OEM AGREEMENT
BETWEEN
INTERNATIONAL BUSINESS MACHINES CORPORATION
AND
STORAGE TECHNOLOGY CORPORATION
DECEMBER 18, 1997
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TABLE OF CONTENTS
BACKGROUND...............................................................................................................1
1. DEFINITIONS.......................................................................................................1
2. SCOPE OF AGREEMENT................................................................................................8
3. TERM OF AGREEMENT.................................................................................................8
4. COMPONENTS........................................................................................................9
5. AGREEMENT ADMINISTRATOR...........................................................................................9
6. PURCHASES.........................................................................................................9
6.1 [**] Purchases............................................................................................9
6.2 [**] Pricing.............................................................................................10
7. PRICING & PAYMENT TERMS..........................................................................................12
7.5 [**] Price...............................................................................................13
7.6 SnapShot Feature.........................................................................................13
7.7 FRU Prices...............................................................................................14
7.8 Lowest Cost Sourcing.....................................................................................14
7.9 Taxes/Duties.............................................................................................15
7.10 Payment Terms............................................................................................15
8. IBM SALES TO STORAGETEK..........................................................................................16
9. QUALITY..........................................................................................................18
9.1 Manufacturing Testing....................................................................................18
9.2 Engineering Changes......................................................................................19
9.3 Quality Levels...........................................................................................21
9.4 Quality Assurance........................................................................................27
9.5 ISO 9000 Certification and Use of Subcontractors.........................................................27
10. PRODUCT LEAD TIMES AND FORECAST..................................................................................28
10.4 Current Quarter..........................................................................................29
10.5 StorageTek's Allocation..................................................................................30
11. PURCHASE ORDERS, ALTERATIONS & RESCHEDULING......................................................................30
12. CONSIGNMENT......................................................................................................33
13. DELIVERY.........................................................................................................34
13.1 On-time Delivery.........................................................................................34
13.2 Carrier..................................................................................................38
13.3 Title/Risk of Loss.......................................................................................39
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13.4 Packaging................................................................................................39
14. EQUIPMENT WARRANTY...............................................................................................39
14.10 Licensed Programs, Microcode and Maintenance Code Warranty...............................................41
15. FRUs.............................................................................................................43
15.4 FRU Rework Procedures and Prices.........................................................................43
16. FIELD SERVICE & SUPPORT..........................................................................................43
16.1 Training.................................................................................................43
16.2 Emergency and Expert Maintenance Coverage................................................................44
16.3 New Product Development Center Support...................................................................44
16.4 Maintenance and Installation Tools.......................................................................44
16.5 Maintenance and Technical Support........................................................................44
16.6 Retain Access............................................................................................47
17. MARKETING RIGHTS.................................................................................................47
17.1 Ongoing Training.........................................................................................47
17.2 Marketing Materials......................................................................................48
17.3 Marketing Tools..........................................................................................48
18. REPRESENTATIONS AND WARRANTIES...................................................................................49
19. TRADEMARK & ADVERTISING..........................................................................................50
19.1 Trademark and Design Rights..............................................................................50
19.2 Advertising/Disclosure...................................................................................50
20. CONFIDENTIALITY..................................................................................................50
21. ASSIGNMENT & CHANGE OF CONTROL...................................................................................51
22. DISPUTE RESOLUTION...............................................................................................52
22.1 Escalation Process.......................................................................................52
22.2 Mediation Process........................................................................................53
23. TERMINATION/REMEDIES.............................................................................................53
23.1 Termination by Mutual Consent............................................................................53
23.2 Termination by Bankruptcy................................................................................53
23.3 Termination for Cause....................................................................................54
23.4 Material Breach..........................................................................................56
23.5 [**] License.............................................................................................57
23.6 Manufacturing Make or Have Made Rights...................................................................57
23.7 Termination for Convenience..............................................................................59
23.8 Termination for Burdensome Condition.....................................................................59
23.9 Wind Down................................................................................................61
23.10 [**] After Termination...................................................................................61
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24. INDEMNIFICATION RIGHTS...........................................................................................61
24.1 Intellectual Property Indemnity..........................................................................61
24.2 General Indemnity........................................................................................62
24.3 Obligations of IBM.......................................................................................63
25. GOVERNING LAW....................................................................................................64
25.1 New York Law.............................................................................................64
25.2 Limitation of Actions....................................................................................64
25.3 Limitation of Liability..................................................................................64
26. GENERAL..........................................................................................................65
26.1 Compliance with Laws.....................................................................................65
26.2 Relationship of the Parties..............................................................................65
26.3 Notices..................................................................................................65
26.4 Counterparts.............................................................................................67
26.5 Headings and Attachments.................................................................................67
26.6 Amendment................................................................................................67
26.7 Waiver...................................................................................................67
26.8 Severability.............................................................................................67
26.9 Weekends and Holidays....................................................................................68
26.10 Force Majeure............................................................................................68
26.11 Survival.................................................................................................68
26.12 Order of Precedence......................................................................................68
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EXHIBITS, ATTACHMENTS, APPENDICES
Exhibit 1 - Prices
Attachment 1 - Product Prices
Attachment 2 - Upgrade Pricing
Exhibit 2 - Specifications
Attachment 1 - Manufacturing Test Specifications
Attachment 2 - Product Specifications
Exhibit 3 - IBM Developer Agreement Between IBM and StorageTek: Base Agreement
Attachment 1 - Statement of Work
Appendix A - Functional, Technical and Quality Specifications
Schedule 1 - Iceberg Items Schedule 2 - Kodiak Items
Schedule 3 - SnapShot, IXFP and IXOF Items
Schedule 4 - Iceberg Performance Commitments for [**]
Schedule 5 - Iceberg Performance Commitments for [**]
Schedule 6 - Kodiak Performance Commitments for [**]
Schedule 7 - Kodiak Performance
Commitments for [**] and After
Schedule 8 - Capacity Ratio Specification
Appendix B - Completion and Acceptance Criteria
Schedule 1 - Monterey System Test
Appendix C - Not Used
Appendix D - Certificate of Originality
Appendix E - IBM Source Code Custody Agreement
Appendix F - Performance Assessment Workload (PAWS)
Attachment 2 - Description of Licensed Works
Appendix A - IBM LIC Terms
Appendix B - StorageTek LIC Terms
Exhibit 4 - Consignment Agreement
Exhibit 5 - FRU Prices/Lead Times
Exhibit 6 - List of Countries for IP Indemnity
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OEM AGREEMENT
This agreement is made and entered into as of December 18, 1997, by and
between International Business Machines Corporation, having an office for the
transaction of business at 5600 Cottle Road, San Jose, California 95193
(hereinafter called "IBM" or "Monterey"), and Storage Technology Corporation,
having an office for the transaction of business at 2270 South 88th Street,
Louisville, Colorado 80028 (hereinafter called "StorageTek," "STK" or "Oahu").
StorageTek and IBM may be individually referred to herein as a "Party" and
collectively as the "Parties." This Agreement amends, supersedes and replaces in
its entirety the OEM agreement dated June 7, 1996, as amended, between the
Parties, and will have prospective force and effect. However, this Agreement
shall not affect IBM's obligation to pay for any Equipment ordered by IBM under
a purchase order and accepted by StorageTek prior to the date of the Agreement's
execution by authorized representatives of the Parties.
BACKGROUND
StorageTek manufactures and sells, among other things, certain
Equipment as more fully described below. IBM wishes to purchase such Equipment
from StorageTek on an Original Equipment Manufacturer (OEM) basis in order to
resell or lease such Equipment to its customers throughout the world, both
directly and indirectly through its distributors, Subsidiaries, and other
channels. In order to secure access to IBM's distribution channels, to provide
StorageTek with the opportunity to reach more customers, to provide more product
choices for customers and also due to IBM's willingness to invest a substantial
amount in product research and development and in product engineering,
StorageTek is willing to sell such Equipment to IBM at the prices set forth
herein if IBM will purchase, advertise and market the Products and Upgrades,
provide maintenance and repair service for the Equipment sold or leased by it,
maintain an inventory of spare parts and take certain other related actions.
The provisions of this section are intended to generally explain the
reasons that StorageTek and IBM have entered into this Agreement, but do not
constitute a portion of the contractual obligations, terms or conditions agreed
to by the Parties, which are set forth in the following sections of this
Agreement.
WITNESSETH THAT:
In consideration of the mutual premises and covenants herein contained,
the Parties hereto agree as follows:
1. DEFINITIONS
1.1 "Agreement" shall mean this OEM Agreement, its Exhibits, their
Attachments, their Appendices and their Schedules.
1.2 "Agreement Administrator" shall have the meaning set forth in
Section 5.
1.3 "APAR" shall mean a completed form entitled "Authorized
Program Analysis Report," that is used by IBM to report
suspected Code or
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documentation errors in a Licensed Program (including
updates or enhancements thereto) and to request their
investigation and correction.
1.4 "Audit Rights" (Section 7.5c) shall mean a Party's right to
have Price Waterhouse, Arthur Andersen or Ernst & Young, or
their lawful successors, audit the other Party's books and
records on reasonable prior notice for the purpose of making a
factual determination of whether a specified event has
occurred. The Parties shall request the firms in the order set
forth above, and shall only request the second or third listed
firm if the earlier listed firms decline to serve. In carrying
out such audit responsibilities, said accounting firm shall
use generally accepted accounting principles (hereafter
"GAAP"), as consistently applied by the audited party. The
auditor's working papers shall not be made available to the
Party requesting the audit.
1.5 "Base Iceberg Package" shall have the meaning set forth in the
IDA.
1.6 "Burdensome Condition" (Section 23.8) shall mean: [**]
1.7 "Change of Control" (Section 21) shall mean the acquisition by
an entity of more than [**] of the [**], the sale of all or
substantially all of the assets of StorageTek, or any
consolidation, merger or other reorganization [**] is not the
continuing or surviving corporation or pursuant to which
shares [**] would be converted into cash, securities or other
property.
1.8 "Commit Date" shall have the meaning set forth in Section
13.1i.
1.9 "Cost Exclusions" (Section 9.3f) shall mean those parts costs
that are incurred by IBM for (i) FRUs returned for warranty
credit, (ii) FRU removals which are not in accordance with FRU
removal procedure to the extent that such removals exceed
StorageTek's actual experience during the first six (6) months
of 1996, (iii) defective IBM Drives, and (iv) FRUs replaced
due to a confirmed IBM Drive or any other IBM-supplied
component failure (without a defect in the associated
StorageTek FRU package).
1.10 "Day(s)," "month(s)," "quarter(s)" and "year(s)" shall mean
calendar days, months, quarters or years, unless otherwise
specified.
1.11 "Delivery," "Delivered," "Deliver" (Section 2.1) or other
forms of the term shall mean the physical transfer of
Equipment by StorageTek to an IBM-specified common carrier,
freight forwarder, or IBM's agent at StorageTek's plant of
manufacture.
1.12 "Devices" shall mean products which would be [**].
1.13 "Disclosing Party" shall have the meaning set forth in Section
20.
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1.14 "Drives" shall have the meaning set forth in Section 12.1.
1.15 "Emergency Engineering Change" shall have the meaning set
forth in Section 9.2b.
1.16 "Equipment" (Section 2) shall mean Products, Upgrades and
FRUs.
1.17 "Error Free Installation" (Section 9.3b) shall mean
installations of Products and Upgrades Delivered that both (i)
Plug and Play; and (ii) meet the following criteria: (a)
arrives configured according to IBM's written instructions;
(b) has all of the correct documentation, cables and
accessories included; and (c) is Delivered in the correct
packaging and with the shipping documents. Such criteria shall
specifically not include any failures caused by IBM or the
customer, or for which IBM or the customer is responsible,
including without limitation, I/O control program generations,
shipping damage, failure (for any reason) of Drives or other
IBM-supplied components.
1.18 "FAST" shall mean Iceberg, as described in the Specifications.
1.19 "FASTER" shall mean Kodiak, as described in the
Specifications.
1.20 "FRU" (Section 6.2) shall mean any part or component of
Products, Devices or Upgrades supplied by StorageTek that are
designed to be replaceable in the field.
1.21 "Gigabyte" or "GB" shall mean one billion bytes of storage.
1.22 "IDA" (Section 2.2) shall refer to the IBM Developer
Agreement, which is attached hereto as Exhibit 3.
1.23 "Impact Error" (Section 9.3a) shall mean an incident, as
reasonably determined by IBM, that either results in: (1) the
loss of data, or (2) the loss of access to data resulting in
an application interrupt (e.g., an abnormal program ending or
"abend" or inability to bring up an application) or system
interrupt (e.g., a system outage or requirement to initiate an
initial program load command in order to resolve or clear an
error condition). Any Impact Error due to improper use of the
Equipment by the customer, or an IBM agent or employee will be
excluded.
1.24 "Invention" shall mean any idea, design, concept, process,
technique, invention, discovery or improvement, whether or not
patentable, either conceived or reduced to practice solely by
one or more employees of one of the Parties or its
Subsidiaries (Inventing Party) or jointly by one or more
employees of IBM or its Subsidiaries and one or more employees
of StorageTek or its Subsidiaries (Joint Invention) in the
performance, and during the term, of this Agreement.
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1.25 "Level 1" support are those activities that assist the user in
resolving "how to" and operational-type questions, as well as
technical questions on installation procedures.
1.26 "Level 2" support are those activities that require additional
research and analysis of a user problem. The Problem
Management System database is checked to locate a duplicate of
the problem being reported and the previous solution applied
to that problem.
1.27 "Level 3" support are those activities to distribute a fix to
resolve a user problem.
1.28 "Licensed Programs" shall mean IXFP, IXOF and the Snapshot
Feature (as defined in Section 1.13 of the DLW).
1.29 "Machine Month" or "MM" (Section 9.3a) shall mean a
measurement, established at the end of such calendar month, of
the number of units of Product installed and operational
during a month at an end user's location, prorated on a daily
basis (e.g., the sum of the total number of machine days
[i.e., number of machines installed and operational at an end
user's location on a particular day] in a calendar month,
divided by the number of days in that month).
1.30 "Maintenance Code" shall be as defined in the DLW.
1.31 "Major Enhancements" shall be as defined in the IDA.
1.32 "Mandatory Engineering Changes" shall have the meaning set
forth in Section 9.2.
1.33 "Megabyte" or "MB" shall mean one million bytes of storage.
1.34 "Microcode" shall have the meaning set forth in the
Description of Licensed Works.
1.35 "[**] Price" shall have the meaning set forth in Section 7.5.
1.36 "New FRU Cost" (Section 7.7a) shall mean StorageTek's price
for FRUs, as specified in Section 7.7a. StorageTek will
provide IBM a schedule setting forth this cost for each FRU
(the current version set forth in Exhibit 5 to this Agreement,
FRU Prices and Lead Times) which list will be adjusted
semiannually (in January and July).
1.37 "Non-RMM Device" shall have the meaning set forth in Section
1.11 of the DLW.
1.38 "Object Code" shall have the meaning set forth in the SOW.
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1.39 "Plug and Play" means that a unit of Product or Upgrade, when
installed following StorageTek's recommended installation
procedures, operates without experiencing any functional
failures during installation and passes all installation
verification tests, that internal diagnostic routines execute
successfully and generally that each such unit of Product or
Upgrade is observed to operate properly and in accordance with
the Specifications (as the same may be changed in any
applicable Product Development Plan) through the installation
of such unit. A functional failure is defined as any
repair/replacement/adjustment corrective action that is
required to install or make the subsystem functional that is
not specified as part of the installation instructions.
1.40 "PMR" shall mean a problem management report that is used by
IBM to report machine failures.
1.41 "Product(s)" (Section 6.1) shall mean the products purchased
from StorageTek by IBM and consist of the
StorageTek-manufactured Iceberg, Kodiak and Arctic Fox high
performance storage subsystems, including any Deliverables,
Enhancements and Maintenance Modifications hereafter made
pursuant to the IDA, and controllers, A-boxes, B-boxes,
Microcode and Licensed Works, and which are further described
in Exhibit 2, Specifications, and Appendices A and B to
Attachment 1 of Exhibit 3. Products also include related
documentation and other supporting materials.
1.42 "Product Engineering Services" shall mean the support and
services as described in Section 3.7 of the SOW.
1.43 "Quarterly Cost" (Section 6.2) shall mean the sum of [**] plus
[**], and for [**] for the [**] quarter, plus the [**];
provided, however, that [**] plus [**] and the [**] plus [**].
1.44 "QUICK" shall mean Arctic Fox.
1.45 "RAS criteria" shall have the meaning set forth in Section
9.3a.
1.46 "Receiving Party" shall have the meaning set forth in Section
20.
1.47 "Service Call" (Section 9.3a) shall mean any service call due
to a failure condition resulting from either a subsystem
hardware or Microcode error (including the Microcode portion
of Snapshot Feature) (e.g., 01, 02 and 04 service codes).
1.48 "Service Call Rate" (Section 9.3a) shall mean a rate which is
calculated as follows:
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number of service 180 GB for Iceberg or
calls during month 360 GB for Kodiak
x
number of average capacity
Machine Months in GB per machine
1.49 "Severity Level" shall mean a designation (i.e., Severity 1,
Severity 2, Severity 3 and Severity 4) assigned to errors that
is intended to indicate the seriousness of the error based
upon the impact that the error has on the user's operation.
1.50 "Severity 1" is a "critical problem"; the product is unusable
or an error severely impacts a customer's operation. Severity
1 requires maximum effort to resolve a critical problem until
an emergency fix is developed, implemented and made generally
available to IBM's customers who experience such problem.
1.51 "Severity 2" is a "major problem"; important function is not
available resulting in operations being severely restricted.
1.52 "Severity 3" is a "minor problem"; inability to use a function
occurs, but it does not seriously affect the user.
1.53 "Severity 4" is a "minor problem" that is not significant to
the user's operation; the user may be able to circumvent the
problem.
1.54 "Source Code" shall have the meaning as set forth in the SOW.
1.55 "Specifications" (Section 2.1) shall mean the descriptions
contained in Appendices A and B to Attachment 1 of Exhibit 3
and Exhibit 2, Specifications.
1.56 "Standard Parts Cost" (Section 9.3f) shall mean [**] of the
New FRU Cost plus [**] of the Used FRU Cost for each FRU, plus
actual freight.
1.57 "STK DASD" (Section 7.5c) shall mean any DASD product
developed, manufactured, or supplied by StorageTek at any time
prior to the expiration of the Final Judgment dated December
___, 1997, including but not limited to Iceberg, Kodiak, the
products marketed by IBM as RAMAC Virtual Array and RAMAC
Scalable Array, and any future versions, models or generations
of any of the aforementioned products (regardless of name or
designation). The term "STK DASD" does not include Virtual
Storage Manager, any future versions, models or generations
thereof (regardless of name or other product designation), or
any existing or future StorageTek Nearline storage products,
or any used DASD.
1.58 "StorageTek Installed Base" shall mean [**] prior to the [**].
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1.59 "Subsidiary" shall mean a corporation, company, limited
liability company or other entity:
a. more than fifty percent (50%) of whose outstanding
shares or securities (representing the right to vote
for the election of directors or other managing
authority) are, now or hereafter, owned or
controlled, directly or indirectly, by a party
hereto; or
b. which does not have outstanding shares or securities,
as may be the case in a partnership, joint venture,
or unincorporated association, but more than fifty
percent (50%) of whose ownership interest
representing the right to make the decisions for such
corporation, company or other entity is, now or
hereafter, owned or controlled, directly or
indirectly, by a party hereto;
but such corporation, company or other entity shall be deemed
to be a Subsidiary only so long as such ownership or control
exists.
1.60 [**]
1.61 "Terabyte" or "TB" shall mean one trillion bytes of storage
which is accessible to the customer. For calculating storage
capacities of purchases of [**]
1.62 "Upgrade(s)" shall mean a subassembly that increases the
capacity or performance of Products or Devices.
1.63 "Used FRU Cost" (Section 7.7a) shall mean the price of rework
for FRUs as determined by Section 15.4. This cost is set forth
in Exhibit 5 to this Agreement, FRU Prices and Lead Times,
which will be adjusted semiannually (in January and July).
1.64 Capitalized terms not otherwise defined in the OEM Agreement
shall have the definitions set forth elsewhere in the
Agreement.
2. SCOPE OF AGREEMENT
2.1 Subject to the terms of the Agreement, StorageTek agrees to
develop IBM requested enhancements to the Equipment, to
provide continuing engineering and technical assistance to IBM
for the Equipment, and to manufacture, test, sell and Deliver
Equipment to IBM and desires that IBM supply Drives for use in
such Equipment all in accordance with the Specifications,
procedures and conditions contained in this Agreement.
2.2 IBM (i) agrees to fund the continuing engineering on, and the
future development of, specific enhancements to the Equipment
as set forth in the IDA, (ii) intends to add value to such
Equipment by consigning IBM Drives to StorageTek for inclusion
in the Equipment, and (iii) has the right
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to market and sell Equipment purchased from StorageTek, all in
accordance with the terms of this Agreement.
2.3 Changes to Specifications, procedures and conditions contained
in the Agreement, its Exhibits, their Attachments and their
Schedules may be made from time to time upon mutual written
agreement, specifically identifying this Agreement and stating
an intent to make such changes.
3. TERM OF AGREEMENT
Unless earlier terminated, the term of this Agreement shall be through
December 31, 2000.
4. COMPONENTS
Because the Equipment purchased by IBM from StorageTek is likely to be
associated with the IBM brand, IBM wishes to be assured that such
Equipment, when sold to its customers, will have the quality that its
customers expect from items so branded. Accordingly, IBM believes that,
to the extent that StorageTek can utilize components in such Equipment
that are manufactured by or for IBM under its high quality standards,
it would be desirable for StorageTek to obtain such components from IBM
for use in manufacturing the Equipment. On receipt of IBM's written
request, StorageTek agrees if such [**], it will [**]. StorageTek
agrees to [**] if IBM [**], and if such [**], and such [**].
5. AGREEMENT ADMINISTRATOR
Each Party will identify during the term of the Agreement an Agreement
Administrator who shall have overall responsibility for managing this
Agreement for such Party. Except for any changes that are made to the
Statement of Work and agreed to in writing by an authorized
representative from IBM's procurement function and StorageTek's
Agreement Administrator, the Agreement Administrators may not amend the
terms of this Agreement. The Agreement Administrators are [**] for
StorageTek, and [**] for IBM.
6. PURCHASES
6.1 [**] PURCHASES
IBM intends to purchase Products and Upgrades during the
remainder of 1997 and [**]. In consideration for StorageTek's
commitment to accept IBM's purchase orders during [**] in
accordance with this Agreement, and StorageTek's associated
investment in parts, labor, facilities, etc., during such
year, IBM will make a payment to StorageTek of [**] during
[**].
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6.2 [**] PRICING
On or before [**], the Parties will [**].
[**], then if IBM submits a binding forecast in accordance
with Section 10.1 between [**] of Products and Upgrades (of
which [**] of IBM's forecast for Upgrades will count towards
such forecast range) for the [**] or any [**], and if IBM has
submitted a binding forecast for [**] or more in accordance
with Section 10.1 for each prior [**] during [**], then IBM
shall be entitled to purchase [**] during the applicable [**]
at a price that [**] the [**]:
(1) [**]; or
(2) The [**]
If IBM submits a binding forecast in accordance with Section 10.1 [**]
and [**] of Products and Upgrades (of which [**] of IBM's forecast for
Upgrades will count towards such forecast range), for the [**] or any
[**] [**], and if IBM has submitted a binding forecast for [**] or more
in accordance with Section 10.1 for each prior [**], then IBM shall be
entitled to purchase [**] during the applicable [**] at a price that
[**] the [**]:
(1) [**]; or
(2) [**]
If IBM submits a binding forecast in accordance with Section 10.1 for
[**] or more of Products and Upgrades (of which [**] of IBM's forecast
for Upgrades will count towards such forecast range), for the [**] or
any [**], and if IBM has submitted a binding forecast for [**] in
accordance with Section 10.1 for each prior [**], then IBM shall be
entitled to purchase [**] during the applicable [**] at a price that
[**] the [**]:
(1) [**]; or
(2) [**]
The prices for [**] for [**] shall [**] the prices that [**] for each
[**] set forth in Attachment 1 to Exhibit 1 of this Agreement. The
prices for [**] shall [**] set forth in Attachment 2 to Exhibit 1 of
this Agreement.
Provided that IBM has previously submitted binding forecasts in
accordance with Section 10.1 for [**] in each prior [**] during [**],
IBM will also [**] of Products and Upgrades [**] by submitting a
binding forecast for the [**] of [**] in accordance with Section 10.1
of the Agreement, and thereafter issuing a [**] , at least [**] before
the beginning of the [**] of [**], for Products and Upgrades to be
Delivered during the [**] of [**], or subsequent [**] during [**] if
such order [**]. The prices for [**] of Products and Upgrades will be
[**] the Parties. If the Parties [**] on the [**] for Products and
Upgrades for [**], such [**] shall be set
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forth in an Attachment of an Exhibit to this Agreement. If the Parties
are [**] on [**], the [**] for Products and Upgrades ordered under the
[**] shall [**] for Products and Upgrades that is associated with the
[**] of forecasted volumes. All Products ordered under [**] will be
subject to a [**] for [**] and [**]; provided, however, that IBM may
request and obtain [**] in accordance with the terms of this Agreement
before their Delivery. Such [**] shall be [**] any right of IBM to [**]
under Section 23.9 of this Agreement.
Notwithstanding anything to the contrary, if the Parties are unable to
[**] on the [**] for [**] to be Delivered by StorageTek to IBM during
[**] and StorageTek [**] determines that it would be [**] and [**] to
IBM during [**] , then StorageTek [**] to [**] during [**] [**] that it
supplies under this Agreement. If StorageTek [**] from [**] during [**]
that it supplies under this Agreement, StorageTek shall notify IBM in
writing of its [**] of [**] by no later than [**], and [**] by
submitting a binding forecast for the [**] of [**] in accordance with
Section 10.1 of the Agreement, and thereafter issuing a [**] at least
[**] before the [**] of the [**] of [**] for Kodiak Products to be
Delivered during the first quarter of 1999. The prices for this [**]
shall [**] for each [**] set forth in Attachment 1 to Exhibit 1 of this
Agreement. All [**] ordered under [**] will be subject to a [**];
provided, however, that IBM may request [**] in accordance with the
terms of this Agreement before their Delivery.
7. PRICING & PAYMENT TERMS
7.1 Prices charged to IBM by StorageTek for Products to be sold
hereunder in the [**] of [**] and the [**] shall be as set
forth in Attachment 1 to Exhibit 1 to this Agreement, and any
related future written amendments thereto agreed to by
authorized representatives of the Parties. These prices
include such software, packaging, packing and shipping
materials and other items as StorageTek currently includes in
its [**] for [**]
7.2 Prices charged to IBM by StorageTek for Upgrades to be sold
hereunder in the [**] of [**] and the [**] shall be as set
forth in Attachment 2 to Exhibit 1 to this Agreement, and any
related future written amendments thereto agreed to by
authorized representatives of the Parties.
7.3 In the case of Products or Upgrades manufactured by StorageTek
in Europe, [**], an additional charge equivalent to [**] will
be added by mutual agreement to the prices set forth in
Attachments 1 and 2 to Exhibit 1, which charge shall be:
For [**] = [**]; For [**] through [**] = [**]; and For [**]
and beyond = [**].
7.4 Prices charged for Products and Upgrades for [**] may [**]
and, if [**], such prices shall be set forth in an Attachment
of an Exhibit to this Agreement.
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7.5 [**] PRICE
Notwithstanding any other provisions in this Agreement, in no
event will any price charged by StorageTek to IBM exceed "[**]
Price," as defined below:
a. The prices, [**] offered by StorageTek to IBM for
[**] ordered by IBM under [**] placed on or before
[**] under this Agreement shall be [**]. The prices,
[**] offered by StorageTek to IBM for [**] by IBM
under [**] and/or [**] under this Agreement shall be
[**] after [**] to [**].
b. If StorageTek offers, on or before [**], to any [**]
purchasing [**] at the [**] more [**] than are
offered to IBM for [**] hereunder; or if StorageTek
offers to [**] [**] for [**] to [**] on or [**]
and/or [**] than are offered to [**]; then StorageTek
agrees to notify IBM in writing within [**] of making
such offer, and StorageTek agrees to [**] to IBM the
[**] prices, [**].
c. Notwithstanding anything to the contrary, under no
circumstances shall StorageTek be [**] to offer to
IBM any prices [**] for [**] that StorageTek has
offered to a[**] from StorageTek.
StorageTek grants IBM Audit Rights for purposes of
confirming that IBM is receiving [**] Prices. If the auditor
determines that IBM did not receive such prices, then in
addition to the remedies provided above, StorageTek will
reimburse IBM its costs for the audit. Audits will not exceed
two in any 12-month period.
7.6 SNAPSHOT FEATURE
IBM will license the Snapshot Feature as set forth in the
Description of Licensed Works for the license fees set forth
in Attachment 2 to Exhibit 1 hereto.
7.7 FRU PRICES
Prices charged by StorageTek to IBM for new FRUs will be [**]
of such FRUs and the multiples set forth in Section 7.7a,
below ("New FRU Cost"). For the purpose of this Section and
Section 15.4, cost shall be determined by using [**]. The
standard cost will be reviewed [**], and any differences in
cost will be adjusted in the following period. Compliance with
this section shall be subject to IBM's Audit Rights.
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a. Multiples for New FRUs.
(1) During the term of this Agreement the multiple
is [**].
(2) After the termination of this Agreement the
multiple is [**].
b. FRU Rework. Prices for FRUs returned by IBM will be
determined in accordance with Section 15.4.
7.8 LOWEST COST SOURCING.
The Parties agree that it is in their mutual interest for
StorageTek to obtain parts for new production and maintenance
purposes at the lowest practicable cost. If IBM identifies a
potential alternative source for any part, StorageTek will
make a good faith reasonable effort to qualify the
alternative. If such bid is comparable with the quality, terms
and conditions and offers a better price compared to the then
current source of such parts, and awarding such alternative
source a supply contract pursuant to such bid does not
adversely impact the terms of StorageTek's purchases of other
parts from the then current source, then the lower cost will
be used in determining prices to IBM for Equipment whether or
not StorageTek actually obtains the part or parts from such
alternative source.
7.9 TAXES/DUTIES
The prices for Equipment supplied under this Agreement are
exclusive of any customs charges and duties and sales, use,
privilege, excise and similar taxes levied by the USA, foreign
territories, or any other governmental entity on the Products,
their export, import, shipment, purchase or sale. IBM shall
pay and be responsible for the payment of any such taxes
(excluding taxes based upon StorageTek's net income) or
duties; and, to the extent legally required, StorageTek shall
collect any applicable taxes unless IBM establishes its
exemption therefrom. If StorageTek is required to pay any such
taxes or duties, IBM will reimburse StorageTek pursuant to
StorageTek's invoice.
IBM hereby represents to StorageTek that it is purchasing the
Products hereunder for the purpose of resale, rent, lease or
in-house use, and, if required by applicable law, IBM will
furnish StorageTek with pertinent and valid sales and use tax
exemption certificates.
7.10 PAYMENT TERMS
a. StorageTek will invoice IBM for Equipment on or after
the date on which such Equipment is Delivered. If any
unit of Equipment is Delivered and is not suitable to
be installed, then the Equipment shall not be
considered as Delivered until such time that such
Equipment is rendered suitable for installation. IBM
or its designee will exercise reasonable efforts to
install Equipment that it receives. IBM will promptly
notify StorageTek when such Equipment is not suitable
for installation.
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Subject to Section 13.1k, payment terms will be the
number of days from date of receipt of a correct
invoice by IBM as shown in the following table:
Invoice Date Payment Term
4Q of 1997 [**] days
1998 [**] days
1999 or later [**] days
b. StorageTek's invoices must state the IBM purchase
order number, description of the item(s) being
invoiced, quantity shipped, ship date, unit price,
total amount due and the remit-to address. StorageTek
will mail or deliver invoices to the address
indicated on the purchase order.
c. Payment of an invoice by IBM under IBM purchase
order(s) will not be construed as and will not
constitute an acceptance of Product failing to
conform to specifications or agreed-upon quality
levels, nor will any payment to StorageTek be
construed as or constitute a waiver of any of IBM's
legal rights or remedies.
d. StorageTek will invoice, and IBM will pay, in US
Dollars to the address listed on StorageTek's
invoice. All payments will be made by wire transfer
of immediately available funds.
8. IBM SALES TO STORAGETEK
IBM will offer for sale to StorageTek the [**] IBM disk drives that are
used in the [**] and [**] and sold to IBM under the Agreement, or
similar IBM disk drive replacements therefor, for use in [**] (whether
or not considered to be a [**] under this Agreement) and the [**] [**]
throughout the term that this Agreement is in effect, for a [**]
thereafter, and [**] [**] to [**].
Notwithstanding anything to the contrary, in the event of a termination
of this Agreement pursuant to Sections 21, 23(e), 23.7 or 23.8 , for a
period of [**] after such termination or [**], whichever occurs first,
IBM will offer for sale to StorageTek the same IBM disk drives that are
used in the [**] and [**] and sold to IBM under the Agreement, or
similar IBM disk drive replacements therefor, for use in [**] (whether
or not considered to be a [**] under this Agreement) and the [**].
Upon [**] notice, IBM will notify StorageTek of its planned withdrawal
from general availability of the IBM disk drives that StorageTek
chooses to purchase. If a similar IBM disk drive replacement therefor
is not available, then subject to [**] and prior written notice from
StorageTek no later than [**] after StorageTek's receipt of IBM's
notice, IBM will allow StorageTek, at its option, to
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either (i) [**] IBM disk drives before their planned withdrawal date;
or (ii) [**] contained in the IBM withdrawal notification letter.
IBM disk drives will be made available for sale by IBM to StorageTek
solely in accordance with the terms of its existing [**] and this
Section 8 of the Agreement.
Throughout the term of this Agreement and for a period [**], and in the
event of a termination of this Agreement pursuant to Sections 21,
23(e), 23.7 or 23.8, [**] or through [**], whichever occurs first, the
price to be charged to StorageTek for IBM disk drives to be sold during
a [**] shall be [**]. Pricing for StorageTek's purchase of IBM disk
drives during a [**] will be based on [**] disk drives for such [**]
under IBM's terms and conditions set forth in [**] and this Section 8.
StorageTek will integrate or incorporate IBM disk drives into [**]
(whether or not considered to be a [**] under this Agreement) and the
[**] that are to be sold [**]. StorageTek will be deemed to have
accepted IBM disk drives [**] after StorageTek receives them unless
written notice of rejection therefor is sent to IBM during such period
by StorageTek. IBM will inform StorageTek of changes to the product
specifications of IBM disk drives sold to StorageTek under [**] and
this Section 8 that may affect form, fit or function within [**] prior
to delivery of such IBM disk drives to StorageTek; provided, however,
that IBM may make any changes to the [**] of IBM disk drives without
prior notification if such changes are made to [**] issue, or to comply
with governmental regulations or laws. For all claims that are not
excluded by Section 10(a), or subject to other terms, of [**] and this
Section 8, IBM's liability for [**] shall be [**] or [**].
Upon request, IBM will offer StorageTek up to a [**] warranty on the
IBM disk drives it wishes to purchase; provided, however, that IBM [**]
offers the same period of warranty on such IBM disk drives to other
[**] . IBM may [**] the pricing it provides to StorageTek for
differences in warranty terms. Such pricing will, however, be
consistent with the pricing that is established [**] for the [**] who
receive the same length of warranty on IBM disk drives and the [**] for
their existing commitments to purchase comparable quantities over such
[**] under other standard [**] terms and conditions.
If StorageTek is unable to obtain IBM [**] for use in [**] from [**],
through [**], then StorageTek shall promptly notify IBM in writing and
upon receipt of such written notification and subject to availability,
IBM will make reasonable efforts to [**].
The terms of this Section 8 will survive the [**] or [**] of this
Agreement. In addition, in the event of an inconsistency between the
terms of this Section 8 and the terms of the [**], the terms of this
Section 8 shall prevail.
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9. QUALITY
9.1 MANUFACTURING TESTING
Prior to Delivery, StorageTek shall conduct a mutually
agreed-upon preshipment manufacturing test at its plant on
each unit of Equipment. Notwithstanding such preshipment
manufacturing testing, all Equipment must conform to the
Specifications.
StorageTek will provide IBM on a quarterly basis with a
complete, summarized record of inspection and tests performed
on each unit of Equipment during the term of the Agreement.
Detailed records of inspection and tests (in manual and
electronic form) performed for each unit of Equipment shall
also be kept by StorageTek for three (3) years. Upon IBM's
request, StorageTek will provide IBM with access to an
electronic copy of the specific test results for each unit of
Equipment within two (2) business days after receipt of such
request.
