Current Assets

Dot Hill Systems PPA: PRO02542-060507

***Text Omitted and Filed Separately
with the Securities and Exchange Commission.
Confidential Treatment Requested
Under 17 C.F.R. Sections 200.80(b)(4) and 240.24b-2.

PRODUCT PURCHASE AGREEMENT

Dot Hill Systems

Agreement # PRO02542-060507

HP Confidential

Dot Hill Systems PPA: PRO02542-060507

TABLE OF CONTENTS

1. Scope of Agreement			1
1.1 Definitions			1
1.2 General			1
1.3 Eligible Purchasers			1
1.4 Term of Agreement			1
1.5 Sale and Purchase			1
1.6 Committed Volume			1
2. Ordering and Shipment of Product. Ordering and Shipment of Product terms are set forth in Exhibit D (Ordering and Shipment of Product)			1
3. Prices and Payment Terms. Prices, payment terms and other pricing terms will be as follows:			1
3.1 Prices			1
3.2 Payment Terms			1
3.3 Discounts and Rebates			1
3.4 Sales Tax and Duties			1
3.5 Financial Condition			1
3.6 Invoices			1
4. Competitive Pricing			1
4.1 General. Supplier will maintain competitive pricing of Products for HP throughout the Term			2
4.2 Competitive Offerings			2
4.3 [...***...] Pricing			2
4.4 New Product Offerings			2
5. Inspection and Audit Rights			2
5.1 Inspection and Audit Rights			2
6. Engineering Process, Design Changes and Quality			3
6.1 Quality			3
7. Warranties			3
7.1 Product General Warranties			3
7.2 Warranty Periods			3
8. Epidemic Failure Warranty			4
9. Safety			4
10. Product Returns; Non-Conforming Product			4
11. Support; Other Services			4
12. Business Recovery Plan; Loss Control			5
13. Confidential Information			6
14. Marketing and Licenses			1
14.4 Software License			1
15. Intellectual Property Ownership Warranty and Indemnification			2
15.1 Intellectual Property Ownership			2
16. Delaying Causes			1
17. Events of Default and Remedies			1
18. General Indemnity			3
18. General Indemnity			3
19. Limitation of Liability			4
20. Termination			5
21. Additional Obligations of Supplier			5
21.5 Social and Environmental Responsibility			1
21.6 Product Content			2
22. Miscellaneous			2
22.5 Assignment			3
22.6 No Waiver			3
22.14 Disputes/Escalation Process			5

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Dot Hill Systems PPA: PRO02542-060507

EXHIBIT INDEX

1. Exhibit A — Definitions			20-24
2. Exhibit B — Product Description and Specifications			25
3. Exhibit C — Eligible Purchasers Under this Agreement			26-27
4. Exhibit D — Ordering and Shipment of Product			28-29
5. Exhibit E — Pricing			30
6. Exhibit F — Engineering Process or Design Changes			31
7. Exhibit G — Quality			32
8. Exhibit H — Product Returns; Non-Conforming Product			33
9. Exhibit I — Manufacturing Rights			34
10. Exhibit J — Recipients for Notices and Relationship Managers			35
11. Exhibit K — Service and Support Requirements			36
12. Exhibit L — Third Party and Open Source Software Components			37
13. Exhibit M — Flexibility Agreement			38
14. Exhibit N — Quality Compensation Exhibit			39-42
15. Exhibit O — Governmental Compliance			43
16. Exhibit P — Insurance			44
17. Exhibit Q — Industrial Design of the Product			45

HP Confidential

 

Dot Hill Systems PPA: PRO02542-060507

PRODUCT PURCHASE AGREEMENT

AGREEMENT NO. [INSERT # ]

This PRODUCT PURCHASE AGREEMENT (“Agreement”) is entered into as of the 10^th day of September, 2007 (the “Effective Date”) by and between Hewlett-Packard Company, a Delaware corporation having its principal place of business located at 3000 Hanover Street, Palo Alto, California 94304 (“HP”), and Dot Hill Systems Corp.(“Supplier”), organized and operating under the laws of Delaware with its principal place of business at 2200 Faraday Avenue, Suite 100, Carlsbad, CA 92008, HP and Supplier are collectively referred to herein as the “Parties”.

RECITALS

WHEREAS, Supplier wishes to sell, and HP wishes to purchase, goods or services, or both, upon the terms and conditions hereinafter provided.

NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, Supplier and HP hereby agree as follows:

1.

Scope of Agreement

	1.1		Definitions. Definitions for capitalized terms used in this Agreement are set forth either in the main body of this Agreement where used or in Exhibit A (Definitions).
	1.2		General. The goods to be provided under this Agreement are set forth in Exhibit B (Product Description and Specifications) (the “Goods”). Services may be provided under this Agreement (the “Services”) in connection with the furnishing of Goods or as primary performance. As used in this Agreement, unless the context otherwise requires, “Product” refers interchangeably to any Goods or any Services, or both in combination, and “Product” includes both singular and plural forms. Product provided by Supplier to HP and Eligible Purchasers during the Term will be furnished under this Agreement and will be governed by and subject to this Agreement in all cases.
	1.3		Eligible Purchasers. The entities eligible to purchase under this Agreement are listed in Exhibit C (Eligible Purchasers Under This Agreement).
	1.4		Term of Agreement. This Agreement will be effective upon execution by the Parties and covers a period (the “Term”) which commences as of the Effective Date and continues for one (1) year and thereafter continues unless terminated earlier under the terms of this Agreement, provided that in no event will this Agreement continue longer than three (3) years from the Effective Date unless extended or renewed upon mutual written agreement of the Parties.
	1.5		Sale and Purchase. During the Term, Supplier will produce (or procure) and sell to HP, and HP will order and purchase from Supplier, the item(s) and volume of Product that HP may order and Supplier may agree to supply from time to time. By mutual written agreement the Parties may add or delete Products from coverage under this Agreement.
	1.6		Committed Volume. Nothing in this Agreement obligates HP to purchase any minimum quantity of Product. This Agreement sets forth the terms and conditions during the Term which govern Orders and Acknowledgments for Product. Any Order or Acknowledgment or other legally binding volume commitment for Product which is entered during the Term will remain governed by this Agreement notwithstanding expiration or termination of this Agreement for any reason. Unless otherwise agreed, if HP fails, for any reason or no reason, to purchase committed volume, Supplier’s sole and exclusive remedy will be to give HP written notice of termination except that HP will have up to [...***...] following receipt of Supplier’s notice of termination within which to purchase Product at the then current volume rate and pricing.

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1.6.1

Unless agreed to otherwise in Exhibit M (Flexibility Agreement), in no event will HP be liable for any monetary damages for failure to purchase committed volume; provided that HP will remain obligated to pay amounts due and owing under Sections 3.2 (Payment Terms) and 3.4 (Sales Taxes and Duties). Unless otherwise agreed, if Supplier is unable, for any reason or no reason, to furnish or delays furnishing committed volume, HP may purchase such committed volume, or any part thereof, from other source(s), and such purchase(s) will be aggregated with purchases hereunder for purposes of determining HP’s compliance with this Agreement.

