Document:

exv10w4

 

Exhibit 10.4

ARBITRON INC.

Amended and Restated

Schedule of Non-Employee Director Compensation 1/

	 	 	 
	Annual Retainer Fee
	 	$30,000
	 
	 	 
	Board Meeting Fees (In person or by
telephone)
	 	$1,500
	 
	 	 
	Committee Chair Retainer
	 	Audit Committee: $10,000
	 
	 	Other Committees: $7,500
	 
	 	 
	Chairman of the Board Annual Retainer
	 	The Chairman of the Board of Directors will also receive an additional annual retainer of $135,000.
	 
	 	 
	Committee In Person Meeting Fees
	 	$1,500
	 
	 	 
	Committee Telephonic Meeting Fees
	 	$750
	 
	 	 
	Initial Option Awards
	 	Each newly elected director will receive a one-time grant of options to purchase 15,000 shares of common stock, which options will vest and become exercisable in three equal installments of 5,000 shares over a three-year period and will expire 10 years from the date of grant.
	 
	 	 
	Annual Option Awards
	 	Beginning the year after initial election, each non-employee director will receive an annual grant of options to purchase 7,000 shares of common stock, which options will be fully vested upon grant.  These options will become exercisable in full six months after the date of grant and will expire 10 years from the date of grant.

 

			
	1/	 	All cash retainer fees and meeting fees payable to directors, except the Chairman of the
Board’s Annual Retainer, may be partially or fully deferred at the election of each director into
deferred stock units (DSUs) or may be paid at the election of each director in the form of stock
options in lieu of cash.exv10w1

 

Exhibit 10.1

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

VOLUME PURCHASE AGREEMENT

     This Volume Purchase Agreement (“VPA”), dated as of March 31, 2006 (the “Effective
Date”), is made by and between Komag USA (Malaysia) Sdn., a Malaysia unlimited liability
company (“Komag”), Komag, Incorporated, a Delaware Corporation (“Komag Inc.”), and Hitachi
Global Storage Technologies Singapore Pte., Ltd., a Singapore corporation (“HITACHI GST”).

BACKGROUND

     A. HITACHI GST (and/or its Affiliates) desires to purchase certain Media Products in
accordance with the terms of this VPA.

     B. Komag desires to sell to HITACHI GST (and/or its Affiliates) certain Media Products in
accordance with the terms of this VPA.

     NOW THEREFORE, for and in consideration of the covenants, conditions, and undertakings
hereinafter set forth, the parties agree as follows:

ARTICLE 1: DEFINITIONS

     For the purposes of this VPA, unless the context otherwise requires, the following terms will
have the respective meanings set out below and grammatical variations of such terms will have
corresponding meanings:

     1.1 [Intentionally Omitted]

     1.2 “Affiliate” of a party means any entity that directly or indirectly controls, is
under common control with, or is controlled by, such party. As used in this definition, “control”
means possession, directly or indirectly, of power to direct or cause the direction of management
or policies (whether through beneficial ownership of securities or other ownership interests, by
contract or otherwise).

     1.3 [Intentionally Omitted]

     1.4 “Component” means a component of a HITACHI GST product.

     1.5 [Intentionally Omitted]

     1.6 “Days” means consecutive calendar days.

     1.7 “Defect” has the meaning set forth in Section 5.5.1.

1

 

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

     1.8 “Delivery Date” or “Scheduled Delivery Date” means the date of delivery of
Products as specified in Pull Requests.

     1.9 [Intentionally Omitted]

     1.10 “Disentanglement” has the meaning set forth in Section 9.4.1.

     1.11 “Effective Date” has the meaning set forth in the opening paragraph of this VPA.

     1.12 [Intentionally Omitted]

     1.13 “Exhibit” means an attachment to this VPA that is referenced in Section
2.4. Exhibits are incorporated herein by reference thereto.

     1.14 “FGI” has the meaning set forth in Section 5.1.

     1.15 “First Executive Conference” has the meaning set forth in Section 12.4.

     1.16 “Force Majeure Event” means an act of nature, civil disruption, power outage,
public enemy, government action, or freight embargo beyond the control of a party.

     1.17 “HDDs” means hard disk drives.

     1.18 “Initial Term” has the meaning set forth in Section 9.1.

     1.19 “JIT Hubs” has the meaning set forth in Section 5.3.

     1.20 “Komag Group” means Komag Inc. and all of its subsidiaries.

     1.21 “Komag Shortfall” has the meaning set forth in Section 4.3.2.

     1.22 “Komag Shortfall Remedy Trigger” has the meaning set forth in Section
4.3.3.

     1.23 “Lead Time” means, for purposes of this VPA, the minimum length of time prior to
a specific Delivery Date that Komag must receive a Pull Request to ensure delivery by such date,
not to exceed 8 hours.

     1.24 [Intentionally Omitted]

     1.25 “Material Default” shall mean the occurrence of any of the following,
provided that in the event any of the following conditions are cured within the time
periods set forth therein, then no Material Default shall have occurred:

          1.25.1 Failure of Komag to deliver (subject to the conditions and requirements of
Sections 4.3.2 and 6.7) in a given Quarter the Purchase Requirements during the
applicable Quarter, or the failure of Komag to accept a valid and compliant Purchase Order in
accordance with Section 5.2.2 (but subject to Section 5.5), and the

2

 

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

failure by
Komag to remedy such condition within ten (10) business days after Komag has received notice
thereof (which notice must explicitly assert the existence and the nature of such condition under
this Section 1.25.1);

          1.25.2 Failure of HITACHI GST (subject to the conditions and requirements of Sections
4.3 and 5.5.1) to timely issue valid and compliant Purchase Orders pursuant to
Section 5.2.1 or HITACHI GST’s cancellation of such Purchase Orders, and the failure by
HITACHI GST to cure such breach within ten (10) business days after HITACHI GST has received notice
of such default (which notice must explicitly assert the existence and the nature of such condition
under this Section 1.25.2);

          1.25.3 Other than (i) a failure of Komag under Section 1.25.1 above, (ii) a failure of
HITACHI GST under Section 1.25.2 above and (iii) a breach of a payment obligation of
HITACHI GST under Section 6.6, a material breach by either party of any obligation,
covenant, or condition under this Agreement that is susceptible of cure, and the failure by the
breaching party to cure such breach within thirty (30) Days after the breaching party has received
notice of such default (which notice must explicitly assert the existence and the nature of such
condition under this Section 1.25.3), provided that if the cure requires more than
thirty (30) Days, a Material Default will be deemed to exist if the breaching party fails to (i)
promptly take action to cure such breach as quickly as reasonably possible; or (ii) cure such
breach within sixty (60) Days after the breaching party has received notice of such default;

          1.25.4 A failure of HITACHI GST to meet its payment obligations under Section 6.6, or

          1.25.5 An assignment or attempted assignment in violation of Section 12.5.

     1.26 “Media” means recording disks, manufactured by any entity, as used in data
storage devices.

     1.27 [Intentionally Omitted]

     1.28 “New Capacity” means the increase in media capacity by Komag in connection with
this Agreement.

     1.29 “Next Quarter” has the meaning set forth in Section 6.1.3.

     1.30 “Offset” has the meaning set forth in Section 6.5.4.

     1.31 “Overdue” has the meaning set forth in Section 6.6.

     1.32 “Price” or “Prices” means the amount(s) charged for Products, as
specified in Section 6.1.

     1.33 “Product” means the Media manufactured by Komag.

3

 

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

     1.34 “Program” means a HITACHI GST product classification, currently including, for
example, “Vancouver 4” and “Kurofune 2” disk drives. A Program may include various capacities,
numbers of disks per drive or drive performance specifications.

     1.35 [Intentionally Omitted]

     1.36 “Pull Request” means a request made by HITACHI GST to Komag for delivery of
Product(s) to HITACHI GST from a JIT Hub.

     1.37 “Purchase Order” means a purchase order placed by HITACHI GST or any subsidiary
of HITACHI GST to Komag for Products as contemplated by this VPA.

     1.38 “Purchase Requirements” has the meaning set forth in Section
4.1.1.

     1.39 “Quarter” means the applicable calendar quarter ending on March 31, June 30,
September 30 and December 31 of a given calendar year.

     1.40 [Intentionally Omitted]

     1.41 “Second Term” has the meaning set forth in Section 9.1.

     1.42 “Section” means a numbered section of this VPA.

     1.43 “Specifications” means designs, drawings, prints and written descriptions,
specification reviews and requirements for Products that have been developed or mutually accepted
by HITACHI GST and Komag as of the date of this VPA, or which may be developed or mutually accepted
by HITACHI GST and Komag during the term of this VPA.

     1.44 “Tolling Period” has the meaning set forth in Section 12.2.

     1.45 “Unit” means a single Product.

     1.46 “Unit Shortfall” has the meaning set forth in Section 5.5.1.

