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Exhibit 10.16
CONFIDENTIAL TREATMENT
THE FOLLOWING IS A REDACTED VERSION OF
AMENDMENT NO. 3 TO THE OEM AGREEMENT
DATED AS OF DECEMBER 18, 1997
BY AND BETWEEN STORAGE TECHNOLOGY
CORPORATION AND INTERNATIONAL BUSINESS
MACHINES CORPORATION.
THIS MATERIAL IS BEING SUBMITTED IN
CONNECTION WITH A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO
RULE 24b-2 UNDER THE SECURITIES
AND EXCHANGE ACT OF 1934
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September 19, 1998
[**]
Storage Technology Corporation
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Re: Amendment No. 3
OEM Agreement dated December 18, 1997, as amended, between
International Business Machines Corporation and Storage Technology
Corporation (the "OEM Agreement")
Dear [**]:
This letter is an amendment to the above-referenced OEM Agreement. The following
changes are hereby made and agreed upon by International Business Machines
Corporation ("IBM") and Storage Technology Corporation ("STK") to such
agreement:
1. The following is added as a separate paragraph in Section 6.2 of the base
OEM agreement:
"Notwithstanding anything to the contrary, if IBM submits to STK during the
period from [**] to [**] a [**] in accordance with [**] that [**] less than
[**] for the immediately following quarter, then such [**] shall be
considered by the Parties as a [**] for the [**] in which IBM will be
entitled to purchase [**] from STK under the Agreement, and IBM will submit
to STK a [**] for such [**] that have been [**] the beginning of such
[**]."
2. The payment term of [**] for 1999 or later in Section 7.10(a) of the base
OEM agreement is changed to [**].
3. The maximum percentage of [**] in Section 10.3 of the base OEM agreement is
changed to [**]. In addition, the following sentence is added to the end of
Section 10.3 of the base OEM agreement: "Notwithstanding the foregoing, the
[**] shall not apply to the monthly build forecast that IBM previously
submitted to STK at the beginning of [**].
4. The following is added as Section 3.8 to Attachment 1 to Exhibit 3, i.e.,
the Statement of Work:
"STK shall [**] into [**] that are to be provided by [**] to [**] under the
Agreement by [**] to be provided by, IBM."
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5. The description of [**] in Section 4.3(c), Funding of Deliverables, in
Attachment 1 to Exhibit 3, i.e., Statement of Work, is changed to the
following: [**].
6. The description of [**] in Section 4.3(c), Funding of Deliverables, in
Attachment 1 to Exhibit 3 i.e., Statement of Work, is changed to the
following: [**] as described in the previously executed Amendment No. 2 to
the OEM Agreement.
7. The [**] Deliverable that appears in Section 6, Deliverables, Schedules and
Adjustments, of Attachment 1 to Exhibit 3 i.e., the Statement of Work, is
replaced with the following:
"Deliverable Type ESP Date Volume Adjustment
------------ ---- -------- ------ ----------
[**] [**] [**] [**] [**]
8. The following footnote is added to the description of [**] for [**]
products that appears in the [**] Deliverable in Section 6, Deliverables,
Schedules and Adjustments, of Attachment 1 to Exhibit 3, i.e., the
Statement of Work:
[**]
9. The third paragraph in Section E (1), Adjustment for Failure to Meet Volume
Date, of Appendix B to Attachment 1 of Exhibit 3 i.e., Completion and
Acceptance Criteria, that begins with "If the Parties agree on ...." is
replaced with the following paragraph:
"If StorageTek fails to meet the Volume Date for [**] associated with the
[**] Deliverable, then IBM shall receive [**] to be used against its [**]
that is equal to [**], as stated below, for each failure. If StorageTek
fails to meet the Volume Date for [**] associated with the [**]
Deliverable, then IBM shall receive [**] to be used against its [**] that
is equal to [**], as stated below, for each failure."
10. The words ", including [**] for [**] are added after the word "software"
that appears in the fourth line of Section 3.1(e), Grant of Licenses, in
Attachment 2 to Exhibit 3, i.e., Description of Licensed Works.
11. The [**] of [**] for each workload in Schedule 5 of Appendix A of
Attachment 1 to Exhibit 3, i.e., the Statement of Work, is changed to [**].
In addition, the [**] of [**] in Schedule 5 of Appendix A of Attachment 1
to Exhibit 3, i.e., the Statement of Work, is changed to [**].
12. The paragraph in Section 26.3, Notices, of the base OEM agreement that
begins with "Either Party may change any address at which ...." is changed
to "Either Party may change any person who, or address at which it, will
receive notices by notifying the other Party in writing."
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All other terms and conditions of the OEM Agreement that are unaffected by this
amendment shall remain in full force and effect. If your company agrees with the
foregoing, please indicate its acceptance by signing both copies of this letter,
and returning them to me for IBM's execution.
Sincerely,
[**]
ACCEPTED AND AGREED TO:
STORAGE TECHNOLOGY INTERNATIONAL BUSINESS
CORPORATION MACHINES CORPORATION
[**] [**]
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