WESTERN DIGITAL CORP
EXHIBIT 10.36
<DOCUMENT>
<TYPE>EX-10.36
<SEQUENCE>5
<FILENAME>a83140exv10w36.txt
<DESCRIPTION>EXHIBIT 10.36
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.36

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             AGREEMENT FOR FABRICATION AND PURCHASE OF SEMICONDUCTOR
                                    PRODUCTS

                                     between

                   INTERNATIONAL BUSINESS MACHINES CORPORATION
                                       and
                           WESTERN DIGITAL CORPORATION



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            AGREEMENT FOR FABRICATION AND PURCHASE OF SEMICONDUCTOR
                                    PRODUCTS

<TABLE>
<CAPTION>
Section                                                                 Page
-------                                                                 ----
<S>                                                                <C>
1.0    DEFINITIONS ..............................................   Page 3 of 24
2.0    UTILIZATION OF PRODUCTS ..................................   Page 4 of 24
3.0    CONTRACT PERIOD ..........................................   Page 4 of 24
4.0    PRODUCT PURCHASE INFORMATION .............................   Page 4 of 24
5.0    PURCHASE ORDERS ..........................................   Page 4 of 24
6.0    SECURITY INTEREST ........................................   Page 5 of 24
7.0    INVOICING, PAYMENT TERMS, TAXES ..........................   Page 5 of 24
8.0    TERMINATION ..............................................   Page 6 of 24
9.0    ENGINEERING CHANGES ......................................   Page 7 of 24
10.0   PRODUCT WARRANTY .........................................   Page 8 of 24
11.0   IBM TRADEMARKS AND TRADE NAMES ...........................   Page 9 of 24
12.0   INTELLECTUAL PROPERTY RIGHTS INDEMNITY ...................   Page 9 of 24
13.0   CONFIDENTIAL INFORMATION .................................  Page 10 of 24
14.0   LIMITATION OF REMEDIES ...................................  Page 11 of 24
15.0   NOTICES ..................................................  Page 12 of 24
16.0   GENERAL PROVISIONS .......................................  Page 12 of 24
ATTACHMENT 1 ....................................................  Page 15 of 24
JIT PROGRAM SUPPLEMENT ..........................................  Page 20 of 24
EXHIBIT I (FORM PARTICIPATION AGREEMENT) ........................  Page 24 of 24
</TABLE>



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            AGREEMENT FOR FABRICATION AND PURCHASE OF SEMICONDUCTOR
                                    PRODUCTS

                                                        Agreement Number: 000690
                                                        Customer Number: WD1

This Agreement for Fabrication and Purchase of Semiconductor Products
("Agreement"), Agreement Number 000690, dated February 7, 2001, is made and
entered into by and between Western Digital Corporation ("Buyer") and
International Business Machines Corporation ("IBM").

Buyer agrees to purchase and IBM agrees to fabricate and sell the Products as
specified herein in accordance with the terms and conditions stated in this
Agreement including its Attachments.

1.0     DEFINITIONS

        1.1     Commencement Date: February 7, 2001.

        1.2     Engineering Change: A mechanical or electrical change to Product
                which may affect form, fit, function or maintainability.

        1.3     Plant of Manufacture: The IBM location that manages the
                consolidation/assembly and shipment of Product to IBM
                Distribution Points or Buyer.

        1.4     Product(s): The product(s) to be fabricated, sold and purchased
                under this Agreement and listed in Attachments.

        1.5     Purchase Order: An order submitted by Customer for the purchase
                of Products under this Agreement.

        1.6     Purchase Order Lead Time: The required minimum amount of time
                between IBM's receipt of the purchase order issued by Buyer and
                the requested shipment date that is necessary to accommodate
                manufacturing cycle time.

        1.7     Shipment Date: The date for shipment of Product requested by
                Buyer in a Purchase Order accepted by IBM.