     1.47 “VPA” means this Volume Purchase Agreement, including the Exhibits.

     1.48 “HITACHI GST Shortfall Remedy Trigger” has the meaning set forth in Section
5.5.1.2.

2 ARTICLE 2: AGREEMENT STRUCTURE

     2.1 Background. Each party agrees to diligently cooperate with the other party to accomplish
the objectives of this VPA.

     2.2 Agreement Components. This VPA consists of this VPA (including its Exhibits), Purchase
Orders and Pull Requests. If there is a conflict among the terms and conditions of the various
documents or an ambiguity created by differences therebetween, the order of precedence will be (i)
this VPA (excluding its Exhibits), (ii) the Exhibits, and

4

 

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

(iii) the Purchase Orders and Pull
Requests. The VPA does not supersede the existing Goods Agreement #4902SD0054 (“Goods Agreement”),
attached as Exhibit E, originally executed between Komag and IBM, which has been assigned by IBM to
Hitachi Global Storage Technologies, Inc. In addition, this VPA does not supersede any unexpired
Statements of Work to the Goods Agreement entered into between Komag and HITACHI GST and/or its
Affiliates.

     2.3 Purchase Order. Purchase Orders will be used to convey the Price and number of Units, and
accordingly Purchase Orders must contain the following: Komag-designated part number, Price, Units
ordered, customer name, ship to address (destination), bill to address, and Purchase Order number.
The parties acknowledge that such Purchase Orders, as well as confirming documents,
acknowledgments, forms, invoices and the like used in the ordinary course of business may contain
other terms and conditions. Subject to Section 2.2, the parties agree that this VPA will take
precedence over any such document or other communication, representation or understanding whether
oral or written and that any term or condition relating to the subject matter of this VPA that is
inconsistent with this VPA (whether in contradiction to, in addition to, or that would result in
any ambiguity with respect to any term or condition in this VPA) will be deemed deleted and be of
no force, including, but not limited to, any term or condition purporting to supersede this VPA in
whole or in part or purporting to make any offer, acceptance, term, condition or other action
conditional upon acceptance of, or indicating agreement to, any inconsistent term or condition.
The foregoing may not be modified or waived except by written agreement of the parties,
specifically referencing this VPA, and signed by officers of both parties. The parties agree that,
without limiting Section 12.1, the foregoing shall not be superseded, altered, or
overridden by any provision in the Uniform Commercial Code as it may have been adopted by any
competent jurisdiction.

     2.4 Exhibits. The following Exhibits are incorporated into this VPA by reference and deemed to
be a part hereof:

       Exhibit A:
Current Prices and Sample Prices

       Exhibit B:
Progress Milestones

       Exhibit C:
Warranty Verification and Disposition Flow Chart

       Exhibit D:
Volume/Purchase Requirements

       Exhibit E:
Goods Agreement

3 ARTICLE 3: PRODUCT QUALIFICATION AND DEVELOPMENT

     3.1 Qualification Process. Each of the parties shall use commercially reasonable efforts to
qualify and to keep qualified Komag’s Products on at least one Program at all

5

 

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

times. Such efforts
will require qualification of Products in combination with other Components (such as multiple
combinations of Media and recording heads), as well as the subsequent qualification of HITACHI
GST’s disk drives incorporating such combinations.

     3.2 Qualification Locations. Following the Effective Date, Komag intends to manufacture
Products under this Agreement at factory locations in Penang, Malaysia.

4 ARTICLE 4: PRODUCT PURCHASE AND SALE COMMITMENTS

     4.1 Volume.

          4.1.1 Subject to Section 4.3, Komag agrees that it shall supply to HITACHI GST (and/or
its Affiliates and/or authorized contract manufacturers), and HITACHI GST agrees that it (and/or or
its Affiliates and/or authorized contract manufacturers) shall purchase from Komag, at the volumes
of Product set forth in Exhibit D (the “Purchase Requirements”). For purposes of
clarification, any Hitachi GST obligations regarding the Purchase Requirements or procedures
associated with the purchase of Products may be fulfilled by any HITACHI GST Affiliate.

          4.1.2 In an effort to bring the New Capacity up to its operational capacity as soon as is
practicable to both (a) satisfy the Purchase Requirements and (b) maximize the availability of
Product for HITACHI GST beyond the Purchase Requirements for each Quarter, Komag shall use all
commercially reasonable efforts and assign all commercially reasonable resources to (1) expedite
the completion of the New Capacity and the qualification of Products for HITACHI GST and (2)
maximize the utilization of New Capacity and existing capacity to improve yields. HITACHI GST
shall cooperate in good faith with Komag and provide all commercially reasonable assistance
necessary to help achieve such goals. The parties shall meet regularly to review, develop and
update plans and review progress toward goals. Komag and HITACHI GST agree that if Komag produces
any Products, other than sample Products, from the New Capacity in excess of Purchase Requirements,
such excess shall first be offered to HITACHI GST for purchase. If HITACHI GST declines to
purchase such excess Products, then Komag may use the excess New Capacity to offer Products to its
other customers.

          4.1.3
[***].

     4.2 [intentionally omitted]

     4.3 Exceptions and Qualifications to Purchase Requirements.

	 	4.3.1	 	Provided that Komag remains qualified on a Program pursuant to which HITACHI GST may
be able to use quantities of Products, the purchase of which would be sufficient to
satisfy the Purchase Requirements of Section 4.1, then HITACHI GST must (to the
extent commercially and economically reasonable) first satisfy its Purchase Requirements
with purchases of Products for such Programs.

6

 

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

	 	4.3.2	 	If Komag (a) does not deliver the Purchase Requirements due to failure of a Product
or Products to qualify for a particular Program or Programs; or (b) refuses or is unable
to deliver Products to satisfy duly accepted Purchase Orders in quantities equal to the
Purchase Requirements for the then applicable Quarter, then HITACHI GST shall notify Komag
of such condition (or, if Komag becomes aware of such condition prior to HITACHI GST
becoming aware of such condition, Komag shall notify HITACHI GST immediately) and give
Komag five (5) business days to remedy the condition before electing a remedy in
accordance with Section 4.3.3; provided, however, in the case of
clause (a) and (b) of this Section 4.3.2, if the difference between actual Komag
Product deliveries and the Purchase Requirements for a Quarter (the “Komag
Shortfall”) is not more than [***] percent ([***]%) of the Purchase Requirements for
such Quarter, Komag may increase the Purchase Requirement for the subsequent Quarter by a
number of Units equal to the Komag Shortfall, and no breach of Section 4.1.1 shall
have occurred (it being understood that if Komag fails to make up the full Komag Shortfall
in the subsequent Quarter, HITACHI GST may freely elect its remedies pursuant to
Section 4.3.3 and this VPA).
	 
	 	4.3.3	 	In the event that (A) Komag does not make up the Komag Shortfall in the immediately
following Quarter, or (B) the Komag Shortfall is more than [***] percent ([***]%) of the
Purchase Requirements for any Quarter (each a “Komag Shortfall Remedy Trigger”),
then HITACHI GST and Komag shall meet to discuss an amicable resolution and allocation of
the Purchase Requirements, which shall be set forth in writing and reference this VPA, and
in the event that such resolution has not been reached within five (5) business days of
HITACHI GST’s notice to Komag of the Komag Shortfall Remedy Trigger, then HITACHI GST
shall then be entitled at its sole discretion to elect the following remedies:

	 	4.3.3.1	 	continue under the terms of this VPA and reduce the Purchase
Requirements for the relevant Quarter only and make allocations to
and purchase Units from other suppliers; or
	 
	 	4.3.3.2	 	continue under the terms of this VPA and allow Komag to increase
the Purchase Requirements for the subsequent Quarter (and for that
Quarter only) by a number of Units determined by HITACHI GST, up to a
number equal to the Komag Shortfall (it being understood that if
Komag fails to make up such Komag Shortfall amount determined by
HITACHI GST in the subsequent Quarter, HITACHI GST may freely elect
its remedies pursuant to this Section 4.3.3 and this VPA); or

7

 

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

	 	4.3.3.3	 	terminate this VPA in accordance with Section 9.2 and take
the Offset under Section 6.7 below.

5 ARTICLE 5: PURCHASE OF PRODUCTS BY HITACHI GST

     5.1 Forecasts and Planning Schedules. HITACHI GST shall provide to Komag a current written
forecast of demand for Products HITACHI GST expects to purchase during the first twelve (12) months
of the term of this VPA, which forecast shall include the Purchase Requirements for each Quarter
and may include forecasts for additional Product needs. Thereafter during the term of this VPA, on
a monthly basis, HITACHI GST shall provide an updated forecast for any quantities of such Product
HITACHI GST expects to purchase in the following twelve (12) months, which forecast shall include
the Purchase Requirements for each Quarter and may include forecasts for additional product needs.
The most recently issued forecast will supersede all previous forecasts. Consistent with current
practice, Komag shall respond within seven (7) days with its supply commitment for the following
twelve (12) months. Komag shall also provide, on a monthly basis, a daily ship schedule for the
following month at least fourteen (14) days prior to each month. In addition, during the term of
this VPA on a monthly basis, Komag shall provide to HITACHI GST a current written summary of the
Product finished goods inventory (“FGI”) intended for HITACHI GST. This summary shall list
by Komag manufacturing site and JIT Hub location the amounts and types of FGI being held by Komag
for each of HITACHI GST’s Programs. All such forecasts by HITACHI GST and any confirmations or
other written summaries of FGI issued by Komag are intended to be non-binding and designed only to
assist the parties in allocating resources.

