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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

EXHIBIT 10.5  

 
 

OEM AGREEMENT    
  

        THIS OEM AGREEMENT (the "Agreement") is made and entered into on
May 20, 2002 by and between DOT HILL SYSTEMS CORPORATION, having a place of business at 6305 El Camino Real, Carlsbad, California 92009
(hereinafter "Dot Hill"), and INFORTREND TECHNOLOGY INC., having a place of business at 8F,
No-102 Chung-Shan Rd., Sec. 3, Chung-Ho City, Taipei Hsien, Taiwan, Republic of China (hereinafter "Infortrend"). 

 
 

RECITALS    
  

        WHEREAS, Dot Hill is engaged in the business of manufacturing and providing computer storage solutions to
prospective computer industry clients, both directly to end users and through resellers. 

        WHEREAS, Infortrend is engaged in the business of manufacturing storage computer components; and 

        WHEREAS, Dot Hill desires to purchase certain storage computer components from Infortrend to incorporate into Dot Hill's products for use,
rental and sale to others, and Infortrend desires to sell such storage computer components to Dot Hill. 

        NOW THEREFORE, in consideration of the promises and the covenants set forth herein and intending to be legally bound, the parties hereby
agree as follows: 

 
 

AGREEMENT    
  

1.    DEFINITIONS. Words, as employed in this Agreement, shall have their normally accepted meanings. The terms
"herein" and "hereof', unless specifically limited, shall have reference to the entire Agreement. The
word "shall" is mandatory, the word "may" is permissive, the word
"or" is not exclusive, the words "includes" and
"including" are not limiting and the singular includes the plural and vice versa. The following terms shall have the described meanings: 

        1.1  "Accepted" shall mean the acceptance of a Product by the procedure as
specified in Section 4.2(a). 

        1.2  "API" shall mean Infortrend's proprietary application programming
interface(s) provided in Source Code and Object Code form, which enable Dot Hill storage products to interoperate with the Licensed Software and Licensed Firmware. 

        1.3  "Business Day" or "Working
Day" shall be each week day that companies, with a business similar to the business of each of the parties, are generally open for business in California and in Taiwan, as the
case may be. 

        1.4  "Demand Replenishment Program" shall mean the program which provides for
Infortrend-owned Product located at a designated [...***...] 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 Dot Hill by means of a Demand Trigger, as further described in Section 4.4 and  Exhibit H. 

        1.5  "Demand Trigger" shall mean the mechanism, whether written or by
electronic means in a method agreed to by the parties, by which Dot Hill communicates to Infortrend the required 

1

 

Product(s), quantities, delivery locations and delivery timeframes, for Orders delivered by Dot Hill to Infortrend in accordance with the terms of this Agreement. 

        1.6  "Documentation" shall have the same meaning as that term is ascribed
thereto in the definitions section of Exhibit K. 

        1.7  "Dot Hill Contractor" shall mean any of the following third parties that
must be authorized by Dot Hill in writing to purchase Products directly from Infortrend for integration into a product that is designed by or for Dot Hill: (a) Sun,
(b) [...***...] Corporation, or (c) any [...***...] manufacturer that produces products by or for Dot Hill and is approved in writing by
Infortrend, which approval shall not be unreasonably withheld, delayed or conditioned. Such authorization or a request by Dot Hill for Infortrend to approve such [...***...]
manufacturer as an authorized Dot Hill Contractor will be provided by Dot Hill to Infortrend at or about the same time it is provided by Dot Hill to such Dot Hill Contractor. 

        1.8  "Effective Date" shall mean the effective date of Dot Hill's Product
Purchase Agreement with Sun. 

        1.9  "Error" shall have the same meaning as that term is ascribed thereto in
the definitions section of Exhibit K. 

        1.10 "Error Correction" shall have the same meaning as that term is ascribed
thereto in the definitions section of Exhibit K.

        1.11 "Escrow Agreement" shall mean that certain Escrow Agreement by and
between Dot Hill, Infortrend, Sun and the Escrow Agent. 

        1.12 "Existing Agreement" shall mean that certain OEM Agreement by and
between Infortrend and Dot Hill that was executed by Stone Lo on September 8, 2000 and Jim Lambert on September 22, 2000. 

        1.13 "General Availability" or
"GA" shall mean the first production shipment of commercial quantities of a Product by Dot Hill to a customer. 

        1.14 "Intellectual Property Rights" shall mean all intellectual property
rights worldwide arising under statutory or common law or by contract and whether or not perfected, now existing or hereafter filed, issued, or acquired, including all (a) patent rights;
(b) rights associated with works of authorship, including copyrights and mask work rights; (c) rights relating to the protection of trade secrets and confidential information; and
(d) any right analogous to those set forth herein and any other proprietary rights relating to intangible property; but specifically excluding trademarks, service marks, trade dress, trade
names and service names. 

        1.15 "Leadtime" shall mean the number of days from placement of a Order or
Demand Trigger to the time of delivery to the specified delivery location that the parties may mutually agree upon initially and from time to time. The parties will engage in commercially reasonable
efforts to determine the initial Leadtimes within thirty (30) days after the Effective Date. 

        1.16 "Licensed Firmware" shall mean Infortrend firmware which forms an
integral part of a Product, including: (a) any diagnostics, set-up configuration software and device drivers included in such microcode; and (b) any Updates and Upgrades to
such firmware that are made available by Infortrend to Dot Hill under this Agreement. 

        1.17 "Licensed Software" shall mean the Infortrend software programs that are
identified in Exhibit A, if any, including: (a) any diagnostics, set-up configuration software and device drivers included in
such programs; and (b) any Updates and Upgrades to such software programs that are made available by Infortrend to Dot Hill under this Agreement. As of the date of execution of this Agreement
by both parties, there are no Infortrend software programs currently identified on Exhibit A. 

2

 

        1.18 "Manufacturing Agreement" means that certain Manufacturing Agreement,
dated May 20, 2002, by and between Dot Hill and Solectron Corporation, solely in the form in which it exists on such date, in the form provided by Dot Hill to Infortrend prior to the date of
execution of this Agreement by the parties. 

        1.19 "Manufacturing Rights Agreement" means that certain Manufacturing Rights
Agreement by and between Dot Hill, Infortrend and Sun. 

        1.20 "Minimum Purchase Rights Period" means the period that begins on the
Effective Date and ends [...***...] immediately thereafter. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        1.21 "Object Code" shall mean the fully complied version of a software
program or microcode that can be executed by a computer and used by a user without further compilation. 

        1.22 "Order" shall mean, individually and collectively, a procurement
purchase order issued for Products by Dot Hill or a Dot Hill Contractor. 

        1.23 "Product(s)" shall mean the storage software products and hardware
products, including related firmware included as part thereof, set forth in Exhibit A. 

        1.24 "Quarter" shall mean each succeeding three (3) consecutive month
period during the term of this Agreement, beginning with the first day of the third full calendar month after the month in which the Effective Date occurs. 

        1.25 "Specifications" shall mean the applicable product specifications for
each Product that is set forth in Exhibit E to this Agreement. 

        1.26 "Source Code" shall mean program code in high-level computer
language readable by humans skilled in the language. "Source Code" includes available related development documentation, including source code comments, and internal development tools necessary to
develop the Licensed Software and Licensed Firmware. 

        1.27 "Sun" shall mean Sun Microystems, Inc. and its affiliates. 

        1.28 "Supplier Guidelines" shall mean Dot Hill's then-existing
supply chain management directives and include, without limitation, requirements in the areas of quality, qualification, compliance, connectivity, cost, supply and performance, and may include
requirements for auto-swap, co-planning, Demand Replenishment Program certification, direct ship, supplier performance management and other initiatives. 

        1.29 "Unexpected Failure" shall mean identical, reproducible Product failures
that are due to the same or substantially similar cause, which occur in the same series of Product and impair the use of the Product and which occur within [...***...] after
the date of delivery of the Product, and are equal to or in excess of [...***...] of the total number of Product from any production lot or [...***...]
of the total number of Products delivered to Dot Hill during any [...***...] period (the "Unexpected Failure Rate"), resulting
from defects in materials, workmanship, manufacturing process or design. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        1.30 "Unique Components" shall mean those components or raw materials Dot
Hill and Infortrend have agreed in writing upon from time to time, on a Product by Product basis, are to be used exclusively in Products. 

3

 

        1.31 "Update" shall have the same meaning as that term is ascribed thereto in
the definitions section of Exhibit K.

        1.32 "Upgrade" means a releases, modification, enhancement, or extension to
the Licensed Software and Licensed Firmware containing major new features or functionality. 

        1.33 "Upside Support" shall mean the applicable maximum percentage increase
set out in Exhibit H of the quantity of each Product constituting the undelivered portion, from time to time, of quantities of such Product to be
delivered in the then-current Quarter pursuant to Orders that are received on or before the first day of such Quarter, or the then-current forecast for such Quarter, as of the
first day of such Quarter, whichever shall result in the higher amount ("Projected Quarterly Deliveries"), in excess of the Projected Quarterly Deliveries for such Quarter that, upon request by Dot
Hill, Infortrend shall sell and deliver to Dot Hill under this Agreement. 

2.    PRODUCT PRODUCTION, DISTRIBUTION RIGHTS AND DEDICATED PERSONNEL  

        2.1    Product Production.    Infortrend will notify Dot Hill, in writing, of the physical address of the facilities
in which the Products will be produced, prior to the production of each Product. Dot Hill requires that Infortrend use a company that provides manufacturing services ("External Manufacturer") to
manufacture the Products. The parties will identify on Exhibit D all External Manufacturers and location of the facilities for manufacture of the
Products. Supplier will contract with the identified External Manufacturers for the manufacturing services related to the Products. Infortrend shall not change any External Manufacturer or use its
facility in Taiwan to manufacture Products without the prior written approval of Dot Hill, which approval will not be unreasonably withheld, delayed or conditioned. Use of External Manufacturers shall
not relieve Infortrend from its duties under this Agreement. The External Manufacturers will build to the Specifications, [...***...]. 

        2.2    Reverse Engineering.    Except as otherwise provided in any license rights provided to Dot Hill in this
Agreement or in the Manufacturing Rights Agreement, Dot Hill shall have no right to manufacture, to modify or to copy the Products. Except as otherwise provided in Section 2.5, Dot Hill shall
not use any confidential or proprietary information of Infortrend to create any products which are functionally, visually or otherwise similar to any Products. Dot Hill shall not reverse engineer,
disassemble or decompile any of the Products, or make any attempt to obtain or derive the source code from any Products provided in Object Code form under this Agreement, unless and except to the
extent otherwise permitted under applicable law. Nothing herein shall limit Dot Hill's ability to purchase components comparable to the Products from other sources or to independently develop any
components or products, including any components comparable to the Products. 

        2.3    License Rights    

        (a)  Subject to Dot Hill's payment of all applicable fees as are set forth on  Exhibit A, if any, for a Product, Infortrend hereby grants Dot Hill a
non-exclusive, royalty-free, fully
paid-up, perpetual, worldwide license to use, reproduce, display, perform and distribute, directly or indirectly through multiple tiers, the Licensed Firmware solely as integrated into
each such Product. 

        (b)  Subject to Dot Hill's payment of all applicable fees as are set forth on  Exhibit A, if any, for Licensed Software provided to Dot Hill under this
Agreement and intended for use in or with a Product, Infortrend hereby
grants Dot Hill a non-exclusive, royalty-free, fully paid-up, perpetual, worldwide license to use, reproduce, display, perform and distribute, directly or
indirectly through multiple tiers, of the Licensed Software solely as integrated in or used with each such Product. 

        2.4    Infortrend Personnel.    Infortrend shall provide certain personnel to service the Dot Hill account. These will
initially be an Account Manager, a Program Manager, a Systems Support Engineer, 

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a Quality Engineer, and a Buyer/Planner. The Systems Support Engineer shall be located in California or such other location as may be agreed to by Dot Hill, which agreement shall not be unreasonably
withheld, delayed or conditioned. The Quality Engineer shall be located within the San Francisco Bay Area of California until such time as the DPM levels set forth in  Exhibit F have been obtained
for at least four (4) consecutive calendar weeks. All other personnel may be located at a location determined
by Infortrend. All such individuals assigned will be replaced upon reasonable notice from Dot Hill if reasonable cause exists for such replacement. Infortrend will select and identify all such
personnel within a commercially reasonable period after the Effective Date of this Agreement. [...***...] The individuals will be required to execute normal confidentiality
agreements and comply with rules established by Dot Hill for employees of other companies working in Dot Hill facilities. Details of the roles of the personnel will later be mutually determined by the
parties. Dot Hill will provide office and lab space as Dot Hill reasonably deems appropriate for the Systems Support Engineer if he or she works at Dot Hill. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        2.5    API License.    Infortrend hereby grants to Dot Hill a non-exclusive, royalty-free,
fully paid-up, perpetual, worldwide license to use and reproduce the API solely to modify the software embedded in Dot Hill products as necessary to enable Dot Hill products to
interoperate with the Licensed Software and Licensed Firmware, and to distribute the API included in the modified Dot Hill software solely for use with the Products. Such modified Dot Hill software
shall not provide exposed access to the API. The API shall be deemed to be the Confidential Information of Infortrend and treated in accordance with  Exhibit C. Infortrend represents and warrants to
Dot Hill that the API does not contain any virus, worm or other harmful code. Except as set
forth in the immediately preceding sentence of this Section 2.5, Dot Hill acknowledges that Infortrend has made no representations or warranties with respect to the API and that the API is not
covered by the Specifications. 

3.    EXCLUSIVITY, NEW PRODUCTS AND UNIQUE COMPONENTS  

        3.1    Exclusivity.    At all times during the Minimum Purchase Rights Period, and also thereafter while this
Agreement is in effect, Infortrend hereby grants to Dot Hill the exclusive right to market, distribute and support the Infortrend [...***...] SCSI controller product (the
"Infortrend [...***...] SCSI Controller"); provided, however, that (a) if Dot Hill fails to pay for at least [...***...] of the Infortrend
[...***...] SCSI Controllers no later than [...***...] after the later of (i) [...***...], or
(ii) [...***...], and (b) such failure does not result from a delay or failure of Infortrend to deliver Products in a timely manner to Dot Hill, then the
foregoing exclusive right shall become non-exclusive. Nothing in this Section 3.1 shall constitute or be deemed to be any commitment by Dot Hill to purchase any quantities of any
Products. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        3.2    Quarterly Management Reviews.    The parties will conduct quarterly management reviews of the Products. During
such reviews and to the extent not prevented by confidentiality restrictions, the parties will share with each other product plans and roadmaps for future products. 

        3.3    Unique Components.    Infortrend shall not use, sell, distribute or otherwise transfer any configuration of a
Product that contains any Unique Components. Nothing in this Section 3.3 shall limit the ability or right of Infortrend to use, sell, distribute or otherwise transfer any configuration of any
Product that does not contain such Unique Components. 

5

 

4.    ORDERING TRANSACTIONS  

        4.1    Prices    

        (a)    The prices for Products purchased under this Agreement shall be as indicated in  Exhibit A. Except as
otherwise set forth in Exhibit A, Product prices are inclusive of
freight and all taxes. All amounts set forth in Exhibit A are in U.S. dollars. 

        (b)    Infortrend represents and warrants that the prices charged by Infortrend to Dot Hill for each of
the Products [...***...]. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        4.2    Payment Terms    

        (a)  Payment for each Product shall be made to Infortrend within [...***...] after Products are drawn
from a [...***...] location pursuant to the provisions of Exhibit H based on a Demand Triggers. Dot Hill shall have the
right to inspect, or have inspected, Products within fifteen (15) days after such pull, and if Dot Hill reasonably determines that a Product is non-conforming, it may return such
Product to Infortrend during such period. If a Product is not returned to Infortrend during such period, it shall be deemed "Accepted." Upon the return of a Product during such fifteen (15) 
day period because it is not conforming, credit shall be provided by Infortrend to Dot Hill for the original amount due for such Product. All returns will be made pursuant to the RMA process described
in this Agreement. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        (b)  Dot Hill's credit limit for purchases or all products of Infortrend, whether under this Agreement or otherwise, shall be
a total of [...***...] U.S. Dollars (U.S. [...***...]. This credit limit may be increased by Infortrend upon written notice to Dot Hill. If Dot Hill
exceeds the credit limit, Dot Hill shall pay Infortrend immediately an amount necessary to bring its aggregate outstanding credits within the credit limit. This credit limit may be decreased in a
reasonable amount by Infortrend upon thirty (30) days written notice if Dot Hill's overall liquidity position changes in a detrimental manner. When Dot Hill reaches the credit limit, Infortrend
shall not be obligated to provide to Dot Hill any additional products or services under this Agreement until the outstanding credits are brought within the credit limit, and Infortrend may
[...***...] any Products on order to other customers of Infortrend. If Dot Hill brings the outstanding credits under the credit limit, Infortrend shall deliver Products
previously ordered in accordance with the Demand Replenishment Program in Section 4.4 of this Agreement to the extent the dollar amount of the Products to be delivered does not cause Dot Hill
to exceed the credit limit. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        (c)  If Dot Hill fails to pay an overdue payment within fifteen (15) days after the day on which it is due, Infortrend,
at its sole option and upon five (5) business days notice to Dot Hill, may suspend all or any portion of Infortrend's performance hereunder, pending Dot Hill curing such default. Such
suspension of performance shall not limit Infortrend's other rights or remedies with respect to overdue payments. 

        4.3    Ordering.    This Agreement does not constitute a contract to purchase any quantity of Products from
Infortrend. In the event that Dot Hill elects to purchase Products from Infortrend, Dot Hill shall issue and deliver an Order to Infortrend. Such Order shall be submitted in writing or via electronic
data interchange ("EDI"). Each Order shall specify quantity, part number, price, and 

6

 

requested and other such matters necessary for the individual transaction to be adequately described. Infortrend shall accept Dot Hill's Orders to the extent that such Orders are consistent with Dot
Hill's then-current forecast for the applicable period and applicable Leadtimes. The parties will use commercially reasonable efforts to implement, within
[...***...] of the Effective Date, the systems and procedures that would enable them to submit/receive such Orders in compliance with  Exhibit G. Neither party will be considered in breach of its
obligations under this Section 4.3 if it does not implement such systems and
procedures within such [...***...] period, provided such party has used commercially reasonable efforts to implement such systems and procedures. 

        4.4    Demand Replenishment Program.    Infortrend shall maintain an inventory of the Products set forth in  Exhibit H as
implemented through the Demand Replenishment Program set forth on Exhibit H.
The costs associated with the maintenance of such inventory shall be borne entirely by Infortrend. 

        4.5    Rescheduling and Cancellation    

        (a)  Dot Hill shall have the same rights to cancel Orders for and reschedule delivery of Products under this Agreement as Dot
Hill has with [...***...], with respect to Dot Hill products that contain Products, and Infortrend shall have the same related obligations, together with any mitigation effort
obligations, under this Agreement as [...***...], with respect to Dot Hill products that contain Products. Such rights and obligations are hereby incorporated by reference into
this Section 4.5(a) and shall form a part of this Agreement. 

        (b)  Limitation on Dot Hill Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY, DOT HILL SHALL NOT BE LIABLE TO OR OBLIGATED TO PAY INFORTREND UNDER
THIS SECTION 4.5 OR UNDER SECTION 7 OF EXHIBIT H OF THIS AGREEMENT FOR ANY CARRYING COSTS AND OTHER CHARGES FOR ANY PURCHASES OF PRODUCTS WHICH ARE TO BE MADE BY ANY DOT HILL
CONTRACTORS.

        4.6    Upside Support.    The terms and conditions for Upside Support are set forth in  Exhibit H. Infortrend will use
commercially reasonable efforts to accommodate Dot Hill requests for Products beyond the Upside Support agreed to
in Exhibit H. Upon designation of a Dot Hill product that includes a Product as end of life by Dot Hill, Infortrend shall not be required to
provide for Upside Support for such Product unless mutually agreed by the parties. When requested by Dot Hill, Infortrend shall use commercially reasonable efforts to sell and deliver Product(s) to
Dot Hill at an accelerated delivery schedule. 

        4.7    Dot Hill Contractors.    Subject to the foregoing provisions in this Section 4.7 and upon receipt by
Infortrend of a written authorization from Dot Hill, a Dot Hill Contractor shall have the right to issue purchase orders directly to Infortrend for the purchase of Products under this Agreement, up to
Dot Hill's authorized limit in such authorization; provided, however, each such purchase shall be subject to a separate reasonably established credit limit by and between Infortrend and such Dot Hill
Contractor, as such credit limit may change from time to time upon mutual agreement by and between Infortrend and such Dot Hill Contractor. Upon Infortrend's receipt of such authorization from Dot
Hill, Infortrend will determine if an authorized Dot Hill Contractor is creditworthy to purchase Products from Infortrend, which determination shall be reasonably made. If Infortrend determines that
such Dot Hill Contractor is creditworthy, then Infortrend shall establish an appropriate credit limit with such Dot Hill Contractor and fulfill purchase orders received from Dot Hill Contractors under
the same terms and conditions of this Agreement as if Dot Hill had submitted such purchase orders in its own name to Infortrend for fulfillment under this Agreement. With respect to such purchases and
the related Products, the applicable Dot Hill Contractor shall have all of the obligations of Dot Hill, as are set forth in this Agreement with respect to the Products that such Dot Hill Contractor
purchases. All purchases made by Dot Hill Contractors shall be aggregated for the purpose of determining all
applicable volume discounts and any exclusivity conditions that exist under this Agreement. Each Dot Hill Contractor shall be responsible to pay Infortrend directly for Products that it orders. 

7

 

Notwithstanding anything to the contrary in this Agreement, Dot Hill shall not be liable to pay for any Products that are ordered by Dot Hill Contractors, and shall not be liable to Infortrend for
any carrying costs, charges or other fees under this Agreement that apply to the Products ordered by Dot Hill Contractors, or for any liabilities or carrying costs which pertain to raw materials or
components that are to be used in Products purchased by Dot Hill Contractors. The responsibility for the payment of all such liabilities or costs shall borne solely by such Dot Hill Contractors. 

        4.8    Qualification, Demonstration, Support and Training Units.    At the request of Dot Hill, Infortrend shall sell
to Dot Hill a total of up to [...***...] units of Products at the [...***...]: (a) [...***...] units that may be
purchased, and (b) [...***...]. All such units of Products will be used in products that are to be used by Sun for qualification, demonstration, support, training or
other internal purposes. Unless otherwise agreed by the parties, each purchase of [...***...] will be in an [...***...]. All units will be available for
purchase by Dot Hill prior to revenue release of the Products. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

5.    FORECAST, PRODUCT PRICING AND INVENTORY MANAGEMENT  

        5.1    Forecasts.    Dot Hill shall provide Infortrend with at least a [...***...] rolling
forecast, by month, of its intended purchases of Products, updated monthly by the third business day of each month (the "Rolling Forecast"). The Rolling
Forecast will be for Infortrend's convenience only and shall not create any obligation or liability for Dot Hill to purchase Product. Such forecasts shall be prepared in good faith, on a reasonable
basis, based primarily on Dot Hill's internal forecasts of its sales for the period. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        5.2    [...***...].    Infortrend shall provide to Dot Hill a
[...***...]. Infortrend will work actively to achieve cost reductions on all materials/processes associated with a Product. Infortrend will provide to Dot Hill an
anticipated [...***...], on a quarterly basis, as part of Dot Hill's Product Cost Review process. Dot Hill encourages Infortrend to suggest to Dot Hill changes to
materials/processes, however small, that will result in improved performance, reliability or yield of Products. Any such changes proposed by Dot Hill are subject to the notification and acceptance
provisions of Exhibit F. If any such changes reduce the cost of a Product ordered by Dot Hill after the implementation of such change,
[...***...] of the resulting cost savings, reduced by the cost of implementing such change until fully credited, in excess of the price reduction for such Product made as
provided above, will be passed on to Dot Hill with respect to each such Product. The remaining [...***...] of such costs savings will be retained by Infortrend. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

6.    ALLOCATION, PACKING AND SHIPPING  

        6.1    Allocation.    Infortrend will notify Dot Hill promptly whenever Infortrend identifies a reasonable likelihood
that there is or will be a materials or capacity constraint that adversely affects Infortrend's ability to meet Dot Hill's Rolling Forecast for Product(s) ("Supply
Constraint"). During any period of Supply Constraint, Infortrend agrees, at a minimum, to allocate materials and capacity to Dot Hill under whichever of the following formulas
would give Dot Hill the greatest quantity of Products: (i) in proportion to Dot Hill's [...***...] of all of Infortrend's customer Orders for the previous
[...***...] full months for Products which use such scarce materials or capacity; (ii) in 

8

 

proportion to Dot Hill's [...***...] of all of Infortrend's [...***...] for Products which use the scarce materials or capacity; or (iii) any
allocation formula which Infortrend utilizes with any other customer. 

        6.2    Packing and Labeling.    Products shall be suitably packed and shipped with the requirements of common
carriers, and in such manner as to assure against damage from transportation, weather and other environmental conditions. Infortrend shall adhere to the requirements set forth in the Dot Hill
Packaging and Labeling Requirements Policy in the form provided to Infortrend by Dot Hill prior to the date of execution of this Agreement by both parties (the "Policy"). Dot Hill may amend such
Policy from time to time, and, subject to the succeeding sentences, Infortrend shall be obligated to adhere to the requirements of any reasonable amendment to the Policy within thirty (30) days
of receiving written notice of such amendment. Infortrend will inform Dot Hill of any amendments to such Policy that will increase Infortrend's costs no later than ten (10) business days after
such changes are provided by Dot Hill to Infortrend. Infortrend shall have no obligation to adhere to any such amendment unless such cost increase is material in nature, and Dot Hill agrees to
reimburse Infortrend for such cost increase. 

        6.3    Packing List.    A packing list shall accompany each shipment indicating the Products included therein. Dot
Hill Order numbers, Products serial numbers and Part numbers shall be indicated on the packing list and all shipping containers. 

        6.4    Risk Of Shipping.    Delivery shall be [...***...] to a Dot Hill-specified
delivery destination. Infortrend shall be responsible for any loss or damage to Product due to Infortrend's failure to properly preserve, package, or handle the Product. Notwithstanding any prior
inspection, Infortrend will bear all risk of loss, damage or destruction to the ordered Products until delivery to the specified delivery location. 

        6.5    Late Shipping.    If Infortrend is unable to deliver the total quantity of Products ordered on the scheduled
delivery date, Infortrend shall notify Dot Hill promptly of such inability, and Dot Hill may, at its sole option, consent to partial delivery of such Products. If Dot Hill does not consent to such
partial delivery, Dot Hill may: (1) reschedule the delivery; or (2) if such partial delivery is due to the fault of Infortrend, cancel the affected portion of the order without any
further obligation to Infortrend for the canceled portion. Partial deliveries shall be separately invoiced by Infortrend. In addition, if it should be reasonably determined that a shipment of Product
will not be delivered on the agreed delivery date, upon Dot Hill's request, Infortrend shall, at Infortrend's expense, use such expedited transportation as may be necessary to deliver Product at the
earliest possible date; provided, however, that if such delay is caused by a force majeure event, then, if Dot Hill requests expedited delivery, Dot Hill shall be responsible for any Dot
Hill-authorized transportation costs in excess of normal costs. 

7.    DOCUMENTATION, TRAINING, QUALITY, PROCUREMENT SPECIFICATION CHANGES AND TECHNICAL SUPPORT  

        7.1    Documentation.    Infortrend shall, upon request, provide Dot Hill with documents relating to the
specifications and capabilities of the Products. To the extent that there are any inconsistencies between such documents for the Product and the Specifications, the Specifications will govern, and
such documents shall not constitute a representation or warranty of Infortrend with respect to any matter therein. 

        7.2    Training.    Upon mutual agreement of the schedule and cost to be incurred, Infortrend shall provide training
to enable Dot Hill to install, operate, test, and maintain the Products. 

        7.3    Quality.    Infortrend shall at all times deliver Products which conform in all material respects to the
Specifications, and Infortrend shall comply with Infortrend Quality Program and Customer Support Quality Program attached as Exhibit F and  Exhibit F-1. The quantity of Products which Infortrend provides to Dot Hill shall not exceed the Defects Per Million
("DPM") levels set forth in 

9

 

 Exhibit F. Dot Hill shall not be required to accept any product of Infortrend that is not qualified by or for Dot Hill for use in or with Dot Hill's products, except as
otherwise mutually agreed upon by the parties, in writing. Dot Hill acknowledges that the Products, that have been supplied previously to Dot Hill before the date of execution of this Agreement by
both parties, have been qualified by Dot Hill. 