        1.8     Related Company: A corporation, company or other entity which
                controls or is controlled by a party hereunder or by another
                Related Company of such party, where control means ownership or
                control, direct or indirect, of more than fifty (50) percent of:
                (i) the outstanding voting shares or securities (representing
                the



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                right to vote for the election of directors or managing
                authority), or (ii) the ownership interests representing the
                right to make decisions for such a corporation, company or other
                entity (as the case may be in a partnership, joint venture or
                unincorporated association having no outstanding shares or
                securities). However, any such corporation, company or other
                entity shall be deemed to be a Related Company of such party
                only so long as such ownership or control exists.

        1.9     Unit(s): A single unit of the Product.

2.0     UTILIZATION OF PRODUCTS

        IBM will not have any installation, warranty or maintenance
        responsibilities for Product except as referred to in Section 9.0
        entitled "Engineering Changes", and Section 10.0 entitled "Product
        Warranty" unless otherwise agreed to in writing between the parties.

3.0     CONTRACT PERIOD

        The term of this Agreement shall begin on the Commencement Date and
        expire on February 7, 2003.

4.0     PRODUCT PURCHASE INFORMATION

        Product forecasting, pricing, shipping terms and related provisions, if
        applicable, are set forth in Attachments or the Just In Time (JIT)
        Program Supplement ("the Supplement").

5.0     PURCHASE ORDERS

        5.1     Buyer shall order Product by issuing written Purchase Orders,
                which are subject to acceptance by IBM. Acknowledgment of
                acceptance or rejection of Purchase Orders must be made within
                seven (7) days. If IBM fails to accept or reject a Purchase
                Order within such period, both Buyer and IBM agree to discuss if
                any options or provisions are available to resolve the issue.
                IBM and Buyer authorize Buyer's Related Companies to purchase
                under this Agreement, provided that such Related Company enters
                into a "Participation Agreement" in the form attached hereto at
                Exhibit 1. IBM shall ship Units in accordance with such Purchase
                Orders. Purchase Orders must be placed in advance, with at least
                the Purchase Order Lead Time specified in Attachments, to allow
                IBM to meet Buyer's requested Shipment Date. Buyer may request
                an improved shipment date, however, such request is subject to
                acceptance by IBM.

        5.2     Except for Product part numbers, part number descriptions,
                price, and quantities, Purchase Orders and acknowledgments will
                be used to convey information only and any terms and conditions
                on those are void and replaced by this Agreement.




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        5.3     Purchase Orders shall include the following:

                a)      Product being purchased;

                b)      quantity requested;

                c)      Product price per the applicable Attachment;

                d)      destination address and requested Shipment Date(s); and

                e)      reference to this Agreement and Agreement Number.

        5.4     [***]

6.0     SECURITY INTEREST

        IBM reserves a purchase money security interest in each Unit purchased
        under this Agreement in the amount of its Product price and in Buyer's
        proceeds from Product, including accounts receivable. These interests
        will be satisfied by payment in full. Buyer agrees to execute UCC-1
        financing statements or other appropriate documents to be filed on IBM's
        behalf with appropriate state or other authorities in order to perfect
        IBM's security interest.

7.0     INVOICING, PAYMENT TERMS, TAXES

        7.1     [***]

        7.2     Buyer agrees to pay amounts equal to any taxes resulting from
                this Agreement, or any activities hereunder, exclusive of taxes
                based on IBM's net income. Buyer shall be responsible for any
                personal property taxes assessable on Products after delivery to
                the carrier.

        7.3     Buyer hereby certifies that it holds a valid Reseller's
                exemption certificate for Products purchased for resale in each
                applicable taxing jurisdiction. Based on this certification, IBM
                shall, where the law permits, treat Buyer as exempt from
                applicable state and/or local sales tax for Product purchased
                hereunder.



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        7.4     Where required by state or local law, Buyer shall provide IBM
                with a valid Reseller's Exemption Certificate for each taxing
                jurisdiction to which IBM will ship Products.

        7.5     Buyer shall notify IBM promptly in writing of any modification
                or revocation of its exempt status. Buyer shall reimburse IBM
                for any and all assessments resulting from a refusal by a taxing
                jurisdiction to recognize any Buyer exemption certificates, or
                from Buyer's failure to have a valid certificate. If Buyer
                purchases Product under this Agreement for internal use, Buyer
                agrees to notify IBM and pay applicable sales tax.