	2.		Ordering and Shipment of Product. Ordering and Shipment of Product terms are set forth in Exhibit D (Ordering and Shipment of Product).
	3.		Prices and Payment Terms. Prices, payment terms and other pricing terms will be as follows:

	3.1		Prices. Prices for Product are as set forth in Exhibit E (Pricing).
	3.2		Payment Terms. Payments will be issued [...***...] after receipt of a valid invoice or receipt of the Goods or Services, whichever is later. No invoice may be dated or submitted earlier than date of Delivery. Any prompt payment discount will be calculated from the same date. Payment will be in U.S. currency unless otherwise stated. [...***...]
	3.3		Discounts and Rebates. Discounts and rebates may be negotiated by the Parties from time to time during the Term.
	3.4		Sales Tax and Duties. Unless otherwise agreed, prices are exclusive of all taxes or duties (other than taxes levied on Supplier’s income) that Supplier may be required to collect or pay upon purchase, sale or shipment of Product. Any such taxes or duties must appear as a separate item on Supplier’s invoice. [...***...] Where applicable, HP will provide Supplier with an exemption resale certificate.
	3.5		Financial Condition. Except for HP Subsidiaries and HP Affiliates, any credit line extended to an Eligible Purchaser will be subject to Supplier’s normal credit standards and approval procedures in effect from time to time during the Term.

3.5.1

HP may review Supplier’s performance capability under this Agreement at HP’s discretion, and Supplier will make available to HP, upon written request, information as may be reasonable, customary and sufficient to show Supplier’s then current performance capability, including financial condition. If the financial condition of either Party materially and adversely changes from its financial condition as of the date of this Agreement, then the other Party will have the right to demand adequate assurance of due performance.

	3.6		Invoices. HP may require Supplier to submit invoices electronically, at Supplier’s sole expense, in which case Supplier is thereby authorized to, and will, transmit the required information in electronic format. HP may utilize a third party, at HP’s sole discretion, to facilitate HP’s order and invoicing processes that may entail disclosure of information about the Supplier, this Agreement, and the receipt and processing of any purchase order, invoice and related documentation.
	3.7		Right of Offset. Either party, at its option, shall have the right to setoff or deduct from the other party’s invoice any credits, refunds or claims of any kind, provided that: (i) the party subject to the setoff or deduction has had forty-five (45) days from notice of the amounts due to make payment but fails to do so, and; (ii) the party subject to the setoff or deduction has confirmed, in writing or by email, the amount and the validity of the credit, refund or claim.

4.

Competitive Pricing.

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Dot Hill Systems PPA: PRO02542-060507

     4.1 General. Supplier will maintain competitive pricing of Products for HP throughout the Term.

     4.2 Competitive Offerings. At any time during the Term, unless otherwise agreed, HP may notify Supplier that HP has received a bona fide offer to deliver Product, or a substantial equivalent, under written contract in approximately comparable volume, mix, service level and duration of committed sale as the undelivered or unperformed portion of any committed volume under this Agreement at pricing lower than pricing in effect under this Agreement or at lower total cost to HP. If [...***...] of the date of such notice Supplier does not reduce its pricing sufficiently to meet the terms of such offer and advise HP of such reduction, HP may purchase from such offer any or all of the undelivered or unperformed portion of any committed volume under this Agreement. The quantity so purchased will be deleted from any HP purchase requirements. Anything in the foregoing to the contrary notwithstanding, this provision will not apply to [...***...]

     4.3 [...***...] Pricing. At any time during the Term, unless otherwise agreed, [...***...], Supplier will [...***...], unless prohibited by Applicable Law, [...***...].

     4.4 New Product Offerings. At any time during the Term HP may notify Supplier that HP has received a bona fide offer to deliver goods which have superior technical specifications or superior attributes or capabilities as compared with Product, and to the extent it deems itself able to do so, HP may provide specifics so that Supplier may revise specifications for Product or otherwise offer such substitute goods to HP hereunder. If within a commercially reasonable time after such notice Supplier is unable to sell or fails to offer to sell HP Product with revised specifications (which are acceptable to HP) or such substitute goods at reasonable pricing and otherwise meeting the terms of such offer, HP may purchase from such offeror any or all of the undelivered or unperformed portion of any committed volume under this Agreement. The quantity so purchased will be deleted from HP’s purchase requirements.

5.

Inspection and Audit Rights.

     5.1 Inspection and Audit Rights. HP, at its expense, may engage an independent third party (“Auditor”) to inspect and audit, on an annual basis, or more frequently if Supplier has breached any of its obligations under this Agreement, Supplier’s books and records relating to Supplier’s performance of its obligations under this Section 5.1 and that are reasonably required to determine Supplier’s compliance with Supplier’s obligations under this Section 5.1.

     5.1.1 HP will provide Supplier reasonable notice, not less than [...***...] in advance, of such inspection and audit.

     5.1.2 Supplier will refund the amount of any overcharge or other discrepancy as may reasonably be determined by such inspection and audit, and if the final report of such inspection and audit reveals an overcharge or other discrepancy of five percent (5%) or more during the relevant time period, Supplier will also reimburse HP for all reasonable costs of the inspection and audit.

     5.1.3 Supplier will cooperate fully with all such inspection and audit requests; provided that (i) in no event will material containing any information that is protected under court order or the written directions of regulatory authorities be required to be disclosed and (ii) material may be redacted by Supplier to the extent necessary to protect against any invasion of personal privacy.

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***Confidential Treatment Requested

Dot Hill Systems PPA: PRO02542-060507

     5.1.4 Any such Auditor will execute a confidentiality agreement in favor of Supplier containing terms no less restrictive than those set forth in Section 13 of this Agreement prior to receipt of any of the information referenced above; provided that such Auditor may disclose such information only to HP and Supplier; and provided further that (i) the identity of Supplier’s other customers, details of specific customer transactions and actual costs incurred by Supplier will not be disclosed to HP and (ii) aggregated pricing, aggregate costs and other information not identifiable to an individual or source may be disclosed to HP. HP’s right of inspection and audit under this Section 5 (Audit Rights) will continue and survive for [...***...] after expiration or any termination of this Agreement.

6.

Engineering Process, Design Changes and Quality. Terms pertaining to engineering process and/or design changes for the Product are set forth in Exhibit F (Engineering Process or Design Changes).

6.1

Quality. Supplier will maintain the quality system specified in Exhibit G (Quality) of this Agreement.

7.

Warranties.

7.1

Product General Warranties. Supplier represents and warrants that all Product will:

	7.1.1		Be manufactured, processed, and assembled by Supplier or Supplier’s authorized Subcontractors.
	7.1.2		Conform to Specifications, including without limitation, HP’s General Specification for the Environment.
	7.1.3		Be new,
	7.1.4		Contain first-quality components, raw materials and parts.
	7.1.5		Be free from defects in design, material and workmanship.
	7.1.6		Be free and clear of all liens, encumbrances, restrictions, and other claims against title or ownership.
	7.1.7		Comply with the intellectual property warranty terms set forth in Section 15 (Intellectual Property Ownership Warranty and Indemnification).

7.2

Warranty Periods.

	7.2.1		All warranties set forth in Section 7.1 will survive any inspection, delivery, acceptance or payment by HP.
	7.2.2		The warranties set forth in sub-sections 7.1.2 and 7.1.5 are effective upon Delivery, are continuing, and will remain in effect for and expire [...***...] following Supplier’s delivery of the Product (“Product Warranty Period”).
	7.2.3		The warranties set forth in Sections 7.1.1, 7.1.3, 7.1.4 and 7.1.6 are made and effective at Delivery.

	7.3		Services and Support Warranty. Supplier warrants that all Services and Support will be provided in a professional and workmanlike manner by competent, experienced personnel possessing suitable expertise in the subject matter.
	7.4		[...***...] Warranty. Supplier warrants that Product [...***...].