     5.2 Issuing Purchase Orders and Pull Requests.

	 	5.2.1	 	Consistent with the parties’ current practice, HITACHI GST shall submit to Komag a
[***] Purchase Order for all Units HITACHI GST must purchase pursuant to the Purchase
Requirements of Section 4.1. Hitachi GST may also include other volumes provided
by this VPA on the same Purchase Order.
	 
	 	5.2.2	 	With respect to Purchase Orders issued pursuant to Section 5.2.1 and in full
compliance with Section 2.3, no more than two (2) business days after receipt of
each such Purchase Order, Komag shall issue an acceptance of the Purchase Order in writing
confirming the quantity and other terms thereof; provided, however, that
if such Purchase Orders include quantities that are inconsistent with the Purchase
Requirements or do not meet the requirements of Section 2.3, Komag shall follow
the procedures and remedies set forth in Section 5.5.
	 
	 	5.2.3	 	HITACHI GST shall transmit a Pull Request by facsimile or other agreed upon means to
communicate to Komag, at the applicable JIT Hub, the part number, quantity, delivery
location and Delivery Date and time of each

8

 

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

	 	 	 	Product required. HITACHI GST’s transmission
of a Pull Request is authorization for Komag to deliver Product to HITACHI GST against the
Purchase Order for the part numbers and quantities set forth in the Pull Request. Komag
shall deliver Product from the applicable JIT Hub upon receipt of a Pull Request in
accordance with applicable Lead Times. HITACHI GST and Komag shall, prior to the
commencement of each Quarter, establish mutually acceptable Lead Times for Pull Requests,
which Lead Times shall in no event exceed eight hours.

     5.3 Komag Production and Inventory. During the term of this VPA, HITACHI GST will be issuing
forecasts and Purchase Orders and Komag will be producing FGI to meet the Purchase Requirements.
HITACHI GST’s forecast for a certain Quarter is not, and should not be deemed to be, a commitment
by HITACHI GST to buy or Komag to sell a specific amount of Product in a specific period of time.
Komag will use just-in-time delivery hubs located at or near HITACHI GST’s manufacturing or
distribution facilities in China and Thailand (“JIT Hubs”) with respect to its obligations
to provide the Purchase Requirements. Komag will: (i) bear all costs associated with warehousing
Products in the JIT Hub(s); (ii) ensure that HITACHI GST may withdraw Products from the JIT Hub(s)
in accordance with the terms of this VPA; (iii) retain title to Products until they are physically
delivered to HITACHI GST or its carrier upon withdrawal from the JIT Hub(s); (iv) fully insure or
require the JIT Hub operator to fully insure all Products in transit to or stored at a JIT Hub
against all risk of loss or damage until such time as HITACHI GST takes title to them; and (v)
require that the JIT Hub operator take all steps necessary to protect all Products in a JIT Hub
consistent with good commercial warehousing practice. The parties may enter into SOWs or other
agreements regarding JIT hub practices, if needed.

     5.4 End of Life. HITACHI GST shall use commercially reasonable efforts to notify Komag as soon
as possible before the termination of each Program.

     5.5 Liability on Cancellation or Deficient Issuance of a Purchase Order.

	 	5.5.1	 	Section 5.2.1 Purchase Orders.

	 	5.5.1.1	 	HITACHI GST must issue a Purchase Order for Units of Product equal
to the Purchase Requirements in each Quarter pursuant to Section
5.2.1. In the event that HITACHI GST fails to (i) timely issue
such Purchase Order, (ii) cancels such Purchase Order in writing or
(iii) deficiently issues such Purchase Order (such that the aggregate
number of Units requested in a given Quarter is less than the
Purchase Requirements (such shortfall in the number of Units, the
“Unit Shortfall”), and each of (i), (ii) or (iii), a
“Defect”), Komag may elect a remedy in accordance with
Section 5.5.1.2, provided, however, that
prior to taking any of the foregoing actions, Komag must

9

 

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

	 	 	 	(a)give HITACHI GST written notice of the Defect and give HITACHI GST a
single five (5) business day period to correct such Defect and issue
or re-issue such Purchase Order, and the time requirement for issuing
such Purchase Order set forth in Section 5.2.1 shall be extended
accordingly, and (b) if HITACHI GST’s Unit Shortfall in a given
Quarter is not greater than [***] percent ([***]%) of its Purchase
Requirements for that Quarter, then HITACHI GST may increase the
Purchase Requirement for the subsequent Quarter by a number of Units
equal to the Unit Shortfall, and no breach of Section 4.1.1
shall have occurred (it being understood that if HITACHI GST fails to
make up the full Unit Shortfall in the subsequent Quarter, Komag may
freely elect its remedies pursuant to Section 5.5.1.2 and
this VPA).
	 
	 	5.5.1.2	 	In the event that (A) HITACHI GST fails to make up the full Unit
Shortfall for a Quarter in the following Quarter, or (B) the Unit
Shortfall in any given Quarter is more than [***] percent ([***]%) of
the Purchase Requirements for such Quarter (each a “HITACHI GST
Shortfall Remedy Trigger”), then HITACHI GST and Komag shall meet
to discuss an amicable resolution and allocation of the Purchase
Requirements, which shall be set forth in writing and reference this
VPA, and in the event that such resolution has not been reached
within five (5) business days of Komag’s notice to HITACHI GST of the
HITACHI GST Shortfall Remedy Trigger, then Komag shall then be
entitled at its sole discretion to elect the following remedies:

	 	5.5.1.2.1	 	[Intentionally Omitted]
	 
	 	5.5.1.2.2	 	waive the breach and continue under the terms of this
VPA; Komag shall be free to use the Unit Shortfall in that
Quarter only for any other purpose it elects, including
manufacturing Products to sell to third party purchasers;
furthermore, if Komag wishes to reduce the Purchase
Requirements on a going forward basis as a result of the Unit
Shortfall, the parties shall meet in good faith to discuss a
mutually acceptable solution, such meeting to include an
executive from each party if desired by the other

10

 

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

	 	 	 	party (the
parties may also use the Dispute Resolution method of Section
12.4); or
	 
	 	5.5.1.2.3	 	waive the breach and continue under the terms of this
VPA and allow HITACHI GST to increase the Purchase
Requirement for the subsequent Quarter by a number of Units
determined by HITACHI GST, up to a number equal to the Unit
Shortfall, but at least [***]% of the Purchase Requirements
for that Quarter (it being understood that if HITACHI GST
fails to make up the agreed amount of Unit Shortfall in the
subsequent Quarter, Komag may freely elect its remedies
pursuant to this Section 5.5.1.1 and this VPA).
	 
	 	5.5.1.2.4	 	If Hitachi GST does not make up the Unit Shortfall as
set forth in Section 5.5.1.2.3, Komag may invoke the dispute
resolution procedures in either 6.2.1 or 12.4. In such
discussions, the parties will explore in good faith all
available options to mitigate harm to Komag, which may
include, but are not limited to, reducing or extending the
term of this VPA, reducing or increasing the Purchase
Commitment for future Quarters, and other measures to allow
Komag to mitigate its damages, such as transferring capacity
to other customers.

6 ARTICLE 6: PRICE AND PAYMENT TERMS FOR PRODUCTS

     6.1 Product Pricing. All Prices shall be in U.S. Dollars.

	 	6.1.1	 	Current Prices. The current Unit Prices that HITACHI GST will pay for all Products
purchased during the first Quarter pursuant to this VPA are in U.S. Dollars and set forth
in Exhibit A (the “Prices”). The Prices for such Products are subject to
adjustment following the first Quarter of the term of this VPA in accordance with
Section 6.1.3.
	 
	 	6.1.2	 	[***]. In the event that HITACHI GST elects to challenge the pricing of the
Products under this Section 6.1.2, the parties shall follow the procedures set
forth in Section 6.2 below.
	 
	 	6.1.3	 	Subsequent Prices for All Products. Komag shall make commercially reasonable
efforts to increase efficiencies and take other measures so as to

11

 

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

	 	 	 	reduce prices on an
ongoing basis. The parties agree to negotiate in good faith to set the Prices for any
Products under any Program. Such negotiations must commence on a date beginning no later
than fifty (50) Days before the beginning of the Quarter following the then current
Quarter (the “Next Quarter”) and the parties must conclude such negotiations no
later than twenty (20) Days before the beginning of the Next Quarter. Komag shall, no
later than nineteen (19) Days before the beginning of the Next Quarter, notify HITACHI GST
of the mutually agreed-upon Prices applicable to the Next Quarter by means of a pricing
letter. Notwithstanding the foregoing, the parties agree that the review of such Prices
shall not require the parties to modify any of the non-price terms of this VPA.