IBM's representative may, if it so requests and at its sole
expense, witness the preshipment tests carried out by
StorageTek, provided such request is made at least three (3)
days prior to the scheduled Delivery of the items being
tested. Any such observation by IBM shall be subject to
StorageTek's reasonable safety and security rules and shall be
conducted to the extent feasible on a noninterference basis.
IBM may also conduct its own testing to the extent feasible on
a non- interference basis either at StorageTek's plant, its
own facilities or IBM's customers' facilities, at IBM's own
expense, to confirm that the Equipment meets the
Specifications. Any testing performed at StorageTek's plant
shall be subject to StorageTek's reasonable safety and
security rules.
9.2 ENGINEERING CHANGES
a. Mandatory Engineering Changes. If changes that may
affect the form, fit, function, interface,
reliability or serviceability of the Equipment
(including interchangeability with previously
purchased FRUs) are required in order to make the
Equipment sold hereunder conform to the
Specifications ("Mandatory Engineering Changes"),
StorageTek shall first obtain IBM's approval. If it
is mutually agreed that the change is to be made,
StorageTek shall make the changes at no charge to IBM
in all units of Equipment which are not yet delivered
to IBM. If such changes are required to make
delivered units of Equipment conform to those
Specifications, they shall be supplied in the form of
mandatory field change kits at no charge to IBM in
accordance with the procedure set forth below.
IBM shall supply labor to install, subject to Section
9.3h, all Mandatory Engineering Changes in delivered
units of Equipment.
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Field change kits resulting from Mandatory
Engineering Changes described above will be
administered as follows:
(1) StorageTek will promptly send an engineering
change notice (ECN) to IBM prior to Delivery
of the first shipment of Equipment that
contains a Mandatory Engineering Change. IBM
shall issue a no-charge purchase order for
all mandatory field change kits that IBM
desires. Such kits and any Equipment
returned which are covered by the Mandatory
ECNs shall be shipped freight prepaid by
StorageTek, at no charge to IBM.
(2) StorageTek will ship the mandatory field
change kits according to the schedule that
is set forth in clause (4), below, and issue
a no-charge invoice to IBM for all parts
ordered and shipped as a part of the
mandatory field change kits.
(3) Subject to the terms of Section 15.3, IBM
will use reasonable efforts to see that
repairable parts (displaced by field change
kits) from Equipment are packaged separately
from other parts returned. IBM will send
Products to StorageTek, freight prepaid, and
Upgrades and FRUs, freight collect.
(4) For each Mandatory Engineering Change the
parties will agree upon an appropriate
round-robin process for distributing field
change kits to the field and securing the
return of displaced FRUs for rework by
StorageTek.
b. Emergency Engineering Changes. Notwithstanding
Section 9.2a, above, StorageTek may issue any
engineering change necessary to remedy an
Equipment-down situation at a customer of IBM or to
make any unit of the Equipment safe (an "Emergency
Engineering Change") upon notice to IBM but without
any prior evaluation or approval by IBM; provided,
however, that StorageTek agrees to follow the
procedures as set forth in Section 9.2a in order to
implement a permanent solution to resolve the safety
or down situation that arose precipitating the need
for the engineering change.
As to any affected Equipment from time to time in
IBM's inventory or control, or already accepted by
IBM, IBM shall use reasonable efforts to promptly
accomplish the installation of such Emergency
Engineering Change. In the event of installation of
Emergency Engineering Changes by IBM hereunder,
StorageTek shall implement a corrective action plan,
including the provision of
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information, materials, tools and parts necessary to
effect the installation of such Emergency Engineering
Changes on the affected Equipment (all without cost
to IBM), subject to Section 9.3h.
c. Optional Engineering Changes. In addition to
Mandatory Engineering Changes, it is recognized by
the Parties that there may be optional changes
requested by either IBM or StorageTek, which are not
required to make the units of Equipment conform to
the Specifications. The cost of implementing such
changes (including kits and labor) on delivered
Equipment shall be divided between the parties as
they mutually agree. StorageTek will deliver field
change kits for such changes to IBM, as specified in
IBM's purchase order, which purchase order shall be
given by IBM to StorageTek within such time period as
the Parties shall mutually agree.
d. Procedures Regarding Proposed Engineering Changes. In
connection with any engineering changes proposed
pursuant to Section 9.2a, above, StorageTek will
forward to IBM, at IBM's request, a minimum of two
(2) samples of each such proposed engineering change,
as well as the details of any proposed change, to
enable IBM to determine whether to approve such
change, including:
(1) the effect of the change on the form, fit,
function, interface, reliability or
serviceability of the Equipment;
(2) StorageTek's reference number for the
proposed change;
(3) StorageTek's identification of the item to
be changed and whether any items should be
returned;
(4) description of and reason for the change
with sufficient engineering detail and
applicable validation data, as endorsed by
StorageTek's quality control process, to
enable the proposal to be assessed;
(5) the date and, if available at the time,
StorageTek's serial number from which
StorageTek proposes to implement the change;
(6) whether retroactive action is proposed and,
if so, the details of any necessary field
action and the initial availability of FRUs
(on Engineering Changes, StorageTek will
advise IBM about the effect on (a)
outstanding orders for Equipment; (b) units
of Equipment which are at the time of such
proposed change in for repair or
replacement; and (c)
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the next batch of units of Equipment to be
delivered from StorageTek's plant on which
the Engineering Change should be
implemented);
(7) intended alterations to FRUs, documentation,
tools and other relevant material supplied
or to be supplied to IBM; and
(8) whether any parts will become obsolete as a
result of the change.
Except for any Emergency Engineering Changes,
StorageTek is required to obtain IBM's prior written
approval for each Engineering Change before
StorageTek's implementation of the same.
e. Revalidation. Upon implementation of each engineering
change, StorageTek agrees to perform revalidation
testing at no charge to IBM to ensure that the
Equipment so changed meets the Specifications.
f. Obsolete Upgrades and FRUs. If StorageTek makes any
Mandatory, Emergency or StorageTek-initiated
Engineering Change which renders any Upgrades and
FRUs obsolete (i.e., unusable), StorageTek shall
replace the obsolete Upgrades and FRUs at no charge
to IBM in accordance with the procedures set forth in
Section 9.2a, above. No returns are authorized for
field change kits that are requested as a result of
an optional IBM- initiated engineering change which
renders any Upgrade or FRU obsolete.
9.3 QUALITY LEVELS
a. RAS Criteria. StorageTek shall maintain (i)
throughout [**], and (ii) for a period of [**] after
the date of last Delivery of each type of Product
(provided IBM pays for the Product Engineering
Services unless it is not required to do so and
StorageTek is still providing Product Engineering
Services for its own distribution of Equipment or
Devices); the following reliability, availability and
service ("RAS") levels for the Products:
SERVICE CALL CALCULATION
RAS Criteria [**] [**]
Service Call Rate [**] [**]
[**] [**] [**]
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For measuring Service Calls, the calculation of a
Machine Month is based on the use of a 180 GB and 360
GB machine configuration for Iceberg and Kodiak,
respectively.
IMPACT ERROR CALCULATION
IMPACT ERRORS
------------------------------------------------
[**] [**]
------------------------------------------------
[**] [**] [**]
------------------------------------------------
[**] [**] [**]
------------------------------------------------
[**] [**] [**]
------------------------------------------------
Such rates will be calculated based on the total
number of Impact Errors that occur during a calendar
quarter divided by the total number of Machine Months
during said quarter for Iceberg and Kodiak,
respectively.
EXAMPLE:
--------------------------------------------------------------------------------------------------------------
OCTOBER NOVEMBER DECEMBER TOTAL
--------------------------------------------------------------------------------------------------------------
END OF MONTH
--------------------------------------------------------------------------------------------------------------
INSTALL BASE [**] [**] [**] [**]
--------------------------------------------------------------------------------------------------------------
IMPACT ERRORS [**] [**] [**] [**]
--------------------------------------------------------------------------------------------------------------
FAILURE RATE [**]
--------------------------------------------------------------------------------------------------------------
Impact Error measurements for Kodiak will not count
toward any criteria until the first quarter in which
[**] units of Kodiak have been installed by IBM.
The RAS measurements shall exclude impacts or
failures of Products where a microcode or engineering
change is available which, if installed, would have
prevented the impact or failure from occurring;
provided, however, that such microcode or engineering
change was made available by StorageTek for
installation pursuant to a nonemergency (i.e.,
generally distributed) engineering change at least
three (3) months prior to the date of an Impact Error
or Service Call. The RAS measurements will exclude
any Impact Errors and Service Calls that arise from
[**] or more concurrent Drive failures in the same
array, and any Service Calls and Impact Errors for
units of Iceberg and Kodiak installed as part of the
ESP, as defined in the SOW.
For the first ninety (90) days following the
availability of a Major Enhancement, IBM will
exercise reasonable efforts to install
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within 30 days engineering changes that StorageTek
designates as "critical."
Calculations of the actual Service Call Rate and
Impact Error Rate will be made based on U.S.
installations only.
IBM will notify StorageTek in writing of an Impact
Error within [**] after an Impact Error occurs. In
order to assist IBM in this notification process,
StorageTek will provide IBM with [**] to StorageTek's
[**]. IBM acknowledges that the [**], and IBM agrees
to keep such information confidential and in
accordance with the AECI between the Parties. If
detailed information about an Impact Error is needed,
then StorageTek will notify IBM in writing of its
need to obtain such information [**] after IBM
reports an Impact Error to StorageTek. Upon receipt
of StorageTek's written request for detailed
information, IBM will obtain and supply to StorageTek
the requested information, if and as available, [**]
after the receipt of StorageTek's written request.
StorageTek will analyze the available information and
determine whether an Impact Error occurred.
StorageTek will then communicate its decision in
writing as to whether it believes an Impact Error has
or has not occurred to IBM. If StorageTek believes
that an Impact Error has not occurred, then it will
provide in writing to IBM, [**] after StorageTek's
receipt of the available information, a reason for
StorageTek's belief that an Impact Error has not
occurred and shall [**]. If IBM fails to notify
StorageTek in writing of an Impact Error or to
provide written information that is available, within
the established time periods, then the [**]. If
StorageTek fails to request information in writing
from IBM, to provide in writing to IBM a reason for
its belief that an Impact Error has not occurred, or
to [**] in writing to the [**], within the
established periods, then the [**].
b. Error Free Installation Criteria. StorageTek shall
maintain a [**] Error Free Installation rate for
Products and Upgrades (separately calculated) until
the date on which IBM no longer markets Products and
Upgrades. These measurements will be calculated
separately for Products and Upgrades. This rate
assumes that an average IBM-customer subsystem
installation is comprised of an Iceberg subsystem, or
a Kodiak control unit and one connecting storage
cabinet. If the average IBM-customer installation for
the Kodiak Product involves more than one connecting
storage cabinet, then the [**] rate for Kodiak will
be reduced by [**] for each connecting storage
cabinet in calculating such average.
c. Levels for Future Functions. Features or functions
added after the initial shipment in volume of Iceberg
and Kodiak will be measured
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against specific reliability, availability and
service criteria that is to be documented and
addressed in each applicable product development plan
and related specification for the future feature or
function, but in any event they must meet the Iceberg
and Kodiak criterion as specified herein.
d. Guardband. StorageTek shall not be considered to be
failing to meet the criterion unless the percentage
by which IBM's actual measurements exceeds the
criterion is at least higher than the Guardband
percentage set forth above in Section 9.3a for
Service Calls or Impact Errors.
e. Action Plan. If StorageTek fails to meet the Service
Call Rate, Impact Error Rate, or Error Free
Installation Rate, then StorageTek shall promptly
investigate the cause of the failures, and generate
and provide to IBM within ten (10) days a root-cause
failure analysis that describes the cause of the
failures. StorageTek will promptly develop and
implement an action plan acceptable to IBM to resolve
such failures, which plan shall include remedies for
failure to meet the Service Call Rate, Impact Error
Rate, or Error Free Installation Rate in such action
plan.
StorageTek shall provide all support necessary to
meet an agreed-upon repair turnaround time that is
established in the action plan to maintain IBM's
customers' satisfaction. StorageTek's plan may
include, but is not limited to increased repair
capacity (i.e., labor, equipment, facilities);
expedited freight; and providing new, repaired and/or
upgraded buffer stock to IBM's stocking locations,
distributors and customer sites.
f. Price Reduction for FRU Costs. StorageTek shall
provide a price reduction to IBM [**] after the date
of last Delivery of each type of Products in an
amount that is equal to [**] ("Excess FRU Cost"). The
calculation of this price reduction shall
specifically exclude [**]. The price reduction
provided hereunder may [**] StorageTek. Any claim to
such price reduction will be deemed waived if not
made by IBM no later than [**] days after the [**] in
which such Excess FRU Cost occurred.
g. Reporting of FRU Consumption. IBM will provide a
quarterly report to StorageTek that summarizes
IBM-reported fault symptom information for the
consumption of FRUs in repair actions that are
undertaken by IBM in the United States. The
summarized information in this report will be
adjusted by IBM to exclude those items which qualify
as Cost Exclusions. This information is considered to
be IBM confidential, and StorageTek agrees to keep
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such information confidential under the terms of the
Agreement for Exchange of Confidential Information
between the Parties.
h. Credit for Labor Costs. The target for labor required
for repair actions (including [**] and those repair
actions related to [**], but excluding labor required
for [**] is [**] for each [**] during a Machine
Month. StorageTek shall provide a credit to IBM on a
[**] basis up through [**] after the date of last
Delivery of Product, upon StorageTek's receipt of
appropriate supporting documentation, for average
labor costs per Machine Month incurred by IBM in
connection with repair actions that are in excess of
[**] of that [**] target ("Excess Labor Cost"). The
amount of this credit will be calculated by
multiplying the number of hours in excess of [**] of
that [**] target by a rate of [**] per hour. In the
event that IBM incurs labor costs in excess of [**]
of that [**] target and the Parties determine that
the incurrence of [**], then a [**] action will be
developed and implemented. This plan shall include
[**]. The calculation of Excess Labor Cost will be
based on [**] and [**]. The credit provided hereunder
may [**] be used by [**], first, by [**] against any
[**] during the [**]; second, against [**]; or third,
[**] after [**]. Any claim to such credit will be
deemed waived if not made by IBM no later than [**]
days after the [**] in which such Excess Labor Cost
occurred.
i. Attainment. The RAS criteria will be separately
calculated and applied to Iceberg and Kodiak. If
StorageTek fails to meet the established RAS criteria
for Service Calls or Impact Error rates set forth in
Section 9.3a for Iceberg or Kodiak in any calendar
quarter (after taking into consideration the
applicable Guardbands), then StorageTek shall be
given until the end of the immediately succeeding
quarter to implement the action plan described in
Section 9.3e, above.
If the RAS criteria is missed again during an
immediately succeeding [**], then an amount equal to
[**] by which the RAS experience for such period was
more than the target RAS criterion set forth in
Section 9.3a., above, for a [**] with [**] shall be
[**] and [**] purchases and any [**] obtained under
this Agreement [**] such [**] to determine the [**]
of [**] to be acquired during [**]. In the event that
this [**] results in a [**] of [**] and [**]
purchases and any [**] obtained under this Agreement
during [**] that is [**], then IBM shall [**] and
[**] in an [**] Section 9.3a., above, for each [**]
toward [**] over [**].
If the Parties agree on a [**] for [**] purchases and
the RAS criteria is missed again during an
immediately succeeding [**], then IBM [**] and/or
[**]. The amount of [**] that IBM
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will obtain will be calculated by [**] set forth in
Section 9.3a, above, for a miss associated with [**].
However, if IBM reaches [**] whereby [**], or if [**]
by the Parties, then IBM will [**] and [**] that is
equal to the [**] and [**] [**] (i) the [**]; and
(ii) [**].
The Parties agree that [**], which will be [**] by
the Parties, shall be available with regard to a RAS
criteria miss [**]. Notwithstanding anything to the
contrary, no [**] or [**] shall be given to IBM with
respect to any RAS criteria miss for [**] until [**];
or for [**] during [**] and any [**].
The [**] that IBM is [**] will be calculated
separately for "Service Calls" and "Impact Errors."
Such separate amounts will be aggregated to determine
the amount of the credit that IBM is entitled to
receive and [**] of [**] and [**].
9.4 QUALITY ASSURANCE
StorageTek shall maintain at its sole cost and expense an
effective quality control system to maintain under continuous
control the entire process of design, manufacture and FRU
repairs, including the packaging and shipping of Equipment.
This system shall include checks to verify that all
requirements of the Specifications are satisfied.
StorageTek is responsible to insure that workmanship,
construction and other standards specified by this system
satisfy the requirements of the Specifications. StorageTek's
quality assurance shall be applied in a manner that will
maintain a consistent level of quality. StorageTek's quality
control procedures and instructions shall be made available to
StorageTek's employees, agents, contractors and
subcontractors, and to IBM, at the place of manufacture.
Upon request, IBM may conduct inspections on a
non-interference basis at StorageTek's manufacturing and
repair plants at any time during normal working hours provided
that, within 24 hours if an emergency situation exists or at
least three (3) days under non-emergency situations, prior
written notice is given by IBM. StorageTek will use reasonable
efforts to accommodate visits on shorter notice. Such
inspection may, at IBM's option, include the witnessing of
tests and inspection of Equipment, whether completed or not.
StorageTek will promptly take appropriate corrective action
with regard to any deficiencies found by IBM and reasonably
agreed to by StorageTek.
9.5 ISO 9000 CERTIFICATION AND USE OF SUBCONTRACTORS
StorageTek shall maintain ISO 9000 certification, and use
statistical process control systems to monitor quality, for
its manufacturing and
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development processes for Equipment supplied to IBM during the
term of the Agreement.
StorageTek shall ensure that its subcontractors that are
involved with the manufacturing and development of Equipment
shall maintain ISO 9000 certification, and use similar
statistical process control systems to monitor quality.
StorageTek shall also ensure that its suppliers who provide
parts, assemblies or subassemblies that are used in the
manufacturing and development of Equipment shall maintain ISO
9000 certification or use reasonable process control systems
to monitor quality.
It is the sole responsibility of StorageTek to select and
manage its suppliers. StorageTek will make available to IBM,
upon request, a list of all suppliers that are used to supply
parts or components in StorageTek's manufacturing process for
Equipment. StorageTek agrees to use its best efforts to notify
IBM of any additions or changes made in its suppliers. If IBM
reasonably determines that there is a supplier that may be of
concern to it, then StorageTek shall develop and implement a
mutually agreeable plan to address IBM's concerns.
StorageTek shall provide, upon written request by IBM, all
information pertaining to the measurements of quality that are
made for Equipment, and generated or derived from StorageTek's
statistical process control systems.
StorageTek is solely responsible for the quality of Equipment
supplied to IBM. Review and approval by IBM of StorageTek's or
any of its subcontractor's quality process systems does not
relieve StorageTek of this responsibility.
StorageTek agrees to notify IBM of any planned significant
changes that may adversely affect its manufacturing processes
or could adversely affect the form, fit, function, quality,
reliability, serviceability or safety of the Equipment to be
supplied to IBM no later than ninety (90) days before planned
implementation.
10. PRODUCT LEAD TIMES AND FORECAST
10.1 IBM will provide a monthly build forecast to StorageTek for a
[**] period (or a period equal to the remaining term of this
Agreement if less than [**]). The current quarter forecast
will be broken down by week and by Delivery location. Volumes,
specified in units of Product and Upgrades by Delivery
location, for the quarter following the then-current quarter
will be established and provided to StorageTek no later than
[**] prior to the start of any given quarter. At such time,
the forecast for the upcoming quarter will be binding, subject
to the quarterly volume modifications referred to in Sections
10.2 and 10.3. Except as otherwise provided in the preceding
sentence, volume forecasts are provided as good faith
estimates
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of IBM's anticipated requirements for Products and Upgrades
for the periods indicated based on current market conditions
and do not constitute commitments to purchase any fixed
quantity of Products.
10.2 StorageTek agrees to supply, and IBM agrees to issue purchase
orders for and take Delivery of, during any current quarter,
and to pay for in accordance with Section 7 above, [**] of the
[**] units forecasted for the [**] in the binding forecast
provided by IBM to StorageTek pursuant to Section 10.1. Unless
IBM [**] in the [**] by issuing purchase orders therefor,
StorageTek agrees to use such [**] to satisfy the next
quarter's orders. Any units not required under this section to
be purchased and delivered in the then-current quarter will be
applied to and delivered to fulfill the next-following
quarter's forecast before any new orders for such
next-following quarter are fulfilled.
10.3 After IBM provides a binding forecast to StorageTek pursuant
to Section 10.1, IBM may also require StorageTek to Deliver
during the current quarter by issuing purchase orders for [**]
and [**], for which IBM shall pay in accordance with Section
7, above, up to [**] of the units forecasted as of date the
volumes became binding as provided in Section 10.1.
10.4 CURRENT QUARTER
Subject to Sections 10.2 and 10.3, solely to assist StorageTek
in planning its manufacturing operations for units that are
forecasted for the current quarter, IBM will provide
modifications to the previously submitted weekly schedules in
the current forecast, as follows:
FLEXIBILITY NOTICE PERIOD
TARGET (in days from anticipated
Delivery date)
--------------
+/-[**] within [**]
+/-[**] within [**]
+/-[**} within [**]
StorageTek shall [**] in accordance with the binding forecast
unless IBM issues purchase orders for [**]. Any modifications
that IBM makes to the [**] shall not affect IBM's obligation
to purchase [**] that were originally forecasted for the [**]
unless IBM submits binding purchase orders for additional
units of [**] and [**]. In addition, under no circumstances
shall StorageTek be required to Deliver to IBM per the matrix
above more than [**] of [**] or [**] during the [**] , and the
[**].
10.5 STORAGETEK'S ALLOCATION
a. If StorageTek is unable to meet its Delivery
commitments and must allocate its capacity,
inventory, test equipment, resources, use
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of personnel, parts, components, supplier resources
and capabilities, etc., that are used to produce
Equipment, then StorageTek agrees to:
(1) act in good faith; and
(2) allocate its capacity, supplier resources
and capabilities, inventory, test equipment,
resources, use of personnel, parts,
components, and available supply of [**],
among IBM and other customers based upon the
delivery dates requested in purchase orders
received by StorageTek from IBM and other
customers.
For a given date, StorageTek will allocate production
for shipment to IBM and other customers on a [**]
basis.
b. StorageTek will allocate parts, components and
materials in accordance with the following
priorities:
(1) Code A FRUs order/requirements are filled
first; and
(2) then a fair allocation between manufacturing
orders and nonemergency maintenance parts
order/requirements.
11. PURCHASE ORDERS, ALTERATIONS & RESCHEDULING
11.1 IBM may submit purchase orders at any time; provided, however,
that subject to Section 11.6, any order shall be binding on
both Parties if such order is within the forecast range set
forth in Sections 10.2 and 10.3, and is submitted not less
than ten (10) business days before IBM's requested date of
Delivery. IBM may request that StorageTek deliver in fewer
than ten (10) business days and StorageTek may agree to do so,
which delivery shall hereafter be referred to as "Expedite
Shipment."
11.2 This Agreement does not constitute a purchase order. IBM may
issue purchase orders from time to time during the term of
this Agreement in either electronic (EDI) or written form.
Authorization to StorageTek to perform any work or produce any
Equipment under this Agreement will be through IBM purchase
orders only. Alterations to the quantity, delivery date,
engineering level, or other items on purchase orders may be
made by IBM from time to time, subject to StorageTek's
agreement. Purchase orders will be considered noncancelable
within ten (10) days of the scheduled Delivery date.
11.3 IBM shall submit its purchase orders to StorageTek at the
address set forth in the Notices section of this Agreement.
IBM's purchase orders will include:
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a. IBM's part, model or feature numbers, configuration
and description of Equipment;
b. quantity required;
c. unit or item price and total order price;
d. required delivery date(s);
e. delivery instructions (including a carrier who will
accept delivery at StorageTek's address); and
f. reference to this Agreement.
Unless otherwise specifically agreed to in writing, additional
terms and conditions on IBM's purchase orders or on
StorageTek's acknowledgment, whether in conflict with this
Agreement or not, are superseded hereby and are of no force
and effect.
11.4 StorageTek agrees to accept conforming IBM purchase orders and
to manufacture, supply and Deliver Equipment in accordance
with the terms and conditions of this Agreement. StorageTek
agrees to provide written acknowledgment of IBM's purchase
orders within two (2) days, for volumes within IBM's forecast,
or within five (5) days, for volumes in excess of IBM's
forecast, as measured from StorageTek's actual receipt of the
purchase order (without regard to the Notices section of this
agreement, except for EDI) which purchase order may be made
verbally and/or in advance of StorageTek's receipt of a hard
copy confirming such order. If StorageTek's acknowledgment is
not received by IBM within the two (2) or five (5) day period,
as described above, from the date of receipt of the purchase
order from IBM, then the purchase order, including the
requested delivery date(s) will be deemed to be accepted by
StorageTek. StorageTek may not reject any IBM purchase order
that conforms to the requirements of this Agreement and covers
quantities forecasted by IBM, as described in Section 10.
11.5 Orders for FRUs needed on a "Code A" basis (i.e.,
emergency-customer down) will be shipped by StorageTek within
twenty-four (24) hours at a price not to exceed the lesser of
[**] of the price in Exhibit 5 or such price plus [**], with
IBM designating the carrier and being responsible for freight
and insurance costs. However, IBM will not pay any premium
(i.e. pay only 100%) for Code A FRUs necessitated because
StorageTek has failed to deliver nonemergency FRU orders
within the lead times set forth in Exhibit 5.
11.6 Except for any [**] issued by IBM to StorageTek for [**] to be
Delivered after the [**] this Agreement, IBM may cancel
purchase order(s) or any portions thereof for any reason by
notifying StorageTek in writing at least
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ten (10) days prior to the scheduled Delivery date.
Cancellation will be effective upon StorageTek's receipt of
the written cancellation notice from IBM. StorageTek will
immediately cease building such units for the affected
purchase order(s) in accordance with the cancellation notice.
IBM will have no liability for canceled purchase orders other
than as set forth in Section 10.2.
11.7 If for any reason StorageTek is unable to Deliver as required
by accepted IBM purchase order(s), and fails to correct such
inability within [**] of such failure, IBM will have the right
to cancel such purchase order(s) or portions thereof by
notifying StorageTek in writing. If IBM cancels purchase
orders under this Section 11.7, IBM's only obligation will be
to pay for Products or Upgrades already Delivered at the time
of IBM's cancellation notice.
11.8 Due to ongoing and unpredictable market conditions, StorageTek
agrees to permit IBM, upon written notice to StorageTek, to
require StorageTek to reconfigure units of Products and
Upgrades as follows:
a. Configuration changes that do not change a unit model
number may be made without additional cost until [**]
before scheduled Delivery; and
b. Any other configuration changes may be made at any
time (including Product and Upgrades that require
reconfiguration after Delivery) and such
configuration changes will be [**]. StorageTek and
IBM will agree in advance on a schedule of lead times
and costs that will apply to such configurations.
11.9 Subject to Section 10, IBM may reschedule purchase order(s) or
any portions thereof for any reason by notifying StorageTek in
writing at least [**] prior to the Delivery Date specified on
the purchase order(s).
11.10 For the last quarter of this Agreement, the purchase orders
submitted by IBM to StorageTek shall be noncancelable unless
StorageTek is manufacturing Devices.
11.11 Except as otherwise provided in [**] Products and Upgrades
that are supplied to IBM hereunder will consist of new parts
and components. FRUs that IBM returns will be reworked by
StorageTek to an equivalent-to-new reliability level. Such
reworked FRUs will not be used in any new Products or Upgrades
Delivered to IBM hereunder, but may instead be returned to IBM
as reworked FRUs.
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12. CONSIGNMENT
12.1 IBM will consign certain disk drives ("Drives") to StorageTek
for use in Equipment. Except as otherwise provided in [**] of
the IDA, Drives supplied by IBM to StorageTek shall only be
used by StorageTek to build Equipment for IBM and shall remain
the property of IBM. This Section 12 shall not apply to [**]
StorageTek pursuant to the terms of Section 8 of this
Agreement.
12.2 StorageTek agrees to adhere to the terms and conditions of the
IBM Consignment Agreement, attached hereto as Exhibit 4,
provided, however, that the terms of this Section 12 prevail
over those of Exhibit 4.
12.3 IBM agrees to consign Drives to StorageTek in accordance with
a mutually agreed Profile based on at least a five-day buffer
ahead of StorageTek's build cycle, and including a yield
factor based upon the previous quarter's experience and
calculated using a mutually agreed formula. Any Drives, or
other IBM-supplied parts and components, that are not used by
StorageTek due to integration fall-out will be returned to IBM
within ten (10) days after such fall-out.
12.4 If IBM fails to provide consigned Drives to StorageTek in
accordance with Section 12.3, and StorageTek's manufacturing
line is down such that StorageTek cannot meet its Delivery
dates to IBM, then StorageTek will agree, per Section 10.2, to
hold up to [**], as the case may be, of such undelivered and
forecasted Products and Upgrades, without Drives, in inventory
for up to [**]. If the amount of such Products and Upgrades
held in inventory exceeds [**] of the forecasted volumes then
StorageTek will notify IBM, and IBM will [**].
12.5 If IBM Drives are not available for an extended period of
time, IBM may request assistance from StorageTek in securing
drives from other drive manufacturers in lieu of using IBM
Drives. StorageTek agrees, on a best effort basis, to assist
in securing the most cost effective, high quality alternative,
and with the agreement of IBM, to take the steps necessary to
integrate such drives into the Product. In such event, the
parties will agree in advance on an equitable division of
StorageTek's cost of securing, qualifying and integrating such
drives, including any cost relating to inventory or required
firm purchase commitments even if such substitution is only
temporary in nature.
12.6 StorageTek agrees to return to IBM freight collect any Drives
in StorageTek's inventory, within five (5) days of receipt of
IBM's written (or EDI) request.
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13. DELIVERY
13.1 ON-TIME DELIVERY
a. StorageTek shall use its best efforts to ensure that
every scheduled Delivery date is met. StorageTek must
notify IBM in advance if a scheduled Delivery date
will not be met. StorageTek will make every
reasonable effort at its expense to ensure the
earliest possible Delivery date and quantities for
late Equipment, including, but not limited to,
overtime and expedite charges. "On schedule" means
[**]. Unless delay is caused by IBM's delay in its
supply of Drives or IBM-supplied parts and
components, StorageTek will arrange for premium
transportation and pay, at StorageTek's sole cost and
expense, for the difference between normal
transportation and such premium transportation,
including, but not limited to, air transportation and
expedited freight charges. StorageTek also agrees to
provide, at IBM's request, an action plan to correct
late shipments and to resolve any Delivery problems.
b. If, during any [**] period, StorageTek fails, on a
one-time basis only, to Deliver more than [**], but
not more than [**], of the units of [**] and [**]
that are scheduled for Delivery in a calendar month
by their scheduled Delivery dates, then StorageTek
shall be required to expedite shipment of such units
in accordance with Section 13.1. If more than [**] of
such units of [**] and [**] are Delivered late in
[**], then an amount equal to [**] the number of [**]
that were [**] [**] in excess of [**] shall be added
to [**] and [**] purchases and credits obtained under
this Agreement during [**] (i.e., as though IBM had
already purchased such [**]) to determine the [**] to
be [**] during [**] . In the event that this [**]
results in a combined volume of [**] and [**]
purchases and credits obtained under this Agreement
during [**] that is [**], then IBM shall receive a
[**] and [**] in an amount equal to [**] under this
Section 13, On-time Delivery; provided, however, that
under no circumstances shall IBM receive any [**]
hereunder after the combined total of [**] and [**]
purchases and credits [**] [**] obtained under this
Agreement exceeds [**] during the [**].
c. If StorageTek fails to Deliver more than [**] of the
units of [**] and [**] that are scheduled for
Delivery by their scheduled Delivery dates in the
[**] , and except for units subject to the [**]
provision defined in 13.1b, above, then an amount
equal to [**] the number of [**] that were [**] shall
be [**] and [**] obtained under this Agreement during
[**] to determine [**] of future units of [**] to be
acquired during [**]. In the event that this [**]
results in a combined volume of [**] and [**]
purchases and credits obtained under this Agreement
during [**] that is [**], then IBM shall [**] to be
[**] in an amount equal to [**] under this Section
13, On-time Delivery; provided, however, that under
no circumstances shall IBM receive any [**] hereunder
after the combined total of
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[**] and [**] purchases and credits [**] obtained
under this Agreement exceeds [**] during the [**].
d. If, in the [**] following any [**] in which a [**]
was made under this Section 13.1, StorageTek fails to
Deliver more than [**] of the units of [**] and [**]
that are scheduled for Delivery by their scheduled
Delivery dates, then an amount equal to [**] the
number of [**] shall be [**] to [**] and [**]
purchases and credits obtained under this Agreement
during [**] [**] to determine [**] of future units of
[**] to be acquired during [**] . In the event that
this [**] results in a combined volume of [**] and
[**] purchases and credits obtained under this
Agreement during [**] that is [**], then IBM shall
receive a [**] and [**] in an amount equal to [**]
under this Section 13, On-time Delivery; provided,
however, that under no circumstances shall IBM
receive any [**] hereunder after the combined total
of [**] and [**] purchases and credits in [**]
obtained under this Agreement [**] during the [**].
e. If, in the next following month, StorageTek fails to
Deliver more than [**] of the units of [**] and [**]
that are scheduled for Delivery by their scheduled
Delivery dates, then an amount equal to [**] the
number of [**] that were [**] by StorageTek shall be
[**] and [**] purchases and credits obtained under
this Agreement during [**] to determine [**] of
future units of [**] to be acquired during [**]. In
the event that this addition results in a combined
volume of [**] and [**] purchases and credits
obtained under this Agreement during [**] that is
[**] , then IBM shall receive a [**] and [**] in an
amount equal to [**] under this Section 13, On-time
Delivery; provided, however, that under no
circumstances shall IBM receive any [**] hereunder
after the combined total of [**] and [**] purchases
and credits in [**] obtained under this Agreement
[**] during the [**].
f. If, in the next following month, and for each
additional consecutive month, StorageTek fails to
Deliver more than [**] of the units of [**] and [**]
that are scheduled for Delivery by their scheduled
Delivery dates, then an amount equal to [**] the
number of [**] that were [**] by StorageTek shall be
[**] and [**] purchases and credits obtained under
this Agreement during [**] to determine [**] of
future units of [**] to be acquired during [**] . In
the event that this addition results in a combined
volume of [**] and [**] purchases and credits
obtained under this Agreement during 1998 that is
[**], then IBM shall receive a [**] and [**] in an
amount equal to [**] under this Section 13, On-time
Delivery; provided, however, that under no
circumstances shall IBM receive any [**] hereunder
after the combined total of [**] and [**] purchases
and credits in [**] [**] during the [**].
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g. Notwithstanding anything to the contrary in this
Section, and in lieu of credits provided in other
paragraphs of this Section, if, in any calendar
month, and subject to Section 13.1b. above,
StorageTek fails to Deliver more than [**] of the
units of [**] [**] and [**] that are scheduled for
Delivery by their scheduled Delivery dates, then an
amount equal to [**] the number of [**] that were
[**] by StorageTek shall be added to [**] and [**]
purchases and credits obtained under this Agreement
during [**] to determine [**] of future units of [**]
to be acquired during [**] . In the event that this
addition results in a combined volume of [**] and
[**] purchases and credits obtained under this
Agreement during [**] that is greater than [**] then
IBM shall receive a [**] and [**] in an amount equal
to [**] under this Section 13, On-time Delivery;
provided, however, that under no circumstances shall
IBM receive any [**] hereunder after the combined
total of [**] and [**] purchases and credits in [**]
[**] of [**] during the [**] .
h. Any credit [**] by StorageTek to IBM [**] such [**]
and [**] [**] by StorageTek [**] credited.
i. Notwithstanding anything to the contrary in this
Section, units of [**] and [**] which StorageTek
fails to Deliver by the Delivery date will not be
counted as failures to Deliver if StorageTek causes
such units to be delivered to IBM customers by the
delivery date IBM has committed to such customers
(the "Commit Date") or if IBM has requested
StorageTek to Expedite Shipment and StorageTek fails
to do so within the period specified in Section 11.1.
