EXHIBIT 10.1     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.**VOLUME PURCHASE AGREEMENT**     This Volume Purchase Agreement (“**VPA**”), dated as of June 6, 2005 (the “**EffectiveDate**”), is made by and between Komag USA (Malaysia) Sdn., a Malaysia unlimited liabilitycompany **(“****Komag****”),**Komag, Incorporated, a Delaware Corporation (“Komag Inc.”), and WesternDigital Technologies, Inc., a Delaware corporation (“**WDC**”).**BACKGROUND**     A. WDC desires to purchase, and Komag desires to sell to WDC, certain Media Products inaccordance with the terms of this VPA.     B. WDC and Komag previously executed a Volume Purchase Agreement effective as of April 8, 1999and amendments thereto (collectively, the “**Original VPA**”), and the parties now desire toterminate the Original VPA and enter into a new agreement for the purchase and sale of Media underthe terms and conditions provided in this VPA.     NOW THEREFORE, for and in consideration of the covenants, conditions, and undertakingshereinafter set forth, the parties agree as follows:**ARTICLE 1: DEFINITIONS**     For the purposes of this VPA, unless the context otherwise requires, the following terms willhave the respective meanings set out below and grammatical variations of such terms will havecorresponding meanings:     **1.1 “****AAA****”**has the meaning set forth in Section 6.2.1.     **1.2 “****AFR****”**[***].     **1.3**“**Affiliate**” of a party means any entity that directly or indirectly controls, isunder common control with, or is controlled by, such party. As used in this definition, “control”means possession, directly or indirectly, of power to direct or cause the direction of managementor policies (whether through beneficial ownership of securities or other ownership interests, bycontract or otherwise).     **1.4 “****Change of Control****”**has the meaning set forth in Section 12.5.     **1.5 “****Component****”**means a component of a WDC product.     **1.6 “****Confidential Information****”**has the meaning set forth in Section 11.1.     **1.7 “****Days****”**means consecutive calendar days.
 

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.     **1.8 “****Defect****”**has the meaning set forth in Section 5.5.1.     **1.9 “****Delivery Date****”**or **"****Scheduled Delivery Date****”**means the date of delivery ofProducts as specified in Pull Requests.     **1.10 “****Disclosing Party****”**has the meaning set forth in Section 11.1.     **1.11 “****Disentanglement****”**has the meaning set forth in Section 9.4.1.     **1.12 “****Effective Date**” has the meaning set forth in the opening paragraph of this VPA.     **1.13 “****Epidemic Failure****”**has the meaning set forth in Section 8.4.     **1.14 “****Exchange Act****”**has the meaning set forth in Section 12.5.     **1.15 “****Exhibit****”**means an attachment to this VPA that is referenced in Section2.4. Exhibits are incorporated herein by reference thereto.     **1.16**“**FGI**” has the meaning set forth in Section 5.1.     **1.17**“**First Executive Conference**” has the meaning set forth in Section 12.4.     **1.18 “****Fiscal Quarter****”**means the fiscal quarters of WDC set forth on **Exhibit A****.**     **1.19 “****Force Majeure Event****”**means an act of nature, civil disruption, power outage,public enemy, government action, or freight embargo beyond the control of a party.     **1.20 “****HDDs****”**means hard disk drives.     **1.21 “****Initial Term****”**has the meaning set forth in Section 9.1.     **1.22**“**JIT Hubs****”**has the meaning set forth in Section 5.3.     **1.23**“**Komag Group**” means Komag Inc. and all of its subsidiaries.     **1.24 “****Komag Shortfall****”**has the meaning set forth in Section 4.3.2.     **1.25 “****Komag Shortfall Remedy Trigger****”**has the meaning set forth in Section4.3.3.     **1.26 “****Lead Time****”**means, for purposes of this VPA, the minimum length of time prior toa specific Delivery Date that Komag must receive a Pull Request to ensure delivery by such date,not to exceed 8 hours.     **1.27**“**Manufacturing Lot**” means Product manufactured during a continuous time period ofnot less than [***].
2

 
     **1.28 “****Material Default****”**shall mean the occurrence of any of the following,provided that in the event any of the following conditions are cured within the timeperiods set forth therein, then no Material Default shall have occurred:            1.28.1 Failure of Komag to deliver (subject to the conditions and requirements ofSections 4.3.2 and 6.7) in a given Fiscal Quarter the Purchase Requirements duringthe applicable Fiscal Quarter, or the failure of Komag to accept a valid and compliant PurchaseOrder in accordance with Section 5.2.2 (but subject to Section 5.5), and thefailure by Komag to remedy such condition within ten (10) business days after Komag has receivednotice thereof (which notice must explicitly assert the existence and the nature of such conditionunder this Section 1.28.1);            1.28.2 Failure of WDC (subject to the conditions and requirements of Sections 4.3 and5.5.1) to timely issue valid and compliant Purchase Orders pursuant to Section5.2.1(a) or WDC’s cancellation of such Purchase Orders, and the failure by WDC to cure suchbreach within ten (10) business days after WDC has received notice of such default (which noticemust explicitly assert the existence and the nature of such condition under this Section1.28.2);            1.28.3 Other than (i) a failure of Komag under Section 1.28.1 above, (ii) a failure ofWDC under Section 1.28.2 above and (iii) a breach of a payment obligation of WDC underSection 6.6, a material breach by either party of any obligation, covenant, or conditionunder this Agreement that is susceptible of cure, and the failure by the breaching party to curesuch breach within thirty (30) Days after the breaching party has received notice of such default(which notice must explicitly assert the existence and the nature of such condition under thisSection 1.28.3), provided that if the cure requires more than thirty (30) Days, aMaterial Default will be deemed to exist if the breaching party fails to (i) promptly take actionto cure such breach as quickly as reasonably possible; or (ii) cure such breach within sixty (60)Days after the breaching party has received notice of such default;            1.28.4 A failure of WDC to meet its payment obligations under Section 6.6, subject tothe late payment procedures set forth in Section 6.7; or            1.28.5 An assignment or attempted assignment in violation of Section 12.5.     **1.29**“**Media****”**means recording disks, manufactured by any entity, as used in datastorage devices.     **1.30**“**Mediator**” has the meaning set forth in Section 12.4.2.     **1.31**“**New Capacity**” means the increase in media capacity by Komag in connection withthis Agreement.     **1.32 “****Next Fiscal Quarter**” has the meaning set forth in Section 6.1.3.     **1.33 “****Offset****”**has the meaning set forth in Section 6.5.4.
3

 
     **1.34 “****Overdue****”**has the meaning set forth in Section 6.6.     **1.35 “****Price****” or “****Prices****”**means the amount(s) charged for Products, asspecified in Section 6.1.     **1.36 “****Product****”**means the Media manufactured by Komag.     **1.37 “****Program****”**means a WDC product classification, currently including, for example,“Hawk” and “Buccaneer” disk drives. A Program may include various capacities, numbers of disks perdrive, drive performance specifications, or drive interfaces (such as SATA or PATA).     **1.38 “****Prohibited Assignee****”**has the meaning set forth in Section 12.5.     **1.39 “****Pull Request****”**means a request made by WDC to Komag for delivery of Product(s) toWDC from a JIT Hub.     **1.40 “****Purchase Order****”**means a purchase order placed by WDC or any subsidiary of WDC toKomag for Products as contemplated by this VPA.     **1.41 “****Purchase Requirements**" has the meaning set forth in Section 4.1.1.     **1.42 “****Receiving Party****”**has the meaning set forth in Section 11.1.     **1.43 “****Second Term****”**has the meaning set forth in Section 9.1.     **1.44 “****Section****”**means a numbered section of this VPA.     **1.45 “****Specifications****”**means designs, drawings, prints and written descriptions,specification reviews and requirements for Products that have been developed by WDC and Komag as ofthe date of this VPA, or which may be developed by WDC and Komag during the term of this VPA.     **1.46 “****Stop Ship Order**” means a stop ship order under WDC’s established stop shipprocedure as set forth in **Exhibit C**.     **1.47 “****Tolling Period****”**has the meaning set forth in Section 12.2.     **1.48 “****Unit**” means a single Product.     **1.49 “****Unit Shortfall****”**has the meaning set forth in Section 5.5.1.     **1.50 “****VPA**” means this Volume Purchase Agreement, including the Exhibits.     **1.51 “****WDC Shortfall Remedy Trigger****”**has the meaning set forth in Section 5.5.1.2.
4