        7.4    Specification Changes.    Dot Hill may, at any time, make a revision to the Specifications with Infortrend's
approval, which approval shall not be unreasonably withheld, delayed or conditioned by Infortrend. Dot Hill shall give Infortrend written notice of each such change. Any such change shall take effect
within a commercially reasonable period of time after its approval by Infortrend. If a requested revision by Dot Hill to the Specification results in a material increase in costs or time required for
performance by Infortrend, then Infortrend shall not have any obligation to implement such revision unless an appropriate adjustment is made in the price or delivery requirements for the applicable
Product. 

        7.5    Technical Support.    If Products do not conform to the Specifications or appear to be defective, Dot Hill
shall promptly notify Infortrend of such asserted defect or non-conformity and provide Infortrend with necessary and required information for Infortrend to make an analysis of such
asserted defect or non-conformity. Infortrend's obligations with respect to technical support of Products, including technical support for defective or non-conforming Products,
are set forth in Exhibit F, Exhibit F-1, and  Exhibit K hereto. 

        7.6    Supplier Guidelines.    Infortrend will use commercially reasonable efforts to comply with the Supplier
Guidelines provided to Infortrend by Dot Hill prior to the date of execution of this Agreement by both parties. Dot Hill may, from time to time, make revisions to the Supplier Guidelines. Infortrend
will review each revision of the Supplier Guidelines, that is provided by Dot Hill to Infortrend, within thirty (30) days of Infortrend's receipt thereof. If Infortrend has any reason to
believe it may not be able to comply with any revision to the Supplier Guidelines, then Infortrend shall promptly notify Dot Hill in writing of such compliance issue, and the parties will negotiate to
promptly resolve any reasonable objections that Infortrend has raised regarding its compliance with such revision. If a requested revision by Dot Hill to the then-existing Supplier
Guidelines results in any material increase in costs or time required for performance by Infortrend, then Infortrend shall not have any obligation to implement such revision unless an appropriate
adjustment is made in the price or delivery requirements for the applicable Product. Infortrend acknowledges that Dot Hill will use the Supplier Guidelines to evaluate Infortrend's performance,
including with respect to requirements that are the subject of unresolved Infortrend objections. 

        7.7    Dot Hill Initiatives.    Infortrend will implement or otherwise negotiate with Dot Hill the provisions of all
Dot Hill Break Through Supply Chain ("BTSC") initiatives that are applicable to Infortrend's performance under this Agreement and provided by Dot Hill to Infortrend, including, without limitation,
Advanced Material Planning (AMP) and scorecarding. Infortrend will review each of such Dot Hill initiatives, provided to Infortrend by Dot Hill, within thirty (30) days of Infortrend's receipt
thereof. If Infortrend believes it may not be able to comply with any such Dot Hill initiatives, Infortrend shall promptly notify Dot Hill of its belief and the parties will negotiate to promptly
resolve
any reasonable objections that Infortrend raised regarding its compliance with the initiative. If any such BTSC initiatives, or any requested revisions thereto by Dot Hill, results in any material
increase in costs or time required for performance by Infortrend, then Infortrend shall not have any obligation to implement such BTSC initiative or such revision, as the case may be, unless an
appropriate adjustment is made in the price or delivery requirements for the applicable Product. Infortrend acknowledges that Dot Hill will use the BTSC initiatives to evaluate Infortrend's
performance, including with respect to requirements that are the subject of unresolved Infortrend objections. 

10

 

8.    WARRANTY AND RMA  

        8.1    Warranty Period.    Infortrend warrants that the Product(s) will be free from defects in design, materials and
workmanship and will conform in all material respects to the Specifications on the date on which Dot Hill takes delivery of the Product and for [...***...] thereafter.
Infortrend represents and warrants to Dot Hill that Products do not contain any virus, worm or other harmful code. With respect to any Product that is defective or non-conforming,
Infortrend shall either (i) ship a replacement Product within three (3) business days while this Agreement is in effect, and within five (5) business days after the expiration or
termination of the Agreement, after receipt of notification from Dot Hill that the Product is defective or non-conforming, or (ii) credit Dot Hill for the amount
[...***...] for such Product immediately after its return to Infortrend. Infortrend shall maintain sufficient quantities of Product under the Demand Replenishment Program to
meet these obligations. Infortrend makes no, and hereby disclaims, any warranty with respect to any design provided by Dot Hill. Each repaired or replaced Product shall be warranted, as provided in
this Section 8.1, for the longer of [...***...] from the date of shipment of the repaired or replacement Product or the remainder of the original warranty period on the
defective or non-conforming Product, whichever is longer. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        8.2    WARRANTY DISCLAIMER.    EXCEPT FOR THE EXPRESS WARRANTIES STATED IN THIS SECTION 8 OF
THE AGREEMENT, INFORTREND MAKES NO ADDITIONAL WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER. IN PARTICULAR, ANY AND ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE
ARE EXPRESSLY EXCLUDED. IN ADDITION, INFORTREND MAKES NO WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR COURSE OF DEALING. IF INFORTREND HAS FULLY AND SATISFACTORILY PERFORMED ALL OF ITS OBLIGATIONS
UNDER THIS ARTICLE 8 WITH RESPECT TO UNITS OF PRODUCT IN A TIMELY FASHION, THEN THE REMEDIES IN THIS
SECTION 8 SHALL CONSTITUTE DOT HILL'S SOLE REMEDY FOR A BREACH OF INFORTREND'S WARRANTIES IN THIS ARTICLE 8 WITH RESPECT TO SUCH UNITS.

        8.3    RMA Request Within Warranty Period.    Dot Hill shall request a Return Material Authorization
("RMA") number from Infortrend prior to returning any defective or non-conforming Products to Infortrend. Dot Hill shall submit warranty
claims to Infortrend in writing, within thirty (30) days after becoming aware of any defect or non-conformity, with a brief description of the defect or non-conformity,
indicating the date of the claim and model and serial number of the defective or non-conforming Products. 

        8.4    Repair Schedule And Freight Expense.    For the purpose of this Section 8.4, the term "Designated
Location" shall mean Infortrend's locations in California, or such other Infortrend location in the Western United States that is reasonably acceptable to Dot Hill. During the warranty period, Dot
Hill may return defective or non-conforming Products to the Designated Location, freight, duty, taxes, customs and brokerage fees prepaid, and the Designated Location shall ship the
replacement Products to Dot Hill or a Dot Hill-designated location in the Western United States within three (3) business days while this Agreement is in effect, and within five
(5) business days after the expiration or termination of the Agreement, of Infortrend's receipt of an RMA request from Dot Hill, freight, duty, taxes, customs and brokerage fees prepaid. Out of
warranty items may be returned by Dot Hill to the Designated Location, freight, duty, taxes, customs and brokerage fees prepaid, and Infortrend shall ship replacement Products to Dot Hill or a Dot
Hill-designated location in the Western United States within three (3) business days of Infortrend's receipt of an RMA request from Dot Hill, freight, duty, taxes, customs and
brokerage fees prepaid and billed, using a transportation method approved by Dot Hill which is reasonably acceptable to Infortrend. If Infortrend does not receive the 

11

 

defective or non-conforming product within thirty (30) days of receiving the RMA request, then Infortrend will invoice Dot Hill for the previously shipped replacement Product, and
the related freight, duty, taxes, customs and brokerage fees, and Dot Hill shall pay such invoice within thirty (30) days of its receipt thereof. 

        8.5    Prices And Payment Term for Repair Service Charge    

        (a)  During the warranty period for a Product, the repair or replacement service provided by Infortrend is free unless such
Product is mishandled, including, without limitation, by the Product being operated on reverse polarity, causing the Products to be burned. 

        (b)  During the Term of this Agreement, the Out of Warranty Repair Price Schedule shall be as indicated in  Exhibit B. All amounts set forth in
Exhibit B are in U.S. dollars. 

        (c)  The fixed repair charge for out of warranty repair includes instances where the returned Products cannot be fixed or no
defects are found, as well as when they are fixed. Infortrend shall have the option either to repair returned Products or replace the returned Products with a similar unit or send the returned
Products back to Dot Hill if no defect is found. If a returned Product cannot be repaired, Infortrend will notify Dot Hill of such fact and return such Product to Dot Hill unless Dot Hill instructs
Infortrend to dispose of such Product within three (3) business days after receiving such notification from Infortrend. 

        (d)  Unless prior written approval from Infortrend for a different arrangement is received, payments for repair services shall
be made by Dot Hill in accordance with the payment terms of this Agreement. 

        8.6    Repair and Spare Part Availability.    Infortrend will make available to Dot Hill maintenance services for
Products and maintain an adequate inventory of unique parts for the Products during the term of this Agreement and for at least [...***...] after the termination or expiration
of this Agreement for any reason other than Infortrend's termination of this Agreement pursuant to Section 10.2; provided, however, that for out of warranty repairs, Infortrend will use
commercially reasonable efforts to provide such unique parts. Infortrend shall promptly advise Dot Hill of instances where Infortrend has been advised by its supplier that certain parts will no longer
be available. Dot Hill shall help and inform Infortrend where to purchase such parts for Infortrend's use in manufacturing Products or for spare parts. Further, Infortrend shall substitute parts,
wherever reasonable, in lieu of discontinuing Products due to an inability to purchase necessary parts. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        8.7    Failure Analysis.    Within five (5) business days after Infortrend receives Products returned to
Infortrend by Dot Hill for failure to conform to Specifications and/or defect, Infortrend shall perform a failure analysis upon all returned Products and submit a formal report to Dot Hill describing
the results of the analysis. 

        8.8    Unexpected Failure.    Notwithstanding anything in this Agreement, the following provisions shall apply to
Unexpected Failure. 

        (a)  In the event of a suspected Unexpected Failure, Dot Hill shall promptly notify Infortrend, and shall provide the
following information, if known and as may then exist: a description of the defect, and the suspected lot numbers, serial numbers or other identifiers, and delivery dates of the defective Products.
Dot Hill shall also deliver, or make available to Infortrend, samples of the defective Products for testing and analysis. Within five (5) business days of receipt of such notice and samples
from Dot Hill, Infortrend shall provide its preliminary findings regarding the cause of the failures. Thereafter, Infortrend 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 

12

 

affected Products, and other appropriate or desirable information with respect to the failure as Dot Hill may reasonably request. 

        (b)  The parties shall 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. 

        (c)  In the event of an Unexpected Failure, Infortrend shall be responsible for (i) as may be mutually agreed by the
parties in any corrective action plan with respect to such Unexpected Failure, or at Infortrend's option if no such corrective action plan is agreed to, either: (a) repair and/or replacement of
the defective Products; or (b) a credit or payment (if the affected Products have been paid for) to Dot Hill in an amount equal to the purchase price to Dot Hill for qualified nondefective,
replacement Products that are acceptable to Dot Hill; (ii) if repaired or replaced, [...***...] to repair and/or replace the defective Products that have been
pre-approved in writing by Infortrend, which approval shall not be unreasonably withheld, delayed or conditioned; and (iii) reasonable freight and transportation costs incurred in
connection with the repair and/or replacement of the defective Products (and the larger product in which the Product is incorporated if the Product cannot be separated without undue inconvenience or
disruption to the end user). 

        (d)  Other costs not identified herein may be incurred by either party. The reimbursement, if any, of these costs will be
mutually agreed by the parties. Infortrend shall have no liability or responsibility for any losses or damages under this Section 8.8 to the extent that claims with respect to any Unexpected
Failure are due primarily to (i) Infortrend's or Infortrend's affiliates compliance with Dot Hill-supplied specifications and test procedures that are developed solely by Dot Hill,
or directed specifically by Dot Hill for use by Infortrend or Infortrend's affiliates, and provided in writing by Dot Hill to Infortrend or Infortrend's affiliates for the testing of Products or its
components; (ii) the negligence of Dot Hill or any other person (with the exception of Infortrend and its affiliates, and each of their respective employees, agents and subcontractors, and each
of their respective suppliers of components, other than Infortrend or its affiliates,) in providing goods or services in connection with the design, development, production and distribution of
Products; (iii) modification or alteration of the Product or its components by a party other than Infortrend or its affiliates; (iv) incorrect installation or improper incorporation of
the Product or its components by a party other than Infortrend or its affiliates; or (v) defects in any components supplied specifically by Dot Hill or Dot Hill's agents for incorporation and
use in the Products. 

        8.9    Warranties by Dot Hill.    Infortrend shall not be responsible for any warranties regarding the Products that
are made by Dot Hill in excess of those provided for in this Agreement unless Infortrend provides its prior written consent to Dot Hill for such warranties, which consent may be withheld by Infortrend
in its sole discretion. 

9.    PRODUCT DISCONTINUANCE. During the Minimum Purchase Rights Period, Infortrend shall, upon request by Dot Hill, provide Products to Dot
Hill. Infortrend may discontinue manufacture and sale of a particular Product after giving Dot Hill at least [...***...] written notice of such discontinuance (a) at any
time after the expiration of the Initial Term, as that term is defined in Section 10.1; or (b) within the Minimum Purchase Rights Period if all of the following conditions have been met:
(i) written notice has been provided by Infortrend at least [...***...] after Dot Hill's initial revenue recognition date for the applicable Products; (ii) Dot
Hill's written agreement, which it may not unreasonably withhold, delay or condition, to a replacement product which meets Dot Hill's engineering and other requirements; (iii) Infortrend's
agreement to pay all Dot Hill's costs to migrate from the discontinued Product to the replacement product; (iv) if Dot Hill, in its reasonable opinion, determines that the replacement product
can be qualified within the schedule agreed to between Dot Hill and Infortrend, and (v) Infortrend's agreement on an inventory migration plan for the discontinued 

13

 

Product. If Infortrend discontinues production of any Product without complying with the terms of this Section 9, then Dot Hill may exercise its rights for such Product under the Manufacturing
Rights Agreement or other provisions in this Agreement that provides rights to Dot Hill. Infortrend shall accept Dot Hill's Orders for discontinued Product for delivery during the
[...***...] period set forth above in this Section 9. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

10.    TERM, TERMINATION AND EFFECT OF TERMINATION

        10.1    Term.    The term of this Agreement shall commence on the Effective Date and continue for a period of
[...***...] ("Initial Term") and shall thereafter be automatically renewed for additional [...***...]
periods (each, a "Renewal Term") unless either party gives written notice of termination at least [...***...] before the end of
the Initial Term or the then-current Renewal Term, as the case may be. If any Order meeting the requirements of this Agreement is still in effect at the time this Agreement terminates or
expires pursuant to this Section 10.1, then this Agreement shall continue in effect solely as to such Order until such time as the Order is fulfilled or is cancelled. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        10.2    Termination    

        (a)    For Cause.    Either party may, by
written notice to the other party, terminate this Agreement, or suspend its performance under this Agreement or cancel any Order hereunder without penalty, or both, if the other party fails to comply
with any of the material provisions of this Agreement and such condition is not remedied within thirty (30) days after the defaulting party receives written notice thereof
[...***...] business days if such failure is with respect to any obligation to pay any amount under this Agreement). 

14

  

        (b)    For Bankruptcy Event.    Either party
may, by written notice to the other party, terminate this Agreement, or suspend its performance under this Agreement or cancel any Order hereunder without penalty, or both, if the other party
dissolves, liquidates, or ceases to conduct business or becomes insolvent, admits in writing its inability to pay its debts as they become due, files for any form of bankruptcy, has an involuntary
bankruptcy petition filed against it which is not discharged within sixty (60) days, or makes an assignment for the benefit of creditors. If a party is involved in any of the events enumerated
in this Section 10.2(b), such party shall notify the other party immediately of the occurrence of such event. 

        10.3    Result of Termination    

        (a)  In the event of any termination of this Agreement by either party or the expiration of this Agreement, neither party
shall be entitled to any compensation, damages, loss of profits, or remuneration resulting solely from the termination or expiration of this Agreement, or for goodwill established during the term of
Agreement. 

        (b)  Within thirty (30) days of termination of this Agreement for any reason, each party shall return to the other
party all confidential materials of the other party in its possession or control that is related to the Products, unless the Default License rights referenced in Section 14 have been triggered. 

        (c)  Termination of this Agreement shall not affect Dot Hill's obligation to pay all amounts for which it is indebted to
Infortrend as of the date of termination, which amounts shall become immediately due and payable, or amounts for which it becomes indebted to Infortrend subsequent to such termination. 

        (d)  Expiration or any termination by either party of this Agreement shall not affect (a) any other rights or
obligations of either party which may have accrued up to the date of such termination or expiration; or (b) the rights and obligations of the parties which are set forth in Sections 8 (WARRANTY
AND RMA), 11 (INTELLECTUAL PROPERTY AND CONFIDENTIAL INFORMATION), 14 (BUSINESS CONTINUITY PLAN), 15 (LIMITATIONS OF LIABILITY), 16 (GENERAL INDEMNIFICATION), 17 (GENERAL), 18 (INSURANCE REQUIREMENTS
AND OBLIGATIONS), 20 (APPLICABILITY OF TERMS) AND 21 (ENTIRE AGREEMENT). 

11.  INTELLECTUAL PROPERTY AND CONFIDENTIAL INFORMATION  

        11.1    Rights to Use Trademarks.    Nothing contained in this Agreement shall be construed as licensing either party
to use any trademark or trade name owned or used by the other party without the prior written consent of the other party. 

        11.2    Ownership Claims and Identification.    Except for the license rights granted in this Agreement or the
Manufacturing Rights Agreement, neither party shall claim any ownership or other interest in the intellectual property and proprietary rights of the other party. Neither party will in any way identify
itself as the owner of the other party's copyrights, patents, trademarks, trade names, logos, company name or confidential information, register or attempt to register same in its name. 

        11.3    Protection of Intellectual Property Rights.    Both parties shall use commercially reasonable efforts to
protect the rights of the other party in its trademarks, patents, logos, service marks, copyrights and trade secrets. If either party becomes aware of any actual or suspected unauthorized use or
disclosure of the other party's copyrights, patents, trademarks, service marks, trade secrets or confidential information, the party shall promptly notify the other party and shall, at the request of
the other party, assist in the investigation and prosecution of such unauthorized use or disclosure. 

15

 

        11.4    Confidential Information    

        (a)  Each party hereto shall treat the other party's confidential information in accordance with the Non-disclosure Agreement
attached as Exhibit C. 

        (b)  Neither party shall, without prior the written consent of the other party, disclose the existence of any terms and
conditions of this Agreement, any trade secrets, or confidential information, including, without limitation, technical data owned or provided by the other party hereunder, or in any manner advertise
or publish any information concerning this Agreement. Notwithstanding the foregoing, (i) Infortrend may make such disclosures as are reasonably necessary to comply with any securities laws,
regulations or rules, subject to Dot Hill's review and consent thereof, which shall not be unreasonably withheld, delayed or conditioned; and (ii) Dot Hill may make such disclosures of the
terms and conditions of this Agreement to Dot Hill Contractors that Dot Hill desires to authorize the purchase of Products; provided, however, that each such Dot Hill Contractor agrees to be bound by
the general confidentiality obligations of Dot Hill hereunder with respect to such terms and conditions. 

        11.5    Infortrend's Intellectual Property Indemnification    

        (a)  Subject to Section 11.5(c) of this Agreement, Infortrend, at its own expense, will defend, indemnify and hold Dot
Hill and all of its affiliates, officers, directors, employees, agents and assigns harmless against any loss, liability, damage, expense, cost (including reasonable attorneys' fees incurred in the
enforcement of this indemnity) to the extent arising or resulting from any claim that the Products or any portion thereof, or any Infortrend manufacturing process, process technology or methodology:
(i) infringe a patent, copyright or other intellectual property right of the United States or any other country that is a member of the World Trade Organization, or (ii) misappropriates
a trade secret; provided that Dot Hill: (1) gives Infortrend prompt written notice of such claim, (2) permits Infortrend to defend or settle the claim or proceed under
Section 11.5(b) of this Agreement with respect to such claim, and (3) provides reasonable assistance to Infortrend in defending or settling the claim. Infortrend will: (x) defend
or settle, at its own expense, any such claim; (y) keep Dot Hill advised of the status of such claim and of its defense and/or negotiation efforts; and (z) afford Dot Hill a reasonable
opportunity to review and comment on significant actions planned to be taken by Infortrend on behalf of Dot Hill. Infortrend shall not enter into any settlement that materially effects in an adverse
manner Dot Hill's rights or interests hereunder without Dot Hill's prior written approval, which approval will not be unreasonably withheld, delayed or conditioned. Dot Hill shall have no authority to
settle any claim on behalf of Infortrend. 

        (b)  As to any Product, or part thereof, or Infortrend's manufacturing process, process technology, or methodology that is
subject to a claim described in Section 11.5(a) and which is enjoined or is reasonably likely to become enjoined or be impacted by an adverse judgment, Infortrend may, at its
election:(i) obtain the right of continued marketing, distribution and use of such Product for Dot Hill; or (ii) replace or modify such Product to avoid such claim in a manner reasonably
acceptable to Dot Hill, without changing the form, fit or function of the Product. If neither alternative can be achieved within a commercially reasonable period of time, then Dot Hill may terminate
the Agreement for such Product and, in addition to Infortrend's obligations under Section 11.5(a), in the event of the issuance of an injunction that restrains the use or distribution of a
Product, which injunction continues to be effective forty-five (45) days after its issuance, and subsequent to the end of such forty-five (45) day period, a Product subject to such
injunction is returned to Infortrend by, or on behalf of, Dot Hill or the owner or user thereof whose use or distribution, as the case may be, of such Product is affected by such injunction,
Infortrend will refund to Dot Hill, or such other party as directed by Dot Hill, as the case may be, an amount 

16

 

equal to the [...***...] to the original owner or user of the Product. Any such refund shall be provided only upon the return of the affected Products to Infortrend. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        (c)  Infortrend will not defend or indemnify Dot Hill if any claim of infringement or misappropriation is: (i) asserted
by a parent, subsidiary or other affiliate of Dot Hill; (ii) results from the design for such Product in the Specifications (to the extent the related design specification was provided by Dot
Hill) or any design alteration of any Product that is implemented based on the specific written request of Dot Hill (collectively, a "Dot Hill Design"); or (iii) based upon the combination of
the Products with any hardware or software that is not supplied by Infortrend, if such claim would have been avoided if the Product was not combined with such hardware or software. 

        11.6    Dot Hill's Intellectual Property and Excess Warranty Indemnification    

        (a)  Subject to Section 11.6(c) of this Agreement, Dot Hill, at its own expense, will defend, indemnify and hold
Infortrend and all of its affiliates, officers, directors, employees, agents and assigns harmless against any loss, liability, damage, expense, cost (including reasonable attorneys' fees incurred in
the enforcement of this indemnity) to the extent arising or resulting from (i) any claim that a Dot Hill Design that is implemented in the Products or the combination of the Products with any
hardware or software that is not supplied by Infortrend, which claim would have been avoided if the Product was not combined with such hardware or software: (1) infringes a patent, copyright or
other intellectual property right of the United States or any other country that is a member of the World Trade Organization, or (2) misappropriates a trade secret; or (ii) any
warranties for the Products that are made by Dot Hill, to the extent such warranties are in excess of those provided for in this Agreement or otherwise authorized in writing by Infortrend: provided
that Infortrend (a) gives Dot Hill prompt written notice of such claim, (b) permits Dot Hill to defend or settle the claim or proceed under Section 11.6(b) of this Agreement with
respect to a claim of future infringement, and (c) provides all reasonable assistance to Dot Hill in defending or settling the claim. Dot Hill will: (x) defend or settle, at its own
expense, any such claim; (y) keep Infortrend advised of the status of such claim and of its defense and/or negotiation efforts; and (z) afford Infortrend a reasonable opportunity to
review and comment on significant actions planned to be taken by Dot Hill on behalf of Infortrend. Dot Hill shall not enter into any settlement that materially effects in an adverse manner
Infortrend's rights or interests hereunder without Infortrend's prior written approval, which approval will not be unreasonably withheld, delayed or conditioned. Infortrend shall have no authority to
settle any claim on behalf of Dot Hill. 

        (b)  If the Product that is subject to a claim described in Section 11.6(a) is enjoined or is reasonably likely to
become enjoined or be impacted by an adverse judgment, Dot Hill may, at its election: (i) obtain the right of continued marketing, distribution and use of such Product to Dot Hill and its
customers, whether direct or indirect, for Infortrend; or (ii) modify the Dot Hill Design, or replace or modify the Dot Hill Product that gives rise to such claim, as the case may be, to avoid
such claim in a manner reasonably acceptable to Infortrend. If neither alternative can be achieved by Dot Hill within a commercially reasonable period of time or the distribution of a Product is
enjoined, then Infortrend may suspend its performance under this Agreement with respect to such Product until such time that Dot Hill achieves either of the foregoing alternatives. Additionally,
Infortrend may terminate this Agreement with respect to such Product if Dot Hill fails to achieve either of the foregoing alternatives within (i) ninety (90) days after the occurrence of
the event which gives rise to Dot Hill's right to make an election under this Section 11(b), or (ii) the issuance of such injunction, whichever first occurs. 

17

 

        (c)  Dot Hill will not defend or indemnify Infortrend if any claim of infringement or misappropriation is (i) asserted
by a parent, subsidiary or other affiliate of Infortrend, or (ii) results from the design or manufacture of any Product by Infortrend, its affiliates, subcontractors or suppliers. 

12.  NOTICES  

        12.1    Notices Regarding Defaults and Disputes.    All legal notices and other communications provided for under this
Agreement shall be in writing and shall be deemed given if delivered personally or sent by air courier, such as Federal Express, DHL or United Parcel Service, receipt of delivery which is
acknowledged, to the named parties at the following addresses: 

	To Dot Hill:

Dot Hill Systems Corporation

6305 El Camino Real

Carlsbad, California 92009

Attn: Mr. Preston Romm	 	To Infortrend:

Infortrend Technology Inc.

1700 Wyatt Drive, Suite 9

Santa Clara, California 95054

Attn.: [...***...]

The
addresses for the purposes of this section may be changed in the manner provided herein for giving notice. 

        12.2    Notices Regarding Routine Administrative Matters.    Notwithstanding the foregoing, notices regarding routine
administrative matters, such as Orders or RMAs, shall be sent, with respect to Dot Hill, to the Dot Hill procurement personnel at the addresses noted in the Orders affected; and with respect to
Infortrend, to Infortrend personnel at the addresses noted in its confirmation of the Orders affected. Such notices shall be in writing and sent by e-mail or facsimile for transmitting written
communications. 

13.    FORCE MAJEURE.    Neither party shall be liable to the other party for its
failure to perform any of its obligations under this Agreement (excluding any payment obligations), during any period which such performance is delayed because of earthquakes, fire, flood, strikes,
riots, wars, government regulations, and acts of God or other similar causes beyond its control, or a shortage of component parts or raw materials for Products that does not result from any negligent,
reckless, or intentional act or omission by Infortrend to order the amount of component parts or raw materials, within established material leadtimes for the suppliers thereof, required to produce
Products to fulfill Dot Hill's Orders and Demand Triggers, provided that the party experiencing the delay shall have promptly notified the other party of the delay. However, if any such delay shall
continue for a period in excess of [...***...] consecutive days, then the other party shall have the right to terminate this Agreement
[...***...] business days after giving the party affected by the event of force majeure written notice of such termination. Notwithstanding the foregoing, the occurrence
of an event of force majeure shall not reduce or eliminate either party's responsibilities under its Business Continuity Plan. 

14.    BUSINESS CONTINUITY PLAN.    Infortrend agrees to provide to Dot Hill
documented evidence of a business continuity plan to ensure Infortrend's capability to provide the Products in the agreed upon timeframe after the occurrence of an event which may materially and
adversely affect Infortrend's ability to deliver Products to Dot Hill as scheduled. Such event may include, without limitation, one or more of the following: (1) Infortrend system(s) component
failures (including hard disk failure, computer virus, and local area network outages); (2) natural or man-made disasters (including, without limitation, fire, flood, earthquake, bombing,
sabotage, and vandalism); (3) any work stoppages of any kind; and (4) any failure of a Infortrend subcontractor to provide materials. These plans also include development of alternate
sourcing strategies for materials; redirection of Product manufacture, including work in progress and finished goods to another Infortrend location/facility (subject to qualification by Dot Hill). A
Business Continuity Plan for each Product shall be provided to Dot Hill by Infortrend within thirty (30) days after the date of execution of this Agreement by both parties. 

18

 

Infortrend will modify the Business Continuity Plan to incorporate any reasonably requested changes that are proposed by Dot Hill. Upon completion of the Business Continuity Plan it shall become a
part of this Agreement as Exhibit I. Infortrend hereby provides its permission for Dot Hill to provide a copy of such Business Continuity Plan to
Solectron Corporation and Sun. Infortrend will not be obligated to undertake, or omit to take, any action under a Business Continuity Plan that would have the effect of increasing materially
Infortrend's Product costs. 