IBM will notify StorageTek in writing prior to the
Commit Date in order to give StorageTek an
opportunity to expedite shipment, [**] . IBM will
also notify StorageTek in writing of each unit of
[**] or [**] which fails to arrive by the Commit
Date.
j. If IBM fails to deliver Drives to StorageTek in
accordance with the [**] in Section [**] of this
Agreement and this delay results in [**] in
accordance with [**], then IBM agrees to [**], and
StorageTek agrees to [**], and such units [**].
k. Subject to Section 13.1(i), if StorageTek fails to
deliver to IBM more than [**] of the units of
Products and Upgrades scheduled for Delivery by the
scheduled Delivery dates in a month, for [**]
consecutive calendar [**] then the payment terms in
Section 7.10a will be immediately extended by [**]
until [**] after the first month in which StorageTek
Delivers 98% or more of [**] and [**] by their
scheduled Delivery dates. Notwithstanding the
foregoing, this Section 13.1(k) shall not apply [**]
units of [**] and [**] are
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Delivered during each month of any [**] consecutive
calendar month period.
l. If the Parties agree on a [**] for [**], the Parties
agree that similar remedies as those in Sections
13.1(b) through 13.1(g) shall apply to units of [**]
to be Delivered during the [**]. However, if IBM
reaches [**] whereby [**], or if [**] by the Parties,
then IBM will [**] calculated in a manner consistent
with Sections 13.1(b) through 13.1(g).
m. The Parties agree that similar remedies as those set
forth above in this Section 13, which will be [**] by
the Parties, shall apply for units of [**] to be
Delivered through [**] . IBM expressly reserves the
right to assert that any failure to ship [**] and
[**] on a timely basis could constitute a material
breach of StorageTek's obligations under this
Agreement.
13.2 CARRIER
It is understood and agreed that IBM shall make all
arrangements for shipments of the Equipment. It shall be the
responsibility of IBM, at its own expense, to supply
StorageTek with detailed documentation and instructions and
all necessary export licenses, customs declarations and
certificates in properly executed form required for successful
shipment of Equipment from the Manufacturing Site and entry
into foreign territories. StorageTek shall notify IBM when
Equipment is ready for shipment from StorageTek's plant. IBM
will pay all shipping and transportation charges directly to
the carrier or freight forwarder as long as shipped in
accordance with IBM's routing instructions. If IBM requests
that StorageTek arrange shipping, IBM shall reimburse
StorageTek for the shipping charges pursuant to StorageTek's
invoice. In no event will IBM reimburse StorageTek for, or pay
any C.O.D. charges, should StorageTek ship by another carrier
without prior IBM approval. If StorageTek ships using other
than an IBM-approved carrier, StorageTek is responsible for
any incremental increase in freight charges.
13.3 TITLE/RISK OF LOSS
Title to Equipment and risk of loss shall pass to IBM at
StorageTek's plant of manufacture loading dock. [F.O.B. by
UCC/ExWorks by INCOTERMS]; provided, however, that
notwithstanding anything to the contrary in this Agreement
title to all Licensed Works will remain with StorageTek,
except as provided in the IDA and its related Attachments. All
claims for shipping damage shall be resolved between IBM,
carriers or freight forwarders handling the Equipment and the
insurance companies and agents responsible for adjusting such
claims, and StorageTek shall have no responsibility with
respect thereto. However, at IBM's request,
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StorageTek agrees to cooperate reasonably with IBM in filing
and settling such claims.
13.4 PACKAGING
StorageTek will package each unit of Equipment according to an
agreed-upon Specification for packaging. The prices for
Equipment include all packaging costs.
14. EQUIPMENT WARRANTY
14.1 StorageTek warrants that units of Equipment (excluding Drives
and nonserialized FRUs) that are to be provided to IBM
hereunder conform to the Specifications and are and shall
remain free from defects in materials and workmanship, for the
time periods specified in this Section 14.1.
a. The warranty period for each unit of Products and
Upgrades shall be [**] after the earlier of:
(1) [**]; or
(2) [**].
b. StorageTek will serialize the FRUs identified as
serialized on Exhibit 5, and as to those FRUs the
warranty period shall be [**] after the earlier of:
(1) [**] ; or
(2) [**].
14.2 All warranties provided by StorageTek to IBM hereunder shall
survive any inspection, delivery, acceptance and payment and
shall not be affected by the fact that IBM has resold, rented
or leased units of Equipment to others.
14.3 IBM will maintain failure records for Products and Upgrades to
the same extent as IBM maintains such records for similar
high-end direct access storage device products marketed by it.
If IBM believes failures for a given serial number unit of
Equipment warrants replacement, IBM may request and StorageTek
may agree to replace the same at no cost to IBM. StorageTek's
agreement will not unreasonably be withheld. In order to
improve Equipment quality and minimize costs, StorageTek may
request relevant information from the data which IBM retains
regarding failure by machine serial number. IBM may agree to
provide such information to StorageTek. Such agreement will
not be unreasonably withheld.
14.4 StorageTek's liability under warranty pursuant to Section 14.1
is limited to: Delivery to the IBM regional stocking locations
specified by IBM of retrofit kits (containing FRUs) with
installation instructions (at no charge
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to IBM) as necessary to make Equipment conform to the
Specifications, or otherwise be free from defects in materials
and workmanship; or repair or replacement, at StorageTek's
option, without cost to IBM, of the defective Equipment. IBM
will use reasonable efforts to resolve customer issues through
use of FRUs or retrofit kits before requesting repair or
replacement of the defective Product or Upgrade. Labor to
remove defective FRUs and install replacement FRUs under this
warranty shall be supplied by IBM at no charge to StorageTek,
subject to Section 9.3h. Where warranty can be provided by
replacing a FRU, StorageTek will provide and IBM will install
the replacement FRU.
14.5 All warranty claims shall be made by IBM, regardless of any
transfer of title or possession of the Equipment by IBM to
other parties, and StorageTek agrees that IBM may make
warranty claims against StorageTek on the behalf of any
rightful user or possessor of the Equipment.
14.6 StorageTek's liability to perform warranty under this Section
14 shall not apply to failures of any unit of Equipment
caused by:
a. Physical abuse or use that is not consistent with
operating instructions for the Equipment; or
b. Modification (by other than StorageTek's personnel or
agents) in any way other than approved by StorageTek;
provided, however, that the warranty shall not be
voided by repair or replacement of FRUs or the
attachment of items in the manner described in
maintenance or installation instructions provided by
StorageTek.
14.7 Claims under the terms of this warranty shall be submitted to
StorageTek in writing (including EDI) and shall clearly state
the Product or Upgrade serial number. Where available, IBM
shall send StorageTek its field defect report. Defective FRUs
replaced under this warranty become the property of
StorageTek.
14.8 Both Parties will ensure that FRUs returned to the other Party
are properly and adequately packaged, and IBM agrees to use
the same or equivalent packaging as StorageTek uses to package
such FRUs.
14.9 StorageTek shall use reasonable commercial efforts to complete
repairs of FRUs for in-warranty units within thirty (30)
business days after the date StorageTek receives the defective
FRUs, but in any case, it will complete repairs of the FRUs at
no charge to IBM within sixty (60) days after receipt. If,
upon receipt, StorageTek determines that such defective FRUs
are not repairable or if StorageTek has not completed its
failure analysis on any FRU within ten (10) business days
after StorageTek's receipt, then replacement FRUs will be
provided at no charge by StorageTek to IBM within ten (10)
business days. If StorageTek cannot find a defect or
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assignable cause in a FRU that is returned by IBM as
defective, StorageTek will replace the received FRU and will
ensure that the FRU is not included in Equipment and cannot be
returned in the future to IBM.
14.10 LICENSED PROGRAMS, MICROCODE AND MAINTENANCE CODE WARRANTY
a. StorageTek warrants that the Licensed Programs and
Microcode will conform to the Specifications, as such
Specifications may be modified by any Product
Development Plan, and are and shall remain free from
defects in workmanship. The Maintenance Code shall
remain free from defects in workmanship. The
warranties set forth in this Section 14.10 shall not
apply to:
(1) use of the Licensed Programs or Microcode
which is not in accordance with the end user
documentation delivered by [**], pertaining
to the Licensed Programs or Microcode;
(2) use of the Licensed Programs or Microcode
with other than the hardware described in
the Specifications;
(3) use of the Licensed Programs, Microcode and
Maintenance Code in other than the software
configuration described in the
Specifications;
(4) any modifications of the Licensed Programs,
Microcode and Maintenance Code not made or
authorized by [**];
(5) use of other than the then-current, or
immediately preceding, version of the
Licensed Programs; or
(6) [**] that [**] by [**] of the Microcode.
StorageTek does not warrant that the functions
contained in the Licensed Program and Maintenance
Code will satisfy IBM's or its end user's
requirements to the extent such requirements are
different than those set forth in the Specifications,
as such Specifications may be modified by any Product
Development Plan, or that the Licensed Programs will
[**] or its [**], or that the [**] of the Licensed
Programs and Maintenance Code will be [**].
b. In the event of a breach of the warranties contained
in this Section 14.10, StorageTek will exercise
reasonable commercial efforts to implement
appropriate procedures to correct such breach in
accordance with Section 16.4, for Licensed Programs
and Microcode and Section 16.3 for Maintenance Code.
14.11 StorageTek warrants that it will competently perform all work
relating to the Deliverables in a manner consistent with
ordinary Microcode
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programmers skilled in the art, and, further, all Deliverables
will conform to the mutually agreed-upon Specifications.
14.12 THE WARRANTIES IN SECTIONS 14 AND 18 OF THIS OEM AGREEMENT,
AND IN PART 6 OF THE SOURCE CODE CUSTODY AGREEMENT, ARE IN
LIEU OF ALL OTHER WARRANTIES EITHER WRITTEN, ORAL OR IMPLIED
WITH RESPECT TO THE EQUIPMENT, DELIVERABLES, LICENSED PROGRAMS
AND MAINTENANCE CODE.
STORAGETEK DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE. EXCEPT AS OTHERWISE
PROVIDED IN SECTION 18.2, STORAGETEK ALSO DISCLAIMS THE
IMPLIED WARRANTY OF NONINFRINGEMENT.
STORAGETEK'S WARRANTY OBLIGATIONS SHALL EXTEND ONLY TO IBM,
AND STORAGETEK SHALL HAVE NO LIABILITY ARISING OUT OF ANY
WARRANTIES PROVIDED BY IBM WHICH ARE BEYOND STORAGETEK'S
WARRANTY OBLIGATIONS IN THIS AGREEMENT.
IBM'S EXCLUSIVE REMEDY FOR A BREACH OF THE WARRANTY SET FORTH
IN THIS SECTION 14 IS SET FORTH IN SECTION 14.4 FOR EQUIPMENT,
AND SECTION 14.10(b) FOR LICENSED PROGRAMS, MICROCODE AND
MAINTENANCE CODE, PROVIDED, HOWEVER, THAT STORAGETEK PROMPTLY
PERFORMS ITS WARRANTY OBLIGATIONS PURSUANT TO SECTION 14.
15. FRUS
15.1 During the term of this Agreement and for [**] after the last
Delivery of Product or Upgrades, or for so long as StorageTek
makes FRUs available to any other entity, whichever is later,
StorageTek agrees to provide FRUs to IBM. The list of FRUs and
their respective prices and lead times are described in
Exhibit 5, which Exhibit will be updated semiannually (in
January and July).
15.2 Notwithstanding anything herein to the contrary, if StorageTek
intends to discontinue producing or making available any FRU
after the [**] obligation set forth above, StorageTek agrees
to provide IBM with twelve (12) months' prior written notice
of such intent and permit IBM to purchase as many FRUs as IBM
reasonably believes it will need for the Products. In the
alternative, and at IBM's option, StorageTek agrees to grant
IBM the right to manufacture such FRUs in accordance with
Section 23.6.
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15.3 FRUs shall be packaged in the same or equivalent packaging as
StorageTek used to package such FRUs. Return of FRUs for
repair or replacement is subject to a reasonable material
return procedure to be mutually agreed between the Parties.
15.4 FRU REWORK PROCEDURES AND PRICES
a. StorageTek will attempt to rework/repair all FRUs
returned from IBM and return them to IBM within 30
days of receipt. At IBM's request, StorageTek will
also ship to IBM any unrepairable FRUs.
b. Except as otherwise provided in Section 9, Quality,
and Section 14, Equipment Warranty, StorageTek will
invoice IBM, and IBM agrees to pay, [**] for FRUs as
described in Section 7.7, plus normal transportation
charges unless IBM requests special handling ("Used
FRU Cost"). Such costs will be subject to IBM's Audit
Rights.
16. FIELD SERVICE & SUPPORT
16.1 TRAINING
For all new Products and Upgrades StorageTek makes available
to IBM during the term of this Agreement, StorageTek agrees to
provide IBM personnel with assistance at no charge for IBM to
develop training for IBM's customer engineering personnel at
the same level as the training StorageTek provides to its own
personnel on its other products.
16.2 EMERGENCY AND EXPERT MAINTENANCE COVERAGE
In every country/territory where IBM installs Products and
Upgrades, StorageTek agrees to make available upon IBM's
request and on the shortest possible notice customer service
engineers to support critical customer situations. The maximum
fee StorageTek will charge IBM for each hour of such support
is equal to [**]. In addition, IBM will reimburse StorageTek
for actual and reasonable travel expenses incurred by
StorageTek's personnel in providing this support in countries
where StorageTek does not have a service organization.
16.3 NEW PRODUCT DEVELOPMENT CENTER SUPPORT
If IBM desires to receive support from StorageTek's New
Product Development Center for [**] to be Delivered under the
OEM Agreement and StorageTek is providing such support, then,
[**] the Parties will [**] the [**] and the [**] support to be
provided. The charge for such assistance shall be [**] for
[**] of support.
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16.4 MAINTENANCE AND INSTALLATION TOOLS
To assist IBM in providing optimum hardware and software
maintenance service to customers, StorageTek agrees to
promptly provide to IBM all problem determination and service
information, tools, Maintenance Code and related documentation
(except for the [**] tools and software, as to which
StorageTek agrees to [**] and all replacements, enhancements,
revisions, and modifications [**], to the extent not prevented
by [**]. StorageTek grants IBM a license to the [**] in
accordance with the Description of Licensed Works.
StorageTek also agrees to provide technical support, [**] to
correct and fix bugs and defects that arise from IBM's use of
Maintenance Code.
16.5 MAINTENANCE AND TECHNICAL SUPPORT
a. Maintenance. IBM will be responsible to provide Level
1, Level 2 and Level 3 support to its customers. IBM
agrees to use its commercially reasonable efforts to
perform the following:
(1) maintain [**] to provide maintenance to
customers who are capable of performing
installations of Equipment and taking [**]
and to [**];
(2) maintain [**] to provide support to the
field and who are capable of diagnosing and
resolving complex "system issues" related
to, among other things, system configuration
and operating systems;
(3) maintain [**] of planning and implementing
complex system configurations, performing
virtual DASD capacity planning, planning for
acceptable subsystem performance,
undertaking performance measurement and
tuning, and resolving or assisting in the
resolution of system-related problems when
required;
(4) provide necessary and relevant [**]
information, and [**] information to
StorageTek in order for StorageTek to
perform its technical and engineering
support responsibilities as set forth below;
and
(5) order a [**] for the Products [**] to
address customer requirements.
b. Technical Support. StorageTek agrees, upon IBM's
request, [**] to provide technical support to IBM
for the Equipment, Licensed Programs and Microcode,
including without limitation, assistance in problem
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determination, problem source identification and
problem diagnosis, in the following manner:
(1) Equipment. StorageTek will provide IBM with
reasonable assistance for the Equipment
[**].
In addition, if a malfunction or failure in
Equipment [**], then StorageTek shall, if
requested, provide [**]. Prior to honoring a
request for [**], the Equipment for which
the request is to be made shall be at [**].
IBM's technical support personnel must have
[**] to assist StorageTek's personnel [**]
and to supply needed [**] for repairs). Upon
receipt of appropriate supporting
documentation, IBM will [**] StorageTek for
[**] in providing this support.
StorageTek agrees to use its commercially
reasonable efforts to assist IBM in
resolving problems within the time frames
set forth below:
(a) Any Severity 1 level problem: Within
[**] after notification by IBM of
any such problem;
(b) Any Severity 2 level problem: Within
[**] after notification by IBM of
any such problem;
(c) Any Severity 3 level problem: Within
[**] after notification by IBM of
any such problem; and
(d) Any Severity 4 level problem: Within
[**] after notification by IBM of
any such problem.
For purposes of this Section 16.5(b)(1),
"resolving" by StorageTek means to assist
IBM in restoring the customer's machine to
[**] of operation or functionality (which
may be accomplished by a [**] that such
machine is operating and functioning as
designed).
(2) Licensed Programs and Microcode. The
following is a description of the support
that StorageTek shall provide to IBM:
(a) receive the APAR or PMR, and any
supporting documentation and
materials, as appropriate;
(b) analyze the problem symptoms and
diagnose the suspected error in the
Licensed Programs or Microcode;
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(c) attempt to recreate the problem on
StorageTek's test system, if
recreation is required;
(d) reasonably develop a bypass or
circumvention for high impact (e.g.,
typically, Severity 1) problems with
assistance of IBM's personnel;
(e) reasonably determine if Maintenance
Modifications are required to be
made to the Deliverables and, if so,
provide the Code or other
corrections to IBM in the format
specified by IBM;
(f) provide resolution assistance to
APARs or PMRs in accordance with the
IBM-assigned Severity Level as set
forth in Section 16.8b(1)(a)-(d)
above;
(g) receive technical questions and
supporting documentation and
materials, and analyze such
technical questions and provide
answers to the same; and
(h) generate and promptly provide to IBM
the most current releases of the
Licensed Programs or Microcode with
all of the past fixes incorporated
as required, including any
accumulated maintenance items.
c. In order to [**] IBM's [**] of maintenance services
and technical support for [**] and [**], StorageTek
agrees to [**], which excludes [**] and [**] sold by
StorageTek.
16.6 [**] ACCESS
During the term of the Agreement, IBM agrees to allow
StorageTek to have access to IBM's [**], and [**] access for
[**] and such other implementations solely to support IBM's
and its Subsidiaries' provision of maintenance services for
Equipment and Licensed Programs. This information may be
viewed and updated electronically by StorageTek where feasible
and appropriate. StorageTek's use of and access to [**] is
subject to continual review, and may be terminated if such use
or access is beyond the permitted purposes as set forth
herein.
17. MARKETING RIGHTS
17.1 ONGOING TRAINING
StorageTek agrees to provide IBM with material, documentation,
and support from StorageTek's Engineering and Technical
Support Staff
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similar to that provided as of the Effective Date on
StorageTek's new products, for IBM to provide its personnel
with training for all new Products and Upgrades.
17.2 MARKETING MATERIALS
To the extent that StorageTek has the right to do so,
StorageTek hereby grants IBM a [**], nonexclusive worldwide
right and license to all of the marketing and collateral
materials relating to the Products and Upgrades it receives
from StorageTek, during the term of this Agreement, to use,
reproduce, display, distribute, create and have created
Derivative Works of any or all such materials without
attribution and grant sublicenses of equivalent scope to its
Subsidiaries but not otherwise; provided IBM does not use
StorageTek's trademarks or trade names except as specifically
permitted. StorageTek will identify portions of the materials
which are subject to third-party rights.
17.3 MARKETING TOOLS
StorageTek will provide all of its marketing tools, software
and related documentation related to the Products and
Upgrades, excluding third-party confidential materials, [**].
StorageTek agrees to provide IBM such tools and software (in
Source Code form, to the extent not prevented by supplier
license transferability restrictions and if StorageTek
discontinues its support of such tools and software, and in
Object Code form). StorageTek hereby grants IBM a [**],
nonexclusive worldwide right and license to the tools,
software and related documentation it receives from StorageTek
during the term of this Agreement, to use, reproduce, display,
distribute, and create, and have created Derivative Works of
any or all such tools and software without attribution, and
grant sublicenses of equivalent scope to its Subsidiaries but
not otherwise. In addition, StorageTek shall permit IBM and
its Subsidiaries to grant sublicenses for the tools, software
and documentation: (i) to [**], and (ii) to [**]. Such
sublicenses to [**] shall not include [**]. The software being
licensed under this Section includes [**] to use for [**];
provided, however, that with respect to [**], such [**] shall
be licensed and provided [**] by StorageTek. IBM will [**],
which [**] is subject to Audit Rights under this Agreement.
18. REPRESENTATIONS AND WARRANTIES
18.1 Each Party represents and warrants that it has the authority
and right to enter into this Agreement, and has no existing
obligations, and shall not assume any obligations, that
conflict with its obligations or the rights granted to it in
this Agreement. Each Party also represents and warrants that
it has the authority to convey the rights granted or assigned
by it in this Agreement. Each Party will provide, upon
request, copies of agreements or other documentation necessary
to establish such rights. If a
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Party is unable to supply a copy of such agreements or other
documentation, then such Party shall use its best efforts to
obtain such agreements or other documentation to sufficiently
establish that it has been granted these rights.
18.2 StorageTek represents and warrants that [**] the Equipment (or
Devices if [**] pursuant to Section [**]) (including the
Deliverables), Maintenance Code and Licensed Programs licensed
to IBM hereunder [**] provided, however, that this
representation and warranty shall [**] Equipment (or Devices
if [**] pursuant to Section [**]) that [**], and only
Maintenance Code and Licensed Programs that [**], Equipment
(or Devices if [**] pursuant to Section [**]). The right to
[**] based on the foregoing representation and warranty [**]
upon [**] as set forth in Section [**]. StorageTek further
represents and warrants that the Equipment (including the
Deliverables), Maintenance Code and Licensed Programs, [**].
StorageTek [**], provide IBM with [**] that StorageTek [**] to
the Equipment, including the Deliverables, Maintenance Code or
Licensed Programs.
18.3 StorageTek represents and warrants that, with respect to the
Deliverables, Licensed Programs and Maintenance Code created
outside the United States, all authors have waived their moral
rights in all Deliverables, Licensed Programs and Maintenance
Code to the extent permitted by law.
18.4 StorageTek represents and warrants that the Equipment (or
Devices if manufactured by IBM pursuant to Section 23.6), when
used in accordance with the Specifications, will not present a
health or safety risk to persons or property; and the
Equipment shall comply with all applicable regulatory health
and safety standards, including UL, CSA, VDE, IEC, FCC,
European Economic Community CE-mark standards, any other
standards that are described in the Specifications or as
required by law. StorageTek agrees to provide IBM with copies
of all reports, certifications, and other relevant documents
related to such standards at StorageTek's expense.
19. TRADEMARK & ADVERTISING
19.1 TRADEMARK AND DESIGN RIGHTS
Notwithstanding any other provisions of this Agreement,
neither party hereto is granted the right to use the
trademarks, trade names, or service marks of the other party
(including those of Subsidiaries), directly or indirectly, in
connection with any product, promotion or publication without
the prior written approval of the other party, except that IBM
may use StorageTek's trademarks and trade names for the
aforementioned purposes on any Equipment shipped by StorageTek
which bears such trademarks or trade names. Any approved use
of one Party's trademark or trade name shall enure to the
benefit of the Party owning such trademark or trade name.
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19.2 ADVERTISING/DISCLOSURE
Neither party shall, without first obtaining the written
consent of the other party, in any manner disclose any details
of the work to be performed herein, the terms, conditions and
subject matter of this Agreement, or documents issued
hereunder, except as may be required by law or government rule
or regulation. To the extent that a party is compelled to make
a disclosure due to government rule or regulation, such
disclosure shall be limited to the extent required, and the
other party shall have an opportunity to review the
information prior to its release. Each party may independently
and without the consent of the other party inform customers of
the fact that an OEM distribution arrangement exists between
the Parties; however, to the extent that such communication
includes any additional information about the other party,
such party shall have an opportunity to review such
information prior to disclosure.
19.3 Upon request by IBM, StorageTek shall apply IBM's, its
Subsidiaries', its distributors' and/or its OEMs' trademarks,
logos and other information designated by IBM for the Product
and Upgrades as may be provided to StorageTek by IBM.
19.4 Use of a Party's trademarks by the other Party shall not
diminish the owner's right, title or interest to such
trademarks.
20. CONFIDENTIALITY
20.1 It is anticipated that confidential information will be
exchanged between the Parties. Where confidential information
must be exchanged, it will be exchanged under an IBM Agreement
for the Exchange of Confidential Information (hereafter
"AECI").
20.2 With respect to all nonconfidential information disclosed by
one party (hereafter the "Disclosing Party") to the other
party (hereafter the "Receiving Party"), except to the extent
such information is protected by the Disclosing Party's patent
or copyright rights, the Disclosing Party grants to the
Receiving Party, to the extent, if any, of its interest
therein, a nonexclusive, royalty-free, irrevocable,
unrestricted, worldwide license to use, have used, disclose to
others, make copies in the case of documents, and dispose of,
all without limitation, such nonconfidential information in
any manner as it determines, including the use of such
nonconfidential information in the development, manufacture,
marketing and maintenance of products and services
incorporating such nonconfidential information.
21. ASSIGNMENT & CHANGE OF CONTROL
Neither Party shall assign or subcontract this Agreement, or any right
or obligation hereunder, without the prior written consent of the other
Party, except that subcontracts pursuant to StorageTek's normal
manufacturing procedures may
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be assigned, provided, however, that StorageTek may not subcontract
final assembly and test without IBM's prior written consent. Any
attempted assignment or subcontract not in compliance with this
paragraph shall be void.
StorageTek shall promptly notify IBM in writing of any Change of
Control involving StorageTek. Upon such Change of Control, [**]
provided below.
In the event that a Change in Control occurs whereby control of
StorageTek is acquired by (i) [**]; or (ii) [**]; then IBM may [**] of
the later of: (i) written notice by StorageTek to IBM of such Change of
Control; or (ii) the effective date of such Change of Control. If IBM
[**] pursuant to this Section, the [**] for [**] will be subject to
[**]; and provided further, that [**] shall not [**]. In addition, IBM
[**] hereof for [**] following the date that IBM [**] , [**] under any
binding forecast pursuant to Section 10.2, as well as any [**] during
the [**] in which IBM gives notice of such termination to StorageTek.
[**] the Change of Control described above, a Change of Control of [**]
shall [**] this Agreement.
22. DISPUTE RESOLUTION
22.1 ESCALATION PROCESS
The Parties will attempt in good faith to promptly resolve any
controversy or claim arising out of or relating to this
Agreement by negotiations between executives of the Parties.
If a controversy or claim should arise, the Agreement
Administrators, or their respective successors, or their
superiors, will meet in person or phone, as they decide, at
least once and will attempt to resolve the matter. Either
Agreement Administrator may require the other to meet within
seven days at a mutually agreed upon time and location.
If the matter has not been resolved within ten days of their
first meeting, or a request for such meeting if no meeting
occurs, the Agreement Administrators shall refer the matter to
senior executives, who shall have authority to settle the
dispute (hereafter "Senior Executives"). The Senior Executive
for IBM shall be the General Manager of IBM's Storage System
business or his/her designee and the Senior Executive of
StorageTek shall be its Chief Executive Officer, or his/her
designee. Thereupon, the Agreement Administrators shall
promptly prepare and exchange memoranda stating the issues in
dispute, and their positions, summarizing the negotiations
which have taken place, and attaching relevant documents. The
Senior Executives will meet in person or by telephone within
seven (7) days of the end of the ten (10) day period referred
to above, at a mutually agreed time.
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The first meeting shall be held at the offices of the
Agreement Administrator receiving the request to meet. If more
than one meeting is held, the meetings shall be held in
rotation at the offices of IBM and StorageTek.
If the matter has not been resolved within fifteen (15) days
of the first meeting of the Senior Executives (which period
may be extended by mutual agreement), the Parties will attempt
in good faith to resolve the controversy or claim in
accordance with the following mediation process. During the
course of negotiations between the representatives, all
reasonable requests made by one party to the other for
nonprivileged information will be honored in order that each
of the parties may be fully informed of the circumstances
relevant to the dispute.
22.2 MEDIATION PROCESS
If the escalation process fails to resolve a dispute in
connection with this Agreement, any such dispute shall be
submitted to expedited mediation prior to the commencement of
any litigation with respect to such dispute. In the event
either party intends to seek recourse against the other by an
action at law or in equity, such party shall first give notice
to the other party. Within ten (10) business days of such
notice, the Parties shall attempt to agree on one mediator who
shall be a person mutually agreeable to both Parties and who
shall be experienced in the DASD industry. In the event the
Parties cannot agree on one mediator, each shall have the
right to appoint one mediator, and the two mediators shall
appoint a third. Mediation shall commence within twenty (20)
business days of the notice of request for mediation. Each
party agrees to cooperate fully with the mediator(s) in an
attempt to resolve any disputes. The mediator(s) shall use the
rules of the American Arbitration Association in conducting
the mediation. Any decision reached through mediation shall be
in writing but shall not be legally binding upon the Parties
nor admissible as evidence in any legal proceedings. If the
Parties cannot resolve their differences to their mutual
satisfaction within thirty (30) business days of the request
for mediation, either Party shall be free to pursue any and
all other remedies available to such Party, including, but not
limited to, litigation. Costs of the Mediator shall be born
equally by the Parties.
23. TERMINATION/REMEDIES
23.1 TERMINATION BY MUTUAL CONSENT
This Agreement shall be subject to termination prior to the
expiration of the term at any time by mutual consent of the
parties, evidenced by a written agreement providing for
termination.
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23.2 TERMINATION BY BANKRUPTCY
This Agreement may be immediately terminated by either Party
if any of the following events ("Triggering Events") occur:
(1) the other Party files a voluntary petition under any
provision of the U.S. Bankruptcy Code or under any similar
insolvency law, makes an assignment for the benefit of its
creditors, (2) any involuntary petition in bankruptcy under
any provision of the U.S. Bankruptcy Code or under any similar
insolvency law is filed against such other Party, or (3) a
receiver is appointed for, or a levy or attachment is made
against all or substantially all of its assets, and such
involuntary petition is not dismissed or such receiver or levy
or attachment is not discharged within sixty (60) days after
the filing, appointment or making thereof.
To the extent that applicable bankruptcy law does not permit
the exercise of rights under the immediately preceding
paragraph, the bankrupt party agrees that adequate assurance
of performance by the bankrupt party of the balance of this
Agreement as a "Debtor-in-possession" or any similar entity
under successor bankruptcy laws will include assurances both
of such entity's ability to adequately produce products for
the specifically permitted Agreement and such entity's
willingness and ability to protect the other party's
proprietary rights. As a personal contract, exercise of rights
by a trustee or assignment of rights hereunder would not be
appropriate and such understanding is an essential part of
each Party's willingness to enter into this Agreement.
23.3 TERMINATION FOR CAUSE
a. If either Party is in material breach of this
Agreement, the other Party may give written notice to
the defaulting Party specifying the respects in which
the defaulting Party has failed to perform or comply
with the terms and conditions of this Agreement. In
the event that any defaults so indicated shall not be
remedied by the defaulting Party within sixty (60)
days (ten (10) days as to a failure to pay any
amounts indisputably due) unless a different period
is provided for elsewhere in this Agreement after
such notice, the party not in default may, by written
notice to the defaulting Party, terminate this
Agreement.
b. Either Party may submit disputes related to the
notice of termination to the Escalation Process or
Mediation Process described in Section 22 but such
termination notice shall not be stayed by submission
to escalation or mediation and termination shall take
effect as set forth above. Failure of either Party to
terminate this Agreement due to a breach on the part
of the other Party shall not prejudice its rights to
terminate for a subsequent breach on the part of the
defaulting Party.
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c. The right of a Party to terminate this Agreement, and
the exercise of such right by such Party, shall be in
addition to any other remedies or rights granted in
this Agreement or which a Party would have in law or
equity.
d. If IBM terminates this Agreement for cause:
(1) IBM will receive the [**] license and [**]
rights set forth in, and pursuant to,
Sections [**] of the Agreement, and the [**]
for [**] shall immediately become [**];
(2) So long as StorageTek continues to provide
Product Engineering Services as described in
Section [**] of the [**] for any [**]
product, which product includes any, all or
some of the Deliverables, StorageTek will
provide IBM with such Product Engineering
Services with respect to those same portions
of such Deliverables [**], and will, in
addition grant to IBM a [**] license to the
[**] (with respect to those same portions of
such Deliverables) of the [**] as the
licenses granted to IBM, under the [**], for
Licensed Works;
(3) All licenses granted to StorageTek to use
[**] under Section [**] of the Description
of Licensed Works will survive such
termination, and be [**] as provided in such
Description of Licensed Works, provided,
however, that, if StorageTek elects to
maintain or effectuate, whichever the case
may be, the StorageTek [**] Licenses set
forth in Section [**], and in Section [**]
of the Description of Licensed Works [**],
then StorageTek must [**] and also [**] as
set forth in the Description of Licensed
Works for such license, except that [**]
shall be [**] for each [**] following the
date of StorageTek's receipt of IBM's
written notice of termination, and except
that, once StorageTek has [**] pursuant to
this section [**] then such license shall
immediately become [**], and provided
further, that any [**] by StorageTek to IBM
under this section shall be [**] for
products other than as covered in Sections
[**] of the [**], and shall have no effect
on the [**] to be [**] pursuant to Section
[**]; and
(4) Despite such termination, IBM shall have the
[**] for any and all Specified Functions in
process under the IDA, and if IBM [**],
StorageTek will continue to develop
Specified Functions [**] as specified in the
IDA. Further, if IBM [**], the rights and
obligations of the Parties to the
intellectual property related to such [**].
If IBM does not
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[**] any such Specified Function, StorageTek
will have [**] above), provided, however,
that if IBM [**] for any Specified Function
of the Deliverables [**], and StorageTek
[**] completes development of such Specified
Function, then such [**] Specified Function
to the extent [**] will be deemed a [**] and
not [**].
e. If StorageTek terminates this Agreement for cause:
(1) IBM will pay to StorageTek any amounts that
become due under the IDA during the ninety
(90) day period following the date on which
StorageTek provides notice of termination to
IBM;
(2) The StorageTek Material Use Licenses set
forth in Sections 3.2d and 3.2e of the DLW
will immediately become fully paid-up and
irrevocable; and
(3) So long as StorageTek continues to provide
Product Engineering Services as described in
Section [**] for any StorageTek product
which includes any, all or some of the
Deliverables, StorageTek will provide IBM
with such Product Engineering Services (with
respect to the same portions of the
Deliverables) at [**].
23.4 MATERIAL BREACH
A material breach shall include, but not be limited to, a
material failure to:
a. pay any amounts that are undisputably due;
b. deliver Equipment or to supply software, tools and
licenses in accordance with this Agreement;
c. comply with the reliability, availability, and
service levels specified in the Agreement;
d. manufacture Equipment in accordance with the
Agreement;
e. supply Deliverables in accordance with Attachment 1
to Exhibit 3; or
f. comply with Section 18, Representations and
Warranties.
A Party may not be declared to be in material breach of any
provision of this Agreement if, and to the extent that its
failure to perform has been caused by the other Party's breach
of this Agreement.
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23.5 [**] LICENSE
StorageTek hereby grants to IBM a fully paid-up license to
[**], effective if: (1) IBM has [**], (2) StorageTek has [**],
or (3) one of the Triggering Events set forth in Section 23.2
occurs; provided, however, that IBM may not exercise its
rights under such license if, on the day IBM notifies
StorageTek that IBM will exercise such rights: (i) IBM is in
material breach of this Agreement; (ii) StorageTek has given
IBM notice in writing of such material breach prior to the
applicable event set forth in Section 23.5, above; and (iii)
IBM has failed to cure such material breach; and IBM
thereafter fails to cure such material breach within sixty
(60) days of IBM's notice to StorageTek.
23.6 MANUFACTURING MAKE OR HAVE MADE RIGHTS
If an event under Section 23.5, above, occurs, or if IBM
elects to receive [**] pursuant to Section [**], then
StorageTek agrees to provide the following assistance to IBM
or IBM's designee [**] to enable IBM or its designee to assume
Equipment, Devices or just FRUs, as the case may be,
manufacturing responsibilities:
a. Grant access by [**] to [**];
b. Provide a complete copy of all bills of material for
Equipment including the costs and sources of
materials listed therein and identification of
suppliers. In addition, if IBM requests, StorageTek
agrees to assist IBM in acquiring parts, or materials
from StorageTek's vendors at prices, terms and
conditions [**], and/or including [**].
c. Provide copies of all materials related to and
required for the manufacture and test of any and all
Equipment, Devices or just FRUs, as the case may be,
including, but not limited to, assembly drawings,
component drawings, mechanical drawings, schematics,
process descriptions, tools and fixtures.
d. In addition StorageTek will provide training on the
use of such tools.
e. Provide a copy of each document, Maintenance Code,
Microcode, Licensed Works, and any related software
that relates to the manufacture, maintenance or
repair of Equipment, Devices or just FRUs, as the
case may be.
f. Provide, to the extent that it has the right to do
so: (i) a [**], nonexclusive, [**] and license to use
the information, tooling, equipment, and know-how
described in this Section 23.6 and (ii) a [**];
solely to manufacture, have manufactured, test, have
tested, sell, lease and otherwise distribute, the
Equipment, Devices or just FRUs, as the case may be.