HP Confidential

***Confidential Treatment Requested

Dot Hill Systems PPA: PRO02542-060507

	7.5		Compliance with Applicable Law. Supplier warrants that it will comply with all Applicable Law in its performance under this Agreement.
	7.6		Warranty Exclusions. Except for Sections 7.1.6 and 7.1.7, the warranties set forth in this Section 7 will not apply to any Product to the extent such Product does not function property as a result of: (i) has been improperly installed, repaired, altered or otherwise modified (other than by Supplier or Supplier’s Subcontractors), (ii) has been subjected to misuse, abuse, negligence or accident, (other than by Supplier or Supplier’s Subcontractors).
	7.7		Warranty Remedies. If, during the Product Warranty Period, Products are found to breach any warranty specified in this Agreement, then in addition to any other remedies expressly provided for in this Agreement, HP may return Products to Supplier [...***...] for repair or replacement (in Supplier’s discretion), or if neither alternative is available on commercially reasonable terms, credit. Any Product corrected or furnished in replacement shall, from the date of delivery of those replacement Products, be subject to the provisions of this Sub-Section and Section 7 for [...***...] from the date of delivery or the remaining period of the original Product Warranty Period, whichever is longer. The remedy set forth in this section 7.7 shall be the sole and exclusive remedy for a breach of the warranties set forth herein.
	7.8		Disclaimer of Warranties. EXCEPT AS EXPLICITLY STATED HEREIN, THERE ARE NO WARRANTIES, EXPRESS. IMPLIED OR OTHERWISE, PROVIDED OR MADE, AND ALL PRODUCTS, SERVICES OR OTHER ITEMS ARE PROVIDED “AS IS” AND WITHOUT ANY WARRANTIES. SUPPLIER HEREBY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT OF THIRD PARTY RIGHTS.

	8.		Epidemic Failure Warranty. Supplier also represents and warrants that during the Product Warranty Period, all Product will comply with the terms of the warranty against Epidemic Failure as set forth in Exhibit N (Quality Compensation). In the event that Supplier breaches this warranty, HP shall have the remedies set forth in Exhibit N (Quality and Compensation), in addition to any other remedies available under this Agreement.
	9.		Safety. If the Goods supplied hereunder, or Services performed hereunder, involve any risk of injury or death to persons, or damage to property, Supplier shall provide notice to the appropriate individuals identified in Exhibit J (Recipients for Notices) and follow the procedures set forth in Section 4 of Exhibit F (Engineering Process or Design Changes), as well as any other applicable provisions in this Agreement. Supplier shall also provide HP with a written description of the nature and extent of such risk, including a description of any precautions which should be taken to minimize risk.
	10.		Product Returns; Non-Conforming Product. Terms pertaining to product returns and/or non-conforming Product are set forth in Exhibit H (Product Returns; Non-Conforming Product).
	11.		Support; Other Services.

	11.1		General. Supplier will maintain such number of qualified personnel and do all that is necessary to satisfy the Support and service level obligation set forth in Exhibit K (Service and Support Requirements).
	11.2		HP Property. HP may loan to Supplier HP Property solely for use in providing Services, Support or in Supplier’s manufacturing, testing or adapting Product. All HP Property will be segregated from Supplier’s property and identified as the sole property of HP. HP Property may not be transferred, assigned, loaned or otherwise encumbered by Supplier in any way. HP Property may be loaned to third parties for fulfillment of Supplier’s obligations hereunder only upon HP’s prior written consent, provided that Supplier assumes all responsibility and liability for the HP Property, as set forth herein, while in the possession of such third parties. Supplier will return, at its expense, HP Property in good condition, reasonable wear and tear excepted, upon HP’s request or in all events

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Dot Hill Systems PPA: PRO02542-060507

			upon termination or expiration of this Agreement. Prior to HP Property being loaned to Supplier, Supplier will execute HP’s standard Equipment Loan Agreement.
	11.3		Survival of Support Obligations. Unless otherwise stated in Exhibit K (Service and Support Requirements), Supplier’s obligations to provide Support will continue throughout the Term and for [...***...] after the last Delivery of Product under this Agreement, even if this Agreement is terminated or expires.

	11.3.1		Supplier may not discontinue Support for Product for which manufacture or supply is discontinued in accordance with Exhibit I (Discontinuance of Product and Manufacturing Rights). In addition, if HP issues notice to Supplier that HP is ending the life of a Product, Supplier must continue to provide Support pursuant to this section.
	11.3.2		In the event of any expiration or termination of this Agreement Supplier may [...***...].

11.4

Supplier Support of Third Parties. Supplier may independently offer and provide maintenance and support services to third parties, [...***...].

12.

Business Recovery Plan; Loss Control

	12.1		Business Recovery Plan; Loss Control. Supplier will develop and keep current a formal Business Continuity Plan (“BRP”) that details Supplier’s strategies for response to and recovery from a broad spectrum of potential physical or financial disasters that could disrupt operations and timely delivery of Product or Services required pursuant to this Agreement. Upon request, Supplier will make its Business Continuity Plan available to HP or its designated representative for review.
	12.2		Loss Control. Supplier will be responsible for maintaining its facilities, the Hubs to which Supplier may ship Products, Supplier Managed Inventory (“SMI”) and all warehouse and storage facilities and operations (except HP Warehouses) in accordance with applicable and prudent safety, security, and fire protection standards and Supplier’s BRP. Supplier will allow HP and its designated representative to perform on-site audits of such facilities and operations and will cooperate in the resolution of recommendations for improvement.
	12.3		Production [...***...]. If, for some reason, [...***...], Supplier [...***...].
			Notwithstanding the foregoing, and regardless as to whether [...***...] Supplier hereby agrees to:
			[...***...]

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***Confidential Treatment Requested

Dot Hill Systems PPA: PRO02542-060507

[...***...]

13.

Confidential Information.

13.1

Confidential Information. During the Term, either Party may provide or disclose information that is designated as “Confidential Information” (“Discloser”) to the other Party (“Recipient”).

	13.1.1		Confidential Information may include, but is not limited to, information or data concerning the Discloser’s products or product plans, business operations, strategies, customers and related business information that is marked as confidential or, if disclosed orally, is memorialized in a writing within ten (10) business days of such disclosure.
	13.1.2		Confidential Information shall include without limitation, each Party’s business plans, roadmaps, volume data, technical data, and Specifications, irrespective of any lack of confidentiality marking.
	13.1.3		The Recipient shall protect, and will ensure its employees and subcontractors protect, such Confidential Information by using the same degree of care (but no less than a reasonable degree of care) to prevent the unauthorized use, dissemination, disclosure or publication of such Confidential Information of a like nature.
	13.1.4		The Recipient may disclose the Confidential Information to only those employees and subcontractors who have a need to know and who are under an obligation of confidentiality at least as restrictive as that contained in this section.
	13.1.5		Confidential Information of a Party may be used only for purposes of exercising and fulfilling the Parties’ respective rights and obligations under this Agreement. Each Recipient may reassign its employees who have had access to such Confidential Information. If a Recipient or any of its Affiliates is requested or required by subpoena, court order, or similar process or applicable governmental regulation to disclose any Confidential Information, the Parties agree that the Recipient will provide the Discloser with

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			prompt notice of such request or obligation so that the Discloser may seek an appropriate protective order or procedure if it elects to do so.
	13.1.6		Each Party’s obligation under this Section 13.1 with respect to Confidential Information shall expire three (3) years from the date of disclosure except for Technical Information or other technical or product trade secret information, which will expire only upon the existence of one of the exclusions, set forth below.
	13.1.7		Exclusions. The foregoing confidentiality obligations will not apply to any information that (a) is known by the Recipient prior to disclosure as evidenced by tangible records, (b) was developed by the Recipient prior to disclosure or is subsequently developed independently and without reference to the disclosure, (c) is or becomes publicly available through no fault of the Recipient, (d) is rightfully received from a third party with no duty of confidentiality, (e) is disclosed by the Recipient with the Discloser’s written approval or (f) is disclosed under operation of law.
	13.1.8		Existing Confidential Disclosure Agreements. The Parties agree that this Section 13 is intended to supplement any existing confidential disclosure agreements that are in effect as of the Effective Date of this Agreement.