15.  LIMITATIONS OF LIABILITY  

        15.1    Notice of Actual or Potential Injury or Damage.    In the event that any Product is held or is believed by
Infortrend to cause injury to person or property due to the Products being defective, Infortrend shall promptly notify Dot Hill in writing, and provide sufficient details to Dot Hill in such writing
regarding such injury to person or property. 

        15.2    Damage Limitation.    Each party's total liability to the other party for any claim arising or resulting from
this Agreement, whether the claim be brought in contract or in tort (including negligence or strict liability), shall in no event exceed an amount equal to the amounts paid to Infortrend under this
Agreement (a) with respect to all of the units of the Products to which such claim relates, or (b) if such claim does not relate to a Product, with respect to all of the Products. 

        15.3    Damage Exclusion.    Under no circumstances shall either party be liable to the other party for indirect,
special, or consequential damages (including lost profits). 

16.    GENERAL INDEMNIFICATION.    Each party (the
"Indemnifying Party") shall indemnify, defend and hold the other party (and its officers, directors, employees, assigns and successors) (the
"Indemnified Party") harmless for any loss, liability, damage, expense, cost (including reasonable attorneys' fees incurred in the enforcement of this
indemnity) or liability to the extent that it is based upon a claim (including, without limitation, a claim by a Dot Hill customer) that: (a) the Indemnifying Party breached a provision of this
Agreement; or (b) the negligent, malicious, willful or wrongful acts or omissions of the Indemnifying Party has caused personal injury or damage to tangible property. As a condition of each
party's obligations under this Section 16, the Indemnified Party must: (i) promptly notify the Indemnifying Party in writing of such claim; (ii) grant the Indemnifying Party sole
control of the defense thereof and any related settlement negotiations; and (iii) provide reasonable cooperation and, at the Indemnifying Party's request and expense, assistance in such
defense. The Indemnifying Party will: (x) defend or settle, at its own expense, any such claim; (y) keep the Indemnified Party advised of the status of such claim and of its defense
and/or negotiation efforts; and (z) afford the Indemnified Party a reasonable opportunity to review and comment on significant actions planned to be taken by the Indemnifying Party on behalf of
the Indemnified Party. The Indemnifying Party shall not enter into any settlement that materially effects in an adverse manner the Indemnified Party's rights or interests without the Indemnified
Party's prior written approval, which approval will not be unreasonably withheld, delayed or conditioned. The Indemnified Party shall have no authority to settle any claim on behalf of the
Indemnifying Party. The obligations of each of the parties under this Section 16 shall be subject to the damage limitation and damage exclusion set forth in Sections 15.2 and 15.3,
respectively. 

17.  GENERAL  

        17.1    Governing Law.    This Agreement and/or any Contract shall be governed by and construed under the laws and
regulations of the State of California, United States of America, without reference to its conflicts of laws principles that would result in the application of the laws of a different state. The
United Nations Convention on Contracts for the International Sale of Goods does not apply to this Agreement. The official text of the Agreement shall be in English. 

19

 

        17.2    Arbitration.    In the event there is a dispute between the parties arising out of or otherwise relating to
this Agreement, the parties agree to promptly meet in good faith to try to resolve such dispute, and to escalate the dispute to senior management of each party for resolution. A representative of
senior management of each party shall meet within ten (10) business days following the receipt of notice by a party of the existence of a dispute. Any and all such disputes that cannot be
resolved by the parties within ten (10) business days following such meeting, shall be settled solely and exclusively by arbitration in San Diego, California, United States of America pursuant
to the commercial rules then in effect of Judicial Arbitration and Mediation Services, Inc. ("JAMS"); provided, however, that the arbitrator shall have no authority to award punitive damages,
to add to or refuse to enforce the terms and conditions of this Agreement, or to make any award which could not have been made by a court of law. In addition, the parties shall be entitled to conduct
discovery in accordance with California Code of Civil Procedure Sections 1283.05 and 1283.1, the scope of which shall be determined by the arbitrator. The merits of the dispute shall be
resolved in accordance with the laws of the State of California, United States of America. The arbitration shall be conducted by a single neutral arbitrator who is independent and disinterested with
respect to the parties, this Agreement and the outcome of the arbitration. The arbitrator shall be knowledgeable in the subject matter hereof. If the parties are unable to agree to an arbitrator, the
arbitrator shall be appointed by JAMS from among its San Diego panelists, upon the application of either party. Any appeal to the selection of the arbitrator shall be heard and decided by a panel of
three (3) neutral arbitrators selected from the same panel as the initial arbitrator. The first preference in the selection of any arbitrator shall be a retired judge. The arbitration shall be
conducted in the English language, and all documents shall be submitted in English or be accompanied by an English translation. The arbitrator will provide a written explanation to the parties of any
arbitration award. Any decision rendered by the arbitrator shall be binding, final and conclusive upon the parties, except to the extent that the arbitrator has made a material error of law, and a
judgment thereon may be entered in, and enforced by, any court having jurisdiction over the party against which an award is entered or the location of such party's assets, and the parties hereby
irrevocably waive any objection to the jurisdiction of such courts based on any ground, including improper venue or forum non-conveniens. The parties
and the arbitrator shall be bound to maintain the confidentiality of this Agreement, the dispute and any award, except to the extent necessary to enforce any such award. The prevailing party, if a
party is so designated in the arbitration award, shall be entitled to recover from the other party its reasonable costs and fees, including attorneys' fees, associated with such arbitration. Except
where clearly prevented by the subject matter of the dispute or as otherwise provided in Section 10.2, both parties shall continue performing their respective obligations under this Agreement
while this dispute is being resolved. Notwithstanding anything to the contrary, each party shall be entitled to seek immediate injunctive relief in any court of competent jurisdiction. 

        17.3    Audit Rights    

        (a)    Dot Hill Rights.    Dot Hill reserves the right, for itself and
its customers where Dot Hill has contractual requirements from its customers, to enter Infortrend's premises or other facilities where the Products are being manufactured, upon reasonable advance
notice, during normal business hours and in such a manner as to minimize interference with Infortrend's normal business operations or the manufacture of the Products, to audit and inspect the quality
of the manufacturing and testing procedures utilized and the resulting Products, to verify that the Products conform to the contractual requirements and to confirm that Infortrend is complying with
the terms and conditions herein. The results of any such audit shall be deemed to be the Confidential Information of Infortrend and shall be treated in accordance with  Exhibit C. Dot Hill may share
such results with [...***...] Corporation and Sun provided that such entity has agreed in
writing to keep such results confidential. 

        (b)    Infortrend Rights.    Infortrend reserves the right to enter
Dot Hill's premises or other [...***...] facilities (subject to Infortrend's receipt of consent to enter such facilities from such other 

20

 

[...***...] that operates such facilities) where the Dot Hill Products are being manufactured, upon reasonable advance notice, during normal business hours and in such a
manner as to minimize interference with Dot Hill's normal business operations or the manufacture of the Dot Hill Products to audit the manufacturing assembly and test process and to confirm that Dot
Hill is complying with the terms and conditions herein. The results of any such audit shall be deemed to be the Confidential Information of Dot Hill and shall be treated in accordance with  Exhibit C. 

        17.4    Severability.    If any court should find any particular provision of this Agreement void, illegal, or
unenforceable, then that provision shall be replaced with a new provision so as to give the same economic effect as the original provision to the maximum possible extent and the remainder of this
Agreement shall remain in full force and effect. 

        17.5    Independent Contractors.    It is agreed that the relationship between the parties is that of independent
contractors, and nothing contained in this Agreement shall be construed or implied to create the relationship of partners, joint ventures, agent and principal, employer and employee, or any
relationship other than that of independent contractors. At no time shall either party make any commitments or incur any charges or expenses for or in the name of the other party. 

        17.6    Conflict of Interest.    Each party agrees that it shall not engage, directly or indirectly, either for itself
or with or for any other person or corporation, in any work or undertaking which shall create any legal impediment against the performance of its obligations under this Agreement and the rights and
licenses granted to the other party hereunder. Each party represents that, to the knowledge of its executives, as of the date of execution of this Agreement by both parties there is no such legal
impediment. 

        17.7    Publicity.    Each party shall not, except as may otherwise be required by any foreign, national, state or
local law or regulation (including any securities' laws, regulations or rules), or with respect to court process, or in conjunction with litigation, disclose the contents of this Agreement without the
prior written consent of the other party. Notwithstanding the foregoing, Dot Hill may disclose the contents of this Agreement to those Dot Hill Contractors that it may choose to authorize to purchase
Products under the provisions of this Agreement; provided, however, that such Dot Hill Contractors agree to be bound by the general confidentiality obligations of Dot Hill under this Agreement with
respect to such contents. 

        17.8    Construction.    The section headings of this Agreement are inserted for ease of reference only, and will not
be used to interpret, define, construe, or describe the scope or extent of any aspect of this Agreement. Each party represents that it has had the opportunity to participate in the preparation of
this Agreement and to consult with counsel and, therefore, the parties agree that the rule of construction that ambiguities be resolved against the drafting party shall not apply to this Agreement. 

        17.9    Notice of Delay.    Whenever either party has actual knowledge that an actual occurrence (e.g., an event of
Force Majeure or a filing under a bankruptcy law) will materially delay that party's timely performance under this Agreement, that party shall promptly give notice thereof to the other party, which
notice shall identify the nature of the event. 

        17.10    Compliance with Laws    

        (a)  The parties shall in the performance of this Agreement comply with all applicable laws, executive orders, regulations,
ordinances, rules, proclamations, demands and requisitions of national governments or of any state, local or other governmental authority which may now or hereafter govern performance hereunder,
including all applicable laws, statutes, executive orders, regulations, ordinances, rules and proclamations regarding Equal Employment Opportunity, the exporting of technology and withholding for
income taxes, to the extent applicable. 

21

 

        (b)  All technical data, services and products delivered by a party to the other party in connection with this Agreement are
subject to U.S. export laws and may be subject to the trade laws of other countries. Both parties agree to comply with all such laws. Unless authorized by the U.S. Government, the parties will not
export or re-export such items to entities on the most current U.S. export exclusion lists or to any embargoed or restricted destinations as specified in the U.S. export laws. Infortrend shall provide
all information under its control which is reasonably requested for Dot Hill to obtain any export or import licenses required for Dot Hill to ship or receive Products, including U.S. Customs
Certificates of Delivery, Manufacturer's Certificates of Origin, U.S. Federal Communications Commissions identifier, and Department of Health and Human Services (Bureau of Radiologic Health, Food and
Drug Administration) Accession Number, if applicable. When requested by Dot Hill, Infortrend 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 U.S. Federal Communications Commission identifier, Department of Health and Human Services
(Bureau of Radiologic Health, Food and Drug Administration) Accession Number to permit Dot Hill to import Product; and (ii) U.S. Customs Certificates of Delivery, attention: Dot Hill at the
address listed in Section 12.1 of this Agreement. 

        17.11    Waiver.    The failure of either party to insist, in any one or more instances, upon the performance of any
of the terms, covenants or conditions of this Agreement or to exercise any right hereunder, shall not be construed as a waiver of the future performance of any such term, covenant or condition or the
future exercise of such right. 

        17.12    Assignment.    Neither party shall assign, transfer or delegate its rights, duties or obligations under this
Agreement, in whole or in part by operation of law or otherwise, without the prior express written consent of the other party. Notwithstanding the foregoing, subject to the terms of
Section 4.7, Dot Hill Contractors may purchase Products from Infortrend, and Infortrend shall sell Products to Dot Hill Contractors, under the terms and conditions of this Agreement. Infortrend
shall not unreasonably withhold, delay or condition its written consent to any requested assignment or delegation by Dot Hill of Dot Hill's right to purchase Products, and Dot Hill's related duty and
obligation to pay for Products, to Sun or Solectron Corporation. Notwithstanding the foregoing, either party may assign this Agreement to a successor in interest that acquires substantially all of its
assets that relate to this Agreement upon written notice to the other party; provided, however, that the following conditions are met: (a) the assignee of this Agreement must agree in writing
to be bound by all of the terms and conditions of this Agreement; and (b) the assignee must be able to show that it is capable of fulfilling all of the obligations under this Agreement. Any
attempted assignment, transfer or delegation of any such rights, duties or obligations hereunder without such consent shall be null and void. This Agreement shall be binding on the parties and their
respective successors and permitted assigns. 

        17.13    Order of Precedence.    In the event of a conflict between any provision in this Agreement and any exhibit
hereto, the provision in conflict within this Agreement shall govern. 

        17.14    Third Party Beneficiary Rights.    The parties acknowledge and agree that this Agreement is executed solely
for the benefit of the parties and there are no third party beneficiaries. Notwithstanding the foregoing, [...***...]. 

        17.15    Counterparts.    This Agreement may be signed in counterparts by Infortrend and Dot Hill, each of which when
taken together will be considered an original, but all of which will constitute the same instrument. 

18.    INSURANCE REQUIREMENTS AND OBLIGATIONS.    Infortrend shall comply with the
insurance requirements and obligations that are set forth in Exhibit J. In addition, Dot Hill shall comply with insurance requirements and
obligations that are set forth in any written agreement it has in place 

22

 

while this Agreement is in effect with Sun, as those requirements and obligations may change form time to time. 

19.    CONDITIONS RESPECTING EFFECTIVENESS.    Notwithstanding any provision to the
contrary herein, this Agreement shall terminate, and be of no further force and effect, if: (a) Dot Hill and Sun do not enter into a Product Purchase Agreement, pursuant to which Sun will have
the right to purchase Dot Hill Products which incorporate the Products, on or before June 20, 2002; or (b) Infortrend does not enter into a manufacturing agreement with
[...***...] Corporation, pursuant to which [...***...] Corporation will manufacture Products for Infortrend, on or before June 20, 2002.
Infortrend shall inform Dot Hill in writing on the date on which the condition in Section 19(b) has been met and, if this condition is
fulfilled, then Dot Hill shall inform Infortrend as to whether the condition set forth in Section 19(a) has been fulfilled. 

20.    APPLICABILITY OF TERMS.    The parties acknowledge that Infortrend desires to
make available Products to Dot Hill and Dot Hill Contractors under the terms and conditions of this Agreement only for inclusion in products to be sold by Dot Hill to Sun, or for distribution by Dot
Hill to Sun. The Products will also be made available by Infortrend to Dot Hill under the terms and conditions of the Existing Agreement for inclusion in other products to be sold by Dot Hill to other
customers, or for distribution by Dot Hill to other customers. The prices for Products that are to be provided by Infortrend to Dot Hill under the Existing Agreement shall be negotiated between the
parties. 

21.    ENTIRE AGREEMENT.    This Agreement states the entire agreement between the
parties with respect to the subject matter hereof and shall supersede and replace all previous and contemporaneous proposals, negotiations, representations, commitments, writings, agreements, and
other communications, both oral and written, between the parties. This Agreement shall not, however, supersede or replace the Existing Agreement, which shall remain in full force and effect and,
except as otherwise provided in Section 20, remain unchanged by this Agreement. This Agreement may not be released, discharged, changed, or modified except by an instrument in writing signed by
a duly authorized representative of each of the parties. The following exhibits are attached hereto and hereby incorporated by reference into and form a part of this Agreement: 

	Exhibit A—	 	Product and Price Schedule;
	Exhibit B—	 	Out of Warranty Repair Schedule;
	Exhibit C—	 	Mutual Confidentiality Agreement;
	Exhibit D—	 	External Manufacturers;
	Exhibit E—	 	Specifications;
	Exhibit F—	 	Infortrend Quality Program;
	Exhibit F-1—	 	Customer Support Quality Requirements;
	Exhibit G—	 	Electronic Data Interchange (EDI) Terms;
	Exhibit H—	 	Upside Support and Demand Replenishment Program;
	Exhibit I—	 	Business Continuity Plan;
	Exhibit J—	 	Insurance Requirements and Obligations; and
	Exhibit K—	 	Maintenance and Support.

[The rest of this page has been intentionally left blank.]

23

 

        This
Agreement has been duly signed by authorized representatives of the parties and shall become effective as of the Effective Date. 

	Infortrend:	 	Dot Hill:
	

INFORTREND TECHNOLOGY INC.	
 	

DOT HILL SYSTEMS CORPORATION
	

By:	

    
	
 	

By:	

    

	

Name:	

    
	
 	

Name:	

    

	

Title:	

    
	
 	

Title:	

    

	

Date:	

    
	
 	

Date:	

    

24

 
 
 

EXHIBIT A    
    
    Product and Price Schedule    
  

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

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

[...***...]

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 
 

EXHIBIT B    
    
    Out of Warranty Repair Price Schedule    
  

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

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

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

25

 
 
 

EXHIBIT C    
    
    Mutual Confidentiality Agreement    
  

        This Confidentiality Agreement is made and entered into on May 20, 2002 by and between Dot Hill Systems Corp. with a place of business at 6305 El
Camino Real, Carlsbad, California 92009 ("Dot Hill") and Infortrend Technology Inc., having a place of business at 8F, No-102 Chung-Shan Rd., Sec. 3, Chung-Ho City, Taipei Hsien, Taiwan,
Republic of China (hereinafter "Infortrend"). 

        The
parties set forth above (the "Parties"), for their mutual benefit and for the purposes described below, may disclose to each other certain information, documents, business
strategies, pricing, techniques, computer programs, methods, drawings, formulas, specifications, software or other confidential information of a business or technical nature, in written form
("Confidential Information "), which each Party considers to have value as its confidential property. The Parties intend that this Agreement govern the rights and obligations concerning the use and
protection of Confidential
Information from the Effective Date forward, disclosed by one Party (the "Discloser") to the other Party (the "Recipient") and agree as follows: 

        1.    For
a period of five (5) years from the date of disclosure (ten (10) years for source code or integrated circuit specifications), Recipient will not
disclose or authorize or assist in any disclosure of Confidential Information except to its employees, subcontractors (including any Dot Hill Contractors) and consultants with a need to know, who are
bound by non-disclosure agreements at least as protective as this Agreement, and who will use the Confidential Information only for the Purpose described in this Agreement. 

        2.    Each
party shall mark any document or tangible form of Confidential Information as "Confidential" at the time of disclosure or within a reasonable time thereafter, but in
any case within thirty days of disclosure. If Confidential Information is disclosed verbally, the Discloser will identify' Confidential Information as confidential under this Agreement at the time of
disclosure. 

        3.    Recipient
agrees to prevent the unauthorized use or disclosure of Confidential Information of the other party using the same degree of care with which it protects its own
confidential information, but in no event less than with reasonable care. Recipient agrees to advise its employees, subcontractors (including any Dot Hill Contractors) or consultants to whom such
Confidential Information is disclosed of the confidential nature of the information, and their obligations concerning use and disclosure under this Agreement. Recipient will not reverse engineer
Confidential Information of the other party permitted. Recipient shall not use the Confidential Information of the other party, except to the extent permitted under the OEM Agreement between the
parties or any exhibits thereto. 

        4.    Nothing
in this Agreement will be construed to grant a license to or ownership interest in any Confidential Information disclosed. Unless otherwise provided in other
agreements, all Confidential Information remains the sole property of the Discloser and, upon termination or expiration of this Agreement shall be returned or destroyed at the option of the Discloser.
If the Confidential Information is destroyed, the Recipient agrees to provide written certification of destruction upon request of the Discloser. Return or destruction of the Confidential Information
shall not relieve Recipient of its obligations hereunder. 

        5.    Information
received shall not be reproduced in any form, except as necessary to accomplish the business purpose for which it was received. Any copies of Confidential
Information made by Recipient shall reproduce the "confidential" legend displayed thereon, and Recipient agrees not to remove any copyright logos, mask work right, or in any other manner alter a
proprietary rights legend. 

        6.    The
above restrictions shall not apply to Confidential Information that: 

	•
	was
rightfully known by the Recipient prior to its receipt without any violation or infringement of the confidential rights of the Discloser; 

26

 

	•
	is
in the public domain and is available to the public at large;

	•
	is
now or in the future independently developed by the Recipient without access to or knowledge of the Confidential Information of the Discloser; or

	•
	is
now or in the future rightfully received by the Recipient without any violation or infringement of the confidential rights of the Discloser. 

        If
these exclusions apply to only a portion of the Confidential Information, then only that portion shall be excluded from the restrictions of this Agreement. 

        7.    This
Agreement shall not create any form of agency or partnership relationship between the Parties, who are independent contractors. 

        8.    Recipient
agrees that if it breaches the Agreement, Discloser shall have the right to appropriate injunctive relief. Resort to such relief, however, shall not be
construed to be a waiver of any other rights to other remedies. 

        9.    If
Recipient is directed to use or disclose Confidential Information by Court Order, Recipient may do so only after giving Discloser fifteen (15) days prior
written notice of the nature and deadline for such use or disclosure. Such mandated use or disclosure shall not diminish obligations under this Agreement. 

        10.  This
Confidentiality Agreement and the rights and obligations under it may not be assigned or transferred by Recipient without the express prior written consent of
Discloser. Recipient agrees to comply with all applicable U.S. Export Laws and Regulations. 

        11.  Each
Party warrants that it has the legal right to make disclosures of Confidential Information under this Agreement. ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED,
ARE DISCLAIMED. ALL INFORMATION DISCLOSED HEREUNDER IS PROVIDED" AS IS."
DISCLOSER ACCEPTS NO RESPONSIBILITY FOR LOSSES OR EXPENSES INCURRED AS A RESULT OF THE INFORMATION RECEIVED. 

        12.  This
Confidentiality Agreement constitutes the entire understanding and agreement between the parties with respect to its subject matter and supersedes all other
agreements and understandings, whether written or verbal. This Agreement shall not be changed except by written amendment executed by the Parties. 

        13.  In
the event that any provision of this Confidentiality Agreement is held illegal or unenforceable, the balance of this Confidentiality Agreement shall remain in effect. 

        14.  This
Confidentiality Agreement shall be governed by and construed according to the laws of California, excluding any conflict of laws principles that would result in the
application of the laws of a different state. Any actions arising out of this Agreement shall be submitted to the federal or state courts of California. 

27

 

Accepted
and agreed to by: 

	Dot Hill:	 	Infortrend:
	
DOT HILL SYSTEMS CORPORATION	
 	

INFORTREND TECHNOLOGY INC.
	

Signature:	

    
	
 	

Signature:	

    

	

Name:	

    
	
 	

Name:	

    

	

Title:	

    
	
 	

Title:	

    

	

Date:	

    
	
 	

Date:	

    

28

 
 
 

EXHIBIT D    
    
    EXTERNAL MANUFACTURERS    
  

[...***...] 

29

 
 
 

EXHIBIT E    
    
    SPECIFICATIONS    
  

List
of Specifications: 

	1.
	Procurement
Specification for new procurement and repair of the IFT [...***...] OEM SCSI Raid Controller, Dot Hill P/N MIN-221FAC-512, Dot Hill
Revision 25;

	2.
	Procurement
Specification for new procurement and repair of the IFT [...***...] OEM SCSI Raid Controller, Dot Hill P/N 66-00000051, Dot Hill
Revision 50; and

	3.
	Procurement
Specification for new procurement and repair of the IFT [...***...] Controller Battery Backup Module, Dot Hill P/N 66-00000052, Dot Hill
Revision 50 /50A. 

The
foregoing Specifications that were transmitted electronically on behalf of Dot Hill to Infortrend on May 21, 2002 are hereby incorporated by reference into this  Exhibit E. 

30

  

EXHIBIT F  

 
  INFORTREND QUALITY PROGRAM    
  

1.0    Purpose.    This Exhibit defines Dot Hill's requirements for Infortrend's
quality program ("Quality Program"), and Infortrend's responsibilities for manufacturing, inspecting, testing and supplying production Product(s) to Dot Hill. Additional customer support quality
requirements are set forth in Exhibit F-1 attached hereto. 

2.0    Scope.    This Exhibit describes Dot Hill's requirements for the Quality
Program for the manufacture of Product(s) for Dot Hill. The term "quality" as used herein means conformance in all material respects to the Specification for the Product, as may be amended from time
to time by mutual written agreement signed by authorized representatives of the parties. "Specification" shall mean the applicable Product specification for the Product(s), which may be changed from
time to time by mutual written agreement signed by authorized representatives 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 Infortrend consistently meeting the Quality Program defined in this Exhibit. 

        2.2    Applicable Documents    

Product
Specification

MIL-STD-105E

MIL-HDBK-217E

Scorecard Procedure

ISO 9000

WWOPS Supplier Engineering: Mass Storage Group Supplier Certification Process (923-1336-xx)

Additional Documents (applicable to Products):

Dot Hill's Color Specifications

Dot Hill's Paint Specifications (950-1550-xx, 950-1311-xx)

Dot Hill's Global Cosmetics Quality and Workmanship Standards (923-2001-xx)

First Article Procedure (923-2320-xx) 

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

4.0    Supplier Process Requirements.    Infortrend shall develop and implement a
quality/manufacturing plan (including a data collection/tracking/reporting system) ("the Process") that is consistent with the requirements and terms and conditions of this  Exhibit F, the Agreement,
 and ISO 9000. The Process developed by Infortrend shall be reasonably documented. Dot Hill may elect to review the
Process to certify the Process prior to first production shipment of a Product ("Process Certification"), which certification shall not be unreasonably withheld or delayed. Infortrend is solely
responsible for the quality of Product(s) and/or components thereof procured. Approval of the Process by Dot Hill does not relieve Infortrend of this responsibility. As part of the Process, Infortrend
shall develop and implement a process for initial and ongoing/periodic certification of internal and external suppliers for components and all major subassemblies. Infortrend will provide copies of
certification results/reports to Dot Hill upon request. 

        4.1    Process Flow Charts.    Infortrend shall provide a general process flowchart for the Product(s) and major
subassemblies as agreed to by Dot Hill, and Infortrend and shall identify all assembly, test, and inspection subprocesses. 

31

 

        4.2    Data Collection Systems.    Infortrend shall implement a "Weekly Value Chain Quality Reporting System". This
system will show where failure data is collected and detailed process yield targets. Infortrend shall provide on-going reports, as part of the system, in a mutually acceptable format and
schedule (via electronic or web-based method) of current yields, the top three (3) pareto failures per critical process, failure analysis ("FA") and corrective action ("CA"),
documenting continuous improvement goals and Ongoing Reliability Testing ("ORT"). This system will be reviewed by Dot Hill during any Process Certification. 

        4.3    Configuration Control.    Infortrend must develop and implement a "Dot Hill Configuration DPM Goal Quality
Assurance Plan" prior to production start, as mutually agreed upon in writing by
authorized representatives of the parties, which will address, without limitation, the following issues. "DPM," as defined herein, means defects per million. 

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

        4.4    Quality Assurance Plan.    Infortrend must develop and implement a "Dot Hill Configuration DPM Quality
Assurance Plan" prior to production start, as mutually agreed upon in writing by authorized representatives of the parties, which will address, without limitation, the following issues: 

	•
	FA
plan

	•
	Reporting
methodology/format 

        Weekly
unless agreed otherwise: 

	1.
	Yield/DPM
report (all critical stations, including pareto with FA/CA for the top 3-5 pareto items with targets);

	2.
	Outgoing
Quality Test/Audit DPM report with FA/CA for all failures;

	3.
	DPM
Improvement Plan if greater than Dot Hill goal (updates weekly or biweekly);

	4.
	Corrective
Action Report ("CAR") Tracking Log;

	5.
	Dot
Hill site first level FA reports;

	6.
	FA/CA
reports; and

	7.
	CAR
tracking report. 

	•
	The
reporting frequency of the reports listed below will be as reasonably requested by Dot Hill:

	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) (monthly); and 

32

 

	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.

	•
	Statistical
DPM measurement methodology process to proactively inform Dot Hill of any Products suspected of not meeting Dot Hill's quality or reliability
requirements, as set forth in this Exhibit F, along with risk assessment

	•
	Quality
Demonstration Test Plan 

        4.5    Control of Purchases.    Infortrend will develop and implement 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 Product(s). 

        In
the event Infortrend desires to change the vendor or selected source of a component used in the manufacturing of Product(s), Infortrend shall notify Dot Hill in writing prior to
implementing any change. Infortrend shall implement changes to the source of a component 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. Section 4.7 below details what source changes require prior notification to Dot Hill. 

        In
the event that a problem is identified in the availability or quality of purchased supplies, materials or components used in the manufacture of Product(s), upon Dot Hill's request,
Infortrend agrees to permit Dot Hill to participate in the development of a mutually acceptable CA plan, which may include Dot Hill personnel accompanying Infortrend's personnel to vendor sites to
perform process and design audits and view CAs. 

