tier Supplier-purchased or
Supplier-produced parts to ensure conformance to the Specification. Supplier will develop and
implement a plan for the tracking of individual components by production lot for at least [...***...]
from the date of delivery by Supplier of Products that consist of or contain such components.
Supplier will use commercially reasonable efforts to implement any such plan prior to the date on
which Supplier makes available, in volume, Products to Dot Hill. Supplier shall not use any
non-conforming purchased or produced parts.

     4.6 Defect-Free Program/Corrective Actions. Dot Hill’s goal is to receive Products that are
defect-free. Supplier shall document and implement a defect-free program as part of the Process
which constantly reduces the defect rate of its Products. Dot Hill shall not be obligated to
accept any defective Products shipped by Supplier. Supplier will establish a program to ensure the
performance of effectiveness CAs. This program will be based upon information derived from failure
reporting and analysis and will ensure that parts, components or assemblies are corrected so as to
properly perform their intended function. Supplier shall maintain records of CAs indicating
[...***...].

     4.7 Changes in Manufacturing Process, Product or Manufacturing Locations. In the event that
Supplier desires to change the Product or its fundamental manufacturing process, Supplier shall
notify Dot Hill in writing within a reasonable period (no less than [...***...] unless such shorter
period is agreed to by Dot

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Hill in advance based on the critical nature of implementation of the change, which agreement
will not be unreasonably withheld, delayed or conditioned) prior to the effective date of the
proposed change and provide Supplier deviation, Engineering Change Request (“ECR”)/ECO) or process
change notification document(s) to Dot Hill for formal review/approval. [...***...], and/or will have
a negative impact on Product quality or reliability. Examples of changes which require
notification include, but are not limited to, the following:

	 	•	 	[...***...].

Supplier shall supply Dot Hill copies of all ECOs affecting the Product. Supplier agrees to provide
verbal notification to the appropriate Dot Hill SE of all other process changes which do not affect
form, fit, function, serviceability, or safety. Supplier shall implement such changes in the
process only if [...***...].

     4.8 Re-Qualification. Major changes in manufacturing process will require re-qualification
and/or process re-certification to the Specification, except to the extent Dot Hill waives this
requirement by providing written consent, which consent will not be unreasonably withheld, delayed
or conditioned. Dot Hill may require, at its sole discretion, that Supplier perform reliability
tests if applicable to Product to confirm an equivalent or improved reliability of the Products.
Supplier shall coordinate notification of planned major changes with Dot Hill. At Dot Hill’s
request, Supplier shall run a pilot production. All Product and process changes affecting form,
fit,

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function, quality or reliability require Supplier to submit a completed Qualification Data
Package, reference Quality Data Package Expectation provided by Dot Hill to Supplier. The Quality
Data Package must be completed and supplied to Dot Hill at least [...***...] prior to implementation of
the change. Reimbursement for costs associated with the above requirements will be as mutually
agreed prior to any re-qualification

5.0 Product Qualification Program. This section describes a series of reviews and tests that
Supplier must accomplish during the product development and pilot build of its Products.

     5.1 Process Certification

          5.1.1 Products. Supplier will conduct PCTs prior to the start of Dot Hill production. The
purpose of these tests is to have Supplier demonstrate that its manufacturing process is stable and
capable of producing high quality product in volume. Required documentation will include, but not
be limited to, the following: [...***...]. Pareto, as defined herein, shall mean a list of failures.
At Dot Hill’s option, a representative of Dot Hill may be sent to Supplier’s factory to observe the
build.

          5.1.2 DF* (Design for Manufacturability, Design for Testability, etc.). Supplier will
implement all DF* recommendations as identified by Dot Hill, Supplier’s “Open Bug GAP Report”, and
External Manufacturer(s) recommendations prior to any build. Supplier will review all fixes with
Dot Hill Operations Engineering prior to DF* implementation. Any additional gaps that are
identified by Supplier during pre-production or production volume phase throughout the entire
supply chain will be subject to review by Dot Hill Operations Engineering. Any gaps identified by
Dot Hill Operations Engineering will be communicated to Supplier for review/verification and
implementation in a timely fashion.

          5.1.3 Design/Compliance Verification. Dot Hill Operations Engineering will review all Supplier
Product design verification test plans and results against Dot Hill’s best practices. Any gaps
identified will be reviewed with Supplier for applicable modifications.

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          5.1.4 Supplier Assembly Tooling and Enclosure Products Tool/Process Qualification. No data or
samples will be submitted for Dot Hill’s approval until Supplier has inspected the mutually agreed
upon quantity of parts and has ensured that the tool/process satisfies Dot Hill production level
drawing and engineering specifications. This requirement also applies to any re-submission that
may be required. Submission of gauge Reproducibility and Repeatability reports to Dot Hill is
required for all critical assembly tooling prior to production of a part/assembly for Dot Hill.
For Supplier-developed Dot Hill tooling, Supplier shall provide complete tool design drawings to
Dot Hill for its approval prior to construction of Dot Hill tooling. Tool Approval/First Article
Inspection. Supplier shall provide to Dot Hill, for its approval, data obtained from a 100%
inspection of all dimensions/specifications of the initial parts produced to evaluate the tooling
and set-up. These parts shall be run under production conditions (e.g. correct speed and proper
temperature). Each cavity of a multi-cavity mold must be inspected and approved. If heat treating
and/or plating or coating is specified, the parts must be re-evaluated and additional data
collected after these processes have been completed. Dot Hill reserves the option to verify and
validate any and all First Article results. Reimbursement, if any, of those costs associated with
qualification, inspection, design and creation of tooling will be as mutually agreed.

          5.1.5 Process Capability. Supplier shall produce a Process Capability Study which analyzes
the information and data for the variable characteristics of all processes in a mutually agreed
upon format. Supplier shall adjust processes as indicated by the Process Capability Study results
to achieve targeted quality goals. Supplier shall develop X/R charts or comparable information to
evaluate the capabilities of the processes. All critical dimensions or features of parts called
out in Dot Hill’s drawings shall meet a Cpk index of 1.33 (industry standard measurement).

