Document:

10.1 Settlement and Release Agreement

Exhibit 10.1
SETTLEMENT AND RELEASE AGREEMENT
THIS SETTLEMENT AND RELEASE AGREEMENT(the “Settlement Agreement”) is made as of June 30, 2014 (“Effective Date”) between Kinetic Concepts, Inc., a corporation organized under the laws of Texas and having a place of business at 12930 Interstate 10 West, San Antonio, Texas, 78249, and its Affiliates, including its subsidiaries, their successors and assigns, including but not limited to KCI Licensing, Inc., KCI USA, Inc., KCI Medical Resources, Medical Holdings, and KCI Manufacturing (collectively “KCI”) and Wake Forest University Health Sciences, a non-profit corporation organized and existing under the laws of the State of North Carolina and located at Medical Center Boulevard, Winston-Salem, North Carolina 27157, and its Affiliates, including its subsidiaries, their successors and assigns (collectively “WFUHS”).
WHEREAS, KCI and WFUHS (collectively “the Parties”) are currently involved in litigation in the United States and Germany and desire to fully and finally resolve all disputes with respect to the Litigations (defined below), the Patents (defined below), the Products (defined below), and the License Agreement (defined below); 
WHEREAS, the Parties entered into a Confidential Binding Term Sheet Between Wake Forest University Health Sciences and Kinetic Concepts, Inc., on June 19, 2014 to fully and finally resolve all disputes with respect to the Litigations, the Patents, the Products, and the License Agreement (the “Binding Term Sheet”), wherein the Parties agreed to enter into a Definitive Agreement;
WHEREAS, the Parties desire that this Settlement Agreement shall be the Definitive Agreement between the Parties set forth in the Binding Term Sheet; and
WHEREAS, the Parties acknowledge that full, valid, and binding consideration exists for the execution of this Settlement Agreement and that such consideration consists of the mutual promises contained herein, and the performance by each of the Parties of their respective mutual and independent covenants and representations as set forth herein.
NOW THEREFORE, in consideration of the terms, conditions and mutual obligations set forth herein and understanding the meaning and legal effect of entering into this Agreement, the Parties hereto stipulate, agree, warrant, and represent as follows:
		
	1.
	Definitions.  As used herein, the following terms have the following meanings:

		
	a.
	“Affiliate,” in relation to any Party, shall mean any corporation, partnership, proprietorship, person or other entity controlled by, controlling, or under common control with such Party, and shall include any corporation, or partnership, proprietorship, person or other entity directly or indirectly owning, owned by or under common ownership with such Party to the extent of fifty percent (50%) or more the equity or voting shares, including shares owned beneficially by such Party.

		
	b.
	“Applicable Law” means with respect to any Person, any federal, state or local law (statutory, common, or otherwise), constitution, treaty, convention, ordinance, code, rule, 

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regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person, as amended unless expressly specified otherwise.

		
	c.
	“Governmental Authority” means any transnational, domestic or foreign federal, state, or local, governmental authority, department, court, agency or official, including any political subdivision thereof.

		
	d.
	“License Agreement” means the license agreement entered into between the Parties on October 6, 1993, and all sublicenses, modifications and/or amendments thereto, terminated on or about March 18, 2011.

		
	e.
	“Litigations” means the lawsuits entitled: Kinetic Concepts, Inc.et al. v. Wake Forest University Health Sciences, Civil Action No. 11-CV-00163-XR pending in the United States District Court for the Western District of Texas, San Antonio Division); Wake Forest University Health Sciences vs. Kinetic Concepts,et al., Civil Action No. 11-CV-00713-XR pending in the United States District Court for the Western District of Texas, San Antonio Division, consolidated with 11-CV-00163-XR; the German nullity proceeding between the Parties, in the German Federal Patent Court regarding EP0620720 (DE 692 24 847), case no. 4 Ni 28/13(EP); and any and all lawsuits filed by either of the Parties against the other Party related to the License Agreement, the Products, or the Patents prior to the Effective Date of this Settlement Agreement.

		
	f.
	“Patents” means U.S. patents 5,645,081, 5,636,643, 7,198,046, 7,216,651 and foreign equivalents, including but not limited to European Patent 0620720, including their continuations, continuations-in-part, divisionals, reexaminations, reissues, and any other patent sharing common priority with the aforementioned patents.

