exv10w1



 






EXHIBIT 10.1








***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED
HEREWITH 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 AND
EXCHANGE COMMISSION.




MEDIA SUPPLY AGREEMENT



This Media Supply Agreement (“Agreement”) is between Seagate Technology International (“Seagate”)
and Komag USA (Malaysia) Sdn. and Komag, Incorporated (collectively “Komag”). The individuals
signing this Agreement represent that they are authorized to sign on behalf of their companies.




	 	 	 
	Seagate Technology International
	 
	Signature:
	 	4/s/ David A. Wickersham
	Print Name:
	 	David A. Wickersham
	Title:
	 	Chief Operating Officer
	Date:
	 	July 4, 2005
	Address for
	 	Attn: Corporate Contracts
	Notices to
	 	c/o Seagate Technology LLC
	Seagate:
	 	920 Disc Drive, MS SV15A2
	 
	 	Scotts Valley, CA  95066
	 
	 	 
	Phone No.:
	 	831-439-7288
	Fax No.
	 	831-438-7132
	 
	 	 
	Effective Date:
	 	July 4, 2005
	Expiration Date:
	 	October 1, 2009 with automatic 1
	 
	 	year renewals
	Agreement No.
	 	31036
	 
	 	 
	Komag USA (Malaysia) Sdn.
	 
	 	 
	Signature:
	 	4/s/ Kheng Huat Oung
	Print Name:
	 	Kheng Huat Oung
	Title:
	 	VP, Managing Director
	Date:
	 	July 4, 2005
	Address for
	 	Attn: Kheng Haut Oung, VP
	Notices to Komag
	 	Komag USA (Malaysia) Sdn.
	 
	 	Bayan Lepas Free Industrial Zone,
	 
	 	Phase III
	 
	 	11900 Penang, Malaysia
	Phone No.:
	 	011-604-643-9449
	Fax No.
	 	011-604-644-8356
	 
	 	 
	Komag, Incorporated
	Signature:
	 	4/s/ Ray L. Martin
	 
	 	 
	Print Name:
	 	Ray L. Martin
	Title:
	 	Executive Vice President, Customer
	 
	 	Sales and Service
	Date:
	 	July 4, 2005
	Address for
	 	Komag, Incorporated
	Notices to Komag
	 	1710 Automation Parkway
	 
	 	San Jose, CA  95131-1873
	Phone No.:
	 	408-576-2206
	Fax No.
	 	408-894-0471





The parties agree as follows:




1. PRODUCT ORDERS 




     1.1. Product and Price List. Exhibit A provides a list of the media products
(“Products”) that Seagate may purchase from Komag and the prices that Komag will charge. Seagate
and Komag may update the price list from time to time by agreement to reflect changes to the
Products or prices.



     1.2. Purchase Orders. Seagate will order Product by submitting purchase orders to Komag.
Seagate’s purchase orders will contain, at a minimum: (a) Product description; (b) quantity; (c)
price; (d) Seagate’s ship-to and bill-to addresses; (e) requested delivery date; and (f) an
indication whether the Product is subject to sales tax.



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PORTIONS
DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.







Seagate may issue two types of purchase orders, “discrete” purchase orders and “blanket”
purchase orders, as described below:





     (a) Discrete Purchase Orders. A discrete purchase order is an order for a discrete
amount of Product to be delivered on a specified delivery date. Discrete purchase orders are
firm commitments by Seagate, but may be cancelled or rescheduled as specified in this
Agreement




     (b) Blanket Purchase Orders. A blanket purchase order is an order for an amount of
Product to be determined in the future and to be delivered over a period of time. Seagate
uses blanket purchase orders as an administrative convenience to track orders and to give
Komag a reference number for invoicing. Blanket purchase orders are treated as forecasts
only and are non-binding on Seagate.



     1.3. Order Acceptance. Komag will accept or reject discrete purchase orders placed under this
Agreement within [****]. After [****] days, if Komag does not notify Seagate otherwise, then the
order will be deemed accepted.



     1.4. This Agreement Controls. If the terms of this Agreement contradict the terms of any
purchase order or order acceptance, the terms of this Agreement will take precedence. No
boilerplate terms in either party’s order-tracking documents will apply. Terms in this Agreement
may only be modified in writing, signed by authorized Seagate and Komag personnel and must state
that the modified terms supersede the Media Supply Agreement dated July 4, 2005.



     1.5. Affiliated Purchasers. Seagate’s affiliates that control, are controlled by, or are under
common control with Seagate may purchase Products under this Agreement directly from Komag at the
same prices and on the same terms set forth in this Agreement.



     1.6. Contract Manufacturers. Seagate’s contract manufacturers may purchase Products under this
Agreement directly from Komag at the same prices and on the same terms as set forth in this
Agreement, so long as the contract manufacturer purchases the Products to incorporate into Seagate
products. Seagate’s contract manufacturers are not beneficiaries under this Agreement and are not
entitled to enforce this Agreement against either party. Komag is responsible for entering into
separate agreements with any Seagate contract manufacturers.



     1.7. Right to Incorporate and Resell. Seagate may incorporate the Products into Seagate
products and may resell the Products in any market Seagate elects, subject to export control
regulations.



2. PRICING 




     2.1. [****].



     2.2. Cost Reductions. Komag and Seagate will work together to reduce the costs and expenses to
make and deliver the Products to Seagate. If the costs or expenses decrease, Komag will work with
Seagate to lower the prices charged to Seagate accordingly.



3. SHIPMENT AND DELIVERY




     3.1. Incoterms. Unless specified otherwise, Komag will ship all Products to Seagate “DDU
DESTINATION.”




     (a) “DDU.” The term DDU means Delivered Duty Unpaid, as defined in International
Chamber of Commerce, Incoterms 2000. Komag will pay the costs of carriage and bear the risk
of loss to deliver the Products to Seagate’s destination. Komag will pay the costs and bear
the risk of loss for any warehousing before delivery to the destination.




     (b) “Destination.” Seagate’s destination will always be the incoming dock at Seagate’s
factory, regardless of whether the Products are shipped through an intermediary cross-dock
facility, or stored in a “just-in-time” warehouse or vendor managed inventory before
delivery to the incoming dock at Seagate’s factory.



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PORTIONS
DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.








     3.2. Just-in-Time Warehouse and Supplier Managed Inventory. If requested by Seagate, Komag
will establish a “just-in-time” inventory delivery system in a Seagate-designated and mutually
acceptable (not to be unreasonably withheld) warehouse (“JIT Warehouse”) or a supplier managed
inventory stocking location system at a Seagate-designated location on Seagate’s premises (“SMI
Stocking Location”) where Komag will maintain an inventory of its Products. Komag will be
responsible for the costs and risk of loss for its Products at the JIT Warehouse or SMI Stocking
Location. Komag will maintain a minimum of [****] of inventory, or other mutually acceptable
minimum stocking level of inventory of Products to be maintained in the JIT Warehouse or SMI
Stocking Location. Komag will replenish the JIT Warehouse or SMI Stocking Location to the minimum
stocking levels as Seagate pulls Products from either location. After receiving Seagate’s notice to
pull Product, Komag will have Products shipped from the JIT Warehouse or SMI Stocking Location to
Seagate. All Product shipped to the JIT warehouse will be covered by non-cancelable purchase orders
as described in Section 6.5.



     3.3. Import and Export Formalities. If Products will be exported or imported before arriving
at Seagate’s final ship-to destination, Komag will be the exporter of record and will be
responsible for performing all export formalities; Seagate will be the importer of record and will
be responsible for performing all import formalities. For imports to the United States, Suppler
will provide the customs clearance documentation specified in Exhibit B.



     3.4. On-Time Delivery. Continuity of supply is a material provision of this Agreement. If
Komag does not deliver any Product as set forth below, then Seagate may require Komag to ship
Product by an expedited mode of transportation at Komag’s expense.




     (a) Direct Orders. Komag will deliver Products to Seagate on the delivery date
specified in Seagate’s Order.




