**Exhibit 10.1*****CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILEDHEREWITH OMITS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED AS[****]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION.**EXECUTION COPY****AGREEMENT**     This Agreement is entered into as of January 1, 2007 by and between **Williams AdvancedMaterials, Inc.**, a corporation organized under the laws of the State of New York with its principalplace of business at 2978 Main Street, Buffalo, New York 14214 (“WAM”) and Komag, Incorporated, acorporation organized under the laws of Delaware with its principal place of business at 1710Automation Parkway, San Jose, CA 95131 and, its wholly-owned subsidiary, Komag USA (Malaysia),Sdn., a corporation organized under the laws of Malaysia with its principal place of business atBayan Lepas Free Industrial Zone, Phase III, 11900 Penang (together “Purchaser”). WAM andPurchaser may be referred to herein individually as “Party” or collectively as “Parties”.     The Parties agree as follows:**1. Background**     This Agreement consists of terms and conditions as set forth below and all Exhibits hereto.     WAM has recognized capabilities in the manufacture and refining of the products specified inExhibits A.1 and A.2 hereto (the “Products”). WAM desires to offer the Products to Purchaser forsale, and Purchaser desires to purchase the Products from WAM.     [****]**2. Period of Performance**     The term of this Agreement shall commence as of the date set forth above and shall continueuntil [****] unless sooner terminated in accordance with this Agreement.**3. Forecast**

 

- 2 -     Purchaser will provide to WAM a [****] forecast for the Products [****] by February 2, 2007(the “Forecast”), which will be incorporated in this Agreement as Exhibit B. The Forecast is alegally binding commitment of Purchaser to purchase the Products and/or specified quantities of Ruin accordance with the terms hereof. The Forecast contains Purchaser’s estimates of new quantitiesof Ru necessary for the Products (“Virgin Ru”). [****] a. WAM is under no obligation to supply Ru material to Purchaser which isnot contained in the Forecast.  b. [****].  c. [****].**4. Pricing**     Purchaser shall pay WAM for the Products as set forth in Exhibit C hereto. The fabricationprices, as set forth on Exhibit C, shall not be subject to change for the term of the Agreement.Pricing on Exhibit C is guaranteed only for the quantities specified in Exhibit B (see note onExhibit B).     Payment terms are [****] for Ru metal from date of shipment of fabricated Product(s) and[****] for fabrication charges.     Pricing of Ru metal is determined by the metal pricing [****], or other cost basis establishedwith another qualified supplier from whom the Ru metal has been purchased; provided,however, that WAM shall use its best efforts to obtain a price for Ru that is equal to orlower than the price provided by [****] in the event that it elects to acquire Ru from anotherqualified supplier. However, the Parties hereto recognize that, despite using its best efforts asrequired herein, the price obtained from the qualified supplier by WAM may be greater than theprice provided by [****].**5. Availability, Delivery and Flexibility**     Subject to the terms of this Agreement, WAM shall be obligated to supply the Products toPurchaser in the monthly quantities stipulated in Exhibit B. Further to Purchaser’s minimumpurchase levels set forth in Exhibit B, Purchaser shall be obligated to accept each shipment perPurchaser’s Purchase Order delivery schedule, provided, however, the volumes in thepurchase orders in each month must be for the minimum levels set forth in Exhibit B.

 

- 3 -**6**A **Shipment, Risk of Loss and Title**     Title and risk of loss or damage for all Products shall pass to Purchaser upon [****]. WAMshall make all arrangements for shipment with a carrier specified by the Purchaser. [****] shallbe responsible for all shipping charges and insurance.**6. Product Refining**     The costs and procedures with regard to the refining of Products are set forth on Exhibit Dhereto.**7. Limited Warranty**     For a period of one year from the date of delivery of the Products (the “Warranty Period”),WAM represents and warrants that each Product is (i) free from defects in materials or workmanshipand (ii) conforms to the specifications. WAM will, at its option, replace, or furnish credit forfabrication charges and returned Ru weight, less refining charges, if any, for any Productpurchased by Komag from WAM which, as determined by the parties, fails to meet the foregoingwarranties. THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORYINCLUDING THE WARRANTY OF MERCHANTABILITY AND THE WARRANTY OF FITNESS OR OF SUITABILITY FOR APARTICULAR PURPOSE, AND OF ALL OTHER OBLIGATIONS OR LIABILITIES ON WAM’S PART, AND IT NEITHERASSUMES NOR AUTHORIZES ANY OTHER PERSON TO ASSUME FOR WAM ANY OTHER LIABILITIES IN CONNECTION WITHTHE SALE OF THE PRODUCTS. This provision states Komag’s exclusive and sole remedy for breach ofwarranty and the entire extent of WAM’s liability for defective Products. WAM is not obligated toreplace Products under this warranty: (a) when the damage to the Products resulted from improperuse; or (b) if personnel other than WAM’s representatives, without WAM’s prior written permission,modify the Products in any way.