In addition, StorageTek agrees to
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transfer title to IBM or IBM's designee with respect
to all tooling specific to and necessary for
manufacture and test of Equipment, Devices or just
FRUs, as the case may be.
g. Provide IBM with permission to disclose confidential
StorageTek information related to Equipment, Devices
or just FRUs, as the case may be, which has been
received by IBM under this Agreement, or information
received pursuant to any confidential disclosure
agreement between the Parties, to the same extent as
IBM would disclose its own confidential information
to third Parties in order to have Equipment, Devices
or just FRUs, as the case may be, manufactured by
such third Parties.
h. Grant to IBM a [**], nonexclusive, [**] license to
[**] to the extent such license is required for IBM
to exercise the rights granted under this Section.
Such license shall include the right to [**] the
Equipment, Devices or just FRUs, as the case may be.
Such license shall [**], including [**], [**] to its
[**].
23.7 TERMINATION FOR CONVENIENCE
IBM shall have the right to terminate this Agreement for
convenience [**] by providing StorageTek with a [**] prior
written notice of its election to do so. In the event IBM
elects to terminate this Agreement for convenience, IBM's
liability for such termination is [**] of any [**]. StorageTek
agrees that, in consideration for such [**] , IBM shall have
the option to [**] prior to the date such termination becomes
effective, and StorageTek will at IBM's request [**], finish
any partially completed Equipment in StorageTek's possession
on such date and Deliver any such Equipment promptly to IBM.
Also, the [**] granted pursuant to the [**] will [**] .
23.8 TERMINATION FOR BURDENSOME CONDITION
a. Upon the occurrence of a Burdensome Condition
involving only a circumstance described in Section
[**], IBM shall [**] prior written notice to
StorageTek, to terminate this Agreement in its
entirety (including, but not limited to, the IDA)
[**]; except that
(1) IBM shall be [**] during the [**] notice
period and also the [**] that were scheduled
to have [**] for the [**] period after such
notice period, and StorageTek shall not be
[**] under the [**] after the [**] notice
period;
(2) The licenses granted to StorageTek pursuant
to the [**] shall [**]; and
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(3) StorageTek shall be [**] for [**] for
materials that StorageTek made prior to
notification of termination in order to
comply with its obligations under the
Agreement; provided that such materials are
Delivered to IBM [**] (to the extent that
[**] of such materials has been reimbursed);
and further provided that in no event will
such reimbursement by IBM exceed the sum of
[**]; and
(4) The licenses granted to IBM pursuant to the
Description of Licensed Works shall be the
same as if termination under this Section
23.8a had been a [**] or a [**].
b. Upon the occurrence of a Burdensome Condition
involving a circumstance described in Section [**],
IBM shall [**] prior written notice to StorageTek, to
terminate this Agreement in its entirety (including,
but not limited to, the IDA). IBM's liability will be
limited as set forth in Sections 23.8a(1) through
23.8(4), above, except that the period in which IBM
shall be [**] pursuant to Section 23.8a(1) above
shall be the [**] period following the date that IBM
notifies StorageTek of termination pursuant to
Section 26.3.
c. Upon the occurrence of a Burdensome Condition,
StorageTek shall [**] prior written notice to IBM, to
terminate this Agreement in its entirety [**]; except
that
(1) StorageTek shall [**];
(2) IBM shall have no further obligation to [**]
to StorageTek under the [**], and StorageTek
shall [**] that IBM has made to StorageTek
after [**] under the [**];
(3) The [**] granted to IBM pursuant to the
Description of Licensed Works shall [**] in
all instances; and
(4) IBM will receive the manufacturing make or
have made rights set forth in, and pursuant
to, Section 23.6 of this Agreement.
d. In no event will either Party's liability to the
other for termination pursuant to this Section 23.8
exceed (i) the sum of [**] in the event of a
termination of this Agreement only as a result of a
circumstance described in Section 1.6(ii); or (ii)
the sum of [**] in the event of a termination of this
Agreement as a result of a circumstance described in
Section 1.6(i). These limitations of liability will
not apply to [**] hereof; nor shall such limitations
apply to any [**] as modified above.
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23.9 WIND DOWN
Upon termination of this Agreement by either Party for any
reason prior to the expiration of the term set forth in
Section 3, and except as stated in Section [**] hereof, IBM
may continue for [**] following the date of notice of such
termination, to place noncancelable purchase orders at the
prices that are in effect for the quarter in which such notice
of termination is effective for Equipment, and StorageTek
agrees to accept such orders and to manufacture supply and
Deliver such Equipment to IBM if ordered for Delivery within
[**] of such purchase orders and within appropriate lead
times.
23.10 [**] AFTER TERMINATION
Subject to Sections 23.3 and 23.8, and so long as StorageTek
continues to provide Product Engineering Services as described
in Section [**] for any StorageTek product, if either Party
terminates this Agreement, then IBM may elect to: (i) [**]
Product Engineering Services under the SOW; (ii) [**] Product
Engineering Services at the [**] under the SOW, but at a
funding level of [**] of the funding levels for Product
Engineering Services required under the SOW; or (iii) receive
such Product Engineering Services as it may request, up to the
levels as then required under the SOW, on a time and materials
basis at [**].
24. INDEMNIFICATION RIGHTS
24.1 INTELLECTUAL PROPERTY INDEMNITY
a. StorageTek shall indemnify, defend and hold harmless
IBM [**] in respect to any costs, expenses, liability
or damages, including reasonable attorney's fees,
arising out of or related to any action [**] to the
extent that it is based on a [**]. StorageTek agrees
to provide IBM with [**] to defend a claim brought in
[**].
b. StorageTek shall also indemnify IBM in accordance
with the preceding paragraph for [**], provided that
such [**], provided, however, that StorageTek's
liability under this paragraph is [**].
c. StorageTek shall have no obligation regarding any
[**] to the extent based on: (i) the [**]; (ii) [**],
(iii) [**]; or (iv) [**].
d. If the use of the [**] shall become, [**] to become,
[**] based on [**], StorageTek may, [**], either:
(1) procure for IBM the right to continue to
market and use [**] on a continued,
uninterrupted basis; or
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(2) replace or modify the [**] with a
functionally equivalent substitute so that
the [**] will become noninfringing.
24.2 GENERAL INDEMNITY
a. StorageTek shall indemnify, defend and hold harmless
IBM in respect to any cost, expenses, liability or
damages, including reasonable attorney's fees, for
any third-party claims arising out of or related to:
(1) injury or damage to persons or property
resulting [**] from any [**], or the [**]
used in, or in connection with, [**];
(2) StorageTek's failure to make available any
[**] and related documentation to [**] under
reasonable terms and conditions;
(3) StorageTek's failure to [**];
(4) Any [**], provided that such claims do not
specifically pertain to [**] in the ordinary
course of business by [**] end user
customers; or
(5) StorageTek's failure to comply with or a
[**].
b. StorageTek shall, however, have no liability to
indemnify IBM if and only to the extent that:
(1) the injury or damage is due to use of [**],
Maintenance Code or Licensed Programs in a
manner for which it was not designed;
(2) the injury or damage is caused by the
negligence of IBM or another third party
(but excluding those servants, agents,
contractors or subcontractors of
StorageTek); or
(3) the [**] has been modified by: (i) anyone
other than StorageTek, or (ii) IBM if not
authorized by StorageTek.
24.3 OBLIGATIONS OF IBM
The obligation of StorageTek to defend and make payments under
Sections 24.1 and 24.2 is conditioned on the following:
a. StorageTek shall be notified promptly in writing by
IBM of any claim;
b. StorageTek shall [**] for its settlement or
compromise; and
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c. IBM shall [**] in defending such an action.
IBM may participate, at its sole cost and expense, in the
defense of any action on such claim and any negotiations for
its settlement or compromise.
25. GOVERNING LAW
25.1 NEW YORK LAW
The relationship between the Parties and this Agreement are
governed by the substantive laws of the state of New York. Any
action between the Parties must be brought before a court of
competent jurisdiction located in the United States Southern
District of New York. Each Party hereby waives any right to a
jury trial in any dispute between them. The Parties agree that
the United Nations convention on the international sale of
goods shall not apply to this Agreement.
It shall be a condition precedent to the filing of any such
actions that the dispute resolution procedure set forth in
Section 22 will have been followed prior to the filing of such
action, excepting only that a Party may institute an action
seeking a preliminary injunction, temporary restraining order,
or other equitable relief, if necessary in the opinion of that
Party to avoid material harm to its property, rights or other
interest, before commencing or at any time during the course
of the dispute procedure in Section 22.
25.2 LIMITATION OF ACTIONS
Neither Party will bring a legal action in connection with
this Agreement against the other more than [**] after the
cause of action arose. This limitation does not apply to
actions brought to enforce (i) indemnification rights (Section
24) or (ii) violation of intellectual property rights.
25.3 LIMITATION OF LIABILITY
In no event shall either Party hereto be liable to the other
for more than [**] for any and all causes of action and claims
of any nature (including, but not limited to, claims that
obligations, representations or warranties hereunder have
failed of their essential purpose) in connection with this
Agreement; provided, however, that [**].
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26. GENERAL
26.1 COMPLIANCE WITH LAWS
Each Party agrees to comply at its own expense with all
applicable laws and regulations of the United States, the
European Union, and all other countries or country groups.
26.2 RELATIONSHIP OF THE PARTIES
Each Party acknowledges and agrees that it is independent of
the other. Neither Party is, or will claim to be, a partner,
employee, joint venturer, agent, or legal representative of
the other Party except as specifically stated in this
Agreement. Neither Party will assume or create any obligation
or responsibility, expressly or by implication, on behalf of
or in the name of the other Party. Each Party is responsible
for the direction and compensation of its employees. Each
Party may have similar agreements with others. Each Party may
design, develop, manufacture, acquire or market its own or
competitive products and services.
26.3 NOTICES
All notices by one party to the other in connection with this
Agreement shall be in writing and will be sent to the
following addresses:
Notices related to forecasts, orders, and shipment will be
sent to:
For IBM:
[**]
Procurement Manager
IBM Corporation
5600 Cottle Road
San Jose, CA 95193
For StorageTek:
[**]
Director of Logistics
Storage Technology Corporation
2270 South 88th Street
Louisville, CO 80028
All other notices, including without limitation notices of
breach, default, will be sent to the following addresses:
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For IBM:
[**]
Vice President, Worldwide Materials
IBM Corporation
5600 Cottle Road
San Jose, CA 95193
For StorageTek:
[**]
Agreement Administrator
for IBM Agreement
Storage Technology Corporation
2270 South 88th Street
Louisville, CO 80028
with a copy to:
For IBM:
Legal Department
IBM Corporation
5600 Cottle Road
San Jose, CA 95193
For StorageTek:
General Counsel
StorageTechnology Corporation
2270 South 88th Street
Louisville, CO 80028
Either Party may change any address at which it will
receive notices by notifying the other Party in writing.
Notices and other communications between the Parties
in connection with this Agreement shall be deemed given:
a. three days after being sent by U.S. mail,
postage prepaid, certified or registered, to
the address listed above; or
b. on the date it is sent via facsimile
transmission with confirmation from the
receiving party that the transmission was
completed successfully, with the original
document sent as described above in item a.
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Notices related to order, forecast, shipment, and
delivery may also be sent via confirmed electronic mail (EDI)
to the address listed above and shall be deemed given on the
date of confirmation of delivery.
26.4 COUNTERPARTS
This Agreement may be executed simultaneously in two (2)
counterparts, each of which shall be deemed an original, but
both of which together shall constitute one and the same.
26.5 HEADINGS AND ATTACHMENTS
The headings in this Agreement are for reference only and will
not affect its meaning or interpretation. The Exhibits, their
Attachments, their Appendices and their Schedules, are
attached to and referenced in this Agreement and are
incorporated herein by reference.
26.6 AMENDMENT
For any change to this Agreement to be valid, it must be
signed by both Parties.
26.7 WAIVER
The failure by either Party at any time to enforce the
provisions of this Agreement, to exercise any option or
election, or to require at any time the performance by the
other Party of any provisions herein will not be construed as
a waiver of such provision.
26.8 SEVERABILITY
If any provision or provisions of this Agreement shall be held
to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall
not in any way be affected or impaired provided the original
intentions of both Parties are maintained.
If any provision of this Agreement is inconsistent with any
provision in the Final Judgment dated December ____,1997 that
is agreed upon by the Parties and approved by a Court of
competent jurisdiction, then such provision of this Agreement
shall be interpreted and construed in a manner to be
consistent with the relevant provision of the Final Judgment.
26.9 WEEKENDS AND HOLIDAYS
If any obligation of a party hereunder falls due on a weekend
day or a Federal holiday, then that obligation shall be due on
the next business day following such weekend day or Federal
holiday.
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26.10 FORCE MAJEURE
Neither StorageTek nor IBM shall be liable for any delay or
failure of performance hereunder due to any contingency beyond
its control which renders performance commercially
unreasonable including, but not limited to, an act of God,
war, mobilization, riot, strike, embargo, fire, flood,
hurricane, earthquake or power failure ("force majeure
incident").
When only part of StorageTek's or IBM's ability to perform is
excused under this section, StorageTek or IBM must allocate
production and deliveries or receipt of deliveries among
various customers or suppliers then under contract for similar
goods during the period when StorageTek or IBM is unable to
perform. The allocation must be effected by StorageTek in
accordance with Section 10.5 of the Agreement.
If either StorageTek or IBM claims excuse for nonperformance
under this section, it must give notice in writing to the
other party. If a Party's inability to perform continues for
more than one hundred twenty (120) days, the other party may
terminate this Agreement.
26.11 SURVIVAL
The rights and obligations of Sections 1, 7.7a, 7.8, 7.10, 8,
9, 14, 15, 16.5, 18, 19.1, 19.2, 19.4, 20, 22, 23, 24, 25 and
26, and 11, 13.1a, 13.2, 13.3 and 13.4 (with respect to FRUs),
shall survive and continue after any expiration or termination
of this agreement and shall bind the parties and their legal
representatives, successors and assigns.
26.12 ORDER OF PRECEDENCE
In the event that there is an inconsistency or conflict
between the terms in the Specifications and other terms of
this Agreement, then such other terms in this Agreement shall
take precedence over the terms in the Specifications.
THIS AGREEMENT SUPERSEDES ALL PROPOSALS, ORAL OR WRITTEN, AND
ALL NEGOTIATIONS, CONVERSATIONS OR DISCUSSIONS HERETOFORE HAD
BETWEEN THE PARTIES RELATED TO THE SUBJECT MATTER OF THIS
AGREEMENT. THE PARTIES BOTH ACKNOWLEDGE THAT THEY HAVE NOT
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY ANY
REPRESENTATIONS OR STATEMENTS, ORAL OR WRITTEN, NOT EXPRESSLY
CONTAINED HERE. THE TERMS AND CONDITIONS OF THIS AGREEMENT
SHALL PREVAIL, NOTWITHSTANDING ANY VARIANCE WITH THE TERMS AND
CONDITIONS OF ANY ORDER OR OTHER INSTRUMENT SUBMITTED BY THE
PARTIES.
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INTERNATIONAL BUSINESS STORAGE TECHNOLOGY
MACHINES CORPORATION CORPORATION
By: /s/ [**] By: /s/ [**]
Name: [**] Name: [**]
Title: Vice President Title: Executive Vice President
Enterprise Business
Date: December 18, 1997 Operations
Date: December 18, 1997
67
ATTACHMENT 1 TO EXHIBIT 1
[**]
[Intentionally left blank]
68
ATTACHMENT 2 TO EXHIBIT 1
[**]
[Intentionally left blank]
69
EXHIBIT 2
The document described in the attached pages and in the form as
delivered to IBM in connection with this Agreement prior to the Effective Date,
and as further modified in accordance with the provisions of the Agreement, are
hereby incorporated into the Agreement by this Reference.
70
Attachment 1 To Exhibit 2
71
FILE: GAHIMEG1 LIST3270 A1 National VM/ESA Conversational Monitor System
MANUFACTURING TEST PROCESSES AND QUALIFICATIONS
-------------------------------------------------------
o The test process is described in the [**] test instruction attachment for
Equipment. This process describes test durations, criteria, and feedback,
and includes Oahu monitoring and identification of [**] and [**] are [**]
by Monterey at an appropriate timeframe, and results are acceptable as
measured by [**].
o Oahu agrees that the test process of [**] shall be [**] than that process
described for [**] and will be subject to MONTEREY [**] before
implementation of same in [**] Equipment that is to be [**] under the
Agreement.
72
STORAGETEK
ICEBERG(TM) TEST ENGINEERING
TEST INSTRUCTION, EMUSYS
CONTROLLED COPY NUMBER: ______________
NOTE: A controlled copy is
indicated if RED ink is used for the Control
Copy Number. If the number is not red, this
indicates and Uncontrolled Copy.
73
DOCUMENT APPROVALS
ICEBERG TEST ENGINEERING [**]
DOCUMENT OWNER / DEPT MGR:
Date
ICEBERG TEST ENGINEERING [**]
DOCUMENT CONTROLLER:
Date
ICEBERG TEST ENGINEERING [**]
DOCUMENT CO-AUTHOR:
Date
ICEBERG TEST ENGINEERING [**]
DOCUMENT CO-AUTHOR:
Date
ICEBERG MANUFACTURING [**]
DEPARTMENT MANAGER:
Date
74
REVISION HISTORY
[**]
75
TABLE OF CONTENTS
[**]
76
ATTACHMENT 2 TO EXHIBIT 2
[Intentionally left blank]
77
EXHIBIT 3
IBM DEVELOPER AGREEMENT BETWEEN IBM AND STORAGETEK
BASE AGREEMENT
The IBM Developer Agreement ("IDA") consists of this Base Agreement
and its Transaction Documents. This IBM Developer Agreement is entered into
between International Business Machines Corporation , with an office at 5600
Cottle Road, San Jose, California 95193 ("IBM") and Storage Technology
Corporation, with an office at 2270 South 88th Street, Louisville, Colorado
80028 ("StorageTek"), which IDA is Exhibit 3 to the OEM Agreement between the
parties.
This Base Agreement establishes the basic terms and conditions under
which StorageTek will develop features, enhancements to storage products,
microcode therefor, related software, documentation and other supporting
materials and ongoing support thereof, for the Iceberg, Kodiak and Arctic Fox
storage products that IBM will purchase from StorageTek under the OEM
Agreement. The Transaction Document(s) attached hereto specify the work to be
performed by StorageTek and supplementary provisions and rights of the parties
with respect thereto.
The IDA, together with the documents listed in the Statement of Work
("SOW"), is the complete agreement with respect to the development activities
described above and replaces all prior oral or written communications between
StorageTek and IBM regarding the transactions described in the Transaction
Documents.
1.0 DEFINITIONS
Capitalized terms have the following meanings.
1.1 "Appearance Design" is the appearance presented by an object,
formed in hardware or by software, that creates a visual impression on an
observer. Appearance Design refers to the ornamental and not the functional
aspects of the object.
1.2 "Deliverable" is any item that StorageTek prepares or provides
under a Transaction Document, including IBM Materials and Licensed Works.
Where Deliverables include code, StorageTek shall deliver object and fully
commented source code, which source code shall correspond to the current
release or version of the Deliverable and be in the form specified in the
Transaction Document.
1.3 "Derivative Work" is a work that is based on an underlying
work and that would be a copyright infringement if prepared without the
authorization of the copyright owners of the underlying work. Derivative Works
are subject to the ownership rights and licenses of others in the underlying
work.
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1.4 "Development Environment" includes devices, compilers,
hardware, software, user and programming documentation, media or other items
required for the development, testing, maintenance or implementation of a
Deliverable.
1.5 "Enhancements" are changes or additions, other than
Maintenance Modifications, to the Deliverables.
"Basic Enhancements" are incidental updates or Enhancements
that support new releases of operating systems and devices. They do not
include Major Enhancements.
"Major Enhancements" provide substantial additional value that
could be offered to customers for an additional charge.
1.6 "IBM Licensees" include IBM, its Subsidiaries, and those
authorized by them to Distribute IBM's products.
1.7 "IBM Materials" are Deliverables that are funded in accordance
with the terms of this Agreement by IBM and as result from product engineering
funding specified in the SOW, that IBM owns, such as programs, program
listings, programming tools, documentation, reports and drawings. IBM
Materials also include Basic Enhancements and Maintenance Modifications that
StorageTek creates or authorizes others to create during the term of this IDA.
The term "IBM Materials" does not include Licensed Works, Maintenance Code,
software tools licensed to IBM by StorageTek, equipment or items specifically
excluded in a Transaction Document.
1.8 "Invention" is as defined in the OEM Agreement.
1.9 "Licensed Works" are as identified in the Description of
Licensed Works.
1.10 "Maintenance Modifications" are revisions that correct errors
and deficiencies in the Deliverables.
1.11 "Moral Rights" are personal rights associated with authorship
of a work under applicable law. They include the rights to approve
modifications and to require authorship identification.
1.12 "Personnel" are either party's employees or subcontractors
working under the IDA.
1.13 "Products" are as defined in the OEM Agreement.
1.14 "Services" are efforts expended by StorageTek or StorageTek's
Personnel to perform the work described in a Transaction Document. Deliverables
may result from such work.
2.0 AGREEMENT STRUCTURE
2.1 Structure. The structure of the IDA is as follows:
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The "Base Agreement" defines certain basic terms and
conditions of the development and funding of the Deliverables in the SOW.
"Transaction Documents" specify the details of a transaction
related to the Deliverables and the rights and obligations of the parties
thereto and may include additional terms and conditions. Transaction Documents
include, among others, the Statement of Work and the Description of Licensed
Work, and their amendments, appendices, schedules and exhibits.
2.2 Conflicting Terms. Terms in IBM's purchase orders for
development and support issued under the IDA and terms in StorageTek's invoices
related thereto are all void unless identified otherwise in the IDA.
3.0 RELATIONSHIP OF THE PARTIES
3.1 Independent Contractor. Each party is an independent
contractor. Neither party is, nor will claim to be, a legal representative,
partner, franchisee, agent or employee of the other except as specifically
stated in the IDA. Neither party will assume or create obligations for the
other. Neither party nor such party's Personnel are employees of the other
party. Each party is responsible for the direction and compensation of its own
Personnel.
3.2 Confidentiality. Where confidential information must be
exchanged, it will be done under the Agreement for Exchange of Confidential
Information ("AECI") No. OEM-9447.
All Deliverables that are identified in the Agreement as IBM
Materials shall be marked by StorageTek as IBM Confidential and treated and
protected as the confidential information of IBM in accordance with
StorageTek's obligations under the AECI and mutatis mutandis with respect to
Deliverables and other StorageTek confidential materials that are marked
StorageTek Confidential.
3.3 Loaned Items: If any party lends the other party items
("Loaned Items"), the lending party will do so under a mutually agreeable
equipment loan agreement ("ELA"). The party borrowing the Loaned Items (and
such party's Personnel) will use the Loaned Items only in support of the IDA or
as otherwise mutually agreed in writing in the ELA. The party borrowing the
Loaned Items will return the Loaned Items as specified in the ELA or the
Transaction Document, whichever is earlier.
3.4 Furnished Items: Either party may provide the other party
items for use in connection with this IDA. These items will be identified as
either "IBM Furnished Items" or "StorageTek Furnished Items", as the case may
be, in the applicable Transaction Document(s). The party to whom any Furnished
Items (and such party's Personnel) will use such Furnished Items [**] and [**]
without the approval of the owner of such Furnished Items. At the end of the
term of the Agreement the party receiving such Furnished Items will destroy
such Items, including any copies of them, unless the party owning such
Furnished Items requests that the party receiving such Furnished Items delivers
them to such furnishing party.
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3.5 Records: Both parties will maintain auditable records to
support invoices issued and payments made to the other. The records will be
retained and made available for [**] from the date of the related payment or
invoice. Each party shall have [**], as that term is defined in the OEM
Agreement. The auditor will only disclose to the requesting party any payments
due and payable, or specific failure of records to support invoices, for the
period examined.
3.6 The parties shall each:
a. use their own then-current processes designed to
prevent and/or identify contamination by harmful code. Each party shall
promptly notify the other party if suspected contamination occurs in spite of
such processes.
b. participate in progress meetings to review
StorageTek's performance of its obligations as specified in a Transaction
Document or as otherwise agreed in writing by the parties; and
c. [**] obtain the [**] and such party's Personnel to
convey the rights granted or assigned in the IDA.
3.7 Neither party will, without the other party's prior written
approval:
a. [**] other than as may be permitted under the OEM
Agreement, and any attempt to do so is void; provided, however, that either
party shall be permitted to use individual subcontractors or temporary
agencies, so long as the other party's rights (as set forth in the OEM
Agreement and the documents comprising the IDA) are enforced against such
subcontractors; and provided, further, that each party acknowledges that
Subsidiaries of the other party have been and will continue to be involved in
the development activities described in the IDA.
b. assume or create obligations on the other party's
behalf, or make any representations for such other party; or
c. disclose the terms of the IDA except under a
nondisclosure agreement to the disclosing party's financial advisors, attorneys
and accountants, or to assert the disclosing party's rights under it. If
required by law to disclose the terms of the IDA, StorageTek will promptly
notify IBM. Upon request, StorageTek will seek confidential treatment for the
IDA.
3.8 StorageTek will: unless otherwise specified in the SOW or any
document comprising the IDA, maintain records to verify authorship of all
Licensed Works and IBM Materials for [**] after the expiration of the term of
the OEM Agreement. Upon request by IBM, StorageTek shall deliver or otherwise
make available such information in a form reasonably specified by IBM;
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4.0 OWNERSHIP AND RIGHTS
4.1 IBM Materials: IBM [**], and StorageTek agrees to execute any
documents and undertake any actions reasonably necessary to effect and perfect
the assignment of the ownership of [**] to IBM.
Each party's Personnel may use copies, intermediate versions,
drafts and partial copies of the other parties' owned property (i.e., IBM
Materials for IBM, Licensed Works for StorageTek) only as set forth in the
Agreement. At the expiration of the term of the OEM Agreement and unless
otherwise necessary to exercise the licenses granted to the receiving party for
such other party's owned property, the receiving party will destroy (and, upon
request certify destruction thereof) these items unless the owning party
requests that the receiving party deliver them to the owning party.
4.2 Development Environment
a. For each Deliverable, StorageTek will list all items
contained in its Development Environment that are not provided by IBM.
StorageTek will deliver the listed items that are not commercially available;
StorageTek will revise the list for any changes and deliver these updated items
that are not commercially available.
b. StorageTek grants IBM a [**] license to use, execute,
reproduce, display, perform, and prepare Derivative Works of, all delivered
Development Environment items and their Derivative Works. StorageTek grants
IBM the right to authorize others to do any of the above in support of this
Agreement. This license applies to associated audio and visual works.
4.3 Patents
StorageTek grants IBM an [**] license under any patents and
patent applications that are (a) owned or licensable by StorageTek now or in
the future, and (b) required to make, have made, use, have used, sell, offer
for sale, license or otherwise transfer: (i) combinations of Equipment with
equipment or software; (ii) Deliverables or its Derivative Works for inclusion
in Equipment; and (iii) combinations of a Deliverable or its Derivative Works
with equipment and other software in such equipment.
4.4 Inventions.
a. Disclosure. StorageTek will promptly disclose in
writing to IBM each Invention. Such disclosure will specify the features or
concepts that StorageTek believes to be new or different.
b. Ownership. IBM shall own all [**] and [**] including
[**] relating to an Appearance Design which arise out of development that is
fully or partially funded by IBM under this IDA. StorageTek will, at IBM's
expense, assist in the filing of patent applications on these [**] and have
required documents signed. StorageTek hereby [**], any such [**] together with
the right to seek protection by obtaining patent rights therefor and to claim
all rights of priority thereunder, and the same shall become and remain IBM's
property whether or not such protection is sought.
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c. License. IBM grants to StorageTek a [**] license
under [**] and shall include the right to make, have made, use, have used,
lease, sell offer for sale and/or otherwise transfer any apparatus, and to
practice and have practiced any process, provided, however, that such license
is not applicable to any [**], patent applications or patents relating to
Appearance Designs.
d. No Other Patent Rights. Except as specifically
granted, the IDA does not grant either party any rights in any patents or
patent applications.
5.0 DELIVERY AND ACCEPTANCE
5.1 Delivery: StorageTek will provide all Deliverables according
to the schedule in a Transaction Document with remedies for failure to do so as
specified in the Agreement.
5.2 Evaluation: IBM has the right to evaluate each Deliverable as
specified in the applicable Transaction Document before accepting it to verify
that it meets the requirements of such Transaction Document. IBM will notify
StorageTek if it accepts (in whole or in part) or rejects each Deliverable
according to the processes described in the particular Transaction Document.
6.0 PERSONNEL
6.1 Parties' IDA Representatives: A Technical and a Contract
Coordinator for each of StorageTek and IBM will be appointed pursuant to the
SOW to represent them in matters specific to the SOW and all other documents
comprising the IDA. Each party will address all notices, payments and
deliveries to the appropriate coordinator. A party will notify the other in
writing when coordinators change.
6.2 StorageTek will:
a. provide appropriate [**] the Personnel who will
perform StorageTek's obligations under the IDA;
b. assure that the skill levels being applied by
StorageTek's Personnel to the part of its business being used to perform the
IDA are consistent with the skills being applied in comparable parts of
StorageTek's business that are not involved in performing this IDA;
c. not [**] technical development personnel who will
support development of the Products to areas of StorageTek's business that are
not involved in performing under this IDA if so doing would [**] the Products
or the [**]; and
d. supply its [**] to IBM as to how it will [**] with
the specific development group performing the obligations under this IDA.
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6.3 Both Parties will:
a. assign employees with the requisite knowledge and
skills to perform their respective obligations under the IDA;
b. perform obligations under the IDA and grant rights to
the other party as set forth therein; and
c. be responsible for the direction, control,
compensation and actions of their own Personnel; and
d. if such employment would violate the terms of Section
2397 of Title Ten of the U.S.C.A., not employ or compensate Personnel to
perform work under this IDA (without M's prior written approval) who were,
within the last two years: 1) members of the U.S. Armed forces in a pay grade
of O-4 or higher; or 2) civilians employed by the U.S. Department of Defense
with a pay rate equal to or greater than the minimum rate for a grade GS-13.
7.0 COMPLIANCE WITH LAWS
7.1 Compliance with Laws and Regulations: Each party will, at its
own expense, comply with all applicable governmental laws and regulations.
7.2 Exports: Each party will comply with all applicable
government export laws and regulations.
7.3 EEO/OSHA: To the extent applicable, each party will comply
with Executive Order 11246 of the President of the United States on Equal
Employment Opportunity and the Occupational Safety and Health Act of 1970.
8.0 PRICES, PAYMENTS AND TAXES
8.1 Compensation: IBM will pay StorageTek for its Services in
accordance with the IDA. StorageTek's applicable taxes, expenses and payments
to third parties are included in the compensation, unless identified otherwise
in a Transaction Document.
8.2 Invoices: StorageTek and IBM will each submit invoices for
Services, as specified in each particular Transaction Document in accordance
with that document, with payment due as set forth in such Transaction Document.
The applicable expenses and payments to third parties are included in the
compensation, unless otherwise identified in a Transaction Document.
9.0 AGREEMENT TERM AND TERMINATION AND SURVIVAL
9.1 Term. The term of this IDA is coextensive with that of the
OEM Agreement; the IDA's continuation is contingent upon the OEM Agreement
remaining in effect.
9.2 Termination. The provisions relating to termination of the
IDA shall be as set forth in the OEM Agreement.
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9.3 Survival. Any terms of the IDA that by their nature extend
beyond its termination (e.g., Part 4.0 "Ownership and Rights" and Part 8.0
"Compliance with Laws") shall survive. These terms will apply to either
party's successors and assigns.
10.0 NOT USED
11.0 SUBSIDIARY RIGHTS
11.1 Each party may sublicense its intellectual property rights
granted to it by the other party under the Agreement to its Subsidiaries, who
may sublicense the same to their Subsidiaries.
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STATEMENT OF WORK
A Transaction Document Issued Under the
IBM Developer Agreement ("IDA" or "MDA")
By signing this Transaction Document, IBM and StorageTek agree that
the complete agreement between the parties regarding the Deliverables consists
of the following documents:
A. This Statement of Work ("SOW");
B. The IBM Developer Agreement Base Agreement ("Base Agreement");
C. Exhibit: Certificate of Originality ("COO");
D. Description of Licensed Work ("DLW");
E. IBM Source Code Custody Agreement ("Escrow Agreement");
F. The Agreement for Exchange of Confidential Information
("AECI") No. OEM-9447; and
G. The OEM Agreement.
OVERVIEW
Pursuant to the terms of this SOW and in connection with the purchase
and distribution of Iceberg, Kodiak and Arctic Fox by IBM under the OEM
Agreement, StorageTek will design, develop, document, test and provide certain
features, functions and enhancements to the microcode, software, hardware, and
related materials for Iceberg, Kodiak, and Arctic Fox, as well as ongoing
maintenance and support thereof. IBM agrees [**] these activities and provide
such other items and/or assistance, as specified herein.
DEFINITIONS
Unless otherwise defined herein, capitalized terms shall have the same
meanings as set forth in the Base Agreement or the OEM Agreement.
2.1 "Base Iceberg Package" shall mean the Iceberg product as it exists as
of June 30, 1996, including the Freezer III, IXFP base support, IXOF
and Predictive Service Analysis, as listed in Section 6 of this SOW.
2.2 "Code" means computer programming code, including both Object Code and
Source Code, and including computer programming code being used as
microcode:
Object Code is the computer programming code substantially in binary
form. It is directly executable by a computer after processing, but
without compilation or assembly.
Source Code is the computer programming code, other than Object Code,
and related source code level system documentation, comments and
procedural code, such as job control language. It may be printed out
or displayed in a form readable and understandable by a programmer of
ordinary skill.
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2.3 "Completion and Acceptance Criteria" shall mean, for each Deliverable,
the criteria listed in the attached Appendix B, as modified by the
PDP, that each such Deliverable must meet.
2.4 "Design Change Request" or "DCR" shall mean a request by either of
StorageTek or IBM to make a change in any Specified Function, which
DCR must follow the process listed in Section 5.1(a).
2.5 "Dispute Resolution Process" shall mean the dispute resolution process
described in Section 22 of the OEM Agreement.
2.6 "ESP" or "Early Support Program" means the Early Support Program
process as IBM has previously implemented such programs for S/390
storage subsystems.
2.7 The "ESP Date" shall mean, with respect to Section 6.1 hereof, the
date that StorageTek meets the ESP Checkpoint criteria as specified in
Appendix B attached hereto.
2.8 "Arctic Fox" is a solid state storage device comprised of Kodiak
without the disk drives.
2.9 "Iceberg" shall be as described in Appendix A attached hereto.
2.10 "Kodiak" shall be as described in Appendix A attached hereto.
2.11 "Impact Error" is as defined in the OEM Agreement.
2.12 "PDP Date" is the date specified for StorageTek to provide to IBM the
PDP for each
Specified Function or each group of Specified Function(s).
2.13 "Product Development Plan" or "PDP" shall mean a written plan prepared
by StorageTek describing the activities to be undertaken in connection
with each Specified Function or group of Specified Functions listed in
Section 6.1 hereof.
2.14 "Program Trouble Report" or "PTR" shall mean a report prepared by [**]
to reflect a problem discovered during component testing or IBM's
review of Deliverables.
2.15 "Specified Functions" or "SF" shall mean the specific functions and/or
features that, either individually or together with other Specified
Functions listed in Section 6.1 hereof, comprise Deliverables.
2.16 "Volume" shall mean, with respect to the heading in Section 6.1
hereof, the date on which StorageTek shall meet the Volume Shipment
Checkpoint and Volume Shipment Compliance criteria as specified in
Exhibit B. With respect to all Specified Functions, the Volume date
means that StorageTek has the capability of filling orders in
reasonable quantities on such date.
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STORAGETEK'S RESPONSIBILITIES
StorageTek agrees to perform the following obligations under this SOW:
3.1 PROJECT MANAGEMENT.
Write or provide a PDP for each Deliverable for which a PDP Date is
established in Section 6.1. StorageTek will include in the PDP (or
otherwise provide for in existing PDP's) a project staffing plan, a
specification and a development plan, all as described in Appendix G
and, as required, submit updates that include reassignment of key
personnel and training plans. The PDP is subject to the written
approval of IBM's Contract Coordinator in writing, which approval may
not be arbitrarily withheld or delayed. If no approval is received
within a reasonable time after the PDP Date or if IBM has rejected the
PDP, either party may invoke the Dispute Resolution Process.