     6.2 Pricing Disputes.

	 	6.2.1	 	In the event the parties cannot agree upon pricing as described in Section
6.1.2 or Section 6.1.3, either party may, upon written notice to the other,
submit such dispute to the Chief Executive Officer of Komag and the Chief Operating
Officer of HITACHI GST, or their respective designees, who shall meet to attempt to
resolve the dispute by good faith negotiations. The parties may also use the Dispute
Resolution procedure set forth in Section 12.4.
	 
	 	6.2.2	 	Audit Rights. With respect to [***] Section 6.1.2, HITACHI GST may appoint
an independent auditor (reasonably acceptable to Komag) to validate Komag’s records [***].

     6.3 [Intentionally Omitted]

     6.4 [Intentionally Omitted]

     6.5 Invoices. For shipments through Komag’s designated JIT Hub, Komag shall invoice HITACHI
GST upon delivery of Product to the delivery location indicated on the Pull Request. For shipments
direct to HITACHI GST, Komag will invoice upon shipment. Terms for payment of all invoices will be
net [***] Days from date of invoice.

     6.6 Late Payment. If HITACHI GST fails to make a timely payment on any invoice, Komag will
provide HITACHI GST with a notice of late payment and give HITACHI GST [***] Days to pay the
invoice. If HITACHI GST fails to make full payment on the invoice within the [***] Day period,
KOMAG may invoke the dispute resolution procedure of Section 6.2.1 or 12.4. In any event, the
executives of both HITACHI GST and KOMAG shall attempt in good faith to reach a mutually acceptable
resolution within [***] Days.

     6.7 Right of Offset. HITACHI GST may immediately set off and recoup any amounts HITACHI GST
(including its subsidiaries or Affiliates) owes Komag (including its subsidiaries and Affiliates),
regardless of when payment is due, against any debt, credit or other obligation or liability
payable by Komag to HITACHI GST, including the [***]

12

 

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

Balance (regardless of whether such debt, credit, obligation or liability arose out of or
relates to this VPA) (the “Offset”), and such Offset will be effective even if a receiver,
custodian, trustee, examiner, liquidator or similar official has been appointed for Komag or any
substantial portion of its assets, upon the occurrence of the following events:

	 	6.7.1.1	 	ten (10) business days after Komag’s receipt of written notice
from HITACHI GST of Komag’s Material Default, unless such failure or
performance is corrected within such ten-day period; or
	 
	 	6.7.1.2	 	Komag’s cessation of business, liquidation or dissolution; or
	 
	 	6.7.1.3	 	the occurrence of any insolvency event described in Section
9.3; or

     assignment or attempted assignment in violation of Section 12.4. After the Offset, in
the event the [***] Balance remains positive, Komag shall make a cash payment of the remaining
[***] Balance to HITACHI GST in a reasonable period of time not to exceed [***] Days.

7 ARTICLE 7: SHIPMENT AND DELIVERY OF PRODUCTS

     7.1 Shipment of Product. Consistent with the existing JIT Hub agreement(s) and pull processes,
Product delivery made by Komag will be DDU to the JIT Hub. HITACHI GST will assume title after
Products have been pulled from JIT Hub. Both parties also understood that Komag will bear risk of
loss or damage during transportation or storage prior to HITACHI GST accepted title transfer. Late
Delivery. Komag shall notify HITACHI GST immediately if for any reason Komag fails to comply or
anticipates that it may fail to comply with the timing terms of a Pull Request (i.e., failure to
meet a Delivery Date). In the event of a late delivery, without limiting the rights and remedies
available to HITACHI GST under this VPA, the parties will cooperate in good faith to minimize the
disruption caused to HITACHI GST by such late delivery.

     7.2 [Intentionally Omitted]

8 ARTICLE 8: WARRANTIES

     8.1 General Mutual Warranties. Each party has the corporate power and authority to own its
properties and to carry on its business as now being conducted and as contemplated to be conducted.
Each party is duly qualified to do business and in good standing as a foreign corporation under
the laws of each jurisdiction in which the failure to be so qualified would have a material adverse
effect on it.

     8.2 KOMAG Warranties. In addition to the warranty provisions set forth in the Goods Agreement
and SOW, for a period of fifteen (15) months from the date of Komag’s invoice for each Unit of
Product (the “Warranty Period”), Komag represents and warrants

13

 

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

that each Unit of Product is (i) free from defects in materials or workmanship and (ii)
conforms to the Specifications.

     8.3 Warranty Procedure. The parties agree to use the return material authorization process
described in the Warranty Verification and Disposition flow chart set forth in Exhibit C to
manage and dispose of the Products returned to HITACHI GST under warranty.

     8.4 [Intentionally Omitted]

     8.5 [Intentionally Omitted]

	 	8.5.1	 	[Intentionally Omitted]
	 
	 	8.5.2	 	[Intentionally Omitted]
	 
	 	8.5.3	 	[Intentionally Omitted]
	 
	 	8.5.4	 	[Intentionally Omitted]
	 
	 	8.5.5	 	[Intentionally Omitted]
	 
	 	8.5.6	 	[Intentionally Omitted]

9 ARTICLE 9: TERM AND TERMINATION

     9.1 Term. The term of this VPA shall begin on the Effective Date and shall continue for
thirty-six (36) months from January 1, 2007 (the “Initial Term”). The term of the VPA
shall automatically be extended for an additional twelve (12) months beyond the Initial Term (the
“Second Term”) unless either party gives written notice to the other party no later than
six (6) months prior to the end of the Initial Term that it does not want to extend the term of the
VPA for the Second Term.

     9.2 Termination for Cause. Either party may terminate this VPA in the event of a Material
Default (including the occurrence of a Force Majeure Event that causes a delay exceeding the
Tolling Period) of this VPA by the other party, upon notice to such other party, which notice must
describe the reason for such termination and must specify the termination date, which termination
date must be no earlier than five (5) Days after the date of such notice. The parties acknowledge
that neither party will have the right to terminate this Agreement due to any breach of this
Agreement other than a Material Default or insolvency event under Section 9.3 or a Force
Majeure Event beyond the tolling period in Section 12.2.

     9.3 Termination for Insolvency. This VPA may be terminated by either party by notice to the
other party upon (i) the commencement by the other party of a voluntary or involuntary proceeding
under any federal, state, provincial or foreign bankruptcy law or similar law which is not
dismissed within ninety (90) Days; (ii) the appointment for the other party of a receiver, trustee
or similar official or a general assignment for the benefit of

14

 

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

such party’s creditors; (iii) the winding up or liquidation of the other party; or (iv) a
party becomes unable to pay its debts either because it is subject to a Suspension of Payments
order, bankruptcy, or other insolvency proceeding. In the case of (i) to (iv) above, termination
may also be effected by serving notice on the liquidator, administrator, or receiver, as the case
may be.

     9.4 Rights Upon Termination.

          9.4.1 Disentanglement. Upon termination by either party for any reason under this
Agreement, Komag shall complete delivery and HITACHI GST shall accept delivery on all open monthly
Purchase Orders for already completed Products included in the Purchase Requirements, and HITACHI
GST shall pay for all such Products properly delivered and invoiced in accordance with Article
6, and Komag and HITACHI GST shall cooperate to ensure an orderly separation (collectively, a
“Disentanglement”).

          9.4.2 Termination by Komag or HITACHI GST. In the event that either Komag or HITACHI
GST terminates this VPA pursuant to either Section 9.2 or Section 9.3, such
termination is without prejudice to the terminating party’s rights to recover for damages with
respect to the breach that gave rise to the right to terminate.

     9.5 Survival. The following provisions will survive the termination or expiration of this VPA:
Articles 1, 2, 6, 8, 9.4, 10, 11, and 12, as well as any obligations arising before the effective
date of termination or expiration.

10 ARTICLE 10: OTHER PROVISIONS

     10.1 The terms relating to limitation of liability, indemnification and intellectual property
set forth set forth in the Goods Agreement shall apply to all purchases under this VPA.

     10.2 [Intentionally Omitted]

     10.3 EACH HITACHI GST SUBSIDIARY THAT ISSUES PURCHASE ORDERS TO KOMAG UNDER THIS AGREEMENT IS
A THIRD PARTY BENEFICIARY OF THE RIGHTS AND REMEDIES AFFORDED HITACHI GST AS CONTAINED IN THIS
AGREEMENT.