 

- 4 -**8. Limitation of Liability**     TO THE EXTENT PERMITTED BY APPLICABLE LAW AND NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TOTHE CONTRARY, NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, ECONOMIC ORCONSEQUENTIAL DAMAGES OF ANY KIND, OR FOR ANY DAMAGES RESULTING FROM LOSS OR INTERRUPTION OFBUSINESS OR LOST PROFITS, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE SUBJECT MATTERHEREOF, HOWEVER CAUSED, EVEN IF SUCH PARTY WAS ADVISED OR SHOULD HAVE KNOWN OF THE POSSIBILITY OFSUCH LOSS OR DAMAGE.**9. Confidential Information**     Both WAM and Purchaser shall maintain as confidential and shall not disclose to any personoutside their employ, for use for purposes other than performance of this Agreement, anyspecifications, drawings, data, business and financial information, or other ConfidentialInformation which either Party learns by virtue of this Agreement, except as required by law andafter written notice to the other Party. If requested, upon termination of this Agreement, eachParty shall promptly return to the other Party all confidential information, including workingcopies thereof, in its possession and belonging to the other Party. Notwithstanding the foregoing,each party may disclose the terms and conditions of this Agreement: (i) as required by any court orother governmental body; (ii) as otherwise required by law (including, without limitation, anyrule, regulation or policy statement of any national securities exchange, market or automatedquotation system on which any of the receiving party’s securities are listed or quoted); (iii) tolegal counsel of the parties; (iv) in connection with the requirements of a public offering,secondary offering, debt offering, or securities filing of the parties, or otherwise as obligatedby law; (v) in confidence, to accountants, banks, and financing sources and their advisors; or (vi)in confidence, in connection with the enforcement of this Agreement or rights under this Agreement.In the event of (i), (ii), (iv) or (vi), each party agrees to redact terms that are not necessaryor required by the disclosure.     For purposes of this Agreement, “Confidential Information” means, in addition to what is setforth above any and all information which either Party designates as confidential at the time ofdisclosure except: (i) information in the public domain; (ii) information possessed by eitherParty prior to disclosure by the other Party, or developed independently, without reference to thedisclosed information; (iii) information furnished to others without restrictions similar to thoseimposed herein on the right of WAM or Purchaser to use or disclose it, and (iv) information whichbecomes rightfully known to

 

- 5 -either Party, without confidential restriction, from a source other than WAM or Purchaser. Theundertakings of this paragraph shall survive any expiration or termination of this Agreement.     THIS AGREEMENT AND ALL EXHIBITS ARE UNDERSTOOD TO BE CONFIDENTIAL INFORMATION NOT TO BEDISCLOSED OR USED BY WAM OR PURCHASER EXCEPT AS PROVIDED HEREIN.**10. Force Majeure**     Neither Party shall be liable for failure to perform any of its obligations under thisAgreement during any period in which such Party cannot perform due to fire, flood, earthquake, orother natural disaster, war, embargo, riot, labor dispute, interruption in the supply of rawmaterials for reasons beyond the control of WAM, or the intervention of any government authority,or any other reason beyond the reasonable control of such Party (each a “Force Majeure Event”),provided that the Party so delayed notifies the other Party of such delay. If WAM’s or Purchaser’sperformance is delayed on account of any Force Majeure Event for [****], the performing Party mayterminate this Agreement by giving the other Party notice, which termination shall become effectiveupon receipt of such written notice. In no event, shall exercise of this clause alleviatePurchaser of payment of any funds owed to WAM for Product already shipped to Purchaser.**11. Termination**     In addition to any rights or remedies available at law or in equity, either Party mayterminate this Agreement upon the occurrence of any one of the following:     In the event of a breach of a material obligation by either Party in the performance of theirobligations hereunder, the Party alleging the breach shall give written notice specifying thenature and extent of the breach to the other Party and such Party shall have [****] thereafter tocure the breach or have an agreed to corrective action plan in place. If the breach is not curedwithin the [****] period, termination shall become effective on the [****] following the writtennotice.     In the event of proceedings in bankruptcy or insolvency invoked by or against either Party, orin the event of the appointment of an assignee for the benefit of creditors or a receiver, theother party may elect to immediately terminate this Agreement by providing written notice of itselection to terminate.