8.0     TERMINATION

        8.1     If Buyer shall fail to make payments in a timely fashion in
                accordance with Section 7.1, IBM may terminate this Agreement
                upon written notice to Buyer.

        8.2     Other than in the case of nonpayment, if either party is in
                default of any material provision of this Agreement and such
                default is not corrected within thirty (30) days of receipt of
                written notice, this Agreement may be terminated by the party
                not in default. If the default is such that it cannot be
                reasonably cured within thirty (30) days, then the defaulting
                party must commence cure within thirty (30) days and proceed to
                cure with due diligence.

        8.3     If Buyer terminates due to IBM default, all outstanding Purchase
                Orders shall be fulfilled by IBM unless Buyer notifies IBM in
                its default notice of its desire to cancel any or all such
                Purchase Orders, [***]

        8.4     If IBM terminates due to Buyer default, at IBM's discretion, all
                outstanding Purchase Orders shall be automatically cancelled and
                cancellation charges will apply in addition to any other amounts
                then due.

        8.5     Notwithstanding the provisions of Section 8.2, IBM shall have
                the right to terminate this Agreement immediately upon the
                occurrence of any of the following events:

                a)      A Change of Control of Buyer shall have occurred; for
                        purposes of this Agreement, a "Change in Control" shall
                        be deemed to have occurred if the stockholders of Buyer
                        shall approve any plan or proposal for the liquidation
                        or dissolution of Buyer.

                b)      (i) Buyer shall (a) voluntarily commence any proceeding
                        or file any petition seeking relief under Title II of
                        the United States Code or any other Federal or state
                        bankruptcy, insolvency, or similar law, (b) consent to
                        the



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                        institution of, or fail to controvert in a timely and
                        appropriate manner, any such proceeding or the filing of
                        any such petition, (c) apply for or consent to the
                        appointment of a receiver, trustee, custodian,
                        sequestrator, or similar official for Buyer or for a
                        substantial part of its property or assets, (d) file an
                        answer admitting the material allegations of a petition
                        for involuntary bankruptcy filed against it in any such
                        proceeding, (e) make a general assignment for the
                        benefit of creditors, (f) admit in writing its inability
                        to pay its debts as they become due or (g) take
                        corporate action for the purpose of effecting any of the
                        foregoing; or

                        (ii) an involuntary proceeding shall be commenced or an
                        involuntary petition shall be filed in a court of
                        competent jurisdiction seeking (a) relief in respect of
                        Buyer or of a substantial part of any of its property or
                        assets, under Title 11 of the United States Code or any
                        other Federal or state bankruptcy, insolvency, or
                        similar law, (b) the appointment of a receiver, trustee,
                        custodian, sequestrator, or similar official for Buyer
                        or for a substantial part of its property or (c) the
                        winding-up or liquidation of Buyer, and, if and so long
                        as contested by Buyer, either such proceeding or
                        petition described in this clause (ii) shall continue
                        undismissed for ninety (90) days or an order or decree
                        approving or ordering any of the foregoing shall
                        continue unstayed and in effect for ninety (90) days.

                (c)     In the event of termination under this Section 8.5, all
                        amounts owing to IBM shall become immediately due and
                        payable.

9.0     ENGINEERING CHANGES

        9.1     IBM may implement Engineering Changes required to satisfy
                governmental standards, protect data integrity or for safety or
                environmental reasons ("Mandatory Engineering Changes"). IBM
                will provide reasonable written notification to Buyer prior to
                implementation of a Mandatory Engineering Change. IBM reserves
                the right prior to delivery of Product to make Mandatory
                Engineering Changes without prior approval from Buyer.

