Document:

Exhibit 10.3

Exhibit 10.3

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is entered into by and between Western
Digital Corporation (the “Company”) and Timothy M. Leyden (“Executive”), as of the
7th day of March, 2011. This Agreement is being entered into in connection with the Company’s
entry into a Stock Purchase Agreement by and among the Company, Western Digital Ireland, Ltd.,
Hitachi, Ltd. and Viviti Technologies Ltd. dated on or about the date hereof (the “Stock
Purchase Agreement”), and shall become effective on the date of the closing of the transactions
contemplated by the Stock Purchase Agreement (the “Effective Date”). If the transactions
contemplated by the Stock Purchase Agreement fail to close for any reason, or if the Stock Purchase
Agreement terminates for any reason without the transactions contemplated thereby closing, this
Agreement shall automatically terminate and be of no force and effect.

1. EMPLOYMENT.

The Company hereby agrees to continue to employ Executive and Executive hereby agrees to
accept such continued employment, upon the terms and conditions hereinafter set forth including but
not limited to provisions governing early termination, from the Effective Date to and including the
fifth anniversary of the Effective Date (“Employment Period”). Unless Executive’s
employment is terminated pursuant to any early termination provision hereof or the parties mutually
agree otherwise in writing, Executive’s employment with the Company shall terminate without further
action by either party on the fifth anniversary of the Effective Date.

2. DUTIES.

A. Chief Operating Officer. On the Effective Date, Executive shall serve as Chief
Operating Officer of the Company and shall report to the Company’s President. The Company’s Chief
Executive Officer currently intends to establish an “Office of the Chief Executive Officer” to help
guide the strategic direction and leadership tone of the Company following the closing of the
transactions contemplated by the Stock Purchase Agreement, and to help guide integration
activities. In the event the “Office of the Chief Executive Officer” is established, the Executive
shall be included as a member of the Office of the Chief Executive Officer during the Employment
Period.

B. Executive Commitment. During the Employment Period, Executive agrees to devote
substantially all of his time, energy and ability to the business of the Company, subject to
paragraph E of Section 3.

3. COMPENSATION.

A. Base Salary. During the Employment Period, the Company will pay to Executive a
base salary at the rate of $700,000 per year. Such salary shall be earned monthly and shall be
payable in periodic installments in accordance with the Company’s customary practices. Amounts
payable shall be reduced by standard withholding and other authorized deductions. Executive’s base
salary may be increased in the sole discretion of the Compensation Committee of the Board of
Directors (the “Compensation Committee”).

 

 

 

B. Bonus. Executive’s target bonus during the Employment Period for purposes of the
Company’s semi-annual Incentive Compensation Plan (ICP) bonus program shall be 110% of his
semi-annual base salary from the Company in effect on the last day of such fiscal period.
Executive’s actual bonus under the ICP may range from 0% to 200% of his target bonus based on the
level of attainment of the applicable performance objectives established under the ICP.
Executive’s target bonus may be increased in the sole discretion of the Compensation Committee.

C. Retirement and Welfare Benefit Plans; Fringe Benefits. During the Employment
Period, Executive (and, in the case of welfare benefit plans, his eligible dependents, as the case
may be) shall be eligible for participation in the retirement, welfare, and fringe benefit plans,
practices, policies and programs provided by the Company on terms consistent with those generally
applicable to the Company’s other senior executives and approved by the Compensation Committee.

D. Expenses. During the Employment Period, Executive shall be entitled to receive
prompt reimbursement for all reasonable employment expenses incurred by him in accordance with the
policies, practices and procedures as in effect generally with respect to other senior executives
of the Company.

E. Vacation and Other Leave. During the Employment Period, Executive shall receive
paid vacation in an amount determined by the Company’s then-existing policies based upon
Executive’s years of service with the Company. Such vacation shall be scheduled and taken in
accordance with the Company’s standard vacation policies applicable to Company executives.
Executive shall also be entitled to all other holiday and leave pay generally available to other
executives of the Company.

F. Modification. The Company reserves the right to modify, suspend or discontinue any
and all of the above plans, practices, policies and programs at any time without recourse by
Executive so long as such action is taken generally with respect to other senior executives of the
Company and does not single out Executive.

4. LONG-TERM INCENTIVE COMPENSATION.

A. Long-Term Incentive Awards. During the Employment Period, the Executive shall be
eligible to receive long-term incentive awards on a basis commensurate with the Executive’s
position and in accordance with the long-term incentive guidelines applicable to the Executive’s
position established by the Compensation Committee. Any long-term incentive awards will generally
be granted by the Compensation Committee as part of its normal annual grant cycle applicable to
other senior executives of the Company. However, for the Company’s 2012 fiscal year, if the
Effective Date occurs prior to the Company’s normal fiscal 2012 annual grant cycle that is expected
to occur in September 2011, the Executive shall be eligible to receive long-term incentive awards
at the first Compensation Committee meeting occurring after the Effective Date instead of at the
time of the normal fiscal 2012 annual grant cycle. Any long-term incentive awards granted to the
Executive will be subject to the Company’s customary terms and conditions.

 

 

 

B. Integration Performance Units. As part of the Company’s integration bonus plan that
will be established in connection with the closing of the transactions contemplated by the Stock
Purchase Agreement, it will be recommended to the Compensation Committee that Executive receive a
grant of performance restricted stock units equal to that number of units having a target value on
the grant date equal to $2,000,000 (the “Integration Performance Units”). The Integration
Performance Units are expected to be granted at the first Compensation Committee meeting occurring
after the Effective Date. The actual number of Integration Performance Units that may become
earned and payable will range from 0% to 200% of the target number of Integration Performance Units
awarded on the grant date, with the actual number of Integration Performance Units becoming earned
and payable to be based on the Company’s achievement of the applicable performance milestones. The
performance milestones applicable to the Integration Performance Units will be determined by the
Compensation Committee in consultation with the Chief Executive Officer of the Company following
the Effective Date. Subject to Executive’s continued employment through the first anniversary of
the Effective Date, fifty percent (50%) of the target number of Integration Performance Units shall
become earned and payable within seventy days following the first anniversary of the Effective Date
based on performance during the first year following the Effective Date. Subject to Executive’s
continued employment through the second anniversary of the Effective Date, the remaining fifty
percent (50%) of the target number of Integration Performance Units shall become earned and payable
within seventy days following the second anniversary of the Effective Date based on performance
during the second year following the Effective Date. The integration bonus plan will provide that
in the event Executive’s employment is terminated under circumstances that give rise to the payment
of severance payments under either the Company’s Executive Severance Plan or Amended and Restated
Change of Control Severance Plan ( in accordance with the terms of such plans and as each may be
amended from time to time), then Executive shall be entitled to receive payment of the target
number of his Integration Performance Units applicable to any in-progress or future portion of the
applicable performance periods within seventy days following the date of such termination of
employment (and for the avoidance of doubt, and not in any way in limitation of Executive’s rights
to earn the Integration Performance Units based on performance, if such a termination occurs after
the first anniversary of the Effective Date, Executive shall not be entitled to receive by virtue
of his termination of employment any Integration Performance Units attributable to the first year
following the Effective Date).

5. TERMINATION.

A. Death. This Agreement and Executive’s employment shall terminate automatically on
the death of Executive.

B. Disability. The Company, at its option, may terminate Executive’s employment upon
the Disability of Executive. For purposes of this Agreement, “Disability” shall mean physical or
mental incapacity that renders Executive unable to perform the normal and customary duties of
employment of Executive even with a reasonable accommodation for (A) 120 days in any twelve (12)
month period or (B) for a period of ninety (90) successive days.

 

 

 

C. Cause. The Company may terminate Executive’s employment for Cause. For purposes
of this Agreement, “Cause” shall mean that the Company, acting in good faith
based upon the information then known to the Company, determines that Executive has engaged in
or committed: (i) willful misconduct, (ii) fraud, (iii) failure or refusal to perform the duties of
Chief Operating Officer or (iv) a conviction of or a plea of nolo contendre to a felony.

D. Other than Cause, Death, or Disability. The Company may terminate Executive’s
employment at any time, with or without cause, upon 30 days’ written notice.