		
	g.
	“Products” means all Negative Pressure Wound Therapy and Negative Pressure Technology Platform products and features of such products that were the subject of the License Agreement, or that are the subject of any Litigations, including but not limited to pump sales, pump rentals, canisters, dressing kits, tubing, and any related components for V.A.C. Classic, miniV.A.C., V.A.C.ATS, InfoV.A.C., ActiV.A.C., V.A.C. Simplicity, V.A.C. Instill, V.A.C.Ulta, V.A.C.Via, V.A.C.VeraFlo, AbThera, and Prevena systems, and existing on or before June 19, 2014, including evolutions made to such products in the nature of an insubstantial change in dimension, proportion, components, material, orientation, functionality or materials for component parts, or the general location of existing features or functionalities of such products; provided that such change does not alter the basic operation of such product as provided in such products’ specifications (e.g. applying a negative pressure to the surface of the body in continuous, intermittent, or variable pressure modes).

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	2.
	Other Definitional and Interpretative Provisions.The words “hereof,” “herein,” and “hereunder” 
and words of like import used in this Settlement Agreement shall refer to this Settlement Agreement as a whole and not to any particular provision of this Settlement Agreement.  The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.  References to Sections are to Sections of this Settlement Agreement unless otherwise specified.  Any singular term in this Settlement Agreement shall be deemed to include the plural, and any plural term the singular.  Whenever the words “include,” “includes,” or “including” are used in this Settlement Agreement, they shall be deemed to be followed by the words “without limitation,” whether or not they are in fact followed by those words or words of like import.  “Writing,” “written,” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form.  References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.  References to any person or entity include the successors and permitted assigns of that person or entity.  References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.  References to “law,” “laws” or to a particular statute or law shall be deemed also to include any and all Applicable Law. 

		
	3.
	Releases of Claims and Liabilities.  WFUHS, on behalf of itself and its Affiliates, subsidiaries, licensees to the Patents, named inventors to the Patents, and successors in interest to the Patents and License Agreement, hereby irrevocably releases, acquits, and forever discharges KCI and its Affiliates, subsidiaries, distributors, suppliers, customers, officers, directors, legal representatives, and successors in interest from any and all claims with respect to the Patents, Products, and/or License Agreement, and from any and all claims brought in the Litigations, including any claims, that could have been brought for activities solely occurring before June 19, 2014.  KCI, on behalf of itself and its Affiliates and subsidiaries, hereby irrevocably releases, acquits and forever discharges WFUHS and its Affiliates, subsidiaries, officers, directors, legal representatives, and successors, named inventors to the Patents, and successors in interest from any and all claims with respect to the Patents and/or License Agreement, and from any and all claims brought in the Litigations, including any claims that could have been brought for activities solely occurring before June 19, 2014.

		
	4.
	Stipulations of Dismissal of the Litigations.  For each of the Litigations, each Party shall, and shall cause its counsel in the applicable jurisdictions within 15 (fifteen) days of the Effective Date of this Settlement Agreement to, withdraw its complaints and demands for judicial relief and cause each of its complaints and demands in the Litigations to be dismissed with prejudice.  Each Party shall bear all of its own costs, including attorneys fees, associated with the Litigations.

		
	5.
	Covenant Not to Sue.  WFUHS, on behalf of itself and its Affiliates, subsidiaries, and successors in interest to the Patents and License Agreement, further covenants and agrees not to sue or otherwise assert any claim, demand, cause of action, or request for damages or other relief against KCI and its Affiliates, subsidiaries, distributors, suppliers, customers, officers, directors, legal representatives, and successors in interest with respect to the Products or any current uses of the 

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Products occurring prior to June 19, 2014; provided, however, that the Parties agree that the Covenant Not to Sue will not extend to future uses of the Products which future uses are primarily intended to regenerate bone, or to treat and improve the function of heart, brain, and central nervous tissue (but not including uses of Products to cover or protect any such tissues or otherwise heal wounds) (“Future Uses”).  WFUHS represents that it has no current knowledge of any such Future Uses.