        9.2     [***]

        9.3     For all previously shipped Product, IBM may issue Mandatory
                Engineering Changes (including parts, materials and
                documentation) at no charge to Buyer. IBM may also furnish to
                Buyer detailed installation instructions and any special tools,
                equipment, media and other related requirements for each
                Mandatory Engineering Change under this Agreement. Buyer must
                install Mandatory Engineering Changes on all Buyer installed
                Products and Products in its inventory



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                as specified by IBM and within a reasonable time period as
                specified by IBM. In the event Buyer fails to perform this
                responsibility in the manner and time as specified by IBM, IBM
                may install or cause to be installed Mandatory Engineering
                Changes on all Buyer installed Products and Products in Buyer's
                inventory at Buyer's expense, to include the cost of IBM labor
                at the then applicable rates plus incidental travel expenses.
                Buyer agrees to use its best efforts to obtain access for IBM to
                install or cause to be installed such Mandatory Engineering
                Changes on all Products sold or leased by Buyer, its Related
                Companies and Resellers. At IBM's option, such service may be
                performed at an IBM location, at Buyer's location, or at Buyer's
                customer location.

                If IBM requests the return of parts displaced from Units by
                installation of a Mandatory Engineering Change, Buyer will
                return those parts to IBM within ninety (90) days after
                installation of such Change.

        9.4     IBM may make available other Engineering Changes as requested by
                Buyer ("Optional Engineering Changes"). The cost of any Optional
                Engineering Changes that Buyer desires to implement will be
                borne by Buyer.

10.0    PRODUCT WARRANTY

        10.1    IBM warrants that any Units shipped under this Agreement will be
                free from any liens or other defects in title.

        10.2    IBM warrants that each Unit will be free from defects in
                material and workmanship for the warranty period as provided in
                the applicable Attachment, and will conform, when delivered, to
                IBM's wafer and module test program for the Product and to any
                specifications set forth in the applicable Attachment. This
                warranty does not address performance or nonperformance of
                Product.

        10.3    For a Product which Buyer determines during the warranty period
                does not conform to the warranty, IBM's obligation is limited to
                repairing, replacing or providing a credit for the Product.
                Products, as appropriate, found by Buyer to be defective shall
                be shipped transportation collect by Buyer to the designated IBM
                location. If IBM elects to repair or replace the Product, IBM
                will ship it back to Buyer, transportation prepaid by IBM.
                Exchanged parts will be free from any liens or other defects in
                title except as set forth in Section 6.0 above and will become
                the property of IBM.

        10.4    Should any Product while under warranty returned to IBM
                hereunder be found by IBM to be without defect, IBM will return
                such Product to Buyer and invoice Buyer for return
                transportation and for IBM's inspection time using IBM's then
                applicable hourly rates. Payment will be due and payable by
                Buyer upon receipt of the invoice.



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        10.5    This warranty does not include credit, repair or replacement for
                Products which are defective because of failure to provide a
                suitable installation environment, accident, disaster, neglect,
                abuse, misuse, transportation, alterations, attachments,
                accessories, supplies, non-IBM parts, or improperly performed
                repairs activities.

        10.6    THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES,
                EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
                WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
                PURPOSE.

11.0    IBM TRADEMARKS AND TRADE NAMES

        11.1    Neither this Agreement nor the sale of Product hereunder shall
                be deemed to give Buyer any right to use IBM's trademarks or any
                of IBM's trade names without IBM's specific, written consent.

        11.2    Buyer agrees IBM has ownership of and title to the trademark
                "IBM", all other trademarks and trade names of IBM, and the
                goodwill attaching thereto and agrees that any goodwill which
                accrues because of Buyer's use of the trademark "IBM" and any
                other trademarks and trade names of IBM shall vest in and become
                the property of IBM. Buyer will not contest, or take any action
                to contest, the trademarks or trade names of IBM, or use, employ
                or attempt to register any trademark or trade name which is
                confusingly similar to the trademarks or trade names of IBM.

        11.3    If IBM in its sole judgment determine that any of Buyer's
                advertising, promotional or related materials are an inaccurate
                or misleading use or a misuse of IBM trademarks or trade names,
                Buyer will, upon notice from IBM, change or correct such
                materials at its own expense.