        Infortrend
is responsible for all inspections/tests of sub-tier Infortrend-purchased or Infortrend-produced parts to determine conformance to the applicable Specification.
Traceable process, configuration and quality records must be kept for each Infortrend-purchased or Infortrend-produced lot of components for one (1) year from date of delivery to Infortrend.
Infortrend shall use diligent efforts to avoid using any non-conforming purchased or produced parts as part of the Products in accordance with the quality program developed and implemented
pursuant to this Section 4.5. 

        4.6    Defect-Free Program/Corrective Actions.    Dot Hill's goal is to receive Product(s) that are
defect-free. Infortrend shall document and implement a defect-free program as part of the Process which constantly seeks to reduce the defect rate of its Product(s) to a level
which achieves zero defects. Dot Hill shall not be obligated to accept any defective Product(s) shipped by Infortrend. Infortrend 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 action is taken to have parts, components or assemblies corrected to properly perform
their intended function. Infortrend shall maintain records of CAs indicating the frequency of defect during fabrication of Product(s), the proposed corrective change in process, evaluation of its
effectiveness, and an effective date, date code and serial number for implementation. 

        4.7    Changes in Manufacturing Process or Product.    In the event that Infortrend desires to change the Product or
its fundamental manufacturing process, Infortrend shall notify Dot Hill in writing within a reasonable period (no less than sixty-five (65) days, unless a shorter period is agreed
to by Dot 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 

33

 

change and provide Infortrend deviation, Engineering Change Request ("ECR")/ECO) or process change notification document(s) to Dot Hill for formal review/approval. Infortrend will not implement any
change to a Product that is supplied to Dot Hill for use in a Dot Hill product unless approved by Dot Hill in writing, which approval will not be unreasonably withheld, delayed or conditioned.
Examples of changes which require notification include, but are not limited to, the following: 

	•
	Changes
in major test equipment

	•
	Changes
in burn-in time or environment

	•
	Changes
in manufacturing facility locations

	•
	Any
changes that affect the form, fit, function, quality, reliability, serviceability or safety of the Product(s).

	•
	Any
change to the Product affecting clock speeds.

	•
	Any
change of a programmed part on the Product(s).

	•
	Any
change to a custom or semi-custom I.C.

	•
	Any
change made to correct a problem in a Dot Hill application, made at the request of Dot Hill.

	•
	Any
change made to the board fab.

	•
	Any
change to material specified in the Specification. 

Infortrend
shall supply Dot Hill copies of all ECOs affecting the Product. 

Infortrend
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. 

Infortrend
shall implement such changes in the Process only if collected quality/evaluation data verifies that required quality and reliability levels would continue to be met after the change. The
quality data must be submitted to Dot Hill for review before implementing the change. 

        4.8    Re-Qualification.    Major changes in manufacturing process or Product construction/design will
require re-qualification and/or process re-certification to the applicable Specification in all material respects. Dot Hill may require, at its sole discretion, that Infortrend
demonstrate that the changed process or Product(s) complies with the Specification. Infortrend shall provide notification of planned major changes to Dot Hill pursuant to Section 4.7. Upon
mutual agreement, Infortrend shall run a pilot production of the changed Product. Infortrend shall implement such changes only if collected data verifies that required quality and reliability levels
would continue to be met after the change. The quality data must be submitted to Dot Hill for review before implementing the change. 

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

        5.1    Design Review.    Infortrend will present to Dot Hill Engineering, upon request, a comprehensive review
consisting of: 

[...***...]

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        The
Dot Hill review team will consist of the Development Engineer and SE. Infortrend shall use reasonable efforts to submit the foregoing documentation to Dot Hill one (1) week
prior to the scheduled review. 

34

 

        5.2    Reliability Prediction.    Reliability requirements for Products (if applicable) will be specifically
identified on individual drawings as reliability notes to confirm that reliability requirements as set forth in this Exhibit F are met.
Infortrend shall perform a Mean Time Between Failures ("MTBF") reliability prediction in accordance with Mil-HDBK-217D (or E) based on the preliminary Bill of Material.
Results of the reliability prediction shall be submitted to Dot Hill. 

        5.3    First Prototype Shipments/First Article Inspection.    Infortrend shall submit to Dot Hill Engineering, for
each new Product, the following preliminary design documents, upon request of Dot Hill, with the first pass prototype: 

        [...***...] 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        Upon
mutual agreement by Dot Hill and Infortrend, additional documents may be provided by Infortrend with first pass prototypes. 

        Dot
Hill reserves the right to audit Infortrend's First Article process and to require delivery of First Article sample of finished goods to Dot Hill. 

        5.4    Second Prototype Shipments.    "Second prototype" shipments will be used at Dot Hill to run a reliability
demonstration test. Infortrend will demonstrate the reliability goal at an [...***...] compliance level. Infortrend will start design validation testing, reliability testing,
and life testing at Infortrend's site prior to "second prototype" shipment. Infortrend is responsible for conducting and documenting a complete Design Validation Test ("DVT"). The DVT must show that
the Product is capable of conforming in all material respects to the Specification. Infortrend shall submit to Dot Hill for its approval, which approval will not be unreasonably withheld, delayed or
conditioned, the reliability test plan to be used by Infortrend to demonstrate that the MTBF meets the requirements set forth in the Specification. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        5.5    Process Certification    

        5.5.1    Products    

Infortrend
will conduct mutually agreed upon Product certification tests prior to the start of Dot Hill production. The purpose of these tests is to have Infortrend 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: 

	•
	[...***...] 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        5.5.2    DF* (Design for Manufacturability, Design for Testability, etc.):    Infortrend will implement all mutually
agreed upon DF* recommendations identified by Dot Hill, Infortrend's "Open Bug GAP Report", and External Manufacturer(s) recommendations prior to P2 build. Infortrend will review all fixes with Dot
Hill Engineering prior to DF* implementation. 

Any
additional gaps identified by Infortrend during any pre-production or production volume phase throughout the entire supply chain is subject to review by Dot Hill Engineering. Any gaps
identified by Dot Hill Operations Engineering will be communicated to Infortrend for review/verification and mutually agreed upon implementation in a timely fashion. 

35

 

        5.5.3    Design/Compliance Verification:    Dot Hill Engineering will review all Product Design Verification Test
plans and results against Dot Hill's best practices. Any gaps identified will be reviewed with Infortrend for applicable modifications. 

        5.5.4    Infortrend Assembly Tooling and Products Tool/Process Qualification.    No data or samples will be submitted
for Dot Hill's approval until Infortrend has inspected the mutually agreed upon quantity of parts and has determined 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. 

Dot
Hill Tooling. To the extent applicable, Infortrend shall provide complete tool design drawings to Dot Hill's SE for approval prior to construction of Dot Hill tooling. 

Tool
Approval/First Article Inspection. Infortrend shall provide to Dot Hill, for its approval, data obtained from a 100% inspection of all dimensions/specifications of the mutually agreed upon number
of 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. 

        5.5.5    Process Capability    

Infortrend
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. Infortrend shall adjust
processes as Infortrend determines necessary based on the Process Capability Study results to achieve targeted quality goals. Infortrend 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). 

        5.6    Quality Systems Requirements.    Infortrend must develop, implement and 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)
	Acceptance
processes and facilities

	(b)
	Maintenance
and calibration of gauging and test equipment

	(c)
	Sampling
plans and First Article inspection

	(d)
	Control
and disposition of non-conforming material

	(e)
	Records
maintenance

	(f)
	Ship
hold and Stop-ship authorization procedures

	(g)
	Reliability
and qualification test data for Product 

        5.7    Packaging Requirements.    Packaging and outer packaging must be provided to prevent damaged material arriving
at Dot Hill. 

36

 

        5.8    Dot Hill Quality Levels.    Dot Hill's quality levels for Product are measured in DPMs and cover the
entire Dot Hill manufacturing process. Failures will be attributed to Infortrend's Process or Product if reasonably documented by objective evidence obtained from the screening process. Minimum
targeted DPM rates during production are set forth below. Beyond month one of production, all Product failures reported by Dot Hill to Infortrend in excess of the DPM requirements below will be
required to have a documented improvement plan. Where mutually agreed, this plan will also contain extraordinary action plans such as pre-screening. Dot Hill also reserves the right to
place Products which exceed the DPM requirements on stop-ship, in accordance with the quality system developed and implemented pursuant to Section 5.6 of this  Exhibit F. 

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

 OEM Storage Goals  

	Description of Product
 
	 	First Quarter
	 	Beyond first Quarter

	All Units of Products	 	[...***...]	 	[...***...]

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        "Quarter"
is defined, for purposes of this Exhibit F and  Exhibit F-1, as each successive three (3) consecutive calendar month period beginning after
the first commercial shipment of
Products to Dot Hill. 

        Both
parties acknowledge that the above DPM levels are initial estimates of reasonable targets for the Products. The parties will review such targets every ninety (90) days after
the first quarter of production of the Products and reset these targets as mutually agreed, which agreement shall not be unreasonably withheld, delayed or conditioned. 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 Infortrend. Any adjustment to the rates must be in a mutually agreed upon writing signed by authorized representatives of each party. Steady state DPM will be used for the purposes
of score carding quality. 

        5.9    Actions Related to Excessive DPM Rates and/or Unexpected Failures    

        Dot
Hill and Infortrend agree that in the event Product fails to meet the DPM rates set forth in Section 5.8 above, then Infortrend shall implement immediate CAs, at Infortrend's
expense, to screen out the defects causing the yields to exceed the requirements until long term CAs are implemented and proven effective. Said CAs 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 Infortrend's process.

	•
	Extend
the test time of final/post-final function test(s). 

6.0    Infortrend Audit Programs.    Infortrend shall perform a series of monitoring
tests to ensure that its Product(s) conform to Dot Hill's requirements, as set forth herein. A brief description of each test requirement follows. 

        6.1    ORT.    Infortrend shall conduct ORT tests in accordance with mutually agreed upon criteria. The testing will
be conducted at the site of Infortrend or Infortrend's contract manufacturer in a manner mutually agreed upon between the parties. The ORT test results shall be delivered to Dot Hill on a weekly basis
in a mutually agreed upon format and shall include details of any FA and CAs taken 

37

 

to address any ORT failure. Infortrend shall report ORT failures to Dot Hill within twenty-four (24) hours after occurrence. 

        6.2    Field MTBF and AFR Reporting.    Infortrend will implement a process and worldwide database to effectively
track monthly field returns by Product (model). Infortrend will provide all mutually agreed
upon data on field returns in a month to Dot Hill by the 15th of the next month. Data will be provided separately for Dot Hill population and for "Other Infortrend Customers." Nothing in this
Section 6.2 shall require Infortrend to name or otherwise identify any Infortrend customers. 

        6.3    Ongoing Quality Audit.    Dot Hill and Infortrend 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 Infortrend to ensure their conformance in all
material respects to the Specification. At Dot Hill's request, Infortrend shall conduct ORT to address the issues set forth below in this Section 6.3 in an effort to monitor the ongoing
performance of manufacturing processes and product designs and to identify Infortrend's manufacturing process and design problems at the site of Infortrend or Infortrend's contact manufacturer, rather
than in the Dot Hill manufacturing processes. Testing will be conducted on equipment as reasonably specified by Dot Hill. Dot Hill shall provide procedures, equipment lists, and analysis of test
results. Infortrend shall set up the test, maintain the equipment, analyze the root cause of all failures and take appropriate CAs. The following provisions are also applicable: 

        Process
Control. Infortrend shall maintain control of the manufacturing process, as evidenced by meeting the DPM rate set forth in Section 5.8, utilizing process capability
charts, and take the action set forth in Section 5.11 if the DPM exceed such rate. Infortrend will notify Dot Hill when the established control limits have been reached or exceeded. 

        Audit
Reporting Requirements. Upon Dot Hill's reasonable request, Infortrend shall provide identified samples with actual readings for all variable characteristics from a designated lot. 

        Deliverable
Inspection Data. Infortrend shall submit to Dot Hill control charts and data for all controlled dimensions outlined by Dot Hill at intervals designated by the parties. 

        6.4    Periodic Specification Testing (PST).    Infortrend shall re-test the Product to the full
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. Infortrend 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 

7.0    Dot Hill Audit Programs.    After the Product(s) have been introduced into
manufacturing, Dot Hill may choose to conduct the following tests to ensure conformance in all material respects to the Specification. All audits will be conducted upon reasonable advance written
notice to Infortrend, during Infortrend's normal business hours, and in such a manner as to minimize interruption. Such representative shall comply with all of Infortrend's reasonable rules while at
Infortrend's facility, which rules shall not prevent Dot Hill's ability to perform the audit pursuant to this Section 7.0. 

38

 

        7.1    Source Inspection.    Dot Hill may elect to source inspect lots prior to shipment from Infortrend's factory
during the initial stages of production or until a reasonable confidence level has been established that Infortrend will meet the DPM rate. Source inspection may be initiated or terminated at Dot
Hill's option, in accordance with this Section 7.1. Infortrend 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 mutual pre-agreed upon sample plan. Infortrend shall reasonably assist the source inspector in unpacking, staging,
inspecting, testing, and re-packaging sample units. Infortrend shall screen rejected lots for discrepant parameter(s) and re-submit them for source inspection. Acceptance at
source inspection does not limit Infortrend's responsibility for failures. Product quality and reliability is at all times the responsibility of the Infortrend. If source inspection continues for more
than thirty (30) consecutive days, Infortrend will reimburse Dot Hill for the reasonable, out-of-pocket expenses incurred by Dot Hill for source inspection conducted
after such thirty (30)-day period. 

        7.2    Infortrend Process Audits.    Dot Hill may conduct quality audits of Infortrend's and its sub-tiers
facility(ies), subject to twenty-four (24) hours advance notice, during normal business hours to determine Infortrend's compliance with Dot Hill's quality requirements. These audits
will include review of all aspects of the Process, including without limitation FA. The Infortrend 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 Infortrend's facility until Infortrend's notification to Dot Hill of containment. Containment is defined as the
implementation of the CA, interim or final, to avoid shipment of Products to Dot Hill that have a risk of reproducing the problems found in the 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. Random component failures will be
documented by objective evidence of failure rate DPM history within Infortrend's processes. If Infortrend determines that containment action is not final, the final action will occur within a mutually
agreed upon time period.

	2)
	The
TAT requirement hereunder is an average fourteen (14) calendar days from receipt of Product at Infortrend to notification to Dot Hill of the required need for 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)
	Infortrend
will be responsible for tracking TAT and issuing a weekly summary report, in a mutually agreed upon format, to Dot Hill. Infortrend will also be responsible for issuing
quarterly summary reports, in a mutually agreed upon format, which will be used by Dot Hill as supporting data for FA responsiveness scorecard calculations.

	4)
	Only
Product FA requested by Dot Hill will be used for TAT calculations.

	5)
	Dot
Hill requires 100% FA on all Products failing in the following processes, and will notify Infortrend in writing of the requirement when the Return Material Authorization ("RMA") is
requested. An expedited returns path must be identified for the following priority failures.

	•
	Dot
Hill worldwide customer DOAs

	•
	Dot
Hill internal PPA, where applicable

	•
	Dot
Hill-specific qualification testing failures at Dot Hill, contract manufacturers or key component suppliers 

39

 

	•
	Dot
Hill Reliability Growth Test (RGT), Qualification, Pilot, Post Pack Audit ("PPA"), ORT and Process Verification Test ("PVT")

	•
	Infortrend
"Dot Hill Test" (defined as process step for testing Products on Dot Hill systems at Infortrend)

	•
	Infortrend's
last 100% functional test station

	•
	Infortrend
ORT

	•
	Dot
Hill customer escalations 

Infortrend
shall provide to Dot Hill full details of root cause corrective action results. In the case of escalations, Infortrend will need to work directly with Dot Hill's field support staff. 

For
all of the above returns, priority FA is required as follows: 

FA
completed within [...***...] working days and risk assessment where requested available within [...***...] working days, in both cases after receipt
of the failed Product and a reasonably detailed written description of the failure. 

These
Products will be included in the TAT calculation. 

	6)
	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 Infortrend in writing, at the time of RMA request, the need for FA and the serial numbers of Products which require FA. 

        7.4    Dot Hill Process Yield/Pareto Reports. Dot Hill shall send monthly yield and pareto reports to Infortrend. Infortrend
shall review the reports and investigate any Product in-process for the top three (3) failures listed and advise Dot Hill of the results. Infortrend shall provide detailed root
cause FA and Infortrend pareto information on a weekly basis in a mutually agreed upon format in response to the Dot Hill report. Quarterly meetings will be conducted to review Infortrend'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. 

 
 

EXHIBIT F-1    
    
    CUSTOMER SUPPORT QUALITY REQUIREMENTS    
  

1.0    Purpose.    This exhibit defines Dot Hill's requirements for Infortrend's
repair quality program and Infortrend's responsibilities for testing and repairing Products for Dot Hill. 

2.0    Scope.    This exhibit describes Dot Hill's quality requirements for
worldwide repair of Product either by Infortrend or by Infortrend's authorized third party(ies). Dot Hill's goal is to receive Products from Infortrend which are defect free. Therefore Dot Hill will
measure Infortrend to an average quarterly yield of [...***...] thereafter) in accordance with and pursuant to Section 5.8 of  Exhibit F. Dot Hill shall use a reasonable sample size, determined
in good faith, when computing such measurement. This exhibit specifies the
Infortrend processes required in support of this goal. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

40

 

3.0    Applicable Documents:    

 Title:  

WWOPS:
Global Cosmetics—Quality—Workmanship Standards,

Engineering Specification for Part Identification Label, and

Bar Code Marking Standard for Field Replaceable Units. 

        Infortrend
shall comply, in all material respects, with the foregoing documents, as set forth in this Exhibit F-1, as
such documents exist as of the date of execution of this Agreement by both parties. 

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, Infortrend will be required to complete the Dot Hill Audit Questionnaire, which
will be provided by Dot Hill and will be reasonable in light of its use. 

        4.2    Move and/or New Product Introduction Audit.    If Infortrend moves a repair line, a repair facility, or starts
up a new Product repair line in a previously qualified facility, Dot Hill will permit shipment of Repaired Product from that facility only upon Dot Hill's written approval, which shall not 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    Biennial Survey.    Subject to Section 4.4 below, Dot Hill may perform qualification audits of each
repair site every other year. This audit will cover all repair and business processes. Prior to the audit, Infortrend will be required to complete the Dot Hill Audit Questionnaire, which will be
provided by Dot Hill and will be reasonable in light of its use. 

        4.4    Random Audits.    Upon reasonable prior written notice to Infortrend, Dot Hill may conduct an audit of
Infortrend's repair facility(ies) during normal business hours, and in such a way as to minimize disruption to Infortrend's business, to determine Infortrend's compliance with Dot Hill's requirements
under this Exhibit F-1. 

5.0    Infortrend Process Requirements.    

        5.1    Functional Performance.    Functional performance is defined in the Specifications corresponding to the Dot
Hill FRU part numbers identified in the system level specifications. 

        5.2    Process Commonality.    Infortrend 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: 

	•
	Configuration
control 
	•
	Minimum
acceptable level 
	•
	Test
equipment and software 
	•
	Process
instructions 
	•
	Labeling

	•
	Closed
Loop Corrective Action ("CLCA") 
	•
	Packaging 
	•
	Inspection
criteria 
	•
	Finished
goods and raw inventory planning 
	•
	Engineering
Change Order ("ECO") implementation 
	•
	Continuous
improvement 
	•
	Process
change control 
	•
	Deviations 

41

 

	•
	Stop
ships/purges 

        5.3    Multiple Returns.    "Multiple Returns" means a Product identified by its serial and part number returned with
a similar failure symptom [...***...] or more times during any [...***...] period. Infortrend shall have the capability to recognize, monitor, analyze
and take corrective action on Multiple Returns repaired by Infortrend or Infortrend authorized third party(ies). Dot Hill and Infortrend shall agree on a means to measure performance in this area and
report as defined in Article 8 below. For in-warranty Product returned to Infortrend with a similar symptom for a [...***...] time, Dot Hill shall have the
option of requiring replacement, rather than repair, of the defective unit at no cost to Dot Hill. Returns for ECO upgrade only and not due to field failure will not be considered in the Multiple
Return count. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        5.4    Quality System.    Infortrend 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.    Infortrend shall have the capability to perform root cause and failure analysis
and report findings in a timely manner, as set forth below in this Section 5.5, and to effectively capture and route Product requiring root cause analysis from identified defects or customer
requests. Measurement for Failure Analysis ("FA") response is based on the date of receipt of the defective unit requiring FA by the Infortrend. 

        5.5.1    FA on identified defects is required, as set forth in Section 8.7 of the
Agreement.    

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

        5.5.3    Failure Analysis under this Section 5.5 requires the following:    

        a.    Duplication
of the failure on all failed Products. 

        b.    Analysis
of sub-assembly that has failed (except for board Products). 

        c.    Analysis
of component on the sub-assembly that has failed. 

        d.    Reason
for the component failure, upon the written request of Dot Hill, within [...***...] days after determination of component failure. 

        5.6    Infortrend Corrective Action Request ("SCAR").    Infortrend shall maintain a CLCA process for reactive events
(defects) as well as continuous improvement efforts. Any SCAR issued by Dot Hill will be addressed by Infortrend within Infortrend's CLCA 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. 

        5.7    Cosmetics.    Infortrend shall comply with the requirements specified in Dot Hill's Global
Cosmetics—Quality—Workmanship Standards specification. 

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

6.0    Infortrend Notification Requirements    

        6.1    Stop Ships and Purges.    Infortrend shall notify Dot Hill promptly in writing of any discrepancy in Product
quality, of which it becomes aware, which may have a material detrimental 

42

 

effect on previously manufactured Product. Infortrend will make recommendations to Dot Hill regarding the disposition of such Products, including, without limitation, whether a stop ship or purge
should be implemented with respect to such Products. Infortrend shall take agreed upon actions with respect to such Products to remedy such reported discrepancy in Product quality. Dot Hill shall
cooperate with Infortrend in connection with such action. All reasonable, out-of-pocket costs of Dot Hill incurred in cooperating with such implementation will be borne by
Infortrend. In the event the parties do not mutually agree on the action with respect to such Products, the quality discrepancy in such Product is caused by Infortrend and, after giving Infortrend
written notice of its intention to do so, Dot Hill engages in stop ship or purge action with respect to such Products, all reasonable, out-of-pocket costs of Dot Hill incurred
in implementing such action with respect to each such Product, not in excess of the purchase price for such Product, will be borne by Infortrend. 

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

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

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

	•
	Re-layout
or relocation of a repair line within a facility 
	•
	Cosmetic
criteria 

        Infortrend
agrees to provide written notification to the Dot Hill quality and configuration department, within [...***...] of the implementation date, of all
other repair process changes that do not affect form, fit, function, serviceability or safety. Infortrend 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. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        6.3    ECOs.    Infortrend shall have the capability to manage ECOs throughout all repair and stocking locations and
implement such ECOs in a timely manner. Infortrend shall notify Dot Hill in writing within a reasonable period (no less than [...***...] unless such shorter period is agreed to
by Dot 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.
Infortrend shall not implement any change to the Product that impacts the form, fit, or function, or adversely affects the quality, reliability, serviceability or safety, without the prior written
approval of Dot Hill. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

43

 

7.0    Quality Monitoring and Verification Requirements    

        7.1    Self Surveillance.    It is Dot Hill's goal to implement Infortrend Self-Surveillance where
feasible. Infortrend shall implement, within its facility, a means of tracking, analyzing, and continuously improving post process quality results of Products. 

        7.2    Incoming Inspection.    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 upon Infortrend's agreement, which agreement will not be unreasonably
withheld, delayed or conditioned. 

        7.2.1    Infortrend shall comply with the requirements to maintain an internal continuous improvement
plan to demonstrate how it will achieve the DPM goal, as set forth in Article 2 of Exhibit F.    

        7.3    NTF Testing.    All tests to be used for NTF testing, whether by Dot Hill or Infortrend, must be reviewed and
agreed to by both parties for any NTF fees to be applicable. 

8.0    Reports and Data    

        8.1    Monthly Quality Report.    Infortrend shall submit a monthly quality report to Dot Hill in a mutually
acceptable format that covers three distinct categories: 

	•
	Receiving
and/or source inspection performed and reported by Dot Hill. 
	•
	Multiple
Returns (see Section 5.3). 
	•
	Self
Surveillance by Infortrend (see Section 7.1). 

        For
each of these categories, the report shall include: 

	•
	Performance
trend. 
	•
	Pareto
analysis of defects based on root cause determination. 
	•
	Listing
and status of suitable corrective actions, recovery plans and/or improvement plans. 
	•
	Detail
by serial number of defects and associated analysis. 

        Infortrend
is responsible for correlation analysis across the three 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    Monthly Business Reporting.    Infortrend shall be able to generate and provide to Dot Hill the following
reports on a monthly basis: 

	•
	[...***...]

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        8.3    Quarterly Business Reporting.    Infortrend shall be able to generate and provide to Dot Hill the following
reports on a quarterly basis. 

	•
	[...***...]

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        8.4    Informational Updates.    Infortrend 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 Infortrend: 

	a.
	State
of Infortrend's business; 
	b.
	Any
planned expansions, additions or moves; 

44

 

	c.
	Any
new state of the art processes being implemented; 
	d.
	Additional
capabilities; 
	e.
	ISO
9000 certification plan achievement; 
	f.
	Training
for service, both internal and external (Infortrend's contractors); and 
	g.
	Business
accomplishments 

        8.5    Additional Information.    If requested by Dot Hill, Infortrend shall provide the following additional
information, within five (5) working days of such request, of on hand defective inventory status by Dot Hill part number. If Infortrend's performance falls below
[...***...] for on-time delivery, additional reports may be required by Dot Hill. The format of such reports will be as mutually agreed to by both parties. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

9.0    Scrap.    If scrap costs are not the sole responsibility of Infortrend,
Infortrend shall request direction from Dot Hill as to the disposition of scrap material. 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, Infortrend shall: 

	a.
	Ship
scrap Dot Hill material to the Dot Hill designated location at Dot Hill's expense; or 
	b.
	Destroy
said material and provide Dot Hill with a Certificate of Destruction. 

45

  

 
 

EXHIBIT G
  ELECTRONIC DATA INTERCHANGE
  (EDI) TERMS    
  

        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, ANSI ASC X12 or CII 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 a mutually agreed upon category of 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 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. Upon the successful conclusion of a
testing period for the transmission and receipt of any mutually agreed upon category of Test Documents, all Documents in the same category 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, but will use reasonable efforts to
provide thirty (30) days prior written notice of such change 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 is down and this prevents either party from meeting the pickup or delivery frequency agreed to, that party will use diligent efforts to notify the other party the same day. 

        2.4.    Security Procedures.    Each party shall use industry standard security procedures which are reasonably
designed to: 

        (a)  ensure
that all transmissions of Documents are authorized and (b) protect its business records and data from improper access. 

        2.5.    Signatures.    Each party may adopt as its signature an electronic identification consisting of symbol(s) or
code(s) which are to be affixed to or contained in each Document transmitted by such party ("Signatures"). Each party agrees that any Signature of such party affixed to or contained in any transmitted
Document shall be sufficient to verify such party originated such Document. Neither party shall disclose to any unauthorized person the Signatures of the other party. 

        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. 

46

 

        3.2.    Verification.    Upon receipt of any Document, the receiving party shall promptly and properly transmit a
functional acknowledgement in return within one (1) business day 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 party shall promptly contact the sending party to confirm
the accuracy of the Document. 

        4.    Transaction Terms    

        4.1.    Order Placement.    Each purchase order electronically transmitted shall reference the Order number, and the
EDI number. 

        4.2.    Validity, Enforceability.    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, subject to the terms and conditions of this Agreement. 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. However, 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. 

        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 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. 

        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 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 copies of Signed
Documents under either 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. 

47

 
 
 

EXHIBIT H
  UPSIDE SUPPORT AND
  DEMAND REPLENISHMENT PROGRAM    
  

A. UPSIDE SUPPORT  

Upside Support:  

        Dot Hill may request delivery of all or any part of the Upside Support quantity with respect to a Quarter, as defined in the OEM Agreement, at anytime during an
applicable Quarter, up to the maximum amount indicated below, beginning with the Quarter after the Quarter during which the General Availability of the Dot Hill product or system that incorporates the
Product occurs. Infortrend
shall sell, manufacture and ship such Upside Support quantities to Dot Hill on a "first-in, first-out" basis for delivery on such date as Dot Hill shall request. The Upside
Support percentage for each Quarter will be as follows: 

	Quarter
 
	 	Percentage
	 
	[...***...]	 	[...***...	]
	[...***...]	 	[...***...	]
	[...***...]	 	[...***...	]

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        Infortrend
shall use commercially reasonable efforts to accommodate any request from Dot Hill to accelerate delivery of Upside Support quantities of Products within the timeframes
indicated above. With respect to any request for quantities in excess of Upside Support described above, the parties shall negotiate mutually acceptable delivery dates. 