		
	6.
	Consideration.In addition to the other consideration set forth in this Settlement Agreement, KCI or its designee will pay to WFUHS or its designee $280,000,000 U.S.(Two Hundred Eighty Million Dollars in United States currency) (“the Settlement Payments”) as full and final payment of  all amounts owing under this Settlement Agreement and to resolve the disputes referenced herein, to be paid as follows:

$80,000,000 (eighty million dollars) within 5 (five) business days of the Effective Date of this Settlement Agreement;
$85,000,000 (eighty five million dollars) upon the first anniversary of the Effective Date of this Settlement Agreement;
$85,000,000 (eighty five million dollars) upon the second anniversary of the Effective Date of this Settlement Agreement; and
$30,000,000 (thirty million dollars) upon the third anniversary of the Effective Date of this Settlement Agreement.
The Parties agree there shall be no penalty for pre-payment and no interest shall accrue on the consideration owed by KCI if paid timely.  Payment shall be made by wire transfer in U.S. dollars to the following account:
Acct Name: Wake Forest University Health Sciences
Bank: Wells Fargo Bank, N.A.
Acct # 2079900145793    
ABA # 121000248
Swift Code: WFBIUS6S
		
	7.
	Tax Reporting. The Parties hereby acknowledge, understand and agree that the Settlement Payments due hereunder to WFUHS by, or on behalf of KCI, are payments of retrospective U.S. patent royalties.  Accordingly, KCI shall, for Federal and State income tax purposes, report all installments of the Settlement Payments due hereunder in a manner consistent with its prior tax reporting of the royalty payments made to WFUHS pursuant to the License Agreement, the characterization of which was as ordinary and necessary deductions pursuant to Section 162 of the Internal Revenue Code of 1986, as amended.  Similarly, WFUHS shall, for Federal and State Income Tax purposes, report all its receipt of each installment of the Settlement Payments in a manner consistent thereof.

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	8.
	No Admissions.  Nothing in this Settlement Agreement or the Binding Term Sheet shall be deemed an admission by either Party.

		
	9.
	Authority.  Each Party warrants and represents to the other Party  that (a) such warranting and representing Party is a corporation duly organized, validly existing and in good standing under the Applicable Laws of the state of its incorporation and has the requisite power and authority to enter into this Settlement Agreement and to take actions, or refrain or forebear from taking actions, and grant the releases and covenants not to sue as described herein so as to fully perform its obligations under, and implement the provisions and intent of, this Settlement Agreement, (b) the execution, delivery and performance of this Settlement Agreement has been duly authorized by all corporate actions necessary on the part of such Party, and (c) the individual executing this Settlement Agreement on behalf of such Party has the authority to do so.  

		
	10.
	Amendments / Non-Waiver.  Any provision of this Settlement Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each Party, or in the case of waiver, by the Party against whom the waiver is to be effective.  No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Applicable Law.

		
	11.
	Governing Law.  This Settlement Agreement shall be governed by and construed and enforced with the Applicable Law of the State of Delaware, without regard to the conflict of law principles of such state, except that any claims relating to Section 6 of this Agreement (Consideration) shall be brought in a jurisdiction and venue of WFUHS’s choosing, and any claims relating to Section 5 (Covenant Not to Sue) shall be brought in a jurisdiction and venue of KCI’s choosing.

		
	12.
	Remedies.  The Parties acknowledge and agree that monetary damages would be an inadequate remedy for violations of this Settlement Agreement and that either Party may, in its sole discretion, apply to a court of competent jurisdiction for specific performance, or injunctive relief, or such other relief as such court may deem just and proper, in order to enforce this Settlement Agreement or prevent any violation of the terms hereof, and to the extent permitted by Applicable Law, each Party waives the posting of a bond and any objection to the imposition of such relief.

		
	13.
	Integration.  This Settlement Agreement contains the entire agreement of the Parties with respect to the subject matter of this Settlement Agreement, and supersedes all prior negotiations, agreements, and understandings with respect thereto, including but not limited to the Binding Term Sheet.

		
	14.
	Successors and Assigns.  To the extent not otherwise granted in this Settlement Agreement, all provisions of this Settlement Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.

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	15.
	Severability.  If any term, provision, covenant or restriction of this Settlement Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants, and restrictions of this Settlement Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party.