E. Obligations of the Company Upon Termination.

(i) Termination for any Reason. If Executive’s employment is terminated for any
reason during the Employment Period, Executive shall be entitled to receive timely payment of the
sum of (i) Executive’s annual base salary through the date of termination to the extent not
theretofore paid and (ii) any compensation previously deferred by Executive in accordance with the
Company’s deferred compensation plans (together with any accrued interest or earnings thereon
pursuant to the terms of the applicable plan) and any accrued vacation pay, in each case to the
extent not theretofore paid (the sum of the amounts described in clauses (i) and (ii) shall be
hereinafter referred to as the “Accrued Obligations”).

(ii) Executive Severance Plan and Change of Control Severance Plan. During the
Employment Period, Executive shall be entitled to participate in the Company’s Executive Severance
Plan and Amended and Restated Change of Control Severance Plan in accordance with the terms of such
plans and as each may be amended from time to time. Subject to the preceding sentence, the
Executive shall be entitled to receive “Tier I” benefits under each of the Severance Plan and the
Amended and Restated Change of Control Severance Plan. Any benefits becoming payable under the
Severance Plan or the Amended and Restated Change of Control Severance Plan as a result of the
termination of the Executive’s employment shall be in addition to the Accrued Obligations, provided
that to the extent Executive becomes entitled to receive payments or benefits included within the
Accrued Obligations under either such plan, Executive shall not be entitled to any duplication of
benefits.

F. Exclusive Remedy. Executive agrees that the payments and benefits contemplated by
this Agreement shall constitute the exclusive and sole remedy for any termination of his
employment, and Executive covenants not to assert or pursue any other remedies, at law or in
equity, with respect to any termination of employment.

6. CONFIDENTIALITY AND INVENTION.

Executive has previously executed an Employee Invention and Confidentiality Agreement
(“Invention Agreement”), which is incorporated herein as if fully set forth. In the event
of an inconsistency between a provision of this Agreement and a provision of the Invention
Agreement, the provision of this Agreement controls.

7. NON-INTERFERENCE.

Executive promises and agrees that during the term of this Agreement, and for a period of
twenty-four (24) months thereafter, he will not influence or attempt to influence any customer,
supplier, or distributor of the Company to alter or reduce its business relationship with the
Company.

 

 

 

8. LITIGATION ASSISTANCE.

Executive agrees to cooperate with the Company in any actual or threatened litigation that
arises against or brought by the Company at any time during or after the Employment Period,
including but not limited to participating in interviews with the Company’s counsel to assist the
Company in any such litigation.

9. ARBITRATION.

Any controversy arising out of or relating to Executive’s employment, this Agreement, its
enforcement or interpretation, or because of an alleged breach, default, or misrepresentation in
connection with any of its provisions, shall be submitted to arbitration in Orange County,
California, before a sole arbitrator selected from Judicial Arbitration and Mediation Services,
Inc., Orange County, California, or its successor (“JAMS”), or if JAMS is no longer able to supply
the arbitrator, such arbitrator shall be selected from ADR Services, Inc., and shall be conducted
in accordance with the provisions of California Civil Procedure Code Sections 1280 et seq. as the
exclusive remedy of such dispute; provided, however, that provisional injunctive relief may, but
need not, be sought in a court of law while arbitration proceedings are pending, and any
provisional injunctive relief granted by such court shall remain effective until the matter is
finally determined by the arbitrator. Final resolution of any dispute through arbitration may
include any remedy or relief which the arbitrator deems just and equitable. Any award or relief
granted by the arbitrator hereunder shall be final and binding on the parties hereto and may be
enforced by any court of competent jurisdiction. The parties agree that they are hereby waiving
any rights to trial by jury in any action, proceeding or counterclaim brought by either of the
parties against the other in connection with any matter whatsoever arising out of or in any way
connected with this Agreement or Executive’s employment.

10. SUCCESSORS.

A. This Agreement is personal to Executive and shall not, without the prior written consent of
the Company, be assignable by Executive.

B. This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns and any such successor or assignee shall be deemed substituted for the
Company under the terms of this Agreement for all purposes. As used herein, “successor” and
“assignee” shall include any person, firm, corporation or other business entity which at any time,
whether by purchase, merger or otherwise, directly or indirectly acquires the stock of the Company
or to which the Company assigns this Agreement by operation of law or otherwise.

11. WAIVER.

No waiver of any breach of any term or provision of this Agreement shall be construed to be,
nor shall be, a waiver of any other breach of this Agreement. No waiver shall be binding unless in
writing and signed by the party waiving the breach.

 

 

 

12. MODIFICATION.

This Agreement shall not be modified by any oral agreement, either express or implied, and all
modifications hereof shall be in writing and signed by the parties hereto.

13. SAVINGS CLAUSE.

If any provision of this Agreement or the application thereof is held invalid, the invalidity
shall not affect other provisions or applications of the Agreement which can be given effect
without the invalid provisions or applications and to this end the provisions of this Agreement are
declared to be severable.

14. COMPLETE AGREEMENT.

This Agreement (and all other agreements, exhibits, and schedules referred to in this
Agreement, including without limitation the Invention Agreement) constitutes and contains the
entire agreement and final understanding concerning Executive’s employment with the Company and the
other subject matters addressed herein between the parties. It is intended by the parties as a
complete and exclusive statement of the terms of their agreement. It supersedes and replaces all
prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning
the subject matter hereof. Any representation, promise or agreement not specifically included in
this Agreement shall not be binding upon or enforceable against either party. This is a fully
integrated agreement.

15. GOVERNING LAW.

This Agreement shall be deemed to have been executed and delivered within the County of
Orange, State of California and the rights and obligations of the parties hereunder shall be
construed and enforced in accordance with, and governed by, the laws of the State of California
without regard to principles of conflict of laws.

16. CONSTRUCTION.

Each party has cooperated in the drafting and preparation of this Agreement. Hence, in any
construction to be made of this Agreement, the same shall not be construed against any party on the
basis that the party was the drafter. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.

17. COMMUNICATIONS.

All notices, requests, demands and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered or if mailed by registered or certified mail,
postage prepaid, addressed to Executive at Western Digital Corporation, 3355 Michelson Drive, Suite
100, Irvine, California 92612, or addressed to the Company at: Western Digital Corporation, Attn.
Corporate Secretary, 3355 Michelson Drive, Suite 100, Irvine, California 92612. Either party may
change the address at which notice shall be given by written notice given in the above manner.

 

 

 

18. SECTION 409A.

To the extent that any reimbursements pursuant to paragraph D of Section 3 are taxable to
Executive, any reimbursement payment due to Executive pursuant to such provision shall be paid to
Executive on or before the last day of Executive’s taxable year following the taxable year in which
the related expense was incurred. The reimbursements pursuant to paragraph D of Section 3 are not
subject to liquidation or exchange for another benefit and the amount of such reimbursements that
Executive receives in one taxable year shall not affect the amount of such reimbursements that
Executive receives in any other taxable year.

19. EXECUTION AND EFFECTIVE DATE.

This Agreement is being executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. Photographic
copies of such signed counterparts may be used in lieu of the originals for any purpose. This
Agreement shall become effective on the Effective Date. If the transactions contemplated by the
Stock Purchase Agreement fail to close for any reason, or if the Stock Purchase Agreement
terminates for any reason without the transactions contemplated thereby closing, this Agreement
shall automatically terminate and be of no force and effect.

[Signatures on the following page.]

 

 

 

In witness whereof, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	THE COMPANY:

 	 
	 	By:  	/s/ John F. Coyne
 	 
	 	 	Name:  	John F. Coyne 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	EXECUTIVE:

 	 
	 	By:  	/s/ Timothy M. Leyden
 	 
	 	 	Name:  	Timothy M. LeydenExhibit 10.4

Exhibit 10.4

TRANSITION SERVICES AGREEMENT

THIS TRANSITION SERVICES AGREEMENT (this “Agreement”) is entered into as of March 7,
2011 (the “Effective Date”), by and among Hitachi, Ltd., a company incorporated under the
laws of Japan (“Seller”), Viviti Technologies Ltd., a company incorporated under the laws
of the Republic of Singapore and, prior to the Closing, a wholly-owned subsidiary of Seller
(“Company”), and, solely with respect to Section 1.4 and Section 1.13(c) hereof, Western
Digital Corporation, a Delaware corporation (the “Buyer Parent”). Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase
Agreement (as defined below).