 
**ARTICLE 2: AGREEMENT STRUCTURE**     **2.1 Background**. Each party agrees to diligently cooperate with the other party to accomplishthe objectives of this VPA.     **2.2 Agreement Components**. This VPA consists of this VPA (including its Exhibits), PurchaseOrders and Pull Requests. If there is a conflict among the terms and conditions of the variousdocuments or an ambiguity created by differences therebetween, the order of precedence will be (i)this VPA (excluding its Exhibits), (ii) the Exhibits, and (iii) the Purchase Orders and PullRequests.     **2.3 Purchase Order**. Purchase Orders will be used to convey the Price and number of Units, andaccordingly Purchase Orders must contain the following: Komag-designated part number, Price, Unitsordered, customer name, ship to address (destination), bill to address, and Purchase Order number.The parties acknowledge that such Purchase Orders, as well as confirming documents,acknowledgments, forms, invoices and the like used in the ordinary course of business may containother terms and conditions. The parties agree that this VPA will take precedence over any suchdocument or other communication, representation or understanding whether oral or written and thatany term or condition relating to the subject matter of this VPA that is inconsistent with this VPA(whether in contradiction to, in addition to, or that would result in any ambiguity with respect toany term or condition in this VPA) will be deemed deleted and be of no force, including, but notlimited to, any term or condition purporting to supersede this VPA in whole or in part orpurporting to make any offer, acceptance, term, condition or other action conditional uponacceptance of, or indicating agreement to, any inconsistent term or condition. The foregoing maynot be modified or waived except by written agreement of the parties, specifically referencing thisVPA, and signed by officers of both parties. The parties agree that, without limiting Section12.1, the foregoing shall not be superseded, altered, or overridden by any provision in theUniform Commercial Code as it may have been adopted by any competent jurisdiction.     **2.4 Exhibits.**The following Exhibits are incorporated into this VPA by reference and deemed tobe a part hereof:     Exhibit A: WDC Fiscal Quarters     Exhibit B: Current Prices and Sample Prices     Exhibit C: Stop Ship Order Procedure     Exhibit D: Progress Milestones     Exhibit E: Warranty Verification and Disposition Flow Chart     Exhibit F: Volume/Purchase Requirements
5

 
**ARTICLE 3: PRODUCT QUALIFICATION AND DEVELOPMENT**     **3.1 Qualification Process.**Each of the parties shall use commercially reasonable efforts toqualify and to keep qualified Komag’s Products on at least one Program at all times. Such effortswill require qualification of Products in combination with other Components (such as multiplecombinations of Media and recording heads), as well as the subsequent qualification of WDC’s diskdrives incorporating such combinations at each WDC customer. Subject to Section 4.3, WDCagrees that Product qualifications must include sufficient WDC Programs, Component combinations andcustomers to allow WDC to meet its Purchase Requirements for Products under this VPA, taking intoaccount that a Product may fail to qualify in a Program or Components combination, or for a WDCcustomer, from time-to-time.     **3.2 Qualification Locations.**Following the Effective Date, Komag intends to manufactureProducts under this Agreement at factory locations in Penang, Malaysia.**ARTICLE 4: PRODUCT PURCHASE AND SALE COMMITMENTS**     **4.1 Volume.**            4.1.1 Subject to Section 4.3, Komag agrees that it shall supply to WDC, and WDC agreesthat it shall purchase from Komag, at the volumes of Product set forth in **Exhibit F** (the“**Purchase Requirements**”).            4.1.2 In an effort to bring the New Capacity up to its operational capacity as soon as ispracticable to both (a) satisfy the Purchase Requirements and (b) maximize the availability ofProduct for WDC beyond the Purchase Requirements for each Fiscal Quarter, Komag shall usecommercially reasonable efforts and assign all commercially reasonable resources to (1) expeditethe completion of the New Capacity and the qualification of Products for WDC and (2) maximize theutilization of New Capacity and existing capacity to improve yields. WDC shall cooperate in goodfaith with Komag and provide all commercially reasonable assistance necessary to help achieve suchgoals. The parties shall meet regularly to review, develop and update plans and review progresstoward goals. Komag and WDC agree that it is their mutual intent that, if Komag produces anyProducts, other than sample Products, from the New Capacity in excess of Purchase Requirements,such excess shall be offered to WDC for purchase.     **4.2**[intentionally omitted]     **4.3 Exceptions and Qualifications to Purchase Requirements.** 4.3.1 Provided that Komag remains qualified on a Program pursuantto which WDC may be able to use quantities of Products, the purchase of whichwould be sufficient to satisfy the Purchase Requirements of Section4.1, then WDC must (to the extent commercially and economicallyreasonable) first satisfy its Purchase Requirements with purchases of Productsfor such Programs.
6

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIESAND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.4.3.2 If Komag (a) does not deliver the Purchase Requirements due to failure of aProduct or Products to qualify for a particular Program or Programs; (b) failsto deliver the Purchase Requirements due to a Stop Ship Order where WDCreasonably and in good faith concludes after consultation with Komag that theProducts do not meet the Specifications; or (c) refuses or is unable todeliver Products to satisfy duly accepted Purchase Orders in quantities equalto (i) a minimum of [***] percent [***]%) of the Purchase Requirements foreach of the first two months of the then applicable Fiscal Quarter and (ii)[***] percent [***]%) of the Purchase Requirements by the end of the eleventh(11th) week of the applicable Fiscal Quarter and (iii) [***]percent [***]%) of the Purchase Requirements by the end of the last week ofthe applicable Fiscal Quarter; then WDC shall notify Komag of such conditionand give Komag five (5) business days to remedy the condition before electinga remedy in accordance with Section 4.3.3; provided,however , in the case of clause (a), (b) and (c) of this Section4.3.2, if the difference between actual Komag Product deliveries and thePurchase Requirements for a Fiscal Quarter (the**“****Komag Shortfall****”**) isnot more than [***] percent [***]%) of the Purchase Requirements for suchFiscal Quarter, Komag may increase the Purchase Requirement for the subsequentFiscal Quarter by a number of Units equal to the Komag Shortfall, and nobreach of Section 4.1.1 shall have occurred (it being understood thatif Komag fails to make up the full Komag Shortfall in the subsequent FiscalQuarter, WDC may freely elect its remedies pursuant to Section 4.3.3and this VPA). 4.3.3 In the event that (A) Komag does not make up the KomagShortfall in the immediately following Fiscal Quarter, or (B) the KomagShortfall is more than [***] percent [***]%) of the Purchase Requirements forany Fiscal Quarter (each a “**Komag Shortfall Remedy Trigger**”), then WDCand Komag shall meet to discuss an amicable resolution and allocation of thePurchase Requirements, which shall be set forth in writing and reference thisVPA, and in the event that such resolution has not been reached within five(5) business days of WDC’s notice to Komag of the Komag Shortfall RemedyTrigger, then WDC shall then be entitled at its sole discretion to elect thefollowing remedies: 4.3.3.1 continue under the terms of this VPA and reduce the PurchaseRequirements for the relevant Fiscal Quarter and make allocations toand purchase Units from other suppliers (it being understood thatWDC’s election to reduce the Purchase Requirements shall not resultin a permanent reduction to such Purchase Requirements for
7

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIESAND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.   future Fiscal Quarters unless otherwise mutually agreed inwriting); or  4.3.3.2 continue under the terms of this VPA and allow Komag to increase thePurchase Requirements for the subsequent Fiscal Quarter (and for thatFiscal Quarter only) by a number of Units equal to the KomagShortfall (it being understood that if Komag fails to make up thefull Komag Shortfall in the subsequent Fiscal Quarter, WDC may freelyelect its remedies pursuant to this Section 4.3.3 and thisVPA); or  4.3.3.3 terminate this VPA in accordance with Section 9.2; and/or  4.3.3.4 take the Offset under Section 6.5.4 below.     **4.4 Additional Demand.**WDC may, but will not be obligated to, request that Komag provideUnits in excess of the Purchase Requirements. Purchase Orders for such additional Units may beissued, pursuant to Section 5.2.1(b), at any time by WDC, but will be subject to acceptanceby Komag in its sole discretion. Pricing and other terms for such excess Units shall be subject togood faith negotiations between the parties.**ARTICLE 5: PURCHASE OF PRODUCTS BY WDC**     **5.1 Forecasts and Planning Schedules.**WDC shall provide to Komag a current written forecast ofdemand for Products WDC expects to purchase during the first twelve (12) months of the term of thisVPA, which forecast shall include the Purchase Requirements for each Fiscal Quarter and may includeforecasts for additional Product needs. Thereafter during the term of this VPA, on a monthlybasis, WDC shall provide an updated forecast for any quantities of such Product WDC expects topurchase in the following twelve (12) months, which forecast shall include the PurchaseRequirements for each Fiscal Quarter and may include forecasts for additional product needs. Themost recently issued forecast will supersede all previous forecasts. No more than five (5)business days from receipt of each of the monthly WDC forecasts, Komag shall confirm supply for arolling three-month period (current month plus two), provided, however, that ifsuch monthly forecast fails to include quantities for delivery in each month equal to a minimum of[***] percent [***]%) of the Purchase Requirements for each of the first two months of the thenapplicable Fiscal Quarter and (ii) [***] percent [***]%) of the Purchase Requirements by the end ofthe eleventh (11th) week of the applicable Fiscal Quarter and (iii) [***] percent[***]%) of the Purchase Requirements by the end of the last week of the applicable Fiscal Quarter,then Komag may reject such forecast upon written notice to WDC and allow WDC five (5) business daysto modify and re-issue such forecast. During the term of this VPA on a monthly basis, Komag shallprovide to WDC a current written summary of the Product finished goods inventory (“**FGI**”)intended for WDC. This summary shall list by Komag manufacturing site and JIT Hub location theamounts and types of FGI being held by Komag for each of WDC’s Programs.
8