     5.2 Quality Systems Requirements. Supplier must maintain a defined Quality System for Product
measurement and evaluation throughout the manufacturing process. The Quality System shall monitor
incoming material control, work-in-process and final Product and packaging. The Quality System
shall include:

     (a) [...***...]

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     (g) [...***...]

     5.3 Packaging Requirements. Specific packaging requirements beyond the standard process will
be supplied by Dot Hill as required. In all cases packaging and outer packaging must be provided
to ensure all material arrives at Dot Hill undamaged.

     5.4 Dot Hill Quality Levels. Supplier’s quality levels for Product are measured in DPMs and
shall cover the entire manufacturing process, Supplier post pack audit and customer DOAs. Failures
will be attributed to Supplier’s process or Product unless Dot Hill and Supplier mutually agree
that such a failure was not caused by Supplier. Maximum DPM rates during production are set forth
below. Beyond month one of production, all Product failures in excess of the DPM requirements
below will be required to have a documented improvement plan. Where required by Dot Hill, this
plan will also contain action plans such as pre-screening. Dot Hill also reserves the right to
place Products which exceed the DPM requirements on stop-ship.

Failure rates = # of verified failures divided by the # of units used (by Dot Hill and/or Dot Hill
contractors) multiplied by 1,000,000.

OEM Storage DPM Goals:

	 	 	 
	Production Items	 	Quality Quarterly Goals
	[...***...]

	 	[...***...]
	[...***...]

	 	[...***...]
	[...***...]

	 	[...***...]
	[...***...]

	 	[...***...]
	[...***...]

	 	[...***...]

The parties will review the above DPM requirements every [...***...] after the first quarter of
production of the Products and reset the targets as mutually agreed. It is anticipated that
quality levels will continue to show improvements from these baselines over time. As Dot Hill’s
internal integration DPM rates decrease, Dot Hill reserves the right to re-negotiate these DPM
requirements with Supplier.

     5.5 Actions Related to Excessive DPM Rates and/or Epidemic Failures. If the Products fail to
meet the DPM rates, Supplier will perform a root cause analysis to attempt to identify problems
that may have caused such failure. Dot Hill and Supplier

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agree that in the event Product fails to meet the DPM rates set forth in Section 5.4 above,
and the cause is due to Supplier workmanship or Supplier purchased materials, then Supplier shall
implement immediate corrective actions, at Supplier’s expense and in accordance with an plan and
schedule that has been agreed to by Dot Hill, to screen out the defects causing the yields to
exceed the requirements until long term corrective actions are implemented and proven effective.
Said corrective actions may include, but are not limited to, the following:

	 	•	 	Extended component, sub-assembly and/or final assembly level burn-in to remove any
latent failures.
	 
	 	•	 	Special screening tests in Supplier’s process.
	 
	 	•	 	Extend the test time of final/post-final function test(s).

6.0 Supplier Audit Programs. Supplier shall perform a series of monitoring tests to ensure that
Products conform to Dot Hill’s requirements. A brief description of each test requirement follows.

     6.1 ORT. Supplier shall conduct ORT tests in accordance with mutually agreed upon criteria.
The testing will be conducted at Supplier’s site in a manner mutually agreed upon between the
parties. The ORT test results shall be delivered to Dot Hill on a [...***...] basis and shall include
details of any FA and CAs taken to address any ORT failure. Supplier shall report ORT failures to
Dot Hill within [...***...] after occurrence.

     6.2 Field MTBF and AFR Reporting. Supplier will implement a process and worldwide database to
effectively track monthly field returns by Product (model). Supplier will provide all data
requested by Dot Hill by the [...***...]. Data must be provided for Dot Hill population only and a
separate reporting for “Other Supplier Customers”. This data will also include a pareto of failure
symptoms found on failing FRUs by FRU part number, No Trouble Found rates by FRU part number and
any resulting corrective action activities.

     6.3 Ongoing Quality Audit. Dot Hill and Supplier shall agree to a statistically valid method
for estimating the ongoing quality level of every shipment prior to delivery to Dot Hill. Any lots
not meeting the agreed upon quality level will be 100% screened by Supplier to ensure their
conformance to the Specification. At Dot Hill’s request, Supplier shall conduct Dot Hill
application-specific process monitoring tests. The purpose of this testing is to monitor the
ongoing performance of manufacturing processes and to identify Supplier’s manufacturing process
problems at Supplier’s site. Testing will be conducted on equipment as specified by Dot Hill. Dot

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Hill shall provide procedures, equipment lists, and analysis of test results. Supplier shall
set up the test, maintain the equipment, analyze the root cause of all failures and take
appropriate CAs. Supplier shall maintain control of the manufacturing process utilizing process
capability charts. Supplier will notify Dot Hill when the established control limits have been
reached or exceeded. Supplier shall submit to Dot Hill control charts and data for all controlled
dimensions or designated test and inspection processes outlined by Dot Hill at intervals designated
by the responsible SE.

     6.4 Periodic Specification Testing. Supplier shall re-test the Product to the full Dot Hill
Specification, including beyond spec margin testing and test demonstration, on a periodic basis to
confirm ongoing performance to the Specification and to verify that there are no major changes to
design margins. The specific timing of this test will be determined by mutual agreement of the
parties prior to the start of production. Supplier shall provide a detailed plan for Dot Hill’s
approval at least once per quarter. If at any time any of the Dot Hill quality metrics are
triggered, PST and test demonstration Product validation will be required. These triggers include,
but are not limited to, the following:

	 	•	 	Factory DPMs
	 
	 	•	 	Reliability
	 
	 	•	 	Defects on Arrival (“DOA”)
	 
	 	•	 	Dot Hill customer escalations

Dot Hill ORT or PPA reimbursement, if any, of costs for the above will be agreed.

7.0 Dot Hill Audit Programs. After Products are introduced into manufacturing, Dot Hill may choose
to conduct the following tests for conformance to the Specification.