RECITALS

WHEREAS, concurrently with the execution of this Agreement, Buyer Parent, Western Digital
Ireland, Ltd., a corporation organized under the laws of the Cayman Islands and an indirect
wholly-owned subsidiary of the Buyer Parent (“Buyer”), Seller and Company have entered into
a Stock Purchase Agreement (the “Purchase Agreement”) pursuant to, and subject to the terms
thereof, Buyer is to acquire from Seller all of Seller’s right, title and interest in and to the
Stock; and

WHEREAS, as contemplated by the Purchase Agreement, Seller shall provide, and, as applicable,
shall cause its Affiliates, Representatives and Authorized Third Parties (each as defined below) to
provide, Company and the Subsidiaries certain services reasonably necessary for the operation of
Company and the Subsidiaries for a limited period of time following the Closing, pursuant to and in
accordance with the terms of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and
other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows:

ARTICLE I

SERVICES

1.1 Services.

(a) As partial consideration for Buyer’s payment of the Cash Portion of the Purchase Price and
subject to the terms and conditions of this Agreement, Seller shall provide, and, as applicable,
shall cause its Affiliates, Representatives and Authorized Third Parties to provide, to Company and
the Subsidiaries the services described on Exhibit A attached hereto (the “Services”) for
the period from the Closing Date until the termination or expiration of this Agreement pursuant to
Article III below (the “Transition Period”) solely to the extent that (1) such Services are
provided by Seller or its Affiliates to Company or any of the Subsidiaries as of the Closing Date,
and (2) such Services are reasonably necessary to support during the Transition Period the
operation of Company and the Subsidiaries in all material respects as they were operated as of the
Closing Date. Seller shall provide the Services to Company and the Subsidiaries in substantially
the same manner as Seller provided such services to Company and
the Subsidiaries as of the Closing Date. For purposes of this Agreement,
“Representatives” means, with respect to Seller, its directors, officers, employees,
financial advisors, attorneys, accountants, consultants, agents and other authorized
representatives, acting in such capacity.

 

 

 

(b) Seller shall, and as applicable, shall cause its Affiliates, Representatives and
Authorized Third Parties to, (i) materially comply with all applicable Laws relating to the
performance of the Services; and (ii) materially comply with any reasonable confidentiality,
security, privacy or other policies of Company and the Subsidiaries relating to the performance of
the Services which have been provided to Seller reasonably in advance.

(c) To the extent permitted by applicable Law, Seller agrees to pass through to Company and
the Subsidiaries any rights Seller may have with respect to Authorized Third Parties in connection
with any failure by such Authorized Third Parties to materially comply with all applicable Laws
relating to the performance of the Services or to materially comply with any reasonable
confidentiality, security, privacy or other policies of Seller or Company or the Subsidiaries
relating to the performance of the Services.

(d) Company shall use, and shall cause the Subsidiaries to use, the Services only for
substantially the same purpose and in substantially the same manner and amount as the Services were
used by Company and the Subsidiaries as of the Closing Date; provided, however, that the scope and
amount of the Services may be reduced by Company as specified herein.

(e) Notwithstanding anything herein to the contrary, the Services shall not include (i) the
provision of any funding or financial accommodation and (ii) any service that is directly provided
by any third party to Company or any of the Subsidiaries under an agreement between such third
party and Company or any such Subsidiary.

1.2 Additional Services. Company may request that Seller and/or its Affiliates and
Authorized Third Parties provide additional transition services required by Company or the
Subsidiaries which have not been addressed herein and which are reasonably necessary to support the
operation of Company or any Subsidiary during the Transition Period as Company or such Subsidiary
was operated in all material respects as of the Closing Date. Company shall request such
additional services from Seller in writing within thirty (30) calendar days of the Closing Date.
Within five (5) Business Days of Seller’s receipt of Company’s written request for such additional
services, the Service Coordinators (as defined below) shall commence negotiations, in good faith,
with respect to the scope, duration and price (which may be a market price) of such additional
services to be provided during the Transition Period. Within five (5) Business Days of agreement
on such items, the parties shall work in good faith to set forth the additional agreed-upon
services in a new services description, in a format similar to that set forth in Exhibit A. Upon
the mutual written agreement to such new services description, the additional agreed-upon services
shall be deemed “Services” under this Agreement, and such new schedule shall be deemed incorporated
into Exhibit A and shall in all other respects be subject to the terms and conditions of this
Agreement. Notwithstanding the foregoing, Seller has no obligation to agree to provide any service
pursuant to this Section 1.2 to the extent such service (a) (i) had not been provided by Seller,
its Affiliates or any Authorized Third Party to Company or any of the Subsidiaries as of the
Closing Date (“Existing Services”) and (ii) is not related to
the transition from the Existing Services; or (b) does not require any historical or
institutional knowledge or unique capabilities on the part of Seller or its Affiliates.

 

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1.3 Service Schedules. The parties acknowledge and agree that the descriptions of
Services in Exhibit A are general only and do not purport to contain an exhaustive description of
the Services to be provided. The parties further acknowledge and agree that it may not be
practicable to describe each and every aspect of a particular Service in detail; therefore, each
Service that is generally agreed upon by the parties and included in Exhibit A will be provided in
accordance with the applicable terms of this Agreement, consistent with the past practices of the
parties even where all aspects regarding the provision of a particular Service is not described in
detail.

1.4 Service Coordinators. Each of Seller and Company shall nominate a representative
to act as the primary contact person with respect to the provision of the Services (each such
person, a “Service Coordinator”); provided that Buyer Parent shall have the right to
consent to the identity of the representative nominated by Company, such consent not be
unreasonably withheld or delayed . The Service Coordinators shall be managerial-level employees of
Company and Seller, as applicable. The initial Service Coordinators shall be Toyoki Furuta for
Seller and a designee to be provided promptly after the Effective Date for Company, and each of
their respective phone numbers, facsimile numbers and email addresses shall be set forth on an
update made promptly after the Effective Date to Schedule 1 attached hereto. Each of Seller and
Company may, in its sole discretion, change its Service Coordinator from time to time by providing
written notice to the other party of such change and the relevant contact information for the new
Service Coordinator at least three (3) Business Days prior to such change taking effect. Unless
Seller and Company otherwise agree in writing, all communications relating to this Agreement or to
the Services shall be directed to the Service Coordinators in accordance with Section 5.3 hereof.
At Company’s Service Coordinator request, Seller’s Service Coordinator shall provide Company’s
Service Coordinator with an estimate of Service Fees and Expenses for the Services.

1.5 Insurance. During the Transition Period, Seller shall maintain adequate insurance
for the conduct of the Services in form and coverage consistent with Seller’s current coverage as
of the Effective Date.

1.6 Subcontractors. Seller may subcontract any of its obligations under this
Agreement to third-party service providers which have been approved by Company in writing
(“Authorized Third Parties”), which approval shall not be unreasonably withheld or delayed.
The Authorized Third Parties include those parties so identified in Exhibit A.

1.7 Consents. Seller shall use commercially reasonably efforts to obtain all material
licenses, approvals and consents of any third party required by Seller to provide the Services
(collectively “Required Consents”). If notwithstanding such commercial reasonable efforts,
Seller is unable to provide any Service because of a failure to obtain such material licenses,
approvals or consents, or Seller reasonably believes that performance of the Service would infringe
or misappropriate a third party’s intellectual property rights, the parties shall cooperate to
determine the best alternative approach.

 

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1.8 Intellectual Property.