		
	16.
	Notices.  All notices, requests, and other communications to any Party shall be in writing and shall be given,

if to KCI, to:
    
12930 Interstate 10 West
San Antonio, Texas 78249
Attention:  General Counsel
Facsimile No.:  (210) 255-6990

if to WFUHS, to:
    
Medical Center Boulevard
Winston-Salem, North Carolina 27157
Attention:  General Counsel
Facsimile No.:  (336) 713-4168

		
	17.
	Counterparts.  This Settlement Agreement may be signed in multiple counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  

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Agreed and Accepted by:

	
			
	KINETIC CONCEPTS, INC.
	 
	WAKE FOREST UNIVERSITY HEALTH SCIENCES

	

By:  /s/ John T. Bibb
	 
	

By: /s/ John D. McConnell

	

Print Name:  John T. Bibb
	 
	

Print Name: John D. McConnell

	

Title: Executive Vice President, General Counsel, and Secretary
	 
	

Title:  Chief Executive Officer

	

Date:  June 30, 2014
	 
	

Date:  June 30, 2014

7SNDK Ex-10.1- Hu Consultant Agreement 2014-05- 2014-07

Exhibit 10.1

SANDISK CORPORATION
CONSULTANT SERVICES AGREEMENT

This Consultant Services Agreement (“Agreement”) is entered into as of May 7, 2014 to be effective between the Parties (as defined below) as of April 14, 2014 (the “Effective Date”) by and between SanDisk Corporation, a Delaware corporation having its principal place of business at 951 SanDisk Drive, Milpitas, California 95035 USA and its subsidiaries, affiliates, and/or successors (collectively “SanDisk”), and Dr. Chenming Hu, an individual (“Consultant”) (each referred to herein as “Party” or collectively, the “Parties”).

WHEREAS, Consultant has proposed to provide certain consulting services for SanDisk; and 
WHEREAS, SanDisk requires such services as more fully described below to be provided for SanDisk and Consultant agrees to provide such services, 
Now, therefore, in consideration of the mutual covenants and conditions set forth below, the Parties hereto agree as follows:

TERMS AND CONDITIONS

1.    Consultant Services.  From the Effective Date to July 14, 2014 (“Service Term”), Consultant shall perform, on a non-exclusive basis, the consultancy services as described herein (“Services”).  The Services will consist of the Consultant providing advanced memory technology development services in a manner to be mutually agreed between the Consultant and SanDisk from time to time.  Consultant’s performance of the Services may result in the creation of work product, including without limitation, designs, models, writings, drawings, notebooks, photographs, data, software, inventions, and discoveries, and modifications and derivatives thereof (“Work”).  The Service Term may be extended by the Parties upon their mutual written consent.  Consultant understands and agrees that the performance of the Services in a competent and timely manner is a material obligation under this Agreement.

2.    Fees, Expenses, and Payment Terms.  

2.1    In consideration for Consultant’s performance of the Services, SanDisk shall pay Consultant at the rate of $28,500 per month that the Services are performed up to a maximum of $85,500; provided, however, that if either Party terminates this Agreement in accordance with Section 7 prior to the full Service Term, Consultant shall only be paid the pro rata portion of the monthly fee for the month in which the termination occurred. Consultant shall obtain SanDisk’s prior written approval for expenses or associated travel incurred in the performance of the Services. Subject to the terms herein, the fees and expenses stated herein constitute full compensation for the Services rendered, exclusive of VAT, sales and any similar taxes. Consultant acknowledges and agrees that SanDisk has the right to withhold any applicable taxes from any payments due under this Agreement if required under the applicable law or by any government agency; provided, however, that SanDisk shall furnish Consultant with an official certificate as a proof for the tax withheld upon Consultant’s written request.    

2.2    Invoices referencing the SanDisk purchase order shall be forwarded by Consultant to SanDisk Corporation, 951 SanDisk Drive, Milpitas, CA  95035, ATTN:  ACCOUNTS PAYABLE.  Payment by SanDisk shall be issued within thirty (30) days after receipt of Consultant’s undisputed invoice and verification of the completed Services.  

3.    Consultant Obligations.      

3.1    Consultant shall use SanDisk resources strictly for performing the Services. SanDisk may terminate the Agreement without advanced written notice in case of any unauthorized use of SanDisk resources and without further payment.      

3.2    Consultant shall observe and comply with SanDisk’s safety and security policies.     

3.3    Consultant shall not utilize third party contractors to perform the Services without SanDisk’s prior written approval.