Notwithstanding any failure to obtain IBM's approval of the PDP,
StorageTek shall proceed to perform the Services with respect to the
Deliverable in accordance with the terms of this Agreement, and the
Volume date, and adjustments shall apply with respect thereto.
Submit written monthly status reports ("Reports") that indicate
StorageTek's progress against the accepted plan.
The Reports will include:
(1) a summary of accomplishments during the current reporting
period, as compared with the schedule set forth in the PDP;
(2) a summary of all concerns or issues (including, without
limitation, development delays, and changes to the
Deliverables' specifications pursuant to the DCR and PTR
process described herein) for the current reporting period
along with the plan and projected date for resolution, if
any;
(3) the status of outstanding concerns or issues that were
reported in previous reporting periods; and
(4) any other information that materially affects StorageTek's
ability to provide the Deliverables.
Notify IBM in writing of any development or delivery delays as soon as
StorageTek becomes aware of such delays.
Provide all Deliverables in accordance with Section 6 and as further
described in the PDP, including without limitation, meeting the schedule set
forth therein, which Deliverable shall be in accordance with the requirements
specified in Section 6 and also in accordance with Appendix A, "FUNCTIONAL,
TECHNICAL AND QUALITY SPECIFICATIONS", as the same may be modified by the
applicable PDP.
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3.2 DESIGN, CODE AND DEVELOPMENT.
a. Provide and implement the Deliverables in accordance with the
specifications described in Appendix A and Section 6 hereof,
as the same may be amended by StorageTek's PDP with the
written agreement of IBM's Contract Coordinator.
b. Use its established procedures to implement the following
development processes for activities being under taken
subsequent to the Effective Date hereof:
design change requests (DCRs);
program trouble reports (PTRs);
design reviews of hardware, microcode and software
design; and
code and test case inspections, as appropriate.
c. Ensure that user documentation Deliverables are created by
individuals best qualified to describe the technical details
unique for its subsystems. StorageTek will further ensure
these individuals are available for interviews, at no
additional cost to IBM [**], to augment the information as
required; provided, however, that IBM agrees not to
unreasonably interfere with such individuals' ability to
perform the Services hereunder. IBM will provide prior
reasonable written notice to StorageTek prior to any requested
interviews and shall be subject to StorageTek's facility
security requirements.
3.3 INSPECTIONS.
StorageTek will inspect the Deliverables that StorageTek develops
under this SOW as such inspection is required pursuant to the
applicable PDP. StorageTek's inspection shall be done in accordance
with the processes it applies generally to inspection in its overall
business. StorageTek will inform IBM of the dates for all inspections
and provide draft copies of the Deliverable subject to inspection at
least one (1) week before the inspection meeting, or at such other
time as the parties may mutually agree if such draft copies cannot
reasonably be provided at least one (1) week before the inspection
meeting. IBM has the right to participate in these inspections and to
review the results of the inspections.
3.4 TRAINING. StorageTek agrees to provide training to IBM in accordance
with Sections 16 and 17 of the OEM Agreement.
3.5 QUALITY. StorageTek's Deliverables shall be subject to the quality
requirements set forth in Section 9 of the OEM Agreement and Section
2D to Appendix A attached hereto.
3.6 StorageTek will document and provide to IBM each Deliverable according
to the criteria in Appendix B, "COMPLETION AND ACCEPTANCE CRITERIA."
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3.7 StorageTek shall provide product engineering services ("Product
Engineering Services") to support Equipment that IBM is acquiring or
has acquired from StorageTek. These Services shall include, without
being limited thereto, the following:
a. StorageTek shall correct errors and deficiencies in the
Licensed Works and IBM Materials to ensure conformance to the
Specifications therefor (as these have been modified by any
applicable PDP);
b. StorageTek shall supply to IBM all corrections to the Licensed
Works that it has made outside of the scope of this Agreement
that affect the Equipment;
c. StorageTek shall provide minor updates and changes that
support new releases of operating systems and devices (e.g.,
HDAs, channel path, escon directors); and
d. StorageTek shall provide Basic Enhancements and Maintenance
Modifications to the Licensed Works and IBM Materials, as well
as enhance and support existing StorageTek software and
microcode that are normally shipped in or with Iceberg,
Kodiak, or Arctic Fox for the purpose of configuration,
service, maintenance and support; provided, however, that IBM
shall not acquire any ownership rights with respect to
StorageTek's Maintenance Code, proprietary tools and
maintenance documentation and enhancements thereto that are
owned by StorageTek and generally used by StorageTek for its
other products, all of which are excluded from the term
"Licensed Works."
4. IBM'S RESPONSIBILITIES
IBM agrees to perform the following obligations under this SOW:
4.1 IBM's Contract Coordinator will, on a timely basis, review and accept
or reject in writing all Deliverables according to the acceptance
criteria specified in Appendix B, "COMPLETION AND ACCEPTANCE
CRITERIA," as modified by the PDP. Acceptance of all Deliverables
shall not be unreasonably withheld or delayed, and any disagreement
between the parties shall be subject to the Dispute Resolution Process
described in Section 22 of the OEM Agreement. StorageTek's warranty
in Section 14 of the OEM Agreement relative to the conformance of the
Deliverables with the Specifications applies regardless of any
acceptance of a Deliverable by IBM under the acceptance criteria
specified in Appendix B, as modified by the PDP.
4.2 IBM shall track and record all Impact Errors. Such tracking and
recording shall be performed by IBM's product engineering group in
accordance with its standard practice presently utilized for IBM's
comparable DASD products.
4.3 FUNDING.
The parties have agreed upon the following schedule of funding
relating to the Services already performed in the [**] or to be
performed by StorageTek hereunder:
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Total Funding [**] Funding [**]
4Q of 1997: [**]
[**]
[**] [**]
[**] [**]
Totals: [**]
(1) Subject to Section 4.3b
a. Aggregate Funding Amounts. IBM has provided or will provide
StorageTek with aggregate funding for [**] Services in the
following amounts:
4Q of 1997: [**]
[**] subject to Section [**]; and
[**] subject to Section [**] .
On a quarterly basis the parties shall specify Deliverables (other
than "Committed In-Plan" Deliverables, as specified in Section 6.1
hereof) eligible for consideration for funding from (i) [**] funds;
(ii) [**] funds; or (iii) [**] funds.
StorageTek acknowledges that IBM shall have sole discretion to [**]
funding through the [**] process (except for [**] highlighted in
Section [**].
b. Product Engineering Funding. IBM has funded or shall fund
[**] Services for the products that IBM is purchasing from
StorageTek under the OEM Agreement, as those products are
enhanced in accordance with this IDA, as follows:
4Q of 1997: [**]
[**] [**]
[**] [**]
The total amount of [**] funding [**] shall be divided by 4 and
allocated to each quarter of the applicable year.
In any particular year, if StorageTek requires more funds to meet its
product engineering obligations under the OEM Agreement than is funded
above, StorageTek shall be responsible for any such additional funds.
In any particular year, if StorageTek spends less than the [**] funds,
the amount [**] for [**] will be made available for use by IBM for
Deliverables that are other than "Committed In-Plan Items". In
addition, if StorageTek is achieving its quality requirements for the
Equipment as set forth in Section 9 of the OEM Agreement ("Quality
Requirements"), IBM may, [**] funds and apply the remaining to
Deliverables
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that are other than "Committed In-Plan Items"; provided, however, that
if the quality of the Equipment falls below the Quality Requirements,
then IBM agrees to [**] to be used [**] funds.
With respect to [**], StorageTek shall [**] of the [**] [**] funding
paid by IBM in an amount equal to [**] that is (i) [**], or (ii) [**];
provided, however, that (a) [**], and (b) any [**].
Any [**] StorageTek shall be [**] by [**]; provided, however, that
with respect to any portion of such [**] described in clause (ii)
above, StorageTek agrees [**]. For the purpose of determining any
such [**], only the [**] will be used to determine the amount of [**]
by StorageTek, and a [**].
With respect to [**] , IBM may, at its option, [**] allocated for [**]
by giving written notice at least one year prior to the end of the
first or any subsequent quarter in [**]; any such notice(s) will be
effective for the applicable quarter and for any subsequent quarters
in [**]. StorageTek agrees to negotiate in good faith to provide
Product Engineering Services beyond [**] at a price equal to [**] if
IBM so requests and StorageTek is still providing product engineering
for such Devices or Equipment.
c. Funding of Deliverables. IBM has funded or shall fund [**] of
the development for the Deliverables specified in Section 6.1
as "Committed In-Plan Items" as follows:
(i) [**]
Product $ Period
------- - ------
[**]
(ii) [**]
Product $ Period
------- - ------
[**]
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If StorageTek requires more funds to complete any such
Deliverables than are specified above, StorageTek shall [**]
funding. Notwithstanding such StorageTek funding, the
Deliverables shall remain IBM Materials for purposes of the
rights and obligations set forth in the IDA documents.
If StorageTek requires [**] funds to complete a Deliverable,
then the parties agree any [**] funds shall be made available
for other Deliverables and other development projects.
The total amount of development funding for the [**] shall be
divided by 4 and allocated to each quarter of the applicable
year.
d. General. Funds are considered to be spent for product
engineering or a project based upon the application of GAAP,
as those principles have been applied during the one calendar
year period preceding the calendar year of the execution of
this SOW.
For each quarter, StorageTek shall invoice IBM for Services to
be performed during each such quarter on or before the first
business day of the quarter, and IBM shall pay for such
Services in [**] payments due and payable on the last business
day of the end of each month of each quarter.
e. [**] Funding. During the term of the Agreement, StorageTek
may, from time to time, conceive idea(s) for updates,
improvements, or other development projects which are not
merely duplicative of activities otherwise undertaken
hereunder and which add commercially significant functionality
and/or performance improvements to Equipment or Devices
(hereafter, "New Developments").
StorageTek may, but is not obligated to, offer any New
Development that it conceives through [**] to IBM--together
with its reasonable estimate of the cost and development
schedule for such New Development. IBM may [**] such New
Developments as a project hereunder. If IBM [**] such New
Developments [**] hereunder, or if StorageTek [**], StorageTek
shall own such New Developments.
If StorageTek completes [**] New Developments for inclusion in
or that would enhance the Iceberg, Kodiak and Arctic Fox
Products, then StorageTek shall offer until [**], for purchase
by IBM based on purchase orders that are placed prior to [**],
all devices, features, upgrades, or other products using such
New Developments to IBM at its [**] Price (as defined in the
OEM Agreement); and in the case of microcode or software New
Developments, StorageTek shall offer [**] to license them to
IBM under reasonable terms and conditions, which includes the
right to sublicense customers, at [**], not to exceed such
[**] Price. StorageTek agrees to deliver the object version
of the Code to IBM which may be replicated and distributed
directly to customers for any such New Development that IBM
elects to license and to deliver the source code version of
the Code to IBM to maintain and support such New Development
and prepare Derivative Works thereof.
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If the New Developments include any [**], StorageTek is
licensed to sell or license such [**] devices, features,
upgrades, or other products using such New Developments to
third parties as set forth in the DLW Transaction Documents.
All such New Developments shall become IBM Materials if funded
by IBM and any intellectual property rights arising out of the
development of such New Developments shall be owned by IBM in
accordance with the IDA.
f. IBM agrees to provide to StorageTek IBM drives under the
consignment process for StorageTek's use in [**] of the
Deliverables under the Agreement for [**] for each IBM drive
after the date of StorageTek's [**] of each such IBM drive.
Before the expiration of this period, StorageTek agrees to
remove any such IBM drives from [**] ; to check such IBM
drives under an [**]; and to integrate such IBM drives into
[**] or [**] that are to be Delivered to IBM under the
Agreement. If an IBM drive [**], it shall be promptly
returned to IBM in accordance with Section 12.3 of the OEM
Agreement.
If StorageTek does not remove each IBM drive from its [**],
within a period of [**], then IBM will [**] IBM drive to
StorageTek at a [**] agreed upon price. With regard to each
IBM drive that StorageTek has failed to remove, the following
additional terms shall apply:
(i) except as otherwise provided in subsections (ii),
(iii) and (iv), below, the terms of the IBM [**];
(ii) the IBM drives shall be sold on [**];
(iii) the IBM drives may be used [**] by StorageTek in
connection with its [**] under the OEM Agreement; and
(iv) if IBM drives are [**], then such IBM drives and all
associated documentation shall be considered as [**].
These items shall be covered under the terms of the
[**].
4.4 IBM shall provide SSA design and implementation assistance (not to
exceed two person- years) in accordance with the PDP.
4.5 In order to assist StorageTek in providing Deliverables as specified
in the IDA, IBM's DASD subsystem product development group shall make
reasonable efforts to provide, by the dates set forth in the related
PDP, StorageTek with the following items; but StorageTek shall have no
remedy for IBM's failure to so provide any of these items and shall
remain responsible, despite any such failure by IBM, for StorageTek's
obligations under this Agreement:
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a. Documentation and specifications as required in accordance
with the specific PDP: [**].
b. Products, programs, documentation, and training, as required
in accordance with the PDP:
(1) [**] and [**] such as [**] test;
(2) [**], including the [**] referred to in Section [**]
; and
(3) [**].
c. Assistance as required in accordance with the PDP for:
(1) General Design Review -- not to exceed one person
month per year during this SOW; and
(2) ESP Selection, account management, test plan,
monitoring, VSAM consultation.
d. Product specifications, and support for [**] with [**], as
required by the applicable PDP.
To the extent that IBM has the right to do so, IBM grants StorageTek a
[**] license (unless [**] for such items, and then such license shall
be [**] to use, execute, reproduce, display and perform the items
provided under this subsection-- only in support of IDA.
4.6 If IBM fails to provide any of the above items, then StorageTek will
immediately notify IBM's Contract Coordinator in writing and, if
within fourteen (14) days thereafter, IBM has still not provided such
items, then the parties shall use the Dispute Resolution Process to
reach a resolution in order to avoid unreasonable delays.
5. MUTUAL RESPONSIBILITIES
5.1 PROJECT CONTROLS. Both parties will use the following project
controls for work performed under this SOW.
a. Design Change Requests (DCR). All changes to the
specifications must go through the following DCR process:
(1) either party may propose a DCR;
(2) StorageTek will size the DCR and advise IBM in
writing of any impact to the schedule;
(3) IBM will decide whether to have the DCR implemented
or not; and
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(4) StorageTek will keep a log of all DCRs to track the
status of such DCRs through the development and test
cycle.
The log will specify the status as:
"Proposed" - a DCR has been created and has
been distributed to both parties;
"Accepted/Rejected" - IBM has notified
StorageTek that the DCR has been accepted or
rejected;
"Design Specification Updated" - StorageTek
has updated the Product's Design
Specification to reflect the DCR if it has
been accepted;
"In Process" - StorageTek is implementing the
DCR; or
"Complete" - The DCR has been implemented and
tested and the Documentation is updated to
reflect the DCR.
Any approval of a DCR by IBM or StorageTek
must be made by that party's Contract
Coordinator in writing.
b. Program Trouble Reports (PTR). All problems discovered during
component testing or IBM's review of Deliverables will follow
the PTR process. The procedure used will be as follows:
(1) either party may issue a PTR;
(2) StorageTek will track the status of each PTR; and
(3) the tracking system will specify the status as:
"Opened" - a problem has been discovered and
entered into the PTR tracking system;
"Received" - the programmer or engineer
responsible for the code is working on the
PTR;
"Answered" - the programmer or engineer has
fixed and tested the problem; or
"Closed" - the test has been rerun, to verify
that the problem has been corrected and has
not caused any new problems.
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5.2 PROJECT MANAGEMENT.
a. Project Management. IBM's and StorageTek's respective
management teams will meet monthly and review the field
support and status of the Deliverables. The field support
review will encompass the field performance of products, open
problems and status, resource allocation and use and customer
situations. The status of the Deliverables shall be reviewed
for progress in connection with the PDP, including plans for
corrective action (if any Deliverable is behind the PDP
schedule) and a summary of all concerns and issues.
b. Plan Change Process. As business needs, business
opportunities or resource availabilities change, IBM may
supply StorageTek with a concise description of new product
requirements to StorageTek, which StorageTek will review and
provide [**] therefor. In addition, StorageTek may also
propose alternative descriptions of such new product
requirements (as well as other new product requirements),
together with [**].
If StorageTek can commit to such new product requirements
without adversely affecting, to a material extent, the
Deliverables already planned, StorageTek shall propose an
ESP/volume shipment plan to be reviewed and negotiated in good
faith by the parties. If StorageTek cannot include the
requested new product requirement within the then-current
commitments, IBM may provide a prioritization and the parties
will negotiate in good faith amended commitments for all or
any affected Deliverables.
5.3 ESCROW. The Parties agree that the escrow account established with
[**] pursuant to the IBM Source Code Custody Agreement attached hereto
as Appendix E to Attachment 1 to Exhibit 3 shall apply to the [**]
deposited therewith, and confirm that the purpose for such escrow is
to determine the level of the Licensed Works in existence on [**],
together with the benchmarks used to measure the Products' performance
and other requirements (as such Products are in existence as of [**].
5.4 HEADCOUNT AND EQUIPMENT INVESTMENTS. The parties recognize that in
order to achieve the Impact Error Rate objectives set forth in Section
9.3 of the OEM Agreement, an investment in headcount and equipment is
required. IBM shall provide, at its own cost, through [**],
appropriate field support and test engineering personnel, and through
[**], a [**] IBM Model [**] processor system of a configuration
adequate for the testing that has been defined by both parties with
standard IBM software licenses and maintenance related thereto.
StorageTek shall provide, at its own cost, and incremental to
development and product engineering funding, through [**] appropriate
engineers, test technicians and program administrators.
6. DELIVERABLES, SCHEDULES AND ADJUSTMENTS
6.1 CHART OF DELIVERABLES.
a. [**]
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1. COMMITTED IN PLAN ITEMS
[**] DELIVERABLE
PDP DATE: [**]
SPECIFIED FUNCTIONS COMPRISING FOURTH ICEBERG DELIVERABLE
DELIVERABLE TYPE ESP DATE VOLUME ADJUSTMENT
-------------------------------------- ----------------------------------------
[**]
[**] DELIVERABLE
PDP DATE: [**]
SPECIFIED FUNCTIONS COMPRISING FIFTH ICEBERG DELIVERABLE
DELIVERABLE TYPE ESP DATE VOLUME ADJUSTMENT
-------------------------------------- ------------------------------------------
[**]
[**] DELIVERABLE
PDP DATE: [**]
SPECIFIED FUNCTIONS COMPRISING SIXTH ICEBERG DELIVERABLE
DELIVERABLE TYPE ESP DATE VOLUME ADJUSTMENT
[**]
[**] DELIVERABLE
-PDP DATE: [**]
SPECIFIED FUNCTIONS COMPRISING [**] DELIVERABLE
DELIVERABLE TYPE ESP DATE VOLUME ADJUSTMENT
[**]
B. [**]
1. COMMITTED IN-PLAN ITEMS
[**] DELIVERABLE
PDP DATE: [**]
SPECIFIED FUNCTIONS COMPRISING [**] DELIVERABLE
DELIVERABLE TYPE ESP DATE VOLUME ADJUSTMENT
--------------------------------------
[**]
[**] DELIVERABLE
PDP DATE: [**]
SPECIFIED FUNCTIONS COMPRISING [**] DELIVERABLE
DELIVERABLE TYPE ESP DATE VOLUME ADJUSTMENT
-------------------------------------- ------------------------------------------
[**]
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2. "IN DEVELOPMENT BUDGET" ITEMS
DELIVERABLE TYPE ESP DATE VOLUME ADJUSTMENT
-------------------------------------- ------------------------------------------
[**]
These items will be developed with part of the [**] funds that are specified in
4.3b and have no [**] associated with them.
NOTE: With respect to all of the above Specified Functions, should StorageTek
fail to deliver any Specified Function by the Volume date listed for such
Specified Function in Section 6.1 above, then IBM shall be entitled to
purchase the existing subsystem product from StorageTek at the [**] as if
StorageTek had delivered such Specified Function by such Volume date.
6.2 CERTIFICATE OF ORIGINALITY (COO).
StorageTek agrees to provide a Certificate of Originality for software
and microcode items identified in 6.1. A blank Certificate of
Originality is attached hereto as Appendix D.
7. NOT USED.
8. SPECIFICATIONS
All Deliverables will be prepared and provided according to the
standards in Appendix A, "FUNCTIONAL, TECHNICAL AND QUALITY
SPECIFICATIONS" and those set forth in the associated PDP. In the
event of a conflict between Appendix A and the applicable PDP as
approved in writing by IBM's Contract Coordinator, the PDP shall
control.
9. QUALITY MEASUREMENTS
The quality measurements shall be as set forth in Section 9 of the OEM
Agreement, except for host software, which shall be as set forth in
Section 2D of Appendix A attached hereto.
10. LICENSE
10.1 Except as specifically stated in the Agreement, no license or
immunity is granted either directly or by implication,
estoppel or otherwise, under any intellectual property right
of either party, including, but not limited to, trade secrets,
copyrights, trademarks and patents.
11. COORDINATORS
11.1 CONTRACT COORDINATORS.
IBM and StorageTek agree that the following named contract
coordinators are responsible for amendments (including working
with each party's respective legal department to prepare and
execute such amendments), receipt of notices under
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this IDA and all nontechnical administrative matters associated
with this SOW.
The Contract Coordinators are:
FOR IBM: FOR STORAGETEK:
Name: Mr. [**] Name: Mr. [**]
Title/Dept: Director, Future Title/Dept: Vice President,
Storage Subsystems DASD Product Management
Address: 9000 S. Rita Road Address: 2270 South 88th Street
Tuscon, Arizona 85744 Louisville, Colorado 80028
Phone: (520) [**] Phone: (303) [**]
Facsimile: (520) [**] Facsimile: (303) [**]
Notices shall be deemed given as specified in Section 26.3 of
the OEM Agreement.
11.2 TECHNICAL COORDINATORS.
IBM and StorageTek agree that the following named coordinators
will administer and coordinate the technical matters
associated with this SOW. Any changes in the party's
coordinators shall be provided to the other party in writing.
They are responsible for accepting all Deliverables and will
supervise all exchanges of confidential information under the
CDA. The Technical Coordinators are:
FOR IBM: FOR STORAGETEK:
Name: Mr. [**] Name: Mr. [**]
Title/Dept: Director, Future Title/Dept: Vice President,
Storage Subsystems DASD Systems Development
Address: 9000 S. Rita Road Address: 2270 South 88th Street
Tuscon, Arizona 85744 Louisville, Colorado 80028
Phone: (520) [**] Phone: (303) [**]
Facsimile: (520) [**] Facsimile: (303) [**]
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APPENDIX A
FUNCTIONAL, TECHNICAL AND QUALITY SPECIFICATIONS
TO THE STATEMENT OF WORK
1. TECHNICAL SPECIFICATIONS
The technical specifications for the existing Iceberg, Kodiak and
Arctic Fox products, as well as the IXFP and IXOF software are contained in the
following documents:
a. [**]
b. [**]
c. [**]
d. [**]
e. [**]
f. [**]
g. [**]
h. [**]
i. [**]
j. [**]
k. [**]
l. [**]
m. [**]
n [**]
o. [**]
p. [**]
q. [**]
r. [**]
s. [**]
101
t. [**]
u. [**]
v. [**]
w. [**]
x. [**]
y. [**]
z. [**]
aa. [**]
bb. [**]
cc. [**]
dd. [**]
ee. [**]
ff. [**]
gg. [**]
hh. [**]
ii. [**]
jj. [**]
kk. [**]
ll. [**]
mm. [**]
nn. [**]
oo. [**]
The technical descriptions for the [**] Iceberg Items (as specified in
Section 6.1 hereof) are in Schedule 1.
The technical descriptions for the [**] Kodiak Items are in Schedule 2.
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The technical descriptions for the [**] IXFP and IXOF Items are in
Schedule 3:
2. PERFORMANCE SPECIFICATIONS
A. PERFORMANCE TEST SET
[**]
Each performance workload has a specification of the number of
channels, cache size, subsystem capacity, and the number of logical
volumes to be used for each evaluation.
B. PARTICULAR PERFORMANCE SPECIFICATIONS
As specified in Schedules 4, 5, 6 and 7, Committed in Plan Items must
maintain performance specifications as currently existing or improve thereon as
required by the applicable PDP.
C. CAPACITY RATIO SPECIFICATIONS
For calculating storage capacities for purchases of Iceberg, a ratio of
[**] of storage accessible to 1 [**] is used to determine Terabytes. The
benchmark in Schedule 8 produces a capacity ratio of [**]. Future enhancements
to Iceberg, when this benchmark is applied, shall not produce results less than
[**]. Upon mutual written
agreement, such benchmark may be modified.
D. HOST SOFTWARE QUALITY MEASUREMENTS
StorageTek's host software development (IXFP and IXOF) shall meet a
quality index of no more than [**] errors per [**] lines of actually executing
code (not including comments, dummy, nonoperational or nonfunctional lines of
code) ("KLOC") for all of the code, including base, new and modified code that
is to be delivered to IBM under the IDA and its related attachments and
appendices.
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SCHEDULE 1 TO APPENDIX A TO
STATEMENT OF WORK
Integrated Iceberg Overview
The integrated Iceberg is [**], packaged in an [**]. This unit contains [**].
The system will initially support both FIPS and ESCON interfaces.
There are [**] differences between an Iceberg Controller with Freezer III and
the Integrated Iceberg system. Since the Freezer is [**]
[**]
[**] Overview
The [**] contains the following features. [**]
[**]
[**] Array Description
The [**] array is [**]
[**] Load [**]
This deliverable is described in the documents associated with the PDP
submitted by [**], dated [**], titled [**]
[**] Analysis
[**] Analysis (PSA) is the method by which the [**]
ESCON 128 [**]
For ESCON on Iceberg, the subsystem will initially support a maximum of [**]
followed later with support for a [**] . A host part is defined as the
communication [**] between the [**] and all [**]. In order to access [**], a
[**] will have four logical paths associated with it. This is due to the [**]
Control Unit images that are used to access [**]. The support of four Control
Unit images will not consume [**] resources available to the subsystem. Each
parallel channel card installed in the subsystem will reduce the number of host
paths support by [**] on the [**] and by [**] on the [**]. [**] installed
parallel channel cards ([**] per cluster) will reduce the total number of [**]
from [**] to [**] for [**] [**] and from [**] to [**] for [**] total [**].
The [**] project has been [**] and is currently [**]
104
Table 5-1. Parallel and ESCON Channel Configurations Options
Cluster 0 Cluster 1
--------------------------------------------------------
Total Cntrl Reg 0 Cntrl Reg 1 Cntrl Reg 2 Cntrl Reg 3
--------------------------------------------------------
8P [**]
16P [**]
24P [**]
32P 4P [**]
8S - Single [**]
8S - Dual [**]
16S - Dual [**]
16P/8S - Single [**]
16P/8S - Dual [**]
Note: Mixed channel configurations [**] are supported for [**]. [**] will
support [**] configurations.
(1) Where P is one OEMI channel (one fourth of an ICQ card), 1S is one ESCON
link (one half of an ICE1 or ICE2 card). Where Single is the top link enabled
on each ICE card and Dual is both links enabled in each ICE card.
(2) Each link will support [**] for Release 1 and [**] for Release 2.
(3) Each link will support [**] for Release 1 and [**] for Release 2.
(4) Each link will support [**] for Release 1 and [**] for Release 2.
(5) Each link will support [**] for Release 1. This configuration [**] for
Release 2.
(6) Each link will support [**] for Release 1. This configuration [**] for
Release 2.
All channels to a device from the same system (host or LPAR) must be the same
type. Channel types S (=CNC), FX (=CVC), BL (Block - MUX) cannot be intermixed
to a device from the same system. Channel configurations are therefore
symmetrical between the clusters.
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SCHEDULE 2 TO APPENDIX A TO
STATEMENT OF WORK
KODIAK Descriptions
K-1
[**] SIZE:
This is a cost reduction element to allow the parity group (or RAID group)
size to increase from its current [**] to [**]. This means that the effective
real data space utilization grows from [**] which realizes a reduced cost for
data protection. This group size must [**] for practical reasons.
[**] SIZE:
The current [**] size used in Kodiak is [**]. This was chosen as an optimal
amount for the internal transfer elements and the disk capacity. Subsequent to
that implementation, most drive vendors have dropped support for variable blocks
sizes or sizes of this range. To [**] must be adopted. The [**] size will allow
our internal element size to be maintained and still utilize the [**] drives.
[**] DRIVE CABINET:
With the support of 3.5" disk drives, up to 180 disk drives can be included
in a disk cabinet realizing both cost and floor space savings over the 60 drive
5.25 inch disk cabinets.
[**] DRIVE SUPPORT:
Higher capacity [**] drives are becoming available and will represent a
cost/performance advantage over the current drives being used. Additionally,
following the technology curves will be necessary for both supply and cost
issues. The support for [**] will encompass qualification, development of a dual
port card, packaging, code support (both configuration and functional, and
testing.
"BIND" OR MERGED ARCTIC FOX AND KODIAK
This feature allows [**] to be held resident in cache and treated as if
they were on a [**]. This is set up through the [**] and may be changed by the
customer support engineer. Data may still be [**] to [**] through a requested
action on the support controller for changes, power downs, etc. This feature
allows for [**] to have specific enhance performance characteristics over other
[**] for performance critical data.
[**]
[**] is using [**] and the ability to [**] and [**] on the [**] for [**].
106
K-2
[**] POWER/PACKAGE
The K-2 development [**] of the [**] and allows for [**] of [**] in the
[**] while maintaining the [**]. The [**] in the [**] allows for [**] and [**].
This provides a significant cost reduction, assembly and test time decrease, and
reduced parts count. Additionally, [**] required is [**] as well as other [**]
requirements.
IMPROVED PERFORMANCE [**] :
The [**] will be improved in various areas to provide increased performance
that is targeted to be [**] in the simulated TSO workload. The areas include:
better utilization of [**] , faster [**] , faster [**] , increased [**], and
[**].
NON-HOMOGENEOUS CACHE SUPPORT:
This development allows for [**] . with the development of the appropriate
code, [**] may be done where only data written is [**] in a [**] of the [**]
depending on configuration choices at installation time. This is a cost
reduction over [**] system.
K-3
[**]
This deliverable is described in the Product Development Plan(PDP)
submitted by [**] dated [**] titled: [**].
[**]
This deliverable is described in the PDP submitted by [**] dated [**]
titled:
[**] . It should be noted that the performance requirement is as follows:
[**]
[**]
This deliverable is described in the Product Development Plan(PDP)
submitted by [**] dated [**] titled :[**]
[**]
This deliverable is described in the Product Development Plan(PDP)
submitted by [**] dated [**] titled :[**]
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OTHER ITEMS
ENHANCED PDS SEARCH ASSIST
Enhanced [**] is [**] for [**] operation based on analysis of particular
program accesses.
[**] ESCON
This development is the [**] and the [**] to allow [**]. This includes
evaluation as to feasibility (if it's possible at a reasonable cost/effort).
[**]
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SCHEDULE 3 TO APPENDIX A TO
STATEMENT OF WORK
XSA/SNAPSHOT [**]
XSA/SnapShot is a virtual data duplication program product which [**]
XSA/SNAPSHOT FOR [**]
[**] of XSA/SnapShot will be implemented on [**] as well (after release
of MVS SnapShot). [**] SnapShot will allow [**] and [**] from the [**]. SnapShot
for [**] will run as a [**] or from [**] through [**]. It will also have a
pre-requisite of [**] and [**].
XSA/SNAPSHOT [**]
XSA/SnapShot [**] will be the first major enhancement of XSA/SnapShot.
It will [**] and [**]. Final specifications are still being developed.
109
APPENDIX A: SCHEDULE 4
TO THE STATEMENT OF WORK
ICEBERG PERFORMANCE COMMITMENTS FOR POST [**]
SHIPMENTS
[**] DATA [**] CACHE # OF
WORKLOAD [**] CHNLS [**] SIZE DEVICES
-------------------------------------------------------------------------------------------------------
[**]
NOTE: NA -> NOT APPLICABLE
4
110
APPENDIX A: SCHEDULE 5
TO THE STATEMENT OF WORK
ICEBERG PERFORMANCE COMMITMENTS FOR POST [**]
SHIPMENTS
[**] DATA [**] CACHE # OF
WORKLOAD [**] CHNLS [**] SIZE DEVICES
------------------------------------------------------------------------------------------------------
[**]
NOTE: NA -> NOT APPLICABLE
5
111
APPENDIX A: SCHEDULE 6
TO THE STATEMENT OF WORK
KODIAK PERFORMANCE COMMITMENTS FOR POST [**]
SHIPMENTS
[**] DATA [**] CACHE # OF
WORKLOAD [**] CHNLS [**] SIZE DEVICES
------------------------------------------------------------------------------------------------------
[**]
NOTE: NA -> NOT APPLICABLE
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112
APPENDIX A: SCHEDULE 7
TO THE STATEMENT OF WORK
KODIAK PERFORMANCE COMMITMENTS FOR [**]
SHIPMENTS AND AFTER
[**] DATA [**] CACHE # OF
WORKLOAD [**] CHNLS [**] SIZE DEVICES
------------------------------------------------------------------------------------------------------
[**]
NOTE: NA -> NOT APPLICABLE
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113
SCHEDULE 8 TO APPENDIX A TO
STATEMENT OF WORK
CAPACITY RATIO SPECIFICATION
The test to determine capacity ratio consists of backing up a [**], and [**].
IXFP used to report test results. Specifications are as follows:
A. [**]
[**]
[**]
B. [**] capacity:
[**]
[**]
[**]
C. [**] (on FAST) = [**]
D. Compression ration = [**]
E. Net Capacity Level = [**]
F. Volume Utilization = [**]
G. Capacity Ratio = [**]
114
APPENDIX B
COMPLETION AND ACCEPTANCE CRITERIA
COMPLETION AND ACCEPTANCE CRITERIA.
All completion and acceptance criteria for ESP, volume shipment
checkpoint and volume shipment compliance are included in this section.
In order to qualify for acceptance at the checkpoints identified
herein, each Deliverable must perform according to the specifications identified
and referenced in Appendix A, "FUNCTIONAL, TECHNICAL AND QUALITY SPECIFICATIONS"
as amended by the associated PDP for such Deliverable. For the Iceberg and
Kodiak Deliverables, the IBM System Test is attached as Schedule 1 to this
Appendix B.
STAGE CRITERIA.
Specified Function, ESP and Acceptance Criteria are as follows:
A. ESP Checkpoint. For each Specified Function, other than for the Base
Iceberg Package, StorageTek shall recommend to IBM when each SF is
ready for IBM to conduct an Early Support Program ("ESP"), typically
with a minimum of [**] StorageTek; IBM shall have the right to have up
to [**] be IBM internal customer sites or test installations. Machines
supplied to IBM installations shall be supplied at no charge to IBM
during the ESP test period.
Prior to the ESP start date, an ESP ready review shall be conducted
jointly by the parties; during this review StorageTek will present the
status of the testing that it has completed for the Specified Function,
with an accompanying written report. StorageTek's report will include a
summary of all problems that have been encountered and resolved,
details on all unresolved problems and proposed action plans for their
resolution and status of meeting the agreed to exit criteria for the
function test of this Specified Function.
StorageTek will present its recommendation as to whether to implement
the plan for ESP shipments. If StorageTek has recommended proceeding,
IBM will have [**] working days to conclude whether the SF had met the
criteria in the functional test plan for ESP initiation. IBM will not
unreasonably withhold its agreement that the particular Specified
Function is ready for the ESP.
If StorageTek disagrees with IBM's conclusion, StorageTek may appeal by
means of the Dispute Resolution Process.
For each Specified Function, StorageTek's obligation to be ready to
initiate an ESP at the designated date shall be met upon its delivery
of such Specified Function that is in accordance with the specification
documents for it as listed below:
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o functional specification, as updated in accordance with design
change procedures
o customer documentation readiness
o Functional Test Plan Completion Criteria
o performance measurement results against requirements, substantial
compliance required
B. Volume Shipment Checkpoint. Prior to the volume shipment date, a volume
shipment readiness review shall be conducted jointly by the parties;
during this review StorageTek will present the status of the testing
that it has completed for the Specified Function, with an accompanying
written report. StorageTek's report will include a summary of all
problems that have been encountered and resolved, details on all
unresolved problems and proposed action plans for their resolution and
status of meeting the agreed exit criteria for the ESP test of this
Specified Function ("SF").
StorageTek will present its recommendation as to whether to commence
volume shipments. If StorageTek recommends proceedings with volume
shipments, IBM will have [**] working days to conclude whether the SF
had met the criteria in the ESP test plan for volume shipments.