(a) Developed IP. Subject to Company’s compliance with the terms and conditions of
this Agreement, including payment of all Service Fees and Expenses, Seller hereby assigns and
agrees to assign all of its right, title and interest in and to the Developed IP to Company.
Company shall have the sole right to apply for, file, register, or otherwise seek Intellectual
Property Rights with respect to Developed IP, including the right to seek Patent protection for
inventions that constitute Developed IP, if any. Seller will provide (and will use commercially
reasonable efforts to cause any inventors of Developed IP in Seller’s or its Subsidiaries’ employ
to provide) reasonable information and assistance, at Company’s cost and expense, to effect the
assignment of rights pursuant to this Section 1.8(a). With respect to any Developed Technology,
Seller reserves and Company hereby grants and agrees to grant to Seller and its Subsidiaries, under
the Developed Intellectual Property Rights, a worldwide, non-exclusive, perpetual and irrevocable
license to use such Developed Technology in the ordinary course of its business. With respect to
any Patents within the Developed Intellectual Property Rights, Seller reserves and Company hereby
grants and agrees to grant to Seller and its Subsidiaries a worldwide, non-exclusive, perpetual and
irrevocable license to make, have made, use, sell, offer for sale, and import any article of
manufacture or composition of matter and practice any method or process.

(b) Background IP. To the extent, if any, that any Background Technology is embodied
in any Deliverables provided to Company under this Agreement, subject to Company’s compliance with
the terms and conditions of this Agreement, including payment of all Service Fees and Expenses,
Seller hereby grants and agrees to grant to Company, under Seller’s Background Intellectual
Property Rights, a worldwide, non-exclusive, perpetual, and irrevocable license to use such
Background Technology, solely as embodied in such Deliverables, in the ordinary course of Company’s
business.

(c) No Other Rights. Except as expressly set forth in this Agreement, neither party
grants any rights in or to its Technology or Intellectual Property Rights pursuant to this
Agreement. As between the parties, each party shall be solely responsible to prepare, file,
prosecute, maintain, and enforce its Intellectual Property Rights in its discretion and at its own
cost. Except as expressly set forth in this Agreement, there shall be no right, license,
authority, covenant not to sue, immunity from suit, or other defense, whether by implication, by
reason of exhaustion, estoppel, or otherwise pursuant to or as a result of this Agreement or the
activities of the parties under this Agreement.

(d) Seller will use commercially reasonable efforts to identify to Company any Patents owned
by Seller and claiming Background Technology Seller expects to be embodied in Deliverables to be
delivered to Company in connection with the provision of the Services under which Seller does not
have the right to grant to company a license of the scope set forth in Section 1.8(b) without
incurring an obligation to pay a royalty or other consideration to a third party.

 

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(e) As used in this Section 1.8:

(i) “Background Intellectual Property Rights” means Intellectual
Property Rights, if any, owned by Seller that are (a) embodied in Background Technology, and
(b) not Developed Intellectual Property Rights; provided, however, that a Patent will be a
Background Intellectual Property Right only if Seller has the right to grant to Company a license
of the scope set forth in Section 1.8(b) under such Patent without incurring any obligation to pay
any royalty or other consideration to any third party.

(ii) “Background Technology” means Technology, if any, owned by Seller or its
Subsidiaries that is (a) embodied in any Deliverable, and (b) not Developed Technology.

(iii) “Deliverables” means the deliverables, if any, to be provided by Seller as part
of the Services performed pursuant to this Agreement.

(iv) “Developed Intellectual Property Rights” means Intellectual Property Rights to
the extent such Intellectual Property Rights (i) are first created by Seller in the course of its
performance of the Services pursuant to this Agreement and within the scope and during the term of
this Agreement, and (ii) are embodied in Developed Technology. For the avoidance of doubt,
“Developed Intellectual Property Rights” includes the right to seek Patent protection for
inventions that constitute Developed Intellectual Property, if any, but does not include any
Patents or Patent applications of Seller or its Subsidiaries.

(v) “Developed IP” means, collectively, Developed Technology and Developed
Intellectual Property Rights.

(vi) “Developed Technology” means Technology embodied in any Deliverable to the extent
such Technology is first developed or created by Seller in the course of its performance of the
Services pursuant to this Agreement and within the scope and during the term of this Agreement.

(vii) “Intellectual Property Rights” means Patents, copyrights, and rights with
respect to trade secrets, whether arising under the laws of the United States, Japan or any other
jurisdiction, including, in each case, any rights apply for, register, and enforce any of the
foregoing. Notwithstanding the foregoing, “Intellectual Property Rights” does not include any
trademark rights or similar rights with respect to indicia of source or origin.

(viii) “Patents” means all classes and types of patents, including utility patents,
utility models, design patents, invention certificates, including divisionals, continuations,
continuations-in-part, reexaminations, reissues, extensions and renewals, in all jurisdictions of
the world.

(ix) “Software or Firmware” means a set of instructions, that either (i) directly
provides instructions to the computer hardware, or, (ii) indirectly serves as an input to another
piece of software.

(x) “Technology” means inventions, know-how, designs, specifications, Software or
Firmware and other copyrightable material, technical information, devices, and other developments
and technology.

 

5

 

1.9 Use of Services. Seller shall be required to provide, or cause its Affiliates to
provide, Services only to Company and the Subsidiaries, and only in connection with the operation
of Company and the Subsidiaries in existence as of the Closing Date. Company shall not, and shall
not permit any of the Subsidiaries or any third parties under its control to, resell any Services
to any Person whatsoever or permit the use of the Services by any Person other than in connection
therewith.

1.10 Interruption of Transition Services. Subject to Section 5.14, Seller may cease
or suspend providing, or have its Affiliates, Representatives or Authorized Third Parties cease or
suspend providing, as applicable, the Services to Company and the Subsidiaries if and to the extent
such cessation or suspension is (i) required by applicable Law, (ii) necessary due to regularly
scheduled maintenance, alterations, repairs or replacements with respect to the applicable Services
or the facilities used to provide such Services, (iii) necessary due to emergency maintenance,
alterations, repairs or replacements with respect to the applicable Services or the facilities used
to provide such Services, or (iv) necessary due to the temporary shutdown of the operation of the
facilities providing any Service whenever Seller determines such action is necessary in the
exercise of its reasonable judgment.

1.11 Cooperation. Company shall cooperate, and shall cause the Subsidiaries to
cooperate, with Seller, its Affiliates, Representatives and Authorized Third Parties, and provide
such Persons with such information and assistance as such Persons may reasonably require to enable
them to provide the Services. Company shall allow, and shall cause the Subsidiaries to allow, such
Persons and their respective employees, agents and sub-contractors reasonable access to its
facilities as necessary for the performance of the Services.

1.12 Transitional Nature of Services. The parties acknowledge that the Services are
transitional in nature and that Seller and its Affiliates may make changes from time to time in the
manner in which the Services are performed if Seller (i) makes similar changes in the manner in
which similar services are performed for its Affiliates and (ii) furnishes to Company substantially
the same notice (in consent and timing) as Seller furnishes to its own Affiliates respecting such
changes.

1.13 Consultation Period.

(a) The Service Coordinators shall collectively review, as promptly as reasonably practicable
after the Effective Date, the Services listed on Exhibit A to determine if they properly reflect
the Existing Services that are reasonably necessary, during the Transition Period, to support the
operation of Company or the Subsidiaries as Company or such Subsidiary was operated in all material
respects as of the Closing Date (“Needed Services”). In connection with such review,
Company shall have the right to amend Exhibit A to add any Needed Services to Exhibit A at any time
prior to the date that is forty-five (45) days after the Closing Date; provided that (a) the
parties shall use reasonable efforts to complete such review and such amendment, if any, of Exhibit
A, within the sixty (60) day period after the Effective Date (such period, the “Consultation
Period”); and (b) Company shall not have a right to update Exhibit A with respect to adding any
services relating to intellectual property matters. Notwithstanding the foregoing, no amendments
to Exhibit A shall be made prior to Closing without Buyer Parent consent, such consent not to be
unreasonably withheld or delayed.

 

6

 

(b) During the Consultation Period, the Service Coordinators shall discuss in good faith
details with respect to the process of invoicing by Seller and its Affiliates for the Services
pursuant to Section 4.2, including determining whether a monthly billing cycle is appropriate for
the invoicing of specific Services.

