\n +\/-[**] within [**]
\n +\/-[**] within [**]
\n +\/-[**} within [**]
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n StorageTek shall [**] in accordance with the binding forecast
\n unless IBM issues purchase orders for [**]. Any modifications
\n that IBM makes to the [**] shall not affect IBM’s obligation
\n to purchase [**] that were originally forecasted for the [**]
\n unless IBM submits binding purchase orders for additional
\n units of [**] and [**]. In addition, under no circumstances
\n shall StorageTek be required to Deliver to IBM per the matrix
\n above more than [**] of [**] or [**] during the [**] , and the
\n [**].<\/p>\n
10.5 STORAGETEK’S ALLOCATION<\/p>\n
a. If StorageTek is unable to meet its Delivery
\n commitments and must allocate its capacity,
\n inventory, test equipment, resources, use <\/p>\n
25
\n 32<\/p>\n
of personnel, parts, components, supplier resources
\n and capabilities, etc., that are used to produce
\n Equipment, then StorageTek agrees to:<\/p>\n
(1) act in good faith; and<\/p>\n
(2) allocate its capacity, supplier resources
\n and capabilities, inventory, test equipment,
\n resources, use of personnel, parts,
\n components, and available supply of [**],
\n among IBM and other customers based upon the
\n delivery dates requested in purchase orders
\n received by StorageTek from IBM and other
\n customers.<\/p>\n
For a given date, StorageTek will allocate production
\n for shipment to IBM and other customers on a [**]
\n basis.<\/p>\n
b. StorageTek will allocate parts, components and
\n materials in accordance with the following
\n priorities:<\/p>\n
(1) Code A FRUs order\/requirements are filled
\n first; and<\/p>\n
(2) then a fair allocation between manufacturing
\n orders and nonemergency maintenance parts
\n order\/requirements.<\/p>\n
11. PURCHASE ORDERS, ALTERATIONS & RESCHEDULING<\/p>\n
11.1 IBM may submit purchase orders at any time; provided, however,
\n that subject to Section 11.6, any order shall be binding on
\n both Parties if such order is within the forecast range set
\n forth in Sections 10.2 and 10.3, and is submitted not less
\n than ten (10) business days before IBM’s requested date of
\n Delivery. IBM may request that StorageTek deliver in fewer
\n than ten (10) business days and StorageTek may agree to do so,
\n which delivery shall hereafter be referred to as “Expedite
\n Shipment.”<\/p>\n
11.2 This Agreement does not constitute a purchase order. IBM may
\n issue purchase orders from time to time during the term of
\n this Agreement in either electronic (EDI) or written form.
\n Authorization to StorageTek to perform any work or produce any
\n Equipment under this Agreement will be through IBM purchase
\n orders only. Alterations to the quantity, delivery date,
\n engineering level, or other items on purchase orders may be
\n made by IBM from time to time, subject to StorageTek’s
\n agreement. Purchase orders will be considered noncancelable
\n within ten (10) days of the scheduled Delivery date.<\/p>\n
11.3 IBM shall submit its purchase orders to StorageTek at the
\n address set forth in the Notices section of this Agreement.
\n IBM’s purchase orders will include:<\/p>\n
26
\n 33<\/p>\n
a. IBM’s part, model or feature numbers, configuration
\n and description of Equipment;<\/p>\n
b. quantity required;<\/p>\n
c. unit or item price and total order price;<\/p>\n
d. required delivery date(s);<\/p>\n
e. delivery instructions (including a carrier who will
\n accept delivery at StorageTek’s address); and<\/p>\n
f. reference to this Agreement.<\/p>\n
Unless otherwise specifically agreed to in writing, additional
\n terms and conditions on IBM’s purchase orders or on
\n StorageTek’s acknowledgment, whether in conflict with this
\n Agreement or not, are superseded hereby and are of no force
\n and effect.<\/p>\n
11.4 StorageTek agrees to accept conforming IBM purchase orders and
\n to manufacture, supply and Deliver Equipment in accordance
\n with the terms and conditions of this Agreement. StorageTek
\n agrees to provide written acknowledgment of IBM’s purchase
\n orders within two (2) days, for volumes within IBM’s forecast,
\n or within five (5) days, for volumes in excess of IBM’s
\n forecast, as measured from StorageTek’s actual receipt of the
\n purchase order (without regard to the Notices section of this
\n agreement, except for EDI) which purchase order may be made
\n verbally and\/or in advance of StorageTek’s receipt of a hard
\n copy confirming such order. If StorageTek’s acknowledgment is
\n not received by IBM within the two (2) or five (5) day period,
\n as described above, from the date of receipt of the purchase
\n order from IBM, then the purchase order, including the
\n requested delivery date(s) will be deemed to be accepted by
\n StorageTek. StorageTek may not reject any IBM purchase order
\n that conforms to the requirements of this Agreement and covers
\n quantities forecasted by IBM, as described in Section 10.<\/p>\n
11.5 Orders for FRUs needed on a “Code A” basis (i.e.,
\n emergency-customer down) will be shipped by StorageTek within
\n twenty-four (24) hours at a price not to exceed the lesser of
\n [**] of the price in Exhibit 5 or such price plus [**], with
\n IBM designating the carrier and being responsible for freight
\n and insurance costs. However, IBM will not pay any premium
\n (i.e. pay only 100%) for Code A FRUs necessitated because
\n StorageTek has failed to deliver nonemergency FRU orders
\n within the lead times set forth in Exhibit 5.<\/p>\n
11.6 Except for any [**] issued by IBM to StorageTek for [**] to be
\n Delivered after the [**] this Agreement, IBM may cancel
\n purchase order(s) or any portions thereof for any reason by
\n notifying StorageTek in writing at least <\/p>\n
27
\n 34<\/p>\n
ten (10) days prior to the scheduled Delivery date.
\n Cancellation will be effective upon StorageTek’s receipt of
\n the written cancellation notice from IBM. StorageTek will
\n immediately cease building such units for the affected
\n purchase order(s) in accordance with the cancellation notice.
\n IBM will have no liability for canceled purchase orders other
\n than as set forth in Section 10.2.<\/p>\n
11.7 If for any reason StorageTek is unable to Deliver as required
\n by accepted IBM purchase order(s), and fails to correct such
\n inability within [**] of such failure, IBM will have the right
\n to cancel such purchase order(s) or portions thereof by
\n notifying StorageTek in writing. If IBM cancels purchase
\n orders under this Section 11.7, IBM’s only obligation will be
\n to pay for Products or Upgrades already Delivered at the time
\n of IBM’s cancellation notice.<\/p>\n
11.8 Due to ongoing and unpredictable market conditions, StorageTek
\n agrees to permit IBM, upon written notice to StorageTek, to
\n require StorageTek to reconfigure units of Products and
\n Upgrades as follows:<\/p>\n
a. Configuration changes that do not change a unit model
\n number may be made without additional cost until [**]
\n before scheduled Delivery; and<\/p>\n
b. Any other configuration changes may be made at any
\n time (including Product and Upgrades that require
\n reconfiguration after Delivery) and such
\n configuration changes will be [**]. StorageTek and
\n IBM will agree in advance on a schedule of lead times
\n and costs that will apply to such configurations.<\/p>\n
11.9 Subject to Section 10, IBM may reschedule purchase order(s) or
\n any portions thereof for any reason by notifying StorageTek in
\n writing at least [**] prior to the Delivery Date specified on
\n the purchase order(s).<\/p>\n
11.10 For the last quarter of this Agreement, the purchase orders
\n submitted by IBM to StorageTek shall be noncancelable unless
\n StorageTek is manufacturing Devices.<\/p>\n
11.11 Except as otherwise provided in [**] Products and Upgrades
\n that are supplied to IBM hereunder will consist of new parts
\n and components. FRUs that IBM returns will be reworked by
\n StorageTek to an equivalent-to-new reliability level. Such
\n reworked FRUs will not be used in any new Products or Upgrades
\n Delivered to IBM hereunder, but may instead be returned to IBM
\n as reworked FRUs.<\/p>\n
28
\n 35<\/p>\n
12. CONSIGNMENT<\/p>\n
12.1 IBM will consign certain disk drives (“Drives”) to StorageTek
\n for use in Equipment. Except as otherwise provided in [**] of
\n the IDA, Drives supplied by IBM to StorageTek shall only be
\n used by StorageTek to build Equipment for IBM and shall remain
\n the property of IBM. This Section 12 shall not apply to [**]
\n StorageTek pursuant to the terms of Section 8 of this
\n Agreement.<\/p>\n
12.2 StorageTek agrees to adhere to the terms and conditions of the
\n IBM Consignment Agreement, attached hereto as Exhibit 4,
\n provided, however, that the terms of this Section 12 prevail
\n over those of Exhibit 4.<\/p>\n
12.3 IBM agrees to consign Drives to StorageTek in accordance with
\n a mutually agreed Profile based on at least a five-day buffer
\n ahead of StorageTek’s build cycle, and including a yield
\n factor based upon the previous quarter’s experience and
\n calculated using a mutually agreed formula. Any Drives, or
\n other IBM-supplied parts and components, that are not used by
\n StorageTek due to integration fall-out will be returned to IBM
\n within ten (10) days after such fall-out.<\/p>\n
12.4 If IBM fails to provide consigned Drives to StorageTek in
\n accordance with Section 12.3, and StorageTek’s manufacturing
\n line is down such that StorageTek cannot meet its Delivery
\n dates to IBM, then StorageTek will agree, per Section 10.2, to
\n hold up to [**], as the case may be, of such undelivered and
\n forecasted Products and Upgrades, without Drives, in inventory
\n for up to [**]. If the amount of such Products and Upgrades
\n held in inventory exceeds [**] of the forecasted volumes then
\n StorageTek will notify IBM, and IBM will [**].<\/p>\n
12.5 If IBM Drives are not available for an extended period of
\n time, IBM may request assistance from StorageTek in securing
\n drives from other drive manufacturers in lieu of using IBM
\n Drives. StorageTek agrees, on a best effort basis, to assist
\n in securing the most cost effective, high quality alternative,
\n and with the agreement of IBM, to take the steps necessary to
\n integrate such drives into the Product. In such event, the
\n parties will agree in advance on an equitable division of
\n StorageTek’s cost of securing, qualifying and integrating such
\n drives, including any cost relating to inventory or required
\n firm purchase commitments even if such substitution is only
\n temporary in nature.<\/p>\n
12.6 StorageTek agrees to return to IBM freight collect any Drives
\n in StorageTek’s inventory, within five (5) days of receipt of
\n IBM’s written (or EDI) request.<\/p>\n
29
\n 36<\/p>\n
13. DELIVERY<\/p>\n
13.1 ON-TIME DELIVERY<\/p>\n
a. StorageTek shall use its best efforts to ensure that
\n every scheduled Delivery date is met. StorageTek must
\n notify IBM in advance if a scheduled Delivery date
\n will not be met. StorageTek will make every
\n reasonable effort at its expense to ensure the
\n earliest possible Delivery date and quantities for
\n late Equipment, including, but not limited to,
\n overtime and expedite charges. “On schedule” means
\n [**]. Unless delay is caused by IBM’s delay in its
\n supply of Drives or IBM-supplied parts and
\n components, StorageTek will arrange for premium
\n transportation and pay, at StorageTek’s sole cost and
\n expense, for the difference between normal
\n transportation and such premium transportation,
\n including, but not limited to, air transportation and
\n expedited freight charges. StorageTek also agrees to
\n provide, at IBM’s request, an action plan to correct
\n late shipments and to resolve any Delivery problems.<\/p>\n
b. If, during any [**] period, StorageTek fails, on a
\n one-time basis only, to Deliver more than [**], but
\n not more than [**], of the units of [**] and [**]
\n that are scheduled for Delivery in a calendar month
\n by their scheduled Delivery dates, then StorageTek
\n shall be required to expedite shipment of such units
\n in accordance with Section 13.1. If more than [**] of
\n such units of [**] and [**] are Delivered late in
\n [**], then an amount equal to [**] the number of [**]
\n that were [**] [**] in excess of [**] shall be added
\n to [**] and [**] purchases and credits obtained under
\n this Agreement during [**] (i.e., as though IBM had
\n already purchased such [**]) to determine the [**] to
\n be [**] during [**] . In the event that this [**]
\n results in a combined volume of [**] and [**]
\n purchases and credits obtained under this Agreement
\n during [**] that is [**], then IBM shall receive a
\n [**] and [**] in an amount equal to [**] under this
\n Section 13, On-time Delivery; provided, however, that
\n under no circumstances shall IBM receive any [**]
\n hereunder after the combined total of [**] and [**]
\n purchases and credits [**] [**] obtained under this
\n Agreement exceeds [**] during the [**].<\/p>\n
c. If StorageTek fails to Deliver more than [**] of the
\n units of [**] and [**] that are scheduled for
\n Delivery by their scheduled Delivery dates in the
\n [**] , and except for units subject to the [**]
\n provision defined in 13.1b, above, then an amount
\n equal to [**] the number of [**] that were [**] shall
\n be [**] and [**] obtained under this Agreement during
\n [**] to determine [**] of future units of [**] to be
\n acquired during [**]. In the event that this [**]
\n results in a combined volume of [**] and [**]
\n purchases and credits obtained under this Agreement
\n during [**] that is [**], then IBM shall [**] to be
\n [**] in an amount equal to [**] under this Section
\n 13, On-time Delivery; provided, however, that under
\n no circumstances shall IBM receive any [**] hereunder
\n after the combined total of<\/p>\n
30
\n 37<\/p>\n
[**] and [**] purchases and credits [**] obtained
\n under this Agreement exceeds [**] during the [**].<\/p>\n
d. If, in the [**] following any [**] in which a [**]
\n was made under this Section 13.1, StorageTek fails to
\n Deliver more than [**] of the units of [**] and [**]
\n that are scheduled for Delivery by their scheduled
\n Delivery dates, then an amount equal to [**] the
\n number of [**] shall be [**] to [**] and [**]
\n purchases and credits obtained under this Agreement
\n during [**] [**] to determine [**] of future units of
\n [**] to be acquired during [**] . In the event that
\n this [**] results in a combined volume of [**] and
\n [**] purchases and credits obtained under this
\n Agreement during [**] that is [**], then IBM shall
\n receive a [**] and [**] in an amount equal to [**]
\n under this Section 13, On-time Delivery; provided,
\n however, that under no circumstances shall IBM
\n receive any [**] hereunder after the combined total
\n of [**] and [**] purchases and credits in [**]
\n obtained under this Agreement [**] during the [**].<\/p>\n
e. If, in the next following month, StorageTek fails to
\n Deliver more than [**] of the units of [**] and [**]
\n that are scheduled for Delivery by their scheduled
\n Delivery dates, then an amount equal to [**] the
\n number of [**] that were [**] by StorageTek shall be
\n [**] and [**] purchases and credits obtained under
\n this Agreement during [**] to determine [**] of
\n future units of [**] to be acquired during [**]. In
\n the event that this addition results in a combined
\n volume of [**] and [**] purchases and credits
\n obtained under this Agreement during [**] that is
\n [**] , then IBM shall receive a [**] and [**] in an
\n amount equal to [**] under this Section 13, On-time
\n Delivery; provided, however, that under no
\n circumstances shall IBM receive any [**] hereunder
\n after the combined total of [**] and [**] purchases
\n and credits in [**] obtained under this Agreement
\n [**] during the [**].<\/p>\n
f. If, in the next following month, and for each
\n additional consecutive month, StorageTek fails to
\n Deliver more than [**] of the units of [**] and [**]
\n that are scheduled for Delivery by their scheduled
\n Delivery dates, then an amount equal to [**] the
\n number of [**] that were [**] by StorageTek shall be
\n [**] and [**] purchases and credits obtained under
\n this Agreement during [**] to determine [**] of
\n future units of [**] to be acquired during [**] . In
\n the event that this addition results in a combined
\n volume of [**] and [**] purchases and credits
\n obtained under this Agreement during 1998 that is
\n [**], then IBM shall receive a [**] and [**] in an
\n amount equal to [**] under this Section 13, On-time
\n Delivery; provided, however, that under no
\n circumstances shall IBM receive any [**] hereunder
\n after the combined total of [**] and [**] purchases
\n and credits in [**] [**] during the [**].<\/p>\n
31
\n 38<\/p>\n
g. Notwithstanding anything to the contrary in this
\n Section, and in lieu of credits provided in other
\n paragraphs of this Section, if, in any calendar
\n month, and subject to Section 13.1b. above,
\n StorageTek fails to Deliver more than [**] of the
\n units of [**] [**] and [**] that are scheduled for
\n Delivery by their scheduled Delivery dates, then an
\n amount equal to [**] the number of [**] that were
\n [**] by StorageTek shall be added to [**] and [**]
\n purchases and credits obtained under this Agreement
\n during [**] to determine [**] of future units of [**]
\n to be acquired during [**] . In the event that this
\n addition results in a combined volume of [**] and
\n [**] purchases and credits obtained under this
\n Agreement during [**] that is greater than [**] then
\n IBM shall receive a [**] and [**] in an amount equal
\n to [**] under this Section 13, On-time Delivery;
\n provided, however, that under no circumstances shall
\n IBM receive any [**] hereunder after the combined
\n total of [**] and [**] purchases and credits in [**]
\n [**] of [**] during the [**] .<\/p>\n
h. Any credit [**] by StorageTek to IBM [**] such [**]
\n and [**] [**] by StorageTek [**] credited.<\/p>\n
i. Notwithstanding anything to the contrary in this
\n Section, units of [**] and [**] which StorageTek
\n fails to Deliver by the Delivery date will not be
\n counted as failures to Deliver if StorageTek causes
\n such units to be delivered to IBM customers by the
\n delivery date IBM has committed to such customers
\n (the “Commit Date”) or if IBM has requested
\n StorageTek to Expedite Shipment and StorageTek fails
\n to do so within the period specified in Section 11.1.
\n IBM will notify StorageTek in writing prior to the
\n Commit Date in order to give StorageTek an
\n opportunity to expedite shipment, [**] . IBM will
\n also notify StorageTek in writing of each unit of
\n [**] or [**] which fails to arrive by the Commit
\n Date.<\/p>\n
j. If IBM fails to deliver Drives to StorageTek in
\n accordance with the [**] in Section [**] of this
\n Agreement and this delay results in [**] in
\n accordance with [**], then IBM agrees to [**], and
\n StorageTek agrees to [**], and such units [**].<\/p>\n
k. Subject to Section 13.1(i), if StorageTek fails to
\n deliver to IBM more than [**] of the units of
\n Products and Upgrades scheduled for Delivery by the
\n scheduled Delivery dates in a month, for [**]
\n consecutive calendar [**] then the payment terms in
\n Section 7.10a will be immediately extended by [**]
\n until [**] after the first month in which StorageTek
\n Delivers 98% or more of [**] and [**] by their
\n scheduled Delivery dates. Notwithstanding the
\n foregoing, this Section 13.1(k) shall not apply [**]
\n units of [**] and [**] are <\/p>\n
32
\n 39<\/p>\n
Delivered during each month of any [**] consecutive
\n calendar month period.<\/p>\n
l. If the Parties agree on a [**] for [**], the Parties
\n agree that similar remedies as those in Sections
\n 13.1(b) through 13.1(g) shall apply to units of [**]
\n to be Delivered during the [**]. However, if IBM
\n reaches [**] whereby [**], or if [**] by the Parties,
\n then IBM will [**] calculated in a manner consistent
\n with Sections 13.1(b) through 13.1(g).<\/p>\n
m. The Parties agree that similar remedies as those set
\n forth above in this Section 13, which will be [**] by
\n the Parties, shall apply for units of [**] to be
\n Delivered through [**] . IBM expressly reserves the
\n right to assert that any failure to ship [**] and
\n [**] on a timely basis could constitute a material
\n breach of StorageTek’s obligations under this
\n Agreement.<\/p>\n
13.2 CARRIER<\/p>\n
It is understood and agreed that IBM shall make all
\n arrangements for shipments of the Equipment. It shall be the
\n responsibility of IBM, at its own expense, to supply
\n StorageTek with detailed documentation and instructions and
\n all necessary export licenses, customs declarations and
\n certificates in properly executed form required for successful
\n shipment of Equipment from the Manufacturing Site and entry
\n into foreign territories. StorageTek shall notify IBM when
\n Equipment is ready for shipment from StorageTek’s plant. IBM
\n will pay all shipping and transportation charges directly to
\n the carrier or freight forwarder as long as shipped in
\n accordance with IBM’s routing instructions. If IBM requests
\n that StorageTek arrange shipping, IBM shall reimburse
\n StorageTek for the shipping charges pursuant to StorageTek’s
\n invoice. In no event will IBM reimburse StorageTek for, or pay
\n any C.O.D. charges, should StorageTek ship by another carrier
\n without prior IBM approval. If StorageTek ships using other
\n than an IBM-approved carrier, StorageTek is responsible for
\n any incremental increase in freight charges.<\/p>\n
13.3 TITLE\/RISK OF LOSS<\/p>\n
Title to Equipment and risk of loss shall pass to IBM at
\n StorageTek’s plant of manufacture loading dock. [F.O.B. by
\n UCC\/ExWorks by INCOTERMS]; provided, however, that
\n notwithstanding anything to the contrary in this Agreement
\n title to all Licensed Works will remain with StorageTek,
\n except as provided in the IDA and its related Attachments. All
\n claims for shipping damage shall be resolved between IBM,
\n carriers or freight forwarders handling the Equipment and the
\n insurance companies and agents responsible for adjusting such
\n claims, and StorageTek shall have no responsibility with
\n respect thereto. However, at IBM’s request, <\/p>\n
33
\n 40<\/p>\n
StorageTek agrees to cooperate reasonably with IBM in filing
\n and settling such claims.<\/p>\n
13.4 PACKAGING<\/p>\n
StorageTek will package each unit of Equipment according to an
\n agreed-upon Specification for packaging. The prices for
\n Equipment include all packaging costs.<\/p>\n
14. EQUIPMENT WARRANTY<\/p>\n
14.1 StorageTek warrants that units of Equipment (excluding Drives
\n and nonserialized FRUs) that are to be provided to IBM
\n hereunder conform to the Specifications and are and shall
\n remain free from defects in materials and workmanship, for the
\n time periods specified in this Section 14.1.<\/p>\n
a. The warranty period for each unit of Products and
\n Upgrades shall be [**] after the earlier of:<\/p>\n
(1) [**]; or<\/p>\n
(2) [**].<\/p>\n
b. StorageTek will serialize the FRUs identified as
\n serialized on Exhibit 5, and as to those FRUs the
\n warranty period shall be [**] after the earlier of:<\/p>\n
(1) [**] ; or<\/p>\n
(2) [**].<\/p>\n
14.2 All warranties provided by StorageTek to IBM hereunder shall
\n survive any inspection, delivery, acceptance and payment and
\n shall not be affected by the fact that IBM has resold, rented
\n or leased units of Equipment to others.<\/p>\n
14.3 IBM will maintain failure records for Products and Upgrades to
\n the same extent as IBM maintains such records for similar
\n high-end direct access storage device products marketed by it.
\n If IBM believes failures for a given serial number unit of
\n Equipment warrants replacement, IBM may request and StorageTek
\n may agree to replace the same at no cost to IBM. StorageTek’s
\n agreement will not unreasonably be withheld. In order to
\n improve Equipment quality and minimize costs, StorageTek may
\n request relevant information from the data which IBM retains
\n regarding failure by machine serial number. IBM may agree to
\n provide such information to StorageTek. Such agreement will
\n not be unreasonably withheld.<\/p>\n
14.4 StorageTek’s liability under warranty pursuant to Section 14.1
\n is limited to: Delivery to the IBM regional stocking locations
\n specified by IBM of retrofit kits (containing FRUs) with
\n installation instructions (at no charge <\/p>\n
34
\n 41<\/p>\n
to IBM) as necessary to make Equipment conform to the
\n Specifications, or otherwise be free from defects in materials
\n and workmanship; or repair or replacement, at StorageTek’s
\n option, without cost to IBM, of the defective Equipment. IBM
\n will use reasonable efforts to resolve customer issues through
\n use of FRUs or retrofit kits before requesting repair or
\n replacement of the defective Product or Upgrade. Labor to
\n remove defective FRUs and install replacement FRUs under this
\n warranty shall be supplied by IBM at no charge to StorageTek,
\n subject to Section 9.3h. Where warranty can be provided by
\n replacing a FRU, StorageTek will provide and IBM will install
\n the replacement FRU.<\/p>\n
14.5 All warranty claims shall be made by IBM, regardless of any
\n transfer of title or possession of the Equipment by IBM to
\n other parties, and StorageTek agrees that IBM may make
\n warranty claims against StorageTek on the behalf of any
\n rightful user or possessor of the Equipment.<\/p>\n
14.6 StorageTek’s liability to perform warranty under this Section
\n 14 shall not apply to failures of any unit of Equipment
\n caused by:<\/p>\n
a. Physical abuse or use that is not consistent with
\n operating instructions for the Equipment; or<\/p>\n
b. Modification (by other than StorageTek’s personnel or
\n agents) in any way other than approved by StorageTek;
\n provided, however, that the warranty shall not be
\n voided by repair or replacement of FRUs or the
\n attachment of items in the manner described in
\n maintenance or installation instructions provided by
\n StorageTek.<\/p>\n
14.7 Claims under the terms of this warranty shall be submitted to
\n StorageTek in writing (including EDI) and shall clearly state
\n the Product or Upgrade serial number. Where available, IBM
\n shall send StorageTek its field defect report. Defective FRUs
\n replaced under this warranty become the property of
\n StorageTek.<\/p>\n
14.8 Both Parties will ensure that FRUs returned to the other Party
\n are properly and adequately packaged, and IBM agrees to use
\n the same or equivalent packaging as StorageTek uses to package
\n such FRUs.<\/p>\n
14.9 StorageTek shall use reasonable commercial efforts to complete
\n repairs of FRUs for in-warranty units within thirty (30)
\n business days after the date StorageTek receives the defective
\n FRUs, but in any case, it will complete repairs of the FRUs at
\n no charge to IBM within sixty (60) days after receipt. If,
\n upon receipt, StorageTek determines that such defective FRUs
\n are not repairable or if StorageTek has not completed its
\n failure analysis on any FRU within ten (10) business days
\n after StorageTek’s receipt, then replacement FRUs will be
\n provided at no charge by StorageTek to IBM within ten (10)
\n business days. If StorageTek cannot find a defect or<\/p>\n
35
\n 42<\/p>\n
assignable cause in a FRU that is returned by IBM as
\n defective, StorageTek will replace the received FRU and will
\n ensure that the FRU is not included in Equipment and cannot be
\n returned in the future to IBM.<\/p>\n
14.10 LICENSED PROGRAMS, MICROCODE AND MAINTENANCE CODE WARRANTY<\/p>\n
a. StorageTek warrants that the Licensed Programs and
\n Microcode will conform to the Specifications, as such
\n Specifications may be modified by any Product
\n Development Plan, and are and shall remain free from
\n defects in workmanship. The Maintenance Code shall
\n remain free from defects in workmanship. The
\n warranties set forth in this Section 14.10 shall not
\n apply to:<\/p>\n
(1) use of the Licensed Programs or Microcode
\n which is not in accordance with the end user
\n documentation delivered by [**], pertaining
\n to the Licensed Programs or Microcode;<\/p>\n
(2) use of the Licensed Programs or Microcode
\n with other than the hardware described in
\n the Specifications;<\/p>\n
(3) use of the Licensed Programs, Microcode and
\n Maintenance Code in other than the software
\n configuration described in the
\n Specifications;<\/p>\n
(4) any modifications of the Licensed Programs,
\n Microcode and Maintenance Code not made or
\n authorized by [**];<\/p>\n
(5) use of other than the then-current, or
\n immediately preceding, version of the
\n Licensed Programs; or<\/p>\n
(6) [**] that [**] by [**] of the Microcode.<\/p>\n
StorageTek does not warrant that the functions
\n contained in the Licensed Program and Maintenance
\n Code will satisfy IBM’s or its end user’s
\n requirements to the extent such requirements are
\n different than those set forth in the Specifications,
\n as such Specifications may be modified by any Product
\n Development Plan, or that the Licensed Programs will
\n [**] or its [**], or that the [**] of the Licensed
\n Programs and Maintenance Code will be [**].<\/p>\n
b. In the event of a breach of the warranties contained
\n in this Section 14.10, StorageTek will exercise
\n reasonable commercial efforts to implement
\n appropriate procedures to correct such breach in
\n accordance with Section 16.4, for Licensed Programs
\n and Microcode and Section 16.3 for Maintenance Code.<\/p>\n
14.11 StorageTek warrants that it will competently perform all work
\n relating to the Deliverables in a manner consistent with
\n ordinary Microcode <\/p>\n
36
\n 43<\/p>\n
programmers skilled in the art, and, further, all Deliverables
\n will conform to the mutually agreed-upon Specifications.<\/p>\n
14.12 THE WARRANTIES IN SECTIONS 14 AND 18 OF THIS OEM AGREEMENT,
\n AND IN PART 6 OF THE SOURCE CODE CUSTODY AGREEMENT, ARE IN
\n LIEU OF ALL OTHER WARRANTIES EITHER WRITTEN, ORAL OR IMPLIED
\n WITH RESPECT TO THE EQUIPMENT, DELIVERABLES, LICENSED PROGRAMS
\n AND MAINTENANCE CODE.<\/p>\n
STORAGETEK DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY
\n AND FITNESS FOR A PARTICULAR PURPOSE. EXCEPT AS OTHERWISE
\n PROVIDED IN SECTION 18.2, STORAGETEK ALSO DISCLAIMS THE
\n IMPLIED WARRANTY OF NONINFRINGEMENT.<\/p>\n
STORAGETEK’S WARRANTY OBLIGATIONS SHALL EXTEND ONLY TO IBM,
\n AND STORAGETEK SHALL HAVE NO LIABILITY ARISING OUT OF ANY
\n WARRANTIES PROVIDED BY IBM WHICH ARE BEYOND STORAGETEK’S
\n WARRANTY OBLIGATIONS IN THIS AGREEMENT.<\/p>\n
IBM’S EXCLUSIVE REMEDY FOR A BREACH OF THE WARRANTY SET FORTH
\n IN THIS SECTION 14 IS SET FORTH IN SECTION 14.4 FOR EQUIPMENT,
\n AND SECTION 14.10(b) FOR LICENSED PROGRAMS, MICROCODE AND
\n MAINTENANCE CODE, PROVIDED, HOWEVER, THAT STORAGETEK PROMPTLY
\n PERFORMS ITS WARRANTY OBLIGATIONS PURSUANT TO SECTION 14.<\/p>\n
15. FRUS<\/p>\n
15.1 During the term of this Agreement and for [**] after the last
\n Delivery of Product or Upgrades, or for so long as StorageTek
\n makes FRUs available to any other entity, whichever is later,
\n StorageTek agrees to provide FRUs to IBM. The list of FRUs and
\n their respective prices and lead times are described in
\n Exhibit 5, which Exhibit will be updated semiannually (in
\n January and July).<\/p>\n
15.2 Notwithstanding anything herein to the contrary, if StorageTek
\n intends to discontinue producing or making available any FRU
\n after the [**] obligation set forth above, StorageTek agrees
\n to provide IBM with twelve (12) months’ prior written notice
\n of such intent and permit IBM to purchase as many FRUs as IBM
\n reasonably believes it will need for the Products. In the
\n alternative, and at IBM’s option, StorageTek agrees to grant
\n IBM the right to manufacture such FRUs in accordance with
\n Section 23.6.<\/p>\n
37
\n 44<\/p>\n
15.3 FRUs shall be packaged in the same or equivalent packaging as
\n StorageTek used to package such FRUs. Return of FRUs for
\n repair or replacement is subject to a reasonable material
\n return procedure to be mutually agreed between the Parties.<\/p>\n
15.4 FRU REWORK PROCEDURES AND PRICES<\/p>\n
a. StorageTek will attempt to rework\/repair all FRUs
\n returned from IBM and return them to IBM within 30
\n days of receipt. At IBM’s request, StorageTek will
\n also ship to IBM any unrepairable FRUs.<\/p>\n
b. Except as otherwise provided in Section 9, Quality,
\n and Section 14, Equipment Warranty, StorageTek will
\n invoice IBM, and IBM agrees to pay, [**] for FRUs as
\n described in Section 7.7, plus normal transportation
\n charges unless IBM requests special handling (“Used
\n FRU Cost”). Such costs will be subject to IBM’s Audit
\n Rights.<\/p>\n
16. FIELD SERVICE & SUPPORT<\/p>\n
16.1 TRAINING<\/p>\n
For all new Products and Upgrades StorageTek makes available
\n to IBM during the term of this Agreement, StorageTek agrees to
\n provide IBM personnel with assistance at no charge for IBM to
\n develop training for IBM’s customer engineering personnel at
\n the same level as the training StorageTek provides to its own
\n personnel on its other products.<\/p>\n
16.2 EMERGENCY AND EXPERT MAINTENANCE COVERAGE<\/p>\n
In every country\/territory where IBM installs Products and
\n Upgrades, StorageTek agrees to make available upon IBM’s
\n request and on the shortest possible notice customer service
\n engineers to support critical customer situations. The maximum
\n fee StorageTek will charge IBM for each hour of such support
\n is equal to [**]. In addition, IBM will reimburse StorageTek
\n for actual and reasonable travel expenses incurred by
\n StorageTek’s personnel in providing this support in countries
\n where StorageTek does not have a service organization.<\/p>\n
16.3 NEW PRODUCT DEVELOPMENT CENTER SUPPORT<\/p>\n
If IBM desires to receive support from StorageTek’s New
\n Product Development Center for [**] to be Delivered under the
\n OEM Agreement and StorageTek is providing such support, then,
\n [**] the Parties will [**] the [**] and the [**] support to be
\n provided. The charge for such assistance shall be [**] for
\n [**] of support.<\/p>\n
38
\n 45<\/p>\n
16.4 MAINTENANCE AND INSTALLATION TOOLS<\/p>\n
To assist IBM in providing optimum hardware and software
\n maintenance service to customers, StorageTek agrees to
\n promptly provide to IBM all problem determination and service
\n information, tools, Maintenance Code and related documentation
\n (except for the [**] tools and software, as to which
\n StorageTek agrees to [**] and all replacements, enhancements,
\n revisions, and modifications [**], to the extent not prevented
\n by [**]. StorageTek grants IBM a license to the [**] in
\n accordance with the Description of Licensed Works.<\/p>\n
StorageTek also agrees to provide technical support, [**] to
\n correct and fix bugs and defects that arise from IBM’s use of
\n Maintenance Code.<\/p>\n
16.5 MAINTENANCE AND TECHNICAL SUPPORT<\/p>\n
a. Maintenance. IBM will be responsible to provide Level
\n 1, Level 2 and Level 3 support to its customers. IBM
\n agrees to use its commercially reasonable efforts to
\n perform the following:<\/p>\n
(1) maintain [**] to provide maintenance to
\n customers who are capable of performing
\n installations of Equipment and taking [**]
\n and to [**];<\/p>\n
(2) maintain [**] to provide support to the
\n field and who are capable of diagnosing and
\n resolving complex “system issues” related
\n to, among other things, system configuration
\n and operating systems;<\/p>\n
(3) maintain [**] of planning and implementing
\n complex system configurations, performing
\n virtual DASD capacity planning, planning for
\n acceptable subsystem performance,
\n undertaking performance measurement and
\n tuning, and resolving or assisting in the
\n resolution of system-related problems when
\n required;<\/p>\n
(4) provide necessary and relevant [**]
\n information, and [**] information to
\n StorageTek in order for StorageTek to
\n perform its technical and engineering
\n support responsibilities as set forth below;
\n and<\/p>\n
(5) order a [**] for the Products [**] to
\n address customer requirements.<\/p>\n
b. Technical Support. StorageTek agrees, upon IBM’s
\n request, [**] to provide technical support to IBM
\n for the Equipment, Licensed Programs and Microcode,
\n including without limitation, assistance in problem<\/p>\n
39
\n 46<\/p>\n
determination, problem source identification and
\n problem diagnosis, in the following manner:<\/p>\n
(1) Equipment. StorageTek will provide IBM with
\n reasonable assistance for the Equipment
\n [**].<\/p>\n
In addition, if a malfunction or failure in
\n Equipment [**], then StorageTek shall, if
\n requested, provide [**]. Prior to honoring a
\n request for [**], the Equipment for which
\n the request is to be made shall be at [**].