     (b) JIT and SMI Orders. Komag will ship Product to Seagate on the delivery date
specified in Seagate’s pull notice documentation and replenish the inventory of all JIT
Warehouses and SMI Stocking Locations to maintain the minimum stocking levels in the JIT
Warehouses and SMI Stocking Locations at all times.



     3.5. Packaging and Marking. Komag will mark the Products for shipment as designated by
Seagate. Komag will package the Products for shipment in accordance with standard commercial
practices acceptable to common carriers at the lowest shipping rate available. Komag’s shipping
containers must display: (a) the date of shipment; (b) Seagate’s order number; (c) the Product part
number; (d) the Product revision level and lot number; and (e) the quantity in the container.



     3.6. Order Placement. Purchase Orders for product manufactured in Komag’s Malaysian facilities
but destined for the U.S. should be placed with Komag, U.S. Purchase Orders for products
manufactured in Komag’s Malaysian facilities to be shipped to countries should be placed directly
with the appropriate Malaysian factory.



4. INVOICING AND PAYMENT




     4.1. Invoices and Payment Terms. Komag may invoice Seagate with each delivery. Payment will be
due [****]. Seagate’s local finance department may designate specific days of the month as
deadlines for submitting invoices. If Komag submits its invoice after the local invoice deadline,
then the invoice will not be deemed received by Seagate until the next invoice deadline.



     4.2. Right to Offset. If at any time Seagate has any credits owing from Komag, Seagate may
offset the credits against any payments due to Komag.



5. PRODUCT SPECIFICATIONS AND CHANGES




     5.1. Product Specifications. Komag will comply with the Product descriptions and
specifications referenced in Exhibit C, the Quality Standards identified in Exhibit
D, and any other agreed upon specifications, standard operating procedures, or processes
furnished or adopted by Seagate, including any samples furnished to and approved by Seagate
(collectively the “Specifications”).



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PORTIONS
DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.








     5.2. Specification Changes. Komag may not change the form, fit, or function of any Product, or
its manufacturing process or manufacturing location, without Seagate’s prior written approval.
Seagate may change the Specifications at any time. Komag will use its best efforts to comply with
the changes. [****].



     5.3. Product Information. Komag will provide the following information regarding the Products
to Seagate upon request:




     (a) a bill of materials that includes all material used in manufacturing or assembly
processes, and the related costs;




     (b) a list of component and process sub-suppliers;




     (c) a complete diagram flow chart for all Products with lead-time identified for key
process steps; and




     (d) a description of the Product manufacturing process and a list of the equipment used
in the manufacturing process.



     5.4. Seagate Property. Komag will return to Seagate any tools, drawings, or other materials
provided by Seagate at the termination of this Agreement or upon Seagate’s request.



     5.5. Komag Property. Seagate will return to Komag shipping cassettes used to transport media
and substrate products from Komag to Seagate. Cassettes must be returned in the condition
as-received by Seagate. Bulk shipping boxes and re-usable packaging will be returned by Seagate to
Komag in a condition consistent with wear and tear associated with normal shipping practices.



6. FORECASTS, CAPACITY PLANNING, AND FLEXIBILITY




     6.1. Forecasts. Seagate will provide forecasts to Komag from time to time as agreed between
the parties. Seagate’s forecasts are not binding on Seagate; however, Komag will secure and
allocate capacity in accordance with Seagate’s forecasts. Komag will treat any blanket purchase
order as a forecast for the purpose of allocating capacity.



     6.2. Capacity Planning. Komag will provide a written notice to Seagate within [****] days
after receiving Seagate’s forecasts, confirming it will meet Seagate’s forecasts. Komag will notify
Seagate immediately if it is unable to meet any forecast. Komag will procure and maintain all
necessary equipment, personnel, facilities, and other materials required to manufacture Products
according to the Specifications in volumes sufficient to meet Seagate’s forecasts. At Seagate’s
request, Komag will meet with Seagate to plan Komag’s capacity.



     6.3. End-of-Life Capacity. Komag will give Seagate at least [****] notice before it stops
accepting orders for any Product. During the 6-month notice period, Seagate may continue to place
orders for the discontinued Product. Seagate may schedule deliveries of the discontinued Product
for up to [****] after the last date that Komag will accept orders. Komag will continue to
manufacture and deliver the discontinued Product to Seagate to meet Seagate’s scheduled deliveries.
[****] deliver the discontinued Product to Seagate until Seagate has qualified a new source for the
discontinued Product.



     6.4. Upside Flexibility. [****].



     6.5. Downside Flexibility. Seagate may reschedule any delivery up to [****] beyond the
original delivery date. Seagate may cancel any purchase order, in whole or in part, as follows:




     (a) Cancellation without Charge. [****]. This does not include product already shipped
to the JIT hub which is covered by non-cancelable purchase orders:



[****]





     (b) Cancellation Fees. [****].



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PORTIONS
DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.









     (c) Duty to Mitigate. [****].



7.  PRODUCT WARRANTY




     7.1. Warranty Period. The warranty period for the Products will be fifteen (15) months from
the date of delivery to Seagate unless a different warranty period is specified in Exhibit
A.



     7.2. Warranties Terms. During the warranty period Komag warrants the following:




     (a) The Products will fully comply with the Specifications;




     (b) The Products will fully comply with Seagate’s Product Stewardship Requirements;




     (c) The Products will be free from defects in material, workmanship and design;




     (d) The Products will be of merchantable quality; and




     (e) The Products will be fit for the use intended by Seagate.



     7.3. Warranty Remedies. If the Products do not meet the warranties, Seagate may elect one or
more of the following remedies:




     (a) Seagate may require Komag to repair or replace the Products;




     (b) Seagate may return the Products to Komag at Komag’s expense for a full refund;




     (c) Seagate may correct the non-compliance and charge Komag for the cost to make the
correction.



     7.4. Remedies Nonexclusive. The remedies listed above are in addition to any other remedies
available to Seagate in law or equity. The obligation to provide repaired or replacement Products
during the warranty period continues whether or not Komag has discontinued manufacturing the
Products.



8. RELIANCE ON SUPPLIER




     8.1. Advice Regarding Intended Use. Seagate will rely on Komag’s expertise and advice in the
selection and use of Komag’s Products. Komag will assign personnel to work with Seagate who are
reasonably qualified to advise Seagate in the selection and use of Komag’s Products. Komag must
request relevant information from Seagate regarding Seagate’s selection and use of the Products,
and must notify Seagate if it believes that there are potential problems in Seagate’s selection and
use of the Products.



     8.2. Return of Product. If a Product does not function properly in the manner in which it is
used by Seagate, and if Seagate provided sufficient information to Komag regarding Seagate’s
intended use for the Product such that Komag should have known that the Product would not function
properly, then Seagate may return the Product to Komag as non-conforming.



     8.3. Limits on Reliance. Komag will have no obligation to accept return of non-conforming
Products under this Section 8, if Seagate does not disclose sufficient information about its
intended use of Products, or if Komag warns Seagate in writing of a potential problem with
Seagate’s intended use of Products and Seagate disregards Komag’s warnings.



9. ONGOING QUALITY AND RELIABILITY




     9.1. Quality Standards. Komag warrants that Products will meet the Quality Standards set
forth in Exhibit D, will be free from defects in material, workmanship, and design for the
warranty period identified in Section 7 of this Agreement, and will conform to the Specifications
(collectively “Quality Standards”). The warranty for the replaced or repaired Product will be the
same as the original Product. Komag will implement quality and reliability assurance measures to
ensure compliance with the foregoing and will report on such measures to Seagate at Seagate’s
request.



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PORTIONS
DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.








     9.2. Yield Benchmark. [****]. Seagate will make all reasonable efforts to notify Komag of
its plan to exercise its right not to purchase Product to minimize Komag’s inventory exposure.



     9.3. Line Fallout. The parties will work together on any ongoing basis to determine the cause
of any defects in Products that fail Seagate’s drive testing which Seagate determines are not due
to its assembly or disassembly process. Komag will provide a credit to Seagate based on mutually
agreed media-related or substrate-related defects.