(c) The parties hereby acknowledge and agree that the agreements set forth on Exhibit B
hereto, as may be amended prior to the Closing Date as contemplated by this Section 1.13(c), shall
survive the Closing and remain in effect in accordance with their terms. As soon as practicable
after the Effective Date, the Service Coordinators shall collectively review and discuss whether
any agreements (other than those listed on Exhibit B as of the Effective Date) between Seller or
any of its Affiliates (not including Company and the Subsidiaries) on the one hand, and Company or
any of the Subsidiaries on the other hand (any such agreement, an “Affiliate Agreement”),
should survive the Closing. The Service Coordinators shall endeavor to make a recommendation to
Seller and Buyer Parent with respect to the treatment of such Affiliate Agreements as soon as
reasonably practicable but in any event no later than the expiration of the Consultation Period;
provided that if there are Affiliate Agreements the treatment of which is not agreed to by the
Service Coordinators, such Service Coordinators may make separate recommendations to be considered
by Seller and Buyer Parent. Seller and Buyer Parent agree to promptly discuss such treatment in
good faith based on the recommendations of the Service Coordinators with the intention of resolving
any disagreements between them as soon as reasonably practicable. Without limiting the generality
of the foregoing, the Service Coordinators shall make specific recommendations to Seller and Buyer
Parent about (a) the survival of any provisions of the Affiliate Agreements addressing inventor
compensation with respect to consideration received in connection with licenses granted under
Patents which list as inventors any individuals who were employees or agents of Seller or any of
its Affiliates (other than Company and the Subsidiaries) when the invention claimed in such Patent
was conceived or reduced to practice and which Patents at any time are assigned to Buyer Parent or
any of its Subsidiaries (including, without limitation, Company and the Subsidiaries) and/or (b)
alternative provisions with respect to such inventor compensation to be adopted in lieu of causing
such provisions of such Affiliate Agreements to survive. Seller and Buyer Parent shall not
unreasonably withhold or delay agreement to the commercially reasonable recommendations of the
Service Coordinators with respect to such inventor compensation issues. Any Affiliate Agreement
that Seller and Buyer Parent mutually agree shall survive shall be included on Exhibit B and the
parties agree to amend Exhibit B prior to the Closing Date to reflect any such agreement. Seller
shall cause all Affiliate Agreements other than those included on Exhibit B (as may be amended
prior to the Closing Date as contemplated by this Section 1.13(c)) to be terminated effective as of
the Closing Date with no further obligations of the parties thereunder; provided that
confidentiality and other matters that by the terms of such Affiliate Agreements survive
termination shall so survive in accordance with such terms. Notwithstanding the foregoing, if
Seller is not able to obtain the necessary consents to terminate any such Affiliate Agreement by
the Closing Date, Seller shall not be in breach of this Agreement for failing to terminate such
Affiliate Agreement to the extent it agrees to indemnify Company and the Subsidiaries for any
Losses arising from and after the Closing Date under such Affiliate Agreement.

 

7

 

1.14 Excluded Services. Notwithstanding anything herein to the contrary, the
following shall not be included as Services pursuant to this Agreement:

(a) Any services provided pursuant to any Affiliate Agreement listed on Exhibit B as of the
Closing Date.

(b) Any services relating to intellectual property matters other than those listed on Exhibit
A as of the Effective Date.

ARTICLE II

QUALITY OF SERVICES; LIMITATION OF LIABILITY; IMPROVEMENTS

2.1 Quality of Services.

(a) Seller shall perform the Services, or to cause the Services to be performed, in a
workmanlike manner at the same general level of service, with the same degree of care (which in no
event may be less than reasonable care), and in a manner similar in all material respects to the
manner in which such Services have been provided by Seller and its Affiliates to Company and the
Subsidiaries as of the Closing Date.

(b) In addition to the above and to the extent permitted by applicable Law, Seller agrees to
pass through to Company and the Subsidiaries any warranties provided by Authorized Third Parties
providing the Services.

(c) In the event of an alleged breach, default or nonperformance of any obligation under this
Agreement by Seller or Company, the other party shall provide prompt written notice to the
breaching party setting forth in reasonable detail the nature and extent of the alleged breach,
default or nonperformance. The breaching party will then have a period of ten (10) Business Days
in which to initiate actions reasonably designed to cure such alleged breach, default or
nonperformance, and all such deficiencies shall, in any case, be cured within thirty (30) days
following receipt by the breaching party of notice thereof.

2.2 Specific Performance. Seller acknowledges that the rights of Company to enforce
the covenants and agreements made in this Agreement are special, unique, and of extraordinary
character, and that, in the event Seller violates or fails or refuses to perform any covenant or
agreement made by it herein, Company would be irreparably damaged and be without adequate remedy at
law. Seller agrees, therefore, that, in the event it fails or refuses to perform, or otherwise
violates, any covenant or agreement made by it herein, Company shall, in addition to any remedies
available at law, be entitled to seek specific performance of such covenant(s) or agreement(s) and
any other equitable remedy. For the avoidance of doubt, the foregoing shall not apply to the
extent Company, its Affiliates, Representatives or Authorized Third Parties are expressly permitted
to cease or suspend the provision of Services pursuant to Section 1,10 or otherwise not comply with
other obligations hereunder pursuant to Section 5.14.

 

8

 

2.3 Limitation of Liability. IN NO EVENT SHALL SELLER, ITS AFFILIATES NOR ANY OF
THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS (INCLUDING SELLER’S REPRESENTATIVES) BE
LIABLE TO COMPANY OR ANY SUBSIDIARY FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR FOR ANY LOSS OF PROFITS, LOSS OF REVENUE, LOSS RESULTING FROM INTERRUPTION
OF BUSINESS OR LOSS OF DATA ARISING
UNDER OR RELATING TO THIS AGREEMENT, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING
NEGLIGENCE), OR OTHERWISE, AND WHETHER OR NOT SELLER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGE. EXCEPT IN THE CASE OF SELLER’S GROSS NEGLIGENCE, FRAUD OR WILLFUL MISCONDUCT, IN NO EVENT
SHALL THE TOTAL LIABILITY OF SELLER, ITS AFFILIATES AND ANY OF ITS OR THEIR DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS (INCLUDING SELLER’S REPRESENTATIVES) ARISING OUT OF OR RELATING IN ANY WAY TO
THIS AGREEMENT EXCEED THE FEES PAID BY COMPANY TO SELLER HEREUNDER.

2.4 No Other Warranties. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY
STATED HEREIN, SELLER DISCLAIMS ALL EXPRESS AND IMPLIED REPRESENTATIONS AND WARRANTIES IN
CONNECTION WITH THE SERVICES, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR NON-INFRINGEMENT.

2.5 Indemnification. In addition to Seller’s obligations set forth in Article IX of
the Purchase Agreement, Seller shall indemnify, hold harmless and reimburse Company and the
Subsidiaries for all Losses based upon, attributable to, arising out of or resulting from Seller’s
gross negligence, fraud or willful misconduct in connection with the Services. Notwithstanding
anything herein to the contrary, neither Seller, any of its Affiliates, nor any Representative
shall be liable or held accountable, in damages or otherwise, for any error in judgment or any
mistake of fact or Law or for anything which Seller does or refrains from doing, other than for
Seller’s gross negligence, fraud or willful misconduct.

2.6 Mitigation. Company has a duty to mitigate (and cause the Subsidiaries to
mitigate) the Losses that would otherwise be recoverable from Seller pursuant to this Agreement by
taking appropriate and reasonable actions to reduce or limit the amount of any such Losses.

ARTICLE III

TERM AND TERMINATION OF THE SERVICES

3.1 Term. Unless earlier terminated pursuant to Section 3.2, with respect to each of
the Services (or any portion thereof), the term of this Agreement as it relates thereto will be for
a period beginning on Closing Date and continuing until the earlier of (a) the first anniversary of
the Closing Date; or (b) termination by Company of all the Services to be provided by Seller under
this Agreement pursuant to Section 3.2(a).