12.0    INTELLECTUAL PROPERTY RIGHTS INDEMNITY

        12.1    IBM shall, at its own expense, defend any suit that is
                instituted by an owner of a patent, copyright or mask work right
                against Buyer to the extent such suit alleges that any Products,
                other than prototypes, or any part thereof sold or leased
                hereunder infringe any such patent, copyright or mask work right
                (except Products covered by Section 12.3, below), provided that
                such alleged infringement does not arise from any modification
                or addition made to the Products by anyone other than IBM, or
                the use of such Products as a part of or in combination with any
                other devices or parts or process, and provided further that the
                Buyer gives IBM prompt notice in writing of any such suit and
                permits IBM, through counsel of its choice, to answer the charge
                of infringement and defend such suit; and the Buyer gives IBM
                all the needed information, assistance and authority, at IBM's
                expense, to enable IBM to defend or settle such suit. In the
                case of a final award of



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                damages in any suit IBM, shall pay such award, but shall not be
                responsible for any settlement made without its prior written
                consent. In the event the use, lease or sale of the Products is
                enjoined, IBM may at its own option and expense:

                12.1.1  procure the Buyer the right to use, lease or sell such
                        Products;

                12.1.2  replace such Products;

                12.1.3  modify such Products; or

                12.1.4  remove such Products and refund the aggregate payments
                        made by the Buyer, less a reasonable sum for use, damage
                        and obsolescence.

        12.2    THIS SECTION STATES IBM'S TOTAL RESPONSIBILITY AND LIABILITY,
                AND THE BUYER'S SOLE REMEDY, FOR ANY ACTUAL OR ALLEGED
                INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHT OF ANY PRODUCTS
                DELIVERED HEREUNDER OR ANY PART THEREOF. THIS SECTION IS IN LIEU
                OF AND REPLACES ANY OTHER EXPRESS, IMPLIED OR STATUTORY WARRANTY
                AGAINST INFRINGEMENT.

        12.3    The Buyer shall, at its own expense, indemnify and hold IBM
                harmless from and against any expense or loss resulting from any
                infringement of any patent, trademark, copyright, trade secret
                or mask work right arising as a result of IBM's compliance with
                any of the Buyer's designs specifications or instructions, and
                shall defend at its own expense, including attorney's fees, any
                suit brought against IBM alleging any such infringement provided
                that IBM:

                12.3.1  gives the Buyer immediate notice of any suit and permits
                        the Buyer, through counsel of its choice, to defend such
                        suit; and

                12.3.2  gives the Buyer all needed information, assistance and
                        authority, at the Buyers expense, necessary for the
                        Buyer to defend any such suit.

13.0    CONFIDENTIAL INFORMATION

        13.1    Except as set forth in Section 13.2, all information exchanged
                under this Agreement will be deemed to be non-confidential. If
                it becomes necessary to exchange confidential information, the
                exchange will be made under a separate written agreement.

        13.2    Each party will keep the existence of this Agreement
                confidential until the first Unit is shipped by IBM to Buyer and
                will keep its contents confidential during the existence of this
                Agreement and for a period of three years thereafter and will
                not,



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                without first obtaining the written consent of the other party,
                disclose any portion of this Agreement or any information
                contained herein to any third party except as may be required to
                enforce this Agreement or by law. In the event such disclosure
                is required, the party making such disclosure will provide the
                other party sufficient notice for the other party to seek
                appropriate protection, in court if necessary. In the event of
                disclosure thereafter, the party making the disclosure will keep
                such disclosure to a minimum and protect the information so
                disclosed by a protective order or the like unless otherwise
                agreed by the parties.

14.0    LIMITATION OF REMEDIES

        14.1    IBM's entire liability and Buyer's exclusive remedy are set
                forth in this Section:

                a)      In all situations involving defects in materials or
                        workmanship or failure of Products furnished hereunder
                        to conform to the warranty, Buyer's remedy is provision
                        of an appropriate credit, or repair of the Product or
                        replacement of its parts by IBM. IBM may, at its option,
                        replace the Product. If, after repeated efforts, IBM is
                        unable to provide a replacement Product, all as
                        warranted, Buyer will be entitled to recover actual
                        direct damages to the limits set forth in this Section.
                        For any other claim concerning IBM's performance or
                        nonperformance pursuant to, or in any other way related
                        to the subject matter of, this Agreement, or any
                        Purchase Order under this Agreement, Buyer will be
                        entitled to recover actual direct damages to the limits
                        set forth in this Section.