 

- 6 -     Termination by WAM for cause will not terminate any obligation Purchaser may have to take andpay for any previously forecasted Product hereunder.**12. Notices**     Except as otherwise provided herein, all notices hereunder will be deemed given if (a) inwriting and delivered personally; or (b) sent by facsimile transmission that is confirmed by returnfacsimile or e-mail; to the parties at the following addresses (or at such other addresses as willbe specified by like notice):   (i) if to WAM, to:  Williams Advanced Materials, Inc.  2978 Main Street  Buffalo, NY 14214  Attention: General Counsel  Fax No.: (716) 835-0130  With a copy to:  Williams Advanced Materials  Thin Film Products Division  42 Mt. Ebo Road South  Brewster, NY 10509  Attention: Matthew Willson, VP and General Manager   (ii) if to Komag to:  Komag USA (Malaysia) Sdn.  Bayan Lepas Free Trade Zone  Phase III  11900 Penang  Malaysia  FX: 011-604-643-9881  Attention: 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

 

- 7 -     Wilson Sonsini Goodrich & Rosati, P.C.  650 Page Mill Road  Palo Alto, California 94304  Attention: Page Mailliard, 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.**13. Assignment**     Except as set forth in this Section 13, neither this Agreement, nor any of the rights orobligations hereunder, may be assigned, transferred, subcontracted or delegated by a party heretoto any third party (other than a parent or subsidiary under common control with the assigningparty), including without limitation, by operation of law or pursuant to a Change of Control (asdefined below). Notwithstanding the foregoing, (a) Purchaser may assign this Agreement, and therights and obligations hereunder, without the prior consent of WAM, in connection with a Change ofControl and (b) WAM may assign this Agreement, and the rights and obligations hereunder, withoutthe prior consent of Purchaser, to a third party in connection with a Change of Control; so long asWAM assigns all obligations under this Agreement to any party that succeeds to all or substantiallyall of WAM’s business. For purposes of this Section 13, “Change of Control” shall mean (i) anysale, lease, exchange or other transfer (in one transaction or series of transactions) of all, orsubstantially all, of the assets of such party, (ii) any consolidation or merger or othercombination of a party in which such party is not the continuing or surviving corporation orpursuant to which shares of such party’s common stock would be converted into cash, securities orother property (other than a merger of such party in which the holders of such party’s common stockimmediately prior to the merger hold at least a majority of the outstanding securities of thecombined entity), or (iii) any transaction (or series of related transactions) pursuant to whichany person (as defined in Section 13 of the Securities Exchange Act of 1934, as amended (the“Exchange Act”), becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act),directly or indirectly, of 35% or more of such party’s outstanding common stock. Any purportedassignment of this Agreement or the rights or obligations of a party under this Agreement inviolation of this Section 13 shall be null, void and of no further force or effect.Notwithstanding the foregoing, in the event of an assignment of this Agreement in connection with aChange of Control of Purchaser by a third party [****], no consent by WAM to such assignment shallbe required, but WAM may require

 

- 8 -the assignee to acknowledge in writing its acceptance of revised and accelerated payment termsunder Section 4 of this Agreement following such Change of Control.**14. Rights and Remedies**     All rights and remedies conferred by this Agreement or by law are cumulative and may beexercised singly or concurrently. If any provision of this Agreement is held invalid by any law orregulation of any government or by any court, such invalidity shall not effect the enforceabilityof any other provisions hereof.**15. Applicable Law**     This Agreement shall be governed by and construed under the laws of the State of New Yorkwithout regard to its conflicts of law provisions. The exclusive jurisdiction for the resolutionof any dispute arising out of this Agreement by mediation, arbitration or suit shall be in NewYork, New York.**16. Disputes**     The parties agree that any material dispute between the parties relating to this Agreementshall be handled as follows:16.1 First, the parties will submit the dispute to a panel of two senior executives(Vice-President or more senior) of each party. Either party may initiate thisproceeding by notifying the other party in writing pursuant to the notice provisionsof Section 12. Within five (5) Days from the date of receipt of the notice, theparties’ executives shall confer (via telephone or in person) in an effort toresolve such dispute (the “First Executive Conference”). The decision of theexecutives shall be final and binding on the parties. In the event that theexecutives are unable to resolve such dispute within twenty (20) Days after theFirst Executive Conference, then the parties shall follow the procedures set forthin Sections 16.2 and 16.3 below. Each party’s executives shall be identified bynotice to the other party and may be changed at any time thereafter also by noticeto the other party.16.2 In the event that the First Executive Conference does not resolve the dispute,the parties shall submit the dispute to JAMS, or any other mutually selectedmediator (the “Mediator”) for non-binding mediation. The parties will cooperatewith the Mediator and with one another in selecting the Mediator (in the case ofJAMS, in selecting an individual to mediate from