     9.4. Product Stewardship Requirements. Seagate’s current Product Stewardship Requirements are
attached as Exhibit E. Seagate will update the Product Stewardship Requirements from time
to time and will make the updated versions available to Suppler. Updated versions of the Product
Stewardship Requirement will automatically be incorporated herein as part of this Agreement without
any further action by the parties. Komag must immediately notify Seagate if any of its Products
include chemicals or compounds in amounts that exceed the threshold amounts listed in the Product
Stewardship Requirements. Each shipment of Products to Seagate will constitute a certification by
Komag that the Products shipped meet the Product Stewardship Requirements. Upon Seagate’s request,
Komag will provide sufficient documentation to Seagate to show that the Products conform to the
Product Stewardship Requirements. Komag will maintain processes and policies designed to protect
the environment and employee health and safety at any facility where services related to this
Agreement are performed.



     9.5. ISO 9000 Certification. Komag must have a total quality system in place that meets ISO
9000 certification requirements. Komag will work toward QS 9000 certification, if not already QS
9000 certified.



     9.6. Manufacturing Process Inspections. Seagate may inspect Komag’s manufacturing locations,
warehouses, and other facilities during normal business hours with reasonable notice to Komag.
Komag will provide Seagate with its own inspection, quality and reliability data upon request.



     9.7. Corrective Action. Whenever a Product does not perform as warranted, Seagate may request
that Komag implement a containment plan within [****] after the failure. Komag must provide Seagate
with a detailed failure analysis identifying root cause within five days after the failure. Komag
will work with Seagate to determine the effect of the failures on Seagate’s products and customers;
and Komag will implement a corrective action plan that is acceptable to Seagate to eliminate the
effect of the failures on Seagate’s products and customers. Komag will maintain the effectiveness
of all corrective actions implemented as well as apply these corrective actions to other Products
when and where applicable.



     9.8. Epidemic Failure; Product Recall. If there are multiple Product failures due to the same
or related causes, or if any Products do not meet Seagate’s allowable DPPM described in the
Specifications, or Seagate’s Product Stewardship Requirements, then Seagate may require Komag to
accept return of all Products. Seagate may also elect to recall and return to Komag all Products
that have been incorporated into Seagate’s products and distributed to Seagate’s customers and end
users. If Seagate recalls Komag’s Products from Seagate’s customers or end users, Komag will
negotiate in good faith a settlement for the associated charges based on the actual and reasonable
costs associated with recalling and returning the Products. Seagate to provide documentation
detailing costs.



     9.9. Failure Rate. Seagate may measure the failure rates of the Products in rates in a number
of different ways. Komag will comply with the failure measurement system and failure rate limits as
designated by Seagate, which may include one or more of the following:




     (a) Annualized Return Rate. The parties will determine a common goal for the annualized
return rate (“ARR”) for each Product. Komag will report the actual ARR for each Product on a
monthly basis. If the actual ARR for any Product exceeds the ARR goal, then Komag will
designate a team that will determine root cause of the returns and will report to Seagate at
weekly meetings until the actual ARR for the Product is below the ARR goal.




     (b) [****].



     9.10. Supplier Quality Management Procedures. Komag will comply with the Seagate supplier
quality management procedures provide by Seagate Supplier Quality Engineering.



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     9.11. Product Acceptance. Products purchased under this Agreement will be subject to
inspection and test by Seagate or its designees at such times and places as agreed between the
parties. Unless otherwise specified in any order, final inspection and acceptance of Products by
Seagate will be at Seagate’s facilities.



10. CONTINUITY OF SUPPLY




     10.1. Disaster Recovery Plan. Komag must provide a written disaster recovery plan to Seagate
within 30 days after execution of this Agreement. The disaster recovery plan must demonstrate
Komag’s ability to ensure continuity of supply of the Products in the quantity forecasted by
Seagate and the quality required under this Agreement. Upon Seagate’s request, Komag will evaluate
and test its disaster recovery plan and certify to Seagate that the plan is fully operational.



11. CONFIDENTIALITY




     11.1. Marking Confidential Information. During this Agreement, each party may learn
confidential business or technical information related to the disclosing party (“Confidential
Information”). In order to be protected under this Agreement, any Confidential Information must be
clearly marked as “confidential”, “secret” or with a similar legend. No party will have any
responsibility under this Agreement for any information that is not so marked at the time of
disclosure. Any oral or visual disclosures must be designated as confidential at the time of the
disclosure and confirmed as confidential in a written notice delivered within 20 days after the
disclosure, describing the oral or visual information disclosed and stating that the information is
confidential.



     11.2. Nondisclosure. Each party will protect the Confidential Information of the other party
against unauthorized disclosure using the same degree of care, but no less than a reasonable care
as it uses to protect its own information of a similar kind. The Confidential Information may be
disclosed to employees, affiliates, or consultants of the recipient who have entered into
nondisclosure agreements with the recipient. Komag may only use Seagate’s Confidential Information
for the benefit of Seagate.



     11.3. Confidentiality Period. The duty to protect Confidential Information expires 2 years
after expiration of this Agreement.



     11.4. Exclusions. The obligation of confidentiality do not apply to information that (a) is
generally known to the public or otherwise in the public domain other than through breach of
confidentiality; (b) information that the other party can show was known to the recipient before
receipt from the disclosing party; (d) is disclosed by a third party without breach of any
obligation of confidentiality; (e) is independently developed by the recipient; or (f) is required
to be disclosed by a court, administrative agency, or other governmental body, or by operation of
law.



     11.5. Return of Information. Each party will return or destroy the Confidential Information of
the other upon request upon expiration or termination of this Agreement.



     11.6. Other Nondisclosure Agreements. The parties may also enter into separate nondisclosure
agreements governing specific disclosures. To the extent that the terms of any separate
nondisclosure agreements are more restrictive than the terms of this Agreement, then the more
restrictive terms will control for the specific disclosure.



     11.7. Publicity. Neither party may disclose the existence or terms of this Agreement to any
third party without the prior written consent of the other except as required by law or as
necessary to comply with other obligations stated in this Agreement. Neither party may issue any
press releases related to this Agreement without the written consent of the other party.



12. INDEMNIFICATION AND DEFENSE




     12.1. General Indemnification. Komag will defend and indemnify Seagate and Seagate’s
affiliates, directors, employees and contractors (collectively “Indemnitees”) against any claim or
action brought by a third party against an Indemnitee arising from (a) an allegation of Komag’s
negligence or willful misconduct; (b) any breach by Komag of its obligations to Seagate under this
Agreement, or (c) any breach by Komag of its obligations to Seagate under any other Agreement
between the parties.



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PORTIONS
DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.








     12.2. Infringement Indemnification. Komag will defend and indemnify each Indemnitee against
any claim or action brought by a third party against an Indemnitee, alleging that a Product
infringes a patent, copyright, trademark, trade secret, trade name, trade dress, mask work or other
intellectual property right.



     12.3. Indemnification Procedures. Seagate will promptly notify Komag of any claim or action
and provide Komag reasonable assistance and cooperation in the defense of the claim or action. Any
Indemnitee may, at its own cost, participate through its own attorneys in the investigation,
defense, settlement, or trial of the claim or action. Komag may not without consultation with
Seagate enter into any settlement of any claim or action that involves a remedy other than the
payment of money or receipt of license to permit continued supply of Product by Komag. If Komag
does not defend the claim or action to the reasonable satisfaction of Seagate, Seagate may, after
consultation with Komag, assume full control of the defense.



     12.4. Payment of Damages and Defense Costs. Komag will pay all damages awarded or agreed to in
settlement against an Indemnitee. Komag will pay all reasonable costs incurred by an Indemnitee in
defending the claim or action. Komag will not be obligated to pay damages to an Indemnitee to the
extent that the damages were caused by (a) an Indemnitee’s own gross misconduct; (b) an
Indemnitee’s use of Komag’s Products in combination with other products if the sole cause of the
infringement is the other products; or (c) an Indemnitee’s modification to the Products made
without Komag’s knowledge.



13. LIMITATION OF LIABILITY




     13.1. Limitation of Amount of Liability. Seagate will not be liable to Komag, regardless of
the basis of liability or the form of action, for any amounts exceeding the total price paid by
Seagate to Komag, net of all discounts and refunds, over the 12-month period before the liability
arose.