B. DEMAND REPLENISHMENT PROGRAM  

        [...***...] 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

48

 
 
 

Attachment A
  Demand Replenishment Products    
  

	Raw Materials:

Product Description
 
	 	Infortrend Part Number

	Not Applicable.	 	 

	Finished Goods:

Product Description
 
	 	Infortrend Part Number

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

49

 
 
 

EXHIBIT I
  BUSINESS CONTINUITY PLAN    
  

50

 
 
 

EXHIBIT J
  INSURANCE REQUIREMENTS AND OBLIGATIONS    
  

        1.    Without
limiting Infortrend's liability to Dot Hill or third parties in any way, Infortrend, at its sole cost and expense, agrees to continuously maintain the following
insurance coverages throughout the Term of this Agreement and for [...***...] thereafter: 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        A.    All
insurance coverages required by federal, state or local laws and statutes, including Worker's Compensation insurance, for statutory limits. This insurance shall
include a Waiver of Subrogation for the benefit of Dot Hill. 

        B.    Employer's
liability insurance, including Bodily Injury coverage, with a per person/per accident coverage limit of at least U.S. [...***...]. This
insurance shall include a Waiver of Subrogation for the benefit of Dot Hill. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        C.    Commercial
General Liability insurance, including coverage for Products/Completed Operations and Blanket Contractual Liability, with a per occurrence coverage limit of at
least U.S. [...***...]. This insurance shall name Dot Hill as an additional insured. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        D.    Automobile
Liability Insurance, including coverage for Non-Owned & Hired Autos, with a per occurrence coverage limit of at least U.S.
[...***...]. This insurance shall name Dot Hill as an additional insured. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        E.    Electronic
Errors & Omissions Liability insurance with a per claim limit of at least U.S. [...***...]. This insurance can have a maximum
deductible of U.S. [...***...]. If, at any time the term of this agreement, Infortrend becomes aware that its Professional/Errors & Omissions Liability insurance
coverage will either be interrupted or discontinued for any reason, Infortrend shall be obligated to notify Dot Hill immediately, 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        H.    Property
insurance in amounts adequate to cover replacement cost of Dot Hill's property in Infortrend's care, custody and control. 

        2.    The
insurance coverages and limits required to be maintained by Infortrend shall be primary to any insurance coverages maintained by Dot Hill which shall be excess and
non-contributory. Said coverages shall be placed with insurance companies reasonably acceptable to Dot Hill. 

        3.    Prior
to the commencement of any work or the performance of any services which are the subject of this Agreement no later than ten (10) days after the renewal of
each insurance policy or purchase of replacement insurance, Infortrend must furnish Dot Hill with a Certificate of Insurance evidencing the required insurance coverages and referencing Dot Hill's
additional insured status and waivers of subrogation. Said Certificate(s) shall include a provision requiring the insurance carrier(s) to provide, directly to Dot Hill, thirty (30) days advance
written notice before any termination, 

51

 

cancellation, or other material change to the policies shown on the Certificate takes effect, regardless of whether such action was initiated by the Infortrend, other insured or the insurance
carrier. Copies of the additional insured and waiver of subrogation endorsements, if any, must be provided to Dot Hill upon reasonable request. 

        4.    The
foregoing requirements regarding the minimum types and limits of insurance coverage to be maintained by Infortrend and any approval or waiver of said insurance by Dot
Hill is not intended to and shall not in any manner limit the liabilities or obligations otherwise assumed by the Parties pursuant to this Agreement, including but not limited to, any provisions
concerning indemnifications. 

        5.    The
parties agree to meet annually to review Infortrend's insurance coverage. Dot Hill will consider Infortrend's reasonable requests to self insure provided Infortrend's
liabilities and responsibilities under this Agreement will not be altered in any way by either Infortrend's decision to self-insure or Dot Hill's decision to permit Infortrend to do so. 

52

 
 
 

EXHIBIT K
  SOFTWARE MAINTENANCE AND SUPPORT    
  

1.0    SCOPE.    This Software Maintenance and Support Exhibit describes the responsibilities of Dot Hill and Infortrend as they
relate to training, support and maintenance of the Software. The parties understand that the Software may be incorporated into and distributed with Dot Hill Products in accordance with the Agreement.
Dot Hill shall provide "front-line" support to Dot Hill Customers for Software incorporated into, bundled, and/or distributed with Dot Hill Products, including receipt of initial calls,
verifying the support contract, initial diagnostics, and reproduction of the Error. If an Error is identified, a Dot Hill technical support person will contact Infortrend's support organization(s) for
"backline" support, as described in Section 5.0 ("Infortrend's Responsibilities") of this Exhibit. 

2.0    DEFINITIONS.    Capitalized terms not defined in this Exhibit shall have the
meanings ascribed to them in the Agreement. 

        2.1  "Documentation" means Infortrend's standard OEM documentation (which may be provided in electronic, printed and
hyper-text form), which may include, without limitation, OEM manuals, guides and descriptions relating to the Software. 

        2.2  "Dot Hill Customer" means a customer who is authorized by Dot Hill to receive maintenance and support for the Dot Hill
Products. 

        2.3  "Dot Hill Product(s)" means any product made by or for Dot Hill that incorporates and/or bundles the Software as
authorized under the Agreement. 

        2.4  "Error(s)" means any failure of the Software to conform to the Specifications in all material respects. 

        2.5  "Error Correction(s)" means a modification or addition to the Software or Documentation that establishes a procedure or
routine that, when observed in the regular operation of the Software, eliminates the practical adverse effect of an Error on the use of the Software without any material loss of functionality or other
adverse consequences. 

        2.6  "Error Correction Matrix" means Infortrend's obligations and response times required to make an Error Correction, as
further described in Section 5.4 ("Error Corrective Action") of this Exhibit. 

        2.7  "Escalation Report(s)" means the report of detected Error(s) in the Software provided to Infortrend for Error Correction,
as further described in Section 4.1 ("Error Reporting") of this Exhibit. Dot Hill shall report detected Errors in the Software to Infortrend in writing, including confirmed electronic
transmission such as facsimile or email. If practicable, Infortrend will use a specified electronic method to report Errors with Dot Hill, which may include the use of the SANSolve service. 

        2.8  "Functionality" shall have the meaning set forth in Section 4.2 of this Exhibit. 

        2.9  "General Availability" or "GA" means a Dot Hill Product released to the
general public on a revenue basis. 

        2.10 "Impact" shall have the meaning set forth in Section 4.2 of this Exhibit. 

        2.11 "Initial Action Plan" means an initial plan describing the steps Infortrend intends to take to implement an Error
Correction, according to the requisite time set forth in Section 5.4 ("Error Corrective Action") of this Exhibit. The Initial Action Plan may include, but is not limited to, the following
information: (i) description of the Error, (ii) confirmation (when possible) that Infortrend has
reproduced the Error, (iii) status of the Error, (iv) actions required for Error Correction, (v) when such actions are expected to occur and when they are expected to be
completed, and (vi) the date when Error Correction is expected be implemented. 

53

 

        2.12 "Long Term Action Plan" means the steps Infortrend intends to take to address an Error as set forth in
Section 5.4 ("Error Corrective Action") of this Exhibit. The Long Term Action plan may include, but is not limited to, the following: (i) a description of the Error,
(ii) confirmation (when possible) that Infortrend has reproduced the Error, (iii) status of the Error, (iv) actions required for Error Correction, (v) a
step-by-step outline, citing the cause of the Error and the requirements for an Error Correction, (vi) name of Properly Trained Personnel who will carry out the Long
Term Action Plan, together with their telephone number and other contact information, (vii) expected completion dates for the requirements under the Long Term Action Plan, (viii) the
date the Error Correction is expected to be implemented, (ix) the dates for conference calls to review progress under the Long Term Action Plan, and (x) the expected date of Patch
delivery, if applicable. 

        2.13 "Patch" means any minor change to the Software made by Infortrend, including changes made for the purpose of maintaining
compatibility of the Software with other applications and Error Correction. Patches shall be designated sequentially as "Version 1.1.1", "Version 1.1.2", and so forth. 

        2.14 "Properly Trained Personnel" means Infortrend's engineering personnel capable of performing Error Corrections. 

        2.15 "Severity" is the impact that an Error has on a Dot Hill Customer's operations and on functionality of the Product, as
further described in Section 4.2 ("Error Classification") of this Exhibit. 

        2.16 "Software" means the Licensed Software and Licensed Firmware as defined in the Agreement, including all Error
Corrections, Patches and Updates. 

        2.17 "Specification" means the applicable set of operating criteria for the Software, which are included in  Exhibit E, which may be amended from time to time upon
mutual written agreement of the parties. 

        2.18 "Update(s)" means any minor maintenance releases, modifications, enhancements, or extensions to the Software. Updates
shall be designated sequentially as "Version 1.1", Version 1.2", and so forth. 

        2.19 "Workaround" means a temporary solution to an Error that allows the Dot Hill Customer to continue to do business or use
the Software until an Error Correction is completed. A Workaround may consist of specific administrative steps or alternative programming calls. A Workaround is not an Error Correction. 

3.0    DISTRIBUTION RIGHTS.    Infortrend hereby grants to Dot Hill a limited,
non-exclusive, royalty-free, fully-paid up, perpetual, world-wide license to distribute Updates. Patches and/or Error Corrections of the Software to Dot
Hill Customers by means of a secure password protected web based system or by any other commercially accepted means that provides adequate protection from unauthorized access. All such distributions
of Patches and/or Error Corrections shall be distributed pursuant to reasonably protective license terms in connection with the Dot Hill Customer's provision of maintenance and support for the Dot
Hill Products. 

4.0    DOT HILL'S RESPONSIBILITIES

        4.1    Error Reporting.    Dot Hill shall report detected Errors in the Software to Infortrend by means of an
Escalation Report. Escalation Reports shall be made in writing, including confirmed electronic transmission such as facsimile or by email. Each Escalation Report shall identify in reasonable detail
the nature of the Error(s), as well as any other information which Dot Hill and Infortrend may deem reasonably desirable to assist Infortrend in verification and reproduction of the reported Errors.
Infortrend shall respond to Dot Hill, in writing, including confirmed electronic transmission such as facsimile or by email, within the time frames set forth in the Error Correction Matrix. 

54

 

        4.2    Error Classification.    Each Escalation Report shall include Dot Hill's proposed classification of the
Severity Level of the Error(s), and the reason for such proposed classification, in accordance with the classification criteria set forth in Section 4.2 ("Error Classification"). Infortrend
shall accept Dot Hill's proposed classification, unless Infortrend provides a reasonable basis why an Error should be assigned a different classification. If the parties do not agree, which agreement
shall not be unreasonably withheld, delayed or conditioned, on the classification for any Error within [...***...] of notification to Dot Hill of Infortrend's different Error
classification, the dispute shall be escalated to the management of each party for resolution in good faith. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        Each
Error shall be classified according to impact on the operation of the Dot Hill Customer's system ("Impact") and the loss of functionality of the Software ("Functionality"). 

	IMPACT:	 	 
	 	

Red Alert:	
 	

Significant or potentially significant financial/business impact to the Dot Hill Customer caused by the Error.
	 	

Critical:	
 	

System is down or effectively unusable as a result of the Error, or the Error causes critical impact on the Dot Hill Customer's operation with no acceptable Workaround.
	 	

Significant:	
 	

System is up and running, but the Error causes significant impact and has no acceptable Workaround.
	 	

Limited:	
 	

System is up and running, and the Error causes only limited or insignificant impact.
	

FUNCTIONALITY:	
 	

 
	 	

Red Alert:	
 	

Dot Hill Customer system is or is susceptible to being rendered down and/or unusable due to the Error. Functionality affected by the Error may include Dot Hill Customer experiencing or being susceptible to experiencing data corruption, a security
breach or exposure, inability to run a new application or a miss in key production dates. No acceptable Workarounds or Error Corrections are available.
	 	

Primary:	
 	

Functionality used to perform tasks considered to be essential to business operations, project completion or normal productivity of end-user. Secondary: Functionality used to perform tasks considered to be important, but not primary to immediate
business operations.
	 	

Nonessential:	
 	

Functionality that is not important and infrequently used.

SEVERITY:
The Severity level of an Error (e.g., Severity 1) is determined by the criteria set forth below, and establishes the time period by which Infortrend shall respond to an Escalation
Report and perform an Error Correction, as elaborated in Section 5.4 ("Error Corrective Action"). 

        Two
components establish the Severity of an Error: 

	1.
	The
degree the Error impacts Dot Hill Customer ("Impact"); and

	2.
	Dot
Hill Customer functionality affected by the Error ("Functionality"). 

        Both
Impact and Functionality are described and defined above. 

55

 

        Error
Severity levels range from Red Alert (most severe) to 4 (least severe): 

	 	Red Alert:	 	Errors with the most severe and critical or potentially critical impact on customer's system with primary functionality unusable or susceptible to becoming unusable and no Workaround. Significant or potentially
significant financial/business impact to customer. Red Alerts also include Errors that may have a significant financial and/or image impact to Dot Hill including potential loss of current sale, future business, positive reference account/product
status, etc. Red Alert is its own separate category requiring involvement of Dot Hill's upper level management and technical staff, and Infortrend's management and Infortrend's Properly Trained Personnel.
	 	

Severity 1:	
 	

Critical impact on primary functionality, unusable, no Workaround.
	 	

Severity 2:	
 	

Significant impact on primary functionality, or critical impact on secondary functionality.
	 	

Severity 3:	
 	

Limited impact on primary functionality, or significant impact on secondary functionality.
	 	

Severity 4:	
 	

Limited impact on non-essential functionality, or non-problematic issue.

        The
Impact and Functionality concerns may be mapped to the Severity Matrix in the following manner to indicate the Severity level of an Error: 

Severity Matrix: Indicates Levels of Errors  

	FUNCTIONALITY
 
	 	Red Alert
	 	IMPACT Critical
	 	Significant
	 	Limited

	Red Alert	 	Red Alert	 	 	 	 	 	 
	Primary	 	 	 	Severity 1	 	Severity 2	 	Severity 3
	Secondary	 	 	 	Severity 2	 	Severity 3	 	Severity 4
	Nonessential	 	 	 	Severity 3	 	Severity 4	 	Severity 4

        4.3    Error Correction Acceptance.    After Dot Hill receives an Error Correction from
Infortrend, Dot Hill shall have [...***...] business days to either notify Infortrend, in writing, of Dot Hill's acceptance of the Error Correction or provide Infortrend
with a written report (including test results and test data concerning the Error), specifying in reasonable detail all deficiencies requiring further response from Infortrend according to the assigned
priority of the applicable Error, as set forth in Section 5.4 ("Error Corrective Action"). If Infortrend does not receive such report from Dot Hill within such
[...***...] business day period, Dot Hill shall be deemed to have accepted the applicable Error Correction. Upon notification by Dot Hill that an Error Correction for a
Severity 1, 2, or 3 Error fails to correct the Error, the Severity shall be raised one level and Infortrend shall proceed to implement a second Error Correction in accordance with the priority and
time frame for the new level, as set forth in the Error Correction Matrix in Section 5.4. Upon completion of the second Error Correction, Infortrend shall resubmit the Error Correction to Dot
Hill for acceptance in accordance with this Section 4.3 ("Error Correction Acceptance"). If the resubmitted Error Correction is still unacceptable to Dot Hill, Dot Hill shall so notify
Infortrend within [...***...] business days following receipt thereof and Infortrend shall promptly dispatch Properly Trained Personnel to a Dot
Hill-designated location where Infortrend's Properly Trained Personnel shall use their diligent efforts to provide an Error Correction. If Infortrend does not 

56

 

receive such notice regarding the second Error Correction from Dot Hill within such [...***...] business day period, Dot Hill shall be deemed to have accepted the
applicable second Error Correction. Solely in the event the conditions for a Red Alert Severity Level exist, if no Error Correction is provided within
[...***...] business days after Infortrend's Properly Trained Personnel arrive on-site, Dot Hill may, in
its sole discretion, allege that such failure to provide the Error Correction is a material breach of the Agreement. 

5.0    INFORTREND'S RESPONSIBILITIES

        5.1    Testing.    Infortrend shall test and initially qualify the Software on supported Dot
Hill Products. The parties will mutually agree upon the specific tests and processes which are required to validate the Software on the supported Dot Hill Product, which agreement shall not be
unreasonably withheld, delayed or conditioned. Infortrend will provide its test, qualification, and compatibility results related to the Software to Dot Hill. Infortrend shall test Error Corrections
to determine that each reported Error has been rectified and that the Software continues to conform to the Specification in all material respects. The results of such tests and performance
measurements shall be delivered to Dot Hill. 

        5.2    Test Suites and Support Tools.    Infortrend shall identify and provide Dot Hill with
all available test suites and support tools used by Infortrend to support and enhance the Software that are generally made available by Infortrend to its customers. Infortrend will also produce a
template of information it requires from Dot Hill in order to be able to handle an Error Correction. The template may include, but is not limited to the following information: 

	a.
	Software
(including version number) producing the Error,

	b.
	Date
and Time the Escalation Report is submitted to Infortrend,

	c.
	Infortrend's
service order/tracking number for the Escalation Report,

	d.
	Proposed
Severity level of the Error according to the Error Severity Matrix in Section 4.2 ("Error Classification"),

	e.
	Description
of the Error and reasons for the Error Classification, and

	f.
	Dot
Hill contact and telephone number. 

        5.3    Support Requirements.    The following support terms shall apply to configurations of
the Dot Hill products for which Dot Hill is obligated to provide substantially equivalent support for Dot Hill
Customers; provided that Dot Hill has given Infortrend sufficient information about such configuration(s) to enable Infortrend to provide such support. Infortrend will make telephone access to its
Properly Trained Personnel available to Dot Hill. Infortrend's Properly Trained Personnel will be available [...***...] on the following basis:
[...***...] during designated hours Pacific Standard Time ("PST") and [...***...] during designated hours Taiwanese local time, as designated by
Infortrend. Infortrend's service center will be manned by Properly Trained Personnel during Infortrend's normal PST and Taiwanese business hours. Outside of such hours, Properly Trained Personnel will
be available via pager. Dot Hill shall provide to Infortrend, within ten (10) days of the execution of this Agreement by both parties, a list of Dot Hill personnel who are authorized to contact
Infortrend regarding maintenance and support. Such authorized personnel shall not exceed five (5) in number. Infortrend shall not be obligated to provide maintenance and support services as set
forth in this Exhibit if contacted by Dot Hill personnel who are not included on such list. Dot Hill reserves the right to request that any individual be removed from the pool of Infortrend's Properly
Trained Personnel if they are, in Dot Hill's reasonable opinion, unresponsive to Escalation Reports or unable to perform Error Corrections. Infortrend shall remove such individual from such pool,
unless Infortrend in good faith believes that such individual is appropriately qualified as Properly Trained Personnel. Infortrend shall provide to Dot Hill a list of management-level designated
contacts, and their e-mail addresses, telephone, cellular, pager, and facsimile numbers, who Dot Hill may contact after attempting and being unable to 

57

 

obtain an Error Correction from Properly Trained Personnel. Infortrend shall promptly notify Dot Hill of any changes to the contact information for such contacts. 

        5.4    Error Corrective Action.    Infortrend will respond to Dot Hill with an Error
Correction action and implementation plan in accordance with the following: 

        [...***...]

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        Infortrend
will acknowledge, in writing, including electronic transmission such as facsimile or by email, receipt of the Escalation Report within the timeframe designated above.
Infortrend will provide a service order number to the Dot Hill technical contact so that Dot Hill can track the Error in future communications with Infortrend. Infortrend will provide Dot Hill with an
Initial Action Plan according to the requisite timeframe in the Error Correction Matrix. Once Infortrend submits the Initial Action Plan to Dot Hill, Infortrend will use diligent efforts to implement
Error Corrections. Error Corrections shall be implemented according to the deadlines set forth above or as specified in an agreed Long Term Action Plan, which agreement shall not be unreasonably
withheld, delayed or conditioned. If Infortrend believes that an Error Correction may not be able to be implemented in the applicable time set forth in the Error Correction Matrix, Infortrend will
immediately notify Dot Hill; provided, however, that such notification will not reduce or eliminate Infortrend's obligations under this Agreement or Exhibit. Dot Hill may agree to allow Infortrend to
submit a Long Term Action Plan,
rather than an Error Correction, if Infortrend is unable to meet the requisite deadline for Error Correction, which agreement shall not be unreasonably withheld, delayed or conditioned. 

        Infortrend
agrees that on-site Error Correction services will be provided to Dot Hill and the Dot Hill Customer at no additional charge, unless the Error is determined by
objective data not to be a Software defect or failure, in which case Dot Hill shall reimburse Infortrend for the reasonable, out-of-pocket costs of providing such
on-site Error Correction services. Such reimbursement shall be subject to Dot Hill's review and approval of Infortrend's costs, which approval shall not be unreasonably withheld, delayed
or conditioned. In the event that Infortrend assesses the cause of the Error to be other than a Software defect or failure, Infortrend will contact Dot Hill and promptly provide Dot Hill with a
reasonably detailed explanation of the basis for this determination. 

        5.5    Patches to Software.    At no additional charge to Dot Hill, Infortrend shall provide
all Patches to Dot Hill (in a mutually agreed upon format, which agreement will not be unreasonably withheld, delayed or conditioned) as soon as the Patches are available, but in any event within the
specified time frames set forth in Section 5.4 ("Error Corrective Action"). Where available, Infortrend shall also provide Patches on-line. Infortrend shall conduct bug fix
validation tests (on a standard base-level system) and regression testing for Patch compatibility prior to sending the same to Dot Hill. In the event that such testing may cause Infortrend
not to comply with the relevant time frames required under Section 5.4, Infortrend shall inform Dot Hill and Dot Hill shall have the following options: 

	(a)
	waive
the testing requirement,

	(b)
	waive
the time requirement, or

	(c)
	if
(a) or (b) are not commercially practicable, require that Infortrend proceed under its obligations. 

        Dot
Hill shall not unreasonably withhold, delay or condition the waiver of the testing or timing. Whenever possible, Infortrend shall provide to Dot Hill a test case or test procedure
used to verify all Patches. 

58

 

        5.6    Updates.    Infortrend shall promptly deliver Updates to Dot Hill as soon as Infortrend
makes the Update generally commercially available to its customers. Where available, Infortrend shall supply alpha and beta versions of an Update to Dot Hill to permit Dot Hill to determine whether
the Update will affect the integration of the related Product into Dot Hill Products. In no event will Infortrend provide any alpha or beta versions to Dot Hill later than Infortrend provides such
versions to another
Infortrend customer. Infortrend provides all alpha and/or beta versions of Updates "as-is" without warranty of any kind. Any use of an alpha and/or beta version of an Update shall be at
Dot Hill's sole and exclusive risk, and Infortrend shall not be liable for any problems or damage related to the use of any alpha and/or beta version of any Update. Dot Hill shall have the right, but
not the obligation, to provide input to Infortrend regarding the content and characteristics of future versions and releases of Software. Notwithstanding the foregoing, Infortrend shall have no
obligation to include or incorporate any input in any future version or release of the Software. Any alpha and/or beta versions of Updates are not for commercial release. 

        Infortrend
shall provide Updates to Dot Hill in separate shippable packages as follows: 

	(a)
	licenses
with right to use and distribute the Update solely to Dot Hill Customers,

	(b)
	media
(CDs), and

	(c)
	Update
Documentation. 

        5.7    Bug Reports.    Infortrend shall permit Dot Hill to have access to Infortrend's bug
reports (free of charge) that are relevant to the Software. Infortrend shall provide bug reports to Dot Hill on a monthly basis. Access to the bug reports shall be limited to Dot Hill's employees,
agents and subcontractors with a need to know. The information in the bug reports shall be deemed to be Infortrend's confidential information and treated in accordance with the confidentiality
provisions of the Agreement. Infortrend grants Dot Hill a limited, non-exclusive, royalty-free, fully-paid up, perpetual, world-wide license to use,
copy and distribute such data for purposes of resolving Dot Hill Customer support issues with respect to the Software. 

        5.8    Records.    Infortrend shall keep and maintain accurate records with respect to Error
and Error Correction status, setting forth in reasonable detail Escalation Reports received, response time, Patch, and implementation of Error Corrections. Infortrend shall provide such records to Dot
Hill on a quarterly basis, and in addition, Infortrend shall make them available to Dot Hill upon Dot Hill's reasonable request. The information in the foregoing reports shall be deemed to be
Infortrend's confidential information and treated in accordance with the confidentiality provisions of the Agreement. 

6.0    TRAINING.    Infortrend shall provide to Dot Hill training courses a minimum (the extent practicable) of
[...***...] before Dot Hill's general availability ("GA") date for each Dot Hill Product which incorporates and uses the Software in order to provide Dot Hill with the
information for Dot Hill to perform support for such Dot Hill Product. This training shall be provided in [...***...]. The format/content of the training courses, location, and
availability (dates) of such courses shall be as mutually agreed to by the parties. In addition, Infortrend grants to Dot Hill a limited, non-exclusive,
royalty-free, fully-paid up, perpetual, world-wide license to use, copy and distribute the training materials, in both hard copy and electronic formats, solely to
allow Dot Hill to provide further internal training and maintain ongoing Dot Hill Product training for new employees as needed. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

7.0  END OF LIFE.

        Infortrend
will provide Dot Hill with Software support during the [...***...] years after the termination or expiration of the Agreement, as described below: 

        [...***...] 

59

 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

60

 
 
 

FIRST AMENDMENT
  TO
  OEM AGREEMENT DATED MAY 20, 2002    
  

        THIS FIRST AMENDMENT (the "First Amendment") to the OEM Agreement dated May 20, 2002, (the "OEM Agreement")
is made by and between DOT HILL SYSTEMS CORPORATION, having a place of business at 6305 El Camino Real, Carlsbad, California 92009 (hereinafter
"Dot Hill"), and INFORTREND TECHNOLOGY INC., having a place of business at 8F, No-102
Chung-Shan Rd., Sec. 3, Chung-Ho City, Taipei Hsien, Taiwan, Republic of China (hereinafter "Infortrend"). This First Amendment
shall become effective upon its execution by both parties. 

        For
good and other valuable consideration, the receipt and sufficiency thereof are hereby acknowledged, Dot Hill and Infortrend agree to amend, and hereby amend, the OEM Agreement as
follows: 

        1.    Replace
Section 1.4, Demand Replenishment Program, with the following: 

        "[...***...]
Program" shall mean the program which provides for Infortrend-owned Product located at a designated
[...***...] location to be delivered to a Dot Hill-designated location(s) within the timeframe(s) such Product is required by Dot Hill and which shall be provided
to Dot Hill by means of a Demand Trigger.

        2.    Replace
Section 4.4, Demand Replenishment Program, with the following: 

        "[...***...]
Program. Infortrend shall maintain an inventory of the Products as implemented through the
[...***...] Program described in Exhibit H. Except as provided in  Exhibit H, the costs associated with the
maintenance of such inventory shall be borne entirely by Infortrend." Infortrend shall not have any
obligation to Dot Hill to deliver any quantity of Products to Dot Hill-designated locations or any other location beyond its delivery obligations set forth in  Exhibit H and
Section 6.

        3.    Replace
the words "Demand Replenishment Program" that appear in Sections 1.28, 4.2(b), 8.1 and 21 with the words "[...***...] Program." 

        4.    Delete
provisions of Section 19, Conditions Respecting Effectiveness, in their entirety. 

        5.    Replace
Exhibit E and Exhibit H in their entirety with the
attached Exhibit E and Exhibit H, respectively. 

        6.    Replace
the words "SECTION 7" in Section 4.5(b) with "SECTIONS 2 AND 4." 

        The
OEM Agreement, as amended by this First Amendment, constitutes the entire and complete understanding of the parties regarding its subject matter, and supersedes all written
agreements and understandings between the parties regarding its subject matter. Except as expressly amended hereby, the provisions of the OEM Agreement shall remain unchanged and in full force and
effect. In the event of any inconsistency between the provisions of this First Amendment and the OEM Agreement, the terms of this First Amendment shall prevail. 

Accepted and Agreed to:  

	DOT HILL SYSTEMS CORPORATION	 	INFORTREND TECHNOLOGY, INC.
	