\n IBM’s technical support personnel must have
\n [**] to assist StorageTek’s personnel [**]
\n and to supply needed [**] for repairs). Upon
\n receipt of appropriate supporting
\n documentation, IBM will [**] StorageTek for
\n [**] in providing this support.<\/p>\n
StorageTek agrees to use its commercially
\n reasonable efforts to assist IBM in
\n resolving problems within the time frames
\n set forth below:<\/p>\n
(a) Any Severity 1 level problem: Within
\n [**] after notification by IBM of
\n any such problem;<\/p>\n
(b) Any Severity 2 level problem: Within
\n [**] after notification by IBM of
\n any such problem;<\/p>\n
(c) Any Severity 3 level problem: Within
\n [**] after notification by IBM of
\n any such problem; and<\/p>\n
(d) Any Severity 4 level problem: Within
\n [**] after notification by IBM of
\n any such problem.<\/p>\n
For purposes of this Section 16.5(b)(1),
\n “resolving” by StorageTek means to assist
\n IBM in restoring the customer’s machine to
\n [**] of operation or functionality (which
\n may be accomplished by a [**] that such
\n machine is operating and functioning as
\n designed).<\/p>\n
(2) Licensed Programs and Microcode. The
\n following is a description of the support
\n that StorageTek shall provide to IBM:<\/p>\n
(a) receive the APAR or PMR, and any
\n supporting documentation and
\n materials, as appropriate;<\/p>\n
(b) analyze the problem symptoms and
\n diagnose the suspected error in the
\n Licensed Programs or Microcode;<\/p>\n
40
\n 47<\/p>\n
(c) attempt to recreate the problem on
\n StorageTek’s test system, if
\n recreation is required;<\/p>\n
(d) reasonably develop a bypass or
\n circumvention for high impact (e.g.,
\n typically, Severity 1) problems with
\n assistance of IBM’s personnel;<\/p>\n
(e) reasonably determine if Maintenance
\n Modifications are required to be
\n made to the Deliverables and, if so,
\n provide the Code or other
\n corrections to IBM in the format
\n specified by IBM;<\/p>\n
(f) provide resolution assistance to
\n APARs or PMRs in accordance with the
\n IBM-assigned Severity Level as set
\n forth in Section 16.8b(1)(a)-(d)
\n above;<\/p>\n
(g) receive technical questions and
\n supporting documentation and
\n materials, and analyze such
\n technical questions and provide
\n answers to the same; and<\/p>\n
(h) generate and promptly provide to IBM
\n the most current releases of the
\n Licensed Programs or Microcode with
\n all of the past fixes incorporated
\n as required, including any
\n accumulated maintenance items.<\/p>\n
c. In order to [**] IBM’s [**] of maintenance services
\n and technical support for [**] and [**], StorageTek
\n agrees to [**], which excludes [**] and [**] sold by
\n StorageTek.<\/p>\n
16.6 [**] ACCESS<\/p>\n
During the term of the Agreement, IBM agrees to allow
\n StorageTek to have access to IBM’s [**], and [**] access for
\n [**] and such other implementations solely to support IBM’s
\n and its Subsidiaries’ provision of maintenance services for
\n Equipment and Licensed Programs. This information may be
\n viewed and updated electronically by StorageTek where feasible
\n and appropriate. StorageTek’s use of and access to [**] is
\n subject to continual review, and may be terminated if such use
\n or access is beyond the permitted purposes as set forth
\n herein.<\/p>\n
17. MARKETING RIGHTS<\/p>\n
17.1 ONGOING TRAINING<\/p>\n
StorageTek agrees to provide IBM with material, documentation,
\n and support from StorageTek’s Engineering and Technical
\n Support Staff <\/p>\n
41
\n 48<\/p>\n
similar to that provided as of the Effective Date on
\n StorageTek’s new products, for IBM to provide its personnel
\n with training for all new Products and Upgrades.<\/p>\n
17.2 MARKETING MATERIALS<\/p>\n
To the extent that StorageTek has the right to do so,
\n StorageTek hereby grants IBM a [**], nonexclusive worldwide
\n right and license to all of the marketing and collateral
\n materials relating to the Products and Upgrades it receives
\n from StorageTek, during the term of this Agreement, to use,
\n reproduce, display, distribute, create and have created
\n Derivative Works of any or all such materials without
\n attribution and grant sublicenses of equivalent scope to its
\n Subsidiaries but not otherwise; provided IBM does not use
\n StorageTek’s trademarks or trade names except as specifically
\n permitted. StorageTek will identify portions of the materials
\n which are subject to third-party rights.<\/p>\n
17.3 MARKETING TOOLS<\/p>\n
StorageTek will provide all of its marketing tools, software
\n and related documentation related to the Products and
\n Upgrades, excluding third-party confidential materials, [**].
\n StorageTek agrees to provide IBM such tools and software (in
\n Source Code form, to the extent not prevented by supplier
\n license transferability restrictions and if StorageTek
\n discontinues its support of such tools and software, and in
\n Object Code form). StorageTek hereby grants IBM a [**],
\n nonexclusive worldwide right and license to the tools,
\n software and related documentation it receives from StorageTek
\n during the term of this Agreement, to use, reproduce, display,
\n distribute, and create, and have created Derivative Works of
\n any or all such tools and software without attribution, and
\n grant sublicenses of equivalent scope to its Subsidiaries but
\n not otherwise. In addition, StorageTek shall permit IBM and
\n its Subsidiaries to grant sublicenses for the tools, software
\n and documentation: (i) to [**], and (ii) to [**]. Such
\n sublicenses to [**] shall not include [**]. The software being
\n licensed under this Section includes [**] to use for [**];
\n provided, however, that with respect to [**], such [**] shall
\n be licensed and provided [**] by StorageTek. IBM will [**],
\n which [**] is subject to Audit Rights under this Agreement.<\/p>\n
18. REPRESENTATIONS AND WARRANTIES<\/p>\n
18.1 Each Party represents and warrants that it has the authority
\n and right to enter into this Agreement, and has no existing
\n obligations, and shall not assume any obligations, that
\n conflict with its obligations or the rights granted to it in
\n this Agreement. Each Party also represents and warrants that
\n it has the authority to convey the rights granted or assigned
\n by it in this Agreement. Each Party will provide, upon
\n request, copies of agreements or other documentation necessary
\n to establish such rights. If a <\/p>\n
42
\n 49<\/p>\n
Party is unable to supply a copy of such agreements or other
\n documentation, then such Party shall use its best efforts to
\n obtain such agreements or other documentation to sufficiently
\n establish that it has been granted these rights.<\/p>\n
18.2 StorageTek represents and warrants that [**] the Equipment (or
\n Devices if [**] pursuant to Section [**]) (including the
\n Deliverables), Maintenance Code and Licensed Programs licensed
\n to IBM hereunder [**] provided, however, that this
\n representation and warranty shall [**] Equipment (or Devices
\n if [**] pursuant to Section [**]) that [**], and only
\n Maintenance Code and Licensed Programs that [**], Equipment
\n (or Devices if [**] pursuant to Section [**]). The right to
\n [**] based on the foregoing representation and warranty [**]
\n upon [**] as set forth in Section [**]. StorageTek further
\n represents and warrants that the Equipment (including the
\n Deliverables), Maintenance Code and Licensed Programs, [**].
\n StorageTek [**], provide IBM with [**] that StorageTek [**] to
\n the Equipment, including the Deliverables, Maintenance Code or
\n Licensed Programs.<\/p>\n
18.3 StorageTek represents and warrants that, with respect to the
\n Deliverables, Licensed Programs and Maintenance Code created
\n outside the United States, all authors have waived their moral
\n rights in all Deliverables, Licensed Programs and Maintenance
\n Code to the extent permitted by law.<\/p>\n
18.4 StorageTek represents and warrants that the Equipment (or
\n Devices if manufactured by IBM pursuant to Section 23.6), when
\n used in accordance with the Specifications, will not present a
\n health or safety risk to persons or property; and the
\n Equipment shall comply with all applicable regulatory health
\n and safety standards, including UL, CSA, VDE, IEC, FCC,
\n European Economic Community CE-mark standards, any other
\n standards that are described in the Specifications or as
\n required by law. StorageTek agrees to provide IBM with copies
\n of all reports, certifications, and other relevant documents
\n related to such standards at StorageTek’s expense.<\/p>\n
19. TRADEMARK & ADVERTISING<\/p>\n
19.1 TRADEMARK AND DESIGN RIGHTS<\/p>\n
Notwithstanding any other provisions of this Agreement,
\n neither party hereto is granted the right to use the
\n trademarks, trade names, or service marks of the other party
\n (including those of Subsidiaries), directly or indirectly, in
\n connection with any product, promotion or publication without
\n the prior written approval of the other party, except that IBM
\n may use StorageTek’s trademarks and trade names for the
\n aforementioned purposes on any Equipment shipped by StorageTek
\n which bears such trademarks or trade names. Any approved use
\n of one Party’s trademark or trade name shall enure to the
\n benefit of the Party owning such trademark or trade name.<\/p>\n
43
\n 50<\/p>\n
19.2 ADVERTISING\/DISCLOSURE<\/p>\n
Neither party shall, without first obtaining the written
\n consent of the other party, in any manner disclose any details
\n of the work to be performed herein, the terms, conditions and
\n subject matter of this Agreement, or documents issued
\n hereunder, except as may be required by law or government rule
\n or regulation. To the extent that a party is compelled to make
\n a disclosure due to government rule or regulation, such
\n disclosure shall be limited to the extent required, and the
\n other party shall have an opportunity to review the
\n information prior to its release. Each party may independently
\n and without the consent of the other party inform customers of
\n the fact that an OEM distribution arrangement exists between
\n the Parties; however, to the extent that such communication
\n includes any additional information about the other party,
\n such party shall have an opportunity to review such
\n information prior to disclosure.<\/p>\n
19.3 Upon request by IBM, StorageTek shall apply IBM’s, its
\n Subsidiaries’, its distributors’ and\/or its OEMs’ trademarks,
\n logos and other information designated by IBM for the Product
\n and Upgrades as may be provided to StorageTek by IBM.<\/p>\n
19.4 Use of a Party’s trademarks by the other Party shall not
\n diminish the owner’s right, title or interest to such
\n trademarks.<\/p>\n
20. CONFIDENTIALITY<\/p>\n
20.1 It is anticipated that confidential information will be
\n exchanged between the Parties. Where confidential information
\n must be exchanged, it will be exchanged under an IBM Agreement
\n for the Exchange of Confidential Information (hereafter
\n “AECI”).<\/p>\n
20.2 With respect to all nonconfidential information disclosed by
\n one party (hereafter the “Disclosing Party”) to the other
\n party (hereafter the “Receiving Party”), except to the extent
\n such information is protected by the Disclosing Party’s patent
\n or copyright rights, the Disclosing Party grants to the
\n Receiving Party, to the extent, if any, of its interest
\n therein, a nonexclusive, royalty-free, irrevocable,
\n unrestricted, worldwide license to use, have used, disclose to
\n others, make copies in the case of documents, and dispose of,
\n all without limitation, such nonconfidential information in
\n any manner as it determines, including the use of such
\n nonconfidential information in the development, manufacture,
\n marketing and maintenance of products and services
\n incorporating such nonconfidential information.<\/p>\n
21. ASSIGNMENT & CHANGE OF CONTROL<\/p>\n
Neither Party shall assign or subcontract this Agreement, or any right
\n or obligation hereunder, without the prior written consent of the other
\n Party, except that subcontracts pursuant to StorageTek’s normal
\n manufacturing procedures may <\/p>\n
44
\n 51<\/p>\n
be assigned, provided, however, that StorageTek may not subcontract
\n final assembly and test without IBM’s prior written consent. Any
\n attempted assignment or subcontract not in compliance with this
\n paragraph shall be void.<\/p>\n
StorageTek shall promptly notify IBM in writing of any Change of
\n Control involving StorageTek. Upon such Change of Control, [**]
\n provided below.<\/p>\n
In the event that a Change in Control occurs whereby control of
\n StorageTek is acquired by (i) [**]; or (ii) [**]; then IBM may [**] of
\n the later of: (i) written notice by StorageTek to IBM of such Change of
\n Control; or (ii) the effective date of such Change of Control. If IBM
\n [**] pursuant to this Section, the [**] for [**] will be subject to
\n [**]; and provided further, that [**] shall not [**]. In addition, IBM
\n [**] hereof for [**] following the date that IBM [**] , [**] under any
\n binding forecast pursuant to Section 10.2, as well as any [**] during
\n the [**] in which IBM gives notice of such termination to StorageTek.<\/p>\n
[**] the Change of Control described above, a Change of Control of [**]
\n shall [**] this Agreement.<\/p>\n
22. DISPUTE RESOLUTION<\/p>\n
22.1 ESCALATION PROCESS<\/p>\n
The Parties will attempt in good faith to promptly resolve any
\n controversy or claim arising out of or relating to this
\n Agreement by negotiations between executives of the Parties.<\/p>\n
If a controversy or claim should arise, the Agreement
\n Administrators, or their respective successors, or their
\n superiors, will meet in person or phone, as they decide, at
\n least once and will attempt to resolve the matter. Either
\n Agreement Administrator may require the other to meet within
\n seven days at a mutually agreed upon time and location.<\/p>\n
If the matter has not been resolved within ten days of their
\n first meeting, or a request for such meeting if no meeting
\n occurs, the Agreement Administrators shall refer the matter to
\n senior executives, who shall have authority to settle the
\n dispute (hereafter “Senior Executives”). The Senior Executive
\n for IBM shall be the General Manager of IBM’s Storage System
\n business or his\/her designee and the Senior Executive of
\n StorageTek shall be its Chief Executive Officer, or his\/her
\n designee. Thereupon, the Agreement Administrators shall
\n promptly prepare and exchange memoranda stating the issues in
\n dispute, and their positions, summarizing the negotiations
\n which have taken place, and attaching relevant documents. The
\n Senior Executives will meet in person or by telephone within
\n seven (7) days of the end of the ten (10) day period referred
\n to above, at a mutually agreed time.<\/p>\n
45
\n 52<\/p>\n
The first meeting shall be held at the offices of the
\n Agreement Administrator receiving the request to meet. If more
\n than one meeting is held, the meetings shall be held in
\n rotation at the offices of IBM and StorageTek.<\/p>\n
If the matter has not been resolved within fifteen (15) days
\n of the first meeting of the Senior Executives (which period
\n may be extended by mutual agreement), the Parties will attempt
\n in good faith to resolve the controversy or claim in
\n accordance with the following mediation process. During the
\n course of negotiations between the representatives, all
\n reasonable requests made by one party to the other for
\n nonprivileged information will be honored in order that each
\n of the parties may be fully informed of the circumstances
\n relevant to the dispute.<\/p>\n
22.2 MEDIATION PROCESS<\/p>\n
If the escalation process fails to resolve a dispute in
\n connection with this Agreement, any such dispute shall be
\n submitted to expedited mediation prior to the commencement of
\n any litigation with respect to such dispute. In the event
\n either party intends to seek recourse against the other by an
\n action at law or in equity, such party shall first give notice
\n to the other party. Within ten (10) business days of such
\n notice, the Parties shall attempt to agree on one mediator who
\n shall be a person mutually agreeable to both Parties and who
\n shall be experienced in the DASD industry. In the event the
\n Parties cannot agree on one mediator, each shall have the
\n right to appoint one mediator, and the two mediators shall
\n appoint a third. Mediation shall commence within twenty (20)
\n business days of the notice of request for mediation. Each
\n party agrees to cooperate fully with the mediator(s) in an
\n attempt to resolve any disputes. The mediator(s) shall use the
\n rules of the American Arbitration Association in conducting
\n the mediation. Any decision reached through mediation shall be
\n in writing but shall not be legally binding upon the Parties
\n nor admissible as evidence in any legal proceedings. If the
\n Parties cannot resolve their differences to their mutual
\n satisfaction within thirty (30) business days of the request
\n for mediation, either Party shall be free to pursue any and
\n all other remedies available to such Party, including, but not
\n limited to, litigation. Costs of the Mediator shall be born
\n equally by the Parties.<\/p>\n
23. TERMINATION\/REMEDIES<\/p>\n
23.1 TERMINATION BY MUTUAL CONSENT<\/p>\n
This Agreement shall be subject to termination prior to the
\n expiration of the term at any time by mutual consent of the
\n parties, evidenced by a written agreement providing for
\n termination.<\/p>\n
46
\n 53<\/p>\n
23.2 TERMINATION BY BANKRUPTCY<\/p>\n
This Agreement may be immediately terminated by either Party
\n if any of the following events (“Triggering Events”) occur:
\n (1) the other Party files a voluntary petition under any
\n provision of the U.S. Bankruptcy Code or under any similar
\n insolvency law, makes an assignment for the benefit of its
\n creditors, (2) any involuntary petition in bankruptcy under
\n any provision of the U.S. Bankruptcy Code or under any similar
\n insolvency law is filed against such other Party, or (3) a
\n receiver is appointed for, or a levy or attachment is made
\n against all or substantially all of its assets, and such
\n involuntary petition is not dismissed or such receiver or levy
\n or attachment is not discharged within sixty (60) days after
\n the filing, appointment or making thereof.<\/p>\n
To the extent that applicable bankruptcy law does not permit
\n the exercise of rights under the immediately preceding
\n paragraph, the bankrupt party agrees that adequate assurance
\n of performance by the bankrupt party of the balance of this
\n Agreement as a “Debtor-in-possession” or any similar entity
\n under successor bankruptcy laws will include assurances both
\n of such entity’s ability to adequately produce products for
\n the specifically permitted Agreement and such entity’s
\n willingness and ability to protect the other party’s
\n proprietary rights. As a personal contract, exercise of rights
\n by a trustee or assignment of rights hereunder would not be
\n appropriate and such understanding is an essential part of
\n each Party’s willingness to enter into this Agreement.<\/p>\n
23.3 TERMINATION FOR CAUSE<\/p>\n
a. If either Party is in material breach of this
\n Agreement, the other Party may give written notice to
\n the defaulting Party specifying the respects in which
\n the defaulting Party has failed to perform or comply
\n with the terms and conditions of this Agreement. In
\n the event that any defaults so indicated shall not be
\n remedied by the defaulting Party within sixty (60)
\n days (ten (10) days as to a failure to pay any
\n amounts indisputably due) unless a different period
\n is provided for elsewhere in this Agreement after
\n such notice, the party not in default may, by written
\n notice to the defaulting Party, terminate this
\n Agreement.<\/p>\n
b. Either Party may submit disputes related to the
\n notice of termination to the Escalation Process or
\n Mediation Process described in Section 22 but such
\n termination notice shall not be stayed by submission
\n to escalation or mediation and termination shall take
\n effect as set forth above. Failure of either Party to
\n terminate this Agreement due to a breach on the part
\n of the other Party shall not prejudice its rights to
\n terminate for a subsequent breach on the part of the
\n defaulting Party.<\/p>\n
47
\n 54<\/p>\n
c. The right of a Party to terminate this Agreement, and
\n the exercise of such right by such Party, shall be in
\n addition to any other remedies or rights granted in
\n this Agreement or which a Party would have in law or
\n equity.<\/p>\n
d. If IBM terminates this Agreement for cause:<\/p>\n
(1) IBM will receive the [**] license and [**]
\n rights set forth in, and pursuant to,
\n Sections [**] of the Agreement, and the [**]
\n for [**] shall immediately become [**];<\/p>\n
(2) So long as StorageTek continues to provide
\n Product Engineering Services as described in
\n Section [**] of the [**] for any [**]
\n product, which product includes any, all or
\n some of the Deliverables, StorageTek will
\n provide IBM with such Product Engineering
\n Services with respect to those same portions
\n of such Deliverables [**], and will, in
\n addition grant to IBM a [**] license to the
\n [**] (with respect to those same portions of
\n such Deliverables) of the [**] as the
\n licenses granted to IBM, under the [**], for
\n Licensed Works;<\/p>\n
(3) All licenses granted to StorageTek to use
\n [**] under Section [**] of the Description
\n of Licensed Works will survive such
\n termination, and be [**] as provided in such
\n Description of Licensed Works, provided,
\n however, that, if StorageTek elects to
\n maintain or effectuate, whichever the case
\n may be, the StorageTek [**] Licenses set
\n forth in Section [**], and in Section [**]
\n of the Description of Licensed Works [**],
\n then StorageTek must [**] and also [**] as
\n set forth in the Description of Licensed
\n Works for such license, except that [**]
\n shall be [**] for each [**] following the
\n date of StorageTek’s receipt of IBM’s
\n written notice of termination, and except
\n that, once StorageTek has [**] pursuant to
\n this section [**] then such license shall
\n immediately become [**], and provided
\n further, that any [**] by StorageTek to IBM
\n under this section shall be [**] for
\n products other than as covered in Sections
\n [**] of the [**], and shall have no effect
\n on the [**] to be [**] pursuant to Section
\n [**]; and<\/p>\n
(4) Despite such termination, IBM shall have the
\n [**] for any and all Specified Functions in
\n process under the IDA, and if IBM [**],
\n StorageTek will continue to develop
\n Specified Functions [**] as specified in the
\n IDA. Further, if IBM [**], the rights and
\n obligations of the Parties to the
\n intellectual property related to such [**].
\n If IBM does not<\/p>\n
48
\n 55<\/p>\n
[**] any such Specified Function, StorageTek
\n will have [**] above), provided, however,
\n that if IBM [**] for any Specified Function
\n of the Deliverables [**], and StorageTek
\n [**] completes development of such Specified
\n Function, then such [**] Specified Function
\n to the extent [**] will be deemed a [**] and
\n not [**].<\/p>\n
e. If StorageTek terminates this Agreement for cause:<\/p>\n
(1) IBM will pay to StorageTek any amounts that
\n become due under the IDA during the ninety
\n (90) day period following the date on which
\n StorageTek provides notice of termination to
\n IBM;<\/p>\n
(2) The StorageTek Material Use Licenses set
\n forth in Sections 3.2d and 3.2e of the DLW
\n will immediately become fully paid-up and
\n irrevocable; and<\/p>\n
(3) So long as StorageTek continues to provide
\n Product Engineering Services as described in
\n Section [**] for any StorageTek product
\n which includes any, all or some of the
\n Deliverables, StorageTek will provide IBM
\n with such Product Engineering Services (with
\n respect to the same portions of the
\n Deliverables) at [**].<\/p>\n
23.4 MATERIAL BREACH<\/p>\n
A material breach shall include, but not be limited to, a
\n material failure to:<\/p>\n
a. pay any amounts that are undisputably due;<\/p>\n
b. deliver Equipment or to supply software, tools and
\n licenses in accordance with this Agreement;<\/p>\n
c. comply with the reliability, availability, and
\n service levels specified in the Agreement;<\/p>\n
d. manufacture Equipment in accordance with the
\n Agreement;<\/p>\n
e. supply Deliverables in accordance with Attachment 1
\n to Exhibit 3; or<\/p>\n
f. comply with Section 18, Representations and
\n Warranties.<\/p>\n
A Party may not be declared to be in material breach of any
\n provision of this Agreement if, and to the extent that its
\n failure to perform has been caused by the other Party’s breach
\n of this Agreement.<\/p>\n
49
\n 56<\/p>\n
23.5 [**] LICENSE<\/p>\n
StorageTek hereby grants to IBM a fully paid-up license to
\n [**], effective if: (1) IBM has [**], (2) StorageTek has [**],
\n or (3) one of the Triggering Events set forth in Section 23.2
\n occurs; provided, however, that IBM may not exercise its
\n rights under such license if, on the day IBM notifies
\n StorageTek that IBM will exercise such rights: (i) IBM is in
\n material breach of this Agreement; (ii) StorageTek has given
\n IBM notice in writing of such material breach prior to the
\n applicable event set forth in Section 23.5, above; and (iii)
\n IBM has failed to cure such material breach; and IBM
\n thereafter fails to cure such material breach within sixty
\n (60) days of IBM’s notice to StorageTek.<\/p>\n
23.6 MANUFACTURING MAKE OR HAVE MADE RIGHTS<\/p>\n
If an event under Section 23.5, above, occurs, or if IBM
\n elects to receive [**] pursuant to Section [**], then
\n StorageTek agrees to provide the following assistance to IBM
\n or IBM’s designee [**] to enable IBM or its designee to assume
\n Equipment, Devices or just FRUs, as the case may be,
\n manufacturing responsibilities:<\/p>\n
a. Grant access by [**] to [**];<\/p>\n
b. Provide a complete copy of all bills of material for
\n Equipment including the costs and sources of
\n materials listed therein and identification of
\n suppliers. In addition, if IBM requests, StorageTek
\n agrees to assist IBM in acquiring parts, or materials
\n from StorageTek’s vendors at prices, terms and
\n conditions [**], and\/or including [**].<\/p>\n
c. Provide copies of all materials related to and
\n required for the manufacture and test of any and all
\n Equipment, Devices or just FRUs, as the case may be,
\n including, but not limited to, assembly drawings,
\n component drawings, mechanical drawings, schematics,
\n process descriptions, tools and fixtures.<\/p>\n
d. In addition StorageTek will provide training on the
\n use of such tools.<\/p>\n
e. Provide a copy of each document, Maintenance Code,
\n Microcode, Licensed Works, and any related software
\n that relates to the manufacture, maintenance or
\n repair of Equipment, Devices or just FRUs, as the
\n case may be.<\/p>\n
f. Provide, to the extent that it has the right to do
\n so: (i) a [**], nonexclusive, [**] and license to use
\n the information, tooling, equipment, and know-how
\n described in this Section 23.6 and (ii) a [**];
\n solely to manufacture, have manufactured, test, have
\n tested, sell, lease and otherwise distribute, the
\n Equipment, Devices or just FRUs, as the case may be.
\n In addition, StorageTek agrees to <\/p>\n
50
\n 57<\/p>\n
transfer title to IBM or IBM’s designee with respect
\n to all tooling specific to and necessary for
\n manufacture and test of Equipment, Devices or just
\n FRUs, as the case may be.<\/p>\n
g. Provide IBM with permission to disclose confidential
\n StorageTek information related to Equipment, Devices
\n or just FRUs, as the case may be, which has been
\n received by IBM under this Agreement, or information
\n received pursuant to any confidential disclosure
\n agreement between the Parties, to the same extent as
\n IBM would disclose its own confidential information
\n to third Parties in order to have Equipment, Devices
\n or just FRUs, as the case may be, manufactured by
\n such third Parties.<\/p>\n
h. Grant to IBM a [**], nonexclusive, [**] license to
\n [**] to the extent such license is required for IBM
\n to exercise the rights granted under this Section.
\n Such license shall include the right to [**] the
\n Equipment, Devices or just FRUs, as the case may be.
\n Such license shall [**], including [**], [**] to its
\n [**].<\/p>\n
23.7 TERMINATION FOR CONVENIENCE<\/p>\n
IBM shall have the right to terminate this Agreement for
\n convenience [**] by providing StorageTek with a [**] prior
\n written notice of its election to do so. In the event IBM
\n elects to terminate this Agreement for convenience, IBM’s
\n liability for such termination is [**] of any [**]. StorageTek
\n agrees that, in consideration for such [**] , IBM shall have
\n the option to [**] prior to the date such termination becomes
\n effective, and StorageTek will at IBM’s request [**], finish
\n any partially completed Equipment in StorageTek’s possession
\n on such date and Deliver any such Equipment promptly to IBM.