13.2

No Publication. Supplier shall not publicize or disclose the terms or existence of this Agreement, nor shall Supplier use the name(s), trademark(s), or trade name(s) of HP, HP Subsidiaries or HP Affiliates, except as follows: (i) With the prior written consent of HP; or (ii) as may otherwise be required by law. HP may impose, as a condition of its consent, any restrictions which HP deems appropriate, in its sole discretion. Supplier shall provide ten (10) days advance written notice to HP prior to disclosure and provide HP with the proposed text and context of the disclosure.

14.

Marketing and Licenses

	14.1		Marketing Authority. HP will have the authority worldwide to market Product and HP Products containing Product to the extent it deems appropriate. Nothing in this Agreement precludes HP from independently developing, purchasing, licensing or marketing any product which performs the same or similar function as Product. HP will have the right to use its own business and license terms for all marketing and distribution of Product and HP Products.
	14.2		No Rights in Marks. Except as otherwise set forth in Section 14.3 (Private Labeling), nothing in this Agreement grants either Party any rights in the Marks of the other Party; provided that HP may use the name of Supplier and the name of any Product in advertising and marketing Product or HP Products.
	14.3		Private Labeling. If during the Term HP requests Supplier to produce HP private label versions of Product, Supplier will ensure that Product contains HP Marks, serial number format and packaging as specified by HP and conforms to HP specifications for external appearance. Supplier will make commercially reasonable efforts to fulfill such request, as long as there is no material change in form or dimensions of Product. [...***...] Except as provided herein, Supplier will have no other right or license in any HP Marks.
	14.4		Software License.

14.4.1

If Product includes Software, then subject to the terms and conditions of this Agreement, Supplier hereby grants to HP, a nonexclusive, worldwide, fully paid-up, upon HP’s payment to Suppliers of all applicable fees and royalties for each Product, license to use, reproduce, for archival purposes only, and distribute the Software solely as integrated with Product or HP Products. These rights will extend to HP Subsidiaries, Affiliates and third party channels of distribution for those Products that such entities acquire from Supplier in their capacity as Eligible Purchasers. The rights granted herein include the right to use and

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			distribute updates to such Software directly with the Product or indirectly (without the Product) to customers of the HP Product.
	14.4.2		If any Software is licensed from a third party or subject to a third party license (including, without limitation, open source software), Supplier shall identify each software component and identify the corresponding third party license in Exhibit L (Third Party and Open Source Software Components).
	14.4.3		If any Software is subject to a license which requires the distribution of source code (e.g., GPL/ LGPL licenses), Supplier agrees to provide HP with all such source code.

14.5

Documentation License. For purposes of this Agreement, Supplier hereby grants HP a non-exclusive, perpetual, irrevocable, worldwide fully paid-up license to use, reproduce, and distribute, in connection with distribution or sale of HP Products and prepare derivative works in HP’s name all Documentation furnished by Supplier under this Agreement. HP may reproduce such Documentation without Supplier’s logo or other identification of source, subject to affixing copyright notices to all copies of Documentation that attribute the ownership rights in such Documentation to Supplier and its licensors. These rights with respect to the Documentation will extend to Eligible Purchasers and, to the extent related to distribution or sale of HP Products, to HP Subsidiaries, Affiliates and third party channels of distribution as may be authorized by HP and solely in their capacity as an Eligible Purchaser of Products under this Agreement.

15.

Intellectual Property Ownership Warranty and Indemnification

15.1

Intellectual Property Ownership.

	15.1.1		Each Party will maintain all right, title, and interest in and to its own Pre-Existing Intellectual Property irrespective of any disclosure of such Pre-Existing Intellectual Property to the other party, subject to any licenses granted herein.
	15.1.2		Notwithstanding anything to the contrary in this Agreement, there is no assignment of any of HP’s Intellectual Property Rights to Supplier or Supplier’s Intellectual Property Rights to HP.
	15.1.3		Industrial Design. The Parties agree that HP owns all right, title, and interest in and to the Developed Materials and any derivatives, improvements or modifications thereto and any Intellectual Property Rights related to any and all of the above. “Developed Materials” means the Industrial Design of the Product as identified in Exhibit Q. Supplier warrants that Supplier can assign to HP all right, title and interest in and to the Developed Materials to HP. Supplier hereby irrevocably transfers, conveys and assigns to HP all of its right, title and interest in the Developed Materials to HP. To the extent permitted by law, Supplier waives any moral rights, such as the right to be named as author, the right to modify, the right to prevent mutilation and the right to prevent commercial exploitation, whether arising under the Berne Convention or otherwise. Supplier will sign any necessary documents and will assist HP, at HP’s expense, in preparing and executing any documents necessary for HP to obtain protection for the Developed Materials on a worldwide basis. All works of authorship included in the Developed Materials shall bear the following copyright notice: © Copyright 2006 [INSERT YEAR OF ACTUAL PUBLICATION.] Hewlett-Packard Development Company, L.P.
	15.1.4		Tools. If HP pays the Supplier to produce any Tools, the Parties agree that HP owns all right, title, and interest in and to the Tools and any derivatives, improvements or modifications thereto and any Intellectual Property Rights related to any and all of the above. Supplier warrants that Supplier can assign to HP all right, title and interest in and to the Tools. Supplier hereby irrevocably transfers, conveys and assigns to HP all of its right, title and interest in the Tools to HP. To the extent permitted by law, Supplier waives any

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Dot Hill Systems PPA: PRO02542-060507

			moral rights, such as the right to prevent mutilation and the right to prevent commercial exploitation, whether arising under the Berne Convention or otherwise. Supplier will sign any necessary documents and will assist HP, at HP’s expense, in preparing and executing any documents necessary for HP to obtain protection for the Tools on a worldwide basis. All works of authorship included in the Tools shall bear the following copyright notice: © Copyright 2006 [INSERT YEAR OF ACTUAL PUBLICATION.] Hewlett-Packard Development Company, L.P.
	15.1.5		Products. The Parties agree that if Supplier creates any derivatives, improvements or modifications to the Products and/or Documentation, ownership of said derivatives, improvements or modifications [...***...].

15.2

Intellectual Property Warranties. Supplier represents and warrants with regard to the Product including Software and Documentation, that:

	15.2.1		Supplier will own or have all the necessary copyright licenses for HP to fully exploit the Product, including the Software and Documentation as intended herein;
	15.2.2		the Product does not constitute and will not constitute a misappropriation of the trade secrets of any third party;
	15.2.3		any Supplier Marks on the Product do not infringe any third party trademark rights;
	15.2.4		to the best of Supplier’s knowledge, the Product and the use thereof, does not infringe on any patent of any third party, and there are no claims of such infringement;
	15.2.5		the Product does not infringe and will not infringe upon any other third-party Intellectual Property Rights;
	15.2.6		HP does not and will not need to procure any rights or licenses to any patents or other third-party Intellectual Property Rights to fully exploit the Product;
	15.2.7		there are no patent markings on any part of the external housing of the Product;
	15.2.8		that the Software will not (i) contain lock out devices or have any virus, disabling device, time bomb, Trojan horse, back door or any other harmful component, (ii) replicate, transmit or activate itself without control of a person operating the computing equipment on which it resides, (iii) alter, damage or erase any data or other computer programs without control of a person operating the computing equipment on which it resides or (iv) contain any code, key, node lock, time-out or other function whether implemented by electronic, mechanical or other means which restricts or may restrict use or access to programs or data based on residency on a specific hardware configuration, frequency or duration of use, or other limiting criteria;
	15.2.9		Supplier will assign to HP the benefits of all warranties applicable to any third party software acquired by HP from Supplier; and
	15.2.10		Supplier represents and warrants that Supplier complies with and shall continue to comply with all licenses (including, without limitation, all open source licenses) associated with any software component included in the Product and Documentation.
	15.2.11		If Supplier breaches this Intellectual Property Warranty, HP may immediately terminate this Agreement in whole or in part and may immediately cancel any unfilled Accepted Orders

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without liability, such remedies being in addition to any other remedies provide by this Agreement, or otherwise available to HP under law or equity.