     13.2. Limitation of Type of Liability. Seagate will not be liable to Komag for any
consequential, incidental, indirect, special, economic, or punitive damages even if Seagate has
been advised of the possibility of such damages.



14. TERM AND TERMINATION 




     14.1. [****]



     14.2. [****]



     14.3. [****]



     14.4. [****]



     14.5. [****]



     14.6. [****]



15. DISPUTE RESOLUTION




     15.1. Good-Faith Negotiation. The parties will attempt to resolve any dispute relating to this
Agreement through good-faith informal negotiation.



     15.2. Mediation. If the parties are unable to resolve the dispute through good faith informal
negotiation, they will participate in mediation before an agreed mediator from Judicial Arbitration
and Mediation Services (“JAMS”). Either party may initiate mediation by providing a written request
for mediation to the other party and to JAMS. The request must describe the dispute and the relief
requested. The mediation will be scheduled within ten business days after the request. The
mediation will take place at a JAMS facility in California. The parties will cooperate with JAMS
and with one another in selecting a mediator from a JAMS panel of neutrals, and in scheduling the
mediation proceedings. The parties will participate in the mediation in good faith. The parties
will bear their own expenses in mediation, but will share all fees to JAMS equally.



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     15.3. Arbitration. If the parties are unable to resolve the dispute through mediation, they
will submit the dispute to final, binding arbitration under Rules of Arbitration of the
International Chamber of Commerce (“ICC Rules”). Either party may initiate arbitration by providing
a written request for arbitration to the other party and to the International Chamber of Commerce.
The arbitration will be held in Santa Clara County, California, USA. If the amount of the claim is
less than US $1,000,000, then one arbitrator will conduct the arbitration. If the amount in dispute
is equal to or greater than US $1,000,000, then a panel of three arbitrators will conduct the
arbitration. The arbitrator or arbitrators will be selected in accordance with the ICC Rules and
must have expertise in the subject matter of the dispute. The arbitrator or arbitrators may award
specific performance, injunctions, or other equitable relief. Judgment upon any arbitration award
may be entered in any court with jurisdiction over either party. If either party fails to appear at
any properly noticed arbitration proceeding, an award may be entered against the absent party. The
parties will bear their own expenses in mediation, but will share all fees to ICC equally.



     15.4. Equitable Relief Excluded. Either party may seek equitable relief to enforce the rights
granted in Sections 10, 11, or 12 or to obtain a temporary restraining order or other provisional
remedy to preserve the status quo or prevent irreparable harm.



     15.5. Survival and Attorney’s Fees. This Section 15 will survive the Agreement’s termination
or expiration. This Section 15 may be enforced by any court of competent jurisdiction, and a party
seeking enforcement will be entitled to an award of all costs, fees and expenses, including
attorney’s fees, to be paid by the party against whom enforcement is ordered.



16. INSURANCE




     16.1. Minimum Insurance Requirements. Komag will maintain Commercial General Liability
insurance of not less than $2,000,000 Combined Single Limit for Bodily Injury and Property Damage.
Komag’s general liability insurance must include coverage for broad form property damage, blanket
contractual liability, advertising and personal injury liability, and products/completed
operations. Komag’s insurance must name Seagate, its officers, employees and agents as additional
insureds. Komag will also maintain Automobile Liability insurance with a combined single limit for
Bodily Injury and Property Damage of not less than $1,000,000 per occurrence. Komag may maintain a
lesser limit of General Liability or Automobile Liability insurance if the policy, combined with
Komag’s Umbrella or Excess Liability policy, meets the respective minimum coverage limits for
General Liability and Automobile Liability insurance required under this Agreement.



     16.2. Workers’ Compensation and Employer’s Liability Insurance. If Komag has employees or
acquires employees during the term of this Agreement, then Komag must maintain Workers’
Compensation insurance as required by statute; and Employer’s Liability insurance in not less than
the amounts that follow (or as otherwise required by applicable state law). The policy must permit
(or be endorsed to permit) Komag’s waiver of insurer’s subrogation rights against Seagate and Komag
agrees to waive its subrogation rights.



	 	 	 	 	 	 	 
	 

	 	(a)
	 	Bodily injury by accident
	 	$500,000 per accident
	 
	 	 	 	 	 	 
	 

	 	(b)
	 	Policy limit by disease
	 	$500,000 policy limit
	 
	 	 	 	 	 	 
	 

	 	(c)
	 	Bodily injury by disease
	 	$500,000 per employee






     16.3. Proof of Insurance and General Requirements. Komag’s required insurance must (a) respond
as primary coverage concerning Komag’s indemnity and insurance obligations under this Agreement and
neither Seagate nor its insurers will be required to pay for any portion of such obligations; and
(b) contain a standard cross liability endorsement or severability of interest clause. Komag must
provide Seagate with proof of insurance satisfactory to Seagate. Komag will immediately notify
Seagate of any material change in its insurance. Komag’s certificate of insurance must provide that
no cancellation of the insurance will be effective without ten days’ advance written notice to
Seagate. In no event will any required insurance coverage or limits reduce Komag’s obligations to
Seagate under this Agreement.



17. MISCELLANEOUS




     17.1. Relationship of the Parties. Komag and Seagate are independent contractors.



-9-









 











     17.2. No Intellectual Property Rights Granted. Except as expressly provided, this Agreement
does not grant either party any right to the other party’s patents, copyrights, trademarks, trade
secrets, or other forms of intellectual property.



     17.3. Assignment. Due to the nature of each party’s duties and Seagate’s reliance on Komag’s
performance in supplying Products, Seagate may assign this Agreement to any third party upon
written notice to Komag, with Komag’s consent. Komag may assign this Agreement only with the prior
written consent of Seagate. The transfer of a controlling ownership interest in Komag will
constitute an assignment for purposes of this section. This Agreement will be binding upon and will
inure to the benefit of the parties and their permitted successors and assigns.



     17.4. Compliance with all Laws. Komag, and all Products supplied by Komag and work performed
by Komag, must comply with all applicable laws and regulations in effect, including those governing
environment, health and safety, and labor and employment practices. Komag must require that its
sub-suppliers also comply with all applicable laws and regulations in effect. Upon request, Komag
will certify that it complies with all applicable laws and regulations. Seagate may audit Komag to
confirm Komag’s compliance with this Section.



     17.5. Export Controls. Each party will comply with all applicable export, re-export and
foreign policy controls and restrictions imposed by the U.S. and the country in which they are
located, including the U.S. Export Administration Regulations. Komag may not export, re-export or
allow to be disclosed, any technical data received from Seagate or the product of any technical
data to any person or destination to the extent prohibited by law.



     17.6. English Language; Governing Law. English is the authoritative text of this Agreement,
and all communications and proceedings must be conducted in English. If this Agreement is
translated, then the English language version will control. The laws of the State of California,
USA govern this Agreement, without regard to any conflicts of laws rules. The United Nations
Convention on Contracts for International Sale of Goods does not apply to this Agreement.



     17.7. Force Majeure. Neither party will be liable to the other if its performance is delayed
by acts of nature beyond its control. If a force majeure condition prevents Komag’s performance for
more than 60 days, then Seagate may terminate this Agreement or cancel any unfilled orders without
liability owed to Komag.



     17.8. Severability; Survival. The terms of this Agreement are severable. If any term is
unenforceable for any reason, then that term will be enforced to the fullest extent possible, and
the Agreement will remain in effect. All obligations that by their terms or nature survive
termination of this Agreement will continue until fully performed.



     17.9. Written Amendments; Electronic Business Transactions. This Agreement may be changed only
by written amendment signed by both parties. The parties may exchange electronic documents in lieu
of printed purchase orders, order acknowledgments, or forecasts. Komag will comply with Seagate’s
designated system of exchanging electronic documents and will bear its own costs to participate in
the system. Neither party will contest the validity or enforceability of electronically transmitted
purchase orders or order acknowledgments on the grounds that they fail to comply with the Statute
of Frauds or similar laws requiring that contracts be in writing (such as UCC Section 2-201 or any
state-law equivalent). Neither party is prohibited from asserting that an electronic document is
invalid for any reason that would also invalidate a written document.