\n Also, the [**] granted pursuant to the [**] will [**] .<\/p>\n
23.8 TERMINATION FOR BURDENSOME CONDITION<\/p>\n
a. Upon the occurrence of a Burdensome Condition
\n involving only a circumstance described in Section
\n [**], IBM shall [**] prior written notice to
\n StorageTek, to terminate this Agreement in its
\n entirety (including, but not limited to, the IDA)
\n [**]; except that<\/p>\n
(1) IBM shall be [**] during the [**] notice
\n period and also the [**] that were scheduled
\n to have [**] for the [**] period after such
\n notice period, and StorageTek shall not be
\n [**] under the [**] after the [**] notice
\n period;<\/p>\n
(2) The licenses granted to StorageTek pursuant
\n to the [**] shall [**]; and<\/p>\n
51
\n 58<\/p>\n
(3) StorageTek shall be [**] for [**] for
\n materials that StorageTek made prior to
\n notification of termination in order to
\n comply with its obligations under the
\n Agreement; provided that such materials are
\n Delivered to IBM [**] (to the extent that
\n [**] of such materials has been reimbursed);
\n and further provided that in no event will
\n such reimbursement by IBM exceed the sum of
\n [**]; and<\/p>\n
(4) The licenses granted to IBM pursuant to the
\n Description of Licensed Works shall be the
\n same as if termination under this Section
\n 23.8a had been a [**] or a [**].<\/p>\n
b. Upon the occurrence of a Burdensome Condition
\n involving a circumstance described in Section [**],
\n IBM shall [**] prior written notice to StorageTek, to
\n terminate this Agreement in its entirety (including,
\n but not limited to, the IDA). IBM’s liability will be
\n limited as set forth in Sections 23.8a(1) through
\n 23.8(4), above, except that the period in which IBM
\n shall be [**] pursuant to Section 23.8a(1) above
\n shall be the [**] period following the date that IBM
\n notifies StorageTek of termination pursuant to
\n Section 26.3.<\/p>\n
c. Upon the occurrence of a Burdensome Condition,
\n StorageTek shall [**] prior written notice to IBM, to
\n terminate this Agreement in its entirety [**]; except
\n that<\/p>\n
(1) StorageTek shall [**];<\/p>\n
(2) IBM shall have no further obligation to [**]
\n to StorageTek under the [**], and StorageTek
\n shall [**] that IBM has made to StorageTek
\n after [**] under the [**];<\/p>\n
(3) The [**] granted to IBM pursuant to the
\n Description of Licensed Works shall [**] in
\n all instances; and<\/p>\n
(4) IBM will receive the manufacturing make or
\n have made rights set forth in, and pursuant
\n to, Section 23.6 of this Agreement.<\/p>\n
d. In no event will either Party’s liability to the
\n other for termination pursuant to this Section 23.8
\n exceed (i) the sum of [**] in the event of a
\n termination of this Agreement only as a result of a
\n circumstance described in Section 1.6(ii); or (ii)
\n the sum of [**] in the event of a termination of this
\n Agreement as a result of a circumstance described in
\n Section 1.6(i). These limitations of liability will
\n not apply to [**] hereof; nor shall such limitations
\n apply to any [**] as modified above.<\/p>\n
52
\n 59<\/p>\n
23.9 WIND DOWN<\/p>\n
Upon termination of this Agreement by either Party for any
\n reason prior to the expiration of the term set forth in
\n Section 3, and except as stated in Section [**] hereof, IBM
\n may continue for [**] following the date of notice of such
\n termination, to place noncancelable purchase orders at the
\n prices that are in effect for the quarter in which such notice
\n of termination is effective for Equipment, and StorageTek
\n agrees to accept such orders and to manufacture supply and
\n Deliver such Equipment to IBM if ordered for Delivery within
\n [**] of such purchase orders and within appropriate lead
\n times.<\/p>\n
23.10 [**] AFTER TERMINATION<\/p>\n
Subject to Sections 23.3 and 23.8, and so long as StorageTek
\n continues to provide Product Engineering Services as described
\n in Section [**] for any StorageTek product, if either Party
\n terminates this Agreement, then IBM may elect to: (i) [**]
\n Product Engineering Services under the SOW; (ii) [**] Product
\n Engineering Services at the [**] under the SOW, but at a
\n funding level of [**] of the funding levels for Product
\n Engineering Services required under the SOW; or (iii) receive
\n such Product Engineering Services as it may request, up to the
\n levels as then required under the SOW, on a time and materials
\n basis at [**].<\/p>\n
24. INDEMNIFICATION RIGHTS<\/p>\n
24.1 INTELLECTUAL PROPERTY INDEMNITY<\/p>\n
a. StorageTek shall indemnify, defend and hold harmless
\n IBM [**] in respect to any costs, expenses, liability
\n or damages, including reasonable attorney’s fees,
\n arising out of or related to any action [**] to the
\n extent that it is based on a [**]. StorageTek agrees
\n to provide IBM with [**] to defend a claim brought in
\n [**].<\/p>\n
b. StorageTek shall also indemnify IBM in accordance
\n with the preceding paragraph for [**], provided that
\n such [**], provided, however, that StorageTek’s
\n liability under this paragraph is [**].<\/p>\n
c. StorageTek shall have no obligation regarding any
\n [**] to the extent based on: (i) the [**]; (ii) [**],
\n (iii) [**]; or (iv) [**].<\/p>\n
d. If the use of the [**] shall become, [**] to become,
\n [**] based on [**], StorageTek may, [**], either:<\/p>\n
(1) procure for IBM the right to continue to
\n market and use [**] on a continued,
\n uninterrupted basis; or<\/p>\n
53
\n 60<\/p>\n
(2) replace or modify the [**] with a
\n functionally equivalent substitute so that
\n the [**] will become noninfringing.<\/p>\n
24.2 GENERAL INDEMNITY<\/p>\n
a. StorageTek shall indemnify, defend and hold harmless
\n IBM in respect to any cost, expenses, liability or
\n damages, including reasonable attorney’s fees, for
\n any third-party claims arising out of or related to:<\/p>\n
(1) injury or damage to persons or property
\n resulting [**] from any [**], or the [**]
\n used in, or in connection with, [**];<\/p>\n
(2) StorageTek’s failure to make available any
\n [**] and related documentation to [**] under
\n reasonable terms and conditions;<\/p>\n
(3) StorageTek’s failure to [**];<\/p>\n
(4) Any [**], provided that such claims do not
\n specifically pertain to [**] in the ordinary
\n course of business by [**] end user
\n customers; or<\/p>\n
(5) StorageTek’s failure to comply with or a
\n [**].<\/p>\n
b. StorageTek shall, however, have no liability to
\n indemnify IBM if and only to the extent that:<\/p>\n
(1) the injury or damage is due to use of [**],
\n Maintenance Code or Licensed Programs in a
\n manner for which it was not designed;<\/p>\n
(2) the injury or damage is caused by the
\n negligence of IBM or another third party
\n (but excluding those servants, agents,
\n contractors or subcontractors of
\n StorageTek); or<\/p>\n
(3) the [**] has been modified by: (i) anyone
\n other than StorageTek, or (ii) IBM if not
\n authorized by StorageTek.<\/p>\n
24.3 OBLIGATIONS OF IBM<\/p>\n
The obligation of StorageTek to defend and make payments under
\n Sections 24.1 and 24.2 is conditioned on the following:<\/p>\n
a. StorageTek shall be notified promptly in writing by
\n IBM of any claim;<\/p>\n
b. StorageTek shall [**] for its settlement or
\n compromise; and<\/p>\n
54
\n 61<\/p>\n
c. IBM shall [**] in defending such an action.<\/p>\n
IBM may participate, at its sole cost and expense, in the
\n defense of any action on such claim and any negotiations for
\n its settlement or compromise.<\/p>\n
25. GOVERNING LAW<\/p>\n
25.1 NEW YORK LAW<\/p>\n
The relationship between the Parties and this Agreement are
\n governed by the substantive laws of the state of New York. Any
\n action between the Parties must be brought before a court of
\n competent jurisdiction located in the United States Southern
\n District of New York. Each Party hereby waives any right to a
\n jury trial in any dispute between them. The Parties agree that
\n the United Nations convention on the international sale of
\n goods shall not apply to this Agreement.<\/p>\n
It shall be a condition precedent to the filing of any such
\n actions that the dispute resolution procedure set forth in
\n Section 22 will have been followed prior to the filing of such
\n action, excepting only that a Party may institute an action
\n seeking a preliminary injunction, temporary restraining order,
\n or other equitable relief, if necessary in the opinion of that
\n Party to avoid material harm to its property, rights or other
\n interest, before commencing or at any time during the course
\n of the dispute procedure in Section 22.<\/p>\n
25.2 LIMITATION OF ACTIONS<\/p>\n
Neither Party will bring a legal action in connection with
\n this Agreement against the other more than [**] after the
\n cause of action arose. This limitation does not apply to
\n actions brought to enforce (i) indemnification rights (Section
\n 24) or (ii) violation of intellectual property rights.<\/p>\n
25.3 LIMITATION OF LIABILITY<\/p>\n
In no event shall either Party hereto be liable to the other
\n for more than [**] for any and all causes of action and claims
\n of any nature (including, but not limited to, claims that
\n obligations, representations or warranties hereunder have
\n failed of their essential purpose) in connection with this
\n Agreement; provided, however, that [**].<\/p>\n
55
\n 62<\/p>\n
26. GENERAL<\/p>\n
26.1 COMPLIANCE WITH LAWS<\/p>\n
Each Party agrees to comply at its own expense with all
\n applicable laws and regulations of the United States, the
\n European Union, and all other countries or country groups.<\/p>\n
26.2 RELATIONSHIP OF THE PARTIES<\/p>\n
Each Party acknowledges and agrees that it is independent of
\n the other. Neither Party is, or will claim to be, a partner,
\n employee, joint venturer, agent, or legal representative of
\n the other Party except as specifically stated in this
\n Agreement. Neither Party will assume or create any obligation
\n or responsibility, expressly or by implication, on behalf of
\n or in the name of the other Party. Each Party is responsible
\n for the direction and compensation of its employees. Each
\n Party may have similar agreements with others. Each Party may
\n design, develop, manufacture, acquire or market its own or
\n competitive products and services.<\/p>\n
26.3 NOTICES<\/p>\n
All notices by one party to the other in connection with this
\n Agreement shall be in writing and will be sent to the
\n following addresses:<\/p>\n
Notices related to forecasts, orders, and shipment will be
\n sent to:<\/p>\n
For IBM:<\/p>\n
[**]
\n Procurement Manager
\n IBM Corporation
\n 5600 Cottle Road
\n San Jose, CA 95193<\/p>\n
For StorageTek:<\/p>\n
[**]
\n Director of Logistics
\n Storage Technology Corporation
\n 2270 South 88th Street
\n Louisville, CO 80028<\/p>\n
All other notices, including without limitation notices of
\n breach, default, will be sent to the following addresses:<\/p>\n
56
\n 63<\/p>\n
For IBM:<\/p>\n
[**]
\n Vice President, Worldwide Materials
\n IBM Corporation
\n 5600 Cottle Road
\n San Jose, CA 95193<\/p>\n
For StorageTek:<\/p>\n
[**]
\n Agreement Administrator
\n for IBM Agreement
\n Storage Technology Corporation
\n 2270 South 88th Street
\n Louisville, CO 80028<\/p>\n
with a copy to:<\/p>\n
For IBM:<\/p>\n
Legal Department
\n IBM Corporation
\n 5600 Cottle Road
\n San Jose, CA 95193<\/p>\n
For StorageTek:<\/p>\n
General Counsel
\n StorageTechnology Corporation
\n 2270 South 88th Street
\n Louisville, CO 80028<\/p>\n
Either Party may change any address at which it will
\n receive notices by notifying the other Party in writing.<\/p>\n
Notices and other communications between the Parties
\n in connection with this Agreement shall be deemed given:<\/p>\n
a. three days after being sent by U.S. mail,
\n postage prepaid, certified or registered, to
\n the address listed above; or<\/p>\n
b. on the date it is sent via facsimile
\n transmission with confirmation from the
\n receiving party that the transmission was
\n completed successfully, with the original
\n document sent as described above in item a.<\/p>\n
57
\n 64<\/p>\n
Notices related to order, forecast, shipment, and
\n delivery may also be sent via confirmed electronic mail (EDI)
\n to the address listed above and shall be deemed given on the
\n date of confirmation of delivery.<\/p>\n
26.4 COUNTERPARTS<\/p>\n
This Agreement may be executed simultaneously in two (2)
\n counterparts, each of which shall be deemed an original, but
\n both of which together shall constitute one and the same.<\/p>\n
26.5 HEADINGS AND ATTACHMENTS<\/p>\n
The headings in this Agreement are for reference only and will
\n not affect its meaning or interpretation. The Exhibits, their
\n Attachments, their Appendices and their Schedules, are
\n attached to and referenced in this Agreement and are
\n incorporated herein by reference.<\/p>\n
26.6 AMENDMENT<\/p>\n
For any change to this Agreement to be valid, it must be
\n signed by both Parties.<\/p>\n
26.7 WAIVER<\/p>\n
The failure by either Party at any time to enforce the
\n provisions of this Agreement, to exercise any option or
\n election, or to require at any time the performance by the
\n other Party of any provisions herein will not be construed as
\n a waiver of such provision.<\/p>\n
26.8 SEVERABILITY<\/p>\n
If any provision or provisions of this Agreement shall be held
\n to be invalid, illegal or unenforceable, the validity,
\n legality and enforceability of the remaining provisions shall
\n not in any way be affected or impaired provided the original
\n intentions of both Parties are maintained.<\/p>\n
If any provision of this Agreement is inconsistent with any
\n provision in the Final Judgment dated December ____,1997 that
\n is agreed upon by the Parties and approved by a Court of
\n competent jurisdiction, then such provision of this Agreement
\n shall be interpreted and construed in a manner to be
\n consistent with the relevant provision of the Final Judgment.<\/p>\n
26.9 WEEKENDS AND HOLIDAYS<\/p>\n
If any obligation of a party hereunder falls due on a weekend
\n day or a Federal holiday, then that obligation shall be due on
\n the next business day following such weekend day or Federal
\n holiday.<\/p>\n
58
\n 65<\/p>\n
26.10 FORCE MAJEURE<\/p>\n
Neither StorageTek nor IBM shall be liable for any delay or
\n failure of performance hereunder due to any contingency beyond
\n its control which renders performance commercially
\n unreasonable including, but not limited to, an act of God,
\n war, mobilization, riot, strike, embargo, fire, flood,
\n hurricane, earthquake or power failure (“force majeure
\n incident”).<\/p>\n
When only part of StorageTek’s or IBM’s ability to perform is
\n excused under this section, StorageTek or IBM must allocate
\n production and deliveries or receipt of deliveries among
\n various customers or suppliers then under contract for similar
\n goods during the period when StorageTek or IBM is unable to
\n perform. The allocation must be effected by StorageTek in
\n accordance with Section 10.5 of the Agreement.<\/p>\n
If either StorageTek or IBM claims excuse for nonperformance
\n under this section, it must give notice in writing to the
\n other party. If a Party’s inability to perform continues for
\n more than one hundred twenty (120) days, the other party may
\n terminate this Agreement.<\/p>\n
26.11 SURVIVAL<\/p>\n
The rights and obligations of Sections 1, 7.7a, 7.8, 7.10, 8,
\n 9, 14, 15, 16.5, 18, 19.1, 19.2, 19.4, 20, 22, 23, 24, 25 and
\n 26, and 11, 13.1a, 13.2, 13.3 and 13.4 (with respect to FRUs),
\n shall survive and continue after any expiration or termination
\n of this agreement and shall bind the parties and their legal
\n representatives, successors and assigns.<\/p>\n
26.12 ORDER OF PRECEDENCE<\/p>\n
In the event that there is an inconsistency or conflict
\n between the terms in the Specifications and other terms of
\n this Agreement, then such other terms in this Agreement shall
\n take precedence over the terms in the Specifications.<\/p>\n
THIS AGREEMENT SUPERSEDES ALL PROPOSALS, ORAL OR WRITTEN, AND
\n ALL NEGOTIATIONS, CONVERSATIONS OR DISCUSSIONS HERETOFORE HAD
\n BETWEEN THE PARTIES RELATED TO THE SUBJECT MATTER OF THIS
\n AGREEMENT. THE PARTIES BOTH ACKNOWLEDGE THAT THEY HAVE NOT
\n BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY ANY
\n REPRESENTATIONS OR STATEMENTS, ORAL OR WRITTEN, NOT EXPRESSLY
\n CONTAINED HERE. THE TERMS AND CONDITIONS OF THIS AGREEMENT
\n SHALL PREVAIL, NOTWITHSTANDING ANY VARIANCE WITH THE TERMS AND
\n CONDITIONS OF ANY ORDER OR OTHER INSTRUMENT SUBMITTED BY THE
\n PARTIES.<\/p>\n
59
\n 66<\/p>\n
INTERNATIONAL BUSINESS STORAGE TECHNOLOGY
\nMACHINES CORPORATION CORPORATION<\/p>\n
By: \/s\/ [**] By: \/s\/ [**]<\/p>\n
Name: [**] Name: [**]<\/p>\n
Title: Vice President Title: Executive Vice President
\n Enterprise Business
\nDate: December 18, 1997 Operations
\n Date: December 18, 1997<\/p>\n
67<\/p>\n
ATTACHMENT 1 TO EXHIBIT 1<\/p>\n
[**]<\/p>\n
[Intentionally left blank]
\n 68<\/p>\n
ATTACHMENT 2 TO EXHIBIT 1<\/p>\n
[**]<\/p>\n
[Intentionally left blank]<\/p>\n
69
\n EXHIBIT 2<\/p>\n
The document described in the attached pages and in the form as
\ndelivered to IBM in connection with this Agreement prior to the Effective Date,
\nand as further modified in accordance with the provisions of the Agreement, are
\nhereby incorporated into the Agreement by this Reference.<\/p>\n
70<\/p>\n
Attachment 1 To Exhibit 2<\/p>\n
71<\/p>\n
FILE: GAHIMEG1 LIST3270 A1 National VM\/ESA Conversational Monitor System<\/p>\n
MANUFACTURING TEST PROCESSES AND QUALIFICATIONS<\/p>\n
——————————————————-<\/p>\n
o The test process is described in the [**] test instruction attachment for
\n Equipment. This process describes test durations, criteria, and feedback,
\n and includes Oahu monitoring and identification of [**] and [**] are [**]
\n by Monterey at an appropriate timeframe, and results are acceptable as
\n measured by [**].<\/p>\n
o Oahu agrees that the test process of [**] shall be [**] than that process
\n described for [**] and will be subject to MONTEREY [**] before
\n implementation of same in [**] Equipment that is to be [**] under the
\n Agreement.
\n 72<\/p>\n
STORAGETEK<\/p>\n
ICEBERG(TM) TEST ENGINEERING<\/p>\n
TEST INSTRUCTION, EMUSYS<\/p>\n
CONTROLLED COPY NUMBER: ______________<\/p>\n
NOTE: A controlled copy is
\n indicated if RED ink is used for the Control
\n Copy Number. If the number is not red, this
\n indicates and Uncontrolled Copy.<\/p>\n
73
\n DOCUMENT APPROVALS<\/p>\n
ICEBERG TEST ENGINEERING [**]
\nDOCUMENT OWNER \/ DEPT MGR:
\n Date<\/p>\n
ICEBERG TEST ENGINEERING [**]
\nDOCUMENT CONTROLLER:
\n Date<\/p>\n
ICEBERG TEST ENGINEERING [**]
\nDOCUMENT CO-AUTHOR:
\n Date<\/p>\n
ICEBERG TEST ENGINEERING [**]
\nDOCUMENT CO-AUTHOR:
\n Date<\/p>\n
ICEBERG MANUFACTURING [**]
\nDEPARTMENT MANAGER:
\n Date<\/p>\n
74
\n REVISION HISTORY<\/p>\n
[**]
\n 75
\n TABLE OF CONTENTS<\/p>\n
[**]
\n 76<\/p>\n
ATTACHMENT 2 TO EXHIBIT 2<\/p>\n
[Intentionally left blank]
\n 77<\/p>\n
EXHIBIT 3<\/p>\n
IBM DEVELOPER AGREEMENT BETWEEN IBM AND STORAGETEK<\/p>\n
BASE AGREEMENT<\/p>\n
The IBM Developer Agreement (“IDA”) consists of this Base Agreement
\nand its Transaction Documents. This IBM Developer Agreement is entered into
\nbetween International Business Machines Corporation , with an office at 5600
\nCottle Road, San Jose, California 95193 (“IBM”) and Storage Technology
\nCorporation, with an office at 2270 South 88th Street, Louisville, Colorado
\n80028 (“StorageTek”), which IDA is Exhibit 3 to the OEM Agreement between the
\nparties.<\/p>\n
This Base Agreement establishes the basic terms and conditions under
\nwhich StorageTek will develop features, enhancements to storage products,
\nmicrocode therefor, related software, documentation and other supporting
\nmaterials and ongoing support thereof, for the Iceberg, Kodiak and Arctic Fox
\nstorage products that IBM will purchase from StorageTek under the OEM
\nAgreement. The Transaction Document(s) attached hereto specify the work to be
\nperformed by StorageTek and supplementary provisions and rights of the parties
\nwith respect thereto.<\/p>\n
The IDA, together with the documents listed in the Statement of Work
\n(“SOW”), is the complete agreement with respect to the development activities
\ndescribed above and replaces all prior oral or written communications between
\nStorageTek and IBM regarding the transactions described in the Transaction
\nDocuments.<\/p>\n
1.0 DEFINITIONS<\/p>\n
Capitalized terms have the following meanings.<\/p>\n
1.1 “Appearance Design” is the appearance presented by an object,
\nformed in hardware or by software, that creates a visual impression on an
\nobserver. Appearance Design refers to the ornamental and not the functional
\naspects of the object.<\/p>\n
1.2 “Deliverable” is any item that StorageTek prepares or provides
\nunder a Transaction Document, including IBM Materials and Licensed Works.
\nWhere Deliverables include code, StorageTek shall deliver object and fully
\ncommented source code, which source code shall correspond to the current
\nrelease or version of the Deliverable and be in the form specified in the
\nTransaction Document.<\/p>\n
1.3 “Derivative Work” is a work that is based on an underlying
\nwork and that would be a copyright infringement if prepared without the
\nauthorization of the copyright owners of the underlying work. Derivative Works
\nare subject to the ownership rights and licenses of others in the underlying
\nwork.
\n 78
\n 1.4 “Development Environment” includes devices, compilers,
\nhardware, software, user and programming documentation, media or other items
\nrequired for the development, testing, maintenance or implementation of a
\nDeliverable.<\/p>\n
1.5 “Enhancements” are changes or additions, other than
\nMaintenance Modifications, to the Deliverables.<\/p>\n
“Basic Enhancements” are incidental updates or Enhancements
\nthat support new releases of operating systems and devices. They do not
\ninclude Major Enhancements.<\/p>\n
“Major Enhancements” provide substantial additional value that
\ncould be offered to customers for an additional charge.<\/p>\n
1.6 “IBM Licensees” include IBM, its Subsidiaries, and those
\nauthorized by them to Distribute IBM’s products.<\/p>\n
1.7 “IBM Materials” are Deliverables that are funded in accordance
\nwith the terms of this Agreement by IBM and as result from product engineering
\nfunding specified in the SOW, that IBM owns, such as programs, program
\nlistings, programming tools, documentation, reports and drawings. IBM
\nMaterials also include Basic Enhancements and Maintenance Modifications that
\nStorageTek creates or authorizes others to create during the term of this IDA.
\nThe term “IBM Materials” does not include Licensed Works, Maintenance Code,
\nsoftware tools licensed to IBM by StorageTek, equipment or items specifically
\nexcluded in a Transaction Document.<\/p>\n
1.8 “Invention” is as defined in the OEM Agreement.<\/p>\n
1.9 “Licensed Works” are as identified in the Description of
\nLicensed Works.<\/p>\n
1.10 “Maintenance Modifications” are revisions that correct errors
\nand deficiencies in the Deliverables.<\/p>\n
1.11 “Moral Rights” are personal rights associated with authorship
\nof a work under applicable law. They include the rights to approve
\nmodifications and to require authorship identification.<\/p>\n
1.12 “Personnel” are either party’s employees or subcontractors
\nworking under the IDA.<\/p>\n
1.13 “Products” are as defined in the OEM Agreement.<\/p>\n
1.14 “Services” are efforts expended by StorageTek or StorageTek’s
\nPersonnel to perform the work described in a Transaction Document. Deliverables
\nmay result from such work.<\/p>\n
2.0 AGREEMENT STRUCTURE<\/p>\n
2.1 Structure. The structure of the IDA is as follows:<\/p>\n
2
\n 79
\n The “Base Agreement” defines certain basic terms and
\nconditions of the development and funding of the Deliverables in the SOW.<\/p>\n
“Transaction Documents” specify the details of a transaction
\nrelated to the Deliverables and the rights and obligations of the parties
\nthereto and may include additional terms and conditions. Transaction Documents
\ninclude, among others, the Statement of Work and the Description of Licensed
\nWork, and their amendments, appendices, schedules and exhibits.<\/p>\n
2.2 Conflicting Terms. Terms in IBM’s purchase orders for
\ndevelopment and support issued under the IDA and terms in StorageTek’s invoices
\nrelated thereto are all void unless identified otherwise in the IDA.<\/p>\n
3.0 RELATIONSHIP OF THE PARTIES<\/p>\n
3.1 Independent Contractor. Each party is an independent
\ncontractor. Neither party is, nor will claim to be, a legal representative,
\npartner, franchisee, agent or employee of the other except as specifically
\nstated in the IDA. Neither party will assume or create obligations for the
\nother. Neither party nor such party’s Personnel are employees of the other
\nparty. Each party is responsible for the direction and compensation of its own
\nPersonnel.<\/p>\n
3.2 Confidentiality. Where confidential information must be
\nexchanged, it will be done under the Agreement for Exchange of Confidential
\nInformation (“AECI”) No. OEM-9447.<\/p>\n
All Deliverables that are identified in the Agreement as IBM
\nMaterials shall be marked by StorageTek as IBM Confidential and treated and
\nprotected as the confidential information of IBM in accordance with
\nStorageTek’s obligations under the AECI and mutatis mutandis with respect to
\nDeliverables and other StorageTek confidential materials that are marked
\nStorageTek Confidential.<\/p>\n
3.3 Loaned Items: If any party lends the other party items
\n(“Loaned Items”), the lending party will do so under a mutually agreeable
\nequipment loan agreement (“ELA”). The party borrowing the Loaned Items (and
\nsuch party’s Personnel) will use the Loaned Items only in support of the IDA or
\nas otherwise mutually agreed in writing in the ELA. The party borrowing the
\nLoaned Items will return the Loaned Items as specified in the ELA or the
\nTransaction Document, whichever is earlier.<\/p>\n
3.4 Furnished Items: Either party may provide the other party
\nitems for use in connection with this IDA. These items will be identified as
\neither “IBM Furnished Items” or “StorageTek Furnished Items”, as the case may
\nbe, in the applicable Transaction Document(s). The party to whom any Furnished
\nItems (and such party’s Personnel) will use such Furnished Items [**] and [**]
\nwithout the approval of the owner of such Furnished Items. At the end of the
\nterm of the Agreement the party receiving such Furnished Items will destroy
\nsuch Items, including any copies of them, unless the party owning such
\nFurnished Items requests that the party receiving such Furnished Items delivers
\nthem to such furnishing party.<\/p>\n
3
\n 80
\n 3.5 Records: Both parties will maintain auditable records to
\nsupport invoices issued and payments made to the other. The records will be
\nretained and made available for [**] from the date of the related payment or
\ninvoice. Each party shall have [**], as that term is defined in the OEM
\nAgreement. The auditor will only disclose to the requesting party any payments
\ndue and payable, or specific failure of records to support invoices, for the
\nperiod examined.<\/p>\n
3.6 The parties shall each:<\/p>\n
a. use their own then-current processes designed to
\nprevent and\/or identify contamination by harmful code. Each party shall
\npromptly notify the other party if suspected contamination occurs in spite of
\nsuch processes.<\/p>\n
b. participate in progress meetings to review
\nStorageTek’s performance of its obligations as specified in a Transaction
\nDocument or as otherwise agreed in writing by the parties; and<\/p>\n
c. [**] obtain the [**] and such party’s Personnel to
\nconvey the rights granted or assigned in the IDA.<\/p>\n
3.7 Neither party will, without the other party’s prior written
\napproval:<\/p>\n
a. [**] other than as may be permitted under the OEM
\nAgreement, and any attempt to do so is void; provided, however, that either
\nparty shall be permitted to use individual subcontractors or temporary
\nagencies, so long as the other party’s rights (as set forth in the OEM
\nAgreement and the documents comprising the IDA) are enforced against such
\nsubcontractors; and provided, further, that each party acknowledges that
\nSubsidiaries of the other party have been and will continue to be involved in
\nthe development activities described in the IDA.<\/p>\n
b. assume or create obligations on the other party’s
\nbehalf, or make any representations for such other party; or<\/p>\n
c. disclose the terms of the IDA except under a
\nnondisclosure agreement to the disclosing party’s financial advisors, attorneys
\nand accountants, or to assert the disclosing party’s rights under it. If
\nrequired by law to disclose the terms of the IDA, StorageTek will promptly
\nnotify IBM. Upon request, StorageTek will seek confidential treatment for the
\nIDA.<\/p>\n
3.8 StorageTek will: unless otherwise specified in the SOW or any
\ndocument comprising the IDA, maintain records to verify authorship of all
\nLicensed Works and IBM Materials for [**] after the expiration of the term of
\nthe OEM Agreement. Upon request by IBM, StorageTek shall deliver or otherwise
\nmake available such information in a form reasonably specified by IBM;<\/p>\n
4
\n 81
\n4.0 OWNERSHIP AND RIGHTS<\/p>\n
4.1 IBM Materials: IBM [**], and StorageTek agrees to execute any
\ndocuments and undertake any actions reasonably necessary to effect and perfect
\nthe assignment of the ownership of [**] to IBM.<\/p>\n
Each party’s Personnel may use copies, intermediate versions,
\ndrafts and partial copies of the other parties’ owned property (i.e., IBM
\nMaterials for IBM, Licensed Works for StorageTek) only as set forth in the
\nAgreement. At the expiration of the term of the OEM Agreement and unless
\notherwise necessary to exercise the licenses granted to the receiving party for
\nsuch other party’s owned property, the receiving party will destroy (and, upon
\nrequest certify destruction thereof) these items unless the owning party
\nrequests that the receiving party deliver them to the owning party.<\/p>\n
4.2 Development Environment<\/p>\n
a. For each Deliverable, StorageTek will list all items
\ncontained in its Development Environment that are not provided by IBM.
\nStorageTek will deliver the listed items that are not commercially available;
\nStorageTek will revise the list for any changes and deliver these updated items
\nthat are not commercially available.<\/p>\n
b. StorageTek grants IBM a [**] license to use, execute,
\nreproduce, display, perform, and prepare Derivative Works of, all delivered
\nDevelopment Environment items and their Derivative Works. StorageTek grants
\nIBM the right to authorize others to do any of the above in support of this
\nAgreement. This license applies to associated audio and visual works.<\/p>\n
4.3 Patents<\/p>\n
StorageTek grants IBM an [**] license under any patents and
\npatent applications that are (a) owned or licensable by StorageTek now or in
\nthe future, and (b) required to make, have made, use, have used, sell, offer
\nfor sale, license or otherwise transfer: (i) combinations of Equipment with
\nequipment or software; (ii) Deliverables or its Derivative Works for inclusion
\nin Equipment; and (iii) combinations of a Deliverable or its Derivative Works
\nwith equipment and other software in such equipment.<\/p>\n
4.4 Inventions.<\/p>\n
a. Disclosure. StorageTek will promptly disclose in
\nwriting to IBM each Invention. Such disclosure will specify the features or
\nconcepts that StorageTek believes to be new or different.<\/p>\n
b. Ownership. IBM shall own all [**] and [**] including
\n[**] relating to an Appearance Design which arise out of development that is
\nfully or partially funded by IBM under this IDA. StorageTek will, at IBM’s
\nexpense, assist in the filing of patent applications on these [**] and have
\nrequired documents signed. StorageTek hereby [**], any such [**] together with
\nthe right to seek protection by obtaining patent rights therefor and to claim
\nall rights of priority thereunder, and the same shall become and remain IBM’s
\nproperty whether or not such protection is sought.<\/p>\n
5
\n 82
\n c. License. IBM grants to StorageTek a [**] license
\nunder [**] and shall include the right to make, have made, use, have used,
\nlease, sell offer for sale and\/or otherwise transfer any apparatus, and to
\npractice and have practiced any process, provided, however, that such license
\nis not applicable to any [**], patent applications or patents relating to
\nAppearance Designs.<\/p>\n
d. No Other Patent Rights. Except as specifically
\ngranted, the IDA does not grant either party any rights in any patents or
\npatent applications.<\/p>\n
5.0 DELIVERY AND ACCEPTANCE<\/p>\n
5.1 Delivery: StorageTek will provide all Deliverables according
\nto the schedule in a Transaction Document with remedies for failure to do so as
\nspecified in the Agreement.<\/p>\n
5.2 Evaluation: IBM has the right to evaluate each Deliverable as
\nspecified in the applicable Transaction Document before accepting it to verify
\nthat it meets the requirements of such Transaction Document. IBM will notify
\nStorageTek if it accepts (in whole or in part) or rejects each Deliverable
\naccording to the processes described in the particular Transaction Document.<\/p>\n
6.0 PERSONNEL<\/p>\n
6.1 Parties’ IDA Representatives: A Technical and a Contract
\nCoordinator for each of StorageTek and IBM will be appointed pursuant to the
\nSOW to represent them in matters specific to the SOW and all other documents
\ncomprising the IDA. Each party will address all notices, payments and
\ndeliveries to the appropriate coordinator. A party will notify the other in
\nwriting when coordinators change.<\/p>\n
6.2 StorageTek will:<\/p>\n
a. provide appropriate [**] the Personnel who will
\nperform StorageTek’s obligations under the IDA;<\/p>\n
b. assure that the skill levels being applied by
\nStorageTek’s Personnel to the part of its business being used to perform the
\nIDA are consistent with the skills being applied in comparable parts of
\nStorageTek’s business that are not involved in performing this IDA;<\/p>\n
c. not [**] technical development personnel who will
\nsupport development of the Products to areas of StorageTek’s business that are
\nnot involved in performing under this IDA if so doing would [**] the Products
\nor the [**]; and<\/p>\n
d. supply its [**] to IBM as to how it will [**] with
\nthe specific development group performing the obligations under this IDA.<\/p>\n
6
\n 83
\n 6.3 Both Parties will:<\/p>\n
a. assign employees with the requisite knowledge and
\nskills to perform their respective obligations under the IDA;<\/p>\n
b. perform obligations under the IDA and grant rights to
\nthe other party as set forth therein; and<\/p>\n
c. be responsible for the direction, control,
\ncompensation and actions of their own Personnel; and<\/p>\n
d. if such employment would violate the terms of Section
\n2397 of Title Ten of the U.S.C.A., not employ or compensate Personnel to
\nperform work under this IDA (without M’s prior written approval) who were,
\nwithin the last two years: 1) members of the U.S. Armed forces in a pay grade
\nof O-4 or higher; or 2) civilians employed by the U.S. Department of Defense
\nwith a pay rate equal to or greater than the minimum rate for a grade GS-13.<\/p>\n
7.0 COMPLIANCE WITH LAWS<\/p>\n
7.1 Compliance with Laws and Regulations: Each party will, at its
\nown expense, comply with all applicable governmental laws and regulations.<\/p>\n
7.2 Exports: Each party will comply with all applicable
\ngovernment export laws and regulations.<\/p>\n
7.3 EEO\/OSHA: To the extent applicable, each party will comply
\nwith Executive Order 11246 of the President of the United States on Equal
\nEmployment Opportunity and the Occupational Safety and Health Act of 1970.<\/p>\n
8.0 PRICES, PAYMENTS AND TAXES<\/p>\n
8.1 Compensation: IBM will pay StorageTek for its Services in
\naccordance with the IDA. StorageTek’s applicable taxes, expenses and payments
\nto third parties are included in the compensation, unless identified otherwise
\nin a Transaction Document.<\/p>\n
8.2 Invoices: StorageTek and IBM will each submit invoices for
\nServices, as specified in each particular Transaction Document in accordance
\nwith that document, with payment due as set forth in such Transaction Document.
\nThe applicable expenses and payments to third parties are included in the
\ncompensation, unless otherwise identified in a Transaction Document.<\/p>\n
9.0 AGREEMENT TERM AND TERMINATION AND SURVIVAL<\/p>\n
9.1 Term. The term of this IDA is coextensive with that of the
\nOEM Agreement; the IDA’s continuation is contingent upon the OEM Agreement
\nremaining in effect.<\/p>\n
9.2 Termination. The provisions relating to termination of the
\nIDA shall be as set forth in the OEM Agreement.<\/p>\n
7
\n 84
\n 9.3 Survival. Any terms of the IDA that by their nature extend
\nbeyond its termination (e.g., Part 4.0 “Ownership and Rights” and Part 8.0
\n“Compliance with Laws”) shall survive. These terms will apply to either
\nparty’s successors and assigns.<\/p>\n
10.0 NOT USED<\/p>\n
11.0 SUBSIDIARY RIGHTS<\/p>\n
11.1 Each party may sublicense its intellectual property rights
\ngranted to it by the other party under the Agreement to its Subsidiaries, who
\nmay sublicense the same to their Subsidiaries.<\/p>\n
8
\n 85<\/p>\n
STATEMENT OF WORK<\/p>\n
A Transaction Document Issued Under the
\n IBM Developer Agreement (“IDA” or “MDA”)<\/p>\n
By signing this Transaction Document, IBM and StorageTek agree that
\nthe complete agreement between the parties regarding the Deliverables consists
\nof the following documents:<\/p>\n
A. This Statement of Work (“SOW”);
\n B. The IBM Developer Agreement Base Agreement (“Base Agreement”);
\n C. Exhibit: Certificate of Originality (“COO”);
\n D. Description of Licensed Work (“DLW”);
\n E. IBM Source Code Custody Agreement (“Escrow Agreement”);
\n F. The Agreement for Exchange of Confidential Information
\n(“AECI”) No. OEM-9447; and
\n G. The OEM Agreement.<\/p>\n
OVERVIEW<\/p>\n
Pursuant to the terms of this SOW and in connection with the purchase
\nand distribution of Iceberg, Kodiak and Arctic Fox by IBM under the OEM
\nAgreement, StorageTek will design, develop, document, test and provide certain
\nfeatures, functions and enhancements to the microcode, software, hardware, and
\nrelated materials for Iceberg, Kodiak, and Arctic Fox, as well as ongoing
\nmaintenance and support thereof. IBM agrees [**] these activities and provide
\nsuch other items and\/or assistance, as specified herein.<\/p>\n
DEFINITIONS<\/p>\n
Unless otherwise defined herein, capitalized terms shall have the same
\nmeanings as set forth in the Base Agreement or the OEM Agreement.<\/p>\n
2.1 “Base Iceberg Package” shall mean the Iceberg product as it exists as
\n of June 30, 1996, including the Freezer III, IXFP base support, IXOF
\n and Predictive Service Analysis, as listed in Section 6 of this SOW.<\/p>\n
2.2 “Code” means computer programming code, including both Object Code and
\n Source Code, and including computer programming code being used as
\n microcode:<\/p>\n
Object Code is the computer programming code substantially in binary
\n form. It is directly executable by a computer after processing, but
\n without compilation or assembly.<\/p>\n
Source Code is the computer programming code, other than Object Code,
\n and related source code level system documentation, comments and
\n procedural code, such as job control language. It may be printed out
\n or displayed in a form readable and understandable by a programmer of
\n ordinary skill.
\n 86
\n2.3 “Completion and Acceptance Criteria” shall mean, for each Deliverable,
\n the criteria listed in the attached Appendix B, as modified by the
\n PDP, that each such Deliverable must meet.<\/p>\n
2.4 “Design Change Request” or “DCR” shall mean a request by either of
\n StorageTek or IBM to make a change in any Specified Function, which
\n DCR must follow the process listed in Section 5.1(a).<\/p>\n
2.5 “Dispute Resolution Process” shall mean the dispute resolution process
\n described in Section 22 of the OEM Agreement.<\/p>\n
2.6 “ESP” or “Early Support Program” means the Early Support Program
\n process as IBM has previously implemented such programs for S\/390
\n storage subsystems.<\/p>\n
2.7 The “ESP Date” shall mean, with respect to Section 6.1 hereof, the
\n date that StorageTek meets the ESP Checkpoint criteria as specified in
\n Appendix B attached hereto.<\/p>\n
2.8 “Arctic Fox” is a solid state storage device comprised of Kodiak
\n without the disk drives.<\/p>\n
2.9 “Iceberg” shall be as described in Appendix A attached hereto.<\/p>\n
2.10 “Kodiak” shall be as described in Appendix A attached hereto.<\/p>\n
2.11 “Impact Error” is as defined in the OEM Agreement.<\/p>\n
2.12 “PDP Date” is the date specified for StorageTek to provide to IBM the
\n PDP for each<\/p>\n
Specified Function or each group of Specified Function(s).<\/p>\n
2.13 “Product Development Plan” or “PDP” shall mean a written plan prepared
\n by StorageTek describing the activities to be undertaken in connection
\n with each Specified Function or group of Specified Functions listed in
\n Section 6.1 hereof.<\/p>\n
2.14 “Program Trouble Report” or “PTR” shall mean a report prepared by [**]
\n to reflect a problem discovered during component testing or IBM’s
\n review of Deliverables.<\/p>\n
2.15 “Specified Functions” or “SF” shall mean the specific functions and\/or
\n features that, either individually or together with other Specified
\n Functions listed in Section 6.1 hereof, comprise Deliverables.<\/p>\n
2.16 “Volume” shall mean, with respect to the heading in Section 6.1
\n hereof, the date on which StorageTek shall meet the Volume Shipment
\n Checkpoint and Volume Shipment Compliance criteria as specified in
\n Exhibit B. With respect to all Specified Functions, the Volume date
\n means that StorageTek has the capability of filling orders in
\n reasonable quantities on such date.<\/p>\n
2
\n 87<\/p>\n
STORAGETEK’S RESPONSIBILITIES<\/p>\n
StorageTek agrees to perform the following obligations under this SOW:<\/p>\n
3.1 PROJECT MANAGEMENT.<\/p>\n
Write or provide a PDP for each Deliverable for which a PDP Date is
\n established in Section 6.1. StorageTek will include in the PDP (or
\n otherwise provide for in existing PDP’s) a project staffing plan, a
\n specification and a development plan, all as described in Appendix G
\n and, as required, submit updates that include reassignment of key
\n personnel and training plans. The PDP is subject to the written
\n approval of IBM’s Contract Coordinator in writing, which approval may
\n not be arbitrarily withheld or delayed. If no approval is received
\n within a reasonable time after the PDP Date or if IBM has rejected the
\n PDP, either party may invoke the Dispute Resolution Process.