15.3

Supplier’s Duty to Defend. Subject to the provisions of 15.4 and except as provided in Section 15.7, Supplier will indemnify, defend and hold harmless HP, HP Subsidiaries, HP Affiliates and Eligible Purchasers and its customers (including without limitation end users, distributors and resellers), officers, directors, employees, agents and representatives (“Indemnitees”) from and against any claims or liabilities relating to any claim that:

	15.3.1		any Product;
	15.3.2		any Software included in the Product;
	15.3.3		any Documentation;
	15.3.4		a Supplier Mark or
	15.3.5		anything else provided as part of Supplier’s Support,

			or use of any of the foregoing, constitutes a misappropriation or infringement of any third party’s Intellectual Property Rights (all of the foregoing being referred to as an “IP Claim”). Without limiting the generality of the foregoing, Supplier will pay losses and damages, liabilities, judgments, awards, costs and expenses including reasonable attorneys’ fees, expert witness fees and bonds incurred by Indemnitees and any award in connection with, arising from or with respect to any such claim or agreed to by Supplier in any settlement of that claim.
			The combination of the Product with an HP Product will not void Supplier’s Intellectual Property Warranty and concomitant indemnification obligations provided that the IP Claim would apply regardless of the combination. However, [...***...].
	15.4		HP’s Duty to Notify and Tender of Claims. HP will give Supplier written prompt notice of any IP Claim. If Supplier assumes defense of such IP Claim without reservations of rights, HP will provide Supplier the authority, information and reasonable assistance (at Supplier’s expense) necessary to defend. Supplier will control defense, and HP will not settle such IP Claim without Supplier’s consent, not to be unreasonably withheld. Should Supplier not diligently pursue resolution of such IP Claim or fails to provide HP with reasonable assurance that it will diligently pursue resolution, then HP may, without in any way limiting its other rights and remedies, defend the claim and collect all reasonable costs of doing so from Supplier. Any settlement or compromise Supplier desires to enter into will be subject to HP’s prior approval, which HP agrees not to unreasonably withhold, delay or condition. HP and any other Indemnitee may, at its expense, in its or their discretion, participate in the defense of such IP Claim. Section 22.14 (Disputes/Escalation Process) shall not apply to this section.
	15.5		Limitation on Settlement. Supplier will only enter into a compromise or settlement that will not have the effect of creating any liability or obligation (whether legal or equitable) on HP unless HP otherwise agrees in writing. In addition, Supplier shall obtain a full and complete release of any and all claims that the third party claimant may have against HP.
	15.6		Remedies for Infringing Product. If the use, manufacture, sale, combination, or importation of the Product (“Infringing Product”) is enjoined and Supplier has indemnification obligations pursuant to this Section 15, Supplier will, at its sole expense and option:

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	(i)		procure for HP the right to continue using or combining the Infringing Product, as the case may be;
	(ii)		replace the Infringing Product with a non-infringing product of equivalent function, form factor, and performance; or
	(iii)		modify the Infringing Product to be non-infringing, without materially detracting from function, form factor, or performance.

15.7

Exclusions. Nothing in this Section 15 shall apply to any Products or parts to the extent that such Products or parts (i) have been modified (other than by Supplier or Supplier’s Authorized Contractors), (ii) have been used in a manner contrary to Specifications, or (iii) the infringement arises out of Supplier’s compliance with a design that HP required Supplier to implement.

16.

Delaying Causes.

	16.1		Delaying Causes. Neither Party will be liable for any delay in performance under this Agreement caused by any act of God or other cause beyond Supplier’s reasonable control and without Supplier’s fault or negligence including but not limited to fire, flood, war, embargo, riot or an unforeseeable intervention of any government authority, which causes complete business interruption (a “Delaying Cause”). A Delaying Cause does not include delays in transportation, shortages of materials, delays by manufacturers or subcontractors or economic considerations or inefficiencies. No Delaying Cause will suspend or excuse either Party’s obligations as set forth in Section 13 (Confidential Information), Section 15 (Intellectual Property Ownership Warranty and Indemnification), Exhibit P (Insurance), and Section 18 (Indemnity).
	16.2		Occurrence of a Delaying Cause. Any Party whose performance is affected by a Delaying Cause will notify the other Party promptly upon commencement of a Delaying Cause and will provide its best estimate of the expected duration of such occurrence. Upon notice to Supplier during pendency of a Delaying Cause, HP may terminate any unfilled Accepted Orders without liability. Any Party whose performance is affected by a Delaying Cause will exercise reasonable diligence to overcome and affect cessation of the Delaying Cause and to mitigate effects thereof. Performance of the Parties’ respective obligations to purchase and sell Product will be suspended to the extent affected by, and for the duration of, a Delaying Cause, and during pendency of a Delaying Cause affecting Supplier’s ability to make timely Delivery, HP may purchase replacement Product elsewhere and deduct the quantity of Product affected thereby from its purchase requirements without affecting eligibility or entitlement to pricing hereunder. If, however, Supplier’s performance is delayed for reasons set forth above for a cumulative period of [...***...] or more, HP, notwithstanding any other provision of this Agreement to the contrary, may terminate this Agreement and/or any Order issued hereunder by notice to Supplier.
	16.3		Resumption of Performance. The Parties will resume performance under this Agreement once the Delaying Cause ceases, and HP may, upon written notice not later than [...***...] following such cessation, extend the Term up to the length of time the Delaying Cause endured.

17.

Events of Default and Remedies

17.1

Events of Default. A Party will be in default under this Agreement upon the occurrence of any of the following events (each an “Event of Default”):

	17.1.1		A Party fails to pay or perform any payment obligation when and as due under this Agreement or any Accepted Order after [...***...] receipt of written notice from the other Party;
	17.1.2		A Party fails to perform any obligation under this Agreement or any Accepted Order, other than as set forth in Section 17.1.1, when such failure continues for [...***...] after written notice thereof is given or, if such failure cannot reasonably be cured within said [...***...], but is capable of cure within a longer period not exceeding [...***...]

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			and the Party commences to cure such failure promptly upon receipt of such written notice and thereafter proceeds with reasonable diligence to cure such failure, for such longer period as may be necessary for the Party to cure the same with reasonable diligence;
	17.1.3		Any representation or warranty made by a Party in connection with this Agreement proves to be false in any material respect; provided that if such representation or warranty is capable of being cured, then the Party may cure such misrepresentation or breach of warranty within [...***...] after written notice thereof is given or, if such misrepresentation or breach of warranty cannot reasonably be cured within said [...***...] and the Party commences to cure same promptly and thereafter proceeds with reasonable diligence to cure same, for such longer period as may be necessary for the Party to cure the same with reasonable diligence; or
	17.1.4		A Party makes an assignment for the benefit of creditors, admits in writing its inability to pay its debts as they mature, applies to any court for the appointment of a trustee or receiver for any of its properties, or commences any voluntary proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution, liquidation or other similar law of any jurisdiction; or any such application or any such proceeding is filed or commenced against said Party and said Party indicates its approval, consent or acquiescence thereto; or there is filed or commenced against said Party an involuntary proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment or debt, dissolution, liquidation or other similar law of any jurisdiction and such proceeding is not dismissed, and remains in effect, for thirty (30) days or more; or an order is entered adjudicating said Party bankruptcy or insolvent; or
	17.1.5		Except as may be permitted under Section 22.5 (Assignment), a Party transfers all or substantially all of its properties or merges with or into any other entity or there is otherwise any change in controlling interest or ownership of a Party, without the prior written consent of the other Party; or
	17.1.6		A Party assigns or attempts to assign this Agreement or any Accepted Order to a competing entity or in case of an assumption or delegation of performance of this Agreement or any Accepted Order by a competing entity, if in the other Party’s reasonable determination such assignment or performance would be detrimental to the performance of this Agreement or any Accepted Order or to its business interests or prospects.