If StorageTek disagrees with IBM's conclusion, StorageTek may appeal by
means of the Dispute Resolution Process (as that process is defined in
Section 21 of the OEM Agreement).
For each Specified Function, StorageTek's obligation to justify volume
shipments at the designated date shall be met upon its delivery of such
Specified Function that is in accordance with the specification
documents for such Specified Function as listed below:
o functional specification, as updated in accordance with design
change procedures
o customer documentation readiness for volume shipments
o ESP Test Plan Exit Criteria
o performance measurement results against commitment curves,
complete compliance required
o level 1 and level 2 support training completed
o service cost estimate compliance
o IBM System Test
o manufacturing, marketing & service readiness
C. Testing. StorageTek shall be responsible for running tests as specified
in the applicable test plan; IBM shall have the right to monitor the
tests being run to verify compliance with the specification documents
for that Specified Function. Concurrently, IBM shall have the right to
verify compliance by independently running tests at IBM's expense.
A set of performance requirements will apply for each Specified
Functions in the PDP. These requirements will relate to [**]
environments appropriate to the Specified Function. The standard set of
performance benchmarks that IBM escrows will be run to verify that
performance has not been degraded for the
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116
delivered SF. Any variation from the performance commitments specified
in Appendix A for the identified "Committed In Plans" Items must be
approved in writing by the Contract Coordinators for the respective
parties, with specific reference being made in the approval to such
approval relating to varying the otherwise applicable performance
commitments.
D. Volume Shipment Compliance. StorageTek shall have met its volume
shipment date if it meets its obligation to justify volume shipments by
the Volume Date specified in Section 6.1 above.
IBM will provide written notification to StorageTek of any failure of
the SF to meet the applicable criteria which notice shall identify the
basis for any such IBM conclusion. IBM shall have the right to verify
compliance to test criteria by independently running tests, and
StorageTek shall have the opportunity to witness any such testing.
If StorageTek fails to deliver the Specified Function by the Volume
date, in accordance with this Volume Shipment Compliance process, then
the consequences shall be as specified in Section E below.
E. Adjustment for Failure to Meet Volume Date.
(1) If StorageTek fails to meet the Volume date for any [**] that
is associated with [**] and scheduled to be delivered prior to
[**] , then an amount equal to [**] for each [**] of delay,
[**], as stated below, for each failure relating to a [**]
associated with [**] shall be added to [**] and [**] purchases
and any [**] obtained under the Agreement during [**] to
determine the price of future units of [**] to be acquired
during [**].
However, if the calculation in the preceding paragraph
results in a combined volume of [**] and [**] purchases and
any credits obtained under the Agreement that is [**] for
each [**] of delay, [**], as stated below, for each such
failure.
If the Parties agree on a [**] for [**] purchases, then the
above calculations will be applied to provide IBM with
purchase credits against the [**] for any [**] that is
associated with [**] and scheduled to be delivered during
[**]. If no such [**], then if StorageTek fails to meet the
Volume date for any [**] that is associated with [**] and
scheduled to be delivered during
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117
[**], then IBM shall receive a [**] to be used against its
[**] that is equal to [**], as stated below, for each such
failure.
If StorageTek fails to meet the Volume date for any
[**] that is associated with [**] , then IBM shall receive a
[**] to be used against IBM's [**] that is equal to [**], as
stated below, for each such failure.
The following is a summary of factors to be used for a
failure to meet the Volume Date for a [**]:
*[**] for [**] ADJUSTMENT;
*[**] for [**] ADJUSTMENT; and
*[**] for [**] ADJUSTMENT.
(2) If a SF is delivered at any time later than 15 days after Volume date
specified for such SF, then it shall be considered to be delayed by a
full month. If multiple functions fail to be shipped in accordance with
the designated Volume shipment dates, then the highest applicable
ADJUSTMENT factor shall apply.
3. TEST PLAN CRITERIA
Functional Test Plan Completion/ESP Test Plan Exit Criteria/IBM System
Test Completion:
A. No known [**] problems in any Deliverables remain open; and
B. a list of any known [**] in place by StorageTek to resolve within
a specified period of time.
4. ERROR PROCESSING DURING ESP TEST
All problems found during the ESP Test will be logged by StorageTek and
reported to IBM with the following minimum information:
A. a description of the error;
B. how to reproduce the error. If it is an Information Unit error,
where the error may be found;
C. a description of what is believed to be the correct result; and
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D. the Severity of the problems discovered.
StorageTek shall notify IBM of any [**] errors discovered during ESP
Testing as soon as possible. Other errors shall be provided to IBM in
accordance with StorageTek's Standard Practices. StorageTek shall [**]
to resolve all [**] reasonably possible.
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--------------------------------------------------------------------------------
MONTEREY SYSTEM TEST
--------------------------------------------------------------------------------
For each specified function ("SF"), Oahu shall promptly notify Monterey In
writing when formal test, (i.e., Engineering Verification Test ("EVT")) is to
begin, and shall provide to Monterey a functional specification prior to such
time. Any changes to an early ship program ("ESP") date to test the SF, and
all design change request ("DCRs") to the functional specifications for the
Products must be supplied to and approved by Monterey.
Oahu shall provide, within [**] of request by Monterey, all documentation
determined by Monterey to be required to prepare for possible Monterey System
Test (MST) including but not limited to, all Oahu schedules related to the
development and test of each new SF or SFs, problem logs related to the SF(s),
detailed test plans used by Oahu for the formal testing of the SF(s), customer
and maintenance documentation associated with the SF(s), a list of product
claims for the new SF(s), and any other documentation normally produced for
marketing, service organizations, Oahu test, or for the customer.
Summary reports of test progress and problem status shall be updated and sent
to Monterey on a regular basis from this time until ESP on a schedule to be
agreed upon by Oahu and Monterey.
MONTEREY SYSTEM TEST (MST)
For each SF or group of SFs considered by Monterey to be available to the
customer as part of a single announce package with a single availability date,
Monterey shall have the right to waive execution of an MST, participate in a
joint MST with Oahu, or conduct an MST at either an Oahu or Monterey test site
location or locations, the location(s) and expected duration of such testing to
be reasonably determined by Monterey. As the duration of a test is dependent
on, among other things, the complexity of the SF(s), the number of problems
found, the problem fix rate, and the amount of resources applied to the
testing, the expected duration should not be seen as a commitment by Monterey.
It is expected that should an MST be required by Monterey, the test would run a
minimum of 3 weeks at a level of resource applied to the test as mentioned
below.
A typical MST conducted by Monterey would consist of [**], often conducted in
parallel and each utilizing approximately half the allocated test UUTs (Units
Under Test), tools and on-site support personnel.
The Monterey FVT (Functional Verification Test) would execute test scenarios,
the majority of which are run against a multi-host high stress background
(known as "(FVT) vanilla stress") driven by internally developed Monterey test
drivers. Monterey FVT tests include, but are not limited to, the following
subtests:
120
attachment, stress, functional/algorithm, power, error injection (interface
(both internal and external), logic, drive, media), and channel sequence
controls.
The Monterey SLT (System Level Test) would execute test scenarios, the
majority of which are run against a [**] under the MVS operating system [**]
using both externally available applications, access methods and utilities as
well as internally developed jobstreams. Monterey SLT tests include, but are
not limited to, the following subtests:
[**]
ENTRY REQUIREMENTS FOR MST
Receipt of all test resources as described below with adequate time to
install and configure test UUTs
Available schedule windows, CPUs, personnel and other [**] resources to
conduct the MST
No staging of the [**] considered to be part of the [**] to be tested in the
current MST [**] of contiguous [**] stress runs in both the Monterey FVT and
SLT environments
Documentation as described above
[**]
MST REQUIRED RESOURCES
FAST, FASTER, and QUICK machines supplied to MST test locations will be
supplied at [**] to Monterey. These machines will be at hardware, microcode
(including functional, service, et al.), and supporting software levels
approved by Monterey. For a [**], there are usually [**] divided between FVT
and SLT.
On-site support by Oahu personnel will be supplied to Monterey for any MST.
These personnel will be supplied in a quantity and at a skill level mutually
agreed upon by Oahu and Monterey at [**] to Monterey. Monterey will request at
least [**] personnel, [**] testing and [**] training/testing, UUTEC
(Engineering Change) maintenance, and general support including failure data
collection. This does not include any development resource which might be
required for UUT debug or fix testing.
Tools required by Oahu for its own testing of the products (including but no
limited to debug, support, and error injection) will be supplied at a quantity
and level mutually agreed to by Oahu and Monterey for any MST at [**] to
Monterey.
EXIT CRITERIA FOR MST
All MST test variations attempted with [**] successful as determined by
Monterey
All [**] resolved with a mutually agreeable action plan for the resolution of
the remainder of the problems
Resolution of all problems considered by Monterey to be ESP gates with
adequate time to verify the fixes to such problems and ensure no unexpected
side effects of such fixes
Signoff by the Monterey test group that all claims have been met
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121
SF(s) meets [**] and other Monterey quality criteria
ENTRY CRITERIA FOR ESP
Successful exit of MST or successful Monterey pre-ESP certification of Oahu
testing or the non-default waiving of both of the prior criteria if Monterey
determines that is appropriate
Monterey agrees that all [**] found in any SF test effort by either Oahu or
Monterey do not constitute ESP gates
Monterey agrees that all testing efforts by either Oahu or Monterey (other
than ESP) have been successfully concluded and that [**] met
Appropriate support structures exist to deal in a timely manner with any
field problems which may be found
SF(s) meets Monterey quality criteria for general availability
3
122
Attachment 1 to Exhibit 3
Appendix C
[Intentionally left blank]
123
IBM DEVELOPER AGREEMENT
STATEMENT OF WORK
APPENDIX D
EXHIBIT: CERTIFICATE OF ORIGINALITY
NUMBER: ___(IDA NUMBER)___
DATED
__(IDA DATE)___
BETWEEN
CORPORATION
___(STREET ADDRESS)____
___(CITY, STATE)_____
AND
_____(VENDOR NAME)______
____(STREET ADDRESS)____
_____(CITY, STATE)______
124
CONTENTS
EXHIBIT: CERTIFICATE OF ORIGINALITY APPENDIX:
ICON ORIGINALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
IDENTIFICATION FORM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.0 QUESTIONNAIRE . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.0 ICON REPRESENTATION . . . . . . . . . . . . . . . . . . . . . . . 9
2.0 CERTIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.0 CREATOR OF ICON . . . . . . . . . . . . . . . . . . . . . . . . . 9
2
125
AGREEMENT # ___(IDA Number)___ DATE OF AGREEMENT ___(IDA Date)___
EXHIBIT: CERTIFICATE OF ORIGINALITY
IBM Developer Agreement Transaction Document no:
XXX
--------------------------------------------------------------------------------
If you provide IBM any program product, offering, related documentation,
microcode or other software material (collectively, "Software Material"), you
must complete this questionnaire and send it to IBM's Contract Coordinator for
this project.
You will provide IBM with any additional information needed for copyright
registration or enforcement of legal rights relating to the Software Material.
One questionnaire can cover one complete product, even if that product includes
multiple modules. A separate questionnaire must be completed for code and
another for its related documentation. Significant changes to the Software
Material will require completion of a new questionnaire.
Please do not leave any questions blank. Write "not applicable" or "N/A" if a
question is not relevant to the Software Material. If you need additional
space to complete any question, please attach a separate sheet of paper that
identifies the question number.
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126
1.0 QUESTIONNAIRE
a) Name of the Software Material (provide complete identification
including version, release and modification numbers for programs and
documentation):
b) Was the Software Material or any portion thereof:
1) Written by any person(s) other than you or your employees working
within their job assignments?
YES___ NO___
(If NO, skip to #3)
2) Did the person(s) write ALL or PART of the Software Material?
ALL___ PART___
If PART, state the percentage written by the person(s) ____%
3) Was the Software Material provided to you by COMPANY(IES) or
INDIVIDUAL(S) or both?
COMPANY(IES)___ INDIVIDUAL(S)___ BOTH___
(Completed) and
e) below)
How did you acquire title to the Software Material or the right to grant the
licenses granted to IBM?
4) For each COMPANY, provide the following information:
Name:
Address:
How did the COMPANY acquire title to the Software Material? (For example, the
Software Material was written by the COMPANY's employees as part of their job
assignment):
Did the COMPANY have each non-US contributor to the Software Material sign a
waiver of their moral rights?
YES___ NO___
5) For each INDIVIDUAL(S) in 2c), provide the following:
Name:
Citizenship:
Address:
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127
Did the INDIVIDUAL(S) create the Software Material while employed by, or under
a contractual relationship with, another party?
YES___ NO___
If YES, provide name and address of the other party:
Did the INDIVIDUAL(S) create or first publish the Software Material in a
country other than the US?
YES___ NO___
If YES, did the INDIVIDUAL(S) sign a waiver of moral rights?
YES___ NO___
(If YES, please attach a copy)
6) Was any part of the Software Material registered at any copyright office?
YES___ NO___
(If YES, provide the following registration information:)
i) Claimant Name:
ii) Registration Number:
iii) Date of Registration:
iv) Title of Work:
c) Was any part of the Software Material published?
YES___ NO___
When and where was it published?
Was there a copyright notice on the published material(s)?
YES___ NO___
(If YES, provide the copyright notice below.)
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128
Was any part of the Software Material distributed by you to any outside person
or company other than IBM?
YES___ NO___
When and where was the Software Material distributed?
To whom was the Software Material distributed?
Why was the Software Material distributed?
Under what conditions was the Software Material distributed?
(for example, under a contract.)
d) Was any part of the Software Material derived from preexisting material(s)?
YES___ NO___
(If YES, provide the following information for each of the
preexisting materials:)
1) Name of the material:
2) Author (if known):
3) Owner (if known):
4) Copyright notice appearing on the material (if any):
5) Was any new function added to the preexisting software?
YES___ NO___
Briefly describe the new function(s) below:
___% of preexisting material used
___% of preexisting material modified
___% of new material consisting of or deriving from
preexisting materials
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129
6) Briefly describe below how the preexisting material has been used:
e) Were any part of the display screens, data formats,
instruction or command formats, operator messages, interfaces,
etc. (collectively called "External Characteristics") of the
Software Material copied or derived from the External
Characteristics of another program or product of yours or a
third party?
YES___ NO___
(If YES, provide the following information:)
a) Name of Developer's or third party's program or product:
b) Author (if known):
c) Owner (if known):
d) Copyright notice relating to the preexisting External
Characteristics (if any):
e) Have the preexisting External Characteristics
been modified?
YES___ NO___
(Describe how they have been modified below:)
f) Identify below any other circumstances that may affect
IBM's ability to reproduce and market the Software Material,
including:
1) confidentiality or trade secrecy of
preexisting materials:
2) known or expected royalty obligations to
others:
3) preexisting materials developed for another
party or customer (including government)
where you may not have retained full rights
to the materials:
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130
4) materials acquired from a person or company
possibly having no title to them:
g) Employee Identification. You recognize that for purposes
of copyright registration or enforcement of legal rights
relating to the Software Material, IBM may need to know the
names, addresses and citizenships of all persons who wrote or
contributed to the writing of the Software Materials. You
agree to keep accurate records of all such information
according to the IDA and to provide them to IBM at our
request.
h) ICON. An "ICON" is generally defined as a symbol on a
display screen that a user can point to with a device such as
a mouse in order to select a particular operation or software
application. For each ICON contained in the Software
Materials, you will have its creator complete an ICON
IDENTIFICATION FORM and submit them as appendices to this
Certificate of Originality.
2.0 CERTIFICATION
By signing below, you certify that all information contained in this
Certificate of Originality, including any attachments or appendices to it, are
accurate and complete.
(Developer Name)
-------------------------------------------------------------
Signature:
--------------------------------------------------------------------
Print name:
--------------------------------------------------------------------
(Name of Signer)
-------------------------------------------------------------
Title:
-------------------------------------------------------------------------
(Title of Signer)
-------------------------------------------------------------
Date:
-------------------------------------------------------------------------
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APPENDIX: ICON IDENTIFICATION FORM
1.0 ICON REPRESENTATION
Word(s), function or thing represented by the ICON:
2.0 CREATOR OF ICON
a) Name:
b) Job Title:
c) Business Address:
d) Business Telephone:
e) Citizenship:
f) Date created ICON in tangible form:
1) Was the attached ICON created as an assigned work task
without reference to any preexisting icons or other work
authored or owned by another?
YES___ NO___
(If NO, identify the preexisting icon or other works
that were referenced and attach copies:)
2) If the ICON was created for inclusion in a specific
product, identify the product in which it will be (or was)
used and provide the planned availability date and country of
first publication:
3) Identify or describe any known preexisting icons that
represent the same word or function or that are similar in
appearance to the ICON (attach copies):
4) Please attach a copy of the ICON and, for identification
purposes, include on the drawing the information you provided
in response to Item 2 (a through f) above.
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(Creator Name)
-----------------------------------------------------------------
Signature:
----------------------------------------------------------------------
Print name:
---------------------------------------------------------------------
(Name of Signer)
----------------------------------------------------------------
Date:
---------------------------------------------------------------------------
10
133
Attachment to Exhibit 3
Appendix C
[Intentionally left blank]
134
Exhibit: Certificate of Originality
Dated __ (IDA Date) __
APPENDIX: ICON IDENTIFICATION FORM
1.0 ICON REPRESENTATION
Word(s), function or thing represented by the ICON:
2.0 CREATOR OF ICON
a) Name:
b) Job Title:
c) Business Address:
d) Business Telephone:
e) Citizenship:
f) Date created ICON in tangible form:
1) Was the attached ICON created as an assigned work task without
reference to any preexisting icons or other work authored or
owned by another?
YES ___ NO ___
(If NO, identify the preexisting icon or other works that
were referenced and attach copies:)
2) If the ICON was created for inclusion in a specific product,
identify the product in which it will be (or was) used and provide
the planned availability date and country of first publication:
3) Identify or describe any known preexisting icons that
represent the same word or function or that are similar in
appearance to the ICON (attach copies):
4) Please attach a copy of the ICON and, for identification
purposes, include on the drawing the information you provided in
response to Item 2 (a through f)
135
Exhibit: Certificate of Originality
Dated ___ (IDA Date) ___
above.
(Creator Name) _______________________________________________________
Signature: _______________________________________________________
Print name: _______________________________________________________
(Name of Signer) _______________________________________________________
Date: _______________________________________________________
136
IBM Developer Agreement (Exhibit 3)
Statement of Work (Attachment 1)
Appendix E
--------------------------------------------------------------------------------
IBM Source Code Custody Agreement : Base Agreement
--------------------------------------------------------------------------------
This Source Code Custody Agreement ("SCCA") among Storage Technology
Corporation ("StorageTek"), Data Securities International, Inc. ("Custodian")
and International Business Machines Corporation ("IBM") describes the rights
and obligations of the parties for the Escrowed Works that StorageTek and IBM
deliver to Custodian. StorageTek, Custodian and IBM shall be called the
"parties".
The SCCA consists of this Base Agreement and its Description of Escrowed Work
("DEW"). The SCCA is our complete agreement, as it supplements the IBM
Developer Agreement ("IDA"), and replaces all prior oral or written
communications between us regarding the Escrowed Works.
By signing below for our companies, the parties agree to the terms of this Base
Agreement and its DEW.
Agreed To: Agreed To:
STORAGE TECHNOLOGY CORPORATION INTERNATIONAL BUSINESS MACHINES
CORPORATION
By: [**] By: [**]
--------------------------------- ----------------------------------
(Authorized Signature) (Authorized Signature)
Name: [**] Name: [**]
------------------------------- --------------------------------
Date: July 3, 1996 Date: 6/28/96
------------------------------- --------------------------------
2270 S. 88th Street
Louisville, CO 80028
------------------------------------ -------------------------------------
Address Address
137
IBM Source Code Custody Agreement #:
--------------
Agreed To:
Data Securities International, Inc. License Agreement #:
-----------------
By: [**]
-----------------------------------
(Authorized Signature)
Name: [**]
---------------------------------
Date: 8-12-96
---------------------------------
Custodian Address:
Data Securities International, Inc.
Contract Administration
9555 Chesapeake Drive, Suite 200
San Diego, CA 92123
ph: [**]
2
138
PART I. DEFINITIONS
Capitalized terms in the SCCA have the following meanings. The DEW may define
additional terms.
1.1 CODE is computer programming code including both Object Code and Source
Code.
a) OBJECT CODE is the computer programming code substantially in binary
form. It is directly executable by a computer after processing, but
without compilation or assembly.
b) SOURCE CODE is the computer programming code that may be displayed
in a form readable and understandable by a programmer of ordinary
skill. It includes related source code level system documentation,
comments and procedural code, such as job control language. Source Code
does not include Object Code.
1.2 DERIVATIVE WORK is a work that is based on an underlying work and that would
be a copyright infringement if prepared without the authorization of the
copyright owners of the underlying work.
Derivative Works are subject to the ownership rights and licenses of others in
the underlying work.
1.3 ESCROWED WORKS are the materials that are described in the DEW. They
include:
a) the Source Code in machine-readable form and the source code level
system documentation in hard copy form (for Licensed Works, inclusion
of adequate printing instructions in lieu of hard copy is sufficient);
b) a list of all Source Code modules of the Licensed Work;
c) a directory listing for each machine-readable medium;
d) commentary required to understand and use the Source Code;
e) a list of all Tools;
f) the noncommercially available Tools that Developer is required to
escrow under the License Agreement;
g) the code for initial performance benchmarks that IBM is required
to escrow under the License Agreement;
1.4 LICENSE AGREEMENT is the IBM Developer Agreement in which StorageTek
licenses IBM to its Licensed Works and IBM licenses the initial performance
benchmarks.
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139
1.5 LICENSED WORKS are those deliverables that StorageTek licenses to IBM under
the License Agreement.
1.6 RELEASE EVENTS are the following occurrences when either IBM or StorageTek
may demand that Custodian deliver a copy of the Escrowed Works to the requesting
party:
a) Either IBM or StorageTek may request Custodian to provide a
copy to the requesting party at any time, but Custodian must
retain the original deposited materials. Custodian is
authorized and shall deliver a copy of the Escrowed Works to
the requesting party.
1.7 Tools include devices, compilers, hardware, software, user and programming
documentation, media or other items required for the development, testing,
maintenance or implementation of a Licensed Work.
PART 2. ESCROWED WORKS DEPOSITS
2.1 StorageTek and IBM will:
a) deposit with Custodian two copies of their respective
Escrowed Works as described in the DEW attached hereto.
StorageTek and IBM will identify each item in the deposit by
labeling it;
b) deliver the Escrowed Works in good condition in sealed
containers;
c) provide Custodian with a notice that shall not be
confidential (hereafter "nonconfidential notice") of all
items contained in each container;
d) replace all lost or damaged Escrowed Works promptly upon
notice from Custodian; and
e) if either party determines that the Escrowed Works are not
complete and accurate, the depositing party shall promptly
rectify the same.
2.2 Custodian will:
a) accept each Escrow Works deposit to be held for the
non-Custodian parties and send the non-delivering party a
notice confirming receipt within ten business days;
b) retain the Escrow Works;
c) match all items on the nonconfidential notice to the labels
on Escrowed Works;
d) take all reasonable steps to protect and store Escrowed
Works in appropriate containers
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and atmospheric conditions, segregated from other materials;
e) promptly provide notice to IBM and StorageTek in the event
of lost or damaged Escrowed Works; and
f) store a copy of this SCCA and the nonconfidential notice
of items with Escrowed Works.
PART 3. ESCROWED WORKS VERIFICATION
3.1 Unless the requesting party and Custodian agree in writing, Custodian is not
responsible for technical verification that Escrowed Works are complete,
accurate and current. Each non-Custodian party may, at its expense, hire a party
qualified to do this verification. StorageTek will reimburse IBM's expenses if
the Escrowed Works do not comply with the requirements of this SCCA, and
mutatis mutandis with respect to StorageTek's expenses.
3.2 Verification includes generating Object Code from Source Code for each
Licensed Work. The verifier will witness the transfer of the verified Source
Code to deposited media. The depositing party will supervise the verification
which will be conducted at the depositing company's facilities unless the other
non-Custodian party advises otherwise.
3.3 One technical employee of the non-depositing, non-Custodian party may
witness verification. To the extent possible, verification will be done in a
way that does not expose the Source Code to this employee. If this is not
possible, this employee will treat the Source Code according to the
IBM/StorageTek Agreement for Exchange of Confidential Information, number
OEM-9447.
PART 4. RELEASE OF ESCROWED WORKS
4.1 Either IBM or StorageTek may demand delivery of Escrowed Works by notice to
Custodian pursuant to Section 1.6, copying the other non-Custodian party.
4.2 If either non-Custodian party determines that it does not have a complete
set of Escrowed Works, it may request them from the other party. The other
party will provide the materials required within three days of requesting
party's request.
4.3 Each non-Custodian party will treat Escrowed Works according to the
IBM/StorageTek Agreement for Exchange of Confidential Information.
PART 5. LICENSE TO ESCROWED WORKS
5.1 The license to Escrowed Works is governed by the IDA.
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141
PART 6. WARRANTY
Each depositing party represents and warrants that it has the authority to
deliver the Escrowed Works to the Custodian and that the Escrowed Works (other
than the Licensed Works being escrowed) are complete and accurate.
PART 7. LIABILITY AND INDEMNIFICATION
7.1 Custodian will take all reasonable precautions to prevent disclosure of
Escrowed Works to unauthorized third parties.
7.2 Custodian is liable only for its willful misconduct, gross negligence and
fraud in performing its duties under this SCCA. Custodian is not liable if
StorageTek or IBM fails to comply with any provision of the License Agreement or
this SCCA. Custodian is not liable for acting on any notice that it in good
faith believes to be genuine and legitimate.
7.3 If a third party makes a claim against Custodian:
a) StorageTek will defend and indemnify Custodian for any and
all claims, actions, damages, arbitration fees and expenses,
costs, attorneys' fees and other liabilities incurred by
Custodian on behalf of and pursuant to StorageTek's
instructions; and
b) IBM will defend and indemnify Custodian for any and all
claims, actions, damages, arbitration fees and expenses,
costs, attorneys' fees and other liabilities incurred by
Custodian on behalf of and pursuant to IBM's instructions.
These indemnities do no apply where it is found that Custodian acted with
willful misconduct, gross negligence or fraud.
7.4 The indemnifying party will pay any settlement amount that it authorizes and
all costs, damages and attorney's fees that a court finally awards if Custodian:
a) promptly provides the indemnifying party notice of the
claim; and
b) allows the indemnifying party to control and cooperates
with it in the defense of the claim and settlement
negotiations.
Custodian may participate in (but not control) the proceedings at its option and
expense.
PART 8. TERM AND TERMINATION
8.1 This SCCA begins when all parties sign it and continues until terminated by
mutual written agreement of the parties or for non-payment of Custodian fees.
Either non-Custodian party may, at
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its option, extend the term of the DEW for additional years as described in
Payment. Custodian may terminate this Agreement if invoice fees aren't paid in
accordance with Part 10.
8.2 Custodian will destroy any remaining Escrowed Works 30 days after the
expiration or termination of the DEW unless IBM or StorageTek provides notice,
otherwise with respect to their Escrowed Works.
8.3 The provisions of Liability and Indemnification will survive the expiration
or termination of this SCCA. These terms will apply to the parties respective
successors and assigns.
8.4 If Custodian cannot continue its responsibilities, Custodian may resign by
giving IBM and StorageTek 90 days' notice. IBM and StorageTek in good faith will
select a successor custodian to assume Custodian's responsibilities,
PART 9. COORDINATORS
9.1 SCCA Coordinators responsible to administer all matters associated with this
SCCA and its exhibits are:
FOR: FOR:
INTERNATIONAL BUSINESS MACHINES STORAGE TECHNOLOGY CORPORATION
CORPORATION
Name: [**] Name: [**]
---------------------------- --------------------------------
Title/Dept: Purchasing Manager Title/Dept: Vice President
Dept. G33 -12-4 Project Management
DASD Business Division
----------------------- ----------------------------
Address: 5600 COTTLE ROAD Address: 2270 South 88th Street, MS4218
------------------------- -------------------------------
SAN JOSE, CA 95193 Louisville, CO 80028
------------------------- -------------------------------
with a copy to:
FOR: DATA SECURITIES INTERNATIONAL, INC. OCC, STC/4309
StorageTek
2270 S. 88th St.
Louisville, CO 80028
Name:
-------------------------------
Title/Dept:
-------------------------
Address:
----------------------------
----------------------------
----------------------------
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9.2 Each of us will assign an Escrowed Work Coordinator in the DEW. These
coordinators are responsible to administer matters associated with the DEW. The
SCCA Coordinator and the Escrowed Work Coordinator may be the same person. A
party will provide notice to the others when coordinators change.
PART 10. PAYMENT
10.1 Each non-Custodian party will pay Custodian within 30 days after receipt
of an acceptable invoice for one-half of the fee for services under the DEW.
All payments will be made in U.S. dollars. The Exhibit: Fee Schedule identifies
the specified period of Custodian's services and the firm fees for that period.
Custodian may propose a revised fee schedule to the SCCA Coordinators no later
than 90 days before the end of the specified period. The SCCA Coordinators will
notify Custodian if they accept or reject the proposed fee schedule. If IBM and
StorageTek choose not to pay the new fees, the SCCA will expire at the end of
its term and IBM and StorageTek in good faith will select a successor custodian.
Subject to 8.2, Custodian will provide all assistance required to move the
Escrowed Works to the successor custodian.
10.2 Custodian will invoice each non-Custodian party for:
a) one-half of the fee for all services to be performed under a DEW
for one year; and
b) renewal of a DEW at least 60 days before it expires. Each non-
Custodian party may renew the DEW for an additional year by paying
the renewal fees. If Custodian does not receive the renewal fees
within 30 days, it will notify the IBM Escrowed Work Coordinator
and the StorageTek Escrowed Works Coordinator. Any party to this
Agreement shall have the right to make payment to the Custodian to
cure the default.
If neither IBM nor StorageTek pay the fees by the expiration date of the DEW,
the Custodian shall thereupon notify the IBM Escrowed Works Coordinator and the
StorageTek Escrowed Works Coordinator in writing that the Parties have thirty
days from the date of the notice to cure such failure to pay, and the Custodian
shall continue to maintain the escrow for that period.
In addition to information required by the DEW, the invoice will identify this
SCCA, the DEW and the services invoiced plus their associated fees. Custodian
will submit all invoices as identified in the DEW.
Each non-Custodian party is liable for one-half of the fee for services through
the [**] year; after that, either party may elect not to pay or to contribute
to the fee (in which case continuance of the SCCA is dependent upon the other
party's actions entirely).
PART 11. GENERAL
11.1 Each party will comply with all applicable laws and regulations at its
expense. This includes
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all export and import laws and regulations.
11.2 Except as provided in the SCCA, none of the parties may assign or transfer
the SCCA or its rights under it or delegate or subcontract its obligations
without the prior written approval of the other parties. Any attempt to do so
is void.
11.3 No party will bring a legal action against another party more than two
years after the cause of action arose. All parties will act in good faith to
resolve disputes. All parties waive their rights to a jury trial in any
resulting litigation. Litigation will only be commenced in the State of
New York.
11.4 All notices must be in writing. Except as provided in the SCCA, for a
change to the SCCA to be valid, IBM, StorageTek and Custodian must sign it.
Other than changes to the Release Events, Custodian must also sign changes that
affect its rights or obligations under the SCCA. IBM will provide Custodian with
copies of all changes that Custodian is not required to sign.
No approval, consent or waiver will be enforceable unless signed by the
granting party.
11.5 The substantive laws of the State of New York govern the SCCA.
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IBM Source Code Custody Agreement
Description of Escrowed Work
--------------------------------------------------------------------------------
This Description of Escrowed Work ("DEW") is a Transaction Document issued
under the IBM Source Code Custody Agreement ("SCCA").
PART 1. DESCRIPTION
1.1 The Escrowed Works required for deposit with Custodian: 1) by StorageTek,
are the source code and object code for IXFP, IXOF, ICEBERG, KODIAK, and ARCTIC
FOX (Licensed Works) the applicable noncommercially Development Environment and
the capacity ratio benchmark; and 2) by IBM, the initial benchmarks used to
measure performance requirements for ICEBERG and KODAK. In each case, as more
completely described in the Statement of Work to the IBM Developer Agreement.
1.2 Deposit will occur within thirty days after the signing of this SCCA.
1.3 StorageTek agrees that the Source Code for IXFP, IXOF, ICEBERG, KODIAK, and
ARCTIC FOX, deposited hereunder as of June 30, 1996 shall determine what is
considered Licensed Works under the Description of Licensed Works and that IBM
may rely on what is deposited as determinative for that purpose.
PART 2. ESCROWED WORK COORDINATORS
2.1 Escrowed Work Coordinators responsible to administer all matters associated
with this DEW are:
FOR: FOR:
INTERNATIONAL BUSINESS MACHINES STORAGE TECHNOLOGY CORPORATION
CORPORATION
Name: [**] Name: [**]
--------------------- ------------------------------
Purchasing Manager Vice President
Title/Dept: DEPT 033-12-4 Title/Dept: Project Management
--------------------- ------------------------------
Address: IBM Address: 2270 South 88th Street, MS 4218
--------------------- -------------------------------
5600 Cottle Road Louisville, CO 80028
--------------------- -------------------------------
San Jose, CA 95193
--------------------- -------------------------------
Phone: (408)[**] Phone: (303)[**]
--------------------- -------------------------------
Facsimile: (408)[**] Facsimile:(303)[**]
--------------------- -------------------------------
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FOR: DATA SECURITIES INTERNATIONAL, INC.
Name:
------------------------------
Title/Dept:
------------------------------
Address:
------------------------------
------------------------------
Phone:
------------------------------
Facsimile:
------------------------------
2.2 Notices are effective when received by the appropriate coordinator as
demonstrated by reliable written confirmation (for example, certified mail
receipt, courier receipt or facsimile receipt confirmation sheet.)
PART 3. PAYMENT
3.1 Custodian will send its original invoices to IBM at the following address:
(street address) IBM CORPORATION
----------------- ------------------------
ACCOUNTS PAYABLE
------------------------
DEPT. 42E/BLDG. 14-4
------------------------
(city, state) P.O. BOX 9001
----------------- ------------------------
ENDICOTT, NEW YORK 13761
------------------------
One copy of each invoice will be sent by mail or facsimile to the IBM Escrowed
Work Coordinator.
Custodian will send its original invoices to StorageTek at the following
address:
(street address) [**]
----------------- ------------------------
StorageTek
------------------------
MS 4218
------------------------
(city, state) 2270 South 88th Street
----------------- ------------------------
Louisville, CO 80028
------------------------
One copy of each invoice will be sent by mail or facsimile to the StorageTek
Escrowed Work Coordinator.
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3.2 Custodian's invoices will include the following information:
a) IBM Source Code Custody Agreement Number;
b) name of Custodian and "remit to" address;
c) short description of the performance for which payment is due; and
d) the party's purchase order number (if applicable), Custodian's invoice
number and its date.
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IBM DEVELOPER AGREEMENT (EXHIBIT 3)
STATEMENT OF WORK (ATTACHMENT 1)
APPENDIX F
================================================================================
OVERVIEW
The following document describes the methodology to be used in the
performance evaluation of the STK's ICEBERG and KODIAK DASD I/O
Subsystems.
The performance workload suite has the following attributes:
1. - [**]
2. - [**]
3. - [**]
4. - [**]
5. - [**]
6. - [**]
The following is a summary of the workloads included in the subsystem workload
suite.
1. Random stress test. A set of random access experiments, called
a four-corners test, evaluates performance of [**] conditions,
such as [**] or [**], with either [**] operations, or [**]
writes.
2. Sequential stress tests. A set of sequential experiments are
included that stress the [**] of the subsystem. These tests
include both [**] read and write streams, running between [**]
[**].
3. Data base workload. A data base workload is included that
tests a wide variation in [**]. This workload uses [**], and
has been designed to [**] the type of random access behavior
seen in the [**] data.
4. Batch workload. A batch workload is included that [**] the
[**] seen in customer batch workloads. This workload contains
a mixture of [**] activity.
5. Sort workload. A workload is included that is [**] jobs.
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6. Utility workload. A utility workload is included that contains
the type of "data mover" applications that might be seen in
many [**].
RANDOM STRESS TEST
The purpose of these experiments is to test variations of read and
write content with high and low reference locality.
Key workload characteristics
1. The workload consists of [**] tests:
- [**]
- [**]
- [**]
- [**]
2. Several measurement points are run for each case. First, a
[**] point is taken at approximately [**] to measure [**]
times. An additional [**] points are taken, ranging from
around [**] to [**] for [**], and from around [**] to maximum
[**] rate for [**].