                b)      IBM's liability for actual direct damages for any cause
                        whatsoever, shall be limited to the applicable price
                        paid for the specific Units that caused the damages or
                        that are the subject matter of, or are directly related
                        to, the cause of action. This limitation will apply,
                        except as otherwise stated in this Section, regardless
                        of the form of action, whether in contract or in tort,
                        including negligence. This limitation will not apply to
                        Section 12.0 entitled "Intellectual Property Rights
                        Indemnity." This limitation will not apply to claims by
                        Buyer for bodily injury or damage to real property or
                        tangible personal property caused by IBM's negligence.

                c)      In no event will IBM be liable for any lost profits,
                        lost savings, incidental damages or other consequential
                        damages, even if IBM has been advised of the possibility
                        of such damages.

                d)      In addition, IBM will not be liable for any claim by
                        Buyer based on any third-party claim, except as provided
                        in Section 12.0 entitled "Intellectual Property Rights
                        Indemnity" and except where the damages are for bodily
                        injury (including death) and damage to real property and
                        tangible personal property. In no event will IBM be
                        liable for any damages caused by Buyer's failure to
                        perform Buyer's responsibilities.



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        e)      [***]

        f)      In addition, IBM has no liability when the Products are used in
                conjunction with nuclear materials or other extra-hazardous
                activities to the extent such liability is caused by such
                activities.

15.0    NOTICES

        Notices required to be given under this Agreement will be sent in
        accordance with the applicable Attachment.

16.0    GENERAL PROVISIONS

        16.1    Neither this Agreement nor any activities hereunder will impair
                any right of IBM or Buyer to design, develop, manufacture,
                market, service, or otherwise deal in, directly or indirectly,
                products or services including those which are competitive with
                those offered by IBM or Buyer.

        16.2    Buyer is an independent contractor and is not an agent of IBM
                for any purpose whatsoever. Buyer will not make any warranties
                or representations on IBM's behalf, nor will it assume or create
                any such obligations on IBM's behalf.

        16.3    The substantive laws of the State of New York govern this
                Agreement. [***]

        16.4    If any section or subsection of this Agreement is found by
                competent judicial authority to be invalid, illegal or
                unenforceable in any respect, the validity, legality and
                enforceability of any such section or subsection in every other
                respect and the remainder of this Agreement shall continue in
                effect so long as the amended Agreement still expresses the
                intent of the parties. If the intent of the parties cannot be
                preserved, this Agreement shall be either renegotiated or
                terminated.

        16.5    This Agreement may be modified only by a written amendment
                signed by persons authorized to so bind Buyer and IBM.

        16.6    All obligations and duties which by their nature survive the
                expiration or termination of this Agreement shall remain in
                effect beyond any expiration or termination.



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        16.7    [***]

        16.8    Neither party shall be responsible for failure to fulfill its
                obligations under this Agreement due to fire, flood, war or
                other such cause beyond its control and without its fault or
                negligence provided it promptly notifies the other party.

        16.9    Neither party shall assign this Agreement or any rights
                hereunder without the prior written consent of the other party,
                except that IBM's rights to payments under the Agreement are
                freely assignable. In the event a party requests the right to
                assign this Agreement and the other party rejects such request,
                then the requesting party may terminate this Agreement without
                further obligation.

        16.10   Press releases and other like publicity or advertising which
                mentions the other party by name shall be agreed upon by both
                parties in writing prior to any release.

        16.11   The waiver by either party of an instance of the other party's
                noncompliance with any obligation or responsibility herein shall
                not be deemed a waiver of subsequent instances or of either
                party's remedies for such noncompliance.

        16.12   Each party will comply with all applicable federal, state and
                local laws, regulations and ordinances including, but not
                limited to, the regulations of the U.S. Government relating to
                the export or re-export of machines, commodities, software and
                technical data insofar as they relate to the activities under
                this Agreement. Buyer agrees that machines, commodities,
                software and technical data provided under this Agreement are
                subject to restrictions under the export control laws and
                regulations of the United States of America, including, but not
                limited to, the U.S. Export Administration Act and the U.S.
                Export Administration Regulations. Buyer hereby gives its
                written assurance that neither machines, commodities, software
                or technical data provided by IBM under this Agreement, nor the
                direct product thereof, is intended to be shipped, directly or
                indirectly, to prohibited countries or nationals thereof. Buyer
                agrees it is responsible for obtaining required government
                documents and approvals to export any machine, commodity,
                software or technical data.