\n Notwithstanding any failure to obtain IBM’s approval of the PDP,
\n StorageTek shall proceed to perform the Services with respect to the
\n Deliverable in accordance with the terms of this Agreement, and the
\n Volume date, and adjustments shall apply with respect thereto.<\/p>\n
Submit written monthly status reports (“Reports”) that indicate
\n StorageTek’s progress against the accepted plan.<\/p>\n
The Reports will include:<\/p>\n
(1) a summary of accomplishments during the current reporting
\n period, as compared with the schedule set forth in the PDP;<\/p>\n
(2) a summary of all concerns or issues (including, without
\n limitation, development delays, and changes to the
\n Deliverables’ specifications pursuant to the DCR and PTR
\n process described herein) for the current reporting period
\n along with the plan and projected date for resolution, if
\n any;<\/p>\n
(3) the status of outstanding concerns or issues that were
\n reported in previous reporting periods; and<\/p>\n
(4) any other information that materially affects StorageTek’s
\n ability to provide the Deliverables.<\/p>\n
Notify IBM in writing of any development or delivery delays as soon as
\nStorageTek becomes aware of such delays.<\/p>\n
Provide all Deliverables in accordance with Section 6 and as further
\ndescribed in the PDP, including without limitation, meeting the schedule set
\nforth therein, which Deliverable shall be in accordance with the requirements
\nspecified in Section 6 and also in accordance with Appendix A, “FUNCTIONAL,
\nTECHNICAL AND QUALITY SPECIFICATIONS”, as the same may be modified by the
\napplicable PDP.<\/p>\n
3
\n 88
\n3.2 DESIGN, CODE AND DEVELOPMENT.<\/p>\n
a. Provide and implement the Deliverables in accordance with the
\n specifications described in Appendix A and Section 6 hereof,
\n as the same may be amended by StorageTek’s PDP with the
\n written agreement of IBM’s Contract Coordinator.<\/p>\n
b. Use its established procedures to implement the following
\n development processes for activities being under taken
\n subsequent to the Effective Date hereof:<\/p>\n
design change requests (DCRs);
\n program trouble reports (PTRs);
\n design reviews of hardware, microcode and software
\n design; and
\n code and test case inspections, as appropriate.<\/p>\n
c. Ensure that user documentation Deliverables are created by
\n individuals best qualified to describe the technical details
\n unique for its subsystems. StorageTek will further ensure
\n these individuals are available for interviews, at no
\n additional cost to IBM [**], to augment the information as
\n required; provided, however, that IBM agrees not to
\n unreasonably interfere with such individuals’ ability to
\n perform the Services hereunder. IBM will provide prior
\n reasonable written notice to StorageTek prior to any requested
\n interviews and shall be subject to StorageTek’s facility
\n security requirements.<\/p>\n
3.3 INSPECTIONS.<\/p>\n
StorageTek will inspect the Deliverables that StorageTek develops
\n under this SOW as such inspection is required pursuant to the
\n applicable PDP. StorageTek’s inspection shall be done in accordance
\n with the processes it applies generally to inspection in its overall
\n business. StorageTek will inform IBM of the dates for all inspections
\n and provide draft copies of the Deliverable subject to inspection at
\n least one (1) week before the inspection meeting, or at such other
\n time as the parties may mutually agree if such draft copies cannot
\n reasonably be provided at least one (1) week before the inspection
\n meeting. IBM has the right to participate in these inspections and to
\n review the results of the inspections.<\/p>\n
3.4 TRAINING. StorageTek agrees to provide training to IBM in accordance
\n with Sections 16 and 17 of the OEM Agreement.<\/p>\n
3.5 QUALITY. StorageTek’s Deliverables shall be subject to the quality
\n requirements set forth in Section 9 of the OEM Agreement and Section
\n 2D to Appendix A attached hereto.<\/p>\n
3.6 StorageTek will document and provide to IBM each Deliverable according
\n to the criteria in Appendix B, “COMPLETION AND ACCEPTANCE CRITERIA.”<\/p>\n
4
\n 89<\/p>\n
3.7 StorageTek shall provide product engineering services (“Product
\n Engineering Services”) to support Equipment that IBM is acquiring or
\n has acquired from StorageTek. These Services shall include, without
\n being limited thereto, the following:<\/p>\n
a. StorageTek shall correct errors and deficiencies in the
\n Licensed Works and IBM Materials to ensure conformance to the
\n Specifications therefor (as these have been modified by any
\n applicable PDP);<\/p>\n
b. StorageTek shall supply to IBM all corrections to the Licensed
\n Works that it has made outside of the scope of this Agreement
\n that affect the Equipment;<\/p>\n
c. StorageTek shall provide minor updates and changes that
\n support new releases of operating systems and devices (e.g.,
\n HDAs, channel path, escon directors); and<\/p>\n
d. StorageTek shall provide Basic Enhancements and Maintenance
\n Modifications to the Licensed Works and IBM Materials, as well
\n as enhance and support existing StorageTek software and
\n microcode that are normally shipped in or with Iceberg,
\n Kodiak, or Arctic Fox for the purpose of configuration,
\n service, maintenance and support; provided, however, that IBM
\n shall not acquire any ownership rights with respect to
\n StorageTek’s Maintenance Code, proprietary tools and
\n maintenance documentation and enhancements thereto that are
\n owned by StorageTek and generally used by StorageTek for its
\n other products, all of which are excluded from the term
\n “Licensed Works.”<\/p>\n
4. IBM’S RESPONSIBILITIES<\/p>\n
IBM agrees to perform the following obligations under this SOW:<\/p>\n
4.1 IBM’s Contract Coordinator will, on a timely basis, review and accept
\n or reject in writing all Deliverables according to the acceptance
\n criteria specified in Appendix B, “COMPLETION AND ACCEPTANCE
\n CRITERIA,” as modified by the PDP. Acceptance of all Deliverables
\n shall not be unreasonably withheld or delayed, and any disagreement
\n between the parties shall be subject to the Dispute Resolution Process
\n described in Section 22 of the OEM Agreement. StorageTek’s warranty
\n in Section 14 of the OEM Agreement relative to the conformance of the
\n Deliverables with the Specifications applies regardless of any
\n acceptance of a Deliverable by IBM under the acceptance criteria
\n specified in Appendix B, as modified by the PDP.<\/p>\n
4.2 IBM shall track and record all Impact Errors. Such tracking and
\n recording shall be performed by IBM’s product engineering group in
\n accordance with its standard practice presently utilized for IBM’s
\n comparable DASD products.<\/p>\n
4.3 FUNDING.<\/p>\n
The parties have agreed upon the following schedule of funding
\n relating to the Services already performed in the [**] or to be
\n performed by StorageTek hereunder:<\/p>\n
5
\n 90<\/p>\n
\n\nTotal Funding [**] Funding [**]
\n
\n4Q of 1997: [**]
\n [**]<\/p>\n[**] [**]<\/p>\n
[**] [**]<\/p>\n
Totals: [**]
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
(1) Subject to Section 4.3b<\/p>\n
a. Aggregate Funding Amounts. IBM has provided or will provide
\n StorageTek with aggregate funding for [**] Services in the
\n following amounts:<\/p>\n
4Q of 1997: [**]
\n [**] subject to Section [**]; and
\n [**] subject to Section [**] .<\/p>\n
On a quarterly basis the parties shall specify Deliverables (other
\n than “Committed In-Plan” Deliverables, as specified in Section 6.1
\n hereof) eligible for consideration for funding from (i) [**] funds;
\n (ii) [**] funds; or (iii) [**] funds.<\/p>\n
StorageTek acknowledges that IBM shall have sole discretion to [**]
\n funding through the [**] process (except for [**] highlighted in
\n Section [**].<\/p>\n
b. Product Engineering Funding. IBM has funded or shall fund
\n [**] Services for the products that IBM is purchasing from
\n StorageTek under the OEM Agreement, as those products are
\n enhanced in accordance with this IDA, as follows:<\/p>\n
4Q of 1997: [**]
\n [**] [**]
\n [**] [**]<\/p>\n
The total amount of [**] funding [**] shall be divided by 4 and
\n allocated to each quarter of the applicable year.<\/p>\n
In any particular year, if StorageTek requires more funds to meet its
\n product engineering obligations under the OEM Agreement than is funded
\n above, StorageTek shall be responsible for any such additional funds.<\/p>\n
In any particular year, if StorageTek spends less than the [**] funds,
\n the amount [**] for [**] will be made available for use by IBM for
\n Deliverables that are other than “Committed In-Plan Items”. In
\n addition, if StorageTek is achieving its quality requirements for the
\n Equipment as set forth in Section 9 of the OEM Agreement (“Quality
\n Requirements”), IBM may, [**] funds and apply the remaining to
\n Deliverables<\/p>\n
6
\n 91
\n that are other than “Committed In-Plan Items”; provided, however, that
\n if the quality of the Equipment falls below the Quality Requirements,
\n then IBM agrees to [**] to be used [**] funds.<\/p>\n
With respect to [**], StorageTek shall [**] of the [**] [**] funding
\n paid by IBM in an amount equal to [**] that is (i) [**], or (ii) [**];
\n provided, however, that (a) [**], and (b) any [**].<\/p>\n
Any [**] StorageTek shall be [**] by [**]; provided, however, that
\n with respect to any portion of such [**] described in clause (ii)
\n above, StorageTek agrees [**]. For the purpose of determining any
\n such [**], only the [**] will be used to determine the amount of [**]
\n by StorageTek, and a [**].<\/p>\n
With respect to [**] , IBM may, at its option, [**] allocated for [**]
\n by giving written notice at least one year prior to the end of the
\n first or any subsequent quarter in [**]; any such notice(s) will be
\n effective for the applicable quarter and for any subsequent quarters
\n in [**]. StorageTek agrees to negotiate in good faith to provide
\n Product Engineering Services beyond [**] at a price equal to [**] if
\n IBM so requests and StorageTek is still providing product engineering
\n for such Devices or Equipment.<\/p>\n
c. Funding of Deliverables. IBM has funded or shall fund [**] of
\n the development for the Deliverables specified in Section 6.1
\n as “Committed In-Plan Items” as follows:<\/p>\n
(i) [**]<\/p>\n
\n\n Product $ Period
\n ——- – ——
\n
\n [**]<\/p>\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
(ii) [**]<\/p>\n
\n\n Product $ Period
\n ——- – ——
\n
\n [**]<\/p>\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
7
\n 92
\n If StorageTek requires more funds to complete any such
\n Deliverables than are specified above, StorageTek shall [**]
\n funding. Notwithstanding such StorageTek funding, the
\n Deliverables shall remain IBM Materials for purposes of the
\n rights and obligations set forth in the IDA documents.<\/p>\n
If StorageTek requires [**] funds to complete a Deliverable,
\n then the parties agree any [**] funds shall be made available
\n for other Deliverables and other development projects.<\/p>\n
The total amount of development funding for the [**] shall be
\n divided by 4 and allocated to each quarter of the applicable
\n year.<\/p>\n
d. General. Funds are considered to be spent for product
\n engineering or a project based upon the application of GAAP,
\n as those principles have been applied during the one calendar
\n year period preceding the calendar year of the execution of
\n this SOW.<\/p>\n
For each quarter, StorageTek shall invoice IBM for Services to
\n be performed during each such quarter on or before the first
\n business day of the quarter, and IBM shall pay for such
\n Services in [**] payments due and payable on the last business
\n day of the end of each month of each quarter.<\/p>\n
e. [**] Funding. During the term of the Agreement, StorageTek
\n may, from time to time, conceive idea(s) for updates,
\n improvements, or other development projects which are not
\n merely duplicative of activities otherwise undertaken
\n hereunder and which add commercially significant functionality
\n and\/or performance improvements to Equipment or Devices
\n (hereafter, “New Developments”).<\/p>\n
StorageTek may, but is not obligated to, offer any New
\n Development that it conceives through [**] to IBM–together
\n with its reasonable estimate of the cost and development
\n schedule for such New Development. IBM may [**] such New
\n Developments as a project hereunder. If IBM [**] such New
\n Developments [**] hereunder, or if StorageTek [**], StorageTek
\n shall own such New Developments.<\/p>\n
If StorageTek completes [**] New Developments for inclusion in
\n or that would enhance the Iceberg, Kodiak and Arctic Fox
\n Products, then StorageTek shall offer until [**], for purchase
\n by IBM based on purchase orders that are placed prior to [**],
\n all devices, features, upgrades, or other products using such
\n New Developments to IBM at its [**] Price (as defined in the
\n OEM Agreement); and in the case of microcode or software New
\n Developments, StorageTek shall offer [**] to license them to
\n IBM under reasonable terms and conditions, which includes the
\n right to sublicense customers, at [**], not to exceed such
\n [**] Price. StorageTek agrees to deliver the object version
\n of the Code to IBM which may be replicated and distributed
\n directly to customers for any such New Development that IBM
\n elects to license and to deliver the source code version of
\n the Code to IBM to maintain and support such New Development
\n and prepare Derivative Works thereof.<\/p>\n
8
\n 93
\n If the New Developments include any [**], StorageTek is
\n licensed to sell or license such [**] devices, features,
\n upgrades, or other products using such New Developments to
\n third parties as set forth in the DLW Transaction Documents.<\/p>\n
All such New Developments shall become IBM Materials if funded
\n by IBM and any intellectual property rights arising out of the
\n development of such New Developments shall be owned by IBM in
\n accordance with the IDA.<\/p>\n
f. IBM agrees to provide to StorageTek IBM drives under the
\n consignment process for StorageTek’s use in [**] of the
\n Deliverables under the Agreement for [**] for each IBM drive
\n after the date of StorageTek’s [**] of each such IBM drive.
\n Before the expiration of this period, StorageTek agrees to
\n remove any such IBM drives from [**] ; to check such IBM
\n drives under an [**]; and to integrate such IBM drives into
\n [**] or [**] that are to be Delivered to IBM under the
\n Agreement. If an IBM drive [**], it shall be promptly
\n returned to IBM in accordance with Section 12.3 of the OEM
\n Agreement.<\/p>\n
If StorageTek does not remove each IBM drive from its [**],
\n within a period of [**], then IBM will [**] IBM drive to
\n StorageTek at a [**] agreed upon price. With regard to each
\n IBM drive that StorageTek has failed to remove, the following
\n additional terms shall apply:<\/p>\n
(i) except as otherwise provided in subsections (ii),
\n (iii) and (iv), below, the terms of the IBM [**];<\/p>\n
(ii) the IBM drives shall be sold on [**];<\/p>\n
(iii) the IBM drives may be used [**] by StorageTek in
\n connection with its [**] under the OEM Agreement; and<\/p>\n
(iv) if IBM drives are [**], then such IBM drives and all
\n associated documentation shall be considered as [**].
\n These items shall be covered under the terms of the
\n [**].<\/p>\n
4.4 IBM shall provide SSA design and implementation assistance (not to
\n exceed two person- years) in accordance with the PDP.<\/p>\n
4.5 In order to assist StorageTek in providing Deliverables as specified
\n in the IDA, IBM’s DASD subsystem product development group shall make
\n reasonable efforts to provide, by the dates set forth in the related
\n PDP, StorageTek with the following items; but StorageTek shall have no
\n remedy for IBM’s failure to so provide any of these items and shall
\n remain responsible, despite any such failure by IBM, for StorageTek’s
\n obligations under this Agreement:<\/p>\n
9
\n 94
\n a. Documentation and specifications as required in accordance
\n with the specific PDP: [**].<\/p>\n
b. Products, programs, documentation, and training, as required
\n in accordance with the PDP:<\/p>\n
(1) [**] and [**] such as [**] test;<\/p>\n
(2) [**], including the [**] referred to in Section [**]
\n ; and<\/p>\n
(3) [**].<\/p>\n
c. Assistance as required in accordance with the PDP for:<\/p>\n
(1) General Design Review — not to exceed one person
\n month per year during this SOW; and<\/p>\n
(2) ESP Selection, account management, test plan,
\n monitoring, VSAM consultation.<\/p>\n
d. Product specifications, and support for [**] with [**], as
\n required by the applicable PDP.<\/p>\n
To the extent that IBM has the right to do so, IBM grants StorageTek a
\n [**] license (unless [**] for such items, and then such license shall
\n be [**] to use, execute, reproduce, display and perform the items
\n provided under this subsection– only in support of IDA.<\/p>\n
4.6 If IBM fails to provide any of the above items, then StorageTek will
\n immediately notify IBM’s Contract Coordinator in writing and, if
\n within fourteen (14) days thereafter, IBM has still not provided such
\n items, then the parties shall use the Dispute Resolution Process to
\n reach a resolution in order to avoid unreasonable delays.<\/p>\n
5. MUTUAL RESPONSIBILITIES<\/p>\n
5.1 PROJECT CONTROLS. Both parties will use the following project
\n controls for work performed under this SOW.<\/p>\n
a. Design Change Requests (DCR). All changes to the
\n specifications must go through the following DCR process:<\/p>\n
(1) either party may propose a DCR;<\/p>\n
(2) StorageTek will size the DCR and advise IBM in
\n writing of any impact to the schedule;<\/p>\n
(3) IBM will decide whether to have the DCR implemented
\n or not; and<\/p>\n
10
\n 95
\n (4) StorageTek will keep a log of all DCRs to track the
\n status of such DCRs through the development and test
\n cycle.<\/p>\n
The log will specify the status as:<\/p>\n
“Proposed” – a DCR has been created and has
\n been distributed to both parties;<\/p>\n
“Accepted\/Rejected” – IBM has notified
\n StorageTek that the DCR has been accepted or
\n rejected;<\/p>\n
“Design Specification Updated” – StorageTek
\n has updated the Product’s Design
\n Specification to reflect the DCR if it has
\n been accepted;<\/p>\n
“In Process” – StorageTek is implementing the
\n DCR; or<\/p>\n
“Complete” – The DCR has been implemented and
\n tested and the Documentation is updated to
\n reflect the DCR.<\/p>\n
Any approval of a DCR by IBM or StorageTek
\n must be made by that party’s Contract
\n Coordinator in writing.<\/p>\n
b. Program Trouble Reports (PTR). All problems discovered during
\n component testing or IBM’s review of Deliverables will follow
\n the PTR process. The procedure used will be as follows:<\/p>\n
(1) either party may issue a PTR;<\/p>\n
(2) StorageTek will track the status of each PTR; and<\/p>\n
(3) the tracking system will specify the status as:<\/p>\n
“Opened” – a problem has been discovered and
\n entered into the PTR tracking system;<\/p>\n
“Received” – the programmer or engineer
\n responsible for the code is working on the
\n PTR;<\/p>\n
“Answered” – the programmer or engineer has
\n fixed and tested the problem; or<\/p>\n
“Closed” – the test has been rerun, to verify
\n that the problem has been corrected and has
\n not caused any new problems.<\/p>\n
11
\n 96
\n5.2 PROJECT MANAGEMENT.<\/p>\n
a. Project Management. IBM’s and StorageTek’s respective
\n management teams will meet monthly and review the field
\n support and status of the Deliverables. The field support
\n review will encompass the field performance of products, open
\n problems and status, resource allocation and use and customer
\n situations. The status of the Deliverables shall be reviewed
\n for progress in connection with the PDP, including plans for
\n corrective action (if any Deliverable is behind the PDP
\n schedule) and a summary of all concerns and issues.<\/p>\n
b. Plan Change Process. As business needs, business
\n opportunities or resource availabilities change, IBM may
\n supply StorageTek with a concise description of new product
\n requirements to StorageTek, which StorageTek will review and
\n provide [**] therefor. In addition, StorageTek may also
\n propose alternative descriptions of such new product
\n requirements (as well as other new product requirements),
\n together with [**].<\/p>\n
If StorageTek can commit to such new product requirements
\n without adversely affecting, to a material extent, the
\n Deliverables already planned, StorageTek shall propose an
\n ESP\/volume shipment plan to be reviewed and negotiated in good
\n faith by the parties. If StorageTek cannot include the
\n requested new product requirement within the then-current
\n commitments, IBM may provide a prioritization and the parties
\n will negotiate in good faith amended commitments for all or
\n any affected Deliverables.<\/p>\n
5.3 ESCROW. The Parties agree that the escrow account established with
\n [**] pursuant to the IBM Source Code Custody Agreement attached hereto
\n as Appendix E to Attachment 1 to Exhibit 3 shall apply to the [**]
\n deposited therewith, and confirm that the purpose for such escrow is
\n to determine the level of the Licensed Works in existence on [**],
\n together with the benchmarks used to measure the Products’ performance
\n and other requirements (as such Products are in existence as of [**].<\/p>\n
5.4 HEADCOUNT AND EQUIPMENT INVESTMENTS. The parties recognize that in
\n order to achieve the Impact Error Rate objectives set forth in Section
\n 9.3 of the OEM Agreement, an investment in headcount and equipment is
\n required. IBM shall provide, at its own cost, through [**],
\n appropriate field support and test engineering personnel, and through
\n [**], a [**] IBM Model [**] processor system of a configuration
\n adequate for the testing that has been defined by both parties with
\n standard IBM software licenses and maintenance related thereto.
\n StorageTek shall provide, at its own cost, and incremental to
\n development and product engineering funding, through [**] appropriate
\n engineers, test technicians and program administrators.<\/p>\n
6. DELIVERABLES, SCHEDULES AND ADJUSTMENTS<\/p>\n
6.1 CHART OF DELIVERABLES.<\/p>\n
a. [**]<\/p>\n
12
\n 97
\n 1. COMMITTED IN PLAN ITEMS<\/p>\n
[**] DELIVERABLE
\n PDP DATE: [**]
\n SPECIFIED FUNCTIONS COMPRISING FOURTH ICEBERG DELIVERABLE<\/p>\n
\n\nDELIVERABLE TYPE ESP DATE VOLUME ADJUSTMENT
\n————————————– —————————————-
\n
\n[**]
\n<\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n [**] DELIVERABLE
\n PDP DATE: [**]
\n SPECIFIED FUNCTIONS COMPRISING FIFTH ICEBERG DELIVERABLE<\/p>\n
\n\nDELIVERABLE TYPE ESP DATE VOLUME ADJUSTMENT
\n————————————– ——————————————
\n
\n[**]
\n<\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n [**] DELIVERABLE
\n PDP DATE: [**]
\n SPECIFIED FUNCTIONS COMPRISING SIXTH ICEBERG DELIVERABLE<\/p>\n
\n\nDELIVERABLE TYPE ESP DATE VOLUME ADJUSTMENT
\n
\n[**]
\n<\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n [**] DELIVERABLE
\n -PDP DATE: [**]
\n SPECIFIED FUNCTIONS COMPRISING [**] DELIVERABLE<\/p>\n
\n\nDELIVERABLE TYPE ESP DATE VOLUME ADJUSTMENT
\n
\n[**]
\n<\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n B. [**]<\/p>\n
1. COMMITTED IN-PLAN ITEMS<\/p>\n
[**] DELIVERABLE
\n PDP DATE: [**]
\n SPECIFIED FUNCTIONS COMPRISING [**] DELIVERABLE<\/p>\n
\n\nDELIVERABLE TYPE ESP DATE VOLUME ADJUSTMENT
\n————————————–
\n
\n[**]
\n<\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n [**] DELIVERABLE<\/p>\n
PDP DATE: [**]<\/p>\n
SPECIFIED FUNCTIONS COMPRISING [**] DELIVERABLE<\/p>\n
\n\nDELIVERABLE TYPE ESP DATE VOLUME ADJUSTMENT
\n————————————– ——————————————
\n
\n[**]
\n<\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n 13
\n 98
\n 2. “IN DEVELOPMENT BUDGET” ITEMS <\/p>\n
\n\nDELIVERABLE TYPE ESP DATE VOLUME ADJUSTMENT
\n————————————– ——————————————
\n
\n[**]
\n<\/c><\/s><\/caption>\n<\/table>\nThese items will be developed with part of the [**] funds that are specified in
\n4.3b and have no [**] associated with them.<\/p>\n
NOTE: With respect to all of the above Specified Functions, should StorageTek
\nfail to deliver any Specified Function by the Volume date listed for such
\nSpecified Function in Section 6.1 above, then IBM shall be entitled to
\npurchase the existing subsystem product from StorageTek at the [**] as if
\nStorageTek had delivered such Specified Function by such Volume date.<\/p>\n
6.2 CERTIFICATE OF ORIGINALITY (COO).<\/p>\n
StorageTek agrees to provide a Certificate of Originality for software
\n and microcode items identified in 6.1. A blank Certificate of
\n Originality is attached hereto as Appendix D.<\/p>\n
7. NOT USED.<\/p>\n
8. SPECIFICATIONS<\/p>\n
All Deliverables will be prepared and provided according to the
\n standards in Appendix A, “FUNCTIONAL, TECHNICAL AND QUALITY
\n SPECIFICATIONS” and those set forth in the associated PDP. In the
\n event of a conflict between Appendix A and the applicable PDP as
\n approved in writing by IBM’s Contract Coordinator, the PDP shall
\n control.<\/p>\n
9. QUALITY MEASUREMENTS<\/p>\n
The quality measurements shall be as set forth in Section 9 of the OEM
\n Agreement, except for host software, which shall be as set forth in
\n Section 2D of Appendix A attached hereto.<\/p>\n
10. LICENSE<\/p>\n
10.1 Except as specifically stated in the Agreement, no license or
\n immunity is granted either directly or by implication,
\n estoppel or otherwise, under any intellectual property right
\n of either party, including, but not limited to, trade secrets,
\n copyrights, trademarks and patents.<\/p>\n
11. COORDINATORS<\/p>\n
11.1 CONTRACT COORDINATORS.<\/p>\n
IBM and StorageTek agree that the following named contract
\n coordinators are responsible for amendments (including working
\n with each party’s respective legal department to prepare and
\n execute such amendments), receipt of notices under<\/p>\n
14
\n 99
\n this IDA and all nontechnical administrative matters associated
\n with this SOW.<\/p>\n
The Contract Coordinators are:<\/p>\n
\n\nFOR IBM: FOR STORAGETEK:
\n
\nName: Mr. [**] Name: Mr. [**]
\nTitle\/Dept: Director, Future Title\/Dept: Vice President,
\n Storage Subsystems DASD Product Management
\nAddress: 9000 S. Rita Road Address: 2270 South 88th Street
\n Tuscon, Arizona 85744 Louisville, Colorado 80028
\nPhone: (520) [**] Phone: (303) [**]
\nFacsimile: (520) [**] Facsimile: (303) [**]
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n Notices shall be deemed given as specified in Section 26.3 of
\n the OEM Agreement.<\/p>\n
11.2 TECHNICAL COORDINATORS.<\/p>\n
IBM and StorageTek agree that the following named coordinators
\n will administer and coordinate the technical matters
\n associated with this SOW. Any changes in the party’s
\n coordinators shall be provided to the other party in writing.
\n They are responsible for accepting all Deliverables and will
\n supervise all exchanges of confidential information under the
\n CDA. The Technical Coordinators are:<\/p>\n
\n\n FOR IBM: FOR STORAGETEK:
\n
\n Name: Mr. [**] Name: Mr. [**]
\n Title\/Dept: Director, Future Title\/Dept: Vice President,
\n Storage Subsystems DASD Systems Development
\n Address: 9000 S. Rita Road Address: 2270 South 88th Street
\n Tuscon, Arizona 85744 Louisville, Colorado 80028
\n Phone: (520) [**] Phone: (303) [**]<\/p>\n Facsimile: (520) [**] Facsimile: (303) [**]
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
15
\n 100
\n APPENDIX A
\n FUNCTIONAL, TECHNICAL AND QUALITY SPECIFICATIONS
\n TO THE STATEMENT OF WORK<\/p>\n
1. TECHNICAL SPECIFICATIONS<\/p>\n
The technical specifications for the existing Iceberg, Kodiak and
\nArctic Fox products, as well as the IXFP and IXOF software are contained in the
\nfollowing documents:<\/p>\n
a. [**]<\/p>\n
b. [**]<\/p>\n
c. [**]<\/p>\n
d. [**]<\/p>\n
e. [**]<\/p>\n
f. [**]<\/p>\n
g. [**]<\/p>\n
h. [**]<\/p>\n
i. [**]<\/p>\n
j. [**]<\/p>\n
k. [**]<\/p>\n
l. [**]<\/p>\n
m. [**]<\/p>\n
n [**]<\/p>\n
o. [**]<\/p>\n
p. [**]<\/p>\n
q. [**]<\/p>\n
r. [**]<\/p>\n
s. [**]<\/p>\n
101<\/p>\n
t. [**]<\/p>\n
u. [**]<\/p>\n
v. [**]<\/p>\n
w. [**]<\/p>\n
x. [**]<\/p>\n
y. [**]<\/p>\n
z. [**]<\/p>\n
aa. [**]<\/p>\n
bb. [**]<\/p>\n
cc. [**]<\/p>\n
dd. [**]<\/p>\n
ee. [**]<\/p>\n
ff. [**]<\/p>\n
gg. [**]<\/p>\n
hh. [**]<\/p>\n
ii. [**]<\/p>\n
jj. [**]<\/p>\n
kk. [**]<\/p>\n
ll. [**]<\/p>\n
mm. [**]<\/p>\n
nn. [**]<\/p>\n
oo. [**]<\/p>\n
The technical descriptions for the [**] Iceberg Items (as specified in
\nSection 6.1 hereof) are in Schedule 1.<\/p>\n
The technical descriptions for the [**] Kodiak Items are in Schedule 2.<\/p>\n
2<\/p>\n
102<\/p>\n
The technical descriptions for the [**] IXFP and IXOF Items are in
\nSchedule 3:<\/p>\n
2. PERFORMANCE SPECIFICATIONS<\/p>\n
A. PERFORMANCE TEST SET<\/p>\n
[**]<\/p>\n
Each performance workload has a specification of the number of
\n channels, cache size, subsystem capacity, and the number of logical
\n volumes to be used for each evaluation.<\/p>\n
B. PARTICULAR PERFORMANCE SPECIFICATIONS<\/p>\n
As specified in Schedules 4, 5, 6 and 7, Committed in Plan Items must
\nmaintain performance specifications as currently existing or improve thereon as
\nrequired by the applicable PDP.<\/p>\n
C. CAPACITY RATIO SPECIFICATIONS<\/p>\n
For calculating storage capacities for purchases of Iceberg, a ratio of
\n[**] of storage accessible to 1 [**] is used to determine Terabytes. The
\nbenchmark in Schedule 8 produces a capacity ratio of [**]. Future enhancements
\nto Iceberg, when this benchmark is applied, shall not produce results less than
\n[**]. Upon mutual written
\nagreement, such benchmark may be modified.<\/p>\n
D. HOST SOFTWARE QUALITY MEASUREMENTS<\/p>\n
StorageTek’s host software development (IXFP and IXOF) shall meet a
\nquality index of no more than [**] errors per [**] lines of actually executing
\ncode (not including comments, dummy, nonoperational or nonfunctional lines of
\ncode) (“KLOC”) for all of the code, including base, new and modified code that
\nis to be delivered to IBM under the IDA and its related attachments and
\nappendices.<\/p>\n
3<\/p>\n
103
\n SCHEDULE 1 TO APPENDIX A TO <\/p>\n
STATEMENT OF WORK<\/p>\n
Integrated Iceberg Overview<\/p>\n
The integrated Iceberg is [**], packaged in an [**]. This unit contains [**].
\nThe system will initially support both FIPS and ESCON interfaces.<\/p>\n
There are [**] differences between an Iceberg Controller with Freezer III and
\nthe Integrated Iceberg system. Since the Freezer is [**]<\/p>\n
[**]<\/p>\n
[**] Overview<\/p>\n
The [**] contains the following features. [**]<\/p>\n
[**] <\/p>\n
[**] Array Description<\/p>\n
The [**] array is [**]<\/p>\n
[**] Load [**] <\/p>\n
This deliverable is described in the documents associated with the PDP
\nsubmitted by [**], dated [**], titled [**]<\/p>\n
[**] Analysis<\/p>\n
[**] Analysis (PSA) is the method by which the [**]<\/p>\n
ESCON 128 [**] <\/p>\n
For ESCON on Iceberg, the subsystem will initially support a maximum of [**]
\nfollowed later with support for a [**] . A host part is defined as the
\ncommunication [**] between the [**] and all [**]. In order to access [**], a
\n[**] will have four logical paths associated with it. This is due to the [**]
\nControl Unit images that are used to access [**]. The support of four Control
\nUnit images will not consume [**] resources available to the subsystem. Each
\nparallel channel card installed in the subsystem will reduce the number of host
\npaths support by [**] on the [**] and by [**] on the [**]. [**] installed
\nparallel channel cards ([**] per cluster) will reduce the total number of [**]
\nfrom [**] to [**] for [**] [**] and from [**] to [**] for [**] total [**].<\/p>\n
The [**] project has been [**] and is currently [**]
\n 104
\nTable 5-1. Parallel and ESCON Channel Configurations Options<\/p>\n
\n\n Cluster 0 Cluster 1
\n ——————————————————–
\nTotal Cntrl Reg 0 Cntrl Reg 1 Cntrl Reg 2 Cntrl Reg 3
\n ——————————————————–
\n
\n8P [**]
\n16P [**]
\n24P [**]
\n32P 4P [**]
\n8S – Single [**]
\n8S – Dual [**]
\n16S – Dual [**]
\n16P\/8S – Single [**]
\n16P\/8S – Dual [**]
\n<\/c><\/s><\/caption>\n<\/table>\nNote: Mixed channel configurations [**] are supported for [**]. [**] will
\nsupport [**] configurations.<\/p>\n
(1) Where P is one OEMI channel (one fourth of an ICQ card), 1S is one ESCON
\nlink (one half of an ICE1 or ICE2 card). Where Single is the top link enabled
\non each ICE card and Dual is both links enabled in each ICE card.<\/p>\n
(2) Each link will support [**] for Release 1 and [**] for Release 2.<\/p>\n
(3) Each link will support [**] for Release 1 and [**] for Release 2.<\/p>\n
(4) Each link will support [**] for Release 1 and [**] for Release 2.<\/p>\n
(5) Each link will support [**] for Release 1. This configuration [**] for
\n Release 2.<\/p>\n
(6) Each link will support [**] for Release 1. This configuration [**] for
\nRelease 2.<\/p>\n
All channels to a device from the same system (host or LPAR) must be the same
\ntype. Channel types S (=CNC), FX (=CVC), BL (Block – MUX) cannot be intermixed
\nto a device from the same system. Channel configurations are therefore
\nsymmetrical between the clusters.<\/p>\n
2
\n 105
\n SCHEDULE 2 TO APPENDIX A TO
\n STATEMENT OF WORK<\/p>\n
KODIAK Descriptions<\/p>\n
K-1<\/p>\n
[**] SIZE:<\/p>\n
This is a cost reduction element to allow the parity group (or RAID group)
\nsize to increase from its current [**] to [**]. This means that the effective
\nreal data space utilization grows from [**] which realizes a reduced cost for
\ndata protection. This group size must [**] for practical reasons.<\/p>\n
[**] SIZE:<\/p>\n
The current [**] size used in Kodiak is [**]. This was chosen as an optimal
\namount for the internal transfer elements and the disk capacity. Subsequent to
\nthat implementation, most drive vendors have dropped support for variable blocks
\nsizes or sizes of this range. To [**] must be adopted. The [**] size will allow
\nour internal element size to be maintained and still utilize the [**] drives.<\/p>\n
[**] DRIVE CABINET:<\/p>\n
With the support of 3.5″ disk drives, up to 180 disk drives can be included
\nin a disk cabinet realizing both cost and floor space savings over the 60 drive
\n5.25 inch disk cabinets.<\/p>\n
[**] DRIVE SUPPORT:<\/p>\n
Higher capacity [**] drives are becoming available and will represent a
\ncost\/performance advantage over the current drives being used. Additionally,
\nfollowing the technology curves will be necessary for both supply and cost
\nissues. The support for [**] will encompass qualification, development of a dual
\nport card, packaging, code support (both configuration and functional, and
\ntesting.<\/p>\n
“BIND” OR MERGED ARCTIC FOX AND KODIAK<\/p>\n
This feature allows [**] to be held resident in cache and treated as if
\nthey were on a [**]. This is set up through the [**] and may be changed by the
\ncustomer support engineer. Data may still be [**] to [**] through a requested
\naction on the support controller for changes, power downs, etc. This feature
\nallows for [**] to have specific enhance performance characteristics over other
\n[**] for performance critical data.<\/p>\n
[**]<\/p>\n
[**] is using [**] and the ability to [**] and [**] on the [**] for [**].<\/p>\n
106<\/p>\n
K-2<\/p>\n
[**] POWER\/PACKAGE<\/p>\n
The K-2 development [**] of the [**] and allows for [**] of [**] in the
\n[**] while maintaining the [**]. The [**] in the [**] allows for [**] and [**].