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.     **5.2 Issuing Purchase Orders and Pull Requests.** 5.2.1 At least [***] Days before the beginning of each FiscalQuarter, WDC (a) shall submit to Komag a Purchase Order for such FiscalQuarter for all Units WDC must purchase pursuant to the Purchase Requirementsof Section 4.1 and (b) may submit to Komag a Purchase Order foradditional demand, pursuant to Section 4.4, for all Units WDC hasforecasted it may require in excess of its Purchase Requirements during suchFiscal Quarter.  5.2.2 With respect to Purchase Orders issued in full compliancewith Section 2.3, no more than two (2) business days after receipt ofeach such Purchase Order, Komag shall issue an acceptance of the PurchaseOrder in writing confirming the quantity and other terms thereof;provided, however, that if such Purchase Orders includequantities that are inconsistent with the Purchase Requirements or do not meetthe requirements of Section 2.3, Komag shall follow the procedures andremedies set forth in Section 5.5.  5.2.3 With respect to Purchase Orders issued pursuant to clause(b) of Section 5.2.1, no more than two (2) business days after receiptof each such Purchase Order, Komag shall confirm or reject the Purchase Orderin writing to WDC. Failure of Komag to accept or reject the Purchase Order inwriting within such two business day period shall be deemed acceptance of suchPurchase Order by Komag.  5.2.4 WDC shall transmit a Pull Request by facsimile or otheragreed upon means to communicate to Komag, at the applicable JIT Hub, the partnumber, quantity, delivery location and Delivery Date and time of each Productrequired. WDC’s transmission of a Pull Request is authorization for Komag todeliver Product to WDC against the Purchase Order for the part numbers andquantities set forth in the Pull Request. Komag shall deliver Product from theapplicable JIT Hub upon receipt of a Pull Request in accordance withapplicable Lead Times. WDC and Komag shall, prior to the commencement of eachFiscal Quarter, establish mutually acceptable Lead Times for Pull Requests,which Lead Times shall in no event exceed eight hours.     **5.3 Komag Production and Inventory.**During the term of this VPA, WDC will be issuingforecasts and Purchase Orders and Komag will be producing FGI to meet the Purchase Requirements.WDC’s forecast for a certain Fiscal Quarter is not, and should not be deemed to be, a commitment byWDC to buy a specific amount of Product in a specific period of time. Komag will use just-in-timedelivery hubs located at or near WDC’s manufacturing or distribution facilities in Malaysia andThailand (“**JIT Hubs**”) with respect to its obligations to provide the Purchase Requirements.Komag will: (i)
9

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIESAND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.bear all costs associated with warehousing Products in the JIT Hub(s); (ii) ensure that WDCmay withdraw Products from the JIT Hub(s) in accordance with the terms of this VPA; (iii) retaintitle to Products until they are physically delivered to WDC or its carrier upon withdrawal fromthe JIT Hub(s); (iv) fully insure or require the JIT Hub operator to fully insure all Products intransit to or stored at a JIT Hub against all risk of loss or damage until such time as WDC takestitle to them; and (v) require that the JIT Hub operator take all steps necessary to protect allProducts in a JIT Hub consistent with good commercial warehousing practice. Provided that Komaghas confirmed its acceptance of a Purchase Order, Komag shall, promptly after the Effective Dateand at all times during the term of this VPA, establish and maintain sufficient inventory for eachProgram at each JIT Hub in order to be able to deliver the Purchase Requirements in accordance withthe terms of this VPA.     **5.4 End of Life**. WDC shall use commercially reasonable efforts to notify Komag as soon aspossible before the termination of each Program.     **5.5 Liability on Cancellation or Deficient Issuance of a Purchase Order.**5.5.1 Section 5.2.1(a) Purchase Orders. 5.5.1.1 WDC must issue a Purchase Order for Units of Product equal to thePurchase Requirements in each Fiscal Quarter pursuant to Section5.2.1(a). In the event that WDC fails to (i) timely issue suchPurchase Order, (ii) cancels such Purchase Order in writing or (iii)deficiently issues such Purchase Order (such that the aggregatenumber of Units requested in a given Fiscal Quarter is less than thePurchase Requirements (such shortfall in the number of Units, the**“****Unit Shortfall****”**), and each of (i), (ii) or (iii), a“**Defect**”), Komag may elect a remedy in accordance withSection 5.5.1.2, provided, however, thatprior to taking any of the foregoing actions, Komag must (a) give WDCwritten notice of the Defect and give WDC a single five (5) businessday period to correct such Defect and issue or re-issue such PurchaseOrder, and the time requirement for issuing such Purchase Order setforth in Section 5.2.1 shall be extended accordingly, and (b) ifWDC’s Unit Shortfall in a given Fiscal Quarter is not greater than[***] percent [***]%) of its Purchase Requirements for that FiscalQuarter, then WDC may increase the Purchase Requirement for thesubsequent Fiscal Quarter by a number of Units equal to the UnitShortfall, and no breach of Section 4.1.1 shall have occurred(it being understood that if WDC fails to make up the full UnitShortfall in the subsequent Fiscal Quarter, Komag may freely electits remedies pursuant to Section 5.5.1.2 and this VPA).
10

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIESAND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. 5.5.1.2 In the event that (A) WDC fails to make up the full Unit Shortfallfor a Fiscal Quarter in the following Fiscal Quarter, or (B) the UnitShortfall in any given Fiscal Quarter is more than [***] percent[***]%) of the Purchase Requirements for such Fiscal Quarter (each a“**WDC Shortfall Remedy Trigger**”), then WDC and Komag shallmeet to discuss an amicable resolution and allocation of the PurchaseRequirements, which shall be set forth in writing and reference thisVPA, and in the event that such resolution has not been reachedwithin five (5) business days of Komag’s notice to WDC of the WDCShortfall Remedy Trigger, then Komag shall then be entitled at itssole discretion to elect the following remedies: 5.5.1.2.1 terminate this VPA in accordance with Section9.2; or  5.5.1.2.2 waive the breach and continue under the terms of thisVPA and reduce the Purchase Requirements on a going-forwardbasis by the amount of the Unit Shortfall, which capacityKomag may use for any other purpose it elects, includingmanufacturing Products to sell to third party purchasers (itbeing understood that Komag’s election to reduce the PurchaseRequirements shall result in a permanent reduction to suchPurchase Requirements for future Fiscal Quarters unlessotherwise mutually agreed in writing); or  5.5.1.2.3 waive the breach and continue under the terms of thisVPA and allow WDC to increase the Purchase Requirement forthe subsequent Fiscal Quarter by a number of Units equal tothe Unit Shortfall (it being understood that if WDC fails tomake up the full Unit Shortfall in the subsequent FiscalQuarter, Komag may freely elect its remedies pursuant to thisSection 5.5.1.2 and this VPA).5.5.2 WDC shall not be responsible for any liabilities associatedwith the cancellation of any 5.2.1(a) or 5.2.1(b) Purchase Order, except forthe cost of materials unique to WDC Specifications purchased by Komag thatKomag cannot cancel, return to its supplier for credit, sell or divert toanother use.
11

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED ANDFILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.**ARTICLE 6: PRICE AND PAYMENT TERMS FOR PRODUCTS****6.1 Product Pricing.**All Prices shall be in U.S. Dollars. 6.1.1 **Current Prices.**The current Unit Prices that WDC will payfor Products purchased during the first Fiscal Quarter pursuant to this VPAare in U.S. Dollars and set forth in **Exhibit B**(the **“****Prices****”**).The Prices for such Products are subject to adjustment following the FirstQuarter in accordance with Section 6.1.3.  6.1.2 **[***]**. In the event that WDC elects to challenge thepricing of the Products under this Section 6.1.2, the parties shallfollow the procedures set forth in Section 6.2.2 below.  6.1.3 **New Products.**The parties agree to negotiate in good faithto set the Prices for any new Products or any development Products under anyProgram. Such negotiations must commence on a date beginning no later thanfifty (50) Days before the beginning of the Fiscal Quarter following the thencurrent fiscal quarter (the “**Next Fiscal Quarter**”) and the partiesmust conclude such negotiations no later than twenty (20) Days before thebeginning of the Next Fiscal Quarter. Komag shall, no later than nineteen(19) Days before the beginning of the next Fiscal Quarter, notify WDC of themutually agreed-upon Prices applicable to the Next Fiscal Quarter by means ofa pricing letter. Notwithstanding the foregoing, the parties agree that thereview of such Prices shall not require the parties to modify any of thenon-price terms of this VPA. In the event the parties fail to conclude theirnegotiations by the twentieth (20th) Day preceding the Next FiscalQuarter, each party agrees to enter into the binding dispute resolutionprocedures set forth in Section 6.2 and to conclude such bindingdispute resolution at least five (5) Days prior to the beginning of the NextFiscal Quarter.**6.2 Pricing Disputes.** 6.2.1 In the event the parties cannot agree upon pricing asdescribed in Section 6.1.2 or Section 6.1.3, either party may,upon written notice to the other, submit such dispute to the Chief ExecutiveOfficer of Komag and the Chief Operating Officer of WDC, or their respectivedesignees, who shall meet to attempt to resolve the dispute by good faithnegotiations. In the event the parties are unable to come to agreement uponPrices within five (5) Days after such notice is given, either party mayproceed with arbitration as follows. The parties will submit the matter ofpricing to binding arbitration in San Francisco, California, in accordancewith the Commercial Arbitration Rules of the American Arbitration Association(“**AAA**”). Each party shall appoint one arbitrator, and
12