     7.1 Source Inspection. Dot Hill may elect to source inspect lots prior to shipment from
Supplier’s factory during the initial stages of production or until a reasonable confidence level
has been established. Source inspection may be initiated or terminated at Dot Hill’s option.
Supplier shall permit a Dot Hill employee or representative to visit the factory to source inspect
finished lots. Inspection shall be performed and lot acceptance shall be determined in accordance
with a pre-agreed upon sample plan. Supplier shall assist the source inspector in unpacking,
staging, inspecting, testing, and re-packaging sample units. Supplier shall screen rejected lots
for discrepant parameter(s) and re-submit them for source inspection. Acceptance at source
inspection does not limit Supplier’s responsibility for failures. Product quality and reliability
is at all times the responsibility of the Supplier. If source inspection is required for more than
[...***...]. Supplier shall

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provide dedicated office space at its facilities for Dot Hill personnel to work, as needed.

     7.2 Supplier Process Audits. Dot Hill may conduct quality audits of Supplier’s and Supplier’s
sub-tiers facilities subject to [...***...] advance notice, during normal business hours to determine
Supplier’s compliance with Dot Hill’s quality requirements. These audits will include review of
all aspects of the Process including without limitation FA. The Supplier will also have a
documented procedure including frequency of audits of its sub-tier suppliers by Product
manufacturing site and SQE.

     7.3 FA; Containment; CA Program

          (1) TAT will be measured from the date of receipt of Product at Supplier’s facility until
Supplier’s notification to Dot Hill of containment. Containment is defined as the CA, interim or
final, which prevents shipment of those Products to Dot Hill that have a risk of reproducing
problems found in FA. In the event that Products which are analyzed are found to be NTF or are
caused by a random component failure, containment will be considered complete when Dot Hill is
notified, in writing, of the FA results. Component failures will be documented by objective
evidence of failure rate DPM history within Supplier’s processes. If containment action is not the
final CA, the final action will occur within [...***...] after Supplier’s receipt of Product.

          (2) The TAT requirement hereunder is an average [...***...] from receipt of Product at Supplier to
notification to Dot Hill of containment. Dot Hill agrees to expedite the return of Product
requiring FA, with the intent that Products being returned for FA will not be held for
consolidation.

          (3) Supplier will be responsible for tracking TAT and issuing a weekly summary report to Dot
Hill. Supplier will also be responsible for issuing quarterly summary reports which will be used
by Dot Hill as supporting data for FA responsiveness scorecard calculations.

          (4) Only Product FA that Dot Hill request will be used for TAT calculations.

          (5) Dot Hill requires [...***...] on all Products failing in the following processes, and will
notify Supplier of the requirement when the Return Material Authorization (“RMA”) is requested. An
expedited returns path must be identified for priority failures.

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	 	•	 	[...***...]

Supplier shall provide to Dot Hill full details of root cause corrective action results. In the
case of escalations, Supplier will need to work directly with Dot Hill’s field support staff. For
all of the above returns, priority FA is required as follows: [...***...]. These Products will be
included in the TAT calculation. Dot Hill also requires FA on all trends found within Dot Hill’s
manufacturing process and critical worldwide customer failures. It is Dot Hill’s responsibility to
document and provide to Supplier, at the time of RMA request, the serial numbers of Products which
require FA.

     7.4 Dot Hill Process Yield/Pareto Reports. Dot Hill shall review monthly yield and pareto
reports from Supplier. Supplier shall at Dot Hill’s request, review the reports and investigate
any Product in-process for the top [...***...] failures listed and advise Dot Hill of the results.
Upon request by Dot Hill, Supplier shall provide detailed root cause FA and Supplier pareto
information on a [...***...] basis. [...***...] meetings will be conducted to review Supplier’s progress
in improving its yields. Summaries of this information will be distributed to management in both
companies. Dot Hill will use this information as a basis for awarding future business. Refer to
Attachment 1 for a detailed list of reports required.

8.0 Traceability Requirements. A list of all subassemblies and components that are to be
included in a Product shall be prepared by Supplier and Dot Hill. Supplier shall implement systems
and processes to permit all such subassemblies and components on this list to be backward traceable
in order to mitigate against warranty and epidemic failure issues that could arise. This list will
include, without limitation, those subassemblies and critical devices which are specifically
designated by the Engineering and Operations technical teams of the parties to have backwards
traceability.

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EXHIBIT C-1

CUSTOMER SUPPORT QUALITY REQUIREMENTS

1.0 Purpose. This exhibit defines Dot Hill’s requirements for Supplier’s repair quality program
and Supplier’s responsibilities for testing and repairing Products for Dot Hill. This document
will be used in conjunction with the Exhibit B and Exhibit C.

2.0 Scope. This exhibit describes Dot Hill’s quality requirements for worldwide repair of Product
either by Supplier or by Supplier’s authorized third parties. Dot Hill’s goal is to receive
Products from Supplier which are defect free. Therefore Dot Hill will measure Supplier to an
[...***...]. This exhibit specifies the Supplier processes required in support of this goal.

3.0 Applicable Documents

	 	•	 	Global Cosmetics — Quality — Workmanship Standards
	 
	 	•	 	Engineering Specification for Part Identification Label
	 
	 	•	 	Bar Code Marking Standard for Field Replaceable Units
	 
	 	•	 	Labeling and Packaging Procedure for Repaired FRUs
	 
	 	•	 	Mission Critical Repair Process
	 
	 	•	 	Supplier Repair Data Reporting Specification (or applicable Auto Load Specification)
	 
	 	•	 	Supplier Self-Surveillance Requirements

4.0 Dot Hill Audit Program

     4.1 Initial Facility Qualification. Dot Hill may require an initial facility qualification
audit prior to permitting shipment of Repaired Product. This audit will cover all repair and
business processes. Prior to the audit, Supplier will be required to complete the Dot Hill Audit
Questionnaire, which will be provided by Dot Hill.

     4.2 Move and/or New Product Introduction Audit. If Supplier moves a repair line, a repair
facility, or starts up a new Product repair line in a previously requested facility, Dot Hill will
permit shipment of Repaired Product from that facility only upon Dot Hill’s written approval, such
approval not to be unreasonably withheld, delayed or conditioned. In most cases, Dot Hill will
require an on site audit of the facility prior to providing approval.