     17.10. Entire Agreement; No Waiver; Notices. This Agreement and the documents referred to in
it are the entire agreement of the parties with respect to this subject matter, superseding all
prior or contemporaneous agreements. No failure or delay in exercising any right will be considered
a waiver of that right. All notices and other communications must be delivered to the addresses
designated on the first page of this Agreement.



-10-









 





PORTIONS
DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.








EXHIBIT A

PRODUCT AND PRICE LIST




	 	 	 	 	 	 	 	 	 
	Product

	 	Komag
	 	Seagate	 	 	 	 
	Description

	 	Part No.
	 	Part No.
	 	Unit
	 	Price





[****]




-11-









 













EXHIBIT B

CUSTOMS CLEARANCE DOCUMENTATION



For Product that must be cleared through customs, Komag must provide customs documentation
(sometimes referred to as a “proforma invoice” or “customs invoice”) for the purpose of
facilitating customs clearance. The customs documentation must be in English and must include the
following information:




1. SHIPPING INFORMATION





	 	§	 	Date of shipment;
	 
	 	§	 	Invoice number and shipment number;
	 
	 	§	 	Seagate purchase order number;
	 
	 	§	 	Shipper name and address;
	 
	 	§	 	Ship to party (name and address including attention party if available) and bill to
party (name and address);
	 
	 	§	 	Custom Broker (name);
	 
	 	§	 	Shipments from all countries, except China or Hong Kong, using wood pallets must state
“the solid wood packing materials are totally free from bark, and apparently free from live
plant pests”;
	 
	 	§	 	Shipments from China or Hong Kong, not using solid wood packing materials (“SWPM”) must
state “this shipment contains no SWPM.” If SWPM is used, a separate Chinese or Hong Kong
government issued certificate of fumigation is required”;
	 
	 	§	 	Name, contact information and signature of responsible individual — must be a
responsible employee of the exporter who has knowledge or who can readily obtain knowledge
of the transaction;
	 
	 	§	 	Incoterm and named place; and
	 
	 	§	 	Shipment gross weight.





2. PRODUCT INFORMATION





	 	§	 	Description of Product, grade or quality, as well as marks, numbers, and symbols under
which the Product is sold, if applicable — for product description, use generic terms by
which each item is commonly known.
	 
	 	§	 	Product quantities, including quantity of Product per each individual package/box, the
number of packages/boxes, the number per pallet, the number of pallets, and the
corresponding weights – the information must be sufficiently detailed to enable
identification and matching of Product in the shipment against line items on the shipping
invoice;
	 
	 	§	 	Seagate part numbers
	 
	 	§	 	Country of origin (place of manufacture) by part and quantity
	 
	 	§	 	FCC ID number, if any
	 
	 	§	 	FDA accession number, if any; if the invoice contains multiple pages, each page must be
number, preferably in the following format: X of Y pages
	 
	 	§	 	Product net weight
	 
	 	§	 	Product classification information including:






	 	o	 	Harmonized Tariff Schedule number
	 
	 	o	 	Export Control Classification Number (ECCN)





3. PRICING INFORMATION





	 	§	 	Unit purchase price and type of currency (if the merchandise is not purchased, the value
or usual price in the country or exportation)
	 
	 	§	 	All charges upon the Product, itemized by name and amount, including freight, insurance,
commission, cases, containers, coverings and cost of packing




-12-









 

















	 	§	 	Total purchase price and terms of payment – customs regulations require every shipping
invoice accurately reflect the price to be paid by Seagate. The shipping invoices are used
to declare the value of the imported Product for customs entry. Accordingly, 100% accuracy
is required. Post-shipment price increases can render declarations inaccurate; therefore,
price increases may not be applied to Product already shipped or in JIT or VMI inventories.




Any goods or services furnished to Komag for the production of the Product not included in the
invoice price (e.g. assists such as dies, molds, tools, engineering work) — however, goods or
services furnished in the destination country are excluded.




4. GLOBAL SUPPLY CHAIN SECURITY PROGRAMS



In addition to the customs documentation listed above, Komag will provide Seagate with verification
that they have reviewed their supply chain processes and have the appropriate security measures in
place to guard against cargo theft and cargo terrorism. Komag will conduct a self-audit of its
transit lanes and of the carriers that are bringing the Products into the USA.



If Komag is eligible to participate in the US Customs-Trade Partnership Against Terrorism
(“C-TPAT”) program, Seagate may require that supplier apply for participation and Komag will
provide Seagate with written updates regarding the status of Komag’s C-TPAT application every 90
days. Upon acceptance, Komag will provide Seagate with a copy of its Memorandum of Understanding
with U.S. Customs and Border Protection and a copy of its C-TPAT compliance certificate.



Seagate may require Komag to apply for and participate in similar programs in other jurisdictions
as they are implemented and as Komag becomes eligible, such as the New Computerized Transit System
(“NCTS”) proposed for the European Union.




-13-









 





PORTIONS
DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.








EXHIBIT C

PRODUCT DESCRIPTION AND SPECIFICATIONS INCORPORATED BY REFERENCE




[****]




-14-









 





PORTIONS
DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.








EXHIBIT D

QUALITY STANDARDS

Commitment to Quality Requirement




[****]





-15-









 





PORTIONS
DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.




	 	 	 	 	 
	

Seagate Technology LLC

	 	SUPPLIER

PRODUCT

STEWARDSHIP/RoHS

REQUIREMENTS
	 	
Doc Number: D0000083923

Number Range: N/A

Revision: A

Sheet 1 of 10





 





EXHIBIT E

PRODUCT STEWARDSHIP REQUIREMENTS




[****]




	 	 	 	 	 
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REQUIREMENTS
	 	
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	1.0	 	APPLICABILITY






This Specification applies to:




	 	•	 	All parts, components, subsystems and materials (“Products”) that are
supplied for assembly into products sold by Seagate, and
	 
	 	•	 	All packaging (“Packaging”) for Seagate products that reach final
customers, and all collateral materials (such as instruction manuals,
advertising, etc.) that will be delivered with the product.






This Specification does not apply to indirect materials that are supplied to
Seagate unless these are assembled into Seagate products.




	2.0	 	PURPOSE






The purpose of this Specification is to establish specific requirements for Products that are supplied to Seagate
to ensure that Seagate disc drives meet regulatory and customer requirements. The requirements of this Specification
are based on Seagate’s internal Product Stewardship Standard Operating Procedure, which is periodically updated to
reflect the following:




	 	•	 	Requirements of legislation in countries where Seagate products are sold or manufactured, and
	 
	 	•	 	Requirements of customers regarding products, packaging, user documentation, and
manufacturing processes.






	3.0	 	REQUIREMENTS AND DOCUMENTATION






	 	3.1	 	Requirements. Products, Packaging and manufacturing processes must meet the
requirements of this Specification. Suppliers must ensure that Products and Packaging
do not contain the restricted materials and substances listed in Section 4.0 of this
Specification, in amounts exceeding the specified limits. In addition, Products must
meet the requirements in Section 5.0.
	 
	 	3.2	 	Compliance Documentation. Suppliers will be required to report on the status of
their compliance with this Specification during qualification of their Products and
Packaging with Seagate and at other times designated by Seagate. To report status of
compliance, Suppliers must complete a Product Stewardship Certificate and/or other
documentation as specified by Seagate. The current version of the Product Stewardship
Certificate that must be used by suppliers to report status of compliance can be
obtained from the Seagate Supplier Quality Engineering organization. If the Supplier’s
Product contains plastic (including external cables), resin, rubber, paint or ink, an
analytical report indicating presence of cadmium (see Section 5.0) must also be
provided. In addition, Seagate may require analytical testing for the presence of
additional compounds for selected parts, components or materials. Unless specifically
requested, however, suppliers are not required to provide analytical results in support
of their Certificate.






A supplier must notify Seagate if they determine at any time that their Product is not
in compliance with this Specification. Seagate will work with the supplier to
evaluate and resolve the non-compliance.