3. [**] rates are controlled by selecting various [**]. The
maximum rates are tested by establishing a [**].
4. [**] volumes are standardly used, a sufficient number to allow
[**] of [**] subsystems.
5. Access are uniformly distributed across all of the [**]
volumes. [**] are generated by a set of [**].
6. The [**] tests use [**], and the [**] use a [**].
7. The [**] metrics for this [**] are:
- [**]
- [**]
SEQUENTIAL STRESS TESTS
1. The following are the [**] of the sequential stress tests.
- [**]
- [**]
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KEY WORKLOAD CHARACTERISTICS
1. The experiments are run with [**] to ensure that the [**] to
the device is being [**] by [**]. Each data set is
approximately [**].
2. Experiments are run with [**] number of [**], varying from
[**] to [**] for both [**].
3. The [**] tests transfer roughly [**]. The [**] tests transfer
[**] [**].
4. The [**] tests do not use the [**] in the [**], thereby
testing the [**] capability of the subsystem.
5. The [**] metric for this workload is the [**] rate in [**] per
second.
-- Table 1 shows the test variations included in this sequential
test suite.
Table 1. Sequential test. [**] sequential streams
EXPERIMENT ACCESS METHOD BLKSIZE NO.BLKS # OF STREAMS
[**]
[**]
[**]
[**]
VSAM DATA BASE WORKLOAD
This test includes a general [**] data base workload. This workload
[**] the [**] characteristics of a variety of [**] systems, and is
implemented as an application program using [**] . This program has the
ability to generate a variety of [**]. Unlike some benchmarks of this
type, it is not tuned to [**], but rather is [**], and matches the [**]
of characteristic data base environments. In this way, it is a
reasonable test of the effects of [**] or the efficiency of [**], with
[**] characteristics similar to [**], and some characteristics of [**]
and [**] data base systems.
KEY WORKLOAD CHARACTERISTICS
1. The workload is run with [**], listed in order of "cache
friendliness".
a. [**]
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b. [**]
c. [**]
d. [**]
In general, the less cache friendly workloads have [**], and [**].
2. With the exception of the [**] workload, these workloads are
run at [**] measurement points, with each measurement point
representing a [**] [**] in variable user population. This
means that [**] are added at higher loads, with each [**]
having a [**]. (Some workloads, including the [**] variation,
[**] user population that [**] at [**] measurement points.) As
a result, as the user population grows at the [**] measurement
points, [**] effects are generally observed for a subsystem at
a specific cache size.
[**]
[**]
[**]
The [**] measurement point generates an average of [**] per
[**] volume in the workload, attempting to drive the workload
to [**] and [**] per volume at the [**] measurement points.
However, since the [**] times are fixed, as response times
increase at the [**], the actual subsystem throughputs [**]
these targets.
3. Each measurement point is run for approximately [**]. The data
bases are [**] (to realistically deal with [**] sizes), and
the [**] run duration is generally not long enough for [**]
design to stabilize into record caching. This is due to the
[**] unique to the [**]. As a result, some of the measurements
of the [**] variation may be pessimistic for the [**].
4. The workload can be configured using multiples of [**]
volumes. The current setup uses [**] volumes, but can be
easily expanded beyond that number. It should be noted than
although most [**] are configured with more than [**] volumes,
at any given time most of those volumes have very little
activity, and most of the data is inactive. In that sense, a
[**] volume experiment with these workloads represents the
performance characteristics of a larger customer
configuration.
5. Except for the [**] variation, [**] are skewed across [**]
volumes. For example, at the [**] measurement point for a set
of [**] volumes, [**] volumes attempt an [**] of approximately
[**] volumes attempt approximately [**] that rate, and [**]
volume attempts approximately [**] that rate.
6. In the cache standard variation, a few volumes have [**]
characteristics, while the rest of the volumes have [**]. In
the other workload variations, all of the [**]
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volumes have [**] characteristics. The standard cache
workload contains [**] volumes that have [**] characteristics.
7. A [**] variation is included to [**] throughput capabilities
of the subsystem. [**] measurement points are run, from
approximately [**] sec per volume at the [**] rate, to a [**]
rate. This workload uses a [**] user population, reducing the
[**] as load increases, to a [**] at the [**] measurement
point. For this workload, [**] tend to remain constant across
the measurement points.
8. The workload uses [**] sizes for all variations.
9. The [**] friendly variations have [**] write content. All
writes are [**] writes, meaning that the record is [**], and
therefore [**] a hit in cache.
10. Each [**] volume in the workload has [**] data set. Each [**]
data set is approximately [**] in size.
-- Table 2 shows some of the key workload characteristics for the
random access tests and the [**] workload. The caching attributes shown
are those measured on a [**] configuration.
Table 2. Random Workload Attributes. Workload attributes for a [**]
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EXPERIMENT RD HIT % WRITE % F/W RECRDMISS% XFER SIZE SKEW
DESTG%
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
BATCH WORKLOAD
The purpose of the batch workload is to create a test which is
representative of customer's [**] batch window [**] characteristics.
The following are the basic workload attributes:
KEY WORKLOAD CHARACTERISTICS
1. Contains a mixture of type of [**] /O activity
[**]
[**]
[**]
[**]
2. The average transfer size is [**] if [**] programs excluded).
The [**] applications transfer either [**] or [**] per [**],
and the [**] applications transfer approximately [**] per
[**].
3. [**]
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4. The primary metrics for the workload are [**] and [**] rates
and [**] times.
WORKLOAD IMPLEMENTATION
1. Contains [**] jobs, each with [**] job steps. The following is
the mixture of [**] by the job steps:
- [**] reads of data sets with either [**] or [**] block
sizes.
- A sequential application [**] that copies data sets with
either [**] or [**] block sizes.
- A [**] application that updates [**] of the records.
- A [**] application. This is in fact the [**] [**] variation
of the data base workload.
- A [**] application.
2. Each job is [**] except for the [**] of the steps. This is
done to allow jobs to finish at roughly the same time, but
creates a mixture of activity at each point in time.
3. Each job has [**] data sets. Except for the data base data
sets, data sets are [**] distributed across [**]. Each of the
[**] data base data sets are distributed across each of the
[**].
SORT WORKLOAD
WORKLOAD CHARACTERISTICS
1. A [**] application is included in the workload. The key
attributes +of the workload are:
- The [**]
- [**]
2. [**] sorting is [**], that is [**] sorting options are used.
This is to ensure that this is truly a DASD benchmark, and
that [**] differences are not a significant factor in the sort
elapsed times.
3. A [**] size of [**] is sued to ensure [**] writes for the sort
work data sets.
4. The [**] attributes for [**] are [**], and [**]
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UTILITIES WORKLOAD
A collection of [**] are included in the test. Customers often focus on
these types of applications when conducting [**] benchmarks. The
purpose of these tests are to [**] the various "data mover" type of
utilities. The following are included in this test suite:
1. [**] Physical dump.
- A series of physical dumps are performed, using [**]
and [**] dump operations.
- A [**] has been provided which causes the output to
be [**], thereby eliminating [**] as a bottleneck.
- The volumes dumped are [**] approximately [**] full.
The volumes contain [**] data sets. They are in fact
[**] volumes used for the batch and data base
workloads.
- [**] is used.
2. [**] Physical restore.
- A series of physical restores are performed, using
[**] [**] restore operations. The volumes restored
are the same as the batch and data [**] volumes.
3. [**]
- A series of [**] jobs are executed.
- The data sets used are the [**] as for the [**]
stress tests, [**], with [**].
4. IEBCOPY
- A series of [**] jobs are executed.
- The data sets consist of copies of a source library
[**]
WORKLOAD EXECUTION TIME
-- Table 3 Shows approximate run times for each component of the
workload. These run times vary based upon the product being
evaluated. The total time to run the workloads and load and
initialize the base operating system is currently around [**].
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Table 3. Workload execution times
COMPONENT DB LOAD EXECUTION
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
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ATTACHMENT 2 TO EXHIBIT 3
IBM DEVELOPER AGREEMENT
DESCRIPTION OF LICENSED WORK
This Description of Licensed Works ("DLW") is a Transaction Document
issued under the IBM Developer Agreement ("IDA") for the license to IBM of an
existing Licensed Works owned by StorageTek. StorageTek retains ownership of
its intellectual property rights in the Licensed Works, but grants IBM licenses
to such Licensed Works, as set forth in this DLW Transaction Document. IBM owns
intellectual property rights in IBM Materials included in Deliverables provided
to IBM in accordance with the IDA, but grants StorageTek licenses to such IBM
Materials as set forth in this DLW Transaction Document.
1. DEFINITIONS
1.1 Royalty Accounting Month: Is the time frame during which
licenses fees become due. The start and end dates of a Royalty Accounting
Month vary by the IBM geographic area where licenses are granted. The Royalty
Accounting Months are:
a. For StorageTek Worldwide and for IBM in the United
States/Puerto Rico: begins on the first business day of the current
calendar month and ends on the last business day of that month.
b. For IBM in the Americas/Far East Countries (Excluding
U.S.): begins on the first business day of the prior calendar month,
ending on the last business day of that month.
c. For IBM in Europe/Middle East/Africa Countries:
begins on the first business day of the last week of the prior calendar
month. It includes the first three weeks of the current calendar month
and ends on the last business day of that third week.
1.2 "Tape Server" shall be as defined in the OEM Agreement.
1.3 "Iceberg, Kodiak, Arctic Fox Storage System" (hereinafter "IKA
Storage System") shall mean any storage system which is primarily designed for
storing data, includes controller Microcode of which more than [**] of its
total lines of ultimately executable Source Code (including data declarations,
but not including any comments, dummy, nonoperational, or nonfunctional lines
of Source Code), consists of Licensed Works and IBM Materials in combination,
and either (a) represents itself to a host computer system as a disk drive
storage system, or (b) has more than [**] of its total data storage capacity on
[**].
1.4 "IBM Material Use License" shall mean a [**], nonexclusive,
[**], license to [**] Derivative Works of, the Licensed Works and its
Derivative Works. Such license includes the right of IBM to authorize others
to do any of the above, and also applies to associated audio and
158
visual works. Except for the right to sublicense Subsidiaries pursuant to
Section 11.0 of the IDA, the right to sublicense under this definition is
limited to granting sublicenses for [**] which include terms and conditions
[**], and to [**] under terms and conditions that IBM uses for similar [**] of
its own, and to granting sublicenses to [**] under reasonable terms and
conditions.
1.5 "StorageTek [**] License" shall mean a [**], nonexclusive,
[**], license to [**] Derivative Works, of the IBM Materials and its Derivative
Works. Such license includes the right of StorageTek to authorize others to do
any of the above, and also applies to associated audio and visual works.
Except for the right to sublicense Subsidiaries pursuant to Section 11.0 of the
IDA, the right to sublicense under this definition is limited to granting
sublicenses for [**] which include terms and conditions [**], to granting [**]
under terms and conditions that StorageTek uses for similar [**] of its own,
and to granting sublicenses to [**] under reasonable terms and conditions.
1.6 "IBM [**] License" shall mean a nonexclusive, [**] license to
use: (a) the ideas, concepts, and techniques contained in; (b) the structure,
sequence and organization of, and (c) other nonliteral aspects of, Licensed
Works and their Derivative Works owned by StorageTek. Such license shall not
include the right of IBM to make a copy of any of the Licensed Works or
Derivative Work thereof owned by StorageTek which is substantially similar
thereto and would constitute literal infringement under applicable copyright
law.
1.7 "StorageTek [**] License" shall mean a nonexclusive, [**]
license to use: (a) the ideas, concepts, techniques contained in; (b) the
structure, sequence and organization of, and (c) other nonliteral aspects of
IBM Materials and their Derivative Works. Such license shall not include the
right of StorageTek to make a copy of any of the IBM Materials or any
Derivative Work thereof owned by IBM which is substantially similar thereto and
would constitute literal infringement under applicable copyright law.
1.8 "SSIKA Storage System" shall mean any storage system which is
primarily designed for storing data, which includes controller Microcode of
which more than [**] of its total lines of ultimately executable Source Code
(including data declarations, but not including any comments, dummy,
nonoperational, or nonfunctional lines of Source Code), consists of lines of
Source Code from any Licensed Work, and either (a) represents itself to a host
computer system as a disk drive storage system, or (b) has more than [**]
of its total data storage [**].
1.9 "Microcode" is defined as a set of instructions that is either
imbedded into or is to be loaded into the Product and executes below the
external user interface of such Product. Microcode may be in magnetic or other
storage media, integrated circuitry or other media.
1.10 "Maintenance Code" is defined as software other than
Microcode, including data files, which executes and exercises the Product and
Upgrades, and which detects, records, displays and/or analyzes malfunctions,
errors or other events in the Product and Upgrades.
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1.11 "Non-RMM Device" shall mean a storage system primarily
designed for storing data which has less than [**] of its total data storage
capacity on rotating magnetic media disk drives (other than magneto-optical) or
in semiconductor memory.
1.12 "Arctic Fox Storage System" shall mean any IKA Storage System
manufactured by or for StorageTek which is primarily designed for storing data,
includes controller Microcode of which more than [**] of its total lines of
ultimately executable Source Code including data declarations, but not
including any comments, dummy, nonoperational, or nonfunctional lines of Source
Code, consists of Licensed Works and IBM Materials in combination, or solely
IBM Materials, represents itself to a host computer systems as a disk drive
storage system, and includes only semiconductor memory.
1.13 "Snapshot Feature(s)" means the software with the capability
to enable Snapshot from within IXFP and from within Iceberg.
1.14 All other capitalized terms shall have the meanings defined
elsewhere in the Agreement, as that term is defined in the OEM Agreement
between the Parties hereto, of even date herewith.
2. DESCRIPTION
2.1 The Licensed Works are the StorageTek software and Microcode,
both including Code as defined in the IDA, documentation and related written
materials for the StorageTek Iceberg , Kodiak and Arctic Fox products, and
Licensed Programs, including Snapshot and the Snapshot Feature, all as they
exist on [**] and are required to be escrowed pursuant to the IDA.
2.2 StorageTek shall provide maintenance and support Services for
the Licensed Works, as described in a Statement of Work.
3. GRANT OF LICENSES
3.1 StorageTek hereby grants to IBM:
a. A IBM [**] License: (i) [**], prior to [**], and
[**] thereafter, for any purpose in connection with IKA Storage
Systems, except for manufacturing IKA Storage Systems or SSIKA Storage
Systems, and except that the license for developing and distributing
Basic Enhancements and Maintenance Modifications for IKA Storage
Systems shall remain [**] and (ii) [**] for manufacturing, selling or
leasing IKA Storage Systems except for SSIKA Storage Systems which
becomes effective upon termination or expiration of the Agreement.
b. A IBM [**] License for any purpose;
c. A [**] IBM Material Use License for developing and
distributing Basic Enhancements and Maintenance Modifications for
products other than IKA Storage Systems;
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d. For products other than IKA Storage Systems, a [**]
IBM [**] License for any purpose except for developing and
distributing Basic Enhancements and Maintenance Modifications (which
is subject to Section 3.1c);
e. Notwithstanding any other provisions of the
Agreement, a nonexclusive, [**] license to use, execute, reproduce,
display, perform, transfer, distribute, sublicense, and prepare
Derivative Works of, the IXFP software for the purposes of enabling
the connectivity of IKA Storage Systems to IBM's operating systems and
application software. Such license includes the right of IBM to
authorize others to do any of the above, and also applies to
associated audio and visual works.
f. Notwithstanding any other provisions of the
Agreement, a [**], nonexclusive, [**], license to use, execute,
reproduce, display, perform and distribute internally, and prepare
Derivative Works of, Maintenance Code and related documentation, if
any, and Product service documentation for the sole use in the
maintenance of products. StorageTek agrees, upon request from [**],
to make available a license of the same scope as heretofore provided
under reasonable terms and conditions to such [**].
g. Notwithstanding any other provisions of the
Agreement, IBM may grant limited sublicenses to its Subsidiaries and
[**] to use such Maintenance Code and related documentation, and such
Product service manuals, and Derivative Works prepared by IBM
hereunder, solely for the purpose of maintaining Products purchased by
IBM under the OEM Agreement, such sublicenses to be nontransferable
and lasting only so long as such entities are Subsidiaries of IBM, or
[**] IBM.
h. A [**] IBM Material Use License to use the Snapshot
Feature to enable Snapshot.
i. No rights or licenses are granted to IBM under this
DLW with respect to manufacturing of IKA Storage Systems prior to
expiration or termination of the Agreement or SSIKA Storage Systems at
any time. Rights of IBM to use Licensed Works to manufacture Devices
in the case of a Triggering Event are set forth in Section 23.6 of the
OEM Agreement.
j. Under no circumstances will StorageTek make any claim
against IBM with respect to infringement of StorageTek patents or
copyrights with respect to any software which is provided to IBM by
StorageTek under the Agreement and is not a Licensed Work.
3.2 IBM hereby grants to StorageTek:
a. A StorageTek [**] License for any purpose;
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b. A [**] StorageTek [**] License for developing and
distributing Basic Enhancements and Maintenance Modifications for (i)
Tape Servers and (ii) products other than IKA Storage Systems;
c. For products other than IKA Storage Systems, a [**]
StorageTek [**] License for any purpose except for developing and
distributing Basic Enhancements and Maintenance Modifications for (i)
Tape Servers and (ii) all other products except IKA Storage Systems
(which is subject to Section 3.2b);
d. A StorageTek [**] License for developing and
distributing Basic Enhancements and Maintenance Modifications: (i)
[**] on the StorageTek Installed Base (as defined in the OEM
Agreement) and Devices sold, leased or otherwise distributed by
StorageTek, and (ii) [**] for a period of [**] from [**] and [**]
thereafter, for IKA Storage Systems other than those in the StorageTek
Installed Base and Devices sold, leased or otherwise distributed by
StorageTek;
e. For IKA Storage Systems a [**] StorageTek [**]
License, for any purpose whatsoever, except for developing and
distributing Basic Enhancements and Maintenance Modifications for IKA
Storage Systems (which is subject to Section 3.2d), for performing
development and manufacturing activities, including Major
Enhancements, in connection with IKA Storage Systems (which is subject
to Section 3.2f), Arctic Fox Storage Systems (which is subject to
Section 3.2g), and certain internal usage of Equipment or Devices by
StorageTek and its Subsidiaries (which is described in and subject to
Sections 3.2i and 3.2j);
f. A [**] StorageTek [**] License for performing
development and manufacturing activities, including Major
Enhancements, in connection with IKA Storage Systems, but not for
selling or leasing IKA Storage Systems (which is subject to Section
3.2e);
g. Notwithstanding any other provisions of this
Agreement, a [**] StorageTek [**] License for any purpose in
connection with Arctic Fox Storage Systems;
h. A [**] StorageTek [**] License for any purpose in
connection with Non-RMM Devices which include IBM Materials.
i. A [**] StorageTek [**] License for use of Equipment
or Devices internally by StorageTek and its Subsidiaries for
development, manufacture, test and demonstration at StorageTek's
manufacturing facility or field service offices; and
j. A [**] StorageTek [**] License for use of Equipment
or Devices internally by StorageTek's or its Subsidiaries
noncommercial business needs, provided that such Equipment or Devices
are used by StorageTek or its Subsidiaries solely to process
StorageTek's or its Subsidiaries' own data; and
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sales or distributions of Equipment and Devices by StorageTek or its
Subsidiaries to its Subsidiaries, provided further that such Equipment
or Devices are used solely by such Subsidiary to process StorageTek's
or its Subsidiaries' data; and further provided that the [**] so used
by StorageTek and sold to such Subsidiaries by StorageTek does [**]
this Agreement.
4. COPYRIGHT
4.1 StorageTek is responsible for copyright registration and
maintenance of, and for taking reasonable efforts for, enforcement of the
copyrights for the Licensed Works. StorageTek authorizes IBM to act as its
agent in the copyright registration of the Licensed Works.
4.2 IBM is responsible for copyright registration and maintenance
of, and for taking reasonable effort for enforcement of copyrights for the IBM
Materials.
4.3 Each party agrees, upon the request of the other party, to
provide a copy of the Source Code for software and/or Microcode incorporated in
the nonrequesting party's product, to an independent third party mutually
agreed to by the parties to determine if such software and/ or Microcode makes
Material Use of the requesting party's software and/or Microcode.
4.4 The provisions of this Section 4 shall survive termination or
expiration of the IDA.
5. PAYMENT
5.1 In consideration for the licenses indicated as being royalty
bearing in Section 3.1 granted to IBM in this DLW, IBM will pay StorageTek
royalties against revenues received by IBM and its Subsidiaries as defined
below:
a. [**] of (1) all fees collected for [**], which
include Licensed Works or Derivative Works thereof (but not including
any works which consist only of IBM Materials or Derivative Works
thereof) for storage systems other than IKA Storage Systems, and (2)
all license fees collected for software or Microcode other than Major
Enhancements, which include Licensed Works or Derivative Works
thereof, distributed separately from hardware;
b. The lesser of [**] for each [**], which includes
Licensed Works or Derivative Works thereof (but not including any
works which consist only of IBM Materials or Derivative Works
thereof), and not including [**] by IBM or its Subsidiaries, or [**]
of: (a) the actual revenue received for such [**] or (b) in the case
of a [**], the average price of all such IBM [**] by IBM in the
calendar quarter prior to the sale or lease of such [**];
c. [**] of all fees collected for [**], which include
Licensed Works or Derivative Works thereof (but not including any
works which consist only of IBM Materials or Derivative Works
thereof), installed on [**] after [**];
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d. Notwithstanding any other provision in this
Description of Licensed Works, IBM will pay StorageTek [**] as
specified in Attachment 2 to Exhibit 1 to the OEM Agreement for each
copy of the Snapshot Feature that IBM distributes, except that copies
acquired for internal testing, technical evaluation and field support
of Equipment by IBM shall be [**]; and
e. All royalty obligations will be paid-up for the
Licensed Works when total royalties in the amount of [**] have been
paid by IBM or on [**], whichever occurs first. All the licenses
granted to IBM by StorageTek will be irrevocable at that time.
5.2 In consideration for the licenses indicated as being [**] in
Section 3.2 granted to StorageTek in this DLW, StorageTek will pay IBM [**] by
StorageTek and its Subsidiaries as defined below:
a. (i) [**] of all fees collected for [**], which
include IBM Materials or Derivative Works thereof, for storage systems
other than IKA Storage Systems,
(ii) [**] of the list price charged for customer
service which includes the right to install Basic Enhancements and
Maintenance Modifications on IKA Storage Systems, and
(iii) Except as otherwise provided in Section
5.2(f) of this DLW, [**] of all license fees collected for software
and Microcode other than Major Enhancements, which include IBM
Materials or Derivative Works thereof, distributed separately from
hardware;
b. The lesser of [**] for each (i) [**] , other than an
[**], or [**] therefor, which includes IBM Materials or Derivative
Works thereof, and (ii) each [**] or controller therefor, sold or
leased by StorageTek or its Subsidiaries, or, in the case of (i)
above, [**] of (x) the actual revenue received for [**] or (y) in the
case of a [**] controller, the average price of all StorageTek [**]
sold or leased by StorageTek in the calendar quarter prior to the sale
or lease of such [**];
c. Except as otherwise provided in Sections 5.2(d)(i)
and 5.2(f) of this DLW, [**] of all fees collected for Major
Enhancements, which include IBM Materials and Derivative Works
thereof, made in connection with IKA Storage Systems;
d. (i) The following amounts, [**], for each IKA
Storage System, IKA Storage System controller [**], that is sold or
leased by StorageTek [**] thereof:
[**]
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The [**] will be calculated using an estimate of [**], as the
[**] other than IBM. If the [**] period, then the [**] to be paid by
StorageTek for each unit will be recalculated based on use of a [**]
equal to the [**] period. The [**] will [**], however, if the actual
[**] period.
(ii) The lesser of [**] or IKA Storage System
controller, sold or leased by StorageTek after [**], or [**] of: (1)
[**] , or (2) [**].
e. Except for the royalty obligations specified in
Sections 5.2(d)(i) and 5.2(f) of this DLW which are not subject to any
limitation, all royalty obligations under this Section 5.2 will be
paid-up when total royalties in the amount of [**] in connection with
StorageTek's use of IBM Materials or Derivative Works thereof in
hardware or software products that are sold, leased or licensed have
been paid to IBM or on [**] whichever occurs first. All the licenses
granted to StorageTek by IBM will be irrevocable at that time.
f. The following amounts for each copy of [**] and [**]
that includes IBM Materials or any Derivative Works thereof, and is
licensed by StorageTek for use in or with an IKA Storage System or IKA
Storage System controller prior to [**] :
Description [**] [**]
--------------------------------------------------------
Through [**] [**]
[**] through [**] [**]; and
[**] through [**] [**]
5.3 StorageTek agrees to pay to IBM a [**] during [**] that is
payable in [**] on the [**] of each [**]. This payment will be [**] that
become due and owing to IBM under Section [**], above, of the DLW based upon
StorageTek's [**]. Unused portions of this payment that do not [**] may be
[**] that will become due and owing to IBM under Section [**], above, of the
DLW after [**].
5.4 [**] . Payment will be made by the last day of the calendar
month following the calendar quarter. Royalties will be paid less adjustments
and refunds due to the owing party. The owing party will provide a statement
summarizing the royalty calculation with each payment.
5.5 Notwithstanding any other provision of the Agreement, and
except for StorageTek's obligation to pay royalties pursuant to Section
3.2d(ii) herein, neither Party shall be liable to the other for royalties based
on de minimis use, as determined by applicable copyright law, of the other
Party's Code, documentation, and other written materials.
5.6 The provisions of this Section 5 shall survive termination of
the Agreement.
6. TERMINATION
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6.1 The termination of the Base Agreement or a Transaction
Document will not affect previously granted paid-up rights or licenses to IBM
or StorageTek or product users.
6.2 Any license, which is subject to a royalty, granted hereunder
may be terminated by the licensor if the licensee fails to pay any royalty due
with respect to such grant and fails to cure such nonpayment by the end of the
next calendar quarter after written notice from the Licensor.
6.3 All licenses will survive termination for convenience by IBM
subject to the obligations to pay royalties where applicable, except that, as
set forth in Section 23.7 of the OEM Agreement, the StorageTek [**] License for
[**] Devices and providing [**] for such Devices will immediately become fully
paid up; provided, however that royalties will be due for [**].
6.4 Upon termination of the Agreement for cause by IBM, all of the
licenses granted to IBM in Section 3.1 shall survive such termination subject
to the obligations to pay royalties where applicable, except that the IBM [**]
License set forth in Section 3.1(a) hereof, shall become effective and shall
immediately become fully paid up and irrevocable. Upon termination of the
Agreement for cause by StorageTek, all of the licenses granted to IBM in
Section 3.1 shall survive such termination subject to the obligations to pay
royalties where applicable.
6.5 Upon termination of the Agreement for cause the licenses
granted to StorageTek in Section 3.2 shall be treated as follows:
a. All licenses will survive termination for cause by
StorageTek subject to the obligations to pay royalties where
applicable except that the StorageTek [**] Licenses set forth in
Sections 3.2d and 3.2e shall immediately become [**]; and
b. If terminated for cause by IBM:
All licenses granted to StorageTek to use IBM
Materials under Section 3.2, above, will survive such termination, and
be [**] as provided herein, provided, however, that, if StorageTek
elects to maintain or effectuate, whichever the case may be, the
StorageTek [**] Licenses set forth in Section 3.2d(ii) ([**] for a
period of [**] from June 7, 1996, becoming royalty-free thereafter,
for use in developing and distributing Basic Enhancements and
Maintenance Modifications for IKA Storage Subsystems other than those
in the StorageTek Installed Base), and in Section 3.2e [**] license
for use in IKA Storage Systems or IKA Storage System controllers for
any purpose other than developing and distributing Basic Enhancements
and Maintenance Modifications), then StorageTek must first pay to IBM
the sum of [**] and also pay to IBM royalties as set forth in Section
5.2 above for such license, except that such royalty shall be [**] for
each IKA Storage System or IKA Storage System controller sold or
leased by StorageTek following the date of StorageTek's receipt of
IBM's written notice of termination, and, except that, once StorageTek
has paid in royalties pursuant to this Section the sum of an
additional [**], then such license shall immediately become [**], and
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provided further, that any sums paid by StorageTek to IBM under this
Section shall be in addition to any royalty payments due pursuant to
Section 5.2 hereof for products other than as covered in Sections
3.2d and 3.2e hereof, and shall have no effect on the total royalties
to be paid pursuant to Section 5.2e hereof.
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Attachment 2 to Exhibit 3
Appendix A
168
IBM AGREEMENT FOR LICENSED INTERNAL CODE
--------------------------------------------------------------------------------
You accept the terms of this Agreement by your initial use of a machine that
contains IBM Licensed Internal Code (called "Code").
These terms apply to Code used by certain machines IBM or your reseller
specifies (called "Specific Machines"). International Business Machines
Corporation or one of its subsidiaries ("IBM") owns copyrights in Code or has
the right to license Code. IBM or a third party owns all copies of Code,
including all copies made from them.
If you are the rightful possessor of a Specific Machine, IBM grants you a
license to use the Code (or any replacement IBM provides) on, or in conjunction
with, only the Specific Machine for which the Code is provided. IBM licenses
the Code only one rightful possessor at a time.
Under each license, IBM authorizes you to do only the following:
1. execute the Code to enable the Specific Machine to function according
to its Official Published Specifications (called "Specifications");
2. make a backup or archival copy of tile Code (unless IBM makes one
available for your use), provided you reproduce the copyright notice
and any other legend of ownership on the copy. You may use the copy
only to replace the original. when necessary; and
3. execute and display the Code as necessary to maintain the Specific
Machine.
You agree to acquire any replacement for, or additional copy of, Code directly
from IBM in accordance with IBM's standard policies and practices. You also
agree to use that Code under these terms.
You may transfer possession of the Code to another partly only with the
transfer of the Specific Machine. If you do so, you must 1) destroy all your
copies of the Code that were not provided by IBM, 2) either give the other
party all your IBM-provided copies of the Code or destroy them, and 3) notify
the other party of these terms. IBM licenses the other party when it accepts
these terms. These terms apply to all Code you acquire from any source.
Your license terminates when you no longer rightfully possess the Specific
Machine.
ACTIONS YOU MAY NOT TAKE
You agree to use the Code only as authorized above. You may not do, for
example, any of the following:
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1. otherwise copy, display, transfer, adapt, modify, or distribute the
Code (electronically or otherwise), except as IBM may authorize in the
Specific Machine's Specifications or in writing to you;
2. reverse assemble, reverse compile, or otherwise translate the Code
unless expressly permitted by applicable law without the possibility
of contractual waiver:
3. sublicense or assign the license for the Code; or
4. lease the Code or any copy of it.
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ATTACHMENT 2 TO EXHIBIT 3
APPENDIX B
171
MICROCODE LANGUAGE
FOR
INCORPORATION INTO CONSOLIDATED END USER CONTRACT
TO BE ISSUED IN JULY
MICROCODE
1. Definitions: The following terms are defined as follows:
A. "Microcode" is defined as a set of instructions (software)
that is either imbedded into or is to be loaded into the Equipment and executes
below the external user interface of such Equipment. Microcode includes both
Internal Code and Maintenance Code, and may be in magnetic or other storage
media, integrated circuitry or other media.
B. "Internal Code" is Microcode that (a) is an integral part of
the Equipment, (b) is required by such Equipment to perform its data storage
and retrieval functions, and (C) executes below the user interface of such
Equipment. Internal Code does not include other Microcode or software,
including data files, which may reside or execute in or be used by or in
connection with such Equipment, including, without limitation, Maintenance
Code.
C. "Maintenance Code" is defined as Microcode and other software,
including data files, which may reside or execute in or be used by or in
connection with Equipment, and which detects, records, displays and/or analyzes
malfunctions, errors or other events occurring in the Equipment.
D. "Derivative Works" are defined as works (including software)
based upon one or more preexisting works such as a translation or a musical
arrangement, or any other form in which a work may be recast, transformed or
adapted. A work consisting of editorial revision, annotations, elaboration, or
other modifications which, as a whole, represent an original work of
authorship, is a Derivative Work.
2. The Equipment you have acquired by purchase or lease is
manufactured by or for StorageTek and contains Microcode. By accepting and
using this Equipment you acknowledge that StorageTek or its licensor(s) retains
title to and ownership of all Microcode, as well as all copies thereof, that
may execute in or be used in the operation of servicing of the Equipment and
that the copyright in such Microcode is owned by StorageTek or its licensor(s).
3. StorageTek hereby grants you, the end user of the Equipment, a
personal, non-transferable (except as permitted in the transfer terms in
paragraph 5 below), nonexclusive license to use and execute each copy of the
Internal Code (or any replacement provided by StorageTek or your authorized
StorageTek distributor or reseller) solely to enable the specific unit of
Equipment for which the copy of Internal Code is provided to perform its data
storage and retrieval functions in accordance with StorageTek's (or its
licensor's) official published specifications. If the Internal Code is
provided to you in any fashion other than preloaded into an
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integrated circuit, then you may make a single archival copy to be used only to
restore the Internal Code on the specific unit of Equipment for which the copy
of Internal Code is provided.
4. Your license is limited to the use of the Internal Code as set
forth in paragraph 3 above. You may not use the Internal Code for any other
purpose. You may not, for example, do any of the following:
(i) access copy, display, print, adapt, alter, modify,
patch, prepare Derivative Works of, transfer or distribute (electronically or
otherwise) or otherwise use the Internal Code;
(ii) reverse assemble, decode, translate, decompile or
otherwise reverse engineer the Internal Code (except, for use in European
jurisdictions, as decompilation may be expressly permitted under applicable
European law solely for the purpose of gaining information that will allow
interoperability when such information is not otherwise readily available); or
(iii) sublicense, assign or lease the Internal Code or
permit another person to use such Internal Code, or any copy of it.
5. You may transfer possession of the Internal Code to another
party only with the transfer of the specific Equipment on which its use is
authorized, and your license to use the Internal Code is discontinued when you
are no longer an owner or a rightful possessor the Equipment. You must give
such transferee all copies of the Internal Code for the transferred Equipment
that are in your possession, along with a copy of all the provisions of this
Notice. Any such transfer by you is automatically (without further action on
the part of either party) expressly subject to all the terms and conditions of
this Notice passing in full to the party to whom such Equipment is transferred,
and such transferee accepts the provisions of this license by initial use of
the Internal Code. You cannot pass to the transferee of the Equipment any
greater rights than granted under this Notice, and shall hold StorageTek
harmless from any claim to the contrary by your transferee or its successors or
assigns. In addition, the terms and conditions of this Notice apply to any
copies of Internal Code now in your possession or use or which you hereafter
acquire from either StorageTek or another party.
6. Nothing in the license set forth in paragraph 3 above or in
this entire Notice shall convey, in any manner, to you any license to or title
to or other right to use any Maintenance Code, or any copy of such Maintenance
Code. You agree that you shall not use or attempt to use the Maintenance Code
or permit any other third party to use or access such Maintenance Code. You
acknowledge that copies of both Internal Code and Maintenance Code may be
installed on the Equipment before shipment or included with the Equipment and
other material shipped to you, all for the convenience of StorageTek's service
personnel or service providers licensed by StorageTek, and that during the
warranty period, if any, associated with the Equipment, and during periods in
which the Equipment is covered under maintenance contract with StorageTek or
service providers licensed by StorageTek, both Internal Code and Maintenance
Code may reside and be executed in or used in connection with such Equipment,
and you agree that no rights to Maintenance Code are conferred upon you by such
facts. StorageTek or the licensed service provider may keep Maintenance Code,
service tools and manuals on your premises but they are to be used only by
StorageTek's customer service personnel or those of service
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providers licensed by StorageTek. You further agree that upon (I) any
termination of such warranty period or maintenance contract period; or (ii)
transfer of possession of the Equipment to another party, StorageTek and its
authorized service providers shall have the right with respect to the affected
Equipment to remove all service tools and manuals and to remove or disable all
Maintenance Code and/or replace Microcode which includes both Internal Code and
Maintenance Code with Microcode that consists only of Internal Code.
7. You, the end user, agree to take all appropriate steps to ensure
that all of your obligations set forth in this Notice, particularly in
paragraphs 4 and 6, are complied with by any third party having access to the
Equipment.