3.4    Consultant is solely responsible for all federal, state, local, FICA and other similar withholding and payments required in connection with Consultant’s compensation hereunder. Accordingly, Consultant is not eligible for any benefits SanDisk provides to its employees, and SanDisk will not deduct from Consultant’s fees any amount for taxes, insurance, bonds or payments of any other kind.      

3.5    Consultant is an independent contractor, and not an employee, agent, or servant, of SanDisk and has no authority to bind SanDisk in any manner.

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3.6    Consultant shall be responsible for understanding and complying with SanDisk’s Worldwide Code of Business Conduct and Ethics Policy and SanDisk Supplier Code of Ethical Conduct available at http://www.sandisk.com.      

4.    Warranty. 

4.1    Consultant represents and warrants that the Services will be performed and completed in a professional, timely and workmanlike manner in accordance with the highest standards of Consultant’s profession.    

4.2    Consultant represents and warrants that, to the best of Consultant’s knowledge, Consultant is under no pre-existing obligation(s) inconsistent with the provisions of this Agreement, and will act in good faith and in SanDisk’s best interest throughout the term of this Agreement. 

4.3    Consultant represents and warrants that Consultant will at all times comply with all applicable laws, regulations and rules of any governmental authority having jurisdiction in the performance of the Services. Consultant further represents and warrants that Consultant has obtained and will maintain any applicable approvals, registrations, licenses, permits or the like with regard to performance under this Agreement.  Upon SanDisk’s request, Consultant shall provide SanDisk with information concerning such registrations and confirmation of payment of any applicable fees and demonstrate Consultant’s compliance with all applicable laws and regulations. Consultant shall indemnify, to the fullest extent permitted by law, SanDisk from and against any claims, damages, losses, fines or penalties that may arise as a result of Consultant’s breach of this provision. 

4.4    EXCEPT FOR THE EXPRESS WARRANTIES STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY ADDITIONAL WARRANTIES, EXPRESS OR IMPLIED AND ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE EXPRESSLY EXCLUDED.  ALL MATERIALS, EQUIPMENT OR PROPERTY OF EVERY KIND FURNISHED BY SANDISK AND ALL REPRODUCTIONS OF ANY SUCH ITEMS ARE PROVIDED ON AN “AS IS” BASIS WITHOUT WARRANTIES OF ANY KIND.  

		
	5. 
	CONFIDENTIAL INFORMATION.   

5.1 “CONFIDENTIAL INFORMATION” MEANS THE WORK AND ANY INFORMATION DISCLOSED BY SANDISK TO CONSULTANT DURING THE COURSE OF CONSULTANT’S PERFORMANCE OF THE SERVICES, INCLUDING WITHOUT LIMITATION ANY INFORMATION RELATING TO THIS AGREEMENT AND THE SERVICES, AND ALL TRADE SECRETS, PROCESSES, FORMULAS, DATA AND KNOW-HOW, SOFTWARE PROGRAMS, IMPROVEMENT IDEAS, INVENTIONS, TECHNIQUES, MARKETING PLANS, STRATEGIES, FORECASTS, COMPUTER PROGRAMS AND COPYRIGHTABLE MATERIAL, AND CUSTOMER LISTS,  WHETHER OR NOT MARKED OR IDENTIFIED AS CONFIDENTIAL.  
  
5.3    WITHOUT SANDISK’S PRIOR WRITTEN CONSENT, CONSULTANT SHALL NOT DISCLOSE CONFIDENTIAL INFORMATION TO ANY THIRD PARTY.  CONSULTANT SHALL (A) PROTECT CONFIDENTIAL INFORMATION WITH THE SAME DEGREE OF CARE THAT CONSULTANT EMPLOYS FOR PROTECTION OF CONSULTANT’S OWN PROPRIETARY INFORMATION, BUT NOT LESS THAN COMMERCIALLY REASONABLE CARE; (B) LIMIT CONSULTANT’S USE OF CONFIDENTIAL INFORMATION SOLELY FOR THE PURPOSES SET FORTH IN THIS AGREEMENT, AND NOT OTHERWISE FOR CONSULTANT’S OWN BENEFIT OR THE BENEFIT OF OTHERS, AND NOT REVERSE ENGINEER NOR CREATE DERIVATIVE WORKS OF ANY CONFIDENTIAL INFORMATION; (C) NOT DUPLICATE OR REPRODUCE CONFIDENTIAL INFORMATION, UNLESS AUTHORIZED TO DO SO (ALL SUCH REPRODUCTIONS SHALL BE CONSIDERED CONFIDENTIAL INFORMATION); AND (D) RETURN ALL CONFIDENTIAL INFORMATION TO SANDISK PROMPTLY UPON REQUEST (TOGETHER WITH ANY COPIES THEREOF) OR, AT THE OPTION OF SANDISK, PROVIDE WRITTEN CERTIFICATION OF THE DESTRUCTION THEREOF.
 