	 	3.2	 	Records. Supplier must maintain sufficient documentation regarding its Products
and Packaging to support any representations of their compliance status provided in the
Product Stewardship Certificate. Supplier must retain its





	 	 	 	 	 
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documentation and make the documentation available to Seagate upon request for a
minimum of 3 years from the last date the Products or Packaging are shipped to
Seagate.




	4.0	 	RESTRICTED MATERIALS AND SUBSTANCES






	 	4.1	 	Requirements and exemptions related to lead (Pb), mercury (Hg), cadmium (Cd),
hexavalent chromium (Cr+6), polybrominated biphenyl (PBB) flame retardants,
and polybrominated diphenyl ether (PBDE) flame retardants.






The following substances are restricted by the European Restriction on Hazardous
Substances (RoHS) Directive, as well as by Seagate customers: Lead (Pb), mercury (Hg),
cadmium (Cd), hexavalent chromium (Cr+6), polybrominated biphenyl (PBB) flame
retardants, and polybrominated diphenyl ether (PBDE) flame retardants.




Maximum acceptable concentration levels for these substances have not yet been established by
the European Union. These substances may not be intentionally added to Products and
materials supplied to Seagate. Seagate recognizes that these substances may be present as
contaminants (impurities) in manufacturing processes. The following maximum impurity levels
apply to materials or materials used in parts supplied to Seagate:



	 	 	 	 	 
	Substance	 	Application	 	Maximum Impurity Acceptable
	Lead

	 	Plastic, resin,
rubber, paint, ink and
lacquer
	 	100 ppm
	 

	 	External cable and
overmold insulation
	 	300 ppm
	 

	 	All other applications
	 	1000 ppm
	Mercury

	 	Pigment, paint, and ink
	 	Zero
	 

	 	All other applications
	 	5 ppm
	Cadmium

	 	Plastic, resin,
rubber, resin, paint
ink and lacquer
	 	5 ppm
	 

	 	All other applications
	 	25 ppm
	Hexavalent Chromium

	 	All applications
	 	100 ppm
	Polybrominated
biphenyl (PBB)
flame retardants

	 	All applications
	 	1000 ppm
	Polybominated
diphenyl ether
(PBDE) flame
retardants

	 	All applications
	 	1000 ppm






     Exemptions applicable to parts and components supplied to Seagate are as follows:




	 	•	 	Lead (Pb) in the glass of electronic components;
	 
	 	•	 	Lead (Pb) as an alloying element in steel containing up to 0.35% lead by weight, aluminum
containing up to 0.4% lead by weight, and as a copper alloy containing up to 4% lead by weight;
	 
	 	•	 	Lead (Pb) in electronic ceramic parts (e.g., piezoelectronic devices); and
	 
	 	•	 	Lead (Pb) in high melting temperature type solders (i.e. tin-lead solder alloys containing more than
85% lead).





	 	 	 	 	 
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	 	4.2	 	Requirements related to other materials/substances.






The following Table provides additional restrictions on the presence of chemical
compounds in Products, Packaging and manufacturing processes.



Table 1: Restricted Materials / Substances




	 	 	 	 	 	 	 
	 	 	 	 	C.	 	D.
	 	 	B.	 	Suppler Application	 	Limit by Supplier
	A. 	 	Chemical Abstract Number	 	that restriction	 	Product or
	Chemical Compounds	 	(if applicable)	 	applies to	 	Packaging Wt %
	4-Nitrobiphenyl
	 	92-93-3	 	Product	 	0.1000%
	 
	 	 	 	 	 	 
	Aliphatic Chlorinated Hydrocarbons
	 	See Table 2	 	Product	 	0.1000%
	(CHCs)
	 	 	 	 	 	 
	Anthracene oil
	 	90640-80-5	 	Product	 	Zero
	Asbestos
	 	77536-66-4; 12172-73-5;	 	Product	 	Zero
	 
	 	12001-29-5; 12001-28-4; 1332-21-4;	 	 	 	 
	 
	 	77536-68-6; 77536-67-5	 	 	 	 
	 
	 	 	 	 	 	 
	Amines [diethylamine, dimethylamine
	 	109-89-7, 124-40-3,	 	Product	 	Zero
	(DMA), N,N-dimethyl-acetamide,
	 	127-19-5, 68-12-2, 35576-91-1,	 	 	 	 
	N,N-dimethylformamide (DMF),
	 	614-00-6, 123-39-7, 90-04-0,	 	 	 	 
	nitrosamide, nitrosamine
	 	60-09-3	 	 	 	 
	(NMA), N-methylformamide
(NMF), o-
anisidine,
4-aminoazobenzene]
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Beryllium and compounds
	 	7440-41-7; 15191-85-2; 543-81-7;	 	Product	 	Zero
	Beryllium acetate
	 	13106-47-3; 13597-99-4; 1304-56-9	 	 	 	 
	Beryllium carbonate
	 	 	 	 	 	 
	Beryllium nitrate
	 	 	 	 	 	 
	Beryllium oxide
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Brominated and
	 	See Table 3	 	Product (applies only to	 	Zero
	chlorinated flame retardants1
	 	 	 	plastic housing parts	 	 
	
	 	 	 	>25g.)	 	 
	 
	 	 	 	 	 	 
	Butyl bromoacetate
	 	5292-43-3	 	Product	 	Zero
	 
	 	 	 	 	 	 
	Cadmium and compounds
	 	7440-43-9	 	Product	 	See Section 4.1
	 
	 	 	 	Packaging	 	Zero
	 
	 	 	 	 	 	 
	Carbon tetrachloride
	 	56-23-5	 	Product, Packaging and	 	Zero
	 
	 	 	 	Process	 	 
	 
	 	 	 	 	 	 
	Chlorinated paraffins
	 	8029-39-8, 85535-84-8, 63449-39-8	 	Product and Packaging	 	Zero of chain length
	 
	 	 	 	 	 	C10-13, chlorine
	 
	 	 	 	 	 	content > 50%.
	 
	 	 	 	 	 	 
	Chloroethylene, vinyl chloride
	 	75-01-4	 	Product	 	Zero
	 
	 	 	 	 	 	 
	Chromium (VI) (hexavalent) and


compounds
	 	18540-29-9; 1333-82-0	 	Product	 	See Section 4.1
	 
	 	 	 	Packaging	 	Zero
	 
	 	 	 	 	 	 
	Dibutyltin hydrogen borate (DBB)
	 	75113-37-0	 	Product	 	0.0100%
	 
	 	 	 	 	 	 
	Ethyl bromoacetate
	 	105-36-2	 	Product	 	Zero
	 
	 	 	 	 	 	 
	Halogenated dioxins and furans
	 	See Table 4	 	Product	 	Zero
	 
	 	 	 	 	 	 
	Lead and compounds (including Pb
 carbonates,
 hydrocarbonates, and Pb
 sulfates)
	 	7439-92-1 (598-63-0; 1319-46-6; 	 	Product	 	See Section 4.1
	 	7446-14-2; 10031-13-7; 78-00-2;	 	Packaging	 	0.0100% in sum for all heavy metals
	 	75-74-1; 301-04-2; 6080-56-4;	 	 	 	 
	 
	 	12069-00-0; 15739-80-7)	 	 	 	 
	 
	 	 	 	 	 	
	 
	 	 	 	 	 	 
	Mercury and compounds
	 	7439-97-6; 100-56-1; 627-44-1;	 	Product	 	See Section 4.1
	 
	 	593-74-8; 33631-63-9; 10045-94-0;	 	Packaging	 	0.0100% in sum for
	 
	 	21908-53-2; 1344-48-5	 	 	 	all heavy metals
	 
	 	 	 	 	 	 
	Methyl bromoacetate
	 	96-32-2	 	Product	 	Zero






	 	 	 	 	 
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REQUIREMENTS
	 	
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Table 1: Restricted Materials / Substances




	 	 	 	 	 	 	 
	 	 	 	 	C.	 	D.
	 	 	B.	 	Suppler Application	 	Limit by Supplier
	A.	 	Chemical Abstract Number	 	that restriction	 	Product or
	Chemical Compounds	 	(if applicable)	 	applies to	 	Packaging
Wt %
	Mirex (dodecachloropenta-cyclodecane)
	 	2385-85-5	 	Product	 	Zero
	 