3.2 Termination.

(a) Any of the Services, or any portion thereof, may be terminated by Company, in its sole
discretion, at any time by furnishing forty (45) days’ prior written notice to Seller of Company’s
intention to terminate the applicable Service, which written notice shall specify (i) the Service
(or portion thereof) being terminated and (ii) the date on which the Service (or portion thereof)
shall be terminated; provided, however, that Company shall be responsible for the
payment of any and all Service Fees and Expenses (each as defined below) accrued or
incurred for such Service under this Agreement prior to the later of (A) the effective date of
the termination and, (B) in the event that Seller is contractually or legally required to incur
Expenses related to such Service beyond the effective date of the termination, the date that Seller
is no longer contractually or legally required to incur such Expenses.

 

9

 

(b) Either Seller or Company, with respect to (i) and (ii) below, and Seller, with respect to
(iii) below, may immediately terminate this Agreement by written notice to the other party upon the
occurrence of any of the following events:

(i) the other party (A) enters into proceedings in bankruptcy or insolvency, (B) makes an
assignment for the benefit of creditors, (C) files or has filed against it any petition under a
bankruptcy law or any other law for relief as a debtor (or similar law in purpose or effect) or (D)
enters into liquidation or dissolution proceedings;

(ii) the other party materially breaches any of its obligations hereunder and the breach
remains uncured for the applicable period specified in Section 2.1(c); or

(iii) any amount due under this Agreement remains unpaid by Company for a period of more than
fifteen (15) days following Company’s receipt of a notice of delinquency.

3.3 Survival of Certain Obligations. Without prejudice to the survival of other
agreements of the parties, the right of Seller to receive the applicable payments for expenses for
the Services rendered prior to the effective date(s) of termination of such Services under this
Agreement shall survive the termination or expiration, in whole or in part, of this Agreement. In
addition, Section 2.3, Section 2.4, Section 2.5, Section 2.6, Section 3.3, Section 4.1, Section
4.2, and Article V shall survive the termination or expiration of this Agreement.

ARTICLE IV

CONSIDERATION

4.1 Consideration.

	 	(a)	 	The fees charged by Seller for Services hereunder (“Service Fees”)
shall be equal to Seller’s and, as applicable, its Affiliates’ fully allocated cost for
such Services, including (a) all compensation, benefit and other costs and expenses
incurred by or with respect to employees directly engaged in providing such Services,
including (i) in respect of compensation, all applicable bonus compensation, (ii) in
respect of benefits, all benefits under Plans, and (iii) in respect of costs and
expenses, all costs of materials and for such items as travel incurred in respect of
the Services, as well as a reasonable allocation for space, maintenance, and facilities
costs allocable to employees engaged in providing the Services, as well as the actual
cost of any third party services used in providing the Services, and (b) similar costs
with respect to those directly engaged in the supervision of such Services.

 

10

 

	 	(b)	 	In addition to the Service Fees, Company will reimburse Seller for all
reasonable, documented, out-of-pocket expenses incurred by Seller or the relevant
Affiliate, Representative and/or Authorized Third Party in connection with the
provision of the Services (“Expenses”).

4.2 Invoicing.

(a) Seller and/or the relevant Affiliate will invoice Company for such expenses monthly in
arrears for the Services provided under this Agreement. Each such invoice shall include (i) a
brief description of the Service provided by Seller, its Affiliates, Representatives and Authorized
Third Parties during that month, and the Service Fees for such Services Fees and (ii) the amounts
of Expenses incurred by Seller, its Affiliates, Representatives and Authorized Third Parties during
that month and reasonable documentation of such expenses. Company shall pay all amounts due under
each invoice (in the currency denominated by Seller in such invoice) within forty-five (45) days
following receipt of such invoice (the “Due Date”) without offset, withholding or deduction
of any kind. Company shall be responsible for the payment of all Taxes payable with respect to the
performance, receipt or consumption of the Services or the execution and delivery of this
Agreement, other than any Tax based upon the net income of Seller or any other Person providing any
of the Services.

(b) Interest shall accrue on any unpaid balance at a rate of 1% per month for the period
commencing on the Due Date and ending on the date payment is received in full by Seller, and
Company shall bear all reasonable costs and expenses (including attorney’s fees and court costs)
incurred by Seller or its Affiliates in collecting outstanding balances from Company not paid on
the Due Date.

ARTICLE V

MISCELLANEOUS

5.1 Confidentiality.

(a) Each party (the “Receiving Party”) agrees that, from the Effective Date until the
fifth anniversary of the Effective Date, it shall, and shall cause its Affiliates and
Representatives to:

(i) take proper and all reasonable measures to ensure the confidentiality of all Confidential
Information (as defined below) of the other party (the “Disclosing Party”), including
keeping it separate from information belonging to the Receiving Party;

(ii) use such Confidential Information only for the Proper Use (as defined below);

(iii) permit access to such Confidential Information only to such of its Representatives
having a need to know such Confidential Information (“Permitted Disclosees”),
provided, that Receiving Party shall cause or have caused its Permitted Disclosees to be
bound by and comply with the confidentiality no less restrictive than hereunder by written
agreements, and inform each of those Permitted Disclosees of the confidential nature of such
Confidential Information and of the obligations on Receiving Party in respect thereof, and
Receiving Party shall be responsible for any breach of this Section 5.1 by any of its Permitted
Disclosees;

 

11

 

(iv) make copies of the Confidential Information of the Disclosing Party only to the extent
that the same are strictly required for the Proper Use;

(v) treat all Confidential Information of the Disclosing Party with the degree of care to
avoid disclosure to any third party as is used with respect to Receiving Party’s own information of
like importance which is to be kept confidential; and

(vi) promptly return all Confidential Information of the Disclosing Party to the Disclosing
Party upon its written request or (at the Disclosing Party’s option) destroy all such Confidential
Information and provide to the Disclosing Party a certificate of such destruction signed by a duly
authorized officer of the Receiving Party.

(b) Where any Confidential Information of the Disclosing Party is the subject of any security
regulations of any Governmental Entity, Receiving Party shall, and hereby undertakes to, take such
measures as may be required by such regulations to protect such Confidential Information. Without
prejudice to any obligations imposed on and assumed by the Receiving Party under any security
regulations of any Governmental Entity, the obligations of confidentiality herein shall not apply
to any Information which the Receiving Party by its written records can show:

(i) was in the possession of the Receiving Party before such Information was imparted or
disclosed by the Disclosing Party;

(ii) is independently developed by any servant, agent or employee of the Receiving Party
without access to or use or knowledge of the Information;

(iii) is in or subsequently comes into the public domain other than by breach by the Receiving
Party of its obligations hereunder;

(iv) is received by the Receiving Party without restriction on disclosure or use from a third
party which the Receiving Party reasonably and honestly believes is entitled to make such
disclosure; or

(v) is approved for release by the written agreement of the Disclosing Party.

The Receiving Party may disclose Confidential Information of the Disclosing Party if required
to be disclosed by applicable Law; provided that, if the Receiving Party is to make such
disclosure, it shall give the Disclosing Party as much prior notice thereof as is reasonably
practicable so that the Disclosing Party may seek such protective orders or other confidentiality
protection as the Disclosing Party, in its sole discretion, may elect, and the Receiving Party
shall reasonably co-operate with the Disclosing Party in protecting the confidential or proprietary
nature of such Confidential Information which is to be so disclosed.

 

12

 

(c) As used in this Section 5.1:

(i) “Confidential Information” shall mean: (A) in respect of Information provided in
documentary form or by way of a model or in other tangible or intangible form, Information which at
the time of disclosure to the Receiving Party is marked, or otherwise designated, to show expressly
or by implication that it is imparted or disclosed in confidence; (B) Information the nature of
which, or the circumstances in which it was supplied, implies that it should be treated as
confidential notwithstanding the absence of any mark or designation of confidentiality; (C) in
respect of Information that is imparted or disclosed orally or by demonstration or presentation,
any Information that the Receiving Party has been expressly informed by the Disclosing Party at the
time of disclosure to have been imparted or disclosed in confidence; (D) in respect of Information
imparted or disclosed orally or by demonstration or presentation, any note or record of the
disclosure; and (E) any copy of any of the foregoing.