	17.2		Rights and Remedies Upon Default. The Party not in default may terminate this Agreement or any Accepted Order upon written notice to the other Party and/or may enforce, by all proper and legal suits and other means, its right hereunder, with or without terminating this Agreement or any Accepted Order. All rights and remedies will be cumulative and may be exercised singly or concurrently.
	17.3		Cover Costs. Upon a [...***...]. Supplier will be responsible for [...***...] (“Cover Costs”) [...***...]. Cover Costs may include, but are not limited to: [...***...]. Notwithstanding anything herein to the

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contrary: [...***...].

17.4

Additional Remedies. Unless otherwise specifically stated, all remedies expressed in this Agreement are in addition to any legal, contractual, equitable, or statutory rights that may exist.

	18.		General Indemnity
	18.		General Indemnity

18.1

Indemnity. Supplier shall defend, indemnify, and hold harmless HP, HP’s Subsidiaries, HP Affiliates and all Eligible Purchasers purchasing under this Agreement, and their respective directors, officers, employees and agents from and against any and all claims, losses, liens, demands, attorneys’ fees, damages, liabilities, costs, expenses, obligations, causes of action, or suits (collectively “Claims”) to the extent that such Claims are caused by, arise out of, or are connected in any way with:

	(a)		any act or omission, whether active or passive and whether actual or alleged, or willful misconduct, of Supplier, its employees, or agents;
	(b)		the breach of this Agreement (including, but not limited, to the costs associated with any Product recall) by Supplier, its employees or agents of any of its contractual obligations, covenants, undertakings, or promises under this Agreement, or,
	(c)		property loss, damage, personal injury or death, caused by Supplier, Supplier’s Product (includes Goods and Services), its employees or agents.

A Claim relating to or arising out of Section 18.1 (a), (b) or (c) is hereinafter referred to as an “Indemnified Claim”.

	18.1.1		Supplier shall, at its own expense, defend any third party Indemnified Claim and Supplier will pay all costs, including attorneys’ and experts’ fees and litigation costs.
	18.1.2		Supplier will not have any obligation to defend, indemnify or hold harmless hereunder when [...***...].
	18.1.3		Supplier’s obligations to defend, indemnify and hold harmless hereunder will not be limited or otherwise affected by any insurance, self-insurance or retention of risk which it may carry or assume.

18.2

HP’s Duty to Notify. HP will give Supplier prompt notice of any third party claim that constitutes an Indemnified Claim. HP will provide Supplier the authority, information and reasonable assistance (at Supplier’s expense) necessary to defend. Supplier will control the defense, and HP will not settle any such Indemnified Claim without Supplier’s consent, not to be unreasonably withheld; provided that if Supplier does not diligently pursue resolution of the Indemnified Claim, or, fails to provide HP with reasonable assurance that it

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will diligently pursue resolution, HP may, without in any way limiting its other rights and remedies, defend the Indemnified Claim and collect all costs of doing so from Supplier. Any settlement or compromise Supplier desires to enter into will be subject to HP’s approval. HP and any other Indemnitee may, in its or their discretion, participate in the defense of such claim or action.

19.

Limitation of Liability.

     19.1. Limitation on General Damages. A party’s aggregate liability to the other party under this Agreement for any claims, whether in contract, warranty, negligence, tort, strict liability, or otherwise, for loss or damage arising out of, in connection with, or resulting from this Agreement, or the performance or breach thereof, will not exceed the greater of:

19.1.1. [...***...], or,

19.1.2. [...***...].

19.1.3. Notwithstanding anything herein to the contrary, the limitations on liability set forth in this Section 19.1 shall not apply to Supplier’s liability and responsibilities in Epidemic Failure situations under any Corrective Action Plan as more fully described in Section 2 of Exhibit N (Quality and Compensation).

19.2 Exclusion for Special Damages. NEITHER PARTY WILL BE LIABLE FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS OF DATA, PROFITS OR REVENUE, COST OF CAPITAL OR DOWNTIME COSTS), OR FOR ANY EXEMPLARY OR PUNITIVE DAMAGES ARISING OUT OF ANY PERFORMANCE OF THIS AGREEMENT OR ANY ORDER, REGARDLESS OF WHETHER SUCH DAMAGES ARE BASED IN TORT, WARRANTY, CONTRACT OR ANY OTHER LEGAL THEORY, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

19.3. Exceptions to Liability Limitation and Exclusion. Nothing in Section 19 (“Limitation of Liability”) excludes, disclaims, limits or otherwise affects:

     19.3.1. Either party’s liability for any third party claims for personal injury, death, or claims for physical damage to property; or,

     19.3.2. [...***...]

19.4. Limitation to Products. Notwithstanding anything herein to the contrary, Supplier shall have no liabilities or responsibilities with respect to [...***...].

20.

Termination

20.1

Termination for Convenience. HP may terminate this Agreement at any time without liability for damages and without need to show cause upon [...***...] prior written notice. Upon

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			termination pursuant to this Section, HP will accept delivery of, and pay for, [...***...], Order Changes, of Exhibit D (Ordering and Shipment of Product). HP will purchase and pay for upon delivery to HP [...***...]; provided that Supplier will mitigate to the maximum extent feasible;. Supplier may terminate this Agreement at any time without liability for damages and without need to show cause upon [...***...] prior written notice.
	20.2		Termination for Default. Either Party may terminate this Agreement or any Accepted Order in accordance with Section 17 (Events of Defaults and Remedies).
	20.3		Termination for Cause. Either Party may terminate this Agreement or any Accepted Order pursuant to any other right granted to or reserved in that Party under this Agreement or any Accepted Order or as may exist at law or in equity, as may be limited or otherwise affected by this Agreement.
	20.4		Effect of Termination. Notwithstanding expiration or any termination of this Agreement or any Accepted Order, Sections 3.2 (Payment Terms), 11.3 (Survival of Support Obligations), 13 (Confidential Information), 15 (Intellectual Property Protection and Warranty), 18 (Indemnity), 19 (Limitation of Liability), 22.11 (Governing Law), 22.14 (Disputes/Escalation Process), Exhibit A (Definitions), Exhibit I ( Discontinuance of Product and Manufacturing Rights), Exhibit K (Services and Support Requirements), Exhibit P (Insurance), all licenses granted to HP under Sections 14.4 (Software License) and 14.5 (Documentation License), and any obligations that HP may have under Exhibit M (Flexibility Agreement) will survive. HP’s audit rights under Section 5 (Audit Rights) will survive for three (3) years after expiration or termination of this Agreement.

21.