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIESAND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.   the two arbitrators thus appointed will appoint a third arbitrator. Theparties shall instruct the arbitrators to make a determination of pricingusing the standards set forth in Section 6.1, but in no eventoutside of the range of the “bid” and “asked” prices established by therespective positions of the parties in the last good faith negotiationsprior to referral to arbitration. The parties shall also instruct them tocome to a decision within fifteen (15) Days after submission of thedispute to arbitration. During the pendency of such arbitration, thePrices in the Purchase Order for the Fiscal Quarter before the arbitrationshall remain in effect, and WDC shall issue, and Komag shall accept, thePurchase Order for the applicable Fiscal Quarter with such price (it beingunderstood that such prices will be adjusted retroactively if required inaccordance with the resolution of the pricing dispute). If a price changeis awarded, the party, if any, which owes a balance shall pay suchbalance; and in the event such party fails to pay such balance within ten(10) Days after the date of the award, interest will accrue beginning ten(10) Days after the date of the award, at the maximum rate permitted bylaw in California. Each party shall bear its own arbitration costs andexpenses; provided, however, that the arbitrators maymodify the allocation of fees, costs and expenses in the award in thosecases where fairness dictates other than each party bearing its own fees,costs and expenses. The award shall be final and binding on the parties,and judgment on the award may be entered in and enforced by any court ofcompetent jurisdiction.  6.2.2 **Audit Rights**. With respect to [***] Section 6.1.2, WDC mayappoint an independent auditor (reasonably acceptable to Komag) to validateKomag’s records [***] and such auditor’s report may be admissible in thearbitration proceeding.     **6.3 Taxes and Duties.**Unless otherwise specifically provided herein, the amount of any presentor future sales, revenue, excise or other tax applicable to the Products, will be added to thePrice and will be paid by WDC, or in lieu thereof WDC shall provide Komag with a tax exemptioncertificate acceptable to the taxing authorities. In the event Komag is required to pay any suchtax, fee, or charge, at the time of sale or thereafter, WDC shall reimburse Komag therefor.Notwithstanding the foregoing, WDC will not be responsible for any taxes on Komag’s income.     **6.4 Tax Minimization.**The parties acknowledge that Komag’s Malaysian manufacturing operations,including the tax holiday status of such operations, provide a path to the industry’s lowest coststructure. To ensure that both parties derive benefit from this advantageous manufacturinglocation, the parties shall adopt business practices (e.g. sales terms, title passage, importer ofrecord, and warehousing practices) that
13

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.maximize the benefits of Komag’s tax holiday position in Malaysia to the extent notinconsistent with WDC’s reasonable business objectives.     **6.5 Invoices**. For shipments through Komag’s designated JIT Hub, Komag shall invoice WDC upondelivery of Product to the delivery location indicated on the Pull Request. For shipments directto WDC, Komag will invoice upon shipment. Terms for payment of all invoices will be net [***] Daysfrom date of invoice; after such date the amount becoming “**Overdue**”. In the event paymentis not received by Komag within such period, Komag shall notify WDC and WDC shall make promptpayment of the amount then Overdue pursuant to Section 6.6 below. WDC will be liable forinterest on any Overdue payment under any such invoice, up to the maximum legal rate in the Stateof California. Notwithstanding the foregoing, payment terms shall be payment in advance in theevent of the bankruptcy or insolvency of WDC or in the event any proceeding is brought (a)voluntarily by WDC under the bankruptcy or insolvency laws; or (b) involuntarily against WDC underthe bankruptcy or insolvency laws, and not dismissed within ninety (90) Days.     **6.6 Late Payments.**If (a) WDC’s account with Komag becomes Overdue with respect to anyspecific invoice in any amount by more than seven (7) Days; (b) WDC fails to timely make anypayment as required under Exhibit B; or (c) if WDC’s account with Komag becomes Overdue inexcess of the greater of (i) [***] and (ii) [***]% of WDC’s total accounts receivable balance underthis VPA by more than [***] Days; then Komag may immediately discontinue shipping Products upon[***] Days’ advance written notice to WDC and opportunity for WDC to cure within such [***] DayPeriod. Units that Komag does not ship in accordance with this Section 6.6 shall not counttowards the Units purchased by WDC to fulfill its Purchase Requirements, until such Units areshipped by Komag. The parties agree that a senior officer designated by each party will meet toresolve any issues relating to Overdue amounts. Notwithstanding the foregoing, in the event thatWDC in good faith gives Komag written notice disputing the validity or amount of an invoice, thenWDC may pay the amount in dispute to Komag under protest and such amount shall not be consideredOverdue or subject to Komag’s rights and remedies in this Section 6.6, and the disputeshall be subject to the dispute resolution procedures in Section 12.4.     **6.7****Right of Offset**. WDC may immediately set off and recoup any amounts WDC(including its subsidiaries or Affiliates) owes Komag (including its subsidiaries and Affiliates),regardless of when payment is due, against any debt, credit or other obligation or liabilitypayable by Komag to WDC, including the [***] Balance (regardless of whether such debt, credit,obligation or liability arose out of or relates to this VPA) (the “**Offset**”), and suchOffset will be effective even if a receiver, custodian, trustee, examiner, liquidator or similarofficial has been appointed for Komag or any substantial portion of its assets, upon the occurrenceof the following events: 6.7.1.1 ten (10) business days after Komag’s receipt of written noticefrom WDC of Komag’s Material Default, unless such failure orperformance is corrected within such ten-
14

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIESAND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.   day period; or  6.7.1.2 the occurrence of any insolvency event describe in Section 9.3; or  6.7.1.3 assignment or attempted assignment in violation of Section12.4 ; or  6.7.1.4 any termination of this VPA by Komag under Section 9.2, inwhich case the Offset shall occur fifteen (15) Days after suchtermination.     After the Offset, in the event the [***] remains positive, Komag shall make a cash payment ofthe remaining [***] to WDC in a reasonable period of time not to exceed [***] Days. The rightsdescribed in this Section 6.7 are in addition to any other rights and remedies availableunder this VPA or applicable law.**ARTICLE 7: SHIPMENT AND DELIVERY OF PRODUCTS**     **7.1 Shipment of Product.**Delivery from JIT Hubs will be made DDU (i.e., the ICC standardshipping term for delivery duty unpaid), and liability for loss or damage to Products will pass toWDC upon Komag’s delivery of the Products to WDC. Delivery from Komag factory will be madeEXW-Komag factory (i.e., the ICC standard shipping term for Ex Works), unless the delivery is latein which case the delivery will be made DDU. As between the parties, Komag will bear the cost forinsurance relating to delivery of the Products. For deliveries within Malaysia or Thailand,Western Digital Malaysia SDN. BHD, or Western Digital (Thailand), respectively, will be the“importer of record” for GST purposes. Komag may deliver the Products in installments subject toSection 5.2. Unless otherwise agreed, all Products will be packaged and packed inaccordance with Komag’s normal practices. All Product packages shall be labeled in accordance withapplicable customs regulations. Komag may ship, determine freight forwarder, and provide deliverysupport by the method it deems most advantageous. WDC shall ensure that the freight forwarderselected by Komag may use WDC’s “Manufacturer’s Export Status” for shipments on behalf of WDC toThailand, so long as the parties mutually agree. Transportation charges are included in the UnitPrice. Komag shall deliver, upon request from WDC, appropriate import certificates for duties paidon Media purchased from Komag, imported by Komag into the United States and delivered to WDC in theUnited States.     **7.2 Late Delivery.**Komag shall notify WDC immediately if for any reason Komag fails to complyor anticipates that it may fail to comply with the timing terms of a Pull Request (*i.e.,*failure tomeet a Delivery Date). In the event of a late delivery, without limiting the rights and remediesavailable to WDC under this VPA, the parties will cooperate in good faith to minimize thedisruption caused to WDC by such late delivery.     **7.3 Export Regulations.**WDC and Komag shall comply with all export control laws andregulations applicable to the export or re-export of Products or any related technology. The partyundertaking such export or re-export shall be responsible
15