     4.3 [...***...] Survey. Dot Hill may perform qualification audits of each repair

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site [...***...]. This audit will cover all repair and business processes. Prior to the audit,
Supplier will be required to complete the Dot Hill Audit Questionnaire, which will be provided by
Dot Hill.

     4.4 Random Audits. Dot Hill may, with at least [...***...] prior written notice for North America
repair facility, and [...***...] prior written notice to Supplier for all other repair facilities, at
any time conduct an audit of Supplier’s repair facilities during normal business hours to determine
compliance with Dot Hill’s requirements.

5.0 Supplier Process Requirements

     5.1 Functional Performance. Functional performance is defined in the Specifications
corresponding to the Dot Hill FRU part numbers identified in Exhibit B-5 of Exhibit
B or in the system level specifications.

     5.2 Process Commonality. Supplier shall have the capability to control and make common across
all repair locations, any and all processes that could affect Product quality or the fulfillment of
Dot Hill requirements. These processes may include but are not limited to:

	 	•	 	[...***...].

     5.3 Multiple Returns. Multiple returns means Product identified by serial and part number
returned with a similar reproducible failure symptom [...***...] or more times, unless otherwise
specified, during any [...***...] period as reported by Dot Hill or the Supplier’s testing. Supplier
shall have the capability to

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recognize, monitor, analyze and take corrective action on Multiple Returns repaired by
Supplier or Supplier authorized third parties. Dot Hill and Supplier shall agree on a means to
measure performance in this area and report as defined in Article 8 below. Dot Hill and Supplier
will mutually determine if the returned Product should be repaired or replaced. Returns for ECO
upgrade only and not due to field failure will not be considered in the Multiple Return count.

     5.4 Quality System. Supplier shall maintain a documented quality system consistent with the
requirements set forth in the ISO 9000 standards. The intent of this quality system is to provide
for business and repair processes which are repeatable, sustainable and capable of meeting Dot
Hill’s quality, cost and delivery goals.

     5.5 Root Cause Failure Analysis. Supplier shall have the capability to perform root cause and
failure analysis and report findings in a timely manner, as shown below or as stated in Dot Hill’s
request, and to effectively capture and route Product requiring root cause analysis from identified
defects or customer requests. Supplier shall maintain and track accurate and detailed records of
all such failure analysis performed. Measurement for Failure Analysis (“FA”) response is based on
the date of receipt of the defective unit requiring FA by the supplier.

          5.5.1 Notification of the requirement for a root cause analysis may be provided to Supplier by
phone, email, voicemail or fax prior to or after the return of the defective Product for repair.

          5.5.2 Reasonable requests for FA generated by Dot Hill’s Corrective & Preventive Action System
(“CPAS”) require complete FA and written response via email or a mailed report within five (5)
working days after Supplier’s receipt of the defective unit.

Failure Analysis requirements:

     a. [...***...].

     5.6 Supplier Corrective Action Request (“SCAR”). Supplier shall maintain a CLCA process for
reactive events (defects) as well as continuous improvement efforts. Any SCAR issued by Dot Hill
must be addressed by Supplier within Supplier’s CLCA

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process. SCARs may be issued as a result of events which include, but are not limited to, an
audit finding, quality defect or process failure. Supplier will respond to SCARs in accordance
with the time frames specified in the applicable SCAR.

     5.7 Cosmetics. Supplier shall comply with the requirements specified in Dot Hill’s Global
Cosmetics — Quality — Workmanship specifications.

     5.8 Labeling/Packaging. Supplier shall comply with the requirements specified in Dot Hill’s
Engineering Specification for Part Identification Label; Bar Code Marking Standard for Field
Replaceable Units; and Labeling and Packaging Procedure for Repaired FRUs, for all
reworked/repaired FRUs or new units shipped to replace FRU failures.

     5.9 Mission Critical. Products/FRUs which are Mission Critical will be designated as such in
Exhibit B-5 with the initials “MC” after the part number. All parts designated as Mission
Critical must be complaint with the Mission Critical Process and report data provided by Supplier
in the format specified in Supplier Guidelines.

6.0 Supplier Notification Requirements

     6.1 Stop Ships and Purges. Supplier shall notify Dot Hill in writing of any discrepancy in
Product quality which may have a detrimental effect on previously shipped Product or which may
result in a stop ship or purge. Supplier will make recommendations regarding the disposition of
this material. and Supplier agrees, at Dot Hill’s request, to sort and rework all material at
Supplier locations. Costs associated with stop ship and purge activity, [...***...]. Costs not
attributable to [...***...].

     6.2 Repair Process Change Notification. In the event the Supplier desires to change the
fundamental repair process in such a way that may impact form, fit, function, quality, reliability,
serviceability, or safety, Supplier shall notify Dot Hill in writing within a reasonable period (no
less than [...***...]) prior to the effective date thereof. Examples of changes which require
notification include, but are not limited to:

	 	•	 	Major test equipment or procedures,
	 
	 	•	 	Major repair processes,
	 
	 	•	 	Burn-in time of environment,
	 
	 	•	 	Repair locations,
	 
	 	•	 	Final acceptance criteria,

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	 	•	 	Packaging,
	 
	 	•	 	Re-layout or relocation of a repair line within a facility, and
	 
	 	•	 	Cosmetic criteria.

Supplier agrees to provide verbal notification to the Dot Hill Supplier Engineer, within [...***...] of
all other significant repair process changes that do not affect form, fit, function, serviceability
or safety. Supplier shall implement such changes in the process only if collected data verifies
that quality and reliability levels would be sustained or improved. Said data will be made
available for Dot Hill review upon request.

     6.3 ECOs. Supplier shall have the capability to manage ECOs throughout all repair and
stocking locations and implement such ECOs in a timely manner. Supplier will integrate its ECO and
field change/notification processes with that of Dot Hill’s, for example Dot Hill’s ECO, FIN, and
FCO processes, so that all changes made to a Product are communicated to Dot Hill in a timely and
effective manner to a Dot Hill specified web site or alternative location in accordance with the
requirements of this Agreement. Upon Dot Hill’s request, and at Dot Hill’s expense, Supplier will
provide documentation, tools and parts needed to implement ECOs at Dot Hill or Dot Hill’s TPRSs.