11 ARTICLE 11: CONFIDENTIALITY

     11.1 [Intentionally Omitted]

     11.2 [Intentionally Omitted]

     11.3 [Intentionally Omitted]

     11.4 [Intentionally Omitted]

15

 

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

     11.5 Confidentiality of Agreement. In addition to the confidentiality and exchange of
information terms of the Goods Agreement, each party agrees that the terms and conditions, but not
the existence, of this VPA will be treated as the other’s Confidential Information and that no
reference to the terms and conditions of this VPA or to activities pertaining thereto can be made
in any form of public or commercial advertising without the prior written consent of the other
party; provided, however, that each party may disclose the terms and conditions of
this VPA: (i) as required by law, as set forth in the Goods Agreement; (ii) to legal counsel of the
parties; (iii) in connection with the requirements of a public offering, secondary offering, debt
offering, or securities filing of the parties, or otherwise as obligated by law; (iv) in
confidence, to accountants, banks, and financing sources and their advisors; or (v) in confidence,
in connection with the enforcement of this VPA or rights under this VPA. In the event of (i),
(iii) (iv) and (v), each party agrees to redact terms that are not necessary or required by the
disclosure.

     11.6 [Intentionally Omitted]

     11.7 [Intentionally Omitted]

12 ARTICLE 12: GENERAL

     12.1 Governing Law. The choice of law for this VPA shall be the same as set forth in the Goods
Agreement.

     12.2 Force Majeure. Neither party shall be liable for its failure to perform any of its
obligations hereunder due to a Force Majeure Event, provided that the party suffering such
delay immediately notifies the other party of the delay and provided further that
the period of delay shall not exceed ninety (90) days (the "Tolling Period"). In the event
that the delay exceeds the Tolling Period, the non-breaching party may terminate this VPA pursuant
to Section 9.2. For avoidance of doubt, this provision is intended to clarify and
supplement the force majeure provision of the Goods Agreement with respect to matters covered by
this VPA.

     12.3 Trademarks. Nothing in this VPA gives either party a right to use the other party’s
name, trademark(s), or trade name(s), directly or indirectly, without the other party’s prior
written consent, except as may be required by applicable law or court order. In such a case, the
party required to disclose such information shall provide prompt notice of such requirement in
order that the other party may seek appropriate protective orders.

     12.4 Dispute Resolution. The parties agree that any material dispute between the parties
relating to this VPA may be handled as follows:

	 	12.4.1	 	Upon the request of any party, the parties will submit the dispute to a panel of two
senior executives (Vice-President or more senior) of each party. Either party may
initiate this proceeding by notifying the other party in writing pursuant to the notice
provisions of Section 12.11. Within five (5) Days from the date of receipt of the
notice, the parties’ executives shall confer (via

16

 

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

	 	 	 	telephone or in person) in an effort to resolve such dispute (the “First Executive
Conference”). The decision of the executives shall be final and binding on the
parties. Each party’s executives shall be identified by notice to the other party and
may be changed at any time thereafter also by notice to the other party. In the event
that the dispute cannot resolved in the First Executive Conference, either party is
free to pursue any remedies available to it in law or equity, consistent with the terms
of this VPA.

     12.5 Assignment. Except as set forth in this Section 12.5, neither this Agreement,
nor any of the rights or obligations hereunder, may be assigned, transferred, subcontracted or
delegated by a party hereto to any third party (other than an Affiliate of the assigning party),
including without limitation, by operation of law or pursuant to a Change of Control, as defined
below, without the prior written consent of the other party. Notwithstanding the foregoing, (a)
Komag may assign this Agreement, and the rights and obligations hereunder, without the prior
consent of HITACHI GST, in connection with a Change of Control and (b) HITACHI GST may assign this
Agreement, and the rights and obligations hereunder, without the prior consent of Komag, to a third
party in connection with a Change of Control. However, in the event of such Change in Control, the
other party (i.e., the party NOT undergoing the Change in Control) may terminate this Agreement
upon ninety (90) days notice, and HITACHI GST may exercise its offset rights for any remaining
[***] Balance pursuant to Section 6.7. For purposes of this Section 12.5, "Change of
Control” shall mean (i) any sale, lease, exchange or other transfer (in one transaction or
series of transactions) of all, or substantially all, of the assets of such party, (ii) any
consolidation or merger or other combination of a party in which such party is not the continuing
or surviving corporation or pursuant to which shares of such party’s common stock would be
converted into cash, securities or other property (other than a merger of such party in which the
holders of such party’s common stock immediately prior to the merger hold at least a majority of
the outstanding securities of the combined entity), or (iii) any transaction (or series of related
transactions) pursuant to which any person (as defined in Section 13 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act”), becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of 35% or more of such party’s outstanding
common stock. Any purported assignment of this VPA or the rights or obligations of a party under
this VPA in violation of this Section 12.5 shall be null, void and of no further force or
effect and shall constitute a Material Default.

     12.6 Severability. If any of the provisions of this VPA are held by a court or other tribunal
of competent jurisdiction to be unenforceable, the remaining portions of this VPA will remain in
full force and effect.

     12.7 Failure to Enforce. The failure of either party to enforce at any time or for any period
of time the provisions of this VPA will not be construed to be a waiver of such provisions or of
the right of such party to enforce each and every provision of this VPA in the future.

17

 

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

     12.8 Agency. This VPA does not create a principal to agent, employer to employee, partnership,
joint venture, or any other relationship except that of independent contractors between Komag and
HITACHI GST.

     12.9 Request in Writing. All requests such as Pull Requests, acceptances/rejections, notices,
must be made or confirmed in writing. Such writings must take the form of electronic mail (receipt
confirmed), facsimile (receipt-confirmed) and/or posted letter (return-receipt).

     12.10 Counterparts. This VPA may be executed in one or more counterparts, each of which will
be deemed to be an original, but all of which will be considered one and the same instrument. A
photocopy of a signature or a facsimile of a signature shall be as valid as an original.

     12.11 Notices. Except as otherwise provided herein, all notices hereunder will be deemed given
if (a) in writing and delivered personally; or (b) sent by facsimile transmission that is confirmed
by return facsimile or e-mail; to the parties at the following addresses (or at such other
addresses as will be specified by like notice):

	 	 	 	 	 
	 

	 	(i)
	 	if to HITACHI GST, to:
	 
	 	 	 	 
	 

	 	 	 	Hitachi Global Storage Technologies, Inc.
	 

	 	 	 	5600 Cottle Road
	 

	 	 	 	San Jose, CA 95193
	 

	 	 	 	Attention: Mr. Ed Kwong, Procurement
	 

	 	 	 	Fax No.: (408) 717-9298
	 
	 	 	 	 
	 

	 	 	 	With a copy to:
	 

	 	 	 	Hitachi Global Storage Technologies, Inc.
	 

	 	 	 	Hitachi GST Legal Department
	 

	 	 	 	Attention: Paula Gani
	 

	 	 	 	5600 Cottle Road
	 

	 	 	 	San Jose, CA 95193
	 

	 	 	 	Fax No.: (408) 717-9289
	 
	 	 	 	 
	 

	 	(ii)
	 	if to Komag to:
	 
	 	 	 	 
	 

	 	 	 	Komag USA (Malaysia) Sdn. Bayan Lepas Free Trade Zone
	 

	 	 	 	Phase III
	 

	 	 	 	11900 Penang
	 

	 	 	 	Malaysia
	 

	 	 	 	FX: 011-604-643-9881Attention: Kheng Huat Oung, Vice President, GM, Media

Operations

18

 

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

	 	 	 	 	 
	 

	 	 	 	With a copy to:
	 
	 	 	 	 
	 

	 	 	 	Komag, Incorporated
	 

	 	 	 	1710 Automation Parkway
	 

	 	 	 	San Jose, California 95131
	 

	 	 	 	Attention: Chief Financial Officer
	 

	 	 	 	Fax No.: (408) 944-9234
	 
	 	 	 	 
	 

	 	 	 	and
	 
	 	 	 	 
	 

	 	 	 	Wilson Sonsini Goodrich & Rosati, P.C.
	 

	 	 	 	650 Page Mill Road
	 

	 	 	 	Palo Alto, California 94304
	 

	 	 	 	Attention:      Page Mailliard, Esq.
	 

	 	 	 	                      Selwyn Goldberg, Esq.
	 

	 	 	 	Fax No.: (650) 493-6811

Any notice given by mail will be effective when received. Any notice given by electronic mail or
facsimile transmission will be effective when the appropriate electronic mail or facsimile
transmission acknowledgment is received.

     12.12 Amendments. This VPA may only be amended in writing signed by authorized
representatives of each of the parties. To be effective, such amendments must specifically
reference this VPA.

     12.13 Complete Agreement. Subject to Section 2.2., this VPA, Exhibits, and specific Purchase
Orders and Pull Requests set forth the complete agreement between the parties regarding their
subject matter and replace all prior or contemporaneous communications, understandings or
agreements, written or oral, about this subject.