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.for obtaining any required documents, authorizations and approvals prior to any such export orre-export.**ARTICLE 8: WARRANTIES AND INTELLECTUAL PROPERTY INFRINGEMENT**     **8.1 WDC General Warranties.**WDC has the corporate power and authority to own its propertiesand to carry on its business as now being conducted and as contemplated to be conducted. WDC isduly qualified to do business and in good standing as a foreign corporation under the laws of eachjurisdiction in which the failure to be so qualified would have a material adverse effect on WDC.     **8.2 KOMAG Warranties**. For a period of one year from the date of Komag’s invoice for each Unitof Product (the “Warranty Period”), Komag represents and warrants that each Unit of Product is (i)free from defects in materials or workmanship and (ii) conforms to the Specifications. Komag will,at its option, replace, or furnish credit for any Product purchased by WDC from Komag which, asdetermined by the parties, fails to meet the foregoing warranties. THIS WARRANTY IS IN LIEU OF ALLOTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY INCLUDING THE WARRANTY OF MERCHANTABILITY AND THEWARRANTY OF FITNESS OR OF SUITABILITY FOR A PARTICULAR PURPOSE, AND OF ALL OTHER OBLIGATIONS ORLIABILITIES ON KOMAG’S PART, AND IT NEITHER ASSUMES NOR AUTHORIZES ANY OTHER PERSON TO ASSUME FORKOMAG ANY OTHER LIABILITIES IN CONNECTION WITH THE SALE OF THE PRODUCTS. This provision statesWDC’s exclusive and sole remedy for breach of warranty and the entire extent of Komag’s liabilityfor defective Products, except as may otherwise be determined by the parties in accordance withSection 8.4. This provision does not extend the original warranty period of any Product which asbeen repaired or replaced by Komag.     **8.3 Warranty Procedure.**The parties agree to use the return material authorization processdescribed in the Warranty Verification and Disposition flow chart set forth in **Exhibit E** tomanage and dispose of the Products returned to WDC under warranty.     **8.4 Epidemic Failure.**If during the Warranty Period, (i) (x) the failure rate of a WDC HDDproduct rises to a level that triggers an “Excessive Defect,” “Epidemic Defect,” or “ExcessiveFailure” clause, or a similar clause, in a contract, agreement or Purchase Order between WDC and aWDC customer (collectively, “**Epidemic Failure**”) and and (y) the defect causing the HDDfailures is attributable to a breach of Komag’s warranties in Section 8.2; or (ii) the AFRof the Product exceeds [***] percent [***]%); or (iii) a breach of Komag’s warranties inSection 8.2 result in a Stop Ship Order; then Komag and WDC shall meet to develop and agreeupon a mutually acceptable corrective action plan, which may include, upon mutual agreement of theparties, reasonable compensation to WDC for out-of-pocket expenses actually incurred in good faithto diagnose the defect, develop tests and remedies, promptly respond to customer inquiries andcomplaints, promptly return and replace such defective Product at WDC’s facilities,
16

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.at JIT Hubs, or otherwise positioned for use or consumption by WDC, replace the HDD in whichthe defective Product is located, and transport to a repair or returns center the HDD in which thedefective Product is located. Komag agrees to promptly notify WDC if it has reason to believe thatProducts are likely to present a safety risk to WDC personnel or WDC’s customers or if the AFR ofthe Products is expected to exceed [***] percent [***]%).     **8.5 Disclaimer.**THE WARRANTIES AND OBLIGATIONS OF THIS SECTION 8 WILL BE EXCLUSIVEAND IN LIEU OF ANY AND ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOTLIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGMENT,ALL OF WHICH ARE HEREBY EXPRESSLY DISCLAIMED.     **8.6 Infringement Indemnity**           **8.6.1 Indemnification by Komag.**Subject to Section 8.6.2, Komag shall, at its ownexpense, indemnify and hold WDC (including WDC’s Affiliates and personnel) harmless from andagainst any expense, loss or liability resulting from any actual or alleged infringement of anypatent, trademark, trade secret, copyright, mask work or other intellectual property right relatedto the Products, and Komag shall defend at its own expense, including attorney’s fees, any suitbrought or claim against WDC alleging any such infringement, provided that WDC gives Komag promptnotice of any such suit or claim and permits Komag, through counsel of Komag’s choice, to answerthe charge of infringement and defend such suit (but WDC may be represented by counsel andparticipate in the defense at its own expense), and WDC gives Komag all needed information,assistance and authority, at Komag’s expense, reasonably necessary for Komag to defend such suit.In the event that an infringement suit results in a judgment against WDC, Komag’s liability to WDCshall include without limitation all damages and costs awarded against WDC arising out of suchclaim, suit or proceeding.           **8.6.2 Exclusions.**Komag will have no obligation to indemnify and hold WDC (including WDC’sAffiliates and personnel) harmless against an intellectual property infringement claim underSection 8.6.1 to the extent that: (a) such infringement is required for compliance with WDCSpecifications, (b) the Product has been modified by a party other than Komag without Komag’sapproval and such claim would have been avoided but for such modification, or (c) such claim arisesfrom WDC’s combination of the Product with other products or devices, unless the Product is acomponent that would support liability for contributory infringement under 35 USC §271(c).           **8.6.3 Limited Remedies.**If the use of a Product is enjoined, or earlier at WDC’s option ifWDC reasonably believes such Product is likely to be found to infringe, Komag shall, in its solediscretion and at its own expense, either (a) procure for WDC the right to continue using, sellingand/or distributing such Product; (b) replace same with a non-infringing product that meets WDC’sSpecifications; (c) modify the Product so that it becomes non-infringing and meets WDC’sSpecifications; or (d) if Komag is unable to reasonably do any of the above, refund the Price forsuch Product.
17

 
           **8.6.4 License.**Sale of any Product or any part thereof by Komag does not confer upon WDC anylicense under any patent rights or copyrights, other than as necessary to allow WDC to use, haveused, disseminate, sell or distribute the Product as a Component of a WDC HDD.           **8.6.5 SOLE LIABILITY**. THIS SECTION 8.4 IS IN LIEU OF ALL OTHER EXPRESS, IMPLIED ORSTATUTORY WARRANTIES AGAINST INFRINGEMENT AND WILL BE THE SOLE AND EXCLUSIVE REMEDY FORINTELLECTUAL PROPERTY INFRINGEMENT OF ANY KIND.**ARTICLE 9: TERM AND TERMINATION**     **9.1 Term.**The term of this VPA shall be for eighteen (18) months from the date the NewCapacity is producing Product at full capacity (the “**Initial Term**”). The term of the VPAshall automatically be extended for an additional twelve (12) months beyond the Initial Term (the“**Second Term**”) unless either party gives written notice to the other party no later thansix (6) months prior to the end of the Initial Term that it does not want to extend the term of theVPA for the Second Term. In the event one party gives such notice of its desire not to extend,then unless the parties mutually agree otherwise, the VPA shall automatically be extended for anadditional six (6) months beyond the Initial Term and then terminate automatically at the end ofthe additional six- (6)-month period.     **9.2 Termination for Cause.**Either party may terminate this VPA in the event of a MaterialDefault (including the occurrence of a Force Majeure Event that causes a delay exceeding theTolling Period) of this VPA by the other party, upon notice to such other party, which notice mustdescribe the reason for such termination and must specify the termination date, which terminationdate must be no earlier than five (5) Days after the date of such notice. The parties acknowledgethat neither party will have the right to terminate this Agreement due to any breach of thisAgreement other than a Material Default or insolvency event under Section 9.3 or a ForceMajeure Event beyond the tolling period in Section 12.2; and in the case of such other breach,subject to Sections 10.2,11.6 and 6.5.4, the non-breaching party’s onlyremedy under this Agreement will be an action for damages.     **9.3 Termination for Insolvency.**This VPA may be terminated by either party by notice to theother party upon (i) the commencement by the other party of a voluntary or involuntary proceedingunder any federal, state, provincial or foreign bankruptcy law or similar law which is notdismissed within ninety (90) Days; (ii) the appointment for the other party of a receiver, trusteeor similar official or a general assignment for the benefit of such party’s creditors; (iii) thewinding up or liquidation of the other party; or (iv) a party becomes unable to pay its debtseither because it is subject to a Suspension of Payments order, bankruptcy, or other insolvencyproceeding. In the case of (i) to (iv) above, termination may also be effected by serving notice onthe liquidator, administrator, or receiver, as the case may be.
18

 
     **9.4 Rights Upon Termination.**           9.4.1 Disentanglement. Upon termination by either party for any reason under thisAgreement, Komag shall complete delivery and WDC shall accept delivery on all open Purchase Ordersand WDC shall pay for all Products properly delivered and invoiced in accordance with Article6, and Komag and WDC shall cooperate to ensure an orderly separation (collectively, a“Disentanglement”).           9.4.2 Termination by Komag or WDC. In the event that either Komag or WDC terminatesthis VPA pursuant to either Section 9.2 or Section 9.3, such termination is withoutprejudice to the terminating party’s rights to recover for damages with respect to the breach thatgave rise to the right to terminate.     **9.5 Survival.**The following provisions will survive the termination or expiration of this VPA:Articles 1, 2, 6, 8, 9.4, 10, 11, and 12, as well as any obligations arising before the effectivedate of termination or expiration.**ARTICLE 10: LIMITATION OF LIABILITY**     **10.1 Limitation of Liability.**EXCEPT FOR ARTICLE 11 (CONFIDENTIALITY), NEITHER PARTY SHALL BELIABLE TO THE OTHER FOR CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES EVEN IFADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR ARTICLE 11 (CONFIDENTIALITY) AND SECTION8.6 (INDEMNITY) AND A PARTY’S OBLIGATION TO MAKE PAYMENTS TO THE OTHER HEREUNDER, IN NO EVENT WILLEITHER PARTY’S LIABILITY UNDER THIS AGREEMENT EXCEED THE AMOUNTS ACTUALLY PAID OR PAYABLE (ORRECEIVED OR RECEIVABLE) UNDER THIS AGREEMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTHHEREIN, INCLUDING ARTICLE 8 AND SECTIONS 10.2, IN NO EVENT SHALL EITHER PARTY BE OBLIGATED ORREQUIRED TO PROVIDE ANY REMEDY OR ENGAGE IN ANY CONDUCT WHERE THE COSTS AND EXPENSES THAT WOULD BEINCURRED BY SUCH PARTY WOULD EXCEED THE FOREGOING LIMITATION ON DAMAGES.     **10.2 Performance.**Notwithstanding the foregoing, in light of the fact each of the partiesentered into this VPA in reliance on the full and faithful performance by the other party of itsobligations (including but not limited to purchase and sale obligations) hereunder, the partiesagree that damages would be an inadequate compensation for the breach by the parties of suchobligations and accordingly, upon any such breach, in addition to monetary damages, a party shallbe entitled to obtain an order for specific performance of such obligations at any court havingjurisdiction over the other party.     **10.3**EACH WDC SUBSIDIARY THAT ISSUES PURCHASE ORDERS TO KOMAG UNDER THIS AGREEMENT IS A THIRDPARTY BENEFICIARY OF THE RIGHTS AND REMEDIES AFFORDED WDC AS CONTAINED IN THIS AGREEMENT.
19