\nThis provides a significant cost reduction, assembly and test time decrease, and
\nreduced parts count. Additionally, [**] required is [**] as well as other [**]
\nrequirements.<\/p>\n
IMPROVED PERFORMANCE [**] :<\/p>\n
The [**] will be improved in various areas to provide increased performance
\nthat is targeted to be [**] in the simulated TSO workload. The areas include:
\nbetter utilization of [**] , faster [**] , faster [**] , increased [**], and
\n[**].<\/p>\n
NON-HOMOGENEOUS CACHE SUPPORT:<\/p>\n
This development allows for [**] . with the development of the appropriate
\ncode, [**] may be done where only data written is [**] in a [**] of the [**]
\ndepending on configuration choices at installation time. This is a cost
\nreduction over [**] system.<\/p>\n
K-3<\/p>\n
[**]<\/p>\n
This deliverable is described in the Product Development Plan(PDP)
\nsubmitted by [**] dated [**] titled: [**].<\/p>\n
[**]<\/p>\n
This deliverable is described in the PDP submitted by [**] dated [**]
\ntitled:<\/p>\n
[**] . It should be noted that the performance requirement is as follows:<\/p>\n
[**]<\/p>\n
[**]<\/p>\n
This deliverable is described in the Product Development Plan(PDP)
\nsubmitted by [**] dated [**] titled :[**]<\/p>\n
[**]<\/p>\n
This deliverable is described in the Product Development Plan(PDP)
\nsubmitted by [**] dated [**] titled :[**]<\/p>\n
2<\/p>\n
107<\/p>\n
OTHER ITEMS<\/p>\n
ENHANCED PDS SEARCH ASSIST<\/p>\n
Enhanced [**] is [**] for [**] operation based on analysis of particular
\nprogram accesses.<\/p>\n
[**] ESCON<\/p>\n
This development is the [**] and the [**] to allow [**]. This includes
\nevaluation as to feasibility (if it’s possible at a reasonable cost\/effort).<\/p>\n
[**]<\/p>\n
3<\/p>\n
108
\n SCHEDULE 3 TO APPENDIX A TO<\/p>\n
STATEMENT OF WORK<\/p>\n
XSA\/SNAPSHOT [**]<\/p>\n
XSA\/SnapShot is a virtual data duplication program product which [**]<\/p>\n
XSA\/SNAPSHOT FOR [**]<\/p>\n
[**] of XSA\/SnapShot will be implemented on [**] as well (after release
\nof MVS SnapShot). [**] SnapShot will allow [**] and [**] from the [**]. SnapShot
\nfor [**] will run as a [**] or from [**] through [**]. It will also have a
\npre-requisite of [**] and [**].<\/p>\n
XSA\/SNAPSHOT [**]<\/p>\n
XSA\/SnapShot [**] will be the first major enhancement of XSA\/SnapShot.
\nIt will [**] and [**]. Final specifications are still being developed.
\n 109<\/p>\n
APPENDIX A: SCHEDULE 4<\/p>\n
TO THE STATEMENT OF WORK<\/p>\n
ICEBERG PERFORMANCE COMMITMENTS FOR POST [**]
\n SHIPMENTS<\/p>\n
\n\n [**] DATA [**] CACHE # OF
\nWORKLOAD [**] CHNLS [**] SIZE DEVICES
\n——————————————————————————————————-<\/p>\n
\n[**]
\n<\/c><\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\nNOTE: NA -> NOT APPLICABLE<\/p>\n
4<\/p>\n
110<\/p>\n
APPENDIX A: SCHEDULE 5
\n TO THE STATEMENT OF WORK<\/p>\n
ICEBERG PERFORMANCE COMMITMENTS FOR POST [**]
\n SHIPMENTS<\/p>\n
\n\n [**] DATA [**] CACHE # OF
\nWORKLOAD [**] CHNLS [**] SIZE DEVICES
\n——————————————————————————————————<\/p>\n
\n[**]
\n<\/c><\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\nNOTE: NA -> NOT APPLICABLE<\/p>\n
5<\/p>\n
111<\/p>\n
APPENDIX A: SCHEDULE 6
\n TO THE STATEMENT OF WORK<\/p>\n
KODIAK PERFORMANCE COMMITMENTS FOR POST [**]
\n SHIPMENTS<\/p>\n
\n\n [**] DATA [**] CACHE # OF
\nWORKLOAD [**] CHNLS [**] SIZE DEVICES
\n——————————————————————————————————<\/p>\n
\n[**]
\n<\/c><\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\nNOTE: NA -> NOT APPLICABLE<\/p>\n
6<\/p>\n
112
\n APPENDIX A: SCHEDULE 7
\n TO THE STATEMENT OF WORK<\/p>\n
KODIAK PERFORMANCE COMMITMENTS FOR [**]
\n SHIPMENTS AND AFTER<\/p>\n
\n\n [**] DATA [**] CACHE # OF
\nWORKLOAD [**] CHNLS [**] SIZE DEVICES
\n——————————————————————————————————<\/p>\n
\n[**]
\n<\/c><\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\nNOTE: NA -> NOT APPLICABLE<\/p>\n
7<\/p>\n
113
\n SCHEDULE 8 TO APPENDIX A TO
\n STATEMENT OF WORK<\/p>\n
CAPACITY RATIO SPECIFICATION<\/p>\n
The test to determine capacity ratio consists of backing up a [**], and [**].
\nIXFP used to report test results. Specifications are as follows:<\/p>\n
A. [**]
\n [**]
\n [**]<\/p>\n
B. [**] capacity:<\/p>\n
[**]
\n [**]
\n [**]<\/p>\n
C. [**] (on FAST) = [**]<\/p>\n
D. Compression ration = [**]<\/p>\n
E. Net Capacity Level = [**]<\/p>\n
F. Volume Utilization = [**]<\/p>\n
G. Capacity Ratio = [**]<\/p>\n
114
\n APPENDIX B<\/p>\n
COMPLETION AND ACCEPTANCE CRITERIA<\/p>\n
COMPLETION AND ACCEPTANCE CRITERIA.<\/p>\n
All completion and acceptance criteria for ESP, volume shipment
\ncheckpoint and volume shipment compliance are included in this section.<\/p>\n
In order to qualify for acceptance at the checkpoints identified
\nherein, each Deliverable must perform according to the specifications identified
\nand referenced in Appendix A, “FUNCTIONAL, TECHNICAL AND QUALITY SPECIFICATIONS”
\nas amended by the associated PDP for such Deliverable. For the Iceberg and
\nKodiak Deliverables, the IBM System Test is attached as Schedule 1 to this
\nAppendix B.<\/p>\n
STAGE CRITERIA.<\/p>\n
Specified Function, ESP and Acceptance Criteria are as follows:<\/p>\n
A. ESP Checkpoint. For each Specified Function, other than for the Base
\n Iceberg Package, StorageTek shall recommend to IBM when each SF is
\n ready for IBM to conduct an Early Support Program (“ESP”), typically
\n with a minimum of [**] StorageTek; IBM shall have the right to have up
\n to [**] be IBM internal customer sites or test installations. Machines
\n supplied to IBM installations shall be supplied at no charge to IBM
\n during the ESP test period.<\/p>\n
Prior to the ESP start date, an ESP ready review shall be conducted
\n jointly by the parties; during this review StorageTek will present the
\n status of the testing that it has completed for the Specified Function,
\n with an accompanying written report. StorageTek’s report will include a
\n summary of all problems that have been encountered and resolved,
\n details on all unresolved problems and proposed action plans for their
\n resolution and status of meeting the agreed to exit criteria for the
\n function test of this Specified Function.<\/p>\n
StorageTek will present its recommendation as to whether to implement
\n the plan for ESP shipments. If StorageTek has recommended proceeding,
\n IBM will have [**] working days to conclude whether the SF had met the
\n criteria in the functional test plan for ESP initiation. IBM will not
\n unreasonably withhold its agreement that the particular Specified
\n Function is ready for the ESP.<\/p>\n
If StorageTek disagrees with IBM’s conclusion, StorageTek may appeal by
\n means of the Dispute Resolution Process.<\/p>\n
For each Specified Function, StorageTek’s obligation to be ready to
\n initiate an ESP at the designated date shall be met upon its delivery
\n of such Specified Function that is in accordance with the specification
\n documents for it as listed below:<\/p>\n
8<\/p>\n
115<\/p>\n
o functional specification, as updated in accordance with design
\n change procedures <\/p>\n
o customer documentation readiness <\/p>\n
o Functional Test Plan Completion Criteria <\/p>\n
o performance measurement results against requirements, substantial
\n compliance required<\/p>\n
B. Volume Shipment Checkpoint. Prior to the volume shipment date, a volume
\n shipment readiness review shall be conducted jointly by the parties;
\n during this review StorageTek will present the status of the testing
\n that it has completed for the Specified Function, with an accompanying
\n written report. StorageTek’s report will include a summary of all
\n problems that have been encountered and resolved, details on all
\n unresolved problems and proposed action plans for their resolution and
\n status of meeting the agreed exit criteria for the ESP test of this
\n Specified Function (“SF”).<\/p>\n
StorageTek will present its recommendation as to whether to commence
\n volume shipments. If StorageTek recommends proceedings with volume
\n shipments, IBM will have [**] working days to conclude whether the SF
\n had met the criteria in the ESP test plan for volume shipments.<\/p>\n
If StorageTek disagrees with IBM’s conclusion, StorageTek may appeal by
\n means of the Dispute Resolution Process (as that process is defined in
\n Section 21 of the OEM Agreement).<\/p>\n
For each Specified Function, StorageTek’s obligation to justify volume
\n shipments at the designated date shall be met upon its delivery of such
\n Specified Function that is in accordance with the specification
\n documents for such Specified Function as listed below:<\/p>\n
o functional specification, as updated in accordance with design
\n change procedures <\/p>\n
o customer documentation readiness for volume shipments <\/p>\n
o ESP Test Plan Exit Criteria <\/p>\n
o performance measurement results against commitment curves,
\n complete compliance required <\/p>\n
o level 1 and level 2 support training completed <\/p>\n
o service cost estimate compliance <\/p>\n
o IBM System Test <\/p>\n
o manufacturing, marketing & service readiness<\/p>\n
C. Testing. StorageTek shall be responsible for running tests as specified
\n in the applicable test plan; IBM shall have the right to monitor the
\n tests being run to verify compliance with the specification documents
\n for that Specified Function. Concurrently, IBM shall have the right to
\n verify compliance by independently running tests at IBM’s expense.<\/p>\n
A set of performance requirements will apply for each Specified
\n Functions in the PDP. These requirements will relate to [**]
\n environments appropriate to the Specified Function. The standard set of
\n performance benchmarks that IBM escrows will be run to verify that
\n performance has not been degraded for the <\/p>\n
9<\/p>\n
116<\/p>\n
delivered SF. Any variation from the performance commitments specified
\n in Appendix A for the identified “Committed In Plans” Items must be
\n approved in writing by the Contract Coordinators for the respective
\n parties, with specific reference being made in the approval to such
\n approval relating to varying the otherwise applicable performance
\n commitments.<\/p>\n
D. Volume Shipment Compliance. StorageTek shall have met its volume
\n shipment date if it meets its obligation to justify volume shipments by
\n the Volume Date specified in Section 6.1 above.<\/p>\n
IBM will provide written notification to StorageTek of any failure of
\n the SF to meet the applicable criteria which notice shall identify the
\n basis for any such IBM conclusion. IBM shall have the right to verify
\n compliance to test criteria by independently running tests, and
\n StorageTek shall have the opportunity to witness any such testing.<\/p>\n
If StorageTek fails to deliver the Specified Function by the Volume
\n date, in accordance with this Volume Shipment Compliance process, then
\n the consequences shall be as specified in Section E below.<\/p>\n
E. Adjustment for Failure to Meet Volume Date.<\/p>\n
(1) If StorageTek fails to meet the Volume date for any [**] that
\n is associated with [**] and scheduled to be delivered prior to
\n [**] , then an amount equal to [**] for each [**] of delay,
\n [**], as stated below, for each failure relating to a [**]
\n associated with [**] shall be added to [**] and [**] purchases
\n and any [**] obtained under the Agreement during [**] to
\n determine the price of future units of [**] to be acquired
\n during [**].<\/p>\n
However, if the calculation in the preceding paragraph
\n results in a combined volume of [**] and [**] purchases and
\n any credits obtained under the Agreement that is [**] for
\n each [**] of delay, [**], as stated below, for each such
\n failure.<\/p>\n
If the Parties agree on a [**] for [**] purchases, then the
\n above calculations will be applied to provide IBM with
\n purchase credits against the [**] for any [**] that is
\n associated with [**] and scheduled to be delivered during
\n [**]. If no such [**], then if StorageTek fails to meet the
\n Volume date for any [**] that is associated with [**] and
\n scheduled to be delivered during <\/p>\n
10<\/p>\n
117<\/p>\n
[**], then IBM shall receive a [**] to be used against its
\n [**] that is equal to [**], as stated below, for each such
\n failure.<\/p>\n
If StorageTek fails to meet the Volume date for any
\n [**] that is associated with [**] , then IBM shall receive a
\n [**] to be used against IBM’s [**] that is equal to [**], as
\n stated below, for each such failure.<\/p>\n
The following is a summary of factors to be used for a
\n failure to meet the Volume Date for a [**]:<\/p>\n
*[**] for [**] ADJUSTMENT;<\/p>\n
*[**] for [**] ADJUSTMENT; and<\/p>\n
*[**] for [**] ADJUSTMENT.<\/p>\n
(2) If a SF is delivered at any time later than 15 days after Volume date
\n specified for such SF, then it shall be considered to be delayed by a
\n full month. If multiple functions fail to be shipped in accordance with
\n the designated Volume shipment dates, then the highest applicable
\n ADJUSTMENT factor shall apply.<\/p>\n
3. TEST PLAN CRITERIA<\/p>\n
Functional Test Plan Completion\/ESP Test Plan Exit Criteria\/IBM System
\n Test Completion:<\/p>\n
A. No known [**] problems in any Deliverables remain open; and<\/p>\n
B. a list of any known [**] in place by StorageTek to resolve within
\n a specified period of time.<\/p>\n
4. ERROR PROCESSING DURING ESP TEST<\/p>\n
All problems found during the ESP Test will be logged by StorageTek and
\n reported to IBM with the following minimum information:<\/p>\n
A. a description of the error;<\/p>\n
B. how to reproduce the error. If it is an Information Unit error,
\n where the error may be found;<\/p>\n
C. a description of what is believed to be the correct result; and<\/p>\n
11<\/p>\n
118<\/p>\n
D. the Severity of the problems discovered.<\/p>\n
StorageTek shall notify IBM of any [**] errors discovered during ESP
\n Testing as soon as possible. Other errors shall be provided to IBM in
\n accordance with StorageTek’s Standard Practices. StorageTek shall [**]
\n to resolve all [**] reasonably possible.<\/p>\n
12<\/p>\n
119<\/p>\n
——————————————————————————–
\n MONTEREY SYSTEM TEST
\n——————————————————————————–<\/p>\n
For each specified function (“SF”), Oahu shall promptly notify Monterey In
\nwriting when formal test, (i.e., Engineering Verification Test (“EVT”)) is to
\nbegin, and shall provide to Monterey a functional specification prior to such
\ntime. Any changes to an early ship program (“ESP”) date to test the SF, and
\nall design change request (“DCRs”) to the functional specifications for the
\nProducts must be supplied to and approved by Monterey.<\/p>\n
Oahu shall provide, within [**] of request by Monterey, all documentation
\ndetermined by Monterey to be required to prepare for possible Monterey System
\nTest (MST) including but not limited to, all Oahu schedules related to the
\ndevelopment and test of each new SF or SFs, problem logs related to the SF(s),
\ndetailed test plans used by Oahu for the formal testing of the SF(s), customer
\nand maintenance documentation associated with the SF(s), a list of product
\nclaims for the new SF(s), and any other documentation normally produced for
\nmarketing, service organizations, Oahu test, or for the customer.<\/p>\n
Summary reports of test progress and problem status shall be updated and sent
\nto Monterey on a regular basis from this time until ESP on a schedule to be
\nagreed upon by Oahu and Monterey.<\/p>\n
MONTEREY SYSTEM TEST (MST)<\/p>\n
For each SF or group of SFs considered by Monterey to be available to the
\ncustomer as part of a single announce package with a single availability date,
\nMonterey shall have the right to waive execution of an MST, participate in a
\njoint MST with Oahu, or conduct an MST at either an Oahu or Monterey test site
\nlocation or locations, the location(s) and expected duration of such testing to
\nbe reasonably determined by Monterey. As the duration of a test is dependent
\non, among other things, the complexity of the SF(s), the number of problems
\nfound, the problem fix rate, and the amount of resources applied to the
\ntesting, the expected duration should not be seen as a commitment by Monterey.
\nIt is expected that should an MST be required by Monterey, the test would run a
\nminimum of 3 weeks at a level of resource applied to the test as mentioned
\nbelow.<\/p>\n
A typical MST conducted by Monterey would consist of [**], often conducted in
\nparallel and each utilizing approximately half the allocated test UUTs (Units
\nUnder Test), tools and on-site support personnel.<\/p>\n
The Monterey FVT (Functional Verification Test) would execute test scenarios,
\nthe majority of which are run against a multi-host high stress background
\n(known as “(FVT) vanilla stress”) driven by internally developed Monterey test
\ndrivers. Monterey FVT tests include, but are not limited to, the following
\nsubtests:
\n 120
\n attachment, stress, functional\/algorithm, power, error injection (interface
\n(both internal and external), logic, drive, media), and channel sequence
\ncontrols.<\/p>\n
The Monterey SLT (System Level Test) would execute test scenarios, the
\nmajority of which are run against a [**] under the MVS operating system [**]
\nusing both externally available applications, access methods and utilities as
\nwell as internally developed jobstreams. Monterey SLT tests include, but are
\nnot limited to, the following subtests:<\/p>\n
[**]<\/p>\n
ENTRY REQUIREMENTS FOR MST<\/p>\n
Receipt of all test resources as described below with adequate time to
\ninstall and configure test UUTs<\/p>\n
Available schedule windows, CPUs, personnel and other [**] resources to
\nconduct the MST<\/p>\n
No staging of the [**] considered to be part of the [**] to be tested in the
\n current MST [**] of contiguous [**] stress runs in both the Monterey FVT and
\n SLT environments
\n Documentation as described above
\n [**]<\/p>\n
MST REQUIRED RESOURCES<\/p>\n
FAST, FASTER, and QUICK machines supplied to MST test locations will be
\nsupplied at [**] to Monterey. These machines will be at hardware, microcode
\n(including functional, service, et al.), and supporting software levels
\napproved by Monterey. For a [**], there are usually [**] divided between FVT
\nand SLT.<\/p>\n
On-site support by Oahu personnel will be supplied to Monterey for any MST.
\nThese personnel will be supplied in a quantity and at a skill level mutually
\nagreed upon by Oahu and Monterey at [**] to Monterey. Monterey will request at
\nleast [**] personnel, [**] testing and [**] training\/testing, UUTEC
\n(Engineering Change) maintenance, and general support including failure data
\ncollection. This does not include any development resource which might be
\nrequired for UUT debug or fix testing.<\/p>\n
Tools required by Oahu for its own testing of the products (including but no
\nlimited to debug, support, and error injection) will be supplied at a quantity
\nand level mutually agreed to by Oahu and Monterey for any MST at [**] to
\nMonterey.<\/p>\n
EXIT CRITERIA FOR MST<\/p>\n
All MST test variations attempted with [**] successful as determined by
\nMonterey <\/p>\n
All [**] resolved with a mutually agreeable action plan for the resolution of
\nthe remainder of the problems<\/p>\n
Resolution of all problems considered by Monterey to be ESP gates with
\nadequate time to verify the fixes to such problems and ensure no unexpected
\nside effects of such fixes<\/p>\n
Signoff by the Monterey test group that all claims have been met<\/p>\n
2
\n 121
\n SF(s) meets [**] and other Monterey quality criteria<\/p>\n
ENTRY CRITERIA FOR ESP<\/p>\n
Successful exit of MST or successful Monterey pre-ESP certification of Oahu
\ntesting or the non-default waiving of both of the prior criteria if Monterey
\ndetermines that is appropriate<\/p>\n
Monterey agrees that all [**] found in any SF test effort by either Oahu or
\nMonterey do not constitute ESP gates<\/p>\n
Monterey agrees that all testing efforts by either Oahu or Monterey (other
\nthan ESP) have been successfully concluded and that [**] met<\/p>\n
Appropriate support structures exist to deal in a timely manner with any
\nfield problems which may be found<\/p>\n
SF(s) meets Monterey quality criteria for general availability<\/p>\n
3
\n 122
\n Attachment 1 to Exhibit 3
\n Appendix C<\/p>\n
[Intentionally left blank]<\/p>\n
123<\/p>\n
IBM DEVELOPER AGREEMENT
\n STATEMENT OF WORK<\/p>\n
APPENDIX D<\/p>\n
EXHIBIT: CERTIFICATE OF ORIGINALITY
\n NUMBER: ___(IDA NUMBER)___
\n DATED
\n __(IDA DATE)___
\n BETWEEN
\n CORPORATION
\n ___(STREET ADDRESS)____
\n ___(CITY, STATE)_____
\n AND
\n _____(VENDOR NAME)______
\n ____(STREET ADDRESS)____
\n _____(CITY, STATE)______
\n 124
\n CONTENTS<\/p>\n
EXHIBIT: CERTIFICATE OF ORIGINALITY APPENDIX:<\/p>\n
\n
\nICON ORIGINALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3<\/p>\nIDENTIFICATION FORM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9<\/p>\n
1.0 QUESTIONNAIRE . . . . . . . . . . . . . . . . . . . . . . . . . . 3<\/p>\n
1.0 ICON REPRESENTATION . . . . . . . . . . . . . . . . . . . . . . . 9<\/p>\n
2.0 CERTIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . 8<\/p>\n
2.0 CREATOR OF ICON . . . . . . . . . . . . . . . . . . . . . . . . . 9
\n<\/c><\/s><\/table>\n
2
\n 125<\/p>\n
AGREEMENT # ___(IDA Number)___ DATE OF AGREEMENT ___(IDA Date)___<\/p>\n
EXHIBIT: CERTIFICATE OF ORIGINALITY<\/p>\n
IBM Developer Agreement Transaction Document no:<\/p>\n
XXX<\/p>\n
——————————————————————————–<\/p>\n
If you provide IBM any program product, offering, related documentation,
\nmicrocode or other software material (collectively, “Software Material”), you
\nmust complete this questionnaire and send it to IBM’s Contract Coordinator for
\nthis project.<\/p>\n
You will provide IBM with any additional information needed for copyright
\nregistration or enforcement of legal rights relating to the Software Material.<\/p>\n
One questionnaire can cover one complete product, even if that product includes
\nmultiple modules. A separate questionnaire must be completed for code and
\nanother for its related documentation. Significant changes to the Software
\nMaterial will require completion of a new questionnaire.<\/p>\n
Please do not leave any questions blank. Write “not applicable” or “N\/A” if a
\nquestion is not relevant to the Software Material. If you need additional
\nspace to complete any question, please attach a separate sheet of paper that
\nidentifies the question number.<\/p>\n
3
\n 126
\n1.0 QUESTIONNAIRE<\/p>\n
a) Name of the Software Material (provide complete identification
\n including version, release and modification numbers for programs and
\n documentation):<\/p>\n
b) Was the Software Material or any portion thereof:<\/p>\n
1) Written by any person(s) other than you or your employees working
\n within their job assignments?<\/p>\n
YES___ NO___
\n (If NO, skip to #3)<\/p>\n
2) Did the person(s) write ALL or PART of the Software Material?<\/p>\n
ALL___ PART___
\n If PART, state the percentage written by the person(s) ____%<\/p>\n
3) Was the Software Material provided to you by COMPANY(IES) or
\n INDIVIDUAL(S) or both?<\/p>\n
COMPANY(IES)___ INDIVIDUAL(S)___ BOTH___
\n (Completed) and
\n e) below) <\/p>\n
How did you acquire title to the Software Material or the right to grant the
\nlicenses granted to IBM?<\/p>\n
4) For each COMPANY, provide the following information:<\/p>\n
Name:<\/p>\n
Address:<\/p>\n
How did the COMPANY acquire title to the Software Material? (For example, the
\nSoftware Material was written by the COMPANY’s employees as part of their job
\nassignment):<\/p>\n
Did the COMPANY have each non-US contributor to the Software Material sign a
\nwaiver of their moral rights?<\/p>\n
YES___ NO___<\/p>\n
5) For each INDIVIDUAL(S) in 2c), provide the following:<\/p>\n
Name:<\/p>\n
Citizenship:<\/p>\n
Address:<\/p>\n
4
\n 127
\nDid the INDIVIDUAL(S) create the Software Material while employed by, or under
\na contractual relationship with, another party?<\/p>\n
YES___ NO___
\n If YES, provide name and address of the other party:<\/p>\n
Did the INDIVIDUAL(S) create or first publish the Software Material in a
\ncountry other than the US?<\/p>\n
YES___ NO___
\n If YES, did the INDIVIDUAL(S) sign a waiver of moral rights?<\/p>\n
YES___ NO___
\n (If YES, please attach a copy)<\/p>\n
6) Was any part of the Software Material registered at any copyright office?<\/p>\n
YES___ NO___
\n (If YES, provide the following registration information:)<\/p>\n
i) Claimant Name:<\/p>\n
ii) Registration Number:<\/p>\n
iii) Date of Registration:<\/p>\n
iv) Title of Work:<\/p>\n
c) Was any part of the Software Material published?<\/p>\n
YES___ NO___<\/p>\n
When and where was it published?<\/p>\n
Was there a copyright notice on the published material(s)?<\/p>\n
YES___ NO___
\n (If YES, provide the copyright notice below.)<\/p>\n
5
\n 128
\nWas any part of the Software Material distributed by you to any outside person
\nor company other than IBM?<\/p>\n
YES___ NO___<\/p>\n
When and where was the Software Material distributed?<\/p>\n
To whom was the Software Material distributed?<\/p>\n
Why was the Software Material distributed?<\/p>\n
Under what conditions was the Software Material distributed?
\n(for example, under a contract.)<\/p>\n
d) Was any part of the Software Material derived from preexisting material(s)?<\/p>\n
YES___ NO___
\n (If YES, provide the following information for each of the
\n preexisting materials:)<\/p>\n
1) Name of the material:<\/p>\n
2) Author (if known):<\/p>\n
3) Owner (if known):<\/p>\n
4) Copyright notice appearing on the material (if any):<\/p>\n
5) Was any new function added to the preexisting software?<\/p>\n
YES___ NO___<\/p>\n
Briefly describe the new function(s) below:<\/p>\n
___% of preexisting material used<\/p>\n
___% of preexisting material modified<\/p>\n
___% of new material consisting of or deriving from
\n preexisting materials<\/p>\n
6
\n 129
\n 6) Briefly describe below how the preexisting material has been used:<\/p>\n
e) Were any part of the display screens, data formats,
\n instruction or command formats, operator messages, interfaces,
\n etc. (collectively called “External Characteristics”) of the
\n Software Material copied or derived from the External
\n Characteristics of another program or product of yours or a
\n third party?<\/p>\n
YES___ NO___
\n (If YES, provide the following information:)<\/p>\n
a) Name of Developer’s or third party’s program or product:<\/p>\n
b) Author (if known):<\/p>\n
c) Owner (if known):<\/p>\n
d) Copyright notice relating to the preexisting External
\n Characteristics (if any):<\/p>\n
e) Have the preexisting External Characteristics
\n been modified?<\/p>\n
YES___ NO___
\n (Describe how they have been modified below:)<\/p>\n
f) Identify below any other circumstances that may affect
\n IBM’s ability to reproduce and market the Software Material,
\n including:<\/p>\n
1) confidentiality or trade secrecy of
\n preexisting materials:<\/p>\n
2) known or expected royalty obligations to
\n others:<\/p>\n
3) preexisting materials developed for another
\n party or customer (including government)
\n where you may not have retained full rights
\n to the materials:<\/p>\n
7
\n 130<\/p>\n
4) materials acquired from a person or company
\n possibly having no title to them:<\/p>\n
g) Employee Identification. You recognize that for purposes
\n of copyright registration or enforcement of legal rights
\n relating to the Software Material, IBM may need to know the
\n names, addresses and citizenships of all persons who wrote or
\n contributed to the writing of the Software Materials. You
\n agree to keep accurate records of all such information
\n according to the IDA and to provide them to IBM at our
\n request.<\/p>\n
h) ICON. An “ICON” is generally defined as a symbol on a
\n display screen that a user can point to with a device such as
\n a mouse in order to select a particular operation or software
\n application. For each ICON contained in the Software
\n Materials, you will have its creator complete an ICON
\n IDENTIFICATION FORM and submit them as appendices to this
\n Certificate of Originality.<\/p>\n
2.0 CERTIFICATION<\/p>\n
By signing below, you certify that all information contained in this
\nCertificate of Originality, including any attachments or appendices to it, are
\naccurate and complete.<\/p>\n
(Developer Name)
\n ————————————————————-<\/p>\n
Signature:
\n ——————————————————————–<\/p>\n
Print name:
\n ——————————————————————–<\/p>\n
(Name of Signer)
\n ————————————————————-<\/p>\n
Title:
\n ————————————————————————-<\/p>\n
(Title of Signer)
\n ————————————————————-<\/p>\n
Date:
\n ————————————————————————-<\/p>\n
8
\n 131<\/p>\n
APPENDIX: ICON IDENTIFICATION FORM<\/p>\n
1.0 ICON REPRESENTATION<\/p>\n
Word(s), function or thing represented by the ICON:<\/p>\n
2.0 CREATOR OF ICON<\/p>\n
a) Name:<\/p>\n
b) Job Title:<\/p>\n
c) Business Address:<\/p>\n
d) Business Telephone:<\/p>\n
e) Citizenship:<\/p>\n
f) Date created ICON in tangible form:<\/p>\n
1) Was the attached ICON created as an assigned work task
\n without reference to any preexisting icons or other work
\n authored or owned by another?<\/p>\n
YES___ NO___
\n (If NO, identify the preexisting icon or other works
\n that were referenced and attach copies:)<\/p>\n
2) If the ICON was created for inclusion in a specific
\n product, identify the product in which it will be (or was)
\n used and provide the planned availability date and country of
\n first publication:<\/p>\n
3) Identify or describe any known preexisting icons that
\n represent the same word or function or that are similar in
\n appearance to the ICON (attach copies):<\/p>\n
4) Please attach a copy of the ICON and, for identification
\n purposes, include on the drawing the information you provided
\n in response to Item 2 (a through f) above.<\/p>\n
9
\n 132
\n(Creator Name)
\n —————————————————————–<\/p>\n
Signature:
\n ———————————————————————-<\/p>\n
Print name:
\n ———————————————————————<\/p>\n
(Name of Signer)
\n —————————————————————-<\/p>\n
Date:
\n —————————————————————————<\/p>\n
10
\n 133<\/p>\n
Attachment to Exhibit 3
\n Appendix C<\/p>\n
[Intentionally left blank]<\/p>\n
134
\n Exhibit: Certificate of Originality
\n Dated __ (IDA Date) __<\/p>\n
APPENDIX: ICON IDENTIFICATION FORM<\/p>\n
1.0 ICON REPRESENTATION<\/p>\n
Word(s), function or thing represented by the ICON:<\/p>\n
2.0 CREATOR OF ICON<\/p>\n
a) Name:<\/p>\n
b) Job Title:<\/p>\n
c) Business Address:<\/p>\n
d) Business Telephone:<\/p>\n
e) Citizenship:<\/p>\n
f) Date created ICON in tangible form:<\/p>\n
1) Was the attached ICON created as an assigned work task without
\n reference to any preexisting icons or other work authored or
\n owned by another?<\/p>\n
YES ___ NO ___
\n (If NO, identify the preexisting icon or other works that
\n were referenced and attach copies:)<\/p>\n
2) If the ICON was created for inclusion in a specific product,
\n identify the product in which it will be (or was) used and provide
\n the planned availability date and country of first publication:<\/p>\n
3) Identify or describe any known preexisting icons that
\n represent the same word or function or that are similar in
\n appearance to the ICON (attach copies):<\/p>\n
4) Please attach a copy of the ICON and, for identification
\n purposes, include on the drawing the information you provided in
\n response to Item 2 (a through f)<\/p>\n
135
\n Exhibit: Certificate of Originality
\n Dated ___ (IDA Date) ___<\/p>\n
above.<\/p>\n
(Creator Name) _______________________________________________________<\/p>\n
Signature: _______________________________________________________<\/p>\n
Print name: _______________________________________________________<\/p>\n
(Name of Signer) _______________________________________________________<\/p>\n
Date: _______________________________________________________<\/p>\n
136
\nIBM Developer Agreement (Exhibit 3)
\nStatement of Work (Attachment 1)
\nAppendix E<\/p>\n
——————————————————————————–<\/p>\n
IBM Source Code Custody Agreement : Base Agreement<\/p>\n
——————————————————————————–<\/p>\n
This Source Code Custody Agreement (“SCCA”) among Storage Technology
\nCorporation (“StorageTek”), Data Securities International, Inc. (“Custodian”)
\nand International Business Machines Corporation (“IBM”) describes the rights
\nand obligations of the parties for the Escrowed Works that StorageTek and IBM
\ndeliver to Custodian. StorageTek, Custodian and IBM shall be called the
\n“parties”.<\/p>\n
The SCCA consists of this Base Agreement and its Description of Escrowed Work
\n(“DEW”). The SCCA is our complete agreement, as it supplements the IBM
\nDeveloper Agreement (“IDA”), and replaces all prior oral or written
\ncommunications between us regarding the Escrowed Works.<\/p>\n
By signing below for our companies, the parties agree to the terms of this Base
\nAgreement and its DEW.<\/p>\n
Agreed To: Agreed To:<\/p>\n
STORAGE TECHNOLOGY CORPORATION INTERNATIONAL BUSINESS MACHINES
\n CORPORATION<\/p>\n
By: [**] By: [**]
\n ——————————— ———————————-
\n (Authorized Signature) (Authorized Signature)<\/p>\n
Name: [**] Name: [**]
\n ——————————- ——————————–<\/p>\n
Date: July 3, 1996 Date: 6\/28\/96
\n ——————————- ——————————–<\/p>\n
2270 S. 88th Street
\n Louisville, CO 80028
\n———————————— ————————————-
\n Address Address
\n 137
\nIBM Source Code Custody Agreement #:
\n ————–<\/p>\n
Agreed To:<\/p>\n
Data Securities International, Inc. License Agreement #:
\n —————–
\nBy: [**]
\n ———————————–
\n (Authorized Signature)<\/p>\n
Name: [**]
\n ———————————<\/p>\n
Date: 8-12-96
\n ———————————<\/p>\n
Custodian Address:<\/p>\n
Data Securities International, Inc.