 

- 9 -JAM’s panel of neutrals), and in promptly scheduling the mediation proceedings. Theparties covenant that they will participate in the mediation in good faith, and thatthey will share equally in its costs. All offers, promises, conduct and statements,whether oral or written, made in the course of the mediation by any of the parties,their agents, employees, experts and attorneys, and by the Mediator, areconfidential, privileged and inadmissible for any purpose, including impeachment, inany arbitration or other proceeding involving the parties, provided that evidencethat is otherwise admissible or discoverable shall not be rendered inadmissible ornon-discoverable as a result of its use in the mediation. If the dispute is notresolved within thirty (30) Days from the date of the submission of the dispute tomediation (or such later date as the parties may mutually agree in writing), thedispute shall be submitted to arbitration in accordance with Section 16.3 below.The mediation may continue, if the parties so agree, after the appointment of thearbitrators. Unless otherwise agreed by the parties, the Mediator shall bedisqualified from serving as arbitrator in the case. The pendency of a mediationshall not preclude a party from seeking provisional remedies in aid of thearbitration from a court of appropriate jurisdiction, and the parties agree not todefend against any application for provisional relief on the ground that a mediationis pending.16.3 In the event the parties do not settle the dispute through mediation, theparties will submit the matter(s) to binding arbitration in New York, New York, inaccordance with the Commercial Arbitration Rules of the AAA. Each party shallappoint one arbitrator, and the two arbitrators thus appointed will appoint a thirdarbitrator. The parties shall instruct the arbitrators to make a determinationwithin thirty (30) Days after submission of the dispute to arbitration. Each partyshall bear its own arbitration costs and expenses; provided, however, that thearbitrators may modify the allocation of fees, costs and expenses in the award inthose cases 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.**17. General**     This Agreement is the complete and entire understanding between the Parties on the subjectmatter contained herein and supersedes all prior agreements, proposals,

 

- 10 -representations, statements, or understandings whether written or oral on this subject betweenthem. The provisions of this Agreement may be amended or waived only by a writing executed by theauthorized representatives of the Parties hereto.     In the event that either Party to this Agreement shall, on any occasion, fail to perform anyprovision of this Agreement, and the other Party does not enforce that provision, the failure toenforce shall not prevent enforcement of the provision on any other occasion.     Each Party, including its agents, and employees, is an independent contractor and not an agentor employee of the other. Without limiting the generality of the foregoing, neither Party isauthorized to represent or make any commitments on behalf of the other, and both Parties expresslydisclaim any liability therefore.     The headings contained herein are for reference purposes only and shall not in any way effectthe meaning or interpretation of this Agreement. This Agreement shall be construed without regardto the identity of the Party who drafted it, and each and every provision of this Agreement shallbe construed as though all of the Parties participated equally in the drafting.     **IN WITNESS WHEREOF**, the authorized representatives of the Parties represent that they haveread this Agreement, understand it and agree to be bound by it without exception by executing itbelow:         **WILLIAMS ADVANCED MATERIALS, INC.**           Signature By /s/ Richard W. Sager    Printed Name Richard W. Sager    Title President     Date 2/6/07            **KOMAG, INCORPORATED**           Signature By /s/ Tim Harris    Printed Name Tim Harris     Title CEO   

 

- 11 -         Date 2/5/07                   **KOMAG USA (MALAYSIA), SDN**           Signature By /s/ Tim Harris    Printed Name Tim Harris    Title Director     Date 2/5/07   

 

 **Exhibit A.1 (Komag) Rev 1****Williams Ruthenium Announcement – 06/06/06****As a leader in the Ruthenium sputtering target market, Williams Advanced Materials Thin FilmProducts, has officially standardized impurity reporting. Effective immediately, target purity**[****] **shall be based on**[****] **will also be reported.**[****] **will be guaranteed at less than**[****]**.**[****] **will only be reported. Williams Advanced Materials Thin Film Products remainspoised to satisfy the Ru demand of the data storage industry in a very dynamic market. Elementalimpurity limits as follows:**[****]

 

- 2 -**Exhibit A.2 (Komag) Rev 1**