     12.14 Performance During Pendency of Disputes. If a dispute arises between the parties,
regardless of whether such dispute requires the use of the procedures described in Section
6.2 or Section 12.4, subject to the terms and conditions of this Agreement, (a) in no
event nor for any reason shall Komag interrupt the provision of Products to HITACHI GST, delay
manufacture or delivery of Products or perform any other action that prevents, slows down, or
reduces in any way the provision of Products or HITACHI GST’s ability to conduct its business; and
(b) each party shall continue to perform its obligations under this Agreement, unless: (x)
authority to do so has been granted by the other party or conferred by a court of competent
jurisdiction; or (y) this Agreement has been terminated pursuant to Section 9.2 or
Section 9.3 and a Disentanglement has occurred.

19

 

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

     IN WITNESS WHEREOF, the parties have caused this Volume Purchase Agreement to be signed and
accepted by their duly authorized representatives, effective as of the Effective Date.

	 	 	 	 	 
	 

	 	Hitachi Global Storage Technologies
Singapore Pte., Ltd., a Singapore
corporation
	 	Komag USA (Malaysia) Sdn.
a Malaysian corporation
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	Komag Incorporated	 	 
	 

	 	a Delaware corporation	 	 
	 
	 	 	 	 
	 

	 	 	 	 

S-1

 

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

EXHIBIT A

PRICES

[***]

A-1

 

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

ADDITIONAL PAYMENT TERMS

     HITACHI Global Storage Technologies Singapore Pte., Ltd. shall make [***] payments to Komag
Inc. of [***] to be applied against [***] purchases of Product in accordance with this Exhibit as
set forth below. An [***] Installment shall be made by HITACHI GST on [***] in accordance with
[***] Exhibit B. [***]. The [***] Amount shall be repaid by Komag, Inc. to HITACHI GST
solely in accordance with [***] Section 6.7 and Section 4.3.3 of the VPA.

     The parties agree that the [***] Amount will be used by the Komag Group solely for
manufacturing and operations in connection with the [***], and not for the Komag Group’s general
working capital purposes.

     Starting no earlier than the first date that first production comes off the [***], and no
later than [***], Komag Inc. shall make payments quarterly, within 7 days of the end of each
Quarter, to Hitachi Global Storage Technologies Singapore Pte., Ltd. equal to [***] for each Unit
invoiced (to HITACHI GST, its Affiliates or its authorized contract manufacturers listed below)
above [***] Units per Quarter, (the "Per Unit Offset") [***], then the remainder of the
[***] Balance shall become due and payable to HITACHI GST at the end of the Initial Term, and Komag
Inc. shall make such payment in a reasonable period of time not to exceed 15 Days. For purposes of
clarification, payments by Komag shall be made to Hitachi Global Storage Technologies Singapore
Pte., Ltd only, regardless whether Products are purchased by other HITACHI GST Affiliates or
authorized HITACHI GST contract manufacturers.

     HITACHI GST Authorized Contract Manufacturers*

          o Excelstor

 

			
	*	 	HITACHI GST may revise this list as needed.

A-2

 

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

EXHIBIT B

Progress Milestones

[***]

B-1

 

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

EXHIBIT C

Warranty Verification and Disposition Flow Chart

[***]

C-1

 

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

EXHIBIT D

Volumes

	 	 	 
	Quarter	 	Volume Requirement
	[***] Quarter of [***]

	 	[***] Units
	[***] Quarter of [***]

	 	[***] Units
	[***] Quarter of [***] and each Quarter following the
[***] Quarter of [***] through the end of the term of
this VPA.

	 	[***] Units

D-1

 

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

EXHIBIT E

Goods Agreement

E-1

 

 

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

 

GOODS

Agreement # 4902SD0054

This Base Agreement (“Base Agreement”) dated as of 5/01/2002 (“Effective Date”), between
International Machines Corporation (“Buyer”) and Komag (“Supplier”), establishes the basis for a
multinational procurement relationship under which Supplier will provide Buyer the Products and
Services described in SOWs issued under this Base Agreement. Products and Services acquired by
Buyer on or after the Effective Date will be covered by this Base Agreement. This Base Agreement
will remain in effect until terminated.

1.0 Definitions:

“Affiliates” means entities that control, are controlled by, or are under common control with, a
party to this Agreement.

“Agreement” means this Base Agreement and any relevant Statements of Work (“SOW”), Work
Authorizations (“WA”), and other attachments or appendices specifically referenced in this
Agreement.

“Participation Agreement” or “PA” means an agreement signed by one or more Affiliates which
incorporates by reference the terms and conditions in this Base Agreement, any relevant SOW, and
other attachments or appendices specifically referenced in PA.

“Personnel” means agents, employees or subcontractors engaged or appointed by Buyer or Supplier.

“Prices” means the agreed upon payment and currency for Products and Services, including all
applicable fees, payments and taxes, as specified in the relevant SOW and/or WA.

“Products” means items that Supplier prepares for or provides to Buyer as described in a SOW.

“Services” means work that Supplier performs for Buyer as described in a SOW.

“Statement of Work” or “SOW” means any document that:

1. identifies itself as a statement of work;

2. is signed by both parties;

3. incorporates by reference the term and conditions of this Base Agreement; and

4. describes the Products and Services, including any requirements, specifications or
schedules,

“Work Authorization” or “WA” means Buyer’s authorization in either electronic
or tangible form for Supplier to conduct transactions under this Agreement in accordance
with the applicable SOW (i.e., a purchase order, bill of lading, or other Buyer
designated document). A SOW is a WA only if designated as such in writing by Buyer.

2.0 Statement of Work

Supplier will provide the Products or Services as specified in the relevant SOW only when specified
in a WA. Supplier will begin work only after receiving a WA from Buyer. Buyer may request changes to
a SOW and Supplier will submit to Buyer the impact of such changes. Changes accepted by Buyer will
be specified in an amended SOW or change order signed by both parties. Supplier will maintain the
capability to supply agreed upon Products, including parts of Products, for a period of _12_ months after withdrawal of such Products as specified in the
relevant SOW. Supplier will notify Buyer of its intent to withdraw any Product and will continue to
deliver such withdrawn Products for the periods as specified in the relevant SOW.

3.0 Pricing

Supplier will provide Products and Services to Buyer for the Prices. The Prices for Products and
Services specified in a WA and accepted by Buyer will be the only amount due to Supplier from
Buyer.

4.0 Payments and Acceptance

Terms for payment will be specified in the relevant SOW and/or WA. Payment of invoices will
not be deemed acceptance of Products or Services, but rather such Products or Services will be
subject to inspection, test, acceptance or rejection by Buyer until successful integration into
Buyer’s products, or for a period as specified in the relevant SOW, whichever occurs first. Buyer
may, at its option, either reject Products or Services that do not comply with the specifications
and requirements for a refund plus any inspection, test and transportation charges paid by Buyer,
or require prompt correction or replacement of such Products upon Buyer’s written instruction. Buyer
may reject entire lots of Products which do not meet quality levels as specified in the relevant
SOW and/or WA.

5.0 Electronic Commerce

To the extent permitted by local law, the parties will conduct transactions using an
electronic commerce approach under which the parties will electronically transmit and receive
legally binding purchase and sale obligations (“Documents”), including electronic credit entries
transmitted by Buyer to the Supplier account specified in the relevant SOW and/or WA. The parties
will enter into a separate agreement governing the transmission of such electronic transactions and
associated responsibilities of the parties.

	 	 	 	 	 
	6.0 Warranties
	 	 	 	 
	 
	6.1 Ongoing Warranties
	 	 	 	 
	 
	Form Title: Goods

	 	 
	 	Form Release: 8/98
	Form Owner: Global Procurement

	 	
	 	Revision: 09/01

E-2

 

 

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

 

GOODS

Agreement # 4902SD0054

Supplier makes the following ongoing representations and warranties:

1. it has the right to enter into this Agreement and its performance of this Agreement
will comply, at its own expense, with the terms of any contract, obligation, law, regulation or
ordinance to which it is or becomes subject;

2. no claim, lien, or action exists or is threatened against Supplier that would
interfere with Buyer’s use or sale of the Products;

3. Products and Services do not infringe any intellectual property right of a third party;

4. all authors have agreed not to assert their moral rights (personal rights associated
with authorship of a work under applicable law), in the Products, to the extent permitted
by law;

5. Products are free from defects in design (except for written designs provided by Buyer
unless such designs are based entirely on Supplier’s specifications), material and
workmanship and will conform to the warranties, specifications and requirements, including
but not limited to quality requirements, in this Agreement for the time period from the date
of shipment as specified in the relevant SOW and/or WA;

6. Products are safe for use consistent with and will comply with the Warranties,
specifications and requirements in this Agreement;

7. Products and Services which interact in any capacity with monetary data are euro ready such
that when used in accordance with their associated documentation they are capable of correctly
processing monetary data in the euro denomination and respecting the euro currency formatting
conventions (including the euro sign);