5.4    NOTHING CONTAINED IN THIS SECTION 5 PRECLUDES SANDISK FROM USING OR DISCLOSING IN ANY WAY THE WORK PROVIDED TO IT HEREUNDER.  CONSULTANT ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT SHALL BE CONSIDERED CONFIDENTIAL INFORMATION.
           

6.  Ownership.

6.1      The Work shall not be considered joint work. All Work created by Consultant during the performance of the Services shall be deemed work made for hire under applicable law (“Work for Hire”) and will be the sole and exclusive property of SanDisk.

6.2     In consideration of the mutual covenants and conditions set forth in this Agreement, the value and sufficiency of which is hereby acknowledged by Consultant, Consultant  agrees to and does hereby perpetually and irrevocably assign and transfer and quit claim to SanDisk and its assigns all right, title, and interest in all the “Work for Hire” arising out of Consultant’s retention as a consultant by SanDisk under this Agreement, and waives any moral rights whether arising under the Berne Convention or otherwise. Consultant agrees that Consultant shall cooperate in performing any and all acts necessary to secure SanDisk or its nominee patent, trademark, or copyright protection for any 

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protectable Work for Hire. 

6.3    Consultant acknowledges that SanDisk hereby reserves all rights except those expressly granted herein, and that no right or license will arise by implication, estoppel or otherwise by operation of law.  Consultant shall not reverse engineer, disassemble or decompile any prototypes, software, equipment or other tangible objects provided by SanDisk unless expressly authorized to do so in writing by SanDisk.  Nothing herein grants or is intended to grant to Consultant any right to use the name or any trademark, trade name, logo or service mark of SanDisk for any purpose whatsoever, including but not limited to advertising, without SanDisk’s prior written consent.  

7.    Term and Termination.  

7.1    This Agreement is effective as of the Effective Date above and will continue during the Service Term unless terminated in accordance with this Section 7.    

7.2    Either Party may terminate this Agreement for convenience by giving the other Party written notice at least five (5) days in advance.  SanDisk may terminate this Agreement without advance written notice if Consultant’s performance does not meet the standards specified by these terms and conditions, or if Consultant breaches any of the obligations listed in Section 3 of this Agreement.  If this Agreement is terminated by SanDisk prior to the end of its term, Consultant’s sole remedy at law and in equity and SanDisk’s sole liability will be for SanDisk to pay Consultant any unpaid balance due for Services compliant with Section 2.1 and actually performed and/or completed under this Agreement; provided, however, that in no event will SanDisk be liable to Consultant for any sum in excess of the total price stated in this Agreement for the terminated Services and for damages of  any kind whatsoever. In the event of any termination, SanDisk will not incur any liability whatsoever and Consultant will not have any rights to damages or indemnification of any nature against SanDisk and hereby expressly waives any such claims.

7.3    Upon termination of this Agreement, Consultant shall return to SanDisk all materials, equipment and property of every kind furnished or owned by SanDisk.

7.4    Sections 3, 4, 5, 6, 7, 8, 9, 10, 11 and any other provision of this Agreement that by its nature would continue beyond expiration or any termination of this Agreement will survive termination, expiration or rescission of this Agreement.    

8.    Limitation of Liability. 

8.1    Except for breaches of confidentiality obligations, in no event will either Party be liable for any indirect, consequential, exemplary, punitive, special, or incidental damages, whether based on contract, tort or any other legal theory, arising out of this Agreement, including, but not limited to, loss of data/programs or lost profits, or any and all other commercial damages or losses, even if such Party has been advised of the possibility of such damages.  