By:	

    
	
 	

By:	

    

	Printed Name:	    
	 	Printed Name:	    

	Title:	    
	 	Title:	    

	Date:	    
	 	Date:	    

61

 
 
 

EXHIBIT E
  SPECIFICATIONS    
  

        List of Specifications, as modified below: 

        1.    Procurement
Specification for new procurement and repair of the IFT [...***...] OEM SCSI Raid Controller, Dot Hill P/N
MIN-221FAC-512, Dot Hill Revision 25; 

        2.    Procurement
Specification for new procurement and repair of the IFT [...***...] OEM SCSI Raid Controller, Dot Hill P/N 66-00000051,
Dot Hill Revision 50; and 

        3.    Procurement
Specification for new procurement and repair of the IFT [...***...] Controller Battery Backup Module, Dot Hill P/N
66-00000052, Dot Hill Revision 50 /50A. 

        The
foregoing Specifications were transmitted electronically on behalf of Dot Hill to Infortrend on May 21, 2002, and as modified below, are hereby incorporated by reference into
this Exhibit E. 

        The
following are modifications to the above list of Specifications that have been agreed to by Dot and Infortrend: 

        1.    For
IFT [...***...] Procurement Specification: 

        a.    Modification
1: Section 2.0.10. (MTBF) of greater than [...***...]. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        b.    Modification
2: Appendix B is replaced by the picture of Version 1.2 PCBA. 

        2.    For
IFT [...***...] Procurement Specification: 

        a.    Modification
1: Section 1. TBD upon the mutual agreement of the parties, which agreement will not be unreasonably withheld, delayed or conditioned. 

        b.    Modification
2: Section 2.0.10. (MTBF) of greater than [...***...] 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        c.    Modification
3: Section 2.0.10. SR-332 changed into TR-332. 

        d.    Modification
4: Section 6. Remove "Battery is to be shipped disconnected." 

        e.    Modification
5: Section 7. Remove the following:

[...***...] 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        3.    For
IFT[...***...] Controller Battery Backup Module Procurement Specification: 

        a.    Modification
1: Section 2.0.10. (MTBF) TBD upon the mutual agreement of the parties, which agreement will not be unreasonably withheld, delayed or conditioned. 

        b.    Modification
2: Section 2.0.10. SR-332 changed into TR-332. 

62

 
 
 

EXHIBIT H
  UPSIDE SUPPORT AND JIT HUB PROGRAM    
  

A. UPSIDE SUPPORT  

        Dot Hill may request delivery of all or any part of the Upside Support quantity with respect to a Quarter, as defined in the OEM Agreement, at anytime during an
applicable Quarter, up to the maximum amount indicated below, beginning with the Quarter after the Quarter during which the General Availability of the Dot Hill product or system that incorporates the
Product occurs. Infortrend shall sell, manufacture and ship such Upside Support quantities to Dot Hill, on a "first-in, first-out" basis for delivery on such date as Dot Hill
shall request. The Upside Support percentage for each Quarter will be as follows: 

	Quarter
 
	 	Percentage
	 
	[...***...]	 	[...***...	]
	[...***...]	 	[...***...	]
	[...***...]	 	[...***...	]

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        Infortrend
shall use commercially reasonable efforts to accommodate any request from Dot Hill to accelerate delivery of Upside Support quantities of Products within the timeframes
indicated above. With respect to any request for quantities in excess of Upside Support described above, the parties shall negotiate mutually acceptable delivery dates. 

B. JIT HUB PROGRAM  

        [...***...]

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

63

QuickLinks

OEM AGREEMENT

RECITALS

AGREEMENT

EXHIBIT A Product and Price Schedule

EXHIBIT B Out of Warranty Repair Price Schedule

EXHIBIT C Mutual Confidentiality Agreement

EXHIBIT D EXTERNAL MANUFACTURERS

EXHIBIT E SPECIFICATIONS

INFORTREND QUALITY PROGRAM

EXHIBIT F-1 CUSTOMER SUPPORT QUALITY REQUIREMENTS

EXHIBIT G ELECTRONIC DATA INTERCHANGE (EDI) TERMS

EXHIBIT H UPSIDE SUPPORT AND DEMAND REPLENISHMENT PROGRAM

Attachment A Demand Replenishment Products

EXHIBIT I BUSINESS CONTINUITY PLAN

EXHIBIT J INSURANCE REQUIREMENTS AND OBLIGATIONS

EXHIBIT K SOFTWARE MAINTENANCE AND SUPPORT

FIRST AMENDMENT TO OEM AGREEMENT DATED MAY 20, 2002

EXHIBIT E SPECIFICATIONS

EXHIBIT H UPSIDE SUPPORT AND JIT HUB PROGRAMQuickLinks
 -- Click here to rapidly navigate through this document

  

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

Exhibit 10.6  

 
  MANUFACTURING AGREEMENT    
  

        This Manufacturing Agreement including the exhibits attached hereto (the "Agreement") is made on and as of the 20th day of May, 2002 ("Effective Date") by and
between Dot Hill Systems Corporation, a Delaware corporation, with offices at 6305 El Camino Real, Carlsbad, California, 92009 (hereinafter "Dot Hill") and Solectron Corporation, a Delaware
corporation, with offices at 847 Gibraltar Drive, Milpitas, CA 95035 and and its subsidiaries and affiliates, including but not limited to Solectron Technology Singapore Ltd., Solectron
Technology Sdn Bhd, Solectron Netherlands BV and any other Offshore Business Headquarters ("OBHQs") (hereinafter "Supplier"). 

 
 

Background    
  

        This Agreement governs Dot Hill's purchase of component parts, fabricated materials, and/or finished manufactured products from Supplier (each a "Product""). The
general terms and conditions comprising the body of this Agreement sets forth the general terms for all Product purchases. A separate Product Supplement/Award Letter in the form of Attachment
A-1 ("Award Letter") will be issued for each particular Product, setting forth any additional or special terms and conditions applying to that particular Product, such as prices, order
quantities, and lead times, and any change to the general terms and conditions applying to that particular Product. 

 
 

Agreement Components    
  

        The parties agree to be bound by this Agreement, which consists of this signature page, the general terms and conditions and attachments following this signature
page, any issued and accepted Award Letter (including any Award Letter Components) and the exhibits indicated below: 

ý
Exhibit A (Electronic Data Interchange) 

ý
Exhibit B (Customer Support Provisions) 

ý
Exhibit C (Supplier's Quality Program) 

ý
Exhibit C-1 (Customer Support Quality Requirements) 

ý 
Exhibit D (Demand Replenishment Program) 

        IN
WITNESS WHEREOF, the parties have caused this Agreement to be signed by their duly authorized representatives on the date(s) set forth below. Solectron Corporation hereby signs this 

1

 

Agreement on behalf of itself and those Solectron subsdiaries and affiliates described in the introductory paragraph of this Agreement. 

	Dot Hill Systems Corporation	 	Supplier: Solectron Corporation
	

By:	
 	

 	
 	

By:	
 	

 
	 	 	
	 	 	 	

	Name:	 	 	 	Name:	 	 
	 	 	
	 	 	 	

	

Title:	
 	

 	
 	

Title:	
 	

 
	 	 	
	 	 	 	

	

Date:	
 	

 	
 	

Date:	
 	

 
	 	 	
	 	 	 	

 
 

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  Award Letter shall mean that 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. An Award Letter shall not constitute a commitment
to purchase of any particular quantity of Products. 

        1.2  Confidential Information shall mean 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 both Dot Hill and Solectron 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 either Dot Hill or Solectron. 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 use of Confidential Information. 

        1.3  Demand Replenishment Program shall mean the program agreed to by the parties which provides for Supplier-owned Product
located at Supplier's facilities or Supplier-designated 3rd 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. 

        1.4  Demand Trigger shall mean the mechanism, whether written or by electronic means in a method agreed to by the parties, by
which Dot Hill communicates to Supplier the required delivery timeframes, quantities, delivery locations, and delivery timeframes under a specified purchase order ("P.O"). If Products are subject to
Demand Trigger, the frequency of releases will be specified in the Award Letter. 

2

 

        1.5  Dot Hill Contractor(s) shall mean the party or parties authorized by Dot Hill in writing to purchase Products from
Supplier but shall not include any competitor of Supplier. 

        1.6  Dot Hill Intellectual Property Improvements shall mean all upgrades, enhancements, improvements or other derivatives of
Dot Hill Intellectual Property which are made or acquired by Supplier or by Dot Hill. 

        1.7  Dot Hill Intellectual Property shall mean the following items which are authored, conceived, created, developed or owned
by Dot Hill (or licensed to Dot Hill with the right to grant licenses to third parties without the payment of royalties to Dot Hill's licensor): (i) all information, inventions, technology,
technical documentation, designs (including circuit designs and the Dot Hill product specifications), materials and know-how; (ii) any patents, patent applications or copyrights
pertaining to the foregoing; (iii) Dot Hill Confidential Information; (iv) Work Product and (v) Dot Hill Intellectual Property Improvements; provided that any intellectual
property right that is independently conceived, created or developed prior to, or independent of any work performed under an Award Letter or other agreement and whether or not such intellectual
property right is incorporated in any Work Product, shall remain the exclusive property of Supplier. 

        1.8  Dot Hill-unique Turnkey Components shall mean those Turnkey Components which Supplier has purchased and is
unable to mitigate under the provisions of this Agreement. 

        1.9  Economic Order Quantity ("EOQ") shall mean a quantity of Dot Hill-unique Turnkey Components or Dot
Hill-unique raw materials ordered by Supplier and used in the manufacture of the Product(s), 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. 

        1.10 Long Lead Time Components ("LLTC") shall mean those Dot Hill-unique Turnkey 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. 

        1.11 Material Leadtime shall mean 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. 

        1.12 Notice shall mean the giving of notice in the manner described in Section 12.2 below. 

        1.13 Obsolete Inventory means inventory on hand and non-cancelable/non-returnable on order in excess
of twelve (12) months demand as identified in either Purchase Orders or Forecasts. 

        1.14 Pre-Production and/or Prototype shall mean Product which is fabricated 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. 

        1.15 Product(s) shall mean those component parts, materials or finished goods manufactured by Supplier for Dot Hill and as
more specifically described in the applicable Award Letter. 

        1.16 Product Leadtime shall mean 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. 

        1.17 Six (6) Month Excess Inventory means inventory on hand and non-cancelable/non-returnable
on order that will be in excess of six (6) months of demand as identified in either Purchase Orders or Forecasts. 

3

 

        1.18 Specifications shall mean 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. 

        1.19 Sub-tier Supplier shall mean a supplier who provides material/components related to Products directly to
Supplier. 

        1.20 Supplier Guidelines shall mean Dot Hill's document 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. 

        1.21 Supplier Part shall mean a part 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. 

        1.22 Turnkey Components shall mean 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 Attachment B to the Award Letter and updated quarterly, and purchased only in
accordance with Dot Hill's Approved Vendor Listing ("AVL"), as may be amended from time to time by Dot Hill. 

        1.22 Three (3) Month Excess Inventory means inventory on hand and
non-cancelable/non-returnable on order that will be in excess of three (3) months of demand as identified in either Purchase Orders or Forecasts. 

        1.23 Upside Support shall mean the maximum percentage increase in the quantity of Product(s) that Dot Hill may purchase and
Supplier shall sell, manufacture and ship to Dot Hill, without incurring additional charges, in excess of the quantities set out in Dot Hill's outstanding P.O.'s and/or forecast. 

        1.24 Work Product is defined in Section 4.1 below. 

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. Dot Hill will be committed to purchase Products only if and when both parties enter into both an
Award Letter and a P.O. issued under that Award Letter. Any issued and accepted P.O. shall be subject to all the terms and conditions of the signature page, these general terms and conditions and
attachments following the signature page, the applicable Award Letter(s) for the ordered Product(s) and the exhibits indicated on the signature page (the "Applicable Terms of this Agreement"). 

        2.2    Design and Development Work.    In the event Supplier performs any design or development work in connection
with the manufacture and sale of any Product, the ownership, warranty and indemnity provisions of this Agreement shall apply to any and all resulting Work Product and deliverables and the intellectual
property embodied or contained therein. 

        2.3    Applicable Parties.    

        2.3.1  This
Agreement applies with respect to all current or future divisions, subsidiaries, locations and operations of Supplier, wherever those may be
located, and which arelisted in an addendum to this Agreement. For the purposes of this Agreement, "control" means the legal or beneficial ownership of more than fifty percent (50%) of the voting
securities of an entity. 

        2.3.2  Dot
Hill and all its current and future subsidiaries may issue P.O.'s for the purchase of Products pursuant to this Agreement. 

4

 

        2.3.3  Upon
written request of Dot Hill, Supplier agrees to sell Products to Dot Hill Contractors provided, however, that such Dot Hill Contractors
[...***...] to Supplier and have credit that is acceptable to Supplier, which credit approval shall not be unreasonably withheld. Supplier shall enter into an agreement with
Dot Hill Contractor(s) that extends substantially similar terms and conditions to Dot Hill Contractors as set forth in this Agreement and the corresponding sections of any Award Letter(s) with respect
to pricing, payment terms, Product Leadtimes, on-time delivery, allocation, Upside, shipping point, rescheduling, cancellation, forecasting, warranties, indemnity, acceptance and Product
quality and which agreement will include without limitation that (i) Dot Hill Contractor(s) shall have no right to purchase Products nor to purchase volumes in excess of Dot Hill's
authorization. Supplier shall have the right to determine the creditworthiness of any Dot Hill Contractor prior to accepting or fulfilling any P.O. issued by any Dot Hill Contractor. 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 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. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        2.4    Tooling.    Dot Hill shall own all tooling and test programs for which it fully pays a mutually agreed upon
non-recurring engineering (NRE) charge to Supplier. Additional terms and conditions related to such tooling may be set forth in a separate Tooling Agreement. 

        2.5    Dedicated Personnel.    Supplier shall dedicate full time personnel to servicing the Dot Hill account. The
resources to be dedicated to each project will be mutually agreed upon and specified in the applicable Award Letter. 

3.    ENGAGEMENT PROCESS  

        3.1    Product Supplement/Award Letters.    Supplier will provide manufacturing services and Products to Dot Hill, for
the period set forth in each Award Letter (the "Minimum Manufacturing Services Period"), 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, each party agrees to bear its own costs and expenses associated with such discussions without
compensation or reimbursement from the other party. 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 a negotiated Award Letter incorporating the terms and conditions governing any such purchase. Supplier shall review the Award Letter and, if it is
acceptable, execute it. An Award Letter shall not constitute a commitment to purchase any Product from Supplier. 

        3.2    Purchase Orders.    In the event that Dot Hill elects to purchase Products from Supplier, Dot Hill shall issue
and deliver P.O.'s to Supplier. Supplier shall accept Dot Hill's P.O.'s to the extent that such P.O.'s are consistent with Dot Hill's then current forecast. The parties agree that P.O.'s may be issued
and shall be deemed received in the manner provided in Exhibit A. 

        3.3    Pricing.    The prices set forth in the Award Letter and P.O. shall be determined in accordance with the
following principles: 

        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 material, material mark up, labor and other value-added services and NRE) and estimates for the following six (6) quarters shall be provided
by Supplier to Dot Hill on the Effective Date, and updated by Supplier and 

5

 

provided to Dot Hill on a quarterly basis, or more frequently if reasonably requested in writing by Dot Hill. In addition to providing to Dot Hill the price reductions which arise or result from the
costs reductions in the last sentence of Section 3.3.3, Dot Hill may also elect on a rolling annual period basis (or such shorter period as may be mutually agreed by the parties) from the
Effective Date of an Award Letter, and Supplier shall provide to Dot Hill, an additional reduction in pricing for Products through either: 

        (a)  a
Supplier-committed [...***...] price decrease as set forth in an Award Letter for Products manufactured during such period, or 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        (b)  the
cost reduction in the penultimate sentence of Section 3.3.3. 

Any
Supplier-committed [...***...] price decrease under subsection (a) for a Product will be set forth in an Award Letter or Attachment thereto; if such
Supplier-committed [...***...] price decrease is not set forth in an Award Letter or Attachment thereto, or Dot Hill fails to elect for the second or any succeeding annual
period (or such shorter period as may be mutually agreed by the parties) from the Effective Date of an Award Letter as to which price reduction option it desires to implement before the commencement
of such period, then the cost reduction methodology in subsection (b) shall apply for such applicable annual period (or such shorter period as may be mutually agreed) from the Effective Date of
an Award Letter. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        3.3.2    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, its employees, agents or subcontractors or its Sub-tier Suppliers as the result of factors including, but not
limited to, component purges and stop-shipments if the cause of the component purge or stop-shipment is attributable to Supplier. Notwithstanding the above, 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. 

        3.3.3    Cost Reductions.    Supplier will work actively to achieve cost reductions on all materials and processes
(including costs associated with assembly and test) associated with Product. Supplier will provide to Dot Hill an anticipated [...***...] cost reduction profile on a quarterly
basis. Supplier is encouraged to suggest to Dot Hill changes to materials/processes, however small, that will result in improved performance, reliability or yield of Products. Subject to the
provisions of Section 3.3.1, Supplier will pass through the benefits of all cost reductions achieved as a result of the efforts of the Supplier one full quarter after their implementation for
those units of inventory for which such cost reductions are implemented. Notwithstanding anything to the contrary in this Agreement, any cost reductions that are: (a) achieved through the
efforts of Dot Hill, or (b) received by Supplier based on pricing that is established [...***...] or Dot Hill with any third parties for raw materials or components
(including without limitation drives or controllers) that are to be included in the Products, shall be passed through by Supplier to Dot Hill for those units of Supplier inventory for which such cost
reductions are implemented. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

6

 

        3.3.4    Documentation.    Supplier agrees to make all supporting documentation available to Dot Hill regarding
Supplier's costs (as specified in section 3.3.1 above) and prices for each Product at least [...***...] prior to the quarterly Product Cost Review ("PCR") cycle as
described in the Supplier Guidelines. Such information shall be in a format to be mutually agreed upon by Dot Hill and Supplier and shall include costs that relate directly to this Agreement. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        3.3.5    Dot Hill Requested Changes.    Dot Hill may at any time make changes in the Product upon written notice to
Supplier. This notification shall include documentation to effectively support an investigation of the impact of the engineering change. Supplier will undertake reasonable efforts to 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 P.O. 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
[...***...] or both. No claim by Supplier for such an adjustment will be valid unless asserted within [...***...] from the date of Supplier's receipt of
the change order unless otherwise agreed. Any such change must be agreed upon by Dot Hill. In the event Dot Hill requests that a change be implemented prior to Supplier's evaluation of pricing and
schedule impact, Supplier will undertake reasonable efforts to perform as directed and Dot Hill will be liable for all costs associated with such implementation, unless the change was required due to
Supplier's failure to manufacture Product according to Specifications including excess and obsolete components. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        3.3.6    Packaging.    All prices must include packaging in accordance with Dot Hill's packaging specifications as
provided to and agreed to by Supplier including without limitation those specifications set forth in Supplier Guidelines. Dot Hill encourages the use of reusable packaging to reduce waste and
therefore cost to the Product. 

        3.3.7    Labeling.    All Product pricing must include the costs of labeling in accordance with Dot Hill's labeling
specifications (system level labels, FRU labels, packaging labels, Customer Information sheets, etc.) as provided to and agreed to by Supplier including without limitation those specifications set
forth in Supplier Guidelines. 

        3.3.8    Taxes, Duties and Tariffs.    Supplier shall pay all taxes and other related charges, imposed under any
present or future law, whether now or hereafter in force, up to the delivery point as the result of, or in connection with, this Agreement or any purchase order issued thereunder. 

        3.4    Payment Terms.    Payment (in U.S. dollars unless otherwise specified in the Award Letter) is due within thirty
(30) days after the date of invoice ("Payment Due Date") which shall not be earlier than the date of delivery subject to continuing credit approval, unless Dot Hill disputes an invoice. Dot
Hill shall not be required to pay the disputed portion of any invoice, pending resolution of that dispute; provided, however that notice of the dispute has been forwarded to Supplier prior to the
Payment Due Date. Payment of an invoice does not constitute acceptance of Products. Upon prior written agreement by Supplier, which will not be unreasonably withheld, delayed or conditioned
(i) invoices will be subject to adjustment for errors, shortages and/or rejected Products. Supplier will provide Dot Hill with a credit memo within thirty (30) days after Dot Hill's
return of rightfully rejected Products ("Credit Payment Due Date"). The information on Supplier's invoices shall include, without limitation, the 

7

 

following: P.O. number, Dot Hill part number(s), quantities, unit value and settlement currency, and freight charges (if applicable), each stated separately. Invoices must be addressed to Dot Hill's
Accounts Payable Department, 6305 El Camino Real, Carlsbad, California, 92009. With respect to all U.S. imports, the information provided on Supplier's invoice shall conform to the requirements
specified in the U.S. Code and Code of Federal Regulations. 

        3.5    Delivery/Title.    

        3.5.1    Delivery Point.    Delivery shall be as set out in Exhibit D  (Demand Replenishment) to this Agreement or as otherwise
set forth in the Award Letter. 

        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 the Product in accordance with Dot Hill's specifications. Notwithstanding any prior inspection, Supplier will bear all risk of loss, damage or destruction to the
ordered Products until delivery. 

        3.5.3    Extraordinary Transportation for Late Deliveries.    If it should reasonably be expected that a shipment of
Product(s) will not be delivered on the agreed delivery date, Supplier shall notify Dot Hill and, upon Dot Hill's request, Supplier shall, at Supplier's expense (provided that the expected late
delivery is due to Supplier's fault), use any commercially reasonable means of transportation to deliver Product(s) at the earliest possible date. 

        3.5.4    Delivery Performance.    If Supplier is unable to deliver the total quantity of Products ordered on the
scheduled delivery date, Supplier shall notify Dot Hill promptly, and Dot Hill may, at its sole option, consent to partial delivery. If Dot Hill does not consent, Dot Hill may: (1) reschedule
the delivery or (2) 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. Partial deliveries shall be separately invoiced by Supplier. 

        3.6    Forecasts, Allocation and Rescheduling.    

        3.6.1    Forecasts.    Dot Hill shall use its commercially reasonable efforts to provide Supplier with a
[...***...] rolling forecast of its intended purchases under each Award Letter in the form of Dot Hill's Supply Plan, updated at least quarterly and subsequent updates as
needed. Such forecast is for Supplier's convenience only and will in no way create an obligation on Dot Hill's part to meet such forecast, except for Dot Hill's obligations for EOQ and LLTC components
specified in this Agreement. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        3.6.2    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 could negatively affect Supplier's ability to meet Dot Hill's existing or forecasted needs for Product(s) ("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 would give Dot Hill the greatest quantity of
Products: (i) in proportion to Dot Hill's percentage of all of Supplier's customer orders for the previous two (2) full months for Products which use the scarce materials or capacity;
(ii) in proportion to Dot Hill's percentage of all of Supplier's customers forecasts for Products which use the scarce materials or capacity; or (iii) any allocation formula which
Supplier utilizes with any other customer. 

        3.6.3    Rescheduling of Products.    Dot Hill may, from time to time, reschedule for later shipment those quantities
of Products contained in previously submitted forecasts or purchase orders. 

8

 

        3.6.4    Rescheduling of Raw Materials.    Subject to Supplier's mitigation obligations and the other terms and
conditions in Section 3.7 and 3.9.1, any liability to Dot Hill for excess and obsolete inventory of raw materials purchased by Supplier for use in Products that have not otherwise been used by
Supplier will be determined in accordance with Section 3.9.2 after taking into consideration the below table that limits the amount of raw materials that may be rescheduled for use by Supplier
to produce Products (based on the highest volume forecast during the prior month): 

	Number of days before

Production Use Date
	 	Maximum Quantity
	 	Maximum Period from

Originally Scheduled

Production Use Date

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

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        3.7    Supplier Mitigation Obligations.    In accordance with the applicable Award Letter and P.O., 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; 

        3.7.7  Notify
Dot Hill promptly (not to exceed one (1) business day) 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 Products returned for rework after notice from Dot Hill. All returned Products which are not repaired and delivered to Dot
Hill within thirty (30) days after Supplier's receipt must be delivered to Dot Hill as the then most current version of the Product. Any cost or expense to upgrade or replace such Products so
as to return them to Dot Hill 

9

 

in their most current version shall be borne by Supplier (provided the cause of the delayed repair and return is due to Supplier's fault), 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 during the term hereof. Supplier represents that it has read and familiarized itself with the Supplier Guidelines and agrees to comply with the the Supplier
Guidelines. Supplier acknowledges that from time to time Dot Hill may issue and revise such Supplier Guidelines and will review each revision of the Supplier Guidelines provided by Dot Hill within
thirty (30) days 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 Responsibilities 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. 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 Effecitve 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    Excess and Obsolete Inventory.    Dot Hill acknowledges its financial responsibility for the materials
purchased by Supplier in accordance with required supplier lead times to support the Dot Hill purchase
orders, forecasted demand requirement, requested inventory build up resulting from the flexibility provisions of Section 3.6.3 and defined further per the terms contained in this section. 

Finished
goods and raw material liability will be evaluated monthly as or as mutually agreed by the parties. Liability will be assessed to the Dot Hill immediately following identification of Excess
and/or Obsolete inventory as defined and identified below. 

Excess
and Obsolete inventory assessment will be adjudged against the demand and flexibility requirements. Liability will be as limited in this Agreement and will include existing inventory, supplier
buffers that are agreed to by Dot Hill and non-cancelable/non-returnable orders that cannot be reduced by mitigation per standard purchasing practices, and will include excess
or obsolete materials caused by Dot Hill-controlled material shortages. Additionally, liability will include any supplier-imposed cancellation or restocking fees. 

Dot
Hill liability for Finished Goods Inventory, if any, is specified in Exhibit D. 

10

 

Dot
Hill liability for raw component material and Work In Process (WIP) is to be assessed as follows: 

Three (3) Month Excess Inventory—Dot Hill will be charged carrying costs at a monthly rate of [...***...] per
month. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

Six
(6) Month Excess Inventory—Dot Hill may buy such inventory at the following price: for (i) raw component material at [...***...]
(ii) material in WIP at [...***...] and a [...***...]. Value will include [...***...]. Dot Hill will take receipt of the
inventory specified in (i) and (ii) above within thirty (30) days of notification, or at Dot Hill's request and with Supplier's agreement, Dot Hill shall be charged carrying costs
at a [...***...] from date of notification. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

Obsolete Inventory—Dot Hill shall take receipt of the inventory within thirty (30) days of notification, For: (i) raw
component material at [...***...], and (ii) material in WIP at [...***...]. The [...***...] will include
[...***...] elements. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

Supplier
will invoice Dot Hill for any charges incurred under this Section 3.9.2 and Dot Hill and Supplier agree to payment terms of net thirty (30) days from receipt of invoice. 

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

        3.9.4    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. 

        3.9.5    Direct Ship.    Supplier agrees to use its commercially reasonable efforts 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. 

        3.9.6    Demand Replenishment Program.    Supplier agrees to support and implement a Demand Replenishment Program and
the terms and conditions related to each Demand Replenishment Program shall be set forth as an exhibit to the applicable Award Letter. 

        3.9.7    Supplier Performance Management.    Supplier agrees to support Dot Hill's Supplier Performance Management
process which is used to measure Supplier's ongoing performance, as described in the Supplier Guidelines. 

        3.9.8    Testing/Qualification.    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. 

        3.9.9    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, or have an independent third party audit, Supplier's quality records related to all services provided to Dot Hill
under this Agreement. 

11

 

        3.9.10    Audit Rights.    In addition to the audit rights set forth in Section 3.9.9 above, 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, solely to audit and inspect the quality of the manufacturing and testing procedures utilized and the resulting Products, and to verify that the
Products conform to the contractual requirements. Dot Hill acknowledges that Supplier reserves the right to require any such Dot Hill customer to sign a nondisclosure agreement prior to entering
Supplier's premises or other facilities. 

        3.9.11    Certifications.    All shipping information, including that on invoices, packing lists, and packing labels
will list the country of origin for all Product supplied, must be in both text and scannable bar code formats and must comply with the Supplier Guidelines. The invoice and packing list must also list
the country of origin by part number. Supplier must conform with Dot Hill's Origin Management System and its applicable procedures which are specified in the Supplier Guidelines. 

        3.9.12    Initiatives.    Supplier will negotiate in good faith with Dot Hill regarding all Dot Hill Break Through
Supply Chain ("BTSC") initiatives, including without limitation, Advanced Material Planning (AMP), Product Change Notification (PCN) process and scorecarding. If Supplier has reason to believe it may
not be able 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. 

        3.9.13    Dot Hill-Unique Features.    Supplier shall not sell, distribute or otherwise transfer the
Product(s) to any third party without Dot Hill's written consent. 