8. none of the Products contain nor are any of the Products manufactured using ozone depleting
substances known as halons, chlorofluorocarbons,
hydrochlorofluorocarbons, methyl chloroform and
carbon tetrachloride as defined by the Montreal Protocol;

9. Products are new and do not contain used or reconditioned parts;

10. it is knowledgeable with, and is and will remain in full compliance with all applicable export
and import laws, regulations, orders, and policies (including, but not limited to,
securing all necessary clearance requirements, export and import licenses and exemptions from,
and making all proper filings with appropriate governmental bodies and/or disclosures relating to
the release or transfer of technology and software to non U.S. nationals);

11. it will not export, directly or indirectly, any technology, software or commodities
provided by Buyer or their direct product to any of the countries or to nationals of those
countries, wherever located, listed in U.S. Export Administration Regulations’ Country Groups
D:1 and E:2, as modified from time to time, unless authorized by appropriate government
license or regulations;

12. It will not use, disclose, or transfer across borders any information that is
processed for Buyer that may identify an individual (Personal Data), except to the extent
necessary to perform under this Agreement; and

13. it will comply with all applicable data privacy laws and regulations, will implement and
maintain appropriate technical and other protections for the Personal Data, and will cooperate
fully with Buyer’s requests for access to, correction of, and destruction of Personal Data in
Supplier’s possession.

THE WARRANTIES IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES AND CONDITIONS,
EXPRESS OR IMPLIED, INCLUDING THOSE WARRANTIES OR CONDITIONS OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.

6.2 Warranty Redemption

Subject to Section 9.0 Supplier Liability for Third Party Claims, if Products or Services do
not comply with the warranties in this Agreement, Supplier will repair or replace Products (at
the latest revision level) or re-perform Services, or credit or refund the Price of Products or
Services, such remedy at Buyer’s discretion. For such Products, Supplier will issue to Buyer a
Return Material Authorization (“RMA”) within five (5) days of Buyer’s notice. If Supplier fails to
repair or replace Products or re-perform Services in a timely manner, Buyer may do so and Supplier
will reimburse Buyer for actual and reasonable expenses. Buyer may return Products which do not
conform to the warranties in this Agreement from any Buyer location to the nearest authorized
Supplier location at cost of Supplier and Supplier will, at cost of Supplier, return any repaired
or replaced Product in a timely manner.

6.3 Post Warranty Service

Supplier will offer post warranty Services as specified in the relevant SOW or
identify a third party which will provide such Services. In the event a third party or
Buyer will provide such Services, Supplier will provide the designated party with the
information required for the performance of the Services.

6.4 Defects

Supplier will, at Buyer’s discretion, repair or replace, or credit or refund Products
that are Defective as specified in the relevant SOW (“Defective Products”), or where a safety
defect is found. Supplier will commence such performance within five (5) calendar days of
Buyer’s notice to Supplier of Defective Products. Supplier will reimburse Buyer for all actual
and

	 	 	 
	Form Title: Goods

	 	Form Release: 8/98
	Form Owner: Global Procurement

	 	Revision: 09/01

E-3

 

 

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

 

GOODS

Agreement # 4902SD0054

reasonable expenses incurred by Buyer for such repair and replacement of
Defective Products, including expenses associated with problem diagnosis,
field and finished goods inventory repair, and replacement.

7.0 Delivery

7.1
Delivery Logistics

Delivery under this Agreement means delivery to the Buyer location and delivery point as specified in the relevant SOW
and/or WA. Buyer may cancel of reschedule the delivery date or change the delivery point as specified in the relevant SOW
and/or WA. The term of sale will be specified in a SOW or WA. Buyer may issue a twelve (12) month rolling forecast for quantities of
Products that may be required. Supplier will only deliver the
Products specified in a WA. ANY PRODUCT QUANTITIES CITED IN OR PURSUANT TO THIS
AGREEMENT, EXCEPT FOR QUANTITIES CITED IN A WA AS FIRM, ARE
PRELIMINARY AND NON-BINDING ONLY, BUYER MAKES NO REPRESENTATION OR WARRANTY AS TO THE
QUANTITY OF PRODUCTS THAT IT WILL PURCHASE, IF ANY.

7.2 On-Time Delivery

The lead-time for Buyer to issue a WA prior to delivery will be specified in a
SOW. Products specified in a WA for delivery
with such lead-time will be delivered on time. Supplier will use reasonable
efforts when Buyer requests delivery with a
shorter lead-time. If Supplier cannot comply with a delivery commitment,
Supplier will promptly notify Buyer of a revised
delivery date and Buyer may:

1. cancel without charge Products or Services not yet delivered;

2. require Supplier to deliver Products using priority freight delivery at
Supplier’s expense for the incremental freight charges; and

3. exercise
all other remedies provided at law, in equity and in this Agreement.

8.0 Intellectual Property

Supplier
grants Buyer all intellectual property rights licensable by Supplier
which are necessary for Buyer to use and sell the Products. This Agreement does
not grant either party the right to use the other party’s or their Affiliates’
trademarks, trade names or service marks.

9.0 Supplier Liability
for Third Party Claims

9.1
General Indemnification

Supplier
will defend, hold harmless and indemnify, including legal fees. Buyer
and Buyer Personnel against third party claims
that arise or are alleged to have arisen as a result of negligent or
intentional acts or omissions of Supplier or Supplier
Personnel or breach by Supplier of any term of this Agreement.

9.2
Intellectual Property Indemnification

Supplier will defend, or at Buyer’s option cooperate in the defense of, hold
harmless and indemnify, including legal fees, Buyer and Buyer Personnel from
third party claims that Supplier’s Products or Services infringe the
intellectual property rights of a third party. ; provided however, Buyer shall
(i) promptly notify supplier in writing of the claim, (ii) provide Supplier sole
control over the defense and/or settlement of such claim, at Supplier’s expense
and with Suppliers choice of counsel, and (iii) at Suppliers
request and expense, provide full information and reasonable assistance to Supplier with respect to such claim. Buyer may join in defense of a claim with
counsel of
its choice at its expense. If such a claim is or is likely to be made.
Supplier will, at its own expense and option , exercise the one or more of the
following remedies that is practicable:

1.
 obtain for Buyer the right to continue to use and sell the Products and Services consistent with
this Agreement;

2. modify
the Products and Services so they are non-infringing and in compliance
with this Agreement;

3. replace the Products and Services, or other affected Deliverables or
Services, with non-infringing ones that comply with
this Agreement; or

4. If none of the foregoing are commercially feasible, then at Buyer’s
request, accept the cancellation of infringing Services
and the return of the infringing Products and refund any amount paid.

9.3
Exceptions to Indemnification

Supplier
will have no obligation to indemnify Buyer or Buyer Personnel for
claims that Supplier’s Products or Services infringe the intellectual
property rights of a third party to the extent such claims arise as a result
of:

1. Buyer’s combination of Products or Services with other third party
products or services not reasonably foreseeable by
Supplier and such infringement or claim would have been avoided in the
absence of such combination;

2. Supplier’s implementation of a Buyer originated design and such
infringement or claim would have been avoided in the
absence of such implementation; or

	 	 	 
	Form Title: Goods

	 	Form Release: 8/98
	Form Owner:
Global Procurement

	 	Revision: 09/01

E-4

 

 

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

 

GOODS

Agreement # 4902SD0054

3. modification of the Products except for intended modifications required for use of
the Products and such infringement or claim would have been
avoided in the absence of such modification; or

4. The use by Buyer an specified release of any Product more than thirty (300 days after
supplier notifies buyer in writing that continued use of the specified release may
subject Supplier to such claim of infringement, provide (A) that on or before giving
such notice to Buyer, Supplier has provided Buyer with a replacement release
of the affected Product, and (B) that such claim of infringement would have been avoided
by the use of such replacement release.

10.0 Limitation of Liability between Supplier and Buyer

In no event will either party be liable to the other for any lost revenues, lost
profits, incidental, indirect, consequential, special or punitive damages. This mutual
Limitation of Liability does not limit the obligations and liability of Supplier provided
in Section 9.0 Supplier Liability for Third Party Claims or Subsection 6.4 Defects. In no
event will either party be liable for the respective actions or omissions of its
Affiliates under this Agreement.

11.0 Supplier and Supplier Personnel

Supplier is an independent contractor and this Agreement does not create an agency
relationship between Buyer and Supplier or Buyer and Supplier
Personnel. Buyer assumes no liability or responsibility for Supplier Personnel. Supplier will:

1. ensure it and Supplier
Personnel are in compliance with all laws, regulations, ordinances, and licensing
requirements;

2. be
responsible for the supervision, control, compensation, withholdings,
health and safety of Supplier Personnel.