	 	 	 	 	 	 
	Nickel and compounds
	 	7440-02-0, 3333-67- 3, 13463-39-3,	 	Product (applies only to	 	Zero
	 
	 	12054-48-7, 1313-99-1, 12035-72-2	 	external case parts)	 	(maximum allowable
	 
	 	 	 	 	 	impurity is 100 ppm)
	 
	 	 	 	 	 	 
	o-Nitrobenzaldehyde
	 	552-89-6	 	Product	 	Zero
	(2-nitrobenzaldehyde)
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Organostannic
	 	Many	 	Product	 	Zero
	compounds
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Ozone-depleting
	 	See Montreal Protocol	 	Product, Packaging and	 	Zero
	substances
	 	(http://www.unep.org/ozone/montreal.shtml)	 	Process	 	 
	 
	 	for complete list	 	 	 	 
	 
	 	 	 	 	 	 
	Polybrominated Biphenyl (PBB) and
	 	See Table 5	 	Product	 	See Section 4.1
	Polybrominated diphenyl ether (PBDE)
flame retardants
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Polychlorinated biphenyls (PCB)
	 	27323-18-8, 106-43-4; 1336-36-3;	 	Product	 	Zero
	Polychlorinated terphenyls (PCT)
	 	12767-79-2; 11096-82-5;	 	 	 	 
	 
	 	11097-69-1; 26140-60-3, 61788-33-8	 	 	 	 
	 
	 	 	 	 	 	 
	Pentachlorophenol (PCP) and its
	 	87-86-5; 131-52-2	 	Product	 	Zero
	salts and compounds
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Polychlorinated naphthalenes (PCN)
	 	1321-65-9; 1335-88-2	 	Product	 	Zero
	 
	 	1321-64-8; 2234-13-1	 	 	 	 
	 
	 	 	 	 	 	 
	Polychlorinated phenols
	 	Many	 	Product	 	Zero
	 
	 	 	 	 	 	 
	Ugilec and DBBT (PCB substitutes)
	 	99688-47-8, 76253-60-6	 	Product	 	Zero








 




			
	1	 	TBBPA (Tetra Bromobisphenol A) is a brominated flame retardant widely used in
the electronics industry. TBBPA will remain in use until a UL-certified alternative has been
identified. Note that TBBPA-bis (FR-720), however, is prohibited.





	 	 	 	 	 
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Table 2 (Reference): Aliphatic Chlorinated Hydrocarbons (CHCs)




	 	 	 
	Compound	 	CAS Reference Number
	1,1,1,2- Tetrachloroethane

	 	630-20-6
	1,1,1-Trichloroethane

	 	71-55-6
	1,1,2,2- Tetrachloroethane

	 	79-34-5
	1,1,2-Trichloroethane

	 	79-00-5
	1,1-Dichloroethylene (vinylidene chloride)

	 	75-35-4
	Pentachloroethane

	 	76-01-7
	Tetrachloromethane

	 	56-23-5
	Trichloromethane (Chloroform)

	 	67-66-3






Table 3 (Reference): Brominated / Chlorinated Fire Retardants




	 	 	 
	Compound	 	CAS Reference Number
	Additive brominated flame retardants
	 	 
	Tetrabromoethene

	 	79-28-7
	1,1,2,2-Tetrabromoethane

	 	79-27-6
	Pentabromoethane

	 	75-95-6
	1,2,3,4-Tetrabromobutane

	 	1529-68-6
	Octabromohexadecane

	 	30262-03-4
	Hexabromocyclohexane/1,2,3,4,5,6-hexabromocyclohexane

	 	30105-40-0/1837-91-8
	Tetrabromocyclodecane

	 	30178-92-8
	Hexabromocyclododecane/1,2,5,6,9,10-hexabromocyclododecane

	 	25637-99-4/3194-55-6  
	Hexabromobenzene

	 	87-82-1
	Pentabromobenzene

	 	608-90-2
	Pentabromoethylbenzene

	 	85-22-3
	Pentabromoethoxybenzene

	 	9278-85-1
	1,2,4,5-Tetrabromo-3,6-bis-benzene (pentabromophenoxybenzene)

	 	58965-66-5
	Reactive brominated flame retardants
	 	 
	Tribromomethane (bromoform)

	 	75-25-2
	Bromoethene (vinyl bromide)

	 	593-60-2
	2-Bromoethanol

	 	540-51-2
	Dibromo-1,5-pentanediol

	 	36511-36-1
	Tribromophenol

	 	25376-38-9
	Pentabromophenol

	 	608-71-9
	Dibromostyrene

	 	31780-26-4
	Tetrabromophthalic anhydride

	 	632-79-1
	Tetrabromobisphenol A

	 	79-94-7
	Tetrabromobisphenol A-bis (FR-720, dibromopropyl ether, BDBPT)

	 	21850-44-2
	Chlorinated paraffins and waxes
	 	 
	Chlorinated paraffin

	 	61788-76-9






	 	 	 	 	 
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Table 3 (Reference): Brominated / Chlorinated Fire Retardants




	 	 	 
	Compound	 	CAS Reference Number
	Chlorinated paraffin oils

	 	85422-92-0
	Chlorinated paraffins (C>10)

	 	97553-43-0
	Chlorinated paraffins (C10-13)

	 	85535-84-8
	Chlorinated paraffins (C14-17)

	 	85535-85-9
	Chlorinated paraffins (C18-28)

	 	85535-86-0
	Chlorinated paraffin waxes and hydrocarbon waxes

	 	63449-39-8






Table 4 (Reference): Halogenated Dioxins and Furans




	 	 	 
	Compound	 	CAS Reference Number
	2,3,7,8-Tetra-CDD

	 	1746-01-6
	1,2,3,7,8-Penta-CDD

	 	40321-76-4
	2,3,7,8-Tetra-CDF

	 	51207-31-9
	2,3,4,7,8-Penta-CDF

	 	57117-31-4
	1,2,3,4,7,8-Hexa-CDD

	 	39227-28-6
	1,2,3,7,8,9-Hexa-CDD

	 	19408-74-3
	1,2,3,6,7,8-Hexa-CDD

	 	57653-85-7
	1,2,3,7,8-Penta-CDF

	 	57117-41-6
	1,2,3,4,7,8-Hexa-CDF

	 	70648-26-9
	1,2,3,7,8,9-Hexa-CDF

	 	72918-21-9
	1,2,3,6,7,8-Hexa-CDF

	 	57117-44-9
	2,3,4,6,7,8-Hexa-CDF

	 	60851-34-5
	1,2,3,4,6,7,8-Hepta-CDD

	 	35822-46-9
	1,2,3,4,6,7,8,9-Octa-CDD

	 	3268-87-9
	1,2,3,4,6,7,8-Hepta-CDF

	 	67562-39-4
	1,2,3,4,7,8,9-Hepta-CDF

	 	55673-89-7
	1,2,3,4,6,7,8,9-Octa-CDF

	 	39001-02-0
	2,3,7,8-Tetra-BDD

	 	50585-81-6
	1,2,3,7,8-Penta-BDD

	 	109333-34-8
	2,3,7,8-Tetra-BDF

	 	67733-57-7
	2,3,4,7,8-Penta-BDF

	 	131166-92-2
	1,2,3,4,7,8-Hexa-BDD

	 	110999-44-5
	1,2,3,7,8,9-Hexa-BDD

	 	110999-46-7
	1,2,3,6,7,8-Hexa-BDD

	 	110999-45-6
	1,2,3,7,8-Penta-BDF

	 	109333-34-8






	 	 	 	 	 
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Table 5 (Reference):

Polybrominated Biphenyl/Polybrominated Diphenyl Ether

Flame Retardants




	 	 	 
	Compound	 	CAS Reference Number
	Polybrominated Biphenyls (PBBs)
	 	 
	 
	 	 
	Bromobiphenyl

	 	2052-07-05
	 

	 	2113-57-7
	 

	 	92-66-0
	Decabromobiphenyl

	 	13654-09-06
	Dibromobiphenyl

	 	92-86-4
	Heptabromobiphenyl

	 	59080-40-9
	 

	 	36355-01-8 (hexabromo-1,1’-biphenyl)
	 