        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
the actual and reasonable costs incurred by Supplier resulting from a Stop Production Notice and for the actual and reasonable costs associated with the holding of partially completed Products. In the
event Pre-Production units of Product ordered are not accepted by Dot Hill for commercial shipment due to no fault of Supplier, the provisions of Section 3.12 below shall apply. In
the event 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 reasonable efforts to notify Supplier in writing at least
[...***...] prior to Dot Hill ceasing to purchase any Product set forth in a P.O. due to Dot Hill's discontinuance of a product. Such Notice shall include Dot Hill's purchase
and schedule requirements for such Product during such [...***...], or longer, period. Dot Hill shall have the full end of life ("EOL") period specified in the
Notice, during which Dot Hill may take delivery of EOL quantities or remaining quantities of the Product, as the case may be 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

12

 

        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 Product(s) which is the subject of the purchase order. Dot Hill's liability for cancellation charges shall not exceed (i) for that quantity of finished Products
scheduled for delivery within the hub, the Product price, plus (ii) for that quantity of components and raw materials and WIP that are to be included in Products to be manufactured for delivery
to Dot Hill within the applicable Product Leadtimes, the amounts set forth in Section 3.9.2. 

        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, Supplier shall take the actions indicated in Sections 3.12.1 through 3.12.8 below upon written request from Dot Hill to do so. 

        Upon
receipt by Supplier of such notice from Dot Hill, Supplier shall do the following: 

        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  In
accordance with Section 5.1, 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 Turnkey 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 forecasts and P.O.'s. 

        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 the components to a third party subject to written approval by Dot Hill, at a price acceptable to Dot Hill.
Dot Hill shall [...***...] and the Dot Hill-[...***...]. If the [...***...]. Except as mutually agreed otherwise,
Dot Hill agrees that Supplier is not required to continue mitigation of Dot Hill material liabilities beyond a thirty (30) day period from the date of the initial written notification from
Supplier to Dot Hill of the potential material liability. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        3.12.6  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 five (5) working days 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 twenty (20) business days
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 ten (10) business days after receipt of the documentation. Dot Hill shall pay any undisputed portion of Supplier's claim within thirty (30) days of
receipt of the claim. 

13

 

        3.13    Business Continuity Plan.    Supplier agrees to provide to Dot Hill 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. Such event may include one or more of the following: (1) Supplier system(s) component failures (including without limitation, hard disk failure, computer virus, and local
area network outages); (2) natural or man-made disasters (including without limitation, fire, flood, earthquake, bombing, sabotage, and vandalism); (3) any work stoppages of
any kind; and (4) any failure of a Supplier subcontractor to provide materials. These plans also include development of alternate sourcing strategies for materials; redirection of Product
manufacture, including work in progress and finished goods to another Supplier location/facility (subject to qualification by Dot Hill A Product-specific Business Continuity Plan (the "Plan") shall be
included as an exhibit to the Award Letter if required by Dot Hill for the Product award. Upon prior written approval of Supplier which shall not be unreasonably withheld, delayed or conditioned, Dot
Hill may provide a copy of such Plan to its customers. Supplier specifically approves Dot Hill to provide a copy of the Plan to Sun Microsystems, Inc. In no event shall Supplier increase
Product costs under this Agreement as a result of these business continuity plans or as a result of the implementation of such. 

        3.14    Alternative Sources of Products.    Dot Hill shall have the right to establish alternative and additional
sources of supply for the Products at any time and without restriction. 

4.    OWNERSHIP AND PROPRIETARY RIGHTS  

        4.1    Ownership.    Unless otherwise specified in an applicable Award Letter or Tooling Agreement (i) any and
all Product designs, inventions or improvements, (ii) any other design, 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 made, authored, conceived or
developed by or for Supplier or Dot Hill, alone or with others, which result from or relate to the work or its manufacture, (iii) any intellectual property contained or embodied in such items,
and (iv) any intellectual property rights arising from (i), (ii) or (iii) (collectively, "Work Product"), shall be the sole property of Dot Hill provided that any intellectual
property right that is independently conceived, created or developed prior to, or independent of any work performed under an Award Letter or other agreement and whether or not such intellectual
property right is incorporated in any Work Product,
shall remain the exclusive property of Supplier. Supplier hereby assigns and transfers all worldwide right, title and interest in and to the Work Product to Dot Hill. Supplier warrants that all Work
Product shall be owned exclusively by Dot Hill, free of any and all third party claims, regardless of the author or inventor. Dot Hill shall have the sole right to obtain and to hold in its own name
any copyrights, patents, mask work rights, trademark registration, or other legal protection as may be appropriate to such Work Product and any derivatives thereof. Dot Hill shall have the sole right
to determine the method of protection for any such Work Product, including the right to protect the same as trade secrets, to use and disclose the same without prior patent application or to file
registration for copyright, patent, mask work rights, or trademark in its own name, as Dot Hill deems appropriate in its sole and absolute discretion. Each such application or registration shall be
made at Dot Hill's request and Dot Hill shall pay for Supplier's assistance on a reasonable time and materials basis. 

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

14

 

obtain from its employees, agents and contractors written agreements that will permit Supplier to comply fully with these provisions. 

        4.3    License.    Supplier hereby grants to Dot Hill a fully paid-up, worldwide, unrestricted and
perpetual license under all intellectual property rights to use, reproduce, modify and distribute any material to which Supplier has rights that is necessary for the full and unrestricted enjoyment,
production, distribution (through multiple tiers of distribution) or use of any Work Product, including the right to make, have made, use and sell Products. Such license shall be limited to and solely
for the purpose of allowing Dot Hill to exploit Work Product incorporated in Products. The foregoing license rights are granted with respect to any Work Product for which Supplier's assignment above
is precluded by law or otherwise ineffective. 

        4.4    Proprietary Rights Notices.    Supplier agrees to properly mark each Product and any accompanying documentation
with Dot Hill's copyright or other proprietary rights notice, as directed by Dot Hill, to indicate Dot Hill's intellectual property rights in such Products. Except as expressly provided herein,
nothing in this Agreement shall be construed as a grant of any license, right or interest in any trademark, tradename or service mark of either party, or any third party from whom either party may
have acquired license rights. 

5.    SUPPORT  

        5.1    Upside Support/Accelerated Deliveries.    The terms regarding Supplier's obligation to provide Upside Support
shall be set out in the Award Letter. Supplier will use reasonable efforts to accommodate such requests on a case-by-case basis. Requests for increased quantities may be
subject to additional charges as incurred by Supplier and will be contingent upon manufacturing and materials assembly cycle time, availability of material, personnel and capacity resources. Such
additional charges may also be reduced due to volume pricing discounts being obtained by such increased volumes. Such charges shall be reviewed and approved by Dot Hill prior to the increase being
implemented. Upon designation of a Product as EOL by Dot Hill, Supplier shall not plan for Upside Support unless specifically agreed to by the parties. When requested by Dot Hill from time to time,
Supplier shall use commercially reasonable efforts to sell and deliver to Dot Hill Product(s) at an accelerated delivery schedule. 

        5.2    Customer Support and 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 of Supplier.    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 its affiliates from fully performing all its obligations in this Agreement;
(iii) the services to be provided by Supplier or its 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 for such longer period if a longer period is specified in the
Award Letter or the Product Pricing Matrix
thereto) from the date of delivery to Dot Hill, each Product (including each Supplier Part included in Product) will be free from defects in materials supplied by Supplier and Supplier's workmanship
and will conform in all respects to all of Dot Hill's specifications set forth in the applicable Award Letter and/or P.O. ("Specifications"); 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 

15

 

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. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        6.2    Supplier's 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, at Supplier's option either (i) repair or replace defective non-FRUs within five (5) days after receipt thereof from Dot Hill (ii) ship
replacement or repaired FRUs within 3 working days as specified in Section 4.4 of Exhibit B or (iii) if a non-compliant
Product (including any Supplier Part) can not be repaired or replaced within a commercially reasonable time, credit Dot Hill for the amount paid. Dot Hill shall prepay freight charges for shipment of
each non-compliant Product (including any non-compliant Supplier Part) to Supplier and Supplier shall prepay fright charges for shipment of each repaired or replaced Product or
Supplier Part to Dot Hill. Supplier makes no, and hereby disclaims, any design warranty with respect to any design provided by Dot Hill or any unrelated other party. In the event that the parties have
agreed that a particular Product(s) 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 Product to Dot Hill, (the "Service Period"), at Dot Hill's option, to provide out of warranty repair services to Dot Hill and
its authorized contractors during the Service Period, at a reasonable price and terms to be negotiated by the parties. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        6.3    Unexpected Failures.    

        6.3.1  For
purposes of this Agreement, "Unexpected Failures" shall mean identical, reproducible Product failures (including any Supplier Part failures) due to
the same or substantially similar cause, which occur in the same series of Products and impair the use of the Products, and are a result of a defect in workmanship of Supplier or its affiliates
occurring within [...***...] after the date of delivery of the Product, and are equal to or in excess of [...***...] of the total number of a Product or
any Supplier Part from any production lot or [...***...] of the total number of Products or any Supplier Parts included in Products which are delivered to Dot Hill during any
[...***...] or such other rate that is specifically set forth in each Award Letter (the "Unexpected Failure Rate"). 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        6.3.2  In
the event of a suspected Unexpected 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, serial numbers or other identifiers, and delivery dates of the defective Products (including any defective Supplier Parts). Dot
Hill shall also deliver or make available to Supplier, samples of the defective Products or defective Supplier Parts for testing and analysis. 

        6.3.3  Within
five (5) business days 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. 

16

 

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 Unexpected 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: (i) repair and/or replacement of the defective Products (including any defective Supplier Parts); or (ii) a credit or payment to Dot Hill in an
amount equal to the cost to Dot Hill for qualified, nondefective replacement Products (including any defective Supplier Parts) reasonably acceptable to Dot Hill;
(b) [...***...]; and (c) reasonable freight and transportation costs incurred in connection with the repair and/or replacement of the defective Products (and 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). 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        6.3.6  Other
costs not identified herein may be incurred by either party. The reimbursement, if any, of these costs will be mutually agreed by the Parties.
Supplier shall have no liability or responsibility for any losses or damages under this Section 6.3 to the extent that any such Unexpected Failure claims are due primarily to
(i) Supplier's or Supplier's affiliates compliance with Dot Hill-supplied specifications and test procedures that are developed solely by Dot Hill, or directed specifically by Dot
Hill for use by Supplier or Supplier's affiliates, and provided in writing by Dot Hill to Supplier or Supplier's affiliates for the testing of Products or Supplier Parts; (ii) the negligence of
Dot Hill or any other person (with the exception of Supplier and its affiliates, and each of their respective employees, agents and subcontractors, and each of their respective suppliers of drives,
controllers, and power supplies included in the Products and any other specific items set forth in an Award Letter for which the Unexpected Failure liability protections in this Section 6.3
shall apply) in providing goods or services in connection with the design, development, production and distribution of the Product; (iii) modification or alteration of the Product or the
Supplier Parts by a party other than Supplier or its affiliates; (iv) incorrect installation or improper incorporation of the Product or the Supplier Parts by a party other than Supplier or its
affiliatesr;or (v) defects in any components supplied specifically by Dot Hill or Dot Hill's agents thereof for incorporation and use in the Products. 

        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 epidemic or unexpected failures or other quality failures of components included in Products) obtained from its component or other suppliers for all
component materials and services included in or furnished for the Products. Supplier shall provide, upon request by Dot Hill, all relevant information regarding the party, scope and terms of all such
warranties. Supplier shall not negotiate the modification of a component or service vendor's warranty to the detriment of Dot Hill, without the prior written consent of Dot Hill. For
[...***...] to be purchased by Supplier for inclusion in the Products and on the current AVL, the period of standard warranties available to Supplier are
[...***...], respectively. Supplier shall not request for such periods to be shortened for [...***...] purchased by Supplier for inclusion in the
Products without first obtaining the prior written consent of Dot Hill. Supplier also hereby grants the right to Dot Hill to enforce the warranties which are received by Supplier from other parties
for those components or raw materials included in the Products that are supplied to Dot Hill under this Agreement if Supplier fails to do so in a prompt and reasonable manner. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

17

 

        6.5    Disclaimers.    EXCEPT FOR THE EXPRESS WARRANTIES STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY ADDITIONAL
WARRANTIES, EXPRESS OR IMPLIED AND, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE (EVEN IF THE APPLICABLE PARTY IS ADVISED
OF SUCH PURPOSE) ARE EXPRESSLY EXCLUDED. 

7.    INDEMNIFICATION  

        7.1  Supplier
shall defend, indemnify and hold harmless Dot Hill and its affiliates, customers, officers, directors, employees, assigns and successors for any loss, damage,
expense, cost (including, but not limited to, attorneys' fees incurred in the enforcement of this indemnity) or liability to the extent that it is based upon a claim that Supplier's manufacturing
process, process technology or methodology, and/or any power supply, disk drive or controller that is purchased by Supplier and included in the Products and is listed on the current AVL:
(1) infringes or misappropriates any patent, copyright, trade secret or intellectual property right of a third party, or (2) has caused personal injury or damage to tangible property;
provided that Dot Hill (i) gives Supplier prompt written notice of any such claim made to Dot Hill in writing, (ii) cooperates with Supplier, at Supplier's expense, in the defense of
such claim, and (iii) gives Supplier the right to control the defense and settlement of any such claim to the extent
covered by the indemnification provided herein. Supplier will: (i) defend or settle, at its own expense, any such claim; (ii) keep Dot Hill advised of the status of any such claim and of
its defense and/or negotiation efforts; and (iii) afford Dot Hill reasonable opportunity to review and comment on 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, Supplier shall pass through to Dot
Hill all indemnification coverage provided by the applicable component vendor. Dot Hill shall have no authority to settle any claim on behalf of Supplier. 

        7.2  Should
the manufacture, use, distribution or sale of a Product, 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, Supplier shall, at Dot Hill's option and at no expense to Dot Hill, (a) by license or
other release, procure for Dot Hill the right to continue to use and distribute the same, or (b) replace or modify the same to make it non-infringing, in a manner acceptable to Dot
Hill, without materially changing the form, fit, and function of the Product. However, if such claim can not be resolved on a commercially reasonable basis under (a) or (b) above, then,
Dot Hill may terminate the Award Letter for such Product and, in addition to its obligations under Section 7.1, Supplier shall return to Dot Hill the fees and other charges paid by Dot Hill to
Supplier under the Award Letter. 

        7.3  Dot
Hill will defend, at its expense, any action or claim brought against Supplier or its subsidiaries alleging that Products manufactured in strict compliance with Dot
Hill's designs or specifications and provided by Supplier to Dot Hill under this Agreement infringe any patent, copyright, trademark, or any other proprietary right, and Dot Hill will pay all costs
and damages (including attorney's fees) incurred by Supplier or its subsidiaries in such actions that are attributable to such actions or claims; provided, however, that this indemnification shall not
apply to any claim of indemnification for which Supplier is responsible to defend, indemnify or hold harmless Dot Hill, and/or its affiliates, customers, officers, directors, employees, assigns and
successors under Section 7.1 and provided, further, that Dot Hill is promptly informed in writing and furnished with a copy of any notice regarding any alleged claim of infringement and is
given authority, information, and assistance (at Dot Hill's expense) necessary to defend or settle such claim. 

18

 

8.    LIMITATION OF LIABILITY. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ITS
INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT REGARDLESS OF WHETHER THE PARTY WAS MADE AWARE OF THE POSSIBILITY OF SUCH DAMAGES. 

9.    LICENSED SOFTWARE/FIRMWARE GRANT  

        9.1    Licensed Software Grant.    During the term of this Agreement and solely for use in connection with this
Agreement and subject to the terms and conditions set forth in this Agreement, Dot Hill hereby grants to Supplier a revocable, non-exclusive, non-transferable license to use
the Dot Hill SANscape and SANpath software solely in object code form solely for purposes of production and laboratory testing of the Products. 

        9.2    Firmware License Grant.    During the term of this Agreement and subject to the terms and conditions set forth
in this Agreement, Dot Hill hereby grants to Supplier a revocable, non-exclusive, non-transferable license to reproduce the InforTrend firmware solely as necessary to assemble
the Product and to distribute such firmware solely when integrated into the Product. 

        9.3    Restrictions.    Supplier agrees not to: (a) modify, adapt, alter, translate, or create derivative works
from any software or firmware provided by Dot Hill; (b) merge any software or firmware provided by Dot Hill with other software; (c) sublicense, lease, rent, loan, or otherwise transfer
any software or firmware provided by Dot Hill to any third party; (d) reverse engineer, decompile, disassemble, or otherwise attempt to derive the source code for any software or firmware
provided by Dot Hill; or (e) otherwise use, reproduce, display, perform, or distribute any software or firmware provided by Dot Hill under this Agreement except as expressly allowed under
Sections 9.1 and 9.2. 

        9.4    Documentation.    During the term of this Agreement and subject to the terms and conditions set forth in this
Agreement, Dot Hill hereby grants to Supplier a revocable, non-exclusive, non-transferable license to reproduce the Product user documentation supplied to Supplier by Dot Hill
and to distribute such documentation solely along with Products. 

        9.5    Dot Hill Intellectual Property.    Supplier acknowledges and agrees that, as between the parties, Dot Hill is
and will be the sole and exclusive owner of all right, title, and interest in and to the Dot Hill Intellectual Property and all associated intellectual property rights, and that Supplier acquires no
interests under this Agreement to the Dot Hill Intellectual Property or any intellectual property rights therein, other than the limited interests specifically granted in this Agreement. Supplier
agrees to and hereby does assign to Dot Hill without additional compensation any and all right, title, and interest it may have or obtain in and to such Dot Hill Intellectual Property and associated
intellectual property rights. 

        9.6    Dot Hill Intellectual Property Improvements.    All Dot Hill Intellectual Property Improvements shall be owned
by Dot Hill; Supplier hereby assigns and transfers to Dot Hill, all worldwide right, title and interest in and to Dot Hill Intellectual Property Improvements to Dot Hill. Supplier agrees to promptly
disclose and deliver to Dot Hill in writing, all Dot Hill Intellectual Property Improvements created by
Supplier, together with such other information as Dot Hill may reasonably require to understand and utilize the same. Supplier shall also cooperate and work with Dot Hill or Dot Hill's designee to
apply for and execute any applications or assignments reasonably necessary to obtain or perfect any patent, copyright, trademark, or other rights or statutory protection, worldwide for such Dot Hill
Intellectual Property Improvements, as Dot Hill deems appropriate. Each such application or assignment shall be made at Dot Hill's request and Dot Hill shall pay for Supplier's assistance on a
reasonable time and materials basis. 

19

  

10.  CONFIDENTIALITY  

        10.1    Confidentiality Obligations.    

        10.1.1    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 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. Supplier 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 Dot Hill Confidential Information provided to Supplier in accordance with this Article 10 that is also provided to such third party(ies). 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        10.1.2    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. 

        10.1.3    Dot
Hill retains for itself all proprietary rights it possesses in and to all Dot Hill Confidential Information. Accordingly, Dot Hill Confidential Information which
Dot Hill may furnish to Supplier will be in Supplier's possession pursuant only to a restrictive, nontransferable, nonexclusive license under which Supplier may use such Dot Hill Confidential
Information under the terms of this Agreement, solely for the purposes of manufacturing, operating, servicing and repairing the Products solely for the benefit of Dot Hill. 

        10.1.4    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, for itself or others, that compete with the products, processes, systems or methods contemplated by disclosed Confidential Information. 

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

        10.1.6    Within
thirty (30) days 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. 

11.  TERM AND TERMINATION  

        11.1    Term.    This Agreement shall commence upon the Effective Date and shall [...***...].
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. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

20

 

        11.2    Termination.    

        11.2.1    Either
party may, by written notice, terminate and/or suspend its performance under this Agreement, or cancel any P.O. 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 thirty (30) days
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    Dot
Hill may terminate this Agreement for convenience upon one hundred twenty (120) days written notice to Supplier. Supplier may terminate this Agreement for
convenience upon [...***...] written notice to Dot Hill. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        11.2.3    Upon
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 all equipment loaned from Dot Hill; (ii) return all copies of Dot Hill supplied documentation, Confidential Information and software; (iii) assign to
Dot Hill all purchase orders of Turnkey Components and other components; and (iv) assign to Dot Hill all Supplier P.O.'s for repair services parts. 

        11.2.4    Upon
termination of this Agreement by either party, Dot Hill shall [...***...], provided that [...***...], and
[...***...] In addition, at Dot Hill's option upon termination, Dot Hill may purchase any or all additional conforming Turnkey Components which are in Supplier's inventory, in
which event such inventory will be delivered to Dot Hill within fifteen (15) days 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 fifteen (15) days after termination. Payment by Dot Hill to Supplier will be made in accordance with the payment terms above. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        11.3    Survival.    The provisions of Articles 1, 4, 6, 7, 8, 9.5, 9.6, 10, 11.2.4, 11.3, 12.2 through 12.15; and  Exhibit B,
Exhibit C and  Exhibit C-1 shall survive any termination or expiration of this Agreement and enforcement thereof pursuant to this
Section 11.3 shall not be subject to any condition precedent. 

12.  MISCELLANEOUS  

        12.1    Insurance.    During the term of this Agreement, Supplier, at its sole cost and expense, shall carry and
maintain the following insurance coverages (insuring the Supplier, its agents, employees or associates) issued by insurance companies which are (a) licensed to conduct business in the state in
which the Products or services are provided and (b) rated no lower than A-, X (i.e., A minus, 10) by A.M. Best or (c) otherwise acceptable to Dot Hill. 

        12.1.1    Comprehensive
general liability insurance covering all operations of the Supplier, 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 [...***...] U.S. dollars
(U.S. [...***...] per occurrence/aggregate, and shall contain cross liability and severability of interest provisions. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        12.1.2    All
insurance coverages required by federal, state or local laws or statutes, including workers compensation insurance to cover full liability under workers
compensation laws of the state in which the work is performed, with employers' liability coverage with a limit of not less than [...***...] U.S. dollars (U.S.
[...***...] per claim. This insurance must (a) provide coverage for 

21

 

all of Supplier's employees who perform work or provide services under this Agreement and (b) include a Waiver of Subrogation for the benefit of Dot Hill, its subsidiary and affiliated
companies, directors, officers, employees and agents with respect to any injuries, disease or damages suffered by Supplier's employees. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        12.1.3    Automobile
liability insurance covering bodily injury and property damage liability arising out of the use by or on behalf of the Supplier, its agents and employees
of any owned, non-owned or hired automobile with limit of not less than [...***...] U.S. dollars [...***...] per occurrence. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        12.1.4    Employee
theft policy covering loss of money, securities and other property for which Supplier is legally liable or which is held by Supplier in any capacity, whether
or not Supplier is liable, caused by theft of an employee acting alone or in collusion with others subject to a minimum limitation of [...***...] U.S. dollars (U.S.
[...***...]) per loss. This insurance must (a) include coverage for Employee Dishonesty / Fidelity Crime, (b) cover all of Supplier's employees, officers and
agents who perform work or provide services under this Agreement and (c) name Dot Hill as a loss payee with respect to any loss of Dot Hill-owned property which arises out of a
covered cause of loss. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        12.1.5    Cargo
transit insurance providing all risk coverage for all goods, merchandise, machinery, equipment, inventory, and supplies incidental to Supplier's business,
moving at the risk of Supplier, subject to a minimum limitation of [...***...] U.S. dollars (U.S. [...***...]) per incident. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        12.1.6    Property
insurance covering all real and personal property and inventory, including Dot Hill's Products, for "all risks" of physical loss or damage, including
Supplier's business interruption and boiler and machinery breakdown, subject to a minimum limitation of [...***...] U.S. dollars (U.S. [...***...]).
This insurance must cover (a) "Supplier's Equipment" (defined as any equipment owned, leased or used by Supplier to perform work or provide services under this Agreement) and (b) "Dot
Hill Property" (defined as property in the care, custody and/or control of Supplier which is owned by Dot Hill, including but not limited to materials in transit to and from Dot Hill designated
facilities). This insurance must (a) provide coverage on a replacement cost basis, (b) include a Waiver of Subrogation for the benefit of Dot Hill, its subsidiary and affiliated
companies, directors, officers, employees and agents with respect to any loss or damage to Supplier's Equipment and (c) name Dot Hill as a loss payee with respect to any loss or damage to Dot
Hill Property. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        12.1.7    Errors
and Omissions Liability Insurance with a limit of not less than [...***...] U.S. dollars (US [...***...]) per
claim/aggregate. This insurance must cover all of the Products provided to Dot Hill by any of Supplier's employees, officers and agents under this Agreement. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        12.1.8    Supplier
shall provide Dot Hill with a Certificate of Insurance prior to or at inception of this Agreement evidencing the above insurance policies are in full force
and effect. Policies in Sections 12.1.1 and 12.1.3 [...***...]. Supplier shall require each insurer to give Dot Hill thirty 

22

 

(30) days written notice before the policy or policies are canceled or materially altered. The foregoing requirements concerning the types and limits of insurance coverage to be maintained by
Supplier, and any approval or waiver of said insurance by Dot Hill, is not intended to and shall not in any manner limit or qualify Supplier's liabilities and obligations whether imposed by law or
assumed pursuant to this Agreement, including but not limited to the provisions concerning indemnification. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        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; Import/Export Licenses.    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. 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 Certificates of Delivery, attention: Dot Hill's Import Administration Department, Dot Hill Systems
Corporation, 6305 El Camino Real, Carlsbad, California 92009. 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. 

        12.4    Publicity.    Supplier shall not publicize nor disclose the existence of, the relationship of the parties
arising out of, or the terms and conditions of this Agreement, without the prior written consent of Dot Hill, such disclosures to include without limitation, identification in client lists, press
releases, promotional materials, sales presentation, and advertisements. 

        12.5    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. 

        12.6    Dispute Resolution.    Without prejudice to either party's rights in law or in equity, the parties will use
reasonable efforts to resolve any dispute through appropriate levels of management. Neither parties rights under Article 11 shall be preempted by this subsection. 

        12.7    Governing Law.    This Agreement will be governed by and construed in accordance with the laws of the State of
California excluding its choice of law rules. The parties specifically agree that the United Nations Convention on Contracts for the International Sale of Goods shall not apply to any dispute under
this Agreement. The parties agree that the exclusive jurisdiction and 

23

 

venue for any action between the parties relating to or arising out of this Agreement, including disputes that may arise following the expiration or earlier termination of this Agreement, shall be
brought in the United States District Court for the Northern District of California or the California state courts serving the county of Santa Clara, and each of the parties hereby submits itself to
the jurisdiction and venue of such courts with respect to such actions. 

        12.8    Attorney's Fees.    In the event of any litigation arising out of this Agreement or its enforcement by either
party, the prevailing party shall be entitled to recover as part of any judgement, reasonable attorneys' fees and court costs. 

        12.9    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. 

        12.10    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 forebearance which is mandatory under this Agreement. The word "may" describes an act or forbearance which is optional under this Agreement. 

        12.11    Assignment.    The rights, duties and obligations of either party under this Agreement may not be assigned in
whole or in part by operation of law or otherwise without the prior express written consent of the other party, and any attempted assignment of any rights, duties or obligations hereunder without such
consent shall be null and void. Notwithstanding the above, Dot Hill may assign its right to purchase Products under this Agreement to Sun Microsystems, Inc. upon prior written notice to
Supplier. This Agreement shall be binding on the parties and their respective successors and permitted assigns. 

        12.12    Force Majeure.    Except as provided for in Section 3.13 (Business Continuity Plan), neither party
shall be liable for any delay or failure in performance hereunder caused by acts of God or other causes beyond the party's control and without fault or negligence of such party, if the party gives
prompt Notice and makes all reasonable efforts to perform. 

        12.13    Waiver.    Any express waiver or failure to exercise promptly any right under this Agreement will not create
a continuing waiver or any expectation of non-enforcement. 

        12.14    Order of Precedence.    In the event of a conflict between the documents comprising this Agreement, the order
of precedence shall be: (i) the Award Letter (excluding the Award Letter Exhibits), (ii) this Agreement, (iii) the Agreement Exhibits, and (iv) the Award Letter Exhibits. 

        12.15    Entire Agreement and Modification.    This Agreement, together with any Award Letters and any Tooling
Agreement, constitutes the entire agreement between Supplier and Dot Hill relating to the subject matter hereof. It supersedes all prior or contemporaneous oral or written communications, proposals,
conditions, representations and warranties and prevails over any conflicting or additional terms or other communication between the parties relating to its subject matter during the term of this
Agreement. The preprinted terms of any P.O. and any terms in any P.O. acknowledgement shall be deemed deleted and of no force or effect. No modification of this Agreement will be binding, unless in
writing and signed by an authorized representative of each party. 

24

 
Agreement No.            