3. Inform Buyer if a former employee of Buyer will be assigned work under this
Agreement, such assignment subject to Buyer approval; and

4. ensure
Supplier Personnel performing Services on Buyer’s premises comply with the On
Premises Guidelines and upon
request, provide Buyer, for export evaluation purposes, the country of citizenship and
permanent residence and immigration
status of those persons. Buyer retains the right to refuse to accept
persons made available by Supplier for export control
reasons.

12.0 Insurance

Supplier will maintain at its expense:

1. commercial general or public liability insurance with a minimum limit per occurrence
or accident of 1,000,000 USD (or
local currency equivalent);

2. workers’ compensation or employer’s liability insurance as required by local law, such
policies waiving any subrogation
rights against Buyer; and

3. automobile liability insurance as required by local statute but not less than
1,000,000 USD (or local currency equivalent) if
a vehicle will be used in the performance of this Agreement.

Insurance
required under clauses (1) and (3) will name Buyer as an additional insured with
respect to Buyer’s insurable interest, will be primary or non-contributory regarding
insured damages or expenses, and will be purchased from insurers with an AM Best Rating of
B+ or better and a financial class rating of 11 or better.

13.0 Term and Termination

13.1
Termination of this Base Agreement

Either party may terminate this Base Agreement, without any cancellation charge, for a
material breach of this Agreement by
the other party or if the other party becomes insolvent or files or
has filed against it a
petition in bankruptcy (“Cause”), to the
extent permitted by law. Such termination will be effective at the end of a thirty (30) day
written notice period if the Cause
remains uncured. Either party may terminate this Base Agreement
without Cause when there are no
outstanding SOWs or WAs.

13.2
Termination of a SOW or WA

Buyer may, upon written notice to
Supplier, terminate a SOW or WA:

1. with Cause effective immediately; or

2. without Cause.

Upon termination, in accordance with Buyer’s written direction, Supplier will immediately:

1. cease work;

2. prepare and submit to Buyer an itemization of all completed and partially completed Products
and Services;

3. deliver to Buyer Products satisfactorily completed up to the date of termination at
the agreed upon Prices in the relevant
SOW and/or WA; and

4. deliver upon request any work in process.

In the event Buyer terminates without Cause, Buyer will compensate Supplier for the
actual and reasonable expenses incurred by Supplier for work in process up to and including
the date of termination, provided Supplier uses reasonable efforts to mitigate Buyer’s
liability under this Subsection by, among other actions, accepting the return of, returning
to its suppliers.

	 	 	 	 	 
	Form Title: Goods

	 	 
	 	Form Release: 8/98
	Form Owner: Global Procurement

	 	 	 	Revision: 09/01

E-5

 

 

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

 

GOODS

Agreement # 4902SD0054

selling to others, or otherwise using the canceled Products (including raw materials or works in
process) and provided such expenses do not exceed the Prices.

14.0 General

14.1
Amendments

This Agreement may only be amended
by a writing specifically referencing this Agreement which has
been signed by authorized representatives of the parties.

14.2 Assignment

Neither party will assign their rights or delegate or subcontract their duties under this Agreement
to third parties or Affiliates without the prior written consent of the other party, such consent
not to be withheld unreasonably, except that either party may assign this Agreement in conjunction
with the sale of a substantial part of its business utilizing this Agreement. Any unauthorized
assignment of this Agreement is void.

14.3
Choice of Law
and Forum; Waiver of Jury Trial; Limitation of Action

This Agreement and the performance of transactions under this Agreement will be governed by the
laws of the country where the Buyer entering into the relevant agreement or PA is located, except
that the laws of the State of New York applicable to contracts executed in and performed entirely
within that State will apply if any part of the transaction is performed within the United States.
The United Nations Convention on Contracts for the International Sale of Goods does not apply. The
parties expressly waive any right to a jury trial regarding disputes related to this Agreement.
Unless otherwise provided by local law without the possibility of contractual
waiver or limitation, any legal or other action related to this Agreement must be commenced no
later than two (2) years from the date on which the cause of action arose.

14.4 Communications

All communications between the parties regarding this Agreement will be conducted through the
parties’ representatives as specified in the relevant sow. Supplier will use reasonable efforts to
participate in replenishment logistics programs presented by Buyer.

14.5 Counterparts

This Agreement may be signed in one or more counterparts, each of which will be deemed to be an
original and all of which when taken together will constitute the same agreement. Any copy of this
Agreement made by reliable means (for example, photocopy or facsimile ) is considered an original.

14.6 Exchange of Information

All information exchanged is non confidential. If either party requires the exchange of
confidential information, it will be made under a separate signed confidentiality agreement between
the parties. The parties will not publicize the terms of this Agreement, or the relationship, in
any advertising, marketing or promotional materials without prior written consent of the other
party except as may be required by law, provided the party
publicizing obtains any confidentiality treatment available. Supplier will use information regarding this Agreement only in the performance
of this Agreement. For any business personal information relating to Supplier personnel that
Supplier provides to Buyer, Supplier has obtained the agreement of the Supplier Personnel to
release the information to Buyer and to allow Buyer to use such information in connection with
this Agreement.

14.7 Freedom of Action

This
Agreement is nonexclusive and either party may design, develop, manufacture, acquire or
market competitive products or services. Buyer will independently establish prices for resale of
Products or Services and is not obligated to announce or market any Products or Services and does
not guarantee the success of its marketing efforts, if any.

14.8 Force Majeure

Neither party will be in default or liable for any delay or failure to comply with this Agreement
due to any act beyond the control of the affected party. excluding labor disputes, provided such
party immediately notifies the other.

14.9 Obligations of Affiliates

Affiliates will acknowledge acceptance of the terms of this Agreement through the signing of a PA
before conducting any transaction under this Agreement.

14.10 Prior Communications and Order of Precedence

	 	 	 	 	 
	Form Title: Goods

	 	 
	 	Form Release: 8/98
	Form Owner: Global Procurement

	 	 	 	Revision: 09/01

E-6

 

 

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

 

GOODS

Agreement
# 4902SD0054

This Agreement replaces any prior oral or written agreements or other communication between the
parties with respect to the subject matter of this Agreement,
excluding any confidential disclosure agreements.
In the event of any conflict in these documents, the order of precedence will be:

	1.	 	the quantity, payment and delivery terms of the relevant WA;
	 
	2.	 	the relevant SOW;
	 
	3.	 	this Base Agreement; and
	 
	4.	 	the remaining terms of the relevant WA.

14.11
Record Keeping and Audit Rights

Supplier will maintain (and provide to Buyer upon request) relevant business and accounting
records to support invoices under this Agreement and proof of required permits and professional
licenses, for a period of time as required by local law but not for leas than three (3) years
following completion or termination of the relevant SOW and/or WA. All accounting records will be
maintained in accordance with generally accepted accounting principles.

14.12 Severability

If any
term in this Agreement is found by competent judicial authority to be
unenforceable in any
respect, the validity of the remainder of this Agreement will be unaffected, provided that such
unenforceability does not materially affect the parties’ rights under this Agreement.

14.13 Survival

The provisions set forth in the following Sections and Subsections of this Base Agreement will
survive after termination or expiration of this Agreement and will remain in effect until
fulfilled; “Ongoing Warranties”, “Defects”, “Warranty Redemption”, “Intellectual Property”,
“Supplier Liability for Third Party Claims”, “Limitation of Liability between Supplier and
Buyer”, “Record Keeping and Audit Rights”, “Choice of Law and Forum; Waiver of Jury Trial;
Limitation of Action”, “Exchange of Information”, and “Prior Communications and Order of
Precedence”.

14.14
Waiver

An effective waiver under this Agreement must be in writing signed by the party waiving its
right.  A waiver by either party of any instance of the other party’s noncompliance with any
obligation or responsibility under this Agreement will not be deemed a waiver of subsequent
instances.

15.0

	 	 	 	 	 	 	 	 	 	 	 
	ACCEPTED AND AGREED TO:	 	 	 	ACCEPTED AND AGREED TO:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	International Business Machines Corporation	 	 	 	Komag	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Gary Nakao
	 	5/04/02	 	By:
	 	Mitchell T. Shetterly	 	5/04/02
	 	 	 	 	 	 	   
	Buyer Signature	 	Date	 	Supplier Signature	 	Date
	 
	 	 	 	 	 	 	 	 	 	 
	Gary Nakao	 	 	 	Mitchell T. Shetterly	 	 
	Printed Name	 	 	 	Printed Name	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Commodity
Manager — STD	 	 	 	Technical Sales Manager — Komag	 	 
	Title & Organization	 	 	 	Title & Organization	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Buyer Address:	 	 	 	Supplier Address:	 	 
	5600 Cottle Road	 	 	 	1710 Automation Parkway	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	San Jose , Ca. 95193	 	 	 	San Jose , Ca. 95131	 	 
	USA	 	 	 	USA	 	 

					
	 	 	 	 	 
	Form Title: Goods

Form Owner: Global Procurement
	 	 
	 	Form Release: 8/98

Revision: 09/01      

E-7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}]]