 
**ARTICLE 11: CONFIDENTIALITY**     **11.1 “****Confidential Information****”**means any information disclosed by one party (the**"****Disclosing Party****”)**to the other (the **"****Receiving Party****”)**in relation to this VPA,which, if in written, graphic, machine-readable or other tangible form is marked as"Confidential” or "Proprietary,” or which under the circumstances surroundingdisclosure or by the nature of the information, ought to be treated as confidential by theReceiving Party. Confidential Information includes, but is not limited to, product/servicespecifications or drawings, prototypes, product pricing, product roadmaps, volume projections,marketing plans, and financial data.     **11.2 Exclusions.**Notwithstanding Section 11.1, Confidential Information will excludeinformation that the Receiving Party can demonstrate:            11.2.1 was independently developed by the Receiving Party without any use of the DisclosingParty’s Confidential Information or by the Receiving Party’s employees or other agents (orindependent contractors hired by the Receiving Party) who have not been exposed to the DisclosingParty’s Confidential Information;            11.2.2 becomes known to the Receiving Party, without restriction, from a source other than theDisclosing Party without breach of this VPA and that had a right to disclose it;            11.2.3 was in the public domain at the time it was disclosed or becomes in the public domainthrough no act or omission of the Receiving Party; or            11.2.4 was rightfully known to the Receiving Party, without restriction, at the time ofdisclosure.     **11.3 Compelled Disclosure.**If a Receiving Party believes that it will be compelled by a courtor other authority to disclose Confidential Information of the Disclosing Party, it shall give theDisclosing Party prompt written notice so that the Disclosing Party may take steps to oppose suchdisclosure, and the Receiving Party shall assist in opposing such disclosure at the DisclosingParty’s expense. The parties agree that they shall work together to seek confidential treatmentfor certain confidential portions of this Agreement if required to be filed with the Securities andExchange Commission.     **11.4 Confidentiality Obligation.**During the term of this VPA and for a period of five yearsthereafter, the Receiving Party shall keep such Confidential Information in strict confidence andshall not disclose such Confidential Information to any third party without prior written consentof the Disclosing Party.     **11.5 Confidentiality of Agreement.**Each party agrees that the terms and conditions, but notthe existence, of this VPA will be treated as the other’s Confidential Information and that noreference to the terms and conditions of this VPA or to activities pertaining thereto can be madein any form of public or commercial advertising without the prior written consent of the otherparty; provided,however, that each party may
20

 
disclose the terms and conditions of this VPA: (i) subject to the provisions of Section11.3 as required by any court or other governmental body; (ii) as otherwise required by law(including, without limitation, any rule, regulation or policy statement of any national securitiesexchange, market or automated quotation system on which any of the Receiving Party’s securities arelisted or quoted); (iii) to legal counsel of the parties; (iv) in connection with the requirementsof a public offering, secondary offering, debt offering, or securities filing of the parties, orotherwise as obligated by law; (v) in confidence, to accountants, banks, and financing sources andtheir advisors; or (vi) in confidence, in connection with the enforcement of this VPA or rightsunder this VPA.     **11.6 Remedies.**Unauthorized use by a party of the other party’s Confidential Information willdiminish the value of such information. Therefore, if a party breaches any of its obligations withrespect to confidentiality or use of Confidential Information hereunder, the other party will beentitled to seek equitable relief to protect its interest therein, including injunctive relief, aswell as money damages.     **11.7 Non-disclosure Agreements.**Each party shall obtain the execution of proprietarynondisclosure agreements with its Affiliates, including but not limited to the party’s and/orAffiliates’ respective agents and consultants having access to Confidential Information of theother party, shall diligently enforce such agreements with respect to the Confidential Information,and shall exercise due care to control the actions of such Affiliates, employees, agents andconsultants in this respect so long as they have a working relationship with the party obligatedhereunder to obtain such nondisclosure agreements.**ARTICLE 12: GENERAL**     **12.1 Governing Law and Jurisdiction.**This VPA will be interpreted, and the rights andliabilities of the parties hereto determined, in accordance with the laws of the State ofCalifornia applicable to agreements executed, delivered and performed within such State, withoutregard to the principles of conflicts of laws thereof. Each of the parties hereby consents to thejurisdiction of any state or federal court located within the county of Santa Clara in the State ofCalifornia (except for resolution of pricing disputes as described in Section 6.2), andeach of the parties hereby: (i) waives any objection to venue of any action instituted under thisVPA, and (ii) consents to the granting of such legal or equitable relief as is deemed appropriateby any aforementioned court.     **12.2 Force Majeure.**Neither party shall be liable for its failure to perform any of itsobligations hereunder due to a Force Majeure Event (it being understood that a failure to make anypayments hereunder are not subject to this exception), provided that the party sufferingsuch delay immediately notifies the other party of the delay and providedfurtherthat the period of delay shall not exceed ninety (90) days (the**“****Tolling Period****”**). In theevent that the delay exceeds the Tolling Period, the non-breaching party may terminate this VPApursuant to Section 9.2.     **12.3 Trademarks.**Nothing in this VPA gives either party a right to use the other party’sname, trademark(s), or trade name(s), directly or indirectly, without the
21

 
other party’s prior written consent, except as may be required by applicable law or courtorder. In such a case, the party required to disclose such information shall provide prompt noticeof such requirement in order that the other party may seek appropriate protective orders.     **12.4 Dispute Resolution.**The parties agree that any material dispute between the partiesrelating to this VPA (other than pricing disputes governed by Section 6.2) shall be handledas follows: 12.4.1 First, the parties will submit the dispute to a panel of two seniorexecutives (Vice-President or more senior) of each party. Either party mayinitiate this proceeding by notifying the other party in writing pursuant tothe notice provisions of Section 12.11. Within five (5) Days from thedate of receipt of the notice, the parties’ executives shall confer (viatelephone or in person) in an effort to resolve such dispute (the “**FirstExecutive Conference**”). The decision of the executives shall be final andbinding on the parties. In the event that the executives are unable toresolve such dispute within twenty (20) Days after the First ExecutiveConference, then the parties shall follow the procedures set forth inSections 12.4.2 and 12.4.3 below. Each party’s executivesshall be identified by notice to the other party and may be changed at anytime thereafter also by notice to the other party.  12.4.2 In the event that the First Executive Conference does not resolve thedispute, the parties shall submit the dispute to JAMS, or any other mutuallyselected mediator (the “**Mediator**”) for non-binding mediation. Theparties will cooperate with the Mediator and with one another in selecting theMediator (in the case of JAMS, in selecting an individual to mediate fromJAM’s panel of neutrals), and in promptly scheduling the mediationproceedings. The parties covenant that they will participate in the mediationin good faith, and that they will share equally in its costs. All offers,promises, conduct and statements, whether oral or written, made in the courseof the mediation by any of the parties, their agents, employees, experts andattorneys, and by the Mediator, are confidential, privileged and inadmissiblefor any purpose, including impeachment, in any arbitration or other proceedinginvolving the parties, provided that evidence that is otherwiseadmissible or discoverable shall not be rendered inadmissible ornon-discoverable as a result of its use in the mediation. If the dispute isnot resolved within thirty (30) Days from the date of the submission of thedispute to mediation (or such later date as the parties may mutually agree inwriting), the dispute shall be submitted to arbitration in accordance withSection 12.4.3 below. The mediation may continue, if the parties soagree, after the
22