Additional Obligations of Supplier

	21.1		Governmental Compliance. Supplier, its agents, employees will comply with all Applicable Law and will contractually obligate its Subcontractors to comply with all Applicable Law in its performance of this Agreement, including but not limited to the specific requirements referenced Exhibit O (Governmental Compliance). Upon request, Supplier agrees to certify compliance with any Applicable Law or regulations. HP is neither responsible for monitoring Supplier’s nor Supplier’s Subcontractor’s compliance with any Applicable Law.
	21.2		Trade and Logistics. HP’s compliance and operational requirements regarding Trade and Logistics are set forth in detail at https://h20168.www2.hp.com/supplierextranet/index.do. Supplier and each Supplier shipping location has the obligation for ensuring compliance with U.S. and other national export, import, customs, and trade-related laws and regulations. Supplier also understands that it is responsible for developing and implementing procedures to ensure compliance with HP’s Trade and Logistics Requirements.
	21.3		Personal Data Use and Protection.

21.3.1

“Personal Data” Defined. “Personal Data” means information related to any identified, or identifiable, person or legal entity, including any HP or Supplier employees and/or customers. “Personal Data” shall also mean any additional data deemed personal data by any applicable personal data law or directive.

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21.3.2

Supplier Obligations. With regard to any Personal Data that Supplier receives from HP and/or HP Customers to perform Supplier’s obligations under this Agreement, Supplier shall comply with all of the following obligations:

	(i)		Supplier shall comply with all applicable data protection laws and/or directives, all applicable export laws.
	(ii)		Supplier’s use of the Personal Data is limited to performance of Supplier’s obligations under this Agreement. Supplier may only disclose Personal Data to those Supplier employees that have a need to know in order to perform Supplier’s obligations under this Agreement. Said Supplier employees must be bound by confidentiality obligations no less restrictive that those contained in Section 13 (Confidential Information) of this Agreement.
	(iii)		Supplier may not disclose Personal Data to any third party without the advance, written permission of HP. Supplier shall immediately notify HP if Supplier becomes aware of any unauthorized use of disclosure of Personal Data.
	(iv)		Supplier shall use the same degree of care as it uses to protect its own information of similar nature (but never less than a reasonable degree of care) to prevent unauthorized use, dissemination or publication of Personal Data. Personal Data shall also be considered Confidential Information and treated in accordance with the requirements for Confidential Information under this Agreement.
	(v)		Supplier shall, at HP’s request, and upon termination of this Agreement, deliver to HP any Personal Data in Supplier’s possession and, if copies were made, destroy all copies of Personal Data. Supplier’s Personal Data obligations stated herein shall survive expiration or termination of this Agreement.
	(vi)		Personal Data in Storage Devices. As to Personal Data contained in data storage devices that may be returned to Supplier for “Supply Chain Processes” (“Supply Chain Processes” is defined as repair, refurbishment, recycle or scrap):

			(a)    Supplier shall implement and maintain appropriate security processes to ensure that unauthorized persons will not have access to data storage devices returned to Supplier;
			(b)    Supplier will not access Personal Data on the data storage device beyond that point which is required to repair or refurbish the data storage device;
			(c)    Supplier will not provide access to the data storage device except to Supplier’s employees who require access in order to perform Supplier’s Supply Chain Processes.
			(d)    Personal Data contained in data storage devices, where the data storage device is not returned to originator, will not be retained longer than is required for Supplier to perform its Supply Chain Process, at which point said Personal Data will be destroyed in accordance with leading industry practices.

	21.4		Insurance. Without limiting any of the obligations or liabilities of Supplier, Supplier will maintain, at its own expense, as long as this Agreement is in effect, insurance policies of the kind and limits listed in the attached Exhibit P (Insurance).
	21.5		Social and Environmental Responsibility. Supplier warrants that in all countries in which Supplier and, to Supplier’s knowledge, information and belief, Supplier’s authorized subcontractors do business, its and their operations comply with all applicable laws and regulations governing labor and employment, employee health and safety, protection of the environment, and ethical practices, including but not limited to, laws and regulations relating to working hours, working conditions, wages, benefits, child labor, forced labor, freedom of association and equal employment opportunity. Supplier agrees to sign HP’s Supplier Social and Environmental Responsibility Agreement and comply with HP’s Supplier Code of Conduct, including establishment of

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			management systems as described therein, as set out at http://www.hp.com/hpinfo/globalcitizenship/environment/supplychain/index.html.
	21.6		Product Content.

	21.6.1		Supplier will furnish HP any information reasonably requested by HP to confirm the material composition of the Products or of any parts, components or other constituents of the Products or of their packaging all as supplied to HP under this Agreement or as used in any manufacturing processes.
	21.6.2		Each chemical substance contained in Products is on the inventory of chemical substances compiled and published by the United States Environmental Protection Agency pursuant to the Toxic Substances Control Act.
	21.6.3		Supplier will provide to HP prior to shipment a complete and accurate Material Safety Data Sheets (MSDS) for any Product for which such a data sheet is required under Applicable Law or in order for HP to sell Product in any country.

	21.7		Packaging and Shipment. All Products will be shipped in conformance with all applicable national and international transportation requirements including, where applicable, regulations regarding chemicals and hazardous materials, dangerous goods, or fumigation and aeration. All packaging materials, including pallets, will be free of pests and comply with national and international regulations regarding Solid Wood Packing Materials (SWPM) where applicable. All packaging for Products will comply with HP’s General Specification for the Environment.
	21.8		Access to Information Systems. In order to fulfill its obligations under this Agreement, [...***...]

22.

Miscellaneous

22.1

Notices. Except for HP’s email notifications to Supplier for content changes at HP’s website references stated in this Agreement as noted in section 22.2 below, all other notices that are required to be given under this Agreement will be in writing and will be sent to the respective address as set forth in Exhibit J (Recipients for Notices), or such other address as each Party may designate by notice given in accordance with this Section. Any such notice may be delivered by hand, by overnight courier, by first class pre-paid letter or by facsimile or electronic mail transmission, and will be deemed to have been received: (a) by hand delivery, at the time of delivery; (b) by overnight courier, on the second business day after delivery to the carrier; (c) by first class mail, four (4) business days after day of mailing; and (d) by facsimile or electronic mail, immediately upon confirmation of transmission, provided however, for notice of termination or default, a confirmatory copy is sent pre-paid by first class mail or overnight courier or is hand delivered by the end of the next business day.

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	22.2		Website References. Wherever in this Agreement an HP web site or web address is stated, access may require assistance of HP personnel, or HP may require Supplier to enter into one or more separate agreements concerning access or use thereof. HP reserves all rights, from and after the Effective Date of this Agreement, to revise, withdraw or otherwise modify (variously and collectively, “Change”) the contents of any web site or web address stated in this Agreement. Supplier will be required to comply with all such Changes ten Days after email notification of such Change is sent by HP to Supplier. If Supplier does not accept such Change, Supplier will provide notice of non-acceptance as set forth in Section 22.1 (Notices); provided that HP must receive notice of non-acceptance within fourteen (14) days after HP has provided Supplier notice of such Change, or Supplier will be deemed to have accepted such Change. Any use of a web site or address by Supplier after its receipt of HP’s notice of Change will constitute Supplier’s acceptance of such Change, notwithstanding any notice of non-acceptance or objection HP may receive thereafter.
	22.3		Exhibits; Other Documents. The Exhibits attached to this Agreement and all other documents referred to herein are hereby incorporated by this reference and made part of this Agreement. Unless an Exhibit specifically refers to and amends a term of this Agreement, the terms and conditions of this Agreement will control and take precedence over conflicting terms in an Exhibit.
	22.4		Independent Contractors. The relationship of the Parties established under this Agreement is that of independent contractors, and neither Party is a partner, employee, agent or joint venturer of or with the other. Nothing in this Agreement precludes either Party from independently developing, manufacturing, selling or supporting products similar to Product.
	22.5		Assignment.