        16.13   No license, immunity or other right is granted herein to Buyer,
                its Resellers or End-Users, whether directly or by implication,
                with respect to any patent trademark, copyright, mask work,
                trade secret, utility model, know-how, or other intellectual
                property rights of IBM.

                THE PARTIES ACKNOWLEDGE THAT EACH HAS READ THIS AGREEMENT,
                ATTACHMENT 1, AND THE JUST-IN-TIME (JIT) PROGRAM SUPPLEMENT,
                UNDERSTANDS THEM, AND AGREES TO BE



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                BOUND BY THEIR TERMS AND CONDITIONS. FURTHER, THE PARTIES AGREE
                THAT THIS AGREEMENT, ATTACHMENT 1, THE JUST-IN-TIME (JIT)
                PROGRAM SUPPLEMENT AND ANY INCORPORATED CONFIDENTIAL DISCLOSURE
                AGREEMENTS ARE THE COMPLETE AND EXCLUSIVE STATEMENT OF THE
                AGREEMENT BETWEEN THE PARTIES, WHICH SUPERSEDES ALL PROPOSALS OF
                ALL PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER
                COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT
                MATTER HEREOF.

                Agreed to:                         Agreed to:
                INTERNATIONAL BUSINESS             WESTERN DIGITAL
                MACHINES CORPORATION               CORPORATION
                1000 River Road                    20511 Lake Forest Drive
                Essex Jct., Vermont 05452          Lake Forest, California 92630

                By: /s/ JOHN G. BEISWENGER         By: /s/ JOHN F. COYNE
                   ----------------------------       --------------------------
                Name:  John G. Beiswenger          Name:  John F. Coyne
                Title: Executive Manager, MD WW    Title: Senior V.P. Worldwide
                       Contracts & Business               Operations
                       Practices, T. G.

                Date: March 2, 2001                Date: 15 February 2001



                                 Page 14 of 26
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SIGNATURE VERSION

[PAGES 15 THROUGH 24 ARE INTENTIONALLY OMITTED. ATTACHMENT 1 AND THE JIT PROGRAM
SUPPLEMENT HAVE BEEN AMENDED AND RESTATED IN THEIR ENTIRETY AND ARE INCLUDED AS
EXHIBIT 10.36.3 TO THE REGISTRANT'S FORM 1O-K FOR THE YEAR ENDED JUNE 28, 2002]


<PAGE>
                                                                       EXHIBIT I

                "[***]" INDICATES REDACTED INFORMATION FOR WHICH
                      CONFIDENTIAL TREATMENT IS REQUESTED

SIGNATURE VERSION

                            Participation Agreement

EFFECTIVE DATE OF THIS PARTICIPATION AGREEMENT ("PA"): February 7, 2001.

This PA adopts and incorporates by reference all of the terms and conditions of
the Agreement for Fabrication and Purchase of Semiconductor Products No. 000690
between International Business Machines Corporation and Western Digital
Corporation (the "Base Agreement").

The parties to this PA agree that purchases and sales of Products, as defined
in the Base Agreement, will be conducted in accordance with, and be subject to,
the terms and conditions of this PA, the Base Agreement and any applicable
Attachments and Supplements.

The following terms and conditions amend provisions of the Base Agreement for
purposes of this PA only: [IDENTIFY ANY DIFFERENT TERMS].

[***]

In the event the Base Agreement is terminated, the terms and conditions of the
Base Agreement incorporated by reference herein shall survive such termination
and remain in effect for purposes of this PA only.

ACCEPTED AND AGREED TO:                 ACCEPTED AND AGREED TO:

By:_________________________________    By:___________________________________
Name:_______________________________    Name:_________________________________
Title:______________________________    Title:________________________________
Date:_______________________________    Date:_________________________________

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                      THIS PAGE INTENTIONALLY LEFT BLANK.



                                 Page 26 of 26

</TEXT>
</DOCUMENT>