7.0 Quality Monitoring and Verification Requirements

     7.1 Self Surveillance. It is Dot Hill’s goal to implement Supplier Self-Surveillance where
feasible. The Supplier shall have a system of controls in place which assures consistent high
quality repair and handling of Dot Hill Products. This will include a means of tracking,
analyzing, and continuously improving post process quality results. The Supplier Self-Surveillance
Requirements are outlined in the Supplier Guidelines.

     7.2 Incoming Inspection

          7.2.1 Self-Surveillance Implemented. Dot Hill may perform incoming inspections and testing of
Repaired Products consisting of a functional test according to a Dot Hill test procedure and/or a
visual/mechanical inspection. The sample size may be adjusted at Dot Hill’s discretion and may be
based upon the Supplier’s Self-Surveillance quality level attained as described in the Supplier
Guidelines.

          7.2.2 Self-Surveillance Not Implemented. Dot Hill may utilize its [...***...] incoming inspection
results as the Supplier’s quality performance

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measurement. Acceptance at incoming inspection does not limit Supplier’s responsibilities for
Product failures.

          7.2.3 Supplier shall maintain an internal continuous improvement plan to demonstrate how it
will achieve the DPM goal set forth in Article 2 above.

     7.3 NTF Testing. All tests to be used for NTF testing will be those tests used in the
production process unless otherwise mutually agreed. The results of these tests will be used to
determine applicable NTF charges.

8.0 Reports and Data

     8.1 Monthly Quality Report. Supplier shall submit a [...***...] quality report to Dot Hill
covering three (3) distinct categories:

	 	•	 	[...***...].

Supplier is responsible for correlation analysis across the three (3) categories in order to
identify common issues. The report shall be summarized at the worldwide level and delineated as
appropriate to clearly identify areas requiring corrective action.

     8.2 Repair Data Reporting. Supplier shall comply with the requirements specified in Supplier
Repair Data Reporting Specification.

     8.3 [...***...] Business Reporting. Supplier shall be able to generate and provide to Dot Hill
the following reports on a [...***...] basis.

	 	•	 	[...***...]

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85.

 

	 	•	 	[...***...]

     8.4 [...***...] Business Reporting. Supplier shall be able to generate and provide to Dot Hill
the following reports on a [...***...] basis.

	•	 	[...***...].

     8.5 Informational Updates. Supplier will provide updates to the following items specifically
as they relate to Repair Services as part of the regularly scheduled meetings between Dot Hill and
Supplier:

	 	a.	 	State of the Supplier’s business;
	 
	 	b.	 	Any planned expansions, additions or moves;
	 
	 	c.	 	Any new state of the art processes being implemented;
	 
	 	d.	 	Additional capabilities;
	 
	 	e.	 	ISO 9000 compliance plan achievement; and
	 
	 	f.	 	Training for service, both internal and external (Supplier’s contractors).

     8.6 Additional Information. If requested by Dot Hill, Supplier shall provide within [...***...]
on hand defective inventory status by Dot Hill part number. If Supplier’s performance falls below
[...***...], additional reports may be required by Dot Hill. The format of such reports will be as
mutually agreed to by both parties.

9.0 Scrap. If scrap costs are [...***...]. All material that is pending disposition shall be
segregated from good stock and placed in a holding location. Upon receipt of written instructions
from Dot Hill as to whether Dot Hill elects to exercise option (a) or (b) below, Supplier shall:

     (a) [...***...].

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86.EMPLOYMENT
      AGREEMENT

     

    THIS
      EMPLOYMENT AGREEMENT is
      made
      as of the 1st
      day of
      March, 2007 by and between Century Aluminum Company, a Delaware corporation
      (the
“Company”),
      and
      Wayne Hale (the “Executive”).

     

    RECITALS

    A. The
      Company desires to employ Executive as its Executive Vice President and Chief
      Operating Officer; and 

     

    B. Executive
      is willing to accept such employment on the terms and conditions set forth
      in
      this Agreement. 

     

    THE
      PARTIES AGREE as follows:

     

    1.1 Position.
      Executive shall be employed as an Executive Vice President and Chief Operating
      Officer of the Company and shall devote his full business time, skill, attention
      and best efforts in carrying out his duties and promoting the best interests
      of
      the Company. Executive shall also serve as a director and/or officer of one
      or
      more of the Company's subsidiaries as may be requested from time to time by
      the
      Board of Directors. Subject always to the instructions and control of the Board
      of Directors of the Company, Executive shall report to the Chief Executive
      Officer of the Company and shall be responsible for the day-to-day operations
      of
      the Company and implementation of the Company’s short and long-range operating
      and capital plans.

     

    Executive
      shall not at any time while employed by the Company or any of its affiliates
      (as
      defined in the Severance Protection Agreement between the Company and Executive
      dated as of March 1, 2007, (as amended and restated, from time to time, the
      “SPA”), incorporated in this Agreement by this reference), without the prior
      consent of the Board of Directors, knowingly acquire any financial interests,
      directly or indirectly, in or perform any services for or on behalf of any
      business, person or enterprise which undertakes any business in substantial
      competition with the business of the Company and its affiliates or sells to
      or
      buys from or otherwise transacts business with the Company and its affiliates;
      provided that

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Executive
      may acquire and own a de minimus amount of the outstanding capital stock of
      any
      public corporation which sells or buys from or otherwise transacts business
      with
      the Company and its affiliates.

     

    1.2 Initial
      Term.
      Executive's employment hereunder shall commence as of March 1, 2007, and shall
      end December 31, 2009 (the “Initial Term”); provided, however, that unless
      earlier terminated in accordance with the terms of this Agreement, and subject,
      however, to termination as provided in Section 1.3, commencing on January 1,
      2008, and on each January 1 thereafter, the Initial Term of this Agreement
      shall
      automatically be extended for one year (each then extended year of this
      Agreement being an “Extended Term”). The Initial Term as may be extended by each
      Extended Term is hereinafter referred to as the “term of this Agreement.” For
      the second and each subsequent year during the term of this Agreement, Executive
      shall be employed at a salary not less than Executive’s salary in the
      immediately preceding year, and on other terms and conditions at least as
      favorable to Executive as those applicable to Executive during the immediately
      preceding year, or as may otherwise be agreed to by the Company and Executive
      in
      writing.