\nContract Administration
\n9555 Chesapeake Drive, Suite 200
\nSan Diego, CA 92123<\/p>\n
ph: [**]<\/p>\n
2
\n 138
\nPART I. DEFINITIONS<\/p>\n
Capitalized terms in the SCCA have the following meanings. The DEW may define
\nadditional terms.<\/p>\n
1.1 CODE is computer programming code including both Object Code and Source
\nCode.<\/p>\n
a) OBJECT CODE is the computer programming code substantially in binary
\n form. It is directly executable by a computer after processing, but
\n without compilation or assembly.<\/p>\n
b) SOURCE CODE is the computer programming code that may be displayed
\n in a form readable and understandable by a programmer of ordinary
\n skill. It includes related source code level system documentation,
\n comments and procedural code, such as job control language. Source Code
\n does not include Object Code.<\/p>\n
1.2 DERIVATIVE WORK is a work that is based on an underlying work and that would
\nbe a copyright infringement if prepared without the authorization of the
\ncopyright owners of the underlying work.<\/p>\n
Derivative Works are subject to the ownership rights and licenses of others in
\nthe underlying work.<\/p>\n
1.3 ESCROWED WORKS are the materials that are described in the DEW. They
\ninclude:<\/p>\n
a) the Source Code in machine-readable form and the source code level
\n system documentation in hard copy form (for Licensed Works, inclusion
\n of adequate printing instructions in lieu of hard copy is sufficient);<\/p>\n
b) a list of all Source Code modules of the Licensed Work;<\/p>\n
c) a directory listing for each machine-readable medium;<\/p>\n
d) commentary required to understand and use the Source Code;<\/p>\n
e) a list of all Tools;<\/p>\n
f) the noncommercially available Tools that Developer is required to
\n escrow under the License Agreement;<\/p>\n
g) the code for initial performance benchmarks that IBM is required
\n to escrow under the License Agreement;<\/p>\n
1.4 LICENSE AGREEMENT is the IBM Developer Agreement in which StorageTek
\nlicenses IBM to its Licensed Works and IBM licenses the initial performance
\nbenchmarks.<\/p>\n
3
\n 139<\/p>\n
1.5 LICENSED WORKS are those deliverables that StorageTek licenses to IBM under
\nthe License Agreement.<\/p>\n
1.6 RELEASE EVENTS are the following occurrences when either IBM or StorageTek
\nmay demand that Custodian deliver a copy of the Escrowed Works to the requesting
\nparty:<\/p>\n
a) Either IBM or StorageTek may request Custodian to provide a
\n copy to the requesting party at any time, but Custodian must
\n retain the original deposited materials. Custodian is
\n authorized and shall deliver a copy of the Escrowed Works to
\n the requesting party.<\/p>\n
1.7 Tools include devices, compilers, hardware, software, user and programming
\ndocumentation, media or other items required for the development, testing,
\nmaintenance or implementation of a Licensed Work.<\/p>\n
PART 2. ESCROWED WORKS DEPOSITS<\/p>\n
2.1 StorageTek and IBM will:<\/p>\n
a) deposit with Custodian two copies of their respective
\n Escrowed Works as described in the DEW attached hereto.
\n StorageTek and IBM will identify each item in the deposit by
\n labeling it;<\/p>\n
b) deliver the Escrowed Works in good condition in sealed
\n containers;<\/p>\n
c) provide Custodian with a notice that shall not be
\n confidential (hereafter “nonconfidential notice”) of all
\n items contained in each container;<\/p>\n
d) replace all lost or damaged Escrowed Works promptly upon
\n notice from Custodian; and<\/p>\n
e) if either party determines that the Escrowed Works are not
\n complete and accurate, the depositing party shall promptly
\n rectify the same.<\/p>\n
2.2 Custodian will:<\/p>\n
a) accept each Escrow Works deposit to be held for the
\n non-Custodian parties and send the non-delivering party a
\n notice confirming receipt within ten business days;<\/p>\n
b) retain the Escrow Works;<\/p>\n
c) match all items on the nonconfidential notice to the labels
\n on Escrowed Works;<\/p>\n
d) take all reasonable steps to protect and store Escrowed
\n Works in appropriate containers<\/p>\n
4<\/p>\n
140<\/p>\n
and atmospheric conditions, segregated from other materials;<\/p>\n
e) promptly provide notice to IBM and StorageTek in the event
\n of lost or damaged Escrowed Works; and<\/p>\n
f) store a copy of this SCCA and the nonconfidential notice
\n of items with Escrowed Works.<\/p>\n
PART 3. ESCROWED WORKS VERIFICATION<\/p>\n
3.1 Unless the requesting party and Custodian agree in writing, Custodian is not
\nresponsible for technical verification that Escrowed Works are complete,
\naccurate and current. Each non-Custodian party may, at its expense, hire a party
\nqualified to do this verification. StorageTek will reimburse IBM’s expenses if
\nthe Escrowed Works do not comply with the requirements of this SCCA, and
\nmutatis mutandis with respect to StorageTek’s expenses.<\/p>\n
3.2 Verification includes generating Object Code from Source Code for each
\nLicensed Work. The verifier will witness the transfer of the verified Source
\nCode to deposited media. The depositing party will supervise the verification
\nwhich will be conducted at the depositing company’s facilities unless the other
\nnon-Custodian party advises otherwise.<\/p>\n
3.3 One technical employee of the non-depositing, non-Custodian party may
\nwitness verification. To the extent possible, verification will be done in a
\nway that does not expose the Source Code to this employee. If this is not
\npossible, this employee will treat the Source Code according to the
\nIBM\/StorageTek Agreement for Exchange of Confidential Information, number
\nOEM-9447.<\/p>\n
PART 4. RELEASE OF ESCROWED WORKS<\/p>\n
4.1 Either IBM or StorageTek may demand delivery of Escrowed Works by notice to
\nCustodian pursuant to Section 1.6, copying the other non-Custodian party.<\/p>\n
4.2 If either non-Custodian party determines that it does not have a complete
\nset of Escrowed Works, it may request them from the other party. The other
\nparty will provide the materials required within three days of requesting
\nparty’s request.<\/p>\n
4.3 Each non-Custodian party will treat Escrowed Works according to the
\nIBM\/StorageTek Agreement for Exchange of Confidential Information.<\/p>\n
PART 5. LICENSE TO ESCROWED WORKS<\/p>\n
5.1 The license to Escrowed Works is governed by the IDA.<\/p>\n
5
\n 141<\/p>\n
PART 6. WARRANTY<\/p>\n
Each depositing party represents and warrants that it has the authority to
\ndeliver the Escrowed Works to the Custodian and that the Escrowed Works (other
\nthan the Licensed Works being escrowed) are complete and accurate.<\/p>\n
PART 7. LIABILITY AND INDEMNIFICATION<\/p>\n
7.1 Custodian will take all reasonable precautions to prevent disclosure of
\nEscrowed Works to unauthorized third parties.<\/p>\n
7.2 Custodian is liable only for its willful misconduct, gross negligence and
\nfraud in performing its duties under this SCCA. Custodian is not liable if
\nStorageTek or IBM fails to comply with any provision of the License Agreement or
\nthis SCCA. Custodian is not liable for acting on any notice that it in good
\nfaith believes to be genuine and legitimate.<\/p>\n
7.3 If a third party makes a claim against Custodian:<\/p>\n
a) StorageTek will defend and indemnify Custodian for any and
\n all claims, actions, damages, arbitration fees and expenses,
\n costs, attorneys’ fees and other liabilities incurred by
\n Custodian on behalf of and pursuant to StorageTek’s
\n instructions; and<\/p>\n
b) IBM will defend and indemnify Custodian for any and all
\n claims, actions, damages, arbitration fees and expenses,
\n costs, attorneys’ fees and other liabilities incurred by
\n Custodian on behalf of and pursuant to IBM’s instructions.<\/p>\n
These indemnities do no apply where it is found that Custodian acted with
\nwillful misconduct, gross negligence or fraud.<\/p>\n
7.4 The indemnifying party will pay any settlement amount that it authorizes and
\nall costs, damages and attorney’s fees that a court finally awards if Custodian:<\/p>\n
a) promptly provides the indemnifying party notice of the
\n claim; and<\/p>\n
b) allows the indemnifying party to control and cooperates
\n with it in the defense of the claim and settlement
\n negotiations.<\/p>\n
Custodian may participate in (but not control) the proceedings at its option and
\nexpense.<\/p>\n
PART 8. TERM AND TERMINATION<\/p>\n
8.1 This SCCA begins when all parties sign it and continues until terminated by
\nmutual written agreement of the parties or for non-payment of Custodian fees.
\nEither non-Custodian party may, at<\/p>\n
6
\n 142<\/p>\n
its option, extend the term of the DEW for additional years as described in
\nPayment. Custodian may terminate this Agreement if invoice fees aren’t paid in
\naccordance with Part 10.<\/p>\n
8.2 Custodian will destroy any remaining Escrowed Works 30 days after the
\nexpiration or termination of the DEW unless IBM or StorageTek provides notice,
\notherwise with respect to their Escrowed Works.<\/p>\n
8.3 The provisions of Liability and Indemnification will survive the expiration
\nor termination of this SCCA. These terms will apply to the parties respective
\nsuccessors and assigns.<\/p>\n
8.4 If Custodian cannot continue its responsibilities, Custodian may resign by
\ngiving IBM and StorageTek 90 days’ notice. IBM and StorageTek in good faith will
\nselect a successor custodian to assume Custodian’s responsibilities,<\/p>\n
PART 9. COORDINATORS<\/p>\n
9.1 SCCA Coordinators responsible to administer all matters associated with this
\nSCCA and its exhibits are:<\/p>\n
FOR: FOR:<\/p>\n
INTERNATIONAL BUSINESS MACHINES STORAGE TECHNOLOGY CORPORATION
\nCORPORATION<\/p>\n
Name: [**] Name: [**]
\n —————————- ——————————–<\/p>\n
Title\/Dept: Purchasing Manager Title\/Dept: Vice President
\n Dept. G33 -12-4 Project Management
\n DASD Business Division
\n ———————– —————————-<\/p>\n
Address: 5600 COTTLE ROAD Address: 2270 South 88th Street, MS4218
\n ————————- ——————————-
\n SAN JOSE, CA 95193 Louisville, CO 80028
\n ————————- ——————————-
\n with a copy to:<\/p>\n
FOR: DATA SECURITIES INTERNATIONAL, INC. OCC, STC\/4309
\n StorageTek
\n 2270 S. 88th St.
\n Louisville, CO 80028
\nName:
\n ——————————-<\/p>\n
Title\/Dept:
\n ————————-<\/p>\n
Address:
\n —————————-<\/p>\n
—————————-<\/p>\n
—————————-<\/p>\n
7
\n 143<\/p>\n
9.2 Each of us will assign an Escrowed Work Coordinator in the DEW. These
\ncoordinators are responsible to administer matters associated with the DEW. The
\nSCCA Coordinator and the Escrowed Work Coordinator may be the same person. A
\nparty will provide notice to the others when coordinators change.<\/p>\n
PART 10. PAYMENT<\/p>\n
10.1 Each non-Custodian party will pay Custodian within 30 days after receipt
\nof an acceptable invoice for one-half of the fee for services under the DEW.
\nAll payments will be made in U.S. dollars. The Exhibit: Fee Schedule identifies
\nthe specified period of Custodian’s services and the firm fees for that period.
\nCustodian may propose a revised fee schedule to the SCCA Coordinators no later
\nthan 90 days before the end of the specified period. The SCCA Coordinators will
\nnotify Custodian if they accept or reject the proposed fee schedule. If IBM and
\nStorageTek choose not to pay the new fees, the SCCA will expire at the end of
\nits term and IBM and StorageTek in good faith will select a successor custodian.
\nSubject to 8.2, Custodian will provide all assistance required to move the
\nEscrowed Works to the successor custodian.<\/p>\n
10.2 Custodian will invoice each non-Custodian party for:<\/p>\n
a) one-half of the fee for all services to be performed under a DEW
\n for one year; and<\/p>\n
b) renewal of a DEW at least 60 days before it expires. Each non-
\n Custodian party may renew the DEW for an additional year by paying
\n the renewal fees. If Custodian does not receive the renewal fees
\n within 30 days, it will notify the IBM Escrowed Work Coordinator
\n and the StorageTek Escrowed Works Coordinator. Any party to this
\n Agreement shall have the right to make payment to the Custodian to
\n cure the default.<\/p>\n
If neither IBM nor StorageTek pay the fees by the expiration date of the DEW,
\nthe Custodian shall thereupon notify the IBM Escrowed Works Coordinator and the
\nStorageTek Escrowed Works Coordinator in writing that the Parties have thirty
\ndays from the date of the notice to cure such failure to pay, and the Custodian
\nshall continue to maintain the escrow for that period.<\/p>\n
In addition to information required by the DEW, the invoice will identify this
\nSCCA, the DEW and the services invoiced plus their associated fees. Custodian
\nwill submit all invoices as identified in the DEW.<\/p>\n
Each non-Custodian party is liable for one-half of the fee for services through
\nthe [**] year; after that, either party may elect not to pay or to contribute
\nto the fee (in which case continuance of the SCCA is dependent upon the other
\nparty’s actions entirely).<\/p>\n
PART 11. GENERAL<\/p>\n
11.1 Each party will comply with all applicable laws and regulations at its
\nexpense. This includes<\/p>\n
8<\/p>\n
144<\/p>\n
all export and import laws and regulations.<\/p>\n
11.2 Except as provided in the SCCA, none of the parties may assign or transfer
\nthe SCCA or its rights under it or delegate or subcontract its obligations
\nwithout the prior written approval of the other parties. Any attempt to do so
\nis void.<\/p>\n
11.3 No party will bring a legal action against another party more than two
\nyears after the cause of action arose. All parties will act in good faith to
\nresolve disputes. All parties waive their rights to a jury trial in any
\nresulting litigation. Litigation will only be commenced in the State of
\nNew York.<\/p>\n
11.4 All notices must be in writing. Except as provided in the SCCA, for a
\nchange to the SCCA to be valid, IBM, StorageTek and Custodian must sign it.
\nOther than changes to the Release Events, Custodian must also sign changes that
\naffect its rights or obligations under the SCCA. IBM will provide Custodian with
\ncopies of all changes that Custodian is not required to sign.<\/p>\n
No approval, consent or waiver will be enforceable unless signed by the
\ngranting party.<\/p>\n
11.5 The substantive laws of the State of New York govern the SCCA.<\/p>\n
9<\/p>\n
145
\nIBM Source Code Custody Agreement<\/p>\n
Description of Escrowed Work<\/p>\n
——————————————————————————–<\/p>\n
This Description of Escrowed Work (“DEW”) is a Transaction Document issued
\nunder the IBM Source Code Custody Agreement (“SCCA”).<\/p>\n
PART 1. DESCRIPTION<\/p>\n
1.1 The Escrowed Works required for deposit with Custodian: 1) by StorageTek,
\nare the source code and object code for IXFP, IXOF, ICEBERG, KODIAK, and ARCTIC
\nFOX (Licensed Works) the applicable noncommercially Development Environment and
\nthe capacity ratio benchmark; and 2) by IBM, the initial benchmarks used to
\nmeasure performance requirements for ICEBERG and KODAK. In each case, as more
\ncompletely described in the Statement of Work to the IBM Developer Agreement.<\/p>\n
1.2 Deposit will occur within thirty days after the signing of this SCCA.<\/p>\n
1.3 StorageTek agrees that the Source Code for IXFP, IXOF, ICEBERG, KODIAK, and
\nARCTIC FOX, deposited hereunder as of June 30, 1996 shall determine what is
\nconsidered Licensed Works under the Description of Licensed Works and that IBM
\nmay rely on what is deposited as determinative for that purpose.<\/p>\n
PART 2. ESCROWED WORK COORDINATORS<\/p>\n
2.1 Escrowed Work Coordinators responsible to administer all matters associated
\nwith this DEW are:<\/p>\n
FOR: FOR:<\/p>\n
INTERNATIONAL BUSINESS MACHINES STORAGE TECHNOLOGY CORPORATION
\nCORPORATION<\/p>\n
Name: [**] Name: [**]
\n ——————— ——————————
\n Purchasing Manager Vice President<\/p>\n
Title\/Dept: DEPT 033-12-4 Title\/Dept: Project Management
\n ——————— ——————————<\/p>\n
Address: IBM Address: 2270 South 88th Street, MS 4218
\n ——————— ——————————-
\n 5600 Cottle Road Louisville, CO 80028
\n ——————— ——————————-
\n San Jose, CA 95193
\n ——————— ——————————-<\/p>\n
Phone: (408)[**] Phone: (303)[**]
\n ——————— ——————————-<\/p>\n
Facsimile: (408)[**] Facsimile:(303)[**]
\n ——————— ——————————-<\/p>\n
10
\n 146
\nFOR: DATA SECURITIES INTERNATIONAL, INC.<\/p>\n
Name:
\n ——————————<\/p>\n
Title\/Dept:
\n ——————————<\/p>\n
Address:
\n ——————————<\/p>\n
——————————<\/p>\n
Phone:
\n ——————————<\/p>\n
Facsimile:
\n ——————————<\/p>\n
2.2 Notices are effective when received by the appropriate coordinator as
\ndemonstrated by reliable written confirmation (for example, certified mail
\nreceipt, courier receipt or facsimile receipt confirmation sheet.)<\/p>\n
PART 3. PAYMENT<\/p>\n
3.1 Custodian will send its original invoices to IBM at the following address:<\/p>\n
(street address) IBM CORPORATION
\n—————– ————————
\n ACCOUNTS PAYABLE
\n ————————
\n DEPT. 42E\/BLDG. 14-4
\n ————————
\n (city, state) P.O. BOX 9001
\n—————– ————————
\n ENDICOTT, NEW YORK 13761
\n ————————<\/p>\n
One copy of each invoice will be sent by mail or facsimile to the IBM Escrowed
\nWork Coordinator.<\/p>\n
Custodian will send its original invoices to StorageTek at the following
\naddress:<\/p>\n
(street address) [**]
\n—————– ————————
\n StorageTek
\n ————————
\n MS 4218
\n ————————
\n (city, state) 2270 South 88th Street
\n—————– ————————
\n Louisville, CO 80028
\n ————————<\/p>\n
One copy of each invoice will be sent by mail or facsimile to the StorageTek
\nEscrowed Work Coordinator. <\/p>\n
11
\n 147
\n3.2 Custodian’s invoices will include the following information:<\/p>\n
a) IBM Source Code Custody Agreement Number;<\/p>\n
b) name of Custodian and “remit to” address;<\/p>\n
c) short description of the performance for which payment is due; and<\/p>\n
d) the party’s purchase order number (if applicable), Custodian’s invoice
\n number and its date.<\/p>\n
12
\n 148
\nIBM DEVELOPER AGREEMENT (EXHIBIT 3)
\nSTATEMENT OF WORK (ATTACHMENT 1)
\nAPPENDIX F<\/p>\n
================================================================================
\nOVERVIEW<\/p>\n
The following document describes the methodology to be used in the
\n performance evaluation of the STK’s ICEBERG and KODIAK DASD I\/O
\n Subsystems.<\/p>\n
The performance workload suite has the following attributes:<\/p>\n
1. – [**]<\/p>\n
2. – [**]<\/p>\n
3. – [**]<\/p>\n
4. – [**]<\/p>\n
5. – [**]<\/p>\n
6. – [**]<\/p>\n
The following is a summary of the workloads included in the subsystem workload
\nsuite.<\/p>\n
1. Random stress test. A set of random access experiments, called
\n a four-corners test, evaluates performance of [**] conditions,
\n such as [**] or [**], with either [**] operations, or [**]
\n writes.<\/p>\n
2. Sequential stress tests. A set of sequential experiments are
\n included that stress the [**] of the subsystem. These tests
\n include both [**] read and write streams, running between [**]
\n [**].<\/p>\n
3. Data base workload. A data base workload is included that
\n tests a wide variation in [**]. This workload uses [**], and
\n has been designed to [**] the type of random access behavior
\n seen in the [**] data.<\/p>\n
4. Batch workload. A batch workload is included that [**] the
\n [**] seen in customer batch workloads. This workload contains
\n a mixture of [**] activity.<\/p>\n
5. Sort workload. A workload is included that is [**] jobs.<\/p>\n
149<\/p>\n
6. Utility workload. A utility workload is included that contains
\n the type of “data mover” applications that might be seen in
\n many [**].<\/p>\n
RANDOM STRESS TEST<\/p>\n
The purpose of these experiments is to test variations of read and
\n write content with high and low reference locality.<\/p>\n
Key workload characteristics<\/p>\n
1. The workload consists of [**] tests:
\n – [**]
\n – [**]
\n – [**]
\n – [**]<\/p>\n
2. Several measurement points are run for each case. First, a
\n [**] point is taken at approximately [**] to measure [**]
\n times. An additional [**] points are taken, ranging from
\n around [**] to [**] for [**], and from around [**] to maximum
\n [**] rate for [**].<\/p>\n
3. [**] rates are controlled by selecting various [**]. The
\n maximum rates are tested by establishing a [**].<\/p>\n
4. [**] volumes are standardly used, a sufficient number to allow
\n [**] of [**] subsystems.<\/p>\n
5. Access are uniformly distributed across all of the [**]
\n volumes. [**] are generated by a set of [**].<\/p>\n
6. The [**] tests use [**], and the [**] use a [**].<\/p>\n
7. The [**] metrics for this [**] are:<\/p>\n
– [**]
\n – [**]<\/p>\n
SEQUENTIAL STRESS TESTS<\/p>\n
1. The following are the [**] of the sequential stress tests.<\/p>\n
– [**]<\/p>\n
– [**]<\/p>\n
2
\n 150<\/p>\n
KEY WORKLOAD CHARACTERISTICS<\/p>\n
1. The experiments are run with [**] to ensure that the [**] to
\n the device is being [**] by [**]. Each data set is
\n approximately [**].<\/p>\n
2. Experiments are run with [**] number of [**], varying from
\n [**] to [**] for both [**].<\/p>\n
3. The [**] tests transfer roughly [**]. The [**] tests transfer
\n [**] [**].<\/p>\n
4. The [**] tests do not use the [**] in the [**], thereby
\n testing the [**] capability of the subsystem.<\/p>\n
5. The [**] metric for this workload is the [**] rate in [**] per
\n second.<\/p>\n
— Table 1 shows the test variations included in this sequential
\n test suite.<\/p>\n
Table 1. Sequential test. [**] sequential streams<\/p>\n
\n\nEXPERIMENT ACCESS METHOD BLKSIZE NO.BLKS # OF STREAMS
\n
\n[**] <\/p>\n[**]<\/p>\n
[**]<\/p>\n
[**]
\n<\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
VSAM DATA BASE WORKLOAD<\/p>\n
This test includes a general [**] data base workload. This workload
\n [**] the [**] characteristics of a variety of [**] systems, and is
\n implemented as an application program using [**] . This program has the
\n ability to generate a variety of [**]. Unlike some benchmarks of this
\n type, it is not tuned to [**], but rather is [**], and matches the [**]
\n of characteristic data base environments. In this way, it is a
\n reasonable test of the effects of [**] or the efficiency of [**], with
\n [**] characteristics similar to [**], and some characteristics of [**]
\n and [**] data base systems.<\/p>\n
KEY WORKLOAD CHARACTERISTICS<\/p>\n
1. The workload is run with [**], listed in order of “cache
\n friendliness”.<\/p>\n
a. [**]<\/p>\n
3
\n 151<\/p>\n
b. [**]<\/p>\n
c. [**]<\/p>\n
d. [**]<\/p>\n
In general, the less cache friendly workloads have [**], and [**].<\/p>\n
2. With the exception of the [**] workload, these workloads are
\n run at [**] measurement points, with each measurement point
\n representing a [**] [**] in variable user population. This
\n means that [**] are added at higher loads, with each [**]
\n having a [**]. (Some workloads, including the [**] variation,
\n [**] user population that [**] at [**] measurement points.) As
\n a result, as the user population grows at the [**] measurement
\n points, [**] effects are generally observed for a subsystem at
\n a specific cache size.<\/p>\n
[**]
\n [**]
\n [**]<\/p>\n
The [**] measurement point generates an average of [**] per
\n [**] volume in the workload, attempting to drive the workload
\n to [**] and [**] per volume at the [**] measurement points.
\n However, since the [**] times are fixed, as response times
\n increase at the [**], the actual subsystem throughputs [**]
\n these targets.<\/p>\n
3. Each measurement point is run for approximately [**]. The data
\n bases are [**] (to realistically deal with [**] sizes), and
\n the [**] run duration is generally not long enough for [**]
\n design to stabilize into record caching. This is due to the
\n [**] unique to the [**]. As a result, some of the measurements
\n of the [**] variation may be pessimistic for the [**].<\/p>\n
4. The workload can be configured using multiples of [**]
\n volumes. The current setup uses [**] volumes, but can be
\n easily expanded beyond that number. It should be noted than
\n although most [**] are configured with more than [**] volumes,
\n at any given time most of those volumes have very little
\n activity, and most of the data is inactive. In that sense, a
\n [**] volume experiment with these workloads represents the
\n performance characteristics of a larger customer
\n configuration.<\/p>\n
5. Except for the [**] variation, [**] are skewed across [**]
\n volumes. For example, at the [**] measurement point for a set
\n of [**] volumes, [**] volumes attempt an [**] of approximately
\n [**] volumes attempt approximately [**] that rate, and [**]
\n volume attempts approximately [**] that rate.<\/p>\n
6. In the cache standard variation, a few volumes have [**]
\n characteristics, while the rest of the volumes have [**]. In
\n the other workload variations, all of the [**]<\/p>\n
4
\n 152<\/p>\n
volumes have [**] characteristics. The standard cache
\n workload contains [**] volumes that have [**] characteristics.<\/p>\n
7. A [**] variation is included to [**] throughput capabilities
\n of the subsystem. [**] measurement points are run, from
\n approximately [**] sec per volume at the [**] rate, to a [**]
\n rate. This workload uses a [**] user population, reducing the
\n [**] as load increases, to a [**] at the [**] measurement
\n point. For this workload, [**] tend to remain constant across
\n the measurement points.<\/p>\n
8. The workload uses [**] sizes for all variations.<\/p>\n
9. The [**] friendly variations have [**] write content. All
\n writes are [**] writes, meaning that the record is [**], and
\n therefore [**] a hit in cache.<\/p>\n
10. Each [**] volume in the workload has [**] data set. Each [**]
\n data set is approximately [**] in size.<\/p>\n
— Table 2 shows some of the key workload characteristics for the
\n random access tests and the [**] workload. The caching attributes shown
\n are those measured on a [**] configuration.<\/p>\n
Table 2. Random Workload Attributes. Workload attributes for a [**]<\/p>\n
5
\n 153<\/p>\n
\n\nEXPERIMENT RD HIT % WRITE % F\/W RECRDMISS% XFER SIZE SKEW
\n DESTG%
\n <\/p>\n[**]<\/p>\n
[**]
\n[**]<\/p>\n
[**]<\/p>\n
[**]
\n[**]<\/p>\n
[**]
\n[**]
\n[**]
\n[**]<\/p>\n
[**]
\n[**]
\n[**]
\n[**]
\n<\/c><\/c><\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
BATCH WORKLOAD<\/p>\n
The purpose of the batch workload is to create a test which is
\n representative of customer’s [**] batch window [**] characteristics.
\n The following are the basic workload attributes:<\/p>\n
KEY WORKLOAD CHARACTERISTICS<\/p>\n
1. Contains a mixture of type of [**] \/O activity<\/p>\n
[**]<\/p>\n
[**]<\/p>\n
[**]<\/p>\n
[**]<\/p>\n
2. The average transfer size is [**] if [**] programs excluded).
\n The [**] applications transfer either [**] or [**] per [**],
\n and the [**] applications transfer approximately [**] per
\n [**].<\/p>\n
3. [**]<\/p>\n
6
\n 154<\/p>\n
4. The primary metrics for the workload are [**] and [**] rates
\n and [**] times.<\/p>\n
WORKLOAD IMPLEMENTATION<\/p>\n
1. Contains [**] jobs, each with [**] job steps. The following is
\n the mixture of [**] by the job steps:<\/p>\n
– [**] reads of data sets with either [**] or [**] block
\n sizes.<\/p>\n
– A sequential application [**] that copies data sets with
\n either [**] or [**] block sizes.<\/p>\n
– A [**] application that updates [**] of the records.<\/p>\n
– A [**] application. This is in fact the [**] [**] variation
\n of the data base workload.<\/p>\n
– A [**] application.<\/p>\n
2. Each job is [**] except for the [**] of the steps. This is
\n done to allow jobs to finish at roughly the same time, but
\n creates a mixture of activity at each point in time.<\/p>\n
3. Each job has [**] data sets. Except for the data base data
\n sets, data sets are [**] distributed across [**]. Each of the
\n [**] data base data sets are distributed across each of the
\n [**].<\/p>\n
SORT WORKLOAD<\/p>\n
WORKLOAD CHARACTERISTICS<\/p>\n
1. A [**] application is included in the workload. The key
\n attributes +of the workload are:<\/p>\n
– The [**]<\/p>\n
– [**]<\/p>\n
2. [**] sorting is [**], that is [**] sorting options are used.
\n This is to ensure that this is truly a DASD benchmark, and
\n that [**] differences are not a significant factor in the sort
\n elapsed times.<\/p>\n
3. A [**] size of [**] is sued to ensure [**] writes for the sort
\n work data sets.<\/p>\n
4. The [**] attributes for [**] are [**], and [**]<\/p>\n
7
\n 155<\/p>\n
UTILITIES WORKLOAD<\/p>\n
A collection of [**] are included in the test. Customers often focus on
\n these types of applications when conducting [**] benchmarks. The
\n purpose of these tests are to [**] the various “data mover” type of
\n utilities. The following are included in this test suite:<\/p>\n
1. [**] Physical dump.<\/p>\n
– A series of physical dumps are performed, using [**]
\n and [**] dump operations.<\/p>\n
– A [**] has been provided which causes the output to
\n be [**], thereby eliminating [**] as a bottleneck.<\/p>\n
– The volumes dumped are [**] approximately [**] full.
\n The volumes contain [**] data sets. They are in fact
\n [**] volumes used for the batch and data base
\n workloads.<\/p>\n
– [**] is used.<\/p>\n
2. [**] Physical restore.<\/p>\n
– A series of physical restores are performed, using
\n [**] [**] restore operations. The volumes restored
\n are the same as the batch and data [**] volumes.<\/p>\n
3. [**]<\/p>\n
– A series of [**] jobs are executed.<\/p>\n
– The data sets used are the [**] as for the [**]
\n stress tests, [**], with [**]. <\/p>\n
4. IEBCOPY<\/p>\n
– A series of [**] jobs are executed.<\/p>\n
– The data sets consist of copies of a source library
\n [**]<\/p>\n
WORKLOAD EXECUTION TIME<\/p>\n
— Table 3 Shows approximate run times for each component of the
\n workload. These run times vary based upon the product being
\n evaluated. The total time to run the workloads and load and
\n initialize the base operating system is currently around [**].<\/p>\n
8
\n 156<\/p>\n
Table 3. Workload execution times<\/p>\n
\n\nCOMPONENT DB LOAD EXECUTION
\n
\n[**]<\/p>\n[**]<\/p>\n
[**]<\/p>\n
[**]<\/p>\n
[**]<\/p>\n
[**]<\/p>\n
[**]<\/p>\n
[**]<\/p>\n
[**]<\/p>\n
[**]
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
9
\n 157
\n ATTACHMENT 2 TO EXHIBIT 3<\/p>\n
IBM DEVELOPER AGREEMENT
\n DESCRIPTION OF LICENSED WORK<\/p>\n
This Description of Licensed Works (“DLW”) is a Transaction Document
\nissued under the IBM Developer Agreement (“IDA”) for the license to IBM of an
\nexisting Licensed Works owned by StorageTek. StorageTek retains ownership of
\nits intellectual property rights in the Licensed Works, but grants IBM licenses
\nto such Licensed Works, as set forth in this DLW Transaction Document. IBM owns
\nintellectual property rights in IBM Materials included in Deliverables provided
\nto IBM in accordance with the IDA, but grants StorageTek licenses to such IBM
\nMaterials as set forth in this DLW Transaction Document.<\/p>\n
1. DEFINITIONS<\/p>\n
1.1 Royalty Accounting Month: Is the time frame during which
\nlicenses fees become due. The start and end dates of a Royalty Accounting
\nMonth vary by the IBM geographic area where licenses are granted. The Royalty
\nAccounting Months are:<\/p>\n
a. For StorageTek Worldwide and for IBM in the United
\n States\/Puerto Rico: begins on the first business day of the current
\n calendar month and ends on the last business day of that month.<\/p>\n
b. For IBM in the Americas\/Far East Countries (Excluding
\n U.S.): begins on the first business day of the prior calendar month,
\n ending on the last business day of that month.<\/p>\n
c. For IBM in Europe\/Middle East\/Africa Countries:
\n begins on the first business day of the last week of the prior calendar
\n month. It includes the first three weeks of the current calendar month
\n and ends on the last business day of that third week.<\/p>\n
1.2 “Tape Server” shall be as defined in the OEM Agreement.<\/p>\n
1.3 “Iceberg, Kodiak, Arctic Fox Storage System” (hereinafter “IKA
\nStorage System”) shall mean any storage system which is primarily designed for
\nstoring data, includes controller Microcode of which more than [**] of its
\ntotal lines of ultimately executable Source Code (including data declarations,
\nbut not including any comments, dummy, nonoperational, or nonfunctional lines
\nof Source Code), consists of Licensed Works and IBM Materials in combination,
\nand either (a) represents itself to a host computer system as a disk drive
\nstorage system, or (b) has more than [**] of its total data storage capacity on
\n[**].<\/p>\n
1.4 “IBM Material Use License” shall mean a [**], nonexclusive,
\n[**], license to [**] Derivative Works of, the Licensed Works and its
\nDerivative Works. Such license includes the right of IBM to authorize others
\nto do any of the above, and also applies to associated audio and
\n 158
\nvisual works. Except for the right to sublicense Subsidiaries pursuant to
\nSection 11.0 of the IDA, the right to sublicense under this definition is
\nlimited to granting sublicenses for [**] which include terms and conditions
\n[**], and to [**] under terms and conditions that IBM uses for similar [**] of
\nits own, and to granting sublicenses to [**] under reasonable terms and
\nconditions.<\/p>\n
1.5 “StorageTek [**] License” shall mean a [**], nonexclusive,
\n[**], license to [**] Derivative Works, of the IBM Materials and its Derivative
\nWorks. Such license includes the right of StorageTek to authorize others to do
\nany of the above, and also applies to associated audio and visual works.