 
   appointment of the arbitrators. Unless otherwise agreed by the parties,the Mediator shall be disqualified from serving as arbitrator in the case.The pendency of a mediation shall not preclude a party from seekingprovisional remedies in aid of the arbitration from a court of appropriatejurisdiction, and the parties agree not to defend against any applicationfor provisional relief on the ground that a mediation is pending.  12.4.3 In the event the parties do not settle the dispute through mediation, theparties will submit the matter(s) to binding arbitration in San Francisco,California, in accordance with the Commercial Arbitration Rules of the AAA.Each party shall appoint one arbitrator, and the two arbitrators thusappointed will appoint a third arbitrator. The parties shall instruct thearbitrators to make a determination within thirty (30) Days after submissionof the dispute to arbitration. Each party shall bear its own arbitrationcosts and expenses; provided, however, that the arbitratorsmay modify the allocation of fees, costs and expenses in the award in thosecases where fairness dictates other than each party bearing its own fees,costs and expenses. The award shall be final and binding on the parties, andjudgment on the award may be entered in and enforced by any court of competentjurisdiction.     **12.5 Assignment.**Except as set forth in this Section 12.5, neither this Agreement,nor any of the rights or obligations hereunder, may be assigned, transferred, subcontracted ordelegated by a party hereto to any third party (other than a parent or subsidiary under commoncontrol with the assigning party), including without limitation, by operation of law or pursuant toa Change of Control (as defined below). Notwithstanding the foregoing, (a) Komag may assign thisAgreement, and the rights and obligations hereunder, without the prior consent of WDC, inconnection with a Change of Control and (b) WDC may assign this Agreement, and the rights andobligations hereunder, without the prior consent of Komag, to a third party in connection with aChange of Control; so long as WDC assigns all obligations under this Agreement to any party thatsucceeds to all or substantially all of WDC’s disk drive production business. For purposes of thisSection 12.5, **“****Change of Control****”**shall mean (i) any sale, lease, exchange or othertransfer (in one transaction or series of transactions) of all, or substantially all, of the assetsof such party, (ii) any consolidation or merger or other combination of a party in which such partyis not the continuing or surviving corporation or pursuant to which shares of such party’s commonstock would be converted into cash, securities or other property (other than a merger of such partyin which the holders of such party’s common stock immediately prior to the merger hold at least amajority of the outstanding securities of the combined entity), or (iii) any transaction (or seriesof related transactions) pursuant to which any person (as defined in Section 13 of the SecuritiesExchange Act of 1934, as amended (the **“****Exchange Act****”),**becomes the beneficial owner (asdefined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 35% or more of suchparty’s outstanding common stock. Any purported assignment of this VPA or the
23

 
rights or obligations of a party under this VPA in violation of this Section 12.5shall be null, void and of no further force or effect and shall constitute a Material Default.Notwithstanding the foregoing, in the event of a Change of Control of Komag with respect to aProhibited Assignee, WDC shall have the right to terminate this Agreement upon notice to Komag,which notice shall be effective, at WDC’s option, either immediately upon closing of thetransaction that results in such Change of Control, or such other later date as set forth in thenotice. In the event WDC decides to continue under the terms of this Agreement for any period oftime following the effective date of a Change of Control, Komag agrees that it shall (i) allowrepresentatives of WDC reasonable access to Komag’s manufacturing facility as WDC reasonablybelieves necessary in order for WDC to monitor and protect its interests under this Agreement and(ii) provide WDC with adequate assurances that WDC’s intellectual property, product roadmaps,Specifications and other Confidential Information is screened from and will not be disclosed toemployees that were employees of the Prohibited Assignee prior to the Change of Control.Notwithstanding the foregoing, in the event WDC reasonably believes that at any point following theChange in Control to a Prohibited Assignee that the Prohibited Assignee fails to demonstrate thecommitment and capacity to continue Komag’s management, technology, operations, and financing, andmeet Komag’s commitments to WDC under the Agreement, then WDC may terminate this VPA effectiveimmediately and neither such termination nor such failure to demonstrate such commitment orcapacity will constitute a Material Default by either party. In addition, Komag represents that itis not currently contemplating or in negotiations with any party regarding a Change of Control.**“****Prohibited Assignee****”**shall mean any third party who (x) engages as a substantial part ofits business in the manufacture of HDDs; or (y) engages as a substantial part of its business inthe manufacture of computer or software systems and who manufactures HDDs.     **12.6 Severability.**If any of the provisions of this VPA are held by a court or other tribunalof competent jurisdiction to be unenforceable, the remaining portions of this VPA will remain infull force and effect.     **12.7 Failure to Enforce.**The failure of either party to enforce at any time or for any periodof time the provisions of this VPA will not be construed to be a waiver of such provisions or ofthe right of such party to enforce each and every provision of this VPA in the future.     **12.8 Agency.**This VPA does not create a principal to agent, employer to employee, partnership,joint venture, or any other relationship except that of independent contractors between Komag andWDC.     **12.9 Request in Writing.**All requests such as Pull Requests, acceptances/rejections, notices,must be made or confirmed in writing. Such writings must take the form of electronic mail (receiptconfirmed), facsimile (receipt-confirmed) and/or posted letter (return-receipt).     **12.10 Counterparts.**This VPA may be executed in one or more counterparts, each of which willbe deemed to be an original, but all of which will be considered one
24

 
and the same instrument. A photocopy of a signature or a facsimile of a signature shall be asvalid as an original.     **12.11 Notices.**Except as otherwise provided herein, all notices hereunder will be deemed givenif (a) in writing and delivered personally; or (b) sent by facsimile transmission that is confirmedby return facsimile or e-mail; to the parties at the following addresses (or at such otheraddresses as will be specified by like notice):       (i) if to WDC, to:         Western Digital Technologies, Inc.    20511 Lake Forest Drive, Lake Forest, CA 92630    Attention: General Counsel    Fax No.: (949) 672-5444       (ii) if to Komag to:         Komag USA (Malaysia) Sdn.Bayan Lepas Free Trade Zone    Phase III    11900 Penang    Malaysia    FX: 011-604-643-9881Attention: Kheng Huat Oung, Vice President, GM, Media    Operations         With a copy to:         Komag, Incorporated    1710 Automation Parkway    San Jose, California 95131    Attention: Chief Financial Officer    Fax No.: (408) 944-9234         and         Wilson Sonsini Goodrich & Rosati, P.C.    650 Page Mill Road    Palo Alto, California 94304    Attention:   Page Mailliard, Esq.                         Selwyn Goldberg, Esq.    Fax No.: (650) 493-6811Any notice given by mail will be effective when received. Any notice given by electronic mail orfacsimile transmission will be effective when the appropriate electronic mail or facsimiletransmission acknowledgment is received.
25

 
     **12.12 Amendments.**This VPA may only be amended in writing signed by authorizedrepresentatives of each of the parties. To be effective, such amendments must specificallyreference this VPA.     **12.13 Complete Agreement.**This VPA, Exhibits, and specific Purchase Orders and Pull Requestsset forth the complete agreement between the parties regarding their subject matter and replace allprior or contemporaneous communications, understandings or agreements, written or oral, about thissubject.     **12.14 Performance During Pendency of Disputes.**If a dispute arises between the parties,regardless of whether such dispute requires the use of the procedures described in Section 6.2or Section 12.4, subject to the terms and conditions of this Agreement, (a) in no event nor forany reason shall Komag interrupt the provision of Products to WDC, delay manufacture or delivery ofProducts or perform any other action that prevents, slows down, or reduces in any way the provisionof Products or WDC’s ability to conduct its business; and (b) each party shall continue to performits obligations under this Agreement, unless: (x) authority to do so has been granted by the otherparty or conferred by a court of competent jurisdiction; or (y) this Agreement has been terminatedpursuant to Section 9.2 or Section 9.3 and a Disentanglement has occurred.     **12.15 Termination of Original VPA.**Pursuant to Section 9.1 of the Original VPA, byconsent of the parties, the Original VPA is hereby terminated and replaced in its entirety by theterms and conditions of this Agreement.
26

 
     IN WITNESS WHEREOF, the parties have caused this Volume Purchase Agreement to be signed andaccepted by their duly authorized representatives, effective as of the Effective Date.       Western Digital Technologies, Inc., Komag USA (Malaysia) Sdn.  a Delaware corporation. a Malaysian corporation           By: /s/ Marty Finkbeiner By: /s/ Kheng Huat Oung           Name: Marty Finkbeiner Name: Kheng Huat Oung  Title: Senior Vice President, Materials Title: Managing Director     Komag Incorporated  a Delaware corporation         By: /s/ Ray L. Martin           Name: Ray L. Martin    Title: Executive Vice President, Customer Sales & Service  
S-1

 
**EXHIBIT A****WDC Fiscal Quarters**         **FISCAL**        **QUARTER 1 2006**        Month Start Date End Date Weeks July 2005 07/02/2005 07/29/05  4 August 2005 07/30/05 08/26/05  4 September 2005 08/27/05 09/30/05  5          **FISCAL**        **QUARTER 2 2006**        October 2005 10/01/05 10/28/05  4 November 2005 10/29/05 11/25/05  4 December 2005 11/26/05 12/30/05  5          **FISCAL**        **QUARTER 3 2006**        January 2006 12/31/05 01/27/06  4 February 2006 01/28/06 02/24/06  4 March 2006 02/25/06 03/31/06  5          **FISCAL**        **QUARTER 4 2006**        April 2006 04/01/06 04/28/06  4 May 2006 04/29/06 05/26/06  4 June 2006 05/27/06 06/30/06  5 
A-1