 
 

AWARD LETTER    
  

        This Award Letter (this "Award Letter") is made on and as of the 20th day of May, 2002 ("Effective Date") by and between Dot Hill Systems Corporation ("Dot Hill")
and Solectron Corporation ("Supplier"), pursuant to the Manufacturing Agreement, dated as of May 20, 2002, made between the parties (the "Agreement"). Capitalized terms not defined in this
Award Letter have the meanings set forth in the Agreement. The parties agree as follows: 

1.    Scope:  

        Neither this Award Letter nor the Agreement constitutes a commitment by Dot Hill to purchase Products unless Dot Hill, in its sole discretion, issues one or more
P.O.'s in the manner described in the Agreement. 

2.    Products and Pricing/Initiatives:  

        2.1    Products and Pricing. Dot Hill may purchase Product(s) from Supplier at the prices in U.S.
dollars as set forth in the Attachment A to this Award Letter. Such pricing will be determined by the parties within thirty (30) days after the
execution of the Award Letter by both parties and, at such time, the parties will add Attachment A to this Award Letter. Dot Hill shall receive a
reduction in price for the cost reductions described in the last sentence of Section 3.3.3 (Cost Reductions) of the Agreement. Additionally, Dot Hill may elect to receive on a rolling annual
basis (or such shorter period that may be mutually agreed by the parties) from the Effective Date of this Award Letter, and Supplier shall provide to Dot Hill, an additional reduction in pricing for
Products through either: 

[...***...]

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

In
Attachment A, for the initial annual period (or such shorter period as may be mutually agreed by the parties) that begins after the execution of this
Award Letter, Dot Hill will elect either to accept such Supplier committed fixed price reduction or the cost reduction in the penultimate sentence of Section 3.3.3 (Cost Reductions) of the
Agreement. 

Supplier
shall provide a detailed cost breakdown to Dot Hill for each Product covered by this Award Letter, updated quarterly two (2) weeks prior to product cost review submission, covering the
then current quarter and estimates for the following six (6) quarters. 

        2.1    Demand Replenishment Initiative. The terms and conditions applicable to the Demand Replenishment
Program including without limitation Demand Replenishment Product Leadtimes, Demand Trigger Frequency and Delivery/Title are set forth in  Exhibit D to the Agreement. 

        2.2    Business Continuity Plan. The Product-specific Business Continuity Plan is set forth as  Attachment D to this Award
Letter. 

3.    Supply Plan Communication:  

        Dot Hill's material organization representative shall provide Supplier with an updated Supply Plan on at least a quarterly basis and subsequent updates as needed.
In the event that Supplier has not received this information within ten (10) days after the beginning of a quarter, Supplier will notify Dot Hill accordingly. 

4.    Product Leadtimes:  

        Product Leadtimes for the Products are described in Exhibit D to the Agreement. 

25

 

5.    Upside Support:  

        Dot Hill may request all or any part of Upside Support quantity at anytime during the applicable quarter up to the maximum amount indicated beginning with Dot
Hill's announcement general availability of the Dot Hill product or system that incorporates the Product(s) ("GA"). Supplier shall sell, manufacture and ship such Upside Support quantities to Dot Hill
on a "first-in, first-out" basis after Dot Hill's written request. 

	Timeframe
	 	Upside Max. Percentage Increase

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

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

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

6.    Customer Support and Quality:  

        Supplier will provide in-warranty and out-of-warranty customer service and support in accordance with  Exhibit B to the Agreement.
Supplier shall deliver Product(s) which conforms to the Specification(s) attached as  Attachment E to this Award Letter and shall comply with Supplier's Quality Program attached as  Exhibit C to the Agreement and Customer Support Quality Requirements attached as  Exhibit C-1 to the Agreement. The quantity of Product(s) delivered to Dot
Hill shall not exceed the Defects Per Million ("DPM")
levels set forth in Exhibit C to the Agreement. 

7.    Turnkey Components, Material Leadtimes and EOQ:  

        Dot Hill will provide a components parts list indicating approved vendors for each component. Supplier will use that list to identify current Material Leadtimes
and vendor requirements, if any, for economic order quantities ("EOQ") for each component.(the "List"). The initial version of the List will be added to this Award Letter as  Attachment B within thirty
(30) days after execution of this Award Letter by both parties. Thereafter updates to the List will be set forth in a
separate written document which is hereby incorporated by reference. Supplier shall update the List, subject to Dot Hill's approval, at least once each quarter. As part of the List, Supplier will
identify EOQ components which are required to be procured in a minimum order quantity ("MOQ") so that Dot Hill and Supplier can evaluate, as necessary, the costs of procuring the EOQ versus the MOQ. 

8.    Tooling:  

        The list of Dot Hill-owned Tooling related to this Award Letter is set forth in an Attachment to Attachment
C to this Award Letter. 

26

 

9.    Notices:  

        Dot Hill and Supplier shall each assign an individual to administer the Agreement throughout its term (the "Administrators"). Each party shall inform the
Administrator of the other in writing of a change of Administrator or such Administrator's address or telephone number. 

	Dot Hill's Administrator shall be:	 	Supplier's Administrator shall be:
	Rich McGee, Sr. V.P.—Operations	 	Joe Regan, Vice President Strategic Opportunity Management
	Dot Hill Systems Corporation	 	Solectron Corporation
	6305 El Camino Real	 	847 Gibraltar Drive, Building 5
	Carlsbad, California 92009	 	Milipitas, California 95035
	Ph: (760) 931-5534	 	Ph: (408) 956-6660
	Fax: (760) 931-5527	 	Fax: (408) 945-7101

10.  Award Letter Components:  

        The parties agree to be bound by these terms and conditions which consists of the Award Letter and the following exhibits indicated below that are incorporated by
reference herein: 

	ý	 	Attachment A (Product Pricing Matrix)
	

ý	
 	
Attachment B (Turnkey Components and EOQ)
	

ý	
 	
Attachment C (Tooling)
	

ý	
 	
Attachment D (Business Continuity Plan)
	

ý	
 	
Attachment E (Specification)

        The
undersigned duly authorized representatives of the parties have executed and delivered this Award Letter as of the Effective Date. Solectron Corporation hereby assigns this Agreement
on behalf of itself and those Solectron subsdiaries and affiliates described in the introductory paragraph of the Agreement. 

	Dot Hill Systems Corporation	 	Solectron Corporation
	By	 	By
	
	 	

	Name	 	Name
	
	 	

	Title	 	Title
	
	 	

	Date	 	Date
	
	 	

27

 
 
 

EXHIBIT A
  
    ELECTRONIC DATA INTERCHANGE
  (EDI) TERMS    
  

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, ANSI ASC X12 or CII 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 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 is down and this prevents either party from meeting the pickup or delivery frequency agreed to,
that party must notify the other party the same day. 

        2.4.    Security Procedures.    Each party shall use security procedures which are reasonably anticipated to:
(a) ensure that all transmissions of Documents are authorized; and (b) protect its business records and data from improper access. 

        2.5.    Signatures.    Each party may adopt as its signature an electronic identification consisting of symbol(s) or
code(s) which are to be affixed to or contained in each Document transmitted by such party ("Signatures"). Each party agrees that any Signature of such party affixed to or contained in any transmitted
Document shall be sufficient to verify such party originated such Document. Neither party shall disclose to any unauthorized person the Signatures of the other party. 

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 one (1) business day after receipt of a Document. 

28

 

        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 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 Dot Hill Purchase
Release number, and the Dot Hill EDI number. 

        4.2.    Validity, Enforceability.    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. However, 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. 

        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. 

        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 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 copies of Signed
Documents under either 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 Period. The parties will use commercially reasonable efforts to implement EDI within ninety (90) days following
the Effective Date of this Agreement to permit the electronic interchange of Documents. Until such time that Dot Hill is in a position to use EDI with Supplier, Dot Hill shall not be liable for the
failure by Dot Hill to use EDI to provide to transmit Documents with Supplier. 

29

  

 
 

Exhibit B    
    
    Customer Support Provisions    
  

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 Supplier's
authorized third party(ies). 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. 

        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. 

        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 listed on Exhibit B-5, 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. 

30

 

        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. 

4.0  Repair Services and Requirements  

        4.1  At
a minimum, Supplier shall 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. On
at least a monthly basis, Dot Hill and Supplier shall
review the manangement of the FRU pool, and make any appropriate agreed upon changes thereto. 

        4.2  Supplier
will provide FRU support as follows: 

        4.2.1    Supplier
must identify all Product FRUs by a unique identifier and provide them to Dot Hill. Supplier agrees to coordinate its FRU identification criteria to fully
meet Dot Hill's needs within ten (10) days 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 system forecasts and MTBF results and Supplier will meet or exceed Dot Hill's worldwide FRU needs as
required by Dot Hill. 

        4.3  Supplier
shall ship a Repaired or Replacement FRU to Dot Hill within three (3) working days after receipt of Dot Hill's RMA request. FRUs may be supplied from an
exchange pool of Product meeting the Product Specification provided by Dot Hill and is free from defect. 

        4.4  If
Supplier has not received a Product back from Dot Hill for in-warranty repair within fifteen (15) days after receipt of an RMA 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 fifteen (15) days 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 100% on time delivery performance and quality goal is [...***...]. Supplier agrees to meet these goals for FRUs and all repairs. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

31

 

        4.5.1    For
purposes of this exhibit, "Unexpected Failures" shall mean FRU failures which are related to the identical root cause occurring within
[...***...] after the date of delivery of the FRU, equal to or in
excess of the rate (the "Unexpected Failure Rate") set forth in each Award Letter, resulting from defects, in workmanship, manufacturing process, or design (but specifically excluding therefrom, any
design or specification provided by Dot Hill). Supplier will pass through to the benefit of Dot Hill warranties provided by component and sub-system suppliers. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        4.5.2    In
the event of a suspected Unexpected 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 five (5) days 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 Unexpected Failure, Supplier shall be responsible for (i) repair and/or replacement of the defective FRUs; or (iia credit or payment to Dot
Hill in an amount equal to the cost to Dot Hill for qualified, nondefective replacement FRUs acceptable to Dot Hill;
b) [...***...]; and c) reasonable freight and transportation costs incurred in connection with the repair and/or
replacement of the defective FRUs (and the Product in which the FRU is incorporated if the FRU cannot be separated without undue inconvenience or disruption to the end user). 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        Other
costs not identified herein may be incurred by either party. The reimbursement, if any, of these costs will mutually agreed by the Parties. 

        4.6  For
a period of not less than [...***...] after the last delivery of each production Product to Dot Hill, (the "Service Period") Supplier agrees,
at Dot Hill's option, to either continue manufacture of spare
parts, FRUs and DRUs and provide reasonable quantities of the same to Dot Hill, or to provide Repair Services to Dot Hill, Dot Hill authorized TPRS's and DC's during the entire Service Period. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        4.7  If
Supplier elects to discontinue Repair Service after the expiration of the Service Period, Supplier agrees to provide Dot Hill a minimum of six (6) months
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. 

32

 

        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. 

5.0  Product Support  

        Supplier will support Dot Hill to achieve the following: 

        5.1  Serviceability
requirements will be defined for this project, and the Dot Hill will need to be able to meet them. requirements may include such things as: no special
tools required, maximum average time to repair, including FRU replacement. Diagnostics and troubleshooting coverage of the system to a minimum percent of the system (i.e., Diagnostics can identify a
failing component across XX% of the system). 

        5.2  The
serviceability requirements defined for any Product will be based upon the Base Level Product Serviceability Requirements (BLPSR). These requirements must support
the marketing and service delivery model. 

        5.3  As
part of these serviceability requirements, the product, or product concept, must be able to provide first fault isolation to a single FRU with a
[...***...] success rate by general availability (GA) of the product. If it can not, the service cost estimates will reflect this lack of functionality. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

6.0  Price  

        6.1  Unless
otherwise provided in the Manufacturing Agreement, there shall be no charge to Dot Hill for Repair Services (including, but not limited to, labor, material
testing or packaging) during the warranty period. 

        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-4. 

        6.3  Repair
prices shall not increase for at least [...***...] from termination of the warranty period for the first order of production level units
of Product shipped to Dot Hill under this Agreement. Any subsequent change in pricing shall require written notification to Dot Hill. Any increase will require notification ninety (90) days
prior to the effective date and must include justification for the increase. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

7.0  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. 

33

 

        7.2  Dot
Hill's purchase order number, Product serial number, RMA number, 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—In Warranty Products.    Supplier shall pay all outbound freight
charges, duty, taxes, customs and/or brokerage fees associated with and resulting from the return of the repaired Product to Dot Hill. Supplier will ship returned Product by the same method used
inbound. 8.2 Freight and Import/Export Fees—Out of Warranty Products. Dot Hill shall pay all freight charges, duty, taxes, customs and/or
brokerage fees for shipment of the defective Product to Supplier. 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.. 

        8.3    Expedited Transportation.    All Product, whether in or out of warranty, which is past due from the date
established by the RMA and tracked in the purchase order shall be shipped by the most expeditious method at Supplier's expense. 

9.0  Repair Warranty  

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

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        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 as
agreed to in writing by the Supplier and Dot Hill, and shall be free from defects in material and workmanship as follows: 

        a.    In
warranty: [...***...] from the date of receipt by Dot Hill or for the remainder of the original Product warranty, whichever is greater. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        b.    Out
of warranty: [...***...] from the date of receipt by Dot Hill. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        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-3. NTF charges set forth in Exhibit B-3 will apply only
in the event that the number of units determined to be NTF exceeds [...***...] during the [...***...] after Dot Hill's general availability of a
Product, and [...***...] thereafter, of the total units returned to Supplier for repair each month that are found to be NTF for a specific Product, which has been agreed 

34

 

upon by Dot Hill and Supplier in writing, which agreement as to such specific Product shall not be unreasonably withheld, delayed or conditioned. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        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 the
cost of upgrading any Product to a revision level agreed upon by Dot Hill and Supplier. Upgrade charges will be identified separately. 

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. 

        11.2 Cycle
count results shall be reported by Supplier to Dot Hill within two (2) working days 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 liable for the unaccounted inventory and will: (i) provide Dot Hill a like
unit or, (ii) upon Dot Hill's agreement, give Dot Hill full credit for Dot Hill's replacement cost of the missing item within thirty (30) days after discovery of the variance. 

        11.4 Supplier
shall be responsible and bear the risk of loss for any test equipment, system hardware, and/or bailed materials provided by Dot Hill in support of Product
repair. If Supplier is unable to reconcile any variance in such equipment and/or material, Supplier shall be liable for the unaccounted equipment and will provide Dot Hill a full credit for Dot Hill's
replacement cost of the missing item within thirty (30) days after discovery of the variance. 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 ninety (90) days prior to initiating Product repair support. 

35

 
 
 

Exhibit B-1    
    
    Supplier's Repair Facilities    
  

Solectron
Global Services

260 S. Milpitas Blvd.

Milpitas, CA 95035

Contact: Dot Hill Program Manager

Fax: (408) 957-3198 

36

 
 
 

Exhibit B-2    
    
    Not Used    
  

37

 
 
 

Exhibit B-3    
    
    NTF Charges    
  

        The NTF per unit charge is: U.S. $[...***...] per unit. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

38

 
 
 

Exhibit B-4    
    
    Out of Warranty Repair    
  

        [...***...] 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

39

  

 
 

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 Product(s) 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 Product(s) for Dot Hill. Product(s) 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 Product(s), 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. 

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 Product(s) 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. 

40

 

        4.1    Process Flow Charts    

        Supplier
shall provide a general process flowchart for the Product(s) and major subassemblies as agreed to by Dot Hill and Supplier and shall identify all assembly, test, and inspection
subprocesses. 

        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 three (3) 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. 

        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, as defined herein, 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. 
	•
	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 

Weekly
unless agreed otherwise: 

        1.    Yield/DPM
report (all critical stations, including pareto with FA/CA for the top 3-5 pareto items with targets); 

        2.    Outgoing
Quality Test/Audit DPM report with FA/CA for all failures; 

        3.    DPM
Improvement Plan if greater than Dot Hill goal (updates weekly or biweekly); 

        4.    Corrective
Action Report ("CAR") Tracking Log; 

        5.    Dot
Hill site first level FA reports; 

        6.    FA/CA
reports; and 

        7.    CAR
tracking report. 

	•
	The
reporting frequency of the reports listed below will be as reasonably requested by Dot Hill: 

        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 

41

 

        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) (monthly) 

        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. 
	•
	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 
	•
	Dot
Hill Supplier Engineering: Quality Demonstration Test Plan 

        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 Product(s). 

        In
the event Supplier desires to change the vendor or selected source of a component used in the manufacturing of Product(s), Supplier shall collect quality/evaluation data to support
and justify the change (data must show that quality levels are sustained and/or improved). The quality data will be made available to Dot Hill at least sixty (60) days 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 Product(s), 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 one (1) year from the date of delivery by Supplier of Products that consist of or contain such
components. Such plan and the implementation thereof will be similar in all material respects with the plan that Supplier is developing and plans to use with Sun Microsystems, Inc. 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 Product(s) 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 Product(. Dot Hill shall not be obligated to accept any defective Product(s) 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 the frequency of defect during fabrication of
Product(s), the proposed corrective change in process, evaluation of its effectiveness, 

42

 

and an effective date, date code and serial number for implementation. Such records will be posted on Supplier's Value Chain website (referenced in Section 4.2 above) for review by Dot Hill. 

        4.7    Changes in Manufacturing Process or Product    

        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
sixty-five (65) days unless such shorter period is agreed to be Dot Hill in advance based on the critical nature of implementation of the change, which agreement will not be unreasonably
withheld, delayed or conditoned) 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. Supplier will not implement any change to a Dot Hill configuration which is not approved by Dot Hill in writing, such approval not to be unreasonably withheld,
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: 

	•
	Changes
in major test equipment 
	•
	Changes
in burn-in time or environment 
	•
	Changes
in manufacturing facility locations 
	•
	Any
changes that affect the form, fit, function, quality, reliability, serviceability or safety of the Product(s). 
	•
	Any
change to the Product affecting clock speeds. 
	•
	Any
change of a programmed part on the Product(s). 
	•
	Any
change to a custom or semi-custom integrated circuit. 
	•
	Any
change made to correct a problem in a Dot Hill application, made at the request of Dot Hill. 
	•
	Any
change made to the board fab. 
	•
	Any
change to material specified in Dot Hill's Specification/Drawings (Enclosure Products). 

        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 collected quality/evaluation data verifies that quality and reliability levels would be sustained and/or improved as a result
of such change. The quality data must be submitted to Dot Hill for review before implementing the change. 

        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 Product(s). 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, 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 sixty (60) days prior to implementation of the change. Reimbursement 

43

 

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 Product(s). 

        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: 

	•
	Parts
lists, schematics, and mechanical drawings that have been released to manufacturing for production build. 
	•
	Procedures
for all phases of the production assembly and test of the Product. 
	•
	Demonstration
that modifications to Dot Hill's specified baseline test/burn-in times are adequate to eliminate residual infant mortality. 
	•
	Yield
and pareto data for all test and inspection points covering a sample quantity defined by Dot Hill. 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 P2 build. Supplier will review all fixes with Dot Hill Operations
Engineering prior to DF* implementation. 

        Any
additional gaps identified by Supplier during any pre-production or production volume phase throughout the entire supply chain is 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. 

        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's SE for 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. 

44

 

        Dot
Hill reserves the option to verify and validate any and all First Article results. 

        Reimbursement,
if any, of 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)  Acceptance
processes and facilities 

        (b)  Maintenance
and calibration of gauging and test equipment 

        (c)  Sampling
plans and First Article inspection 

        (d)  Control
and disposition of non-conforming material 

        (e)  Records
maintenance 

        (f)    Ship
hold and Stop-ship authorization procedures 

        (g)  Reliability
and qualification test data for Product 

        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. Minimum targeted 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 extraordinary 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. 

45

 

 OEM Storage Goals  

	Production items
 
	 	First Quarter
	 	Second

Quarter
	 	Third Quarter
	 	Fourth

Quarter and

beyond

	In circuit test	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	Board level functional test	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	System level functional test	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	Post pack audit	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]
	Defects on arrival	 	[...***...]	 	[...***...]	 	[...***...]	 	[...***...]

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        Both
parties acknowledge that the above DPM levels are initial estimates of reasonable targets for the Products. The parties will review such goals every ninety (90) days after
the first quarter of production of the Products and reset the targets as mutually agreed, which agreement shall not be unreasonably withheld, delayed or conditioned. 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. Steady state DPM will be used for the purposes of scorecarding quality. 

        5.5    Actions Related to Excessive DPM Rates and/or Unexpected Failures    

        If
the Product(s) fail to meet the minimum target DPM goals, Supplier will perform a root cause analysis to attempt to identify problems that may have caused such failure. Dot Hill and
Supplier 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 its Product(s) 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 weekly 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 twenty-four (24) hours 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 15th
of each month. Data must be provided for Dot Hill population only and a separate reporting for "Other Supplier Customers". 

46

 

        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 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. The following provisions are also applicable to Enclosure Products. 

        Process
Control. 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. 

        Deliverable
Inspection Data. Supplier shall submit to Dot Hill control charts and data for all controlled dimensions outlined by Dot Hill at intervals designated by the responsible SE. 

        6.4    Periodic Specification Testing (PST)    

        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 associated with the above will be as mutually agreed. 

7.0  Dot Hill Audit Programs  

        After the Product(s) have been introduced into manufacturing, Dot Hill may choose to conduct the following tests to ensure 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. 

47

 

        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 one (1) month, Supplier will incur this expense. 

        Supplier
shall 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 its sub-tiers facility(ies) subject to twenty-four (24) hours 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 Products to Dot Hill that have a risk of reproducing the problems found in the 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. Random component failures will be documented by objective
evidence of failure rate DPM history within Supplier's processes. In the event containment action is not the final CA, the final action will occur within thirty (30) days after Supplier's
receipt of Product. 

        2)    The
TAT requirement hereunder is an average fourteen (14) calendar days 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 requested by Dot Hill will be used for TAT calculations. 

        5)    Dot
Hill requires 100% FA 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. 

	•
	Dot
Hill worldwide customer DOAs 
	•
	Dot
Hill internal Post Pack Audit, where applicable 
	•
	Dot
Hill-specific qualification testing failures at Dot Hillor at key component suppliers 
	•
	Dot
Hill Reliability Growth Test (RGT), Qualification, Pilot, Post Pack Audit, ORT and Process Verification Test ("PVT") 
	•
	Supplier
"Dot Hill Test" (defined as process step for testing Products on Dot Hill systems at Supplier) 
	•
	Supplier's
last 100% functional test station 
	•
	Supplier
ORT 
	•
	Dot
Hill customer escalations 

        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. 

48

 

        For
all of the above returns, priority FA is required as follows: 

        2nd
level FA completed within [...***...] after receipt and risk assessment where requested available within [...***...] after receipt. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        These
Products will be included in the TAT calculation. 

        6)    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 three
(3) 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 weekly basis. 

        Quarterly
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  Request For Quote (RFQ) Package Contents (Enclosure Products)  

        Dot Hill's Request for Quote (RFQ) package will contain a complete set of documentation, including all necessary Bills of Material (BOMs), Approved Vendor Lists
(AVL), specifications and drawings for components and assemblies. Supplier shall review documents/product Specifications and drawings for manufacturability, verify that the correct engineering level
is quoted, and provide a detailed quotation to Dot Hill. 

9.0  Supplier Test Systems Program  

        As referenced in Sections 5.0 and 6.0 above, Supplier is responsible for both initial and on-going testing to ensure the quality of its products. Where
this testing requires the use of Dot Hill Systems, Dot Hill has implemented the "Supplier Test Systems Program." This program enables Supplier to purchase systems at significant savings. 

        To
be eligible for the above-referenced discounts, Supplier must use these systems exclusively for the testing of Product supplied to Dot Hill.Dot Hill and Supplier agree to work
together to determine whether there is a need for Dot Hill systems to be used in the testing process and Dot Hill will at that time provide the program details to Supplier. 

49

 
 
 

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. For the
purpose of this Exhibit C-1, Dot Hill shall mean Dot Hill's Enterprise Services Division. 

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 party(ies). Dot Hill's
goal is to receive Products from Supplier which are defect free. Therefore Dot Hill will measure Supplier to an average monthly or quarterly yield of [...***...]. This exhibit
specifies the Supplier processes required in support of this goal. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

3.0  Applicable Documents.  

Title:

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    Biennial Survey.    

        Dot
Hill may perform qualification audits of each repair site every other year. 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. 

50

 

        4.4    Random Audits.    

        Dot
Hill may at any time conduct an audit of Supplier's repair facility(ies) 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: 

	•
	Configuration
control

	•
	Minimum
acceptable level

	•
	Test
equipment and software

	•
	Process
instructions

	•
	Labeling

	•
	Closed
Loop Corrective Action ("CLCA")

	•
	Packaging

	•
	Inspection
criteria

	•
	Finished
goods and raw inventory planning

	•
	Engineering
Change Order ("ECO") implementation

	•
	Continuous
improvement

	•
	Process
change control

	•
	Deviations

	•
	Stop
ships/purges 

        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 recognize, monitor, analyze and take
corrective action on Multiple Returns repaired by Supplier or Supplier authorized third party(ies). 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. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        Returns
for ECO upgrade only and not due to field failure will not be considered in the Multiple Return count. 

51

 

        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    FA on identified defects is required with corrective action within [...***...] after discovery
of the defect. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

         5.5.2    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. 

        5.5.3    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 [...***...] after Supplier's receipt of the defective unit. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

Failure
Analysis requirements: 

        a.    Duplication
of the failure on all Products. 

        b.    Sub-assembly
that has failed (except for board Products). 

        c.    Component
on the sub-assembly that has failed. 

        d.    Reason
for the component failure, if required by Dot Hill, within thirty (30) days after determination of component failure. 

        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 process. SCARs may be issued as a result of events which include, but are not limited to, an audit finding, quality defect, 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 

52

 

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, attributable to Supplier, will be borne by Supplier. Costs not attributable to Supplier will be borne by Dot Hill. 

        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. Examples of changes which require notification include, but
are not limited to: 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

	•
	Major
test equipment or procedures,

	•
	Major
repair processes,

	•
	Burn-in
time of environment,

	•
	Repair
locations,

	•
	Final
acceptance criteria,

	•
	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. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        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. 

53

 

        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 monthly incoming inspection results as the Supplier's quality performance 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 monthly quality report to Dot Hill covering three distinct categories: 

	•
	Receiving
and/or source inspection performed and reported by Dot Hill.

	•
	Multiple
Returns (see Section 5.3).

	•
	Self
Surveillance by Supplier (see Section 7.1).

	•
	For
each of these categories, the report shall include:

	•
	Performance
trend.

	•
	Pareto
analysis of defects based on root cause determination.

	•
	Listing
and status of suitable corrective actions, recovery plans and/or improvement plans. 

54

 

	•
	Detail
by serial number of defects and associated analysis. 

        Supplier
is responsible for correlation analysis across the three 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    Monthly Business Reporting.    

        Supplier
shall be able to generate and provide to Dot Hill the following reports on a monthly basis. 

	•
	[...***...]

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

	•
	[...***...] 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

	•
	[...***...]

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

	•
	[...***...]

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

	•
	[...***...] 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        8.4    Quarterly Business Reporting.    

        Supplier
shall be able to generate and provide to Dot Hill the following reports on a quarterly basis. 

	•
	[...***...] 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

	•
	[...***...] 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

        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; 

55

 

        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 five (5) working days 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. 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

9.0  Scrap.  

        If scrap costs are not the sole responsibility of Supplier, Supplier shall request direction from Dot Hill as to the disposition of scrap material. 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.    Ship
the scrap Dot Hill material to the Dot Hill designated location at Dot Hill's expense; or 

        b.    Destroy
said material and provide Dot Hill with a Certificate of Destruction. 

56

 
 
 

EXHIBIT D    
    
    DEMAND REPLENISHMENT PROGRAM    
  

[...***...] 

[...***...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

57

 
 
 

ATTACHMENT A
  DEMAND REPLENISHMENT PRODUCTS    
  

Raw
Materials: 

	Part Number
 
	 	Product Description

	TBD.	 	 

Finished
Goods: 

	Sun Part Number
 
	 	Product Description

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

58

QuickLinks

MANUFACTURING AGREEMENT

Background

Agreement Components

GENERAL TERMS AND CONDITIONS

AWARD LETTER

EXHIBIT A ELECTRONIC DATA INTERCHANGE (EDI) TERMS

Exhibit B Customer Support Provisions

Exhibit B-1 Supplier's Repair Facilities

Exhibit B-2 Not Used

Exhibit B-3 NTF Charges

Exhibit B-4 Out of Warranty Repair

EXHIBIT C SUPPLIER'S QUALITY PROGRAM

EXHIBIT C-1 CUSTOMER SUPPORT QUALITY REQUIREMENTS

EXHIBIT D DEMAND REPLENISHMENT PROGRAM

ATTACHMENT A DEMAND REPLENISHMENT PRODUCTS

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