\nExcept for the right to sublicense Subsidiaries pursuant to Section 11.0 of the
\nIDA, the right to sublicense under this definition is limited to granting
\nsublicenses for [**] which include terms and conditions [**], to granting [**]
\nunder terms and conditions that StorageTek uses for similar [**] of its own,
\nand to granting sublicenses to [**] under reasonable terms and conditions.<\/p>\n
1.6 “IBM [**] License” shall mean a nonexclusive, [**] license to
\nuse: (a) the ideas, concepts, and techniques contained in; (b) the structure,
\nsequence and organization of, and (c) other nonliteral aspects of, Licensed
\nWorks and their Derivative Works owned by StorageTek. Such license shall not
\ninclude the right of IBM to make a copy of any of the Licensed Works or
\nDerivative Work thereof owned by StorageTek which is substantially similar
\nthereto and would constitute literal infringement under applicable copyright
\nlaw.<\/p>\n
1.7 “StorageTek [**] License” shall mean a nonexclusive, [**]
\nlicense to use: (a) the ideas, concepts, techniques contained in; (b) the
\nstructure, sequence and organization of, and (c) other nonliteral aspects of
\nIBM Materials and their Derivative Works. Such license shall not include the
\nright of StorageTek to make a copy of any of the IBM Materials or any
\nDerivative Work thereof owned by IBM which is substantially similar thereto and
\nwould constitute literal infringement under applicable copyright law.<\/p>\n
1.8 “SSIKA Storage System” shall mean any storage system which is
\nprimarily designed for storing data, which includes controller Microcode of
\nwhich more than [**] of its total lines of ultimately executable Source Code
\n(including data declarations, but not including any comments, dummy,
\nnonoperational, or nonfunctional lines of Source Code), consists of lines of
\nSource Code from any Licensed Work, and either (a) represents itself to a host
\ncomputer system as a disk drive storage system, or (b) has more than [**]
\nof its total data storage [**].<\/p>\n
1.9 “Microcode” is defined as a set of instructions that is either
\nimbedded into or is to be loaded into the Product and executes below the
\nexternal user interface of such Product. Microcode may be in magnetic or other
\nstorage media, integrated circuitry or other media.<\/p>\n
1.10 “Maintenance Code” is defined as software other than
\nMicrocode, including data files, which executes and exercises the Product and
\nUpgrades, and which detects, records, displays and\/or analyzes malfunctions,
\nerrors or other events in the Product and Upgrades.<\/p>\n
2
\n 159
\n 1.11 “Non-RMM Device” shall mean a storage system primarily
\ndesigned for storing data which has less than [**] of its total data storage
\ncapacity on rotating magnetic media disk drives (other than magneto-optical) or
\nin semiconductor memory.<\/p>\n
1.12 “Arctic Fox Storage System” shall mean any IKA Storage System
\nmanufactured by or for StorageTek which is primarily designed for storing data,
\nincludes controller Microcode of which more than [**] of its total lines of
\nultimately executable Source Code including data declarations, but not
\nincluding any comments, dummy, nonoperational, or nonfunctional lines of Source
\nCode, consists of Licensed Works and IBM Materials in combination, or solely
\nIBM Materials, represents itself to a host computer systems as a disk drive
\nstorage system, and includes only semiconductor memory.<\/p>\n
1.13 “Snapshot Feature(s)” means the software with the capability
\nto enable Snapshot from within IXFP and from within Iceberg.<\/p>\n
1.14 All other capitalized terms shall have the meanings defined
\nelsewhere in the Agreement, as that term is defined in the OEM Agreement
\nbetween the Parties hereto, of even date herewith.<\/p>\n
2. DESCRIPTION<\/p>\n
2.1 The Licensed Works are the StorageTek software and Microcode,
\nboth including Code as defined in the IDA, documentation and related written
\nmaterials for the StorageTek Iceberg , Kodiak and Arctic Fox products, and
\nLicensed Programs, including Snapshot and the Snapshot Feature, all as they
\nexist on [**] and are required to be escrowed pursuant to the IDA.<\/p>\n
2.2 StorageTek shall provide maintenance and support Services for
\nthe Licensed Works, as described in a Statement of Work.<\/p>\n
3. GRANT OF LICENSES<\/p>\n
3.1 StorageTek hereby grants to IBM:<\/p>\n
a. A IBM [**] License: (i) [**], prior to [**], and
\n [**] thereafter, for any purpose in connection with IKA Storage
\n Systems, except for manufacturing IKA Storage Systems or SSIKA Storage
\n Systems, and except that the license for developing and distributing
\n Basic Enhancements and Maintenance Modifications for IKA Storage
\n Systems shall remain [**] and (ii) [**] for manufacturing, selling or
\n leasing IKA Storage Systems except for SSIKA Storage Systems which
\n becomes effective upon termination or expiration of the Agreement.<\/p>\n
b. A IBM [**] License for any purpose;<\/p>\n
c. A [**] IBM Material Use License for developing and
\n distributing Basic Enhancements and Maintenance Modifications for
\n products other than IKA Storage Systems;<\/p>\n
3
\n 160
\n d. For products other than IKA Storage Systems, a [**]
\n IBM [**] License for any purpose except for developing and
\n distributing Basic Enhancements and Maintenance Modifications (which
\n is subject to Section 3.1c);<\/p>\n
e. Notwithstanding any other provisions of the
\n Agreement, a nonexclusive, [**] license to use, execute, reproduce,
\n display, perform, transfer, distribute, sublicense, and prepare
\n Derivative Works of, the IXFP software for the purposes of enabling
\n the connectivity of IKA Storage Systems to IBM’s operating systems and
\n application software. Such license includes the right of IBM to
\n authorize others to do any of the above, and also applies to
\n associated audio and visual works.<\/p>\n
f. Notwithstanding any other provisions of the
\n Agreement, a [**], nonexclusive, [**], license to use, execute,
\n reproduce, display, perform and distribute internally, and prepare
\n Derivative Works of, Maintenance Code and related documentation, if
\n any, and Product service documentation for the sole use in the
\n maintenance of products. StorageTek agrees, upon request from [**],
\n to make available a license of the same scope as heretofore provided
\n under reasonable terms and conditions to such [**].<\/p>\n
g. Notwithstanding any other provisions of the
\n Agreement, IBM may grant limited sublicenses to its Subsidiaries and
\n [**] to use such Maintenance Code and related documentation, and such
\n Product service manuals, and Derivative Works prepared by IBM
\n hereunder, solely for the purpose of maintaining Products purchased by
\n IBM under the OEM Agreement, such sublicenses to be nontransferable
\n and lasting only so long as such entities are Subsidiaries of IBM, or
\n [**] IBM.<\/p>\n
h. A [**] IBM Material Use License to use the Snapshot
\n Feature to enable Snapshot.<\/p>\n
i. No rights or licenses are granted to IBM under this
\n DLW with respect to manufacturing of IKA Storage Systems prior to
\n expiration or termination of the Agreement or SSIKA Storage Systems at
\n any time. Rights of IBM to use Licensed Works to manufacture Devices
\n in the case of a Triggering Event are set forth in Section 23.6 of the
\n OEM Agreement.<\/p>\n
j. Under no circumstances will StorageTek make any claim
\n against IBM with respect to infringement of StorageTek patents or
\n copyrights with respect to any software which is provided to IBM by
\n StorageTek under the Agreement and is not a Licensed Work.<\/p>\n
3.2 IBM hereby grants to StorageTek:<\/p>\n
a. A StorageTek [**] License for any purpose;<\/p>\n
4
\n 161
\n b. A [**] StorageTek [**] License for developing and
\n distributing Basic Enhancements and Maintenance Modifications for (i)
\n Tape Servers and (ii) products other than IKA Storage Systems;<\/p>\n
c. For products other than IKA Storage Systems, a [**]
\n StorageTek [**] License for any purpose except for developing and
\n distributing Basic Enhancements and Maintenance Modifications for (i)
\n Tape Servers and (ii) all other products except IKA Storage Systems
\n (which is subject to Section 3.2b);<\/p>\n
d. A StorageTek [**] License for developing and
\n distributing Basic Enhancements and Maintenance Modifications: (i)
\n [**] on the StorageTek Installed Base (as defined in the OEM
\n Agreement) and Devices sold, leased or otherwise distributed by
\n StorageTek, and (ii) [**] for a period of [**] from [**] and [**]
\n thereafter, for IKA Storage Systems other than those in the StorageTek
\n Installed Base and Devices sold, leased or otherwise distributed by
\n StorageTek;<\/p>\n
e. For IKA Storage Systems a [**] StorageTek [**]
\n License, for any purpose whatsoever, except for developing and
\n distributing Basic Enhancements and Maintenance Modifications for IKA
\n Storage Systems (which is subject to Section 3.2d), for performing
\n development and manufacturing activities, including Major
\n Enhancements, in connection with IKA Storage Systems (which is subject
\n to Section 3.2f), Arctic Fox Storage Systems (which is subject to
\n Section 3.2g), and certain internal usage of Equipment or Devices by
\n StorageTek and its Subsidiaries (which is described in and subject to
\n Sections 3.2i and 3.2j);<\/p>\n
f. A [**] StorageTek [**] License for performing
\n development and manufacturing activities, including Major
\n Enhancements, in connection with IKA Storage Systems, but not for
\n selling or leasing IKA Storage Systems (which is subject to Section
\n 3.2e);<\/p>\n
g. Notwithstanding any other provisions of this
\n Agreement, a [**] StorageTek [**] License for any purpose in
\n connection with Arctic Fox Storage Systems;<\/p>\n
h. A [**] StorageTek [**] License for any purpose in
\n connection with Non-RMM Devices which include IBM Materials.<\/p>\n
i. A [**] StorageTek [**] License for use of Equipment
\n or Devices internally by StorageTek and its Subsidiaries for
\n development, manufacture, test and demonstration at StorageTek’s
\n manufacturing facility or field service offices; and<\/p>\n
j. A [**] StorageTek [**] License for use of Equipment
\n or Devices internally by StorageTek’s or its Subsidiaries
\n noncommercial business needs, provided that such Equipment or Devices
\n are used by StorageTek or its Subsidiaries solely to process
\n StorageTek’s or its Subsidiaries’ own data; and<\/p>\n
5
\n 162
\n sales or distributions of Equipment and Devices by StorageTek or its
\n Subsidiaries to its Subsidiaries, provided further that such Equipment
\n or Devices are used solely by such Subsidiary to process StorageTek’s
\n or its Subsidiaries’ data; and further provided that the [**] so used
\n by StorageTek and sold to such Subsidiaries by StorageTek does [**]
\n this Agreement.<\/p>\n
4. COPYRIGHT<\/p>\n
4.1 StorageTek is responsible for copyright registration and
\nmaintenance of, and for taking reasonable efforts for, enforcement of the
\ncopyrights for the Licensed Works. StorageTek authorizes IBM to act as its
\nagent in the copyright registration of the Licensed Works.<\/p>\n
4.2 IBM is responsible for copyright registration and maintenance
\nof, and for taking reasonable effort for enforcement of copyrights for the IBM
\nMaterials.<\/p>\n
4.3 Each party agrees, upon the request of the other party, to
\nprovide a copy of the Source Code for software and\/or Microcode incorporated in
\nthe nonrequesting party’s product, to an independent third party mutually
\nagreed to by the parties to determine if such software and\/ or Microcode makes
\nMaterial Use of the requesting party’s software and\/or Microcode.<\/p>\n
4.4 The provisions of this Section 4 shall survive termination or
\nexpiration of the IDA.<\/p>\n
5. PAYMENT<\/p>\n
5.1 In consideration for the licenses indicated as being royalty
\nbearing in Section 3.1 granted to IBM in this DLW, IBM will pay StorageTek
\nroyalties against revenues received by IBM and its Subsidiaries as defined
\nbelow:<\/p>\n
a. [**] of (1) all fees collected for [**], which
\n include Licensed Works or Derivative Works thereof (but not including
\n any works which consist only of IBM Materials or Derivative Works
\n thereof) for storage systems other than IKA Storage Systems, and (2)
\n all license fees collected for software or Microcode other than Major
\n Enhancements, which include Licensed Works or Derivative Works
\n thereof, distributed separately from hardware;<\/p>\n
b. The lesser of [**] for each [**], which includes
\n Licensed Works or Derivative Works thereof (but not including any
\n works which consist only of IBM Materials or Derivative Works
\n thereof), and not including [**] by IBM or its Subsidiaries, or [**]
\n of: (a) the actual revenue received for such [**] or (b) in the case
\n of a [**], the average price of all such IBM [**] by IBM in the
\n calendar quarter prior to the sale or lease of such [**];<\/p>\n
c. [**] of all fees collected for [**], which include
\n Licensed Works or Derivative Works thereof (but not including any
\n works which consist only of IBM Materials or Derivative Works
\n thereof), installed on [**] after [**];<\/p>\n
6
\n 163
\n d. Notwithstanding any other provision in this
\n Description of Licensed Works, IBM will pay StorageTek [**] as
\n specified in Attachment 2 to Exhibit 1 to the OEM Agreement for each
\n copy of the Snapshot Feature that IBM distributes, except that copies
\n acquired for internal testing, technical evaluation and field support
\n of Equipment by IBM shall be [**]; and<\/p>\n
e. All royalty obligations will be paid-up for the
\n Licensed Works when total royalties in the amount of [**] have been
\n paid by IBM or on [**], whichever occurs first. All the licenses
\n granted to IBM by StorageTek will be irrevocable at that time.<\/p>\n
5.2 In consideration for the licenses indicated as being [**] in
\nSection 3.2 granted to StorageTek in this DLW, StorageTek will pay IBM [**] by
\nStorageTek and its Subsidiaries as defined below:<\/p>\n
a. (i) [**] of all fees collected for [**], which
\n include IBM Materials or Derivative Works thereof, for storage systems
\n other than IKA Storage Systems,<\/p>\n
(ii) [**] of the list price charged for customer
\n service which includes the right to install Basic Enhancements and
\n Maintenance Modifications on IKA Storage Systems, and<\/p>\n
(iii) Except as otherwise provided in Section
\n 5.2(f) of this DLW, [**] of all license fees collected for software
\n and Microcode other than Major Enhancements, which include IBM
\n Materials or Derivative Works thereof, distributed separately from
\n hardware;<\/p>\n
b. The lesser of [**] for each (i) [**] , other than an
\n [**], or [**] therefor, which includes IBM Materials or Derivative
\n Works thereof, and (ii) each [**] or controller therefor, sold or
\n leased by StorageTek or its Subsidiaries, or, in the case of (i)
\n above, [**] of (x) the actual revenue received for [**] or (y) in the
\n case of a [**] controller, the average price of all StorageTek [**]
\n sold or leased by StorageTek in the calendar quarter prior to the sale
\n or lease of such [**];<\/p>\n
c. Except as otherwise provided in Sections 5.2(d)(i)
\n and 5.2(f) of this DLW, [**] of all fees collected for Major
\n Enhancements, which include IBM Materials and Derivative Works
\n thereof, made in connection with IKA Storage Systems;<\/p>\n
d. (i) The following amounts, [**], for each IKA
\n Storage System, IKA Storage System controller [**], that is sold or
\n leased by StorageTek [**] thereof:<\/p>\n
[**]<\/p>\n
7
\n 164
\n The [**] will be calculated using an estimate of [**], as the
\n [**] other than IBM. If the [**] period, then the [**] to be paid by
\n StorageTek for each unit will be recalculated based on use of a [**]
\n equal to the [**] period. The [**] will [**], however, if the actual
\n [**] period.<\/p>\n
(ii) The lesser of [**] or IKA Storage System
\n controller, sold or leased by StorageTek after [**], or [**] of: (1)
\n [**] , or (2) [**].<\/p>\n
e. Except for the royalty obligations specified in
\n Sections 5.2(d)(i) and 5.2(f) of this DLW which are not subject to any
\n limitation, all royalty obligations under this Section 5.2 will be
\n paid-up when total royalties in the amount of [**] in connection with
\n StorageTek’s use of IBM Materials or Derivative Works thereof in
\n hardware or software products that are sold, leased or licensed have
\n been paid to IBM or on [**] whichever occurs first. All the licenses
\n granted to StorageTek by IBM will be irrevocable at that time.<\/p>\n
f. The following amounts for each copy of [**] and [**]
\n that includes IBM Materials or any Derivative Works thereof, and is
\n licensed by StorageTek for use in or with an IKA Storage System or IKA
\n Storage System controller prior to [**] :<\/p>\n
\n\n Description [**] [**]
\n ——————————————————–
\n
\n Through [**] [**]
\n [**] through [**] [**]; and
\n [**] through [**] [**]
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n 5.3 StorageTek agrees to pay to IBM a [**] during [**] that is
\npayable in [**] on the [**] of each [**]. This payment will be [**] that
\nbecome due and owing to IBM under Section [**], above, of the DLW based upon
\nStorageTek’s [**]. Unused portions of this payment that do not [**] may be
\n[**] that will become due and owing to IBM under Section [**], above, of the
\nDLW after [**].<\/p>\n
5.4 [**] . Payment will be made by the last day of the calendar
\nmonth following the calendar quarter. Royalties will be paid less adjustments
\nand refunds due to the owing party. The owing party will provide a statement
\nsummarizing the royalty calculation with each payment.<\/p>\n
5.5 Notwithstanding any other provision of the Agreement, and
\nexcept for StorageTek’s obligation to pay royalties pursuant to Section
\n3.2d(ii) herein, neither Party shall be liable to the other for royalties based
\non de minimis use, as determined by applicable copyright law, of the other
\nParty’s Code, documentation, and other written materials.<\/p>\n
5.6 The provisions of this Section 5 shall survive termination of
\nthe Agreement.<\/p>\n
6. TERMINATION<\/p>\n
8
\n 165
\n 6.1 The termination of the Base Agreement or a Transaction
\nDocument will not affect previously granted paid-up rights or licenses to IBM
\nor StorageTek or product users.<\/p>\n
6.2 Any license, which is subject to a royalty, granted hereunder
\nmay be terminated by the licensor if the licensee fails to pay any royalty due
\nwith respect to such grant and fails to cure such nonpayment by the end of the
\nnext calendar quarter after written notice from the Licensor.<\/p>\n
6.3 All licenses will survive termination for convenience by IBM
\nsubject to the obligations to pay royalties where applicable, except that, as
\nset forth in Section 23.7 of the OEM Agreement, the StorageTek [**] License for
\n[**] Devices and providing [**] for such Devices will immediately become fully
\npaid up; provided, however that royalties will be due for [**].<\/p>\n
6.4 Upon termination of the Agreement for cause by IBM, all of the
\nlicenses granted to IBM in Section 3.1 shall survive such termination subject
\nto the obligations to pay royalties where applicable, except that the IBM [**]
\nLicense set forth in Section 3.1(a) hereof, shall become effective and shall
\nimmediately become fully paid up and irrevocable. Upon termination of the
\nAgreement for cause by StorageTek, all of the licenses granted to IBM in
\nSection 3.1 shall survive such termination subject to the obligations to pay
\nroyalties where applicable.<\/p>\n
6.5 Upon termination of the Agreement for cause the licenses
\ngranted to StorageTek in Section 3.2 shall be treated as follows:<\/p>\n
a. All licenses will survive termination for cause by
\n StorageTek subject to the obligations to pay royalties where
\n applicable except that the StorageTek [**] Licenses set forth in
\n Sections 3.2d and 3.2e shall immediately become [**]; and<\/p>\n
b. If terminated for cause by IBM:<\/p>\n
All licenses granted to StorageTek to use IBM
\n Materials under Section 3.2, above, will survive such termination, and
\n be [**] as provided herein, provided, however, that, if StorageTek
\n elects to maintain or effectuate, whichever the case may be, the
\n StorageTek [**] Licenses set forth in Section 3.2d(ii) ([**] for a
\n period of [**] from June 7, 1996, becoming royalty-free thereafter,
\n for use in developing and distributing Basic Enhancements and
\n Maintenance Modifications for IKA Storage Subsystems other than those
\n in the StorageTek Installed Base), and in Section 3.2e [**] license
\n for use in IKA Storage Systems or IKA Storage System controllers for
\n any purpose other than developing and distributing Basic Enhancements
\n and Maintenance Modifications), then StorageTek must first pay to IBM
\n the sum of [**] and also pay to IBM royalties as set forth in Section
\n 5.2 above for such license, except that such royalty shall be [**] for
\n each IKA Storage System or IKA Storage System controller sold or
\n leased by StorageTek following the date of StorageTek’s receipt of
\n IBM’s written notice of termination, and, except that, once StorageTek
\n has paid in royalties pursuant to this Section the sum of an
\n additional [**], then such license shall immediately become [**], and<\/p>\n
9
\n 166
\n provided further, that any sums paid by StorageTek to IBM under this
\n Section shall be in addition to any royalty payments due pursuant to
\n Section 5.2 hereof for products other than as covered in Sections
\n 3.2d and 3.2e hereof, and shall have no effect on the total royalties
\n to be paid pursuant to Section 5.2e hereof.<\/p>\n
10
\n 167
\n Attachment 2 to Exhibit 3
\n Appendix A
\n 168
\nIBM AGREEMENT FOR LICENSED INTERNAL CODE<\/p>\n
——————————————————————————–<\/p>\n
You accept the terms of this Agreement by your initial use of a machine that
\ncontains IBM Licensed Internal Code (called “Code”).<\/p>\n
These terms apply to Code used by certain machines IBM or your reseller
\nspecifies (called “Specific Machines”). International Business Machines
\nCorporation or one of its subsidiaries (“IBM”) owns copyrights in Code or has
\nthe right to license Code. IBM or a third party owns all copies of Code,
\nincluding all copies made from them.<\/p>\n
If you are the rightful possessor of a Specific Machine, IBM grants you a
\nlicense to use the Code (or any replacement IBM provides) on, or in conjunction
\nwith, only the Specific Machine for which the Code is provided. IBM licenses
\nthe Code only one rightful possessor at a time.<\/p>\n
Under each license, IBM authorizes you to do only the following:<\/p>\n
1. execute the Code to enable the Specific Machine to function according
\n to its Official Published Specifications (called “Specifications”);<\/p>\n
2. make a backup or archival copy of tile Code (unless IBM makes one
\n available for your use), provided you reproduce the copyright notice
\n and any other legend of ownership on the copy. You may use the copy
\n only to replace the original. when necessary; and<\/p>\n
3. execute and display the Code as necessary to maintain the Specific
\n Machine.<\/p>\n
You agree to acquire any replacement for, or additional copy of, Code directly
\nfrom IBM in accordance with IBM’s standard policies and practices. You also
\nagree to use that Code under these terms.<\/p>\n
You may transfer possession of the Code to another partly only with the
\ntransfer of the Specific Machine. If you do so, you must 1) destroy all your
\ncopies of the Code that were not provided by IBM, 2) either give the other
\nparty all your IBM-provided copies of the Code or destroy them, and 3) notify
\nthe other party of these terms. IBM licenses the other party when it accepts
\nthese terms. These terms apply to all Code you acquire from any source.<\/p>\n
Your license terminates when you no longer rightfully possess the Specific
\nMachine.<\/p>\n
ACTIONS YOU MAY NOT TAKE<\/p>\n
You agree to use the Code only as authorized above. You may not do, for
\nexample, any of the following:<\/p>\n
2
\n 169
\n1. otherwise copy, display, transfer, adapt, modify, or distribute the
\n Code (electronically or otherwise), except as IBM may authorize in the
\n Specific Machine’s Specifications or in writing to you;<\/p>\n
2. reverse assemble, reverse compile, or otherwise translate the Code
\n unless expressly permitted by applicable law without the possibility
\n of contractual waiver:<\/p>\n
3. sublicense or assign the license for the Code; or<\/p>\n
4. lease the Code or any copy of it.<\/p>\n
3
\n 170
\n ATTACHMENT 2 TO EXHIBIT 3
\n APPENDIX B
\n 171
\n MICROCODE LANGUAGE
\n FOR
\n INCORPORATION INTO CONSOLIDATED END USER CONTRACT
\n TO BE ISSUED IN JULY<\/p>\n
MICROCODE<\/p>\n
1. Definitions: The following terms are defined as follows:<\/p>\n
A. “Microcode” is defined as a set of instructions (software)
\nthat is either imbedded into or is to be loaded into the Equipment and executes
\nbelow the external user interface of such Equipment. Microcode includes both
\nInternal Code and Maintenance Code, and may be in magnetic or other storage
\nmedia, integrated circuitry or other media.<\/p>\n
B. “Internal Code” is Microcode that (a) is an integral part of
\nthe Equipment, (b) is required by such Equipment to perform its data storage
\nand retrieval functions, and (C) executes below the user interface of such
\nEquipment. Internal Code does not include other Microcode or software,
\nincluding data files, which may reside or execute in or be used by or in
\nconnection with such Equipment, including, without limitation, Maintenance
\nCode.<\/p>\n
C. “Maintenance Code” is defined as Microcode and other software,
\nincluding data files, which may reside or execute in or be used by or in
\nconnection with Equipment, and which detects, records, displays and\/or analyzes
\nmalfunctions, errors or other events occurring in the Equipment.<\/p>\n
D. “Derivative Works” are defined as works (including software)
\nbased upon one or more preexisting works such as a translation or a musical
\narrangement, or any other form in which a work may be recast, transformed or
\nadapted. A work consisting of editorial revision, annotations, elaboration, or
\nother modifications which, as a whole, represent an original work of
\nauthorship, is a Derivative Work.<\/p>\n
2. The Equipment you have acquired by purchase or lease is
\nmanufactured by or for StorageTek and contains Microcode. By accepting and
\nusing this Equipment you acknowledge that StorageTek or its licensor(s) retains
\ntitle to and ownership of all Microcode, as well as all copies thereof, that
\nmay execute in or be used in the operation of servicing of the Equipment and
\nthat the copyright in such Microcode is owned by StorageTek or its licensor(s).<\/p>\n
3. StorageTek hereby grants you, the end user of the Equipment, a
\npersonal, non-transferable (except as permitted in the transfer terms in
\nparagraph 5 below), nonexclusive license to use and execute each copy of the
\nInternal Code (or any replacement provided by StorageTek or your authorized
\nStorageTek distributor or reseller) solely to enable the specific unit of
\nEquipment for which the copy of Internal Code is provided to perform its data
\nstorage and retrieval functions in accordance with StorageTek’s (or its
\nlicensor’s) official published specifications. If the Internal Code is
\nprovided to you in any fashion other than preloaded into an<\/p>\n
2<\/p>\n
172
\nintegrated circuit, then you may make a single archival copy to be used only to
\nrestore the Internal Code on the specific unit of Equipment for which the copy
\nof Internal Code is provided.<\/p>\n
4. Your license is limited to the use of the Internal Code as set
\nforth in paragraph 3 above. You may not use the Internal Code for any other
\npurpose. You may not, for example, do any of the following:<\/p>\n
(i) access copy, display, print, adapt, alter, modify,
\npatch, prepare Derivative Works of, transfer or distribute (electronically or
\notherwise) or otherwise use the Internal Code;<\/p>\n
(ii) reverse assemble, decode, translate, decompile or
\notherwise reverse engineer the Internal Code (except, for use in European
\njurisdictions, as decompilation may be expressly permitted under applicable
\nEuropean law solely for the purpose of gaining information that will allow
\ninteroperability when such information is not otherwise readily available); or<\/p>\n
(iii) sublicense, assign or lease the Internal Code or
\npermit another person to use such Internal Code, or any copy of it.<\/p>\n
5. You may transfer possession of the Internal Code to another
\nparty only with the transfer of the specific Equipment on which its use is
\nauthorized, and your license to use the Internal Code is discontinued when you
\nare no longer an owner or a rightful possessor the Equipment. You must give
\nsuch transferee all copies of the Internal Code for the transferred Equipment
\nthat are in your possession, along with a copy of all the provisions of this
\nNotice. Any such transfer by you is automatically (without further action on
\nthe part of either party) expressly subject to all the terms and conditions of
\nthis Notice passing in full to the party to whom such Equipment is transferred,
\nand such transferee accepts the provisions of this license by initial use of
\nthe Internal Code. You cannot pass to the transferee of the Equipment any
\ngreater rights than granted under this Notice, and shall hold StorageTek
\nharmless from any claim to the contrary by your transferee or its successors or
\nassigns. In addition, the terms and conditions of this Notice apply to any
\ncopies of Internal Code now in your possession or use or which you hereafter
\nacquire from either StorageTek or another party.<\/p>\n
6. Nothing in the license set forth in paragraph 3 above or in
\nthis entire Notice shall convey, in any manner, to you any license to or title
\nto or other right to use any Maintenance Code, or any copy of such Maintenance
\nCode. You agree that you shall not use or attempt to use the Maintenance Code
\nor permit any other third party to use or access such Maintenance Code. You
\nacknowledge that copies of both Internal Code and Maintenance Code may be
\ninstalled on the Equipment before shipment or included with the Equipment and
\nother material shipped to you, all for the convenience of StorageTek’s service
\npersonnel or service providers licensed by StorageTek, and that during the
\nwarranty period, if any, associated with the Equipment, and during periods in
\nwhich the Equipment is covered under maintenance contract with StorageTek or
\nservice providers licensed by StorageTek, both Internal Code and Maintenance
\nCode may reside and be executed in or used in connection with such Equipment,
\nand you agree that no rights to Maintenance Code are conferred upon you by such
\nfacts. StorageTek or the licensed service provider may keep Maintenance Code,
\nservice tools and manuals on your premises but they are to be used only by
\nStorageTek’s customer service personnel or those of service<\/p>\n
3
\n 173
\nproviders licensed by StorageTek. You further agree that upon (I) any
\ntermination of such warranty period or maintenance contract period; or (ii)
\ntransfer of possession of the Equipment to another party, StorageTek and its
\nauthorized service providers shall have the right with respect to the affected
\nEquipment to remove all service tools and manuals and to remove or disable all
\nMaintenance Code and\/or replace Microcode which includes both Internal Code and
\nMaintenance Code with Microcode that consists only of Internal Code.<\/p>\n
7. You, the end user, agree to take all appropriate steps to ensure
\nthat all of your obligations set forth in this Notice, particularly in
\nparagraphs 4 and 6, are complied with by any third party having access to the
\nEquipment.<\/p>\n
4
\n 174<\/p>\n
——————————————————————————–
\n NOTICE<\/p>\n
INTERNAL CODE LICENSE AND TERMS OF SALE<\/p>\n
PLEASE READ THIS NOTICE CAREFULLY BEFORE INSTALLING AND OPERATING THIS
\nEQUIPMENT. THIS IS A LEGAL AGREEMENT BETWEEN YOU (EITHER AN INDIVIDUAL OR
\nENTITY), THE END USER, AND STORAGE TECHNOLOGY CORPORATION (“STORAGETEK”) THE
\nMANUFACTURER OF THE EQUIPMENT. BY ACCEPTING AND USING ANY UNIT OF EQUIPMENT
\nDESCRIBED IN THIS DOCUMENT AND THE ASSOCIATED MICROCODE, YOU AGREE TO BE BOUND
\nBY THE TERMS OF T HIS AGREEMENT. IF YOU DO NOT AGREE WITH THE TERMS OF THIS
\nAGREEMENT, DO NOT USE THE EQUIPMENT AND ASSOCIATED MICROCODE. IF YOU DO NOT
\nHAVE THE AUTHORITY TO BIND YOUR COMPANY, DO NOT USE THE EQUIPMENT AND
\nASSOCIATED MICROCODE. IF YOU HAVE ANY QUESTIONS, CONTACT THE AUTHORIZED
\nSTORAGETEK DISTRIBUTOR OR RESELLER FROM WHOM YOU ACQUIRED THIS EQUIPMENT. IF
\nTHE EQUIPMENT WAS OBTAINED BY YOU DIRECTLY FROM STORAGETEK, CONTACT YOUR
\nSTORAGETEK REPRESENTATIVE.<\/p>\n
MICROCODE<\/p>\n
1. Definitions: The following terms are defined as follows:<\/p>\n
A. “Microcode” is defined as a set of instructions (software)
\nthat is either imbedded into or is to be loaded into the Equipment and executes
\nbelow the external user interface of such Equipment. Microcode includes both
\nInternal Code and Maintenance Code, and may be in magnetic or other storage
\nmedia, integrated circuitry or other media.<\/p>\n
B. “Internal Code” is Microcode that (a) is an integral part of
\nthe Equipment, (b) is required by such Equipment to perform its data storage
\nand retrieval functions, and (c) executes below the user interface of such
\nEquipment. Internal Code does not include other Microcode or software,
\nincluding data files, which may reside or execute in or be used by or in
\nconnection with such Equipment, including, without limitation, Maintenance
\nCode.<\/p>\n
C. “Maintenance Code” is defined as Microcode and other software,
\nincluding data files, which may reside or execute in or be used by or in
\nconnection with Equipment, and which detects, records, displays and\/or analyzes
\nmalfunctions, errors or other events occurring in the Equipment.<\/p>\n
D. “Derivative Works” are defined as works (including software)
\nbased upon one or more preexisting works such as a translation or a musical
\narrangement, or any other form in which a work may be recast, transformed or
\nadapted. A work consisting of editorial revision, annotations, elaboration, or
\nother modifications which, as a whole, represent an original work of
\nauthorship, is a Derivative Work.<\/p>\n
5
\n 175
\n 2. The Equipment you have acquired by purchase or lease is
\nmanufactured by or for StorageTek and contains Microcode. By accepting and
\nusing this Equipment you acknowledge that StorageTek or its licensor(s) retains
\ntitle to and ownership of all Microcode, as well as all copies thereof, that
\nmay execute in or be used in the operation of servicing of the Equipment and
\nthat the copyright in such Microcode is owned by StorageTek or its licensor(s).<\/p>\n
3. StorageTek hereby grants you, the end user of the Equipment, a
\npersonal, non-transferable (except as permitted in the transfer terms in
\nparagraph 5 below), nonexclusive license to use and execute each copy of the
\nInternal Code (or any replacement provided by StorageTek or your authorized
\nStorageTek distributor or reseller) solely to enable the specific unit of
\nEquipment for which the copy of Internal Code is provided to perform its data
\nstorage and retrieval functions in accordance with StorageTek’s (or its
\nlicensor’s) official published specifications. If the Internal Code is
\nprovided to you in any fashion other than preloaded into an integrated circuit,
\nthen you may make a single archival copy to be used only to restore the
\nInternal Code on the specific unit of Equipment for which the copy of Internal
\nCode is provided.<\/p>\n
4. Your license is limited to the use of the Internal Code as set
\nforth in paragraph 3 above. You may not use the Internal Code for any other
\npurpose. You may not, for example, do any of the following:<\/p>\n
(i) access copy, display, print, adapt, alter, modify,
\npatch, prepare Derivative Works of, transfer or distribute (electronically or
\notherwise) or otherwise use the Internal Code;<\/p>\n
(ii) reverse assemble, decode, translate, decompile or
\notherwise reverse engineer the Internal Code (except, for use in European
\njurisdictions, as decompilation may be expressly permitted under applicable
\nEuropean law solely for the purpose of gaining information that will allow
\ninteroperability when such information is not otherwise readily available); or<\/p>\n
(iii) sublicense, assign or lease the Internal Code or
\npermit another person to use such Internal Code, or any copy of it.<\/p>\n
5. You may transfer possession of the Internal Code to another
\nparty only with the transfer of the specific Equipment on which its use is
\nauthorized, and your license to use the Internal Code is discontinued when you
\nare no longer an owner or a rightful possessor the Equipment. You must give
\nsuch transferee all copies of the Internal Code for the transferred Equipment
\nthat are in your possession, along with a copy of all the provisions of this
\nNotice. Any such transfer by you is automatically (without further action on
\nthe part of either party) expressly subject to all the terms and conditions of
\nthis Notice passing in full to the party to whom such Equipment is transferred,
\nand such transferee accepts the provisions of this license by initial use of
\nthe Internal Code. You cannot pass to the transferee of the Equipment any
\ngreater rights than granted under this Notice, and shall hold StorageTek
\nharmless from any claim to the contrary by your transferee or its successors or
\nassigns. In addition, the terms and conditions of this Notice apply to any
\ncopies of Internal Code now in your possession or use or which you hereafter
\nacquire from either StorageTek or another party.<\/p>\n
6
\n 176
\n 6. Nothing in the license set forth in paragraph 3 above or in
\nthis entire Notice shall convey, in any manner, to you any license to or title
\nto or other right to use any Maintenance Code, or any copy of such Maintenance
\nCode. You agree that you shall not use or attempt to use the Maintenance Code
\nor permit any other third party to use or access such Maintenance Code. You
\nacknowledge that copies of both Internal Code and Maintenance Code may be
\ninstalled on the Equipment before shipment or included with the Equipment and
\nother material shipped to you, all for the convenience of StorageTek’s service
\npersonnel or service providers licensed by StorageTek, and that during the
\nwarranty period, if any, associated with the Equipment, and during periods in
\nwhich the Equipment is covered under maintenance contract with StorageTek or
\nservice providers licensed by StorageTek, both Internal Code and Maintenance
\nCode may reside and be executed in or used in connection with such Equipment,
\nand you agree that no rights to Maintenance Code are conferred upon you by such
\nfacts. StorageTek or the licensed service provider may keep Maintenance Code,
\nservice tools and manuals on your premises but they are to be used only by
\nStorageTek’s customer service personnel or those of service providers licensed
\nby StorageTek. You further agree that upon (I) any termination of such
\nwarranty period or maintenance contract period; or (ii) transfer of possession
\nof the Equipment to another party, StorageTek and its authorized service
\nproviders shall have the right with respect to the affected Equipment to remove
\nall service tools and manuals and to remove or disable all Maintenance Code
\nand\/or replace Microcode which includes both Internal Code and Maintenance Code
\nwith Microcode that consists only of Internal Code.<\/p>\n
7. You, the end user, agree to take all appropriate steps to
\nensure that all of your obligations set forth in this Notice, particularly in
\nparagraphs 4 and 6, are complied with by any third party having access to the
\nEquipment.<\/p>\n
WARRANTY<\/p>\n
(a) StorageTek warrants that at the time of shipment, and for a
\nperiod of twelve (12) months thereafter (the “Warranty Period”), the Equipment
\nand the Internal Code will be in conformance with StorageTek’s published
\nspecifications. Equipment purchased hereunder may consist in part of used
\ncomponents which are warranted equivalent to new in performance. No warranty
\nof any kind is extended with respect to Maintenance Code, as to which you have
\nno right or license as provided above.<\/p>\n
(b) During the Warranty Period, StorageTek will, at no charge to
\nyou, make all adjustments, repairs and parts replacements necessary, in
\nStorageTek’s opinion, to fulfill the above warranty. Any parts so replaced
\nwill become the property of StorageTek on a substitution basis.<\/p>\n
(c) Service pursuant to this warranty, as required at any time
\nduring the Warranty Period, will be provided upon return of the Equipment to
\nthe nearest StorageTek authorized service depot. StorageTek will return a
\nrepaired or replacement unit (which may be used and\/or reconditioned) to you
\nwithin [?thirty 30] days of receipt by StorageTek of the unit to be repaired.