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--------------------------------------------------------------------------------
NOTICE
INTERNAL CODE LICENSE AND TERMS OF SALE
PLEASE READ THIS NOTICE CAREFULLY BEFORE INSTALLING AND OPERATING THIS
EQUIPMENT. THIS IS A LEGAL AGREEMENT BETWEEN YOU (EITHER AN INDIVIDUAL OR
ENTITY), THE END USER, AND STORAGE TECHNOLOGY CORPORATION ("STORAGETEK") THE
MANUFACTURER OF THE EQUIPMENT. BY ACCEPTING AND USING ANY UNIT OF EQUIPMENT
DESCRIBED IN THIS DOCUMENT AND THE ASSOCIATED MICROCODE, YOU AGREE TO BE BOUND
BY THE TERMS OF T HIS AGREEMENT. IF YOU DO NOT AGREE WITH THE TERMS OF THIS
AGREEMENT, DO NOT USE THE EQUIPMENT AND ASSOCIATED MICROCODE. IF YOU DO NOT
HAVE THE AUTHORITY TO BIND YOUR COMPANY, DO NOT USE THE EQUIPMENT AND
ASSOCIATED MICROCODE. IF YOU HAVE ANY QUESTIONS, CONTACT THE AUTHORIZED
STORAGETEK DISTRIBUTOR OR RESELLER FROM WHOM YOU ACQUIRED THIS EQUIPMENT. IF
THE EQUIPMENT WAS OBTAINED BY YOU DIRECTLY FROM STORAGETEK, CONTACT YOUR
STORAGETEK REPRESENTATIVE.
MICROCODE
1. Definitions: The following terms are defined as follows:
A. "Microcode" is defined as a set of instructions (software)
that is either imbedded into or is to be loaded into the Equipment and executes
below the external user interface of such Equipment. Microcode includes both
Internal Code and Maintenance Code, and may be in magnetic or other storage
media, integrated circuitry or other media.
B. "Internal Code" is Microcode that (a) is an integral part of
the Equipment, (b) is required by such Equipment to perform its data storage
and retrieval functions, and (c) executes below the user interface of such
Equipment. Internal Code does not include other Microcode or software,
including data files, which may reside or execute in or be used by or in
connection with such Equipment, including, without limitation, Maintenance
Code.
C. "Maintenance Code" is defined as Microcode and other software,
including data files, which may reside or execute in or be used by or in
connection with Equipment, and which detects, records, displays and/or analyzes
malfunctions, errors or other events occurring in the Equipment.
D. "Derivative Works" are defined as works (including software)
based upon one or more preexisting works such as a translation or a musical
arrangement, or any other form in which a work may be recast, transformed or
adapted. A work consisting of editorial revision, annotations, elaboration, or
other modifications which, as a whole, represent an original work of
authorship, is a Derivative Work.
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2. The Equipment you have acquired by purchase or lease is
manufactured by or for StorageTek and contains Microcode. By accepting and
using this Equipment you acknowledge that StorageTek or its licensor(s) retains
title to and ownership of all Microcode, as well as all copies thereof, that
may execute in or be used in the operation of servicing of the Equipment and
that the copyright in such Microcode is owned by StorageTek or its licensor(s).
3. StorageTek hereby grants you, the end user of the Equipment, a
personal, non-transferable (except as permitted in the transfer terms in
paragraph 5 below), nonexclusive license to use and execute each copy of the
Internal Code (or any replacement provided by StorageTek or your authorized
StorageTek distributor or reseller) solely to enable the specific unit of
Equipment for which the copy of Internal Code is provided to perform its data
storage and retrieval functions in accordance with StorageTek's (or its
licensor's) official published specifications. If the Internal Code is
provided to you in any fashion other than preloaded into an integrated circuit,
then you may make a single archival copy to be used only to restore the
Internal Code on the specific unit of Equipment for which the copy of Internal
Code is provided.
4. Your license is limited to the use of the Internal Code as set
forth in paragraph 3 above. You may not use the Internal Code for any other
purpose. You may not, for example, do any of the following:
(i) access copy, display, print, adapt, alter, modify,
patch, prepare Derivative Works of, transfer or distribute (electronically or
otherwise) or otherwise use the Internal Code;
(ii) reverse assemble, decode, translate, decompile or
otherwise reverse engineer the Internal Code (except, for use in European
jurisdictions, as decompilation may be expressly permitted under applicable
European law solely for the purpose of gaining information that will allow
interoperability when such information is not otherwise readily available); or
(iii) sublicense, assign or lease the Internal Code or
permit another person to use such Internal Code, or any copy of it.
5. You may transfer possession of the Internal Code to another
party only with the transfer of the specific Equipment on which its use is
authorized, and your license to use the Internal Code is discontinued when you
are no longer an owner or a rightful possessor the Equipment. You must give
such transferee all copies of the Internal Code for the transferred Equipment
that are in your possession, along with a copy of all the provisions of this
Notice. Any such transfer by you is automatically (without further action on
the part of either party) expressly subject to all the terms and conditions of
this Notice passing in full to the party to whom such Equipment is transferred,
and such transferee accepts the provisions of this license by initial use of
the Internal Code. You cannot pass to the transferee of the Equipment any
greater rights than granted under this Notice, and shall hold StorageTek
harmless from any claim to the contrary by your transferee or its successors or
assigns. In addition, the terms and conditions of this Notice apply to any
copies of Internal Code now in your possession or use or which you hereafter
acquire from either StorageTek or another party.
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6. Nothing in the license set forth in paragraph 3 above or in
this entire Notice shall convey, in any manner, to you any license to or title
to or other right to use any Maintenance Code, or any copy of such Maintenance
Code. You agree that you shall not use or attempt to use the Maintenance Code
or permit any other third party to use or access such Maintenance Code. You
acknowledge that copies of both Internal Code and Maintenance Code may be
installed on the Equipment before shipment or included with the Equipment and
other material shipped to you, all for the convenience of StorageTek's service
personnel or service providers licensed by StorageTek, and that during the
warranty period, if any, associated with the Equipment, and during periods in
which the Equipment is covered under maintenance contract with StorageTek or
service providers licensed by StorageTek, both Internal Code and Maintenance
Code may reside and be executed in or used in connection with such Equipment,
and you agree that no rights to Maintenance Code are conferred upon you by such
facts. StorageTek or the licensed service provider may keep Maintenance Code,
service tools and manuals on your premises but they are to be used only by
StorageTek's customer service personnel or those of service providers licensed
by StorageTek. You further agree that upon (I) any termination of such
warranty period or maintenance contract period; or (ii) transfer of possession
of the Equipment to another party, StorageTek and its authorized service
providers shall have the right with respect to the affected Equipment to remove
all service tools and manuals and to remove or disable all Maintenance Code
and/or replace Microcode which includes both Internal Code and Maintenance Code
with Microcode that consists only of Internal Code.
7. You, the end user, agree to take all appropriate steps to
ensure that all of your obligations set forth in this Notice, particularly in
paragraphs 4 and 6, are complied with by any third party having access to the
Equipment.
WARRANTY
(a) StorageTek warrants that at the time of shipment, and for a
period of twelve (12) months thereafter (the "Warranty Period"), the Equipment
and the Internal Code will be in conformance with StorageTek's published
specifications. Equipment purchased hereunder may consist in part of used
components which are warranted equivalent to new in performance. No warranty
of any kind is extended with respect to Maintenance Code, as to which you have
no right or license as provided above.
(b) During the Warranty Period, StorageTek will, at no charge to
you, make all adjustments, repairs and parts replacements necessary, in
StorageTek's opinion, to fulfill the above warranty. Any parts so replaced
will become the property of StorageTek on a substitution basis.
(c) Service pursuant to this warranty, as required at any time
during the Warranty Period, will be provided upon return of the Equipment to
the nearest StorageTek authorized service depot. StorageTek will return a
repaired or replacement unit (which may be used and/or reconditioned) to you
within [?thirty 30] days of receipt by StorageTek of the unit to be repaired.
Any such repaired or replacement Equipment unit will be covered by the above
warranty for the balance of the original Warranty Period.
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(d) The foregoing warranty shall not apply if any adjustment,
repair or parts replacement is required because of accident, transportation by
anyone other than StorageTek, neglect, abuse or misuse, use of unauthorized
supplies, failure of electrical power, air conditioning or humidity controls,
theft, fire or water damage, or causes other than ordinary use. StorageTek
shall not be required to adjust or repair any Equipment or part if it would be
impractical to do so because of non-StorageTek alterations to the Equipment,
the Equipment's connection by mechanical or electrical means to unauthorized
equipment devices, or if the Equipment is moved outside the United States.
(e) THE FOREGOING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, AND STORAGETEK SPECIFICALLY DISCLAIMS ANY IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
NON-INFRINGEMENT OF THIRD PARTY RIGHTS ALL WITH RESPECT TO BOTH EQUIPMENT AND
MICROCODE.
PATENT AND PROPRIETARY RIGHT INDEMNITY
(a) StorageTek shall defend, at its own expense, any action
brought against you to the extent that it is based upon a claim that the
Equipment or Internal Code infringes upon any United States patent, copyright,
trademark, mask work, trade secret or other proprietary right. In the event of
such infringement, StorageTek shall pay those costs and damages agreed upon in
settlement or compromise or finally assessed against you in any such action.
The obligation to undertake such defense and make such payments shall be
conditioned upon the following: (1) StorageTek shall be notified promptly in
writing by you of such claim, but in no event later than ten (10) days from the
date you received notice thereof; (2) StorageTek shall have sole control of the
defense of any action on such claim and all negotiations for its settlement or
compromise; (3) you shall provide reasonable assistance and cooperation to
StorageTek in defending such an action; and (4) should the use of Equipment
become, or in StorageTek's opinion be likely to become, the subject of an
injunction, StorageTek shall at its option and expense: (I) procure for you
the right to continue using the Equipment; (ii) replace or modify the same so
that such Equipment becomes non-infringing; or (iii) grant you a refund for
such Equipment, less accumulated depreciation, and accept its return. The
depreciation shall be an equal amount per year over the lifetime of the
Equipment as established by StorageTek.
(b) StorageTek shall not have any liability to you under the
provisions of this Section 9 for any infringement, or claim thereof, to the
extent based upon the use of said Equipment in combination with other machines,
apparatus or devices not manufactured by StorageTek or sold by StorageTek to
you, or the use of the Equipment in a manner or for a purpose other than that
for which it was sold, or the use of the Equipment in a modified condition if
such modification was not authorized in writing by StorageTek. StorageTek will
not defend or indemnify you if any claim of infringement is asserted by your
parent, subsidiary or affiliate.
(c) THE FOREGOING STATES THE ENTIRE LIABILITY OF STORAGETEK AND
YOUR SOLE AND EXCLUSIVE REMEDY WITH RESPECT TO INFRINGEMENT OF
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ANY PROPRIETARY RIGHT BY THE EQUIPMENT OR INTERNAL CODE OR ANY PART THEREOF.
LIMITATION OF LIABILITY
(a) Your sole and exclusive remedy for any breach of the warranty
set forth in Section 8(a) above, shall be limited to the remedies set forth in
paragraph (b) of the section on WARRANTY above. If StorageTek is unable to
effect such remedy within a reasonable time, and such remedy fails of its
essential purpose, you may recover your actual loss directly resulting from the
breach, subject, however, to the limitations set forth below.
(b) StorageTek's entire cumulative liability from any cause
whatsoever, and regardless of the form of action or actions, whether in
contract, warranty or tort (including negligence), arising under this
Agreement, shall in no event exceed the greater of $50,000 or the purchase
price for the specific Equipment that is the subject matter of or is directly
related to the cause of action. The foregoing limitation shall not apply to
claims for proprietary right infringement under Section 9 or to claims by third
parties for personal injury or damage to real or tangible personal property
arising out of the negligence of StorageTek. Except for the two exceptions set
forth in the preceding sentence, StorageTek shall have no liability for claims
against you for loss or damage suffered by third parties.
(c) IN NO EVENT WILL STORAGETEK BE LIABLE FOR ANY INDIRECT,
SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES IN CONNECTION WITH OR ARISING OUT
OF THE PROVIDING, PERFORMANCE OR USE OF THE EQUIPMENT, PARTS OR SERVICES
PROVIDED UNDER THIS AGREEMENT, OR LOSS OF, OR DAMAGE TO, YOUR RECORDS OR DATA.
IT IS YOUR RESPONSIBILITY TO ADEQUATELY SAFEGUARD (BACK UP) YOUR DATA USED IN
CONJUNCTION WITH THE EQUIPMENT.
(d) StorageTek shall not be liable for any failure or delay in
performance hereunder which is due, in whole or in part, to any cause beyond
its control.
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EXHIBIT 4
This is an Agreement between IBM and STK ("Contractor"), pursuant to
which IBM win consign certain disk drives on a no-charge basis to Contractor
for incorporation into Equipment that Contractor is producing for IBM, subject
to the following terms and conditions:
1. DEFINITION OF CONSIGNED GOODS
For the purpose of this Agreement, consigned goods are defined as all
items finished by IBM or caused by IBM to be furnished to Contractor which are
not purchased by Contractor. Consigned goods include certain disk drives that
Contractor will use to fabricate Equipment for IBM.
Consigned goods do not include capital equipment or tooling.
The goods that are to be consigned under this Agreement are:
PART NUMBER DESCRIPTION
[**]
IBM may, at its option and in its sole discretion, consign
additional items to Contractor under the terms of this Agreement.
2. TERM OF AGREEMENT
The term of this Agreement will begin on the date it is signed by
Contractor and will end when IBM no longer has an obligation under Section 12
of the OEM Agreement to consign drives, or earlier, when it is terminated by
either party as provided for in Section 3 below or when it is terminated by IBM
as provided for in Section 13 below.
3. TERMINATION OF AGREEMENT
Either party may terminate this Agreement at any time for cause by
giving thirty (30) days' prior written notice to the other.
Upon termination of this Agreement, Contractor will return to IBM any
consigned goods then in its possession (including any parts, subassemblies, or
assemblies containing any consigned goods). Contractor will account for all
consigned goods within five (5) calendar days.
4. LOCATION OF CONSIGNED GOODS
The consigned goods will be located and used during the term of this
Agreement at a location that has been approved by IBM. Contractor will not
move the consigned goods to another location without IBM's prior written
approval.
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5. IBM'S PROPERTY
The consigned goods are and will remain the property of IBM.
6. IBM'S INSPECTION OF CONSIGNED GOODS
During the term of this Agreement, IBM will have the right to enter
Contractor's property and facilities on reasonable notice during Contractor's
normal business hours and subject to Contractor's normal security requirements
to physically inspect the consigned goods, conduct physical inventories;, and
audit stock-handling procedures (including receiving, storing, and
distribution).
7. CONTRACTOR INSPECTION OF CONSIGNED GOODS
Contractor will Inspect all consigned goods for type, quantity and
condition upon receipt. Contractor will notify IBM of any reasonably apparent
discrepancies within five (5) days of receipt. Contractor's notification to
IBM will include a description of all discrepancies. Discrepancies will be
described on the acknowledgment copy of the packing list accompanying the
shipment. The packing list must be signed and dated before it is returned to
IBM.
8. CONTRACTOR RESPONSIBILITIES
Contractor agrees that with respect to the consigned goods it will
A. Not commingle consigned goods with those of its own or third
parties. Contractor will stock all consigned goods separately and will
specifically identify them as IBM property.
B. Not represent to any person for any reason that the consigned
goods belong to Contractor or to any third party.
C. Not attempt to sell, mortgage, pledge, assign, borrow against,
or otherwise create a security interest in favor of third parties in the
consigned goods. Any such attempt will be void and will constitute a breach of
this Agreement.
D. Not use the consigned goods for any purpose except for the
performance of the OEM Agreement.
E. Maintain records of all consigned goods received from or
returned to IBM. Contractor will maintain in effective consigned goods
inventory system and will use the consigned goods on a first-in, first-out
basis.
F. Perform a reasonable number of physical counts upon IBM's
request (to confirm records), and provide IBM with the results.
G. Carefully store the consigned goods so as to prevent
Deterioration,
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H. Incorporate into Equipment only those consigned goods that
meet the Specifications. Nonconforming goods must be returned to IBM for
replacement, accompanied by a IBM "Authorization for Return of Material" form.
9. CONTRACTOR RESPONSIBILITY FOR LOST OR DAMAGED GOODS
Consigned goods are insured by IBM. Notwithstanding that insurance,
Contractor agrees that it will be fully liable for any loss or damage
occasioned by Contractor's fault or negligence. If any consigned goods are
lost or damaged, Contractor will notify IBM immediately. Payment to IBM for
consigned goods lost or damaged due to Contractor fault or negligence will be
at an amount equal to IBM's replacement cost for such lost or damaged consigned
goods plus transit costs.
10. TAXES AND ASSESSMENTS
IBM will pay all personal property taxes and assessments levied on the
consigned goods while they are in Contractor's possession.
11. SEPARATE AGREEMENTS
This Agreement will not apply to any tools, tooling, gauges, or
capital equipment fabricated or acquired by Contractor pursuant to IBM Purchase
Orders or loaned or leased to Contractor by IBM. All such equipment will be
covered by a separate Tooling, Equipment, Use, or other agreement.
12. CONTRACTOR'S INABILITY TO PRODUCE
If Contractor's facility where the consigned goods are located and
used is involved in any Force Majeure Event by reason of which Contractor
cannot fulfill the terms of IBM Purchase Orders (which conform to the OEM
Agreement), or if for any other reason Contractor is unable or unwilling to
perform under IBM's Purchase Orders (which conform to the OEM Agreement),
Contractor agrees to immediately notify IBM and further agrees, if requested by
IBM, to return any or all of the consigned goods to IBM within ten (10) days of
IBM's request without charge to IBM except that transportation charges shall be
billed collect.
13. BREACH OF CONTRACT
Failure of Contractor to materially comply with the terms and
conditions of this Agreement will be considered a breach of this Agreement
unless IBM has given specific written authorization for each particular
occurrence of each particular deviation. IBM will notify Contractor of any
breach by Contractor. Contractor will have ten (10) business days to rectify
the breach to Monterery's satisfaction. IBM may extend this period, in
writing, at IBM's discretion. If Contractor falls to rectify the breach to
IBM's satisfaction, IBM will have the night to terminate this Agreement
immediately at no charge to IBM for such termination.
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If Contractor falls to perform any of obligations under this
Agreement, or either party terminates this Agreement, IBM will have an
irrevocable right to enter Contractor's property and facilities at any time
during IBM's normal business hours for the purpose of removing the consigned
goods. Contractor expressly waives any right or remedies Contractor has with
regard to the consigned goods, including, but not limited to, any right
Contractor has to notice and a hearing or to a bond, undertaking or surety
before a writ of replevin, order of seizure, or similar writ or order will
issue or become enforceable.
The rights and remedies under this Section 13 are not exclusive and
are in addition to any other rights or remedies provided by law or by this
Agreement.
14. ASSIGNMENT
Contractor will not assign this Agreement or any right or obligation
created under this Agreement except in connection with a permitted assignment
under the OEM Agreement. Any attempted assignment will be void.
15. IBM SUPPLIER CONSIGNMENT GUIDE
The "IBM Supplier Consignment Guide" is expressly incorporated and
made a part of this Agreement.
16. COMMUNICATIONS AND NOTICES
All communications and notices between the parties concerning this
Agreement, if given to Contractor, will be in writing and sent by first class
mail to:
Attention:
-------------------------------
-------------------------------
-------------------------------
and if given to IBM, will be in writing and sent by first class mail to:
Attention:
-------------------------------
-------------------------------
-------------------------------
For the purposes of this Agreement, a "notice" is deemed given upon
receipt by the addressee.
Either party may change the above individual, title, department, or
address by notifying the other party in the same manner as any other notice.
17. CHANGES OR AMENDMENTS
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Except as provided for in Section 17 above, this Agreement may not be
changed or amended except by a written agreement between the parties.
18. CONSTRUCTION
In the event of any inconsistency between the terms and conditions of
this Agreement, the `IBM Supplier Consignment Guide," or the terms and
conditions of the OEM Agreement, the order of precedence shall be: first, the
terms and conditions of the OEM Agreement; second, the terms and conditions of
this Consignment Agreement, and lastly the "IBM Supplier Consignment Guide".
19. CONTINUING OBLIGATIONS
Any obligations and duties that by their nature extend beyond the
expiration or termination of this Agreement shall survive any such expiration
or termination and remain in effect.
20. SEVERABILITY
If any provision of this Agreement shall be held by a court of
competent jurisdiction to be invalid, illegal, or unenforceable, the validity,
legality, and enforceability of the remaining by provisions of this Agreement
shall IN no way be affected or impaired thereby.
21. LIMITATION OF LIABILITY
Neither party shall be in default nor liable for damages for any delay
or failure to perform hereunder due to causes beyond its reasonable control,
including fires, strikes, riots, and acts of war, provided the defaulting party
provides the non-defaulting party with immediate notice of the anticipated
delay or failure to comply.
In no event shall either party be liable for indirect, special, or
consequential damages, including attorney's fees, even if advised in advance of
the possibility of such damages.
Neither party may bring an action, regardless of the form, arising out
of this Agreement more than two (2) years after the cause of action arose.
22. GOVERNING LAW
The relationship between the Parties and this Agreement are governed
by the substantive laws of the state of New York. Any action between the
Parties must be brought before a court of competent Jurisdiction located in the
United States Southern District of New York. Each party hereby ,valves any
night to a jury trial in any dispute between them. The parties will first use
the Dispute Resolution escalation procedures described in the OEM Agreement to
resolve any disputes before any action is to be commenced in a court of
competent jurisdiction.
23. SOLE AGREEMENT
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This Agreement together with the OEM Agreement and its Exhibits
Schedules and Attachments is the entire agreement about this subject between
the parties. This Agreement supersedes all prior or contemporaneous written or
oral agreements about this subject between the parties or any of their
officials or representatives.
IBM STK
-------------- --------------
By By
-------------- --------------
Name Name
-------------- --------------
Title Title
------------ ------------
Date Date
------------ ------------
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CONSIGNMENT INVENTORY CONTROL
All correspondence regarding consigned material should be sent to:
IBM CORPORATION
Department 617
5600 Cottie Road
San Jose, CA 95193
All routine questions or problems should be directed to the
Consignment Coordinator assigned or the buyer.
All questions or problems of a critical nature should be directed to
the IBM Purchasing Department Buyer.
Revised: January 1992 Please note key changes preceded with (*)
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SUPPLIER RESPONSIBILITIES
FOR MATERIAL HANDLING AND CONTROL
OF IBM CONSIGNED MATERIAL
1. INTRODUCTION
As an IBM Supplier, you arc responsible for IBM's inventory while in
your possession. This agreement has been prepared for handling and control of
IBM consigned material. Most questions that could arise involving consignment
are addressed to aid the supplier. IBM may request space and facilities for an
on site consignment representative to assist.
If questions should arise that have not been explained fully by this
document, please contact Consignment Inventory Control (CIC), Department 617.
2. IBM SHIPMENT OF CONSIGNED MATERIAL TO SUPPLIER
a. Material will be shipped to supplier prepaid unless a
different arrangement has been agreed to in advance.
b. Partial shipment of Consigned material may be made when:
1) The entire quantity is not readily available from IBM
stock (an IBM backorder is automatically created when this situation occurs).
2) If the size or quantity of a given item would cause
storage difficulties, the supplier may notify the IBM buyer and the buyer will
arrange with CIC for partial shipments to be made. The notification must be
made on a timely basis, preferably when the order is placed.
3. RECEIPT AND INSPECTION OF CONSIGNMENT BY SUPPLIER
a. All shipments of consigned material by IBM to the supplier
will be accompanied by two copies of an IBM packing list (see Exhibits A, 13,
and C).
b. Immediately upon receipt, supplier is responsible for checking
all cartons for any sign of visible damage and noting such damage on the
consignee memo/bill of lading or delivery receipt. Also, note any shortages or
overages of containers, boxes, pallets, etc., if not as already noted on the
freight bill.
c. Visual external damage - Parts that are received by supplier
in packaging that exhibit external damage must be rejected and held until
disposition is made. Supplier must note damage on the delivery receipt and
have the driver sign that exception is taken. Immediately call the carrier for
a formal inspection of the damage. Carrier should make inspection within five
(5) working days. If the carrier does not respond within the five (5) days,
supplier must notify the IBM Buyer.
187
In the event the carrier elects not to make in inspection. the carrier
must provide the supplier with letter stating that inspection has been waived.
The letter should include the necessary information to identify the damaged
shipment. The inspection report or letter of waiver and a copy of the delivery
receipt must be sent to the appropriate IBM Buyer who will notify the IBM
Traffic Department.
Please Note: Should the part be identified as "CFM", supplier must
notify the IBM Buyer and Traffic Department immediately upon receipt. The
Traffic Department will instruct the carrier to make an expedited 24 hour
disposition.
d. All packing material must be available for the carrier's
inspection.
e. Hidden/concealed damage - Parts that are received with
external packaging intact, but parts inside damaged, must be rejected. If
damage is discovered within ten (10) days of receipt, the carrier must be
notified to make a formal inspection report and a copy of the bill of lading or
delivery receipt and carrier's damage inspection report must be forwarded to
the appropriate IBM Buyer, who in turn will notify the Traffic Department. IBM
Material Review must be notified in order to set up the necessary documentation
for the return of the defective parts.
f. Verification of Count - Hand and scale counts must be made on
all receipts of consigned material, rework material, or material purchased from
IBM. A copy of the packing list must be signed and returned to IBM CIC
Department within five (5) days after receipt of materials. It should be noted
on the form (see Exhibit D) that all items received were correct, or items
received were correct with the exception of any shortage, overage or incorrect
part indicated. The method of count should also be indicated. Notify the IBM
CIC Department by telephone if the discrepancy cannot be reported within the
five day period.
g. All shipments received by supplier should be verified against
the Consignment Inventory Listing (CIL) and any discrepancies should be
referenced to a shipment and a CIL.
h. For audit purposes, supplier should return on copy of the
updated packing list, along with the date the receipt acknowledgment was
returned to IBM.
i. If supplier receives part that should not have been consigned,
contact your Consignment Coordinator and set the parts aside. Request an ARCM
(Authorization to Return Consigned Material) so that they may be returned to
IBM.
j. Supplier should notify the IBM CIC Department immediately of
parts movement to and from supplier premises without authorization, i.e., at
the direction of the Buyer or Engineer.
4. DROP SHIPMENT (Interplant & Supplier)
a. IBM may instruct other IBM plants or another supplier to ship
parts directly to a consigned supplier.
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b. The IBM Buyer will notify your company of this condition. Any
attempt to ship to you without this prior notification should be handled as
explained in Section 3 Item A.
c. Upon receipt of an authorized drop shipment, receive the
material as a normal consigned shipment.
NOTE: All drop shipments must be source stamped signifying
good parts. If you receive unstamped part, set aside
and contact the Buyer immediately. Parts should not
be used until inspected.
d. Once quantities are verified, the receiving supplier should
indicate the actual quantity received on packing slip. Sign and date the
packing slop and DELIVERY RECEIPT, staple the original packing slip to the
delivery receipt and forward to the IBM Receiving Department within 24 hours.
Retain a copy of the packing slip and delivery receipt for audit purposes.
e. If there are count discrepancies or defective parts on an
interplant drop shipment, notify the CIC Department immediately. If
discrepancies or defective parts are received on a drop shipment from another
supplier, contact the Buyer immediately.
f. Drop shipments from another supplier must have a drop ship
sequence number assigned by the sending supplier. A separate series of numbers
should be used if parts are drop shipped to more than one supplier.
*g. All drop shipments must be labeled in accordance with IBM
packing specifications GA21-9261-08 as indicated below:
All articles must be marked with the country of origin. Country
Customs Organizations require every article of foreign origin be marked in a
conspicuous place as legibly, indelibly, and permanently as the nature of the
article will permit. The country of origin is defined as that manufacturing
country wherein the article obtained its present identity as a part,
sub-assembly or finished product.
All domestic and foreign shipping containers must be identified as
described below, this includes bagged or boxed parts within a container or
containers within a unit loan shipper.
IBM P/N
--------------------
E/C LEVEL
--------------------
PKG TY
--------------------
COUNTRY OF ORIGIN
-----------
Figure 1. Identification required on each individual package.
* In addition, the date of manufacture is required on each
container when shipping shelf-life items.
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If size permits, this information should appear on two adjacent,
vertical sides of the container when it is in the normal shipping position.
Figure 2. Label placement - unit package
*h. Audit all (100%) world trade receipts and maintain
documentation by month.
1) Review receipts for container identification of
Country of Origin. In those instances where COO is not obvious, annotate the
packing list and forward to IBM receiving in your normal manner.
5. STOCKING AND CONTROL OF CONSIGNED MATERIAL BY SUPPLIER
a. Store IBM San Jose consigned material in an area separate from
your own material, another company's material, IBM rework material, or another
IBM plant's material.
1) If parts are required for a rework purchase order,
these must be provided. Consigned inventory should not be used.
2) Contact the IBM buyer if this situation exists.
b. Maintain adequate inventory records on all IBM consigned
material including quantity of each part number received by job number,
assembly number and purchase order number.
c. It is recommended that a withdrawal system from the stock room
to the production line be set up and controlled, including a parts inventory
location system. Parts should be issued on a First In, First Out basis (FIFO).
This location file can be either computer system or card file for warehouse
locations and card file within assembly areas. IBM identifies suppliers by
supplier number. If your physical location has been assigned more than one
supplier number, you must segregate IBM's inventory at your location by
supplier number.
d. Selected suppliers will be required to prepare a critical
parts list reflecting parts that will represent a shortage problem within a
specified number of working days. This notification is not to be used for
parts required for rework or reconditioning. These lists are to be forwarded
to IBM CIC Department. Contact you IBM Buyer when delivery problems arise (see
Exhibit E).
e. Discrepant parts found during the manufacturing process are to
be held until dispositioned by IBM. When this condition exists, contact IBM
CIC, Material Review or the IBM Buyer.
6. RETURN OF CONSIGNED MATERIAL TO IBM
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a. All consigned material returned to IBM must be listed on an
Authorization for Return of Consigned Material (ARCM), Form Number 927-0342
(see Exhibit F). A separate ARCM Document for each category of material
(excess, defective, down level, wrong part issue or parts requested by IBM
Analyzer) must be attached to all parts. The only exception is when parts have
been authorized to be scrapped on supplier's location. See page 7, Section 8d.
When this condition exists, only the ARCM document is returned to IBM.
All Returns:
1) An ARCM document will be prepared by CIC upon notification
from supplier that wrong part, excess, down level or defective material exists
at its location.
2) Periodically (at a minimum of twice per year), contact IBM CIC
to review the current IBM consigned part number list to the established IBM
manufacturing process. Any down level parts currently resident in your
facility should be dispositioned via ARCM documents.
3) CIC will send the ARCM document to supplier with authorized
signature within 24 hours of notification (see Exhibit F).
4) When appropriate, CIC will notify IBM Inspector to schedule a
review of the material at suppliers location.
5) The IBM inspector will inspect the material and indicate on
the ARCM document if it is acceptable for IBM stock. Damaged material will be
routed to IBM Material Review.
6) Include the number of boxes shipped to IBM on bottom of form.
Remove and return pink copy of ARCM document for your records.
7) Package individual parts in separate containers with separate
packing list. All parts listed on an ARCM must accompany the ARCM and
preferably unitized. The ARCM document number must be clearly marked on the
outside of each container. Containers should be identified by number of boxes,
i.e., 1 of 6, 2 of 6, etc.
8) Return remaining copies (white, green and yellow) of the ARCM
document along with the material (within five days of receipt of the ARCM
document) to IBM receiving. A bill of lading should be enclosed and a notation
that an ARCM is enclosed.
9) Damaged parts listed on the ARCM document that supplier agrees
are supplier's responsibility must be signed and dated by supplier. Any
disagreement will be resolved through the IBM Buyer.
10) All parts are to be packaged in accordance with IBM General
Packaging Specifications. Transportation charges will be paid by IBM.
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11) If a part is sent on a rework purchase order, the document to
return unreworkable parts is the Request for Return Material (RRM), Form Number
9267-8671 (see Exhibit II). The RRM is provided by the responsible Buyer.
7. INVENTORY AND AUDIT REQUIREMENTS
a. A yearly physical inventory is required on all IBM consigned
material.
b. Additional audits may be required and will be arranged by the
IBM Buyer and/or the IBM Consignment Auditor.
c. RICS (Rotating Inventory Counts) may be performed on a weekly
or monthly basis by CIC. These may be handled over the telephone or in person
by the Consignment Coordinator.
d. Actual inventory counts will be compared to the IBM
Consignment records and a percent-of-variance record will be kept. The control
of consignment may be a factor in IBM's determination of supplier's ability to
perform current and future subcontract work for IBM San Jose.
e. IBM requires that supplier keep inventory records. These
records should indicate current IBM inventory and a record of finished
assemblies shipped to IBM as well as that inventory received on consignment
from IBM or an IBM supplier. These records are commonly referred to as
in-transit records (i.e. receipts, shipments, returned parts on the ARCM
Documents, drop shipments and hand carried parts). Maintenance of these
records is an indication of supplier's ability to control IBM's assets. An
acceptable same log is attached for your review (Exhibit G).
f. When a subcontractor is used to complete operations on IBM
material at supplier's direction or based upon an agreement with IBM, supplier
is responsible for being able to account for that portion of the inventory that
may be at the subcontractor's location. Supplier is also responsible for
informing IBM auditors of the subcontractor, its location and what port of
IBM's inventory is located at subcontractor's premises or at a subsequent
location of supplier's.
g. Domestic Subsidiary - This involves assists that are given to
a domestic supplier who in turn gives it to their foreign subsidiary for use in
the production of goods to be imported into the U.S. with the U.S. supplier as
the Importer of Record.
If you are the Importer of Record for goods benefiting from this
consignment, you may have value declaration responsibilities to U.S. customs.
Contact the IBM Buyer for customs valuation information.
8. SUPPLIER RESPONSIBILITY FOR LOST OR DAMAGED GOODS
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a. IBM Consigned material is insured by IBM; however, supplier
will be held liable for loss occasioned by supplier's fault or negligence. It
is the supplier's responsibility to obtain insurance to protect itself from
loss due to its negligence.
b. Control and reporting as described in this instruction is
necessary to properly account for all IBM consigned material and to prevent
audit discrepancies.
c. IBM consigned parts are to be used only on new production
purchase orders. Special arrangements with IBM buyers are necessary to use
consigned parts for other orders, i.e. rework, engineering jobs, etc.
d. There are occasions when IBM desires to scrap good or
defective parts at supplier location versus return the inventory to IBM. No
parts are to be scrapped until supplier receives written authorization from an
IBM Buyer or IBM Material Review (MR). The physical destruction of the
inventory must be witnessed by an IBM representative and documented on an ARCM.
9. SUPPLEMENTAL STANDARD TERMS AND CONDITIONS - IBM PARTS
a. Supplier acknowledges that all consigned material described in
the Consignment Agreement (Consignment Inventory Listing) has been received in
good condition and in the quantities stated thereon except when supplier has
notified IBM, in writing and within five days following the receipt of the
materials, or specific damage or quantity discrepancies. IBM acknowledges that
Supplier may not discovery defects that are not reasonable apparent until the
consigned material is integrated into systems and tested.
b. Title to all consigned materials shall remain in IBM.
c. For all material lost, destroyed, or damaged through the fault
or negligence of the supplier, supplier will pay IBM, at IBM's option, either
the cost of such materials or the cost of replacement materials required to
complete the performance of this order.
d. Supplier at its own expense will:
1) Separately account for all IBM Material.
2) Maintain current and accurate inventory records.
3) Take an accurate physical inventory thereof as
required by IBM (not more often than once each three months).
4) Return all unused materials to the consigning IBM
location promptly upon completion, cancellation, or expiration unless otherwise
agreed, or at any time after completion, cancellation, or expiration of this
order upon IBM's request.
5) IBM shall have the right to examine and audit said
records and to verify said inventories at any time upon reasonable notice.
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10. EC - ENGINEERING CHANGES
IBM may require supplier to change the parts or process used in
assemblies. Supplier should maintain records related to which purchase orders
the change affects.
If this change affects orders where IBM has already shipped supplier
parts, contact your Consignment Coordinator to make sure correct parts have
been forwarded to these orders.
Supplier should call CIC if any problems occur with implementing an
Engineering Change, including completing the phase-in within the agreed upon
time frame and/or quantity.
11. SHIPMENTS TO IBM
When supplier completes assemblies to be shipped to IBM, supplier will
prepare the shipment and assign a control number in a sequential manner. The
purchase order number for the particular assemble must be shown.
NOTE: Suppliers are not authorized to overship on Consignment
Purchase Orders. Packing slip and invoice quantities must
match shipment quantity.
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Exhibit 5: RVA1 FRU Prices and Lead Times
UNIT REPAIR CURRENT INA
P/N IBM P/N R/C DESCRIPTION PRICE PRICE P/N DATE
[**]
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EXHIBIT 6
LIST OF COUNTRIES FOR
INTELLECTUAL PROPERTY INDEMNITY
COUNTRIES FOR INDEMNIFICATION
-----------------------------
[**]