     

    1.3 Termination
      of Renewal.
      Either
      party may give effective written notice to the other party of such notifying
      party’s intention not to renew this Agreement beyond the then-current term of
      this Agreement (“Notice of Non-Renewal”), provided that such notice is given by
      the notifying party not less than 30 months prior to the end of the then-current
      term of this Agreement (or such shorter term as may be agreed to by the Company
      and Executive in writing). If a party delivers a Notice of Non-Renewal, the
      term
      of this Agreement will end as of the last day of the then-current term of this
      Agreement, or as may otherwise be agreed to by the Company and Executive in
      writing. 

     

    2.1  Base
      Salary.
      

     

    (a)
      (i) Effective
      as of March 1, 2007, Executive shall be paid an initial salary at the monthly
      rate of $37,500.00, which shall be paid in accordance with the Company's normal
      payroll practice with respect to salaried employees, subject to applicable
      payroll taxes and deductions (the “Base Salary”). Executive's Base Salary shall
      be subject to review and possible change in accordance with the usual practices
      and policies of the Company. However, Executive's base annual salary shall
      not
      be reduced to less than $450,000.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    (ii) If
      for
      any reason other than Executive's voluntary resignation, his death, or
      termination for cause pursuant to Section 7(c), Executive does not continue
      to
      be employed by the Company, Executive shall continue to receive an amount equal
      to his then current Base Salary plus an annual performance bonus equal to the
      highest annual bonus payment Executive has received in the previous three years
      (“Highest Annual Bonus”) for the then remaining balance of the term of this
      Agreement. In no event shall such payment be less than one year's Base Salary
      plus Highest Annual Bonus. The foregoing amounts shall be paid to Executive
      over
      the remaining term of this Agreement or one year (whichever is applicable)
      in
      accordance with the Company's payroll and bonus payment policies.
      Notwithstanding the foregoing, no payments under this subparagraph (ii) shall
      be
      made if the Company makes all payments to Executive required to be made, if
      any,
      under the SPA in the event of a Change in Control (as defined in the
      SPA).

     

    (b) If
      Executive resigns voluntarily or ceases to be employed by reason of his death
      or
      by the Company (or any affiliate) for cause as described in Section 7(c) of
      this
      Agreement, all benefits described in Sections 2 and 4 hereof shall terminate
      (except to the extent previously earned or vested).

     

    (c) If
      Executive's employment shall have been terminated as a result of Executive’s
      disability pursuant to Section 7(b), the Company shall pay in equal monthly
      installments for the then remaining balance of the term of this Agreement or
      one
      year, whichever is greater, to Executive (or his beneficiaries or personal
      representatives, as the case may be) disability benefits at a rate per annum
      equal to 100% of his then current Base Salary, plus amounts equal to the Highest
      Annual Bonus, less payments and benefits, if any, received under any disability
      plan or insurance provided by the Company and less any “sick leave” payments
      received from the Company for the applicable period.

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

          
      2.2 Bonuses.
      

     

    (a) Executive
      will be entitled to receive a one-time cash bonus of $225,000, payable on the
      last payroll pay date in March 2007, and otherwise in accordance with the
      Company's payroll policies.

     

    (b) Executive
      shall be eligible for an annual performance bonus in amounts between 0 and
      100
      percent of his Base Salary based upon his individual performance and achievement
      by the Company of overall objectives as determined by the compensation committee
      of the Board of Directors (“Compensation Committee”). The target range for
      Executive’s performance bonus will be between 35% and 100% of his base salary.
      The Company agrees that Executive shall be entitled to receive a cash bonus
      of
      not less than $225,000 for his services for the full year 2007, which shall
      be
      payable in the 2008 calendar year.

     

    2.3 Expenses.
      The
      Company shall pay or reimburse Executive in accordance with the Company's normal
      practices any travel, hotel and other expenses or disbursements reasonably
      incurred or paid by Executive hereunder in connection with the services
      performed by Executive, in each case upon presentation by Executive of itemized
      accounts of such expenditures or such other supporting information as the
      Company may require.

     

    2.4 Relocation;
      Housing.   

     

    (a) Executive
      shall be entitled to receive a one-time cash bonus of $75,000 payable on the
      last payroll pay date in March 2007, and otherwise in accordance with the
      Company's payroll policies, to compensate Executive for the expense and effort
      involved in relocating Executive and his family to Monterey, California.

     

    (b) The
      Company shall pay for reasonable and customary relocation expenses to Monterey,
      California, as set forth in the Relocation Policy attached to this Agreement.
      In
      addition, the Company will reimburse Executive for reasonable and customary
      temporary housing in the Monterey area, as well as storage of Executive’s
      household goods for up to 6-months from Executive’s start date. The Company will
      also reimburse Executive for Reasonable and customary travel for Executive
      and
      Executive’s immediate family members to Monterey, California, in connection with
      the relocation. Any moving, storage, transport and temporary living expense
      payments by the Company will be “grossed-up” for tax purposes to the extent that
      they are taxable as income to Executive.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    3.1 Incentive
      Plan.
      Executive shall be eligible for option grants and performance share unit awards
      under the Company's Amended and Restated 1996 Stock Incentive Plan (the
“Plan”),
      and
      the Guidelines adopted to implement the Plan. Upon approval by the Compensation
      Committee, the Company shall grant Executive options to purchase 50,000 shares
      of Company stock at an exercise price equal to the average of the high and
      low
      sales price of the stock on Executive’s first date of employment (“Start
      Date”),
      determined in accordance with the Plan and otherwise subject to the terms of
      a
      stock option award agreement. The options would vest one-third on the Start
      Date, one-third on the one year anniversary of the Start Date, and one-third
      on
      the two year anniversary of the Start Date. In addition the Compensation
      Committee shall be asked to approve a grant of 25,000 service-based performance
      shares, which grant will vest one-third on each of the one, two and three year
      anniversaries of the Start Date.