\nAny such repaired or replacement Equipment unit will be covered by the above
\nwarranty for the balance of the original Warranty Period.<\/p>\n
7
\n 177
\n (d) The foregoing warranty shall not apply if any adjustment,
\nrepair or parts replacement is required because of accident, transportation by
\nanyone other than StorageTek, neglect, abuse or misuse, use of unauthorized
\nsupplies, failure of electrical power, air conditioning or humidity controls,
\ntheft, fire or water damage, or causes other than ordinary use. StorageTek
\nshall not be required to adjust or repair any Equipment or part if it would be
\nimpractical to do so because of non-StorageTek alterations to the Equipment,
\nthe Equipment’s connection by mechanical or electrical means to unauthorized
\nequipment devices, or if the Equipment is moved outside the United States.<\/p>\n
(e) THE FOREGOING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES,
\nEXPRESS OR IMPLIED, AND STORAGETEK SPECIFICALLY DISCLAIMS ANY IMPLIED
\nWARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
\nNON-INFRINGEMENT OF THIRD PARTY RIGHTS ALL WITH RESPECT TO BOTH EQUIPMENT AND
\nMICROCODE.<\/p>\n
PATENT AND PROPRIETARY RIGHT INDEMNITY<\/p>\n
(a) StorageTek shall defend, at its own expense, any action
\nbrought against you to the extent that it is based upon a claim that the
\nEquipment or Internal Code infringes upon any United States patent, copyright,
\ntrademark, mask work, trade secret or other proprietary right. In the event of
\nsuch infringement, StorageTek shall pay those costs and damages agreed upon in
\nsettlement or compromise or finally assessed against you in any such action.
\nThe obligation to undertake such defense and make such payments shall be
\nconditioned upon the following: (1) StorageTek shall be notified promptly in
\nwriting by you of such claim, but in no event later than ten (10) days from the
\ndate you received notice thereof; (2) StorageTek shall have sole control of the
\ndefense of any action on such claim and all negotiations for its settlement or
\ncompromise; (3) you shall provide reasonable assistance and cooperation to
\nStorageTek in defending such an action; and (4) should the use of Equipment
\nbecome, or in StorageTek’s opinion be likely to become, the subject of an
\ninjunction, StorageTek shall at its option and expense: (I) procure for you
\nthe right to continue using the Equipment; (ii) replace or modify the same so
\nthat such Equipment becomes non-infringing; or (iii) grant you a refund for
\nsuch Equipment, less accumulated depreciation, and accept its return. The
\ndepreciation shall be an equal amount per year over the lifetime of the
\nEquipment as established by StorageTek.<\/p>\n
(b) StorageTek shall not have any liability to you under the
\nprovisions of this Section 9 for any infringement, or claim thereof, to the
\nextent based upon the use of said Equipment in combination with other machines,
\napparatus or devices not manufactured by StorageTek or sold by StorageTek to
\nyou, or the use of the Equipment in a manner or for a purpose other than that
\nfor which it was sold, or the use of the Equipment in a modified condition if
\nsuch modification was not authorized in writing by StorageTek. StorageTek will
\nnot defend or indemnify you if any claim of infringement is asserted by your
\nparent, subsidiary or affiliate.<\/p>\n
(c) THE FOREGOING STATES THE ENTIRE LIABILITY OF STORAGETEK AND
\nYOUR SOLE AND EXCLUSIVE REMEDY WITH RESPECT TO INFRINGEMENT OF<\/p>\n
8
\n 178
\nANY PROPRIETARY RIGHT BY THE EQUIPMENT OR INTERNAL CODE OR ANY PART THEREOF.<\/p>\n
LIMITATION OF LIABILITY<\/p>\n
(a) Your sole and exclusive remedy for any breach of the warranty
\nset forth in Section 8(a) above, shall be limited to the remedies set forth in
\nparagraph (b) of the section on WARRANTY above. If StorageTek is unable to
\neffect such remedy within a reasonable time, and such remedy fails of its
\nessential purpose, you may recover your actual loss directly resulting from the
\nbreach, subject, however, to the limitations set forth below.<\/p>\n
(b) StorageTek’s entire cumulative liability from any cause
\nwhatsoever, and regardless of the form of action or actions, whether in
\ncontract, warranty or tort (including negligence), arising under this
\nAgreement, shall in no event exceed the greater of $50,000 or the purchase
\nprice for the specific Equipment that is the subject matter of or is directly
\nrelated to the cause of action. The foregoing limitation shall not apply to
\nclaims for proprietary right infringement under Section 9 or to claims by third
\nparties for personal injury or damage to real or tangible personal property
\narising out of the negligence of StorageTek. Except for the two exceptions set
\nforth in the preceding sentence, StorageTek shall have no liability for claims
\nagainst you for loss or damage suffered by third parties.<\/p>\n
(c) IN NO EVENT WILL STORAGETEK BE LIABLE FOR ANY INDIRECT,
\nSPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES IN CONNECTION WITH OR ARISING OUT
\nOF THE PROVIDING, PERFORMANCE OR USE OF THE EQUIPMENT, PARTS OR SERVICES
\nPROVIDED UNDER THIS AGREEMENT, OR LOSS OF, OR DAMAGE TO, YOUR RECORDS OR DATA.
\nIT IS YOUR RESPONSIBILITY TO ADEQUATELY SAFEGUARD (BACK UP) YOUR DATA USED IN
\nCONJUNCTION WITH THE EQUIPMENT.<\/p>\n
(d) StorageTek shall not be liable for any failure or delay in
\nperformance hereunder which is due, in whole or in part, to any cause beyond
\nits control.<\/p>\n
9
\n 179
\n EXHIBIT 4<\/p>\n
This is an Agreement between IBM and STK (“Contractor”), pursuant to
\nwhich IBM win consign certain disk drives on a no-charge basis to Contractor
\nfor incorporation into Equipment that Contractor is producing for IBM, subject
\nto the following terms and conditions:<\/p>\n
1. DEFINITION OF CONSIGNED GOODS<\/p>\n
For the purpose of this Agreement, consigned goods are defined as all
\nitems finished by IBM or caused by IBM to be furnished to Contractor which are
\nnot purchased by Contractor. Consigned goods include certain disk drives that
\nContractor will use to fabricate Equipment for IBM.<\/p>\n
Consigned goods do not include capital equipment or tooling.<\/p>\n
The goods that are to be consigned under this Agreement are:<\/p>\n
PART NUMBER DESCRIPTION<\/p>\n
[**]<\/p>\n
IBM may, at its option and in its sole discretion, consign
\nadditional items to Contractor under the terms of this Agreement.<\/p>\n
2. TERM OF AGREEMENT<\/p>\n
The term of this Agreement will begin on the date it is signed by
\nContractor and will end when IBM no longer has an obligation under Section 12
\nof the OEM Agreement to consign drives, or earlier, when it is terminated by
\neither party as provided for in Section 3 below or when it is terminated by IBM
\nas provided for in Section 13 below.<\/p>\n
3. TERMINATION OF AGREEMENT<\/p>\n
Either party may terminate this Agreement at any time for cause by
\ngiving thirty (30) days’ prior written notice to the other.<\/p>\n
Upon termination of this Agreement, Contractor will return to IBM any
\nconsigned goods then in its possession (including any parts, subassemblies, or
\nassemblies containing any consigned goods). Contractor will account for all
\nconsigned goods within five (5) calendar days.<\/p>\n
4. LOCATION OF CONSIGNED GOODS<\/p>\n
The consigned goods will be located and used during the term of this
\nAgreement at a location that has been approved by IBM. Contractor will not
\nmove the consigned goods to another location without IBM’s prior written
\napproval.
\n 180
\n5. IBM’S PROPERTY<\/p>\n
The consigned goods are and will remain the property of IBM.<\/p>\n
6. IBM’S INSPECTION OF CONSIGNED GOODS<\/p>\n
During the term of this Agreement, IBM will have the right to enter
\nContractor’s property and facilities on reasonable notice during Contractor’s
\nnormal business hours and subject to Contractor’s normal security requirements
\nto physically inspect the consigned goods, conduct physical inventories;, and
\naudit stock-handling procedures (including receiving, storing, and
\ndistribution).<\/p>\n
7. CONTRACTOR INSPECTION OF CONSIGNED GOODS<\/p>\n
Contractor will Inspect all consigned goods for type, quantity and
\ncondition upon receipt. Contractor will notify IBM of any reasonably apparent
\ndiscrepancies within five (5) days of receipt. Contractor’s notification to
\nIBM will include a description of all discrepancies. Discrepancies will be
\ndescribed on the acknowledgment copy of the packing list accompanying the
\nshipment. The packing list must be signed and dated before it is returned to
\nIBM.<\/p>\n
8. CONTRACTOR RESPONSIBILITIES<\/p>\n
Contractor agrees that with respect to the consigned goods it will<\/p>\n
A. Not commingle consigned goods with those of its own or third
\nparties. Contractor will stock all consigned goods separately and will
\nspecifically identify them as IBM property.<\/p>\n
B. Not represent to any person for any reason that the consigned
\ngoods belong to Contractor or to any third party.<\/p>\n
C. Not attempt to sell, mortgage, pledge, assign, borrow against,
\nor otherwise create a security interest in favor of third parties in the
\nconsigned goods. Any such attempt will be void and will constitute a breach of
\nthis Agreement.<\/p>\n
D. Not use the consigned goods for any purpose except for the
\nperformance of the OEM Agreement.<\/p>\n
E. Maintain records of all consigned goods received from or
\nreturned to IBM. Contractor will maintain in effective consigned goods
\ninventory system and will use the consigned goods on a first-in, first-out
\nbasis.<\/p>\n
F. Perform a reasonable number of physical counts upon IBM’s
\nrequest (to confirm records), and provide IBM with the results.<\/p>\n
G. Carefully store the consigned goods so as to prevent
\nDeterioration,<\/p>\n
2<\/p>\n
181
\n H. Incorporate into Equipment only those consigned goods that
\nmeet the Specifications. Nonconforming goods must be returned to IBM for
\nreplacement, accompanied by a IBM “Authorization for Return of Material” form.<\/p>\n
9. CONTRACTOR RESPONSIBILITY FOR LOST OR DAMAGED GOODS<\/p>\n
Consigned goods are insured by IBM. Notwithstanding that insurance,
\nContractor agrees that it will be fully liable for any loss or damage
\noccasioned by Contractor’s fault or negligence. If any consigned goods are
\nlost or damaged, Contractor will notify IBM immediately. Payment to IBM for
\nconsigned goods lost or damaged due to Contractor fault or negligence will be
\nat an amount equal to IBM’s replacement cost for such lost or damaged consigned
\ngoods plus transit costs.<\/p>\n
10. TAXES AND ASSESSMENTS<\/p>\n
IBM will pay all personal property taxes and assessments levied on the
\nconsigned goods while they are in Contractor’s possession.<\/p>\n
11. SEPARATE AGREEMENTS<\/p>\n
This Agreement will not apply to any tools, tooling, gauges, or
\ncapital equipment fabricated or acquired by Contractor pursuant to IBM Purchase
\nOrders or loaned or leased to Contractor by IBM. All such equipment will be
\ncovered by a separate Tooling, Equipment, Use, or other agreement.<\/p>\n
12. CONTRACTOR’S INABILITY TO PRODUCE<\/p>\n
If Contractor’s facility where the consigned goods are located and
\nused is involved in any Force Majeure Event by reason of which Contractor
\ncannot fulfill the terms of IBM Purchase Orders (which conform to the OEM
\nAgreement), or if for any other reason Contractor is unable or unwilling to
\nperform under IBM’s Purchase Orders (which conform to the OEM Agreement),
\nContractor agrees to immediately notify IBM and further agrees, if requested by
\nIBM, to return any or all of the consigned goods to IBM within ten (10) days of
\nIBM’s request without charge to IBM except that transportation charges shall be
\nbilled collect.<\/p>\n
13. BREACH OF CONTRACT<\/p>\n
Failure of Contractor to materially comply with the terms and
\nconditions of this Agreement will be considered a breach of this Agreement
\nunless IBM has given specific written authorization for each particular
\noccurrence of each particular deviation. IBM will notify Contractor of any
\nbreach by Contractor. Contractor will have ten (10) business days to rectify
\nthe breach to Monterery’s satisfaction. IBM may extend this period, in
\nwriting, at IBM’s discretion. If Contractor falls to rectify the breach to
\nIBM’s satisfaction, IBM will have the night to terminate this Agreement
\nimmediately at no charge to IBM for such termination.<\/p>\n
3<\/p>\n
182
\n If Contractor falls to perform any of obligations under this
\nAgreement, or either party terminates this Agreement, IBM will have an
\nirrevocable right to enter Contractor’s property and facilities at any time
\nduring IBM’s normal business hours for the purpose of removing the consigned
\ngoods. Contractor expressly waives any right or remedies Contractor has with
\nregard to the consigned goods, including, but not limited to, any right
\nContractor has to notice and a hearing or to a bond, undertaking or surety
\nbefore a writ of replevin, order of seizure, or similar writ or order will
\nissue or become enforceable.<\/p>\n
The rights and remedies under this Section 13 are not exclusive and
\nare in addition to any other rights or remedies provided by law or by this
\nAgreement.<\/p>\n
14. ASSIGNMENT<\/p>\n
Contractor will not assign this Agreement or any right or obligation
\ncreated under this Agreement except in connection with a permitted assignment
\nunder the OEM Agreement. Any attempted assignment will be void.<\/p>\n
15. IBM SUPPLIER CONSIGNMENT GUIDE<\/p>\n
The “IBM Supplier Consignment Guide” is expressly incorporated and
\nmade a part of this Agreement.<\/p>\n
16. COMMUNICATIONS AND NOTICES<\/p>\n
All communications and notices between the parties concerning this
\nAgreement, if given to Contractor, will be in writing and sent by first class
\nmail to:<\/p>\n
Attention:
\n ——————————-<\/p>\n
——————————-<\/p>\n
——————————-<\/p>\n
and if given to IBM, will be in writing and sent by first class mail to:<\/p>\n
Attention:
\n ——————————-<\/p>\n
——————————-<\/p>\n
——————————-<\/p>\n
For the purposes of this Agreement, a “notice” is deemed given upon
\nreceipt by the addressee.<\/p>\n
Either party may change the above individual, title, department, or
\naddress by notifying the other party in the same manner as any other notice.<\/p>\n
17. CHANGES OR AMENDMENTS<\/p>\n
4
\n 183
\n Except as provided for in Section 17 above, this Agreement may not be
\nchanged or amended except by a written agreement between the parties.<\/p>\n
18. CONSTRUCTION<\/p>\n
In the event of any inconsistency between the terms and conditions of
\nthis Agreement, the `IBM Supplier Consignment Guide,” or the terms and
\nconditions of the OEM Agreement, the order of precedence shall be: first, the
\nterms and conditions of the OEM Agreement; second, the terms and conditions of
\nthis Consignment Agreement, and lastly the “IBM Supplier Consignment Guide”.<\/p>\n
19. CONTINUING OBLIGATIONS<\/p>\n
Any obligations and duties that by their nature extend beyond the
\nexpiration or termination of this Agreement shall survive any such expiration
\nor termination and remain in effect.<\/p>\n
20. SEVERABILITY<\/p>\n
If any provision of this Agreement shall be held by a court of
\ncompetent jurisdiction to be invalid, illegal, or unenforceable, the validity,
\nlegality, and enforceability of the remaining by provisions of this Agreement
\nshall IN no way be affected or impaired thereby.<\/p>\n
21. LIMITATION OF LIABILITY<\/p>\n
Neither party shall be in default nor liable for damages for any delay
\nor failure to perform hereunder due to causes beyond its reasonable control,
\nincluding fires, strikes, riots, and acts of war, provided the defaulting party
\nprovides the non-defaulting party with immediate notice of the anticipated
\ndelay or failure to comply.<\/p>\n
In no event shall either party be liable for indirect, special, or
\nconsequential damages, including attorney’s fees, even if advised in advance of
\nthe possibility of such damages.<\/p>\n
Neither party may bring an action, regardless of the form, arising out
\nof this Agreement more than two (2) years after the cause of action arose.<\/p>\n
22. GOVERNING LAW<\/p>\n
The relationship between the Parties and this Agreement are governed
\nby the substantive laws of the state of New York. Any action between the
\nParties must be brought before a court of competent Jurisdiction located in the
\nUnited States Southern District of New York. Each party hereby ,valves any
\nnight to a jury trial in any dispute between them. The parties will first use
\nthe Dispute Resolution escalation procedures described in the OEM Agreement to
\nresolve any disputes before any action is to be commenced in a court of
\ncompetent jurisdiction.<\/p>\n
23. SOLE AGREEMENT<\/p>\n
5<\/p>\n
184
\n This Agreement together with the OEM Agreement and its Exhibits
\nSchedules and Attachments is the entire agreement about this subject between
\nthe parties. This Agreement supersedes all prior or contemporaneous written or
\noral agreements about this subject between the parties or any of their
\nofficials or representatives.<\/p>\n
IBM STK
\n ————– ————–
\n By By
\n ————– ————–
\n Name Name
\n ————– ————–
\n Title Title
\n ———— ————
\n Date Date
\n ———— ———— <\/p>\n
6<\/p>\n
185
\n CONSIGNMENT INVENTORY CONTROL<\/p>\n
All correspondence regarding consigned material should be sent to:<\/p>\n
IBM CORPORATION
\n Department 617
\n 5600 Cottie Road
\n San Jose, CA 95193<\/p>\n
All routine questions or problems should be directed to the
\nConsignment Coordinator assigned or the buyer.<\/p>\n
All questions or problems of a critical nature should be directed to
\nthe IBM Purchasing Department Buyer.<\/p>\n
Revised: January 1992 Please note key changes preceded with (*)<\/p>\n
7<\/p>\n
186
\n SUPPLIER RESPONSIBILITIES
\n FOR MATERIAL HANDLING AND CONTROL
\n OF IBM CONSIGNED MATERIAL<\/p>\n
1. INTRODUCTION<\/p>\n
As an IBM Supplier, you arc responsible for IBM’s inventory while in
\nyour possession. This agreement has been prepared for handling and control of
\nIBM consigned material. Most questions that could arise involving consignment
\nare addressed to aid the supplier. IBM may request space and facilities for an
\non site consignment representative to assist.<\/p>\n
If questions should arise that have not been explained fully by this
\ndocument, please contact Consignment Inventory Control (CIC), Department 617.<\/p>\n
2. IBM SHIPMENT OF CONSIGNED MATERIAL TO SUPPLIER<\/p>\n
a. Material will be shipped to supplier prepaid unless a
\ndifferent arrangement has been agreed to in advance.<\/p>\n
b. Partial shipment of Consigned material may be made when:<\/p>\n
1) The entire quantity is not readily available from IBM
\nstock (an IBM backorder is automatically created when this situation occurs).<\/p>\n
2) If the size or quantity of a given item would cause
\nstorage difficulties, the supplier may notify the IBM buyer and the buyer will
\narrange with CIC for partial shipments to be made. The notification must be
\nmade on a timely basis, preferably when the order is placed.<\/p>\n
3. RECEIPT AND INSPECTION OF CONSIGNMENT BY SUPPLIER<\/p>\n
a. All shipments of consigned material by IBM to the supplier
\nwill be accompanied by two copies of an IBM packing list (see Exhibits A, 13,
\nand C).<\/p>\n
b. Immediately upon receipt, supplier is responsible for checking
\nall cartons for any sign of visible damage and noting such damage on the
\nconsignee memo\/bill of lading or delivery receipt. Also, note any shortages or
\noverages of containers, boxes, pallets, etc., if not as already noted on the
\nfreight bill.<\/p>\n
c. Visual external damage – Parts that are received by supplier
\nin packaging that exhibit external damage must be rejected and held until
\ndisposition is made. Supplier must note damage on the delivery receipt and
\nhave the driver sign that exception is taken. Immediately call the carrier for
\na formal inspection of the damage. Carrier should make inspection within five
\n(5) working days. If the carrier does not respond within the five (5) days,
\nsupplier must notify the IBM Buyer.
\n 187
\n In the event the carrier elects not to make in inspection. the carrier
\nmust provide the supplier with letter stating that inspection has been waived.
\nThe letter should include the necessary information to identify the damaged
\nshipment. The inspection report or letter of waiver and a copy of the delivery
\nreceipt must be sent to the appropriate IBM Buyer who will notify the IBM
\nTraffic Department.<\/p>\n
Please Note: Should the part be identified as “CFM”, supplier must
\nnotify the IBM Buyer and Traffic Department immediately upon receipt. The
\nTraffic Department will instruct the carrier to make an expedited 24 hour
\ndisposition.<\/p>\n
d. All packing material must be available for the carrier’s
\ninspection.<\/p>\n
e. Hidden\/concealed damage – Parts that are received with
\nexternal packaging intact, but parts inside damaged, must be rejected. If
\ndamage is discovered within ten (10) days of receipt, the carrier must be
\nnotified to make a formal inspection report and a copy of the bill of lading or
\ndelivery receipt and carrier’s damage inspection report must be forwarded to
\nthe appropriate IBM Buyer, who in turn will notify the Traffic Department. IBM
\nMaterial Review must be notified in order to set up the necessary documentation
\nfor the return of the defective parts.<\/p>\n
f. Verification of Count – Hand and scale counts must be made on
\nall receipts of consigned material, rework material, or material purchased from
\nIBM. A copy of the packing list must be signed and returned to IBM CIC
\nDepartment within five (5) days after receipt of materials. It should be noted
\non the form (see Exhibit D) that all items received were correct, or items
\nreceived were correct with the exception of any shortage, overage or incorrect
\npart indicated. The method of count should also be indicated. Notify the IBM
\nCIC Department by telephone if the discrepancy cannot be reported within the
\nfive day period.<\/p>\n
g. All shipments received by supplier should be verified against
\nthe Consignment Inventory Listing (CIL) and any discrepancies should be
\nreferenced to a shipment and a CIL.<\/p>\n
h. For audit purposes, supplier should return on copy of the
\nupdated packing list, along with the date the receipt acknowledgment was
\nreturned to IBM.<\/p>\n
i. If supplier receives part that should not have been consigned,
\ncontact your Consignment Coordinator and set the parts aside. Request an ARCM
\n(Authorization to Return Consigned Material) so that they may be returned to
\nIBM.<\/p>\n
j. Supplier should notify the IBM CIC Department immediately of
\nparts movement to and from supplier premises without authorization, i.e., at
\nthe direction of the Buyer or Engineer.<\/p>\n
4. DROP SHIPMENT (Interplant & Supplier)<\/p>\n
a. IBM may instruct other IBM plants or another supplier to ship
\nparts directly to a consigned supplier.<\/p>\n
2
\n 188
\n b. The IBM Buyer will notify your company of this condition. Any
\nattempt to ship to you without this prior notification should be handled as
\nexplained in Section 3 Item A.<\/p>\n
c. Upon receipt of an authorized drop shipment, receive the
\nmaterial as a normal consigned shipment.<\/p>\n
NOTE: All drop shipments must be source stamped signifying
\n good parts. If you receive unstamped part, set aside
\n and contact the Buyer immediately. Parts should not
\n be used until inspected.<\/p>\n
d. Once quantities are verified, the receiving supplier should
\nindicate the actual quantity received on packing slip. Sign and date the
\npacking slop and DELIVERY RECEIPT, staple the original packing slip to the
\ndelivery receipt and forward to the IBM Receiving Department within 24 hours.
\nRetain a copy of the packing slip and delivery receipt for audit purposes.<\/p>\n
e. If there are count discrepancies or defective parts on an
\ninterplant drop shipment, notify the CIC Department immediately. If
\ndiscrepancies or defective parts are received on a drop shipment from another
\nsupplier, contact the Buyer immediately.<\/p>\n
f. Drop shipments from another supplier must have a drop ship
\nsequence number assigned by the sending supplier. A separate series of numbers
\nshould be used if parts are drop shipped to more than one supplier.<\/p>\n
*g. All drop shipments must be labeled in accordance with IBM
\npacking specifications GA21-9261-08 as indicated below:<\/p>\n
All articles must be marked with the country of origin. Country
\nCustoms Organizations require every article of foreign origin be marked in a
\nconspicuous place as legibly, indelibly, and permanently as the nature of the
\narticle will permit. The country of origin is defined as that manufacturing
\ncountry wherein the article obtained its present identity as a part,
\nsub-assembly or finished product.<\/p>\n
All domestic and foreign shipping containers must be identified as
\ndescribed below, this includes bagged or boxed parts within a container or
\ncontainers within a unit loan shipper.<\/p>\n
IBM P\/N
\n ——————–
\n E\/C LEVEL
\n ——————–
\n PKG TY
\n ——————–
\n COUNTRY OF ORIGIN
\n ———–
\n Figure 1. Identification required on each individual package.<\/p>\n
* In addition, the date of manufacture is required on each
\ncontainer when shipping shelf-life items.<\/p>\n
3
\n 189
\n If size permits, this information should appear on two adjacent,
\nvertical sides of the container when it is in the normal shipping position.<\/p>\n
Figure 2. Label placement – unit package<\/p>\n
*h. Audit all (100%) world trade receipts and maintain
\ndocumentation by month.<\/p>\n
1) Review receipts for container identification of
\nCountry of Origin. In those instances where COO is not obvious, annotate the
\npacking list and forward to IBM receiving in your normal manner.<\/p>\n
5. STOCKING AND CONTROL OF CONSIGNED MATERIAL BY SUPPLIER<\/p>\n
a. Store IBM San Jose consigned material in an area separate from
\nyour own material, another company’s material, IBM rework material, or another
\nIBM plant’s material.<\/p>\n
1) If parts are required for a rework purchase order,
\nthese must be provided. Consigned inventory should not be used.<\/p>\n
2) Contact the IBM buyer if this situation exists.<\/p>\n
b. Maintain adequate inventory records on all IBM consigned
\nmaterial including quantity of each part number received by job number,
\nassembly number and purchase order number.<\/p>\n
c. It is recommended that a withdrawal system from the stock room
\nto the production line be set up and controlled, including a parts inventory
\nlocation system. Parts should be issued on a First In, First Out basis (FIFO).
\nThis location file can be either computer system or card file for warehouse
\nlocations and card file within assembly areas. IBM identifies suppliers by
\nsupplier number. If your physical location has been assigned more than one
\nsupplier number, you must segregate IBM’s inventory at your location by
\nsupplier number.<\/p>\n
d. Selected suppliers will be required to prepare a critical
\nparts list reflecting parts that will represent a shortage problem within a
\nspecified number of working days. This notification is not to be used for
\nparts required for rework or reconditioning. These lists are to be forwarded
\nto IBM CIC Department. Contact you IBM Buyer when delivery problems arise (see
\nExhibit E).<\/p>\n
e. Discrepant parts found during the manufacturing process are to
\nbe held until dispositioned by IBM. When this condition exists, contact IBM
\nCIC, Material Review or the IBM Buyer.<\/p>\n
6. RETURN OF CONSIGNED MATERIAL TO IBM<\/p>\n
4
\n 190
\n a. All consigned material returned to IBM must be listed on an
\nAuthorization for Return of Consigned Material (ARCM), Form Number 927-0342
\n(see Exhibit F). A separate ARCM Document for each category of material
\n(excess, defective, down level, wrong part issue or parts requested by IBM
\nAnalyzer) must be attached to all parts. The only exception is when parts have
\nbeen authorized to be scrapped on supplier’s location. See page 7, Section 8d.
\nWhen this condition exists, only the ARCM document is returned to IBM.<\/p>\n
All Returns:<\/p>\n
1) An ARCM document will be prepared by CIC upon notification
\nfrom supplier that wrong part, excess, down level or defective material exists
\nat its location.<\/p>\n
2) Periodically (at a minimum of twice per year), contact IBM CIC
\nto review the current IBM consigned part number list to the established IBM
\nmanufacturing process. Any down level parts currently resident in your
\nfacility should be dispositioned via ARCM documents.<\/p>\n
3) CIC will send the ARCM document to supplier with authorized
\nsignature within 24 hours of notification (see Exhibit F).<\/p>\n
4) When appropriate, CIC will notify IBM Inspector to schedule a
\nreview of the material at suppliers location.<\/p>\n
5) The IBM inspector will inspect the material and indicate on
\nthe ARCM document if it is acceptable for IBM stock. Damaged material will be
\nrouted to IBM Material Review.<\/p>\n
6) Include the number of boxes shipped to IBM on bottom of form.
\nRemove and return pink copy of ARCM document for your records.<\/p>\n
7) Package individual parts in separate containers with separate
\npacking list. All parts listed on an ARCM must accompany the ARCM and
\npreferably unitized. The ARCM document number must be clearly marked on the
\noutside of each container. Containers should be identified by number of boxes,
\ni.e., 1 of 6, 2 of 6, etc.<\/p>\n
8) Return remaining copies (white, green and yellow) of the ARCM
\ndocument along with the material (within five days of receipt of the ARCM
\ndocument) to IBM receiving. A bill of lading should be enclosed and a notation
\nthat an ARCM is enclosed.<\/p>\n
9) Damaged parts listed on the ARCM document that supplier agrees
\nare supplier’s responsibility must be signed and dated by supplier. Any
\ndisagreement will be resolved through the IBM Buyer.<\/p>\n
10) All parts are to be packaged in accordance with IBM General
\nPackaging Specifications. Transportation charges will be paid by IBM.<\/p>\n
5
\n 191
\n 11) If a part is sent on a rework purchase order, the document to
\nreturn unreworkable parts is the Request for Return Material (RRM), Form Number
\n9267-8671 (see Exhibit II). The RRM is provided by the responsible Buyer.<\/p>\n
7. INVENTORY AND AUDIT REQUIREMENTS<\/p>\n
a. A yearly physical inventory is required on all IBM consigned
\nmaterial.<\/p>\n
b. Additional audits may be required and will be arranged by the
\nIBM Buyer and\/or the IBM Consignment Auditor.<\/p>\n
c. RICS (Rotating Inventory Counts) may be performed on a weekly
\nor monthly basis by CIC. These may be handled over the telephone or in person
\nby the Consignment Coordinator.<\/p>\n
d. Actual inventory counts will be compared to the IBM
\nConsignment records and a percent-of-variance record will be kept. The control
\nof consignment may be a factor in IBM’s determination of supplier’s ability to
\nperform current and future subcontract work for IBM San Jose.<\/p>\n
e. IBM requires that supplier keep inventory records. These
\nrecords should indicate current IBM inventory and a record of finished
\nassemblies shipped to IBM as well as that inventory received on consignment
\nfrom IBM or an IBM supplier. These records are commonly referred to as
\nin-transit records (i.e. receipts, shipments, returned parts on the ARCM
\nDocuments, drop shipments and hand carried parts). Maintenance of these
\nrecords is an indication of supplier’s ability to control IBM’s assets. An
\nacceptable same log is attached for your review (Exhibit G).<\/p>\n
f. When a subcontractor is used to complete operations on IBM
\nmaterial at supplier’s direction or based upon an agreement with IBM, supplier
\nis responsible for being able to account for that portion of the inventory that
\nmay be at the subcontractor’s location. Supplier is also responsible for
\ninforming IBM auditors of the subcontractor, its location and what port of
\nIBM’s inventory is located at subcontractor’s premises or at a subsequent
\nlocation of supplier’s.<\/p>\n
g. Domestic Subsidiary – This involves assists that are given to
\na domestic supplier who in turn gives it to their foreign subsidiary for use in
\nthe production of goods to be imported into the U.S. with the U.S. supplier as
\nthe Importer of Record.<\/p>\n
If you are the Importer of Record for goods benefiting from this
\nconsignment, you may have value declaration responsibilities to U.S. customs.
\nContact the IBM Buyer for customs valuation information.<\/p>\n
8. SUPPLIER RESPONSIBILITY FOR LOST OR DAMAGED GOODS<\/p>\n
6
\n 192
\n a. IBM Consigned material is insured by IBM; however, supplier
\nwill be held liable for loss occasioned by supplier’s fault or negligence. It
\nis the supplier’s responsibility to obtain insurance to protect itself from
\nloss due to its negligence.<\/p>\n
b. Control and reporting as described in this instruction is
\nnecessary to properly account for all IBM consigned material and to prevent
\naudit discrepancies.<\/p>\n
c. IBM consigned parts are to be used only on new production
\npurchase orders. Special arrangements with IBM buyers are necessary to use
\nconsigned parts for other orders, i.e. rework, engineering jobs, etc.<\/p>\n
d. There are occasions when IBM desires to scrap good or
\ndefective parts at supplier location versus return the inventory to IBM. No
\nparts are to be scrapped until supplier receives written authorization from an
\nIBM Buyer or IBM Material Review (MR). The physical destruction of the
\ninventory must be witnessed by an IBM representative and documented on an ARCM.<\/p>\n
9. SUPPLEMENTAL STANDARD TERMS AND CONDITIONS – IBM PARTS<\/p>\n
a. Supplier acknowledges that all consigned material described in
\nthe Consignment Agreement (Consignment Inventory Listing) has been received in
\ngood condition and in the quantities stated thereon except when supplier has
\nnotified IBM, in writing and within five days following the receipt of the
\nmaterials, or specific damage or quantity discrepancies. IBM acknowledges that
\nSupplier may not discovery defects that are not reasonable apparent until the
\nconsigned material is integrated into systems and tested.<\/p>\n
b. Title to all consigned materials shall remain in IBM.<\/p>\n
c. For all material lost, destroyed, or damaged through the fault
\nor negligence of the supplier, supplier will pay IBM, at IBM’s option, either
\nthe cost of such materials or the cost of replacement materials required to
\ncomplete the performance of this order.<\/p>\n
d. Supplier at its own expense will:<\/p>\n
1) Separately account for all IBM Material.<\/p>\n
2) Maintain current and accurate inventory records.<\/p>\n
3) Take an accurate physical inventory thereof as
\nrequired by IBM (not more often than once each three months).<\/p>\n
4) Return all unused materials to the consigning IBM
\nlocation promptly upon completion, cancellation, or expiration unless otherwise
\nagreed, or at any time after completion, cancellation, or expiration of this
\norder upon IBM’s request.<\/p>\n
5) IBM shall have the right to examine and audit said
\nrecords and to verify said inventories at any time upon reasonable notice.<\/p>\n
7
\n 193
\n10. EC – ENGINEERING CHANGES<\/p>\n
IBM may require supplier to change the parts or process used in
\nassemblies. Supplier should maintain records related to which purchase orders
\nthe change affects.<\/p>\n
If this change affects orders where IBM has already shipped supplier
\nparts, contact your Consignment Coordinator to make sure correct parts have
\nbeen forwarded to these orders.<\/p>\n
Supplier should call CIC if any problems occur with implementing an
\nEngineering Change, including completing the phase-in within the agreed upon
\ntime frame and\/or quantity.<\/p>\n
11. SHIPMENTS TO IBM<\/p>\n
When supplier completes assemblies to be shipped to IBM, supplier will
\nprepare the shipment and assign a control number in a sequential manner. The
\npurchase order number for the particular assemble must be shown.<\/p>\n
NOTE: Suppliers are not authorized to overship on Consignment
\n Purchase Orders. Packing slip and invoice quantities must
\n match shipment quantity.<\/p>\n
8
\n 194
\n Exhibit 5: RVA1 FRU Prices and Lead Times<\/p>\n
\n\n UNIT REPAIR CURRENT INA
\nP\/N IBM P\/N R\/C DESCRIPTION PRICE PRICE P\/N DATE
\n
\n [**]
\n<\/c><\/c><\/c><\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n 195
\n EXHIBIT 6
\n LIST OF COUNTRIES FOR
\n INTELLECTUAL PROPERTY INDEMNITY<\/p>\n
COUNTRIES FOR INDEMNIFICATION
\n —————————–<\/p>\n
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