(ii) “Information” shall mean (A) with respect to that disclosed by Seller,
information relating to the Services provided pursuant to this Agreement, by or on behalf of
Seller, to Company or any Subsidiary, in oral or documentary form or by way of models or other
tangible or intangible form or by demonstrations or presentations; and (B) with respect to that
disclosed by Company or any Subsidiary, information relating to Company’s or any Subsidiary’s
utilization or receipt of Services provided pursuant to this Agreement, by or on behalf of Company
or any Subsidiary, to Seller, in oral or documentary form or by way of models or other tangible or
intangible form or by demonstrations or presentations, including all Company and Subsidiary
information accessed in connection with the provision of the Services, whether in electronic or
other form.

(iii) “Proper Use” shall mean (A) with respect to Company and the Subsidiaries, the
use of Seller’s Confidential Information (1) wholly necessarily and exclusively for the purpose of
conducting the business of Company and the Subsidiaries in connection with the Services; (2) in
connection with the enforcement of Company’s rights hereunder; and (3) in connection with the
defense by Company of any claim asserted against Company hereunder; and (B) with respect to Seller,
the use of Company’s and the Subsidiaries’ Confidential Information (1) wholly necessarily and
exclusively for the purpose of providing or the causing the provision of, the Services; (2) in
connection with the enforcement of Seller’s rights hereunder; and (3) in connection with the
defense by Seller of any claim asserted against Seller hereunder.

5.2 Entire Agreement; Amendments and Waivers.

(a) This Agreement and the Purchase Agreement contain the entire agreement of the parties with
respect to the subject matter hereof and supersede all prior agreements, written or oral, with
respect to their subject matter. The exhibits and schedules to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.

(b) Any provision of this Agreement, including all exhibits hereto, may be amended or waived,
but only if, such amendment or waiver is in writing and is signed, in the
case of an amendment, by the parties to this Agreement or, in the case of a waiver, by the
party against whom the waiver is to be effective.

 

13

 

(c) No failure or delay by either 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.

5.3 Notices. All notices, requests and other communications to either party hereunder
shall be in writing (including facsimile transmission) and shall be given,

if to Company, to:

Viviti Technologies Ltd.

c/o Hitachi Global Storage Technologies, Inc.

3403 Yerba Buena Road

San Jose, CA 95135

Attention: Christopher Dewees

Facsimile: (408) 717-9063

E-mail: Christopher.Dewees@hitachigst.com

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP

525 University Avenue

Palo Alto, California 94301

Attention: Thomas J. Ivey, Esq.

Facsimile: (650) 470-4570

E-mail: Thomas.Ivey@skadden.com

if to the Buyer Parent, to:

Western Digital Corporation

3355 Michelson Drive, Suite 100

Irvine, California 92612

Attention: Michael Ray

Facsimile: (949) 672-9612

E-mail: Michael.Ray@wdc.com

 

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with a copy (which shall not constitute notice) to:

O’Melveny & Myers LLP

610 Newport Center Drive, Suite 1700

Newport Beach, California 92660

Attention: J. Jay Herron, Esq. and Mark Easton, Esq.

Facsimile: (949) 823-6994

E-mail: jherron@omm.com; measton@omm.com

if to Seller, to:

Hitachi, Ltd., Business Development Office

6-6 Marunouchi 1-chome

Chiyoda-ku

Tokyo 100-8280, Japan

Attention: General Manager

Phone: +81-3-4564-5483

Fax: +81-3-4564-6260

with a copy (which shall not constitute notice) to:

Morrison & Foerster LLP

Shin-Marunouchi Building, 29th Floor

5-1, Marunouchi 1-chome

Chiyoda-ku, Tokyo 100-6529

Japan

Attention: Kenneth A. Siegel, Esq.

Facsimile: 011-81-3-3214-6512

E-mail: KSiegel@mofo.com

or to such other address or facsimile number as such party may hereafter specify for the purpose by
notice to the other party hereto. All such notices, requests and other communications shall be
deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m.
Pacific time on a Business Day in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed to have been received on the next succeeding Business Day in the
place of receipt.

5.4 Disputes. In the event of any controversy or dispute arising out of or relating
to this Agreement, the Service Coordinators shall in good faith attempt to resolve such dispute.
If after 20 days the parties have not reached an agreement with respect to such dispute, either
party may file a claim against the other party pursuant to Section 5.5 below.

 

15

 

5.5 Governing Law; Negotiation Procedure; Service of Process; Consent to Jurisdiction;
Venue; Waiver of Jury Trial.

(a) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to its conflicts of law rules.

(b) Negotiation Procedure; Service of Process.

(i) The parties intend that all disputes between the parties arising out of this
Agreement shall be settled by the parties amicably through good faith discussions upon the
written request of either party.

(ii) Prior to filing suit, instituting a Proceeding or seeking other judicial or
governmental resolution in connection with any dispute between the parties or any of their
subsidiaries arising out of this Agreement or any of the transactions contemplated hereby,
the parties will attempt to resolve such dispute by good faith negotiations. Such
negotiations shall proceed as follows:

(A) Any party may send a written notice to another party requesting such
negotiations. Promptly following receipt of such notice by the receiving party,
each party shall cause the individual designated by it as having general
responsibility for this Agreement to meet in person with the individual so
designated by the other party to discuss the dispute.

(B) If the dispute is not resolved within thirty (30) days after the first
meeting between such individuals (or if earlier within forty five (45) days of the
notice referred to in clause (i) above), then, upon the written request of any
party, each party shall cause the individual designated by it as having general
responsibility for the overall relationship defined by this Agreement to meet in
person with the individual so designated by the other party to discuss the dispute.

(C) If the dispute is not resolved within fifteen (15) days after the first
meeting between such individuals (or if earlier within thirty (30) days of the
notice referred to in clause (ii) above), then, upon the written request of either
party, Company shall nominate one corporate officer of the rank of senior vice
president or higher, and Seller shall nominate one corporate officer of the rank of
Board Director or higher, which corporate officers shall meet in person and attempt
in good faith to negotiate a resolution to the dispute.

(iii) Except and only to the limited extent provided in Section 5.5(b)(iv),
neither party shall file suit, institute a Proceeding or seek other judicial or governmental
resolution of the dispute until at thirty (30) days after the first meeting between the
corporate officers described in clause (iii) above (or if earlier forty five (45) days after
the notice referred to in such clause (iii)) but after the expiration of such periods,
either party may file suit, institute a Proceeding or seek other judicial or governmental
resolution. For purposes of this Agreement, the procedures set forth in Section
5.5(b)(ii) and this Section 5.5(b)(iii) shall be referred to as the
“Negotiation Procedures”.

 

16

 

(iv) Notwithstanding the provisions of Sections 5.5(b)(ii) and
5.5(b)(iii), any party may institute a Proceeding at any time seeking a preliminary
injunction, temporary restraining order, or other equitable relief, if necessary in the sole
judgment of that party to avoid material harm to its property, rights or other interests,
before commencing, or at any time during the course of, the dispute procedure described in
Sections 5.5(b)(ii) and 5.5(b)(iii). In addition, any party may file an
action prior to the commencement of or at any time during or after the dispute resolution
procedures in Sections 5.5(b)(ii) and 5.5(b)(iii) if in the sole judgment of
that party it is necessary to prevent the expiration of a statute of limitations or filing
period or the loss of any other substantive or procedural right.

(c) Consent to Jurisdiction; Venue. Each of the parties irrevocably and
unconditionally submits to the exclusive jurisdiction of the Delaware Court of Chancery (and if
jurisdiction in the Delaware Court of Chancery shall be unavailable, any Delaware State court and
the Federal court of the United States of America sitting in the State of Delaware) for the
purposes of any Action or other proceeding arising out of this Agreement or any transaction
contemplated hereby (and agrees that no such Action or proceeding relating to this Agreement shall
be brought by it or any of the Subsidiaries except in such courts). Each of the parties further
agrees that, to the fullest extent permitted by applicable Law, service of any process, summons,
notice or document by U.S. registered mail to such person’s respective address set forth in
Section 5.3 above shall be effective service of process for any Action or proceeding in the
State of Delaware with respect to any matters to which it has submitted to jurisdiction as set
forth above in the immediately preceding sentence. Each of the parties irrevocably and
unconditionally waives (and agrees not to plead or claim), any objection to the laying of venue of
any Action or proceeding arising out of this Agreement or the transactions contemplated hereby in
the Delaware Court of Chancery (and if the Delaware Court of Chancery shall be unavailable, in any
Delaware State court or the Federal court of the United States of America sitting in the State of
Delaware) or that any such Action or proceeding brought in any such court has been brought in an
inconvenient forum.