8.2    NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN AND TO THE MAXIMUM EXTENT PERMITTED BY LAW, IN NO EVENT WILL SANDISK’S TOTAL LIABILITY ARISING UNDER THIS AGREEMENT, WHETHER SUCH THEORY OF LIABILITY IS BASED IN CONTRACT, TORT OR OTHERWISE, EXCEED THE TOTAL AMOUNT OF THE PAYMENTS ACTUALLY DUE AND OWING BY SANDISK FOR SERVICES COMPLETED AND PROVIDED BY CONSULTANT UNDER THIS AGREEMENT IN THE PRECEDING TWELVE (12) MONTHS PRIOR TO THE DATE THE LIABILITY FIRST AROSE. 

8.3    The above limitations will apply notwithstanding the failure of essential purpose of any limited remedy.    

9.     Notice.   All written notices required by the Agreement must be delivered in person or by means evidenced by a delivery receipt and will be effective upon receipt.  All Work and writing provided hereunder including notices shall be in English.
10.    Indemnification

10.1     Consultant agrees to indemnify, defend and hold harmless SanDisk and its officers, directors, employees, shareholders, direct and indirect customers, agents, successors and assigns, from and against any and all claims, liabilities, losses, debts, damages, expenses (including legal expenses) or settlements that may arise out of any acts or omissions related to Consultant’s performance under this Agreement.

10.2     Upon the assertion of any claim or the commencement of any suit or proceeding by a third party, SanDisk shall promptly notify Consultant of the existence of such claims, suit or proceeding and shall give Consultant a reasonable opportunity to defend and/or settle the claim at Consultant’s own expense and with counsel of its own selection. SanDisk shall provide reasonably requested assistance and cooperation at Consultant’s own expense to ensure a proper and adequate defense.  Consultant will have sole control of the defense and settlement of any claims for which it provides indemnification hereunder, provided that Consultant shall not enter into any settlement of such claim without the prior approval of SanDisk, which approval shall not be unreasonably withheld.  If Consultant refuses or does not agree to timely assume control of the defense and settlement of any claim for which it has an indemnity obligation hereunder, then SanDisk shall be entitled to defend and/or settle such claim without the prior approval of Consultant subject to the right of Consultant to assume control of any such action after reimbursing 

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SanDisk for all costs and expenses incurred in connection therewith.  Notwithstanding the foregoing, SanDisk, at its sole option and own expense, may (i) hire its own counsel to provide its defense and (ii) fully participate in any settlement.  

11.    General Terms.  

11.1     This Agreement may not be assigned by Consultant, by operation of law or otherwise, without the prior written consent of SanDisk.  Any assignment in violation of this Section will be void.  Subject to the foregoing, this Agreement will be binding upon the Parties’ respective successors and assigns. 

11.2     This Agreement supersedes all prior and contemporaneous communications, understandings and writings and constitutes the entire agreement between the Parties with respect to the subject matter hereof. This Agreement may not be amended or altered except by written agreement signed by the Parties.  No failure or delay by either Party in enforcing any right under this Agreement will be deemed a waiver of such right.  

11.3     This Agreement will be governed in all respects by California law without regard to its choice or conflict of law rules.  The Parties agree that the exclusive jurisdiction and venue for any action brought between the Parties under this Agreement shall be the courts sitting in Santa Clara County, California. The parties hereto further agree to accept service of process, for any action brought related to this Agreement in Santa Clara County, California, by the mailing of process by registered or certified mail, postage prepaid, return receipt requested, to the representative or address specified above in this Agreement, as applicable, or such other representative or address as has been identified as of such time as service is to be made.

11.4    If any term of this Agreement is held to be invalid or unenforceable, the remaining of its provisions will continue in full force and effect.

11.5     This Agreement may be executed by exchange of signature pages by facsimile and in any number of counterparts, each of which shall be deemed an original as against any Party whose signature appears thereon and all of which together will constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives.
	
					
	SanDisk Corporation
	 
	CONSULTANT: Dr. Chenming Hu

	 
	 
	 
	 
	 

	BY:
	/s/ Judy Bruner
	 
	BY:
	/s/ Chenming Hu

	 
	 
	 
	 
	 

	NAME:
	Judy Bruner
	 
	NAME:
	Chenming Hu

	 
	 
	 
	 
	 

	TITLE:
	EVP Administration & CFO
	 
	TITLE:
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

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