	 	67774-32-7 (Firemaster FF-1)
	Hexabromobiphenyl

	 	59080-40-9
	 

	 	36355-01-8
	 

	 	67774-32-7
	Nonabromobiphenyl
	 	 
	Octabromobiphenyl

	 	61288-13-9
	Pentabromobiphenyl
	 	 
	Polybrominated Biphenyl

	 	59536-65-1
	Tetrabromobiphenyl

	 	40088-45-7
	Tribromobiphenyl
	 	 
	Polybrominated Diphenyl Ethers (PBDEs)
	 	 
	Bromodiphenyl Ether

	 	101-55-3
	Decabromobiphenyl Ether

	 	1163-19-5
	Dibromobiphenyl Ether

	 	2050-47-7
	Heptabromobiphenyl Ether

	 	68928-80-3
	Hexabromobiphenyl Ether

	 	36483-60-0
	Nonabromobiphenyl Ether

	 	63936-56-1
	Octabromobiphenyl Ether

	 	32536-52-0
	Pentabromobiphenyl Ether

	 	32534-81-9
	Tetrabromobiphenyl Ether

	 	40088-47-9
	Tibromobiphenyl Ether

	 	49690-94-0






	 	 	 	 	 
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5.0 ADDITIONAL REQUIREMENTS FOR PARTS, COMPONENTS, SUBSYSTEMS AND MATERIALS CONTAINING
PLASTIC, RUBBER, PAINT OR INK





For plastic parts >25g, the part name/number, type of plastic used,
flame retardant type, plastic brand name, and plastic model name must be
included in the Product’s specification. Plastic parts of any weight must be of
one polymer or compatible polymers, except for large cases, which must be of no
more than two types of polymer that are separable.




For plastic parts >25g, the part must not have paint, lacquer, or varnish,
which as dry matter increases the weight of the plastic part by more than 1%,
and no in-mold decoration (IMD).




Plastic parts >25g must have a permanent visible marking in accordance with
ISO 11469; plastic parts <25g, but having adequate surface area (minimum
14mm X 70mm) for marking, must also have a permanent visible mark in accordance
with ISO 11469.




Plastic components >100g must be made from the same type of plastic.




ICP-AEP testing of a representative sample is required for Products that
contain plastic (including external cables), resin, rubber, paint or ink,
including semiconductor/IC housings and connector housings.




Standards for measurement are as follows:




1) Pre-conditioning: Typical examples are as follows:




	 	•	 	Wet decomposition method specified in BS EN 1122; 2001,
“Plastics—Determination of cadmium—Wet decomposition method”;
	 
	 	•	 	Incineration under the existence of sulfuric acid; and
	 
	 	•	 	Pressurized acid decomposition done in a sealed container (a
microwave decomposition method).






Precipitates must be dissolved using established methodology.




2) Measurement method: Use any one of ICP-AES (OES) (Inductively Coupled
Plasma-Atomic [Optical] Emission Spectroscopy) or AAS (Atomic Absorption
Spectroscopy), or ICP-MS (Inductively Coupled Plasma Mass Spectroscopy).



3) Laboratory analysis must be performed by an independent, third party
government-certified (if applicable) laboratory. Laboratory reports must
reference the applicable Seagate Part Number.




	 	 	 	 	 
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	6.0	 	DEFINITIONS






	 	6.1	 	Intentionally introduced: Deliberately utilized in the formulation of a material
or component where the restricted chemical’s continued presence is desired in the
final product to provide a specific characteristic, appearance or quality.
	 
	 	6.2	 	Limit by Product or Packaging Weight %: Seagate-specified weight of a
chemical compound that can be present, expressed as a percent of the total weight of
the individual product, part, component or packaging provided by the supplier.
	 
	 	6.3	 	Packaging: Supplier-provided packaging for Seagate products that reach final
customers.
	 
	 	6.4	 	Process: Process refers to a manufacturing process resulting in Products or
Packaging materials that are incorporated into Seagate products delivered to
customers. Processes are defined to include the chemical inputs used in those
processes, such as solvents and cleaning solutions.
	 
	 	6.5	 	Product: Supplier-provided parts, components, subsystems and materials.
	 
	 	6.6	 	Zero: For the purposes of certifying compliance with this Specification, zero
shall be defined as meaning that a chemical compound is not present at a concentration
greater than one part per million.





	 	 	 	 	 
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EXHIBIT F

BUSINESS CONTINUITY,

EMERGENCY RESPONSE,

AND DISASTER RECOVERY PLANS




A. GENERAL




     1. Komag recognizes that these terms and conditions apply to each of Komag’s facilities,
buildings, or operations that will be used to supply Products under this Agreement, including those
warehouses that will be used to store property used in connection with the supply of Products.



     2. Komag will maintain site-specific Emergency Response Plans and Disaster Recovery Plans,
which will be made available to Seagate upon request.



     3. Komag shall disclose to Seagate upon request, fire protection designs and capabilities for
each warehouse building or operation that will store or distribute property used in connection with
supply of the Products.



B. COMPLIANCE WITH LAW




     1. Komag must have a written and implemented plan that ensures compliance with local
environmental, health, safety and fire protection laws. The plan must contain a description of
potential hazards and corresponding control plans, and details of how Komag will ensure compliance
with laws and regulations and with the terms of the Agreement and this Exhibit F.



     2. Komag must implement and maintain appropriate risk control and response measures for
foreseeable emergencies, including fire, natural disasters at the operations or warehouse sites or
during shipment.



     3. Seagate reserves the right, but not the obligation, to require Komag, to undertake periodic
inspections in order to verify compliance with this standard and any other requirements of the
contract with Seagate. Seagate reserves the right to inspect buildings and operations upon
reasonable notice.



C. PROHIBITIONS FOR ALL FACILITIES USED TO STORE SEAGATE WIP AND FINISHED GOODS




     The following business risk conditions are prohibited at or near warehouses used to store
Seagate materials, such as finished product, components, or manufacturing equipment:



     1. Storage of flammable liquids in any quantities greater than those required for maintenance
and operation of Komag’s facilities.



     2. Storage of flammable or oxidizing gases or aerosols in any quantities greater than those
required for maintenance and operation of Komag’s facilities.



     3. Storage of toxic or corrosive liquids or gases in any quantities greater than those
required for maintenance and operation of Komag’s facilities.



D. REPORTING OF DISRUPTION OF PRODUCT SUPPLY




     Komag will report to Seagate within one business day the discovery of any incident that could
result in the disruption of the supply of Product to Seagate.



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E. DISASTER RECOVERY PLAN




     Komag will implement the following disaster recovery plan to ensure the continuity of Product
supply in the event of a major interruption to its facilities’ ability to maintain production.
These requirements include the recovery of documentation, manufacturing systems, materials, key
personnel, and plan and equipment.



     1. General



     The objective of these requirements is to enable reinstitution of supply of Product within a
time period agreed upon by Seagate and Komag.



     2. Requirements




     (a) Komag will maintain backup copies of all documentation needed to ensure supply of
the Product, including but not limited to: drawings, files, process aids, tooling drawings,
process control data, materials receiving inspection data, floor layouts, process
flowcharts, bills of material, and training plans.




     (b) Komag will plan for restoration or replacement of manufacturing IT systems and
hardware.




     (c) Komag will back up materials relating to supplier records, and will negotiate
supplier agreements to ensure replacement of critical parts.




     (d) Komag will cross-train key personnel for purposes of replacement due to a loss of
any key individuals. Komag will maintain adequate job description and training materials to
allow for hiring of replacements.




     (e) Komag will have a contingency plan for moving production to an alternate facility
if interruption of Product supply is estimated to exceed 10 days.



-19-









 





PORTIONS
DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.








EXHIBIT G

VOLUME COMMITMENT

AND PAYBACK AMORTIZATION SCHEDULE




1. Volume Commitment.




          [****]




	 	 	 
	Effective Date
	 	Committed Volume






[****]




2. Consideration.




          [****]




          [****]





-20-