     

    3.2 Effect
      of Termination of Employment or Change in Control. 

     

    (a)
       If
      Executive shall resign voluntarily or cease to be employed by the Company (or
      an
      affiliate) for cause as described in Section 7(c) of this Agreement, except
      as
      provided in the SPA, all benefits described in Section 3 hereof shall terminate
      (except to the extent previously earned or vested and, if Executive retires,
      those which may become vested upon retirement pursuant to the terms of the
      Guidelines). 

     

    (b)
       If
      Executive dies or becomes disabled, all options which have not vested will
      accelerate and vest immediately, and, in the event of Executive's death, all
      option rights will transfer to Executive's representative. If Executive’s
      employment terminates by reason of death or disability, Executive or Executive’s
      representative may exercise all unexercised options within three years after
      such death or disability or the expiration date of the option, whichever is
      sooner.

     

    (c)
       If
      Executive dies, becomes disabled or retires, performance shares awarded to
      such
      Executive pursuant to the Guidelines shall immediately vest, but be valued
      and
      awarded at the times and in the manner awarded to other plan participants
      pursuant to the terms of such Guidelines.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    (d) If
      there
      is a Change in Control, then all options and performance shares that have not
      vested will accelerate and vest immediately. Performance shares awarded to
      Executive pursuant to the Guidelines shall be valued at 100 percent as though
      the Company had achieved its target for each relevant plan period. Executive
      shall be entitled to receive one share of the Company’s common stock upon the
      vesting of each Performance Share. Upon a Change in Control, Executive shall
      have the right to require the Company to purchase, for cash, and at fair market
      value, any shares of stock purchased upon exercise of any option or received
      upon the vesting of any Performance Share. (Terms used in this Section, unless
      defined in this Employment Agreement, are as defined in the SPA.)

     

    4.1 Other
      Benefits.
      Executive shall be entitled to participate in life, medical, dental,
      hospitalization, disability and life insurance benefit plans made available
      by
      the Company to its senior executives as well as providing global healthcare
      coverage for your spouse and dependents while they are residing overseas, and
      shall also be eligible to participate in existing retirement or pension plans
      offered by the Company to its senior executives, but, except as otherwise
      provided in Section 4.2, subject in each case to the terms and requirements
      of
      each such plan or program; and

     

    4.2 Pension
      Benefits.
      Executive shall be entitled to receive retirement benefits as
      follows:

     

    (a) Qualified
      Plan Benefits.
      Executive shall be entitled to receive, upon his retirement as provided for
      in
      the Century Aluminum Employees Retirement Plan (the “Qualified Plan”), payments
      under the Qualified Plan computed as set forth in that plan.

     

    (b) Supplemental
      Executive Retirement Benefits.
      In
      addition to payments Executive is entitled to receive under the Qualified Plan,
      Executive also shall be entitled to receive Supplemental Executive Benefits
      as
      set forth in this Agreement and in the SERB Plan, which benefits are an amount
      equal to the difference between the amount Executive would receive under the
      Qualified Plan and the amount he would be entitled to receive had his benefit
      under the Qualified Plan not been subject to the limitations on benefits and
      contributions set forth in
      Sections 401 (a)(17) and 415 of the Internal Revenue Code of 1986, as at any
      time amended, and the regulations thereunder.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    (c) Vesting.
      The
      Qualified Plan Benefits and the Supplemental Retirement Benefit described in
      Section 4.2 (b) shall be fully vested as of the date of this Agreement. Upon
      the
      termination of Executive's employment he shall be entitled to receive all such
      benefits as provided in Section 4.2 (d).

     

    (d) Time
      and Method of Payment of Benefits.
      Benefit
      payments under the SERB Plan shall be made to Executive in the same manner
      as
      provided under the Qualified Plans. Except as otherwise provided in the
      Qualified Plans, no benefits shall be payable hereunder prior to death,
      disability or termination of employment.

     

    (e) Prohibition
      on Assignment.
      Other
      than pursuant to the laws of descent and distribution, Executive's right to
      benefit payments under this Section 4.2 are not subject in any manner to
      anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
      attachment or garnishment by creditors of Executive or Executive's
      beneficiary.

     

    (f) Source
      of Payments.
      Subject
      to Section 10 of the SERB Plan (“Section 10”), all benefits under this Section
      4.2 shall be paid in cash from the general funds of the Company, and, except
      as
      set forth below, no special or separate fund shall be established or other
      segregation of assets made to assure such payments;
      provided, however, that the Company may establish a bookkeeping reserve to
      meet
      its obligations hereunder. It is the intention of the parties that the
      arrangements be unfunded for tax purposes and for purposes of
      Title
      I of the
      Employee Retirement Income Security Act of 1974. In the event of a possible
      Change in Control, and before a Change in Control occurs, the Company shall
      contribute to the Trust described in Section 10, and in the manner described
      therein, those amounts necessary to cause the present value of the Trust assets
      to be no less than the present value of the future benefits payable under the
      SERB Plan.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (g) Executive's
      Status.
      Executive shall have the status of a general unsecured creditor of the Company,
      and the SERB Plan shall constitute a mere promise to make benefit payments
      in
      the future.

     

    (h) Survival
      of Benefit.
      The
      Supplemental Retirement benefits described in this Section 4.2 shall not be
      reduced during the term of this Agreement or thereafter, and Executive's rights
      with respect to these benefits shall survive any termination (or non-renewal)
      of
      this Agreement, including, without limitation, a termination pursuant to Section
      7(c), or any amendment or termination of the SERB Plan, to the full extent
      necessary to protect the interests of Executive under this Agreement and under
      the terms of the SERB Plan.