	22.5.1		Neither this Agreement nor any right, license, privilege or obligation provided herein or in any Accepted Order may be assigned, transferred or shared by either Party without the other Party’s prior written consent, not to be unreasonably withheld, and any attempted assignment, transfer or sharing without consent is void; provided that Supplier may perform its obligations hereunder through any Subsidiary or Affiliate for whose performance Supplier will be responsible and remains liable and HP may assign any Order to an HP Subsidiary or HP Affiliate for whose performance HP will be responsible and remains liable.
	22.5.2		Any merger, consolidation, reorganization, transfer of substantially all or a material portion of the assets of a Party, or other change in control or ownership will be considered as assignment of the purposes of this Agreement; provided that either Party may merge with or into any of its Subsidiaries, Affiliates or parent companies and may assign this Agreement or any Accepted Order to any of its Subsidiaries, Affiliates or parent companies without need for consent.
	22.5.3		The assigning Party must ensure that the assignee assumes in writing or by operation of law the assigning Party’s obligations, and no assignment will relieve the assigning Party of its obligations, under this Agreement and any assigned Accepted Orders. This Agreement will inure to the benefit of and will be binding on the permitted successors and assigns of the Parties.

22.6

No Waiver.

	22.6.1		No modification or waiver of, or amendment to, or release from, any provision of this Agreement or any Accepted Order and no waiver of, or release from, any breach or default hereunder, will be of any force or effect unless contained in a writing which is signed by the Party which is sought to be bound thereby, nor may same be held or considered to be a modification or waiver of, or amendment to, or release from, any other provision, nor be a waiver of or release from any other breach or default.
	22.6.2		No modification or waiver of, or amendment to, or release from, any provision of this Agreement and no waiver of, or release from, any breach or default hereunder, will result

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			from any conflicting, different or printed provisions of any subsequently dated sales or purchase order, order acknowledgment, or a confirmation thereof, for Product, unless such subsequent provision is stated conspicuously on the face of any such order, acknowledgment or confirmation and such order, acknowledgment or confirmation is agreed in a writing signed by an authorized representative of the Party to be bound thereby.
	22.6.3		The Parties contemplate that from time to time order, acknowledgment and confirmation forms may be utilized, and the provision of this Agreement will govern and control such forms except to the extent of any such subsequent provision as aforesaid. The failure of any Party to enforce any provision of this Agreement, or to exercise any right, will not be considered a waiver of that provision or right.

	22.7		No Third Party Beneficiary. This Agreement does not confer any right or remedy other than to the Parties hereto and their respective permitted successors and assigns, and no action may be brought against any Party hereto by any third party claiming as a third party beneficiary to this Agreement or any Accepted Order. Nothing in this Agreement is intended to relieve or discharge any obligation or liability of any third party to any Party to this Agreement, and nothing herein confers, or is intended to give any third party, any right of subrogation.
	22.8		Headings; Interpretation. The Section titles and headings used in this Agreement are for reference only and do not limit or extend the meaning of any provision of this Agreement, and will not be used in interpretation of any provision of this Agreement. All terms defined in this Agreement in the singular form will have comparable meanings when used in the plural form and vice versa. References in this Agreement to “Sections”, and “Exhibits” are to sections and exhibits herein or hereto unless otherwise indicated. The words “include” and “including” and words of similar import when used in this Agreement will not be construed to be limiting or exclusive.
	22.9		Severability. If any provision in this Agreement is held invalid or unenforceable by a body of competent jurisdiction, such provision will be construed limited or, if necessary, severed only to the extent necessary to eliminate such invalidity or unenforceability. The Parties will negotiate a valid, enforceable substitute provision that most nearly effects the Parties’ original intent in entering into this Agreement or to provide an equitable adjustment in the event no such provision can be added. The other provisions of this Agreement will remain in full force and effect.
	22.10		Entire Agreement. This Agreement, together with the Exhibits, comprise the entire understanding between the Parties with respect to the subject matter hereof and supersede any previous or contemporaneous communications, representations or agreements, whether oral or written, with respect thereto; provided that any separate non-disclosure agreement between the Parties will continue unchanged and in full force and effect according to its terms. For purposes of construction and interpretation, this Agreement will be deemed to have been drafted by both Parties, and no ambiguity will be construed in favor of or against either Party.
	22.11		Governing Law. This Agreement and any dispute related to or arising out of this Agreement will be governed in all respects by New York law without reference to any choice or conflict of laws provisions of New York or the law of any other jurisdiction. The Parties exclude application of the 1980 United Nations Convention on Contracts for the International Sale of Goods, if applicable. The Parties hereby submit to the jurisdiction of the courts of California with subject matter jurisdiction, and waive any venue objections against the United States District Court for the Northern District of California, San Jose Branch and the Superior and Municipal Courts of the State of California, Santa Clara County, in any litigation arising under this Agreement.
	22.12		Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. If this Agreement is executed in counterparts, no signatory hereto will be bound until all Parties have duly executed, or caused to be duly executed, a counterpart of this Agreement.

HP Confidential

Dot Hill Systems PPA: PRO02542-060507

	22.13		Authority of Signatory. If HP or Supplier executed this Agreement by agent or representative, such agent or representative by his/her act of signing this Agreement individually warrants and represents to the Parties, and HP and Supplier warrant and represent respectively to each other, that he/she is authorized to execute, acknowledge and deliver this Agreement on behalf of HP or Supplier, as the case may be, and thereby to bind the respective Party to the same.
	22.14		Disputes/Escalation Process.

	22.14.1		The escalation process for Support is set forth in Exhibit K (Service and Support Requirements).
	22.14.2		Supplier and HP will attempt in good faith to resolve all disputes under this Agreement by mutual agreement before initiating any legal action or attempting to enforce any rights or remedies hereunder; provided that nothing herein will prevent either Party from giving notice at any time of default as set forth in Section 17 (Events of Defaults and Remedies) or termination as set forth in Section 20 (Termination).
	22.14.3		In the event of a dispute, and as a required precondition to initiating legal action (other than for an injunction or restraining or protective order), either Party must give notice to the other Party, and within [...***...] after receipt of the notice, HP’s procurement representative and his/her corresponding functional-level counterpart at Supplier will meet to discuss and attempt to resolve the dispute.
	22.14.4		If a resolution mutually recognized as such by both Parties is not achieved within [...***...] thereafter, the dispute will be referred to senior officers of the Parties of comparable rank or position who will meet to discuss and attempt a resolution of the dispute.
	22.14.5		If within [...***...] after referral the dispute remains unresolved, both Parties may pursue any or all rights and remedies as may exist at law or in equity, as may be limited or otherwise affected by this Agreement.
	22.14.6		If either Party fails to meet or discuss a dispute as provided above, such Party covenants not to commence a suit as to that dispute, other than for an injunction or restraining or protective order. The failure or refusal of either Party to meet and discuss any dispute as provided above will entitle the other Party to immediately exercise and pursue any such right or remedy, including commencement of a suit as to the dispute. Nothing herein will prevent either Party, at any time, from suggesting referral of any dispute to mediation before a mutually acceptable mediator under mutually acceptable rules and procedures.

IN WITNESS WHEREOF, the Parties, intending to be legally bound, have executed this Agreement by their respective authorized representatives as of the Effective Date.

DOT HILL SYSTEMS CORP.		HEWLETT-PACKARD COMPANY
/s/ Dana Kammersgard		/s/ Jeff J. Kato
Authorized Signature		Authorized Signature
9/4/07		9/10/2007
Date		Date
Dana Kammersgard		Jeff J. Kato
Printed Name		Printed Name
President & CEO		Director of Nearline Disk SWD
Title		Title

HP Confidential

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