 
         **FISCAL**        **QUARTER 1 2007**        July 2006 7/1/06 7/28/06  4 August 2006 7/29/06 8/25/06  4 September 2006 8/26/06 9/29/06  5          **FISCAL**        **QUARTER 2 2007**        October 2006 9/30/06 10/27/06  4 November 2006 10/28/06 11/24/06  4 December 2006 11/25/06 12/29/06  5          **FISCAL**        **QUARTER 3 2007**        January 2007 12/30/06 01/26/07  4 February 2007 01/27/07 02/26/07  4 March 2007 02/24/07 03/30/07  5          **FISCAL**        **QUARTER 4 2007**        April 2008 3/31/2007 4/27/2007  4 May 2008 4/28/2007 5/25/2007  4 June 2008 5/26/2007 6/29/2007  5 
A-2

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.**EXHIBIT B****PRICES**[***]
B-1

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.ADDITIONAL PAYMENT TERMS     WDC shall make [***]payments to Komag Inc. of[***] to be applied against [***] purchases ofProduct in accordance with this Exhibit as set forth below. [***]Payment [***] shall bemade by WDC on [***] and [***] in accordance with [***] **Exhibit D**. [***]. The partiesacknowledge that the [***] has already been paid and received. [***]Payment [***] shall be repaidby Komag, Inc. to WDC solely in accordance with [***] Section 6.7 and 4.3.3 of the VPA.     The parties agree that it is their mutual intent that [***]Payment [***] be used by the KomagGroup solely for manufacturing and operations in connection with the [***], and not for the KomagGroup’s general working capital purposes.     Starting no earlier than the first date that first production comes off the [***], and nolater than [***], Komag Inc. shall make payments monthly to WDC equal to [***] for each Unitinvoiced during the fiscal month, within 7 days after the fiscal month-end (regardless of whethersuch Unit was a result of [***] or previously existingcapacity) (the **“****Per Unit Offset****”**)[***], then the remainder of the [***] shall become due and payable to WDC at the end of theInitial Term, and Komag Inc. shall make such payment in a reasonable period of time not to exceed15 Days.
B-2

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.**EXHIBIT C****Stop Ship Order Procedures**[***]
C-1

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.**EXHIBIT D****Progress Milestones**[***]
D-1

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.**EXHIBIT E****Warranty Verification and Disposition Flow Chart**[***]
E-1

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.**EXHIBIT F****Volumes**   **Quarter** **Volume Requirement**[***]Fiscal Quarter [***] (*i.e.*, the quarter ending[***]) [***]Units   WDC [***]Fiscal Quarter [***] (*i.e.*, the quarter ending[***]) [***]Units   Each WDC Fiscal Quarter following the [***] FiscalQuarter [***] (*i.e.*, each quarter after the quarterending [***]) for the term of this VPA. [***]Units
 

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.**AMENDMENT NO. 1 TO VOLUME PURCHASE AGREEMENT**     This Amendment No. 1 to the Volume Purchase Agreement (this “**Amendment**”) is dated as of July22, 2005 (the **“Effective Date”**), and is made by and between Komag USA (Malaysia) Sdn., a Malaysiaunlimited liability company **(“****Komag****”),**Komag, Incorporated, a Delaware Corporation(**“Komag Inc.”**), and Western Digital Technologies, Inc., a Delaware corporation(**“WDC”**).**RECITALS**     A. WDC, Komag and Komag Inc. previously executed a Volume Purchase Agreement (the “**VPA**”)effective as of June 6, 2005.     B. WDC, Komag and Komag Inc. now desire to amend the Agreement in the manner and upon theterms and conditions hereinafter provided in this Amendment.     NOW, THEREFORE, for and in consideration of the mutual covenants herein contained and forother good and valuable consideration, the receipt and sufficiency of which are herebyacknowledged, the parties executing this Amendment hereby agree as follows:**AGREEMENT**     1. **Defined Terms**. Capitalized terms not defined herein shall have the meanings setforth in the VPA.     2. **Term**. Section 9.1 of the VPA is hereby deleted in its entirety and replaced withthe following:     9.1 Term. The term of this VPA shall be for eighteen (18) months from the date the NewCapacity is producing Product at full capacity, including capacity and volumes addedpursuant to Amendment No.1 to the VPA (the “Initial Term”). The Initial Term is currentlyexpected to begin [***]. The term of the VPA shall automatically be extended for anadditional twelve (12) months beyond the Initial Term (the “Second Term”) unless eitherparty gives written notice to the other party no later than six (6) months prior to the endof the Initial Term that it does not want to extend the term of the VPA for the Second Term.In the event one party gives such notice of its desire not to extend, then unless theparties mutually agree otherwise, the VPA shall automatically be extended for an additionalsix (6) months beyond the Initial Term and then terminate automatically at the end of theadditional six- (6)-month period.     3. **Exhibit B**. The second page of Exhibit B of the VPA is hereby deleted inits entirety and replaced with Exhibit B attached hereto.
 

 
     4. **Exhibit D**. Exhibit D of the VPA is hereby deleted in its entirety andreplaced with Exhibit D attached hereto.     5. **Exhibit F**. Exhibit F of the VPA is hereby deleted in its entirety andreplaced with Exhibit F attached hereto.     6. **Miscellaneous**. a. The references to “Section 6.5.4” in Section 4.3.3.4 of the VPA and Section 9.2of the VPA are hereby deleted and replaced with “Section 6.7”.  b. The reference to “Komag” in the last paragraph of Section 6.7 of the VPA ishereby deleted and replaced with “Komag Inc.”  c. The reference to “Section 8.4” in Section 8.6.5 of the VPA is hereby deletedand replaced with “Section 8.6”.     7. **Ratification of VPA**. In the event of an inconsistency between the terms of thisAmendment and the terms of the VPA, the terms of this Amendment shall control. Except as amendedhereby, the VPA is ratified, approved and confirmed and shall remain in full force and effect inaccordance with its terms without modification.     8. **Confidentiality**. Each party agrees that the terms and conditions, but not theexistence, of this Amendment will be treated as the other’s Confidential Information subject toSection 11 of the VPA.     9. **Entire Agreement**. The VPA, Exhibits, and specific Purchase Orders and PullRequests and this Amendment No. 1 set forth the complete agreement between the parties regardingtheir subject matter and replace all prior or contemporaneous communications, understandings oragreements, written or oral, about this subject.     10. **Counterparts**. This Amendment may be executed in one or more counterparts, each ofwhich will be deemed to be an original, but all of which will be considered one and the sameinstrument. A photocopy of a signature or a facsimile of a signature shall be as valid as anoriginal.
 

 
     IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to Volume Purchase Agreementto be signed and accepted by their duly authorized representatives, effective as of the EffectiveDate.           Western Digital Technologies, Inc., Komag USA (Malaysia) Sdn.  a Delaware corporation. a Malaysian corporation           By: /s/ Marty Finkbeiner By: /s/ Kheng Huat Oung           Name: Marty Finkbeiner Name: Kheng Huat Oung  Title:  Senior Vice President, Materials Title: Managing Director     Komag Incorporated  a Delaware corporation         By: /s/ Ray L. Martin           Name: Ray L. Martin    Title:  Executive Vice President, Customer Sales & Service  
 

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED ANDFILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.**EXHIBIT B****PRICES**ADDITIONAL PAYMENT TERMS     WDC shall make [***]payments to Komag Inc. in accordance with the schedule set forth below[***] to be applied against [***] purchases of Product in accordance with this Exhibit as set forthbelow:     [***]     [***]Payment [***] shall be made subject to [***] **Exhibit D**. [***]. The partiesacknowledge that the [***] has already been paid and received. [***]Payment [***] shall be repaidby Komag, Inc. to WDC solely in accordance with [***] Section 6.7 and 4.3.3 of the VPA.     The parties agree that it is their mutual intent that [***]Payment [***] be used by the KomagGroup solely for manufacturing and operations in connection with the [***], and not for the KomagGroup’s general working capital purposes.     Starting no earlier than the first date that first production comes off the [***], and nolater than [***], Komag Inc. shall make payments monthly to WDC equal to [***] for each Unitinvoiced during the fiscal month, within 7 days after the fiscal month-end (regardless of whethersuch Unit was a result of [***] or previously existingcapacity) (the **“****Per Unit Offset****”**)[***], then the remainder of the [***] shall become due and payable to WDC at the end of theInitial Term, and Komag Inc. shall make such payment in a reasonable period of time not to exceed15 Days.     Notwithstanding the foregoing, in the event WDC makes payment to Komag in accordance withSection 6.5 of the VPA for Units invoiced during [***], then the monthly payment by Komag Inc. toWDC referenced in the previous paragraph shall increase [***].
 

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.**EXHIBIT D****Progress Milestones**[***]
 

 
     PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.**EXHIBIT F****Volumes**   **Quarter** **Volume Requirement**[***]Fiscal Quarter [***] (*i.e.*, the quarter ending[***]) [***] Units   [***]Fiscal Quarter [***] (*i.e.*, the quarter ending[***]) [***]Units   [***]Fiscal Quarter [***] (*i.e.*, the quarter ending[***]) [***]Units   [***]Fiscal Quarter [***] (*i.e.*, the quarter ending[***]) [***]Units   Each WDC Fiscal Quarter following the [***] FiscalQuarter [***] (*i.e.*, each quarter after the quarterending [***]) for the term of this VPA. [***]Units