     

    5. Confidential
      Information.
      Except
      as specifically permitted by this Section 5, and except as required in the
      course of his employment with the Company, while in the employ of the Company
      or
      thereafter, Executive will not communicate or divulge to or use for the benefit
      of himself or any other person, firm, association, or corporation without the
      prior written consent of the Company, any Confidential Information (as defined
      herein) owned, or used by the Company or any of its affiliates that may be
      communicated to, acquired by or learned of by Executive in the course of, or
      as
      a result of, Executive's employment with the Company or any of its affiliates.
      All Confidential Information relating to the business of the Company or any
      of
      its affiliates which Executive shall use or prepare or come into contact with
      shall become and remain the sole property of the Company or its
      affiliates.

     

    “Confidential
      Information” means information not generally known about the Company and its
      affiliates, services and products, whether written or not, including information
      relating to research, development, purchasing, marketing plans, computer
      software or programs, any copyrightable material, trade secrets and proprietary
      information, including, but not limited to, customer lists.

     

    Executive
      may disclose Confidential Information to the extent it (i) becomes part of
      the
      public domain otherwise than as a result of Executive's breach hereof or (ii)
      is
      required to be disclosed by law. If Executive is required by applicable law
      or
      regulation or by legal process to disclose any Confidential Information,
      Executive will provide the Company with prompt notice thereof so as to enable
      the Company to seek an appropriate protective order.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Upon
      request by the Company, Executive agrees to deliver to the Company at the
      termination of Executive's employment, or at such other times as the Company
      may
      request, all memoranda, notes, plans, records, reports and other documents
      (and
      all copies thereof) containing Confidential Information that Executive may
      then
      possess or have under his control.

     

    6. Assignment
      of Patents and Copyrights.
      Executive shall assign to the Company all inventions and improvements within
      the
      existing or contemplated scope of the Company's business made by Executive
      while
      in the Company's employ, together with any such patents or copyrights as may
      be
      obtained thereon, both domestic and foreign. Upon request by the Company and
      at
      the Company's expense, Executive will at any time during his employment with
      the
      Company and after termination regardless of the reason therefore, execute all
      proper papers for use in applying for, obtaining and maintaining such domestic
      and foreign patents and/or copyrights as the Company may desire, and will
      execute and deliver all proper assignments therefore.

     

    7. Termination.

     

    (a)
       This
      Agreement shall terminate upon Executive's death.

    (b)
       The
      Company may terminate Executive's employment hereunder upon 15 days' written
      notice if in the opinion of the Board of Directors, Executive's physical or
      mental disability has continued or is expected to continue for 180 consecutive
      days and as a result thereof, Executive will be unable to continue the proper
      performance of his duties hereunder. For the purpose of determining disability,
      Executive agrees to submit to such reasonable physical and mental examinations,
      if any, as the Board of Directors may request and hereby authorizes the
      examining person to disclose his findings to the Board of Directors of the
      Company.

     

    (c)
       The
      Company may terminate Executive's employment hereunder “for cause” (as
      hereinafter defined). If Executive's employment is terminated for cause,
      Executive's salary and all other rights not then vested under this Agreement
      shall terminate upon written notice of termination being given to Executive.
      As
      used herein, the term “for cause” means the occurrence of any of the
      following:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (i)
       Executive's
      disregard of a direct, material order of the Board of Directors of the Company,
      the substance of which order is (a) a proper duty of Executive pursuant to
      this
      Agreement, (b) permitted by law and (c) otherwise permitted by this Agreement,
      which disregard continues after 15 days' opportunity and failure to cure;
      or

     

    (ii)
       Executive's
      conviction for a felony or any crime involving moral turpitude.

     

            8. Additional
      Remedies.
      Executive recognizes that irreparable injury will result to the Company and
      to
      its business and properties in the event of any breach by Executive of the
      non-compete provisions of Section 1, the confidentiality provisions of Section
      5
      or the assignment provisions of Section 6 and that Executive’s continued
      employment is predicated on the covenants made by him pursuant to such Sections.
      In the event of any breach by Executive of his obligations under said
      provisions, the Company shall be entitled, in addition to any other remedies
      and
      damages available, to injunctive relief to restrain any such breach by Executive
      or by any person or persons acting for or with Executive in any capacity
      whatsoever and other equitable relief.

     

    9. Successors
      and Assigns.
      This
      Agreement is intended to bind and inure to the benefit of and be enforceable
      by
      Executive and the Company and their respective legal representatives, successors
      and assigns. Neither this Agreement nor any of the duties or obligations
      hereunder shall be assignable by Executive.

     

    10. Governing
      Law; Jurisdiction.
      This
      Agreement shall be interpreted and construed in accordance with the laws of
      the
      State of California. Each of the Company and Executive consents to the
      jurisdiction of any state or federal
      court sitting in California, in any action or proceeding arising out of or
      relating to this Agreement.

     

    11. Headings.
      The
      paragraph headings used in this Agreement are for convenience of reference
      only
      and shall not constitute a part of this Agreement for any purpose or in any
      way
      affect the interpretation of this Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    12. Severability.
      If any
      provision, paragraph or subparagraph of this Agreement is adjudged by any court
      to be void or unenforceable in whole or in part, this adjudication shall not
      affect the validity of the remainder of this Agreement.

     

    13. Complete
      Agreement.
      This
      Agreement and the SPA embody the complete agreement and understanding among
      the
      parties, written or oral, which may have related to the subject matter hereof
      in
      any way and neither shall be amended orally, but only by the mutual agreement
      of
      the parties in writing, specifically referencing this Agreement or the SPA,
      as
      the case may be. To the extent there is an inconsistency between the terms
      of
      this Agreement and the terms of the SPA, the Agreement which provides terms
      most
      favorable to Executive shall govern.

     

    14. Counterparts.
      This
      Agreement may be executed in one or more separate counterparts, all of which
      taken together shall constitute one and the same Agreement.

     

    CENTURY
      ALUMINUM COMPANY

     

    

    By: /s/
      Logan W. Kruger  
 /s/
      Wayne Hale 

    Logan
      W.
      Kruger  
 Wayne
      Hale 

    President
      and Chief Executive Officer

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    CENTURY
      ALUMINUM COMPANY

    RELOCATION
      POLICY - CORPORATE STAFF/MONTEREY

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