(d) Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT.

5.6 Books and Records; Inspection. Company shall, and shall cause the Subsidiaries
to, make available on a timely basis to Seller and its Affiliates, Representatives and Authorized
Third Parties such information and materials reasonably requested by Seller to enable such Persons
to provide the Services. Company shall, and shall cause the Subsidiaries to, provide to such
Persons reasonable access to the premises of Company and the other Subsidiaries, to the extent
necessary for the purpose of providing the Services. During the Transition Period and for a period
of three (3) years following the Transition Period or, if applicable Law requires a longer period,
such longer period, Seller shall maintain a complete and accurate set of files, books and records
of all business activities and operations conducted by Seller related to the Services provided
under the terms of this Agreement, as well as any correspondence related to compliance with any
applicable national, state and local laws, rules and regulations. Seller will provide Company,
subject to Section 5.1 hereof, such information as Company may reasonably request from Seller’s
books and records to the extent relating to the provision of any Service hereunder.

 

17

 

5.7 Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction or other Governmental Entity to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this 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. Upon such a determination, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.

5.8 Binding Effect; Benefit; Assignment.

(a) The provisions of this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns. No provision of this Agreement is
intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any
Person other than the parties hereto and their respective successors and assigns.

(b) No party may assign, delegate or otherwise transfer any of its rights or obligations under
this Agreement without the consent of each other party hereto, except that Company may transfer or
assign its rights and obligations under this Agreement, in whole or from time to time in part, to
one or more of its Affiliates at any time; provided that such transfer or assignment shall not
relieve Company of any of its obligations hereunder.

5.9 Definitional and Interpretive Provisions. Section 1.2 of the Purchase Agreement
shall also apply to this Agreement; provided, however, that for the purposes of this Agreement,
“Business Days” shall mean a day, other than Saturday, Sunday or a public holiday in the country in
which the applicable Service is performed.

5.10 Counterparts. This Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement shall become effective when each party hereto shall have
received a counterpart hereof signed by the other party hereto. Until and unless each party has
received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect
and no party shall have any right or obligation hereunder (whether by virtue of any other oral or
written agreement or other communication).

5.11 No Third Party Beneficiaries. This Agreement is intended and agreed to be solely
for the benefit of the parties, and no third party, other than the Subsidiaries, shall accrue any
benefit, claim or right of any kind whatsoever pursuant to, under, by or through this Agreement.

 

18

 

5.12 Relationship of the Parties. It is expressly understood and agreed that in
rendering the Services hereunder, each of the parties is acting as an independent contractor and
that this Agreement does not make the providing party an employee, agent or other representative of
the other party for any purpose whatsoever. Neither party has the right or authority to enter into
any contract, warranty, guarantee or other undertaking in the name or for the account of the other
party, or to assume or create any obligation or liability of any kind,
express or implied, on behalf of the other party, or to bind the other party in any manner
whatsoever, or to hold itself out as having any right, power or authority to create any such
obligation or liability on behalf of the other party or to bind the other party in any manner
whatsoever (except as to any actions taken by a party at the express written request and direction
of the other party). No employee, contractor or subcontractor of any party shall be deemed to be
an employee, contractor or subcontractor of the other party, it being fully understood and agreed
that no employee of any party is entitled to benefits or compensation from the other party. Each
party is wholly responsible for withholding and payment of all applicable national, state and local
and other payroll taxes with respect to its own employees, including any contributions from them as
required by Law.

5.13 Conflict. In case of conflict between the terms and conditions of this Agreement
and any exhibit or schedule hereto, the terms and conditions of such exhibit or schedule shall
control and govern, insofar as such terms and conditions in the exhibit or schedule relate to the
Service that is the subject of such conflict. In the event of any conflict between the terms of
the Purchase Agreement, on the one hand, and this Agreement and each exhibit or schedule hereto, on
the other hand, the terms of this Agreement shall control and govern.

5.14 Force Majeure. Each party shall be excused from its obligations under this
Agreement, other than payment obligations, to the extent that any delay or failure in the
performance of such obligations is a result of any cause beyond its reasonable control (and without
the fault of such party), including, acts of God, acts of civil or military authority, embargoes,
epidemics, war, terrorism, riots, insurrections, fires, explosions, earthquakes, floods, severe
weather conditions or changes in Law.

5.15 Termination of Purchase Agreement. This Agreement shall immediately terminate
and be of no further force and effect upon any termination of the Purchase Agreement in accordance
with the terms thereof.

5.16 Services Contingent on Closing. For the avoidance of doubt, Seller shall have no
obligation to perform any of the Services pursuant to this Agreement unless and until Closing has
occurred.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

19

 

[SIGNATURE PAGE TO THE TRANSITION SERVICES AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.

	 	 	 	 	 
	 	Viviti Technologies Ltd.

 	 
	 	By:  	/s/ Stephen Dwight Milligan
 	 
	 	 	Name:  	Stephen Dwight Milligan 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	Hitachi, Ltd.

 	 
	 	By:  	/s/ Toyoki Furuta
 	 
	 	 	Name:  	Toyoki Furuta 	 
	 	 	Title:  	General Manager, Business 

Development Office 	 
	 

Solely with respect to Sections 1.4 and 1.13(c)

Western Digital Corporation

	 	 	 	 	 	 	 
	By:	 	/s/ Wolfgang U. Nickl	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Wolfgang U. Nickl	 	 
	 

	 	Title:
	 	Senior Vice President and Chief Financial Officer	 	 

 

20

 

EXHIBIT A

SERVICES

	 	 	 
	Services	 	Description of Services
	IP Services

	 	•   Assistance with respect to the transfer of patent docket information, file-wrapper and the like;

	 
	 	 
	 

	 	•   Consultation on historical and background information relating to the services that Seller or
its Affiliates provided to Company or the Subsidiaries prior to the Closing Date.

	 
	 	 
	IT Services

	 	•   Information technology services.

	 
	 	 
	Communication Services

	 	•   Videoconferencing services.

	 
	 	 
	Technical Services

	 	•   Technical support services;

	 

	 	•   Hardware maintenance services; and

	 

	 	•   Design and creation of electronic circuit software and other software.

	 
	 	 
	Facility Services

	 	•   Waste disposal services;

	 

	 	•   Maintenance services;

	 

	 	•   Security services;

	 

	 	•   Transportation services; and

	 

	 	•   Storage services.

	 
	 	 
	Consulting Services

	 	•   Failure analysis and reporting;

	 

	 	•   Production engineering, productivity, and environmental consulting;

	 

	 	•   Materials procurement consulting;

	 

	 	•   Materials evaluation services; and

	 

	 	•   Foreign affairs and governmental relations consulting.

	 
	 	 
	Education Support Services

	 	•   Education support services.

 

A-1

 

EXHIBIT B

AFFLIATE AGREEMENTS

1. The Transaction Documents, and any other contract delivered at Closing pursuant to the Purchase
Agreement.

2. Invention Award Integration Agreement dated December 10, 2010 between Seller and Company.

 

A-2

 

Schedule 1

Service Coordinator Contact Information:

For Seller:

Toyoki Furuta

General Manager, Business Development Office

Hitachi, Ltd.

6-6 Marunouchi 1-chome

Chiyoda-ku

Tokyo 100-8280, Japan

E-Mail: toyoki.furuta.re@hitachi.com

Phone: +81-3-4564-5483

Fax: +81-3-4564-6260

For Company:

[To be provided by Company promptly after the Effective Date]

E-Mail:

Phone:

Fax: None

 

A-3

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