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Exhibit B

Case 12-10947-CSS Doc 369-2 Filed 02/08/13 Page 1 of 21

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TSG Reporting - Worldwide 877-702-9580

Page 1

1

2 IN THE UNITED STATES BANKRUPTCY COURT

3 FOR THE DISTRICT OF DELAWARE

4

------------------------------------

5 In Re :

: Chapter 15

6 Elpida Memory, Inc., :

:

7 : Case No. 12-10947 (CSS)

Debtor in a Foreign Proceeding. :

8 :

:

9 -------------------------------------

10

11

* H I G H L Y C O N F I D E N T I A L *

12

13

14

15 RULE 30(b)(6) deposition of ELPIDA MEMORY, INC., through

16 its representative: SEIJI NAKASHIMA

17 New York, New York

18 October 22, 2012

19

20

21

22

23

24 Reported by:

ANNETTE ARLEQUIN, CCR, RPR, CRR, CLR

25 JOB NO. 54953


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Page 2

1

2

3

4

5 October 22, 2012

6 10:12 a.m.

7

8 HIGHLY CONFIDENTIAL RULE 30(b)(6)

9 deposition of ELPIDA MEMORY, INC., through

10 its representative, SEIJI NAKASHIMA,

11 held at the offices of White & Case LLP,

12 1155 Avenue of the Americas, New York, New

13 York, before Annette Arlequin, a Certified

14 Court Reporter, a Registered Professional

15 Reporter, a Certified Realtime Reporter, a

16 Certified LiveNote Reporter, and a Notary

17 Public of the State of New York.

18

19

20

21

22

23

24

25


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Page 3

1

2 A P P E A R A N C E S:

3

4 WHITE & CASE LLP

5 Attorneys for Steering Committee and

6 Ad Hoc Bondholders

7 1155 Avenue of the Americas

8 New York, New York 10036

9 BY: J. CHRISTOPHER SHORE, ESQ.

10 THOMAS MacWRIGHT, ESQ. (Telephonically)

11 LYDIA EMILY LIN, ESQ.

12

13

14

15

16 DAVIS POLK & WARDWELL LLP

17 Attorneys for Elpida Memory, Inc.

18 450 Lexington Avenue

19 New York, New York 10017

20 BY: JAMES I. McCLAMMY, ESQ.

21 SCOTT EISMAN, ESQ.

22

23

24

25


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Page 4

1

2 A P P E A R A N C E S (Cont'd.):

3

4 LANDIS RATH & COBB LLP

5 Attorneys for Micron Technologies

6 919 Market Street, Suite 600

7 Wilmington, Delaware 19899

8 BY: MATTHEW McGUIRE, ESQ. (Telephonically)

9

10

11

12

13 BAKER & McKENZIE LLP

14 Attorneys for Rambus, Inc.

15 300 East Randolph Street, Suite 5000

16 Chicago, Illinois 60601

17 BY: ERIN BRODERICK, ESQ.

18

19

20 ALSO PRESENT:

21

22 YOKO ONISHI, Lead Japanese Interpreter

23 NORIKO FUKUI, Check Japanese Interpreter

24

25


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Page 5

1

2 IT IS HEREBY STIPULATED AND AGREED by

3 and between the attorneys for the

4 respective parties herein, that filing and

5 sealing be and the same are hereby waived;

6 IT IS FURTHER STIPULATED AND AGREED

7 that all objections, except as to the form

8 of the question, shall be reserved to the

9 time of the trial;

10 IT IS FURTHER STIPULATED AND AGREED

11 that the within deposition may be sworn to

12 and signed before any officer authorized to

13 administer an oath, with the same force and

14 effect as if signed and sworn to before the

15 Court.

16

17 - o0o -

18

19

20

21

22

23

24

25


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Page 6

1 S. Nakashima - * Highly Confidential *

2 * * *

3 Y O K O O N I S H I, Lead Interpreter was

4 duly previously sworn to interpret the

5 questions from English into Japanese, and

6 the answers from Japanese into English.

7 * * *

8 N O R I K O F U K U I, Check Interpreter, was

9 duly previously sworn to check interpret

10 the questions from English into Japanese,

11 and the answers from Japanese into

12 English.

13 * * *

14 S E I J I N A K A S H I M A, called as a

15 witness, having been previously sworn

16 by a Notary Public, was examined and

17 testified through the interpreter as

18 follows:

19 MR. SHORE: All right. Let me put a

20 couple of things on the record.

21 First, prior to the deposition there

22 has been some back and forth between

23 counsel for Elpida and the foreign

24 representatives, counsel for Rambus and

25 counsel for Micron, with respect to


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2 Memory, Inc. Concerning Micron License

3 Motion, marked for identification, as of

4 this date.)

5 (Deposition Exhibit Nakashima 2, The

6 Steering Committee of the Ad Hoc Group of

7 Bondholders of Elpida Memory, Inc.'s

8 30(b)(6) Notice of Depositions to Elpida

9 Memory, Inc Concerning Rambus Patent

10 Motion, marked for identification, as of

11 this date.)

12 BY MR. SHORE:

13 Q. I've handed you a document marked

14 No. 1 which is The Steering Committee of Ad Hoc

15 Group of Bondholders 30(B)(6) Notice Concerning

16 the Micron License Agreement or Micron License

17 Motion.

18 Have you seen this document before?

19 (Interpreter Interpreting.)

20 A. Yes.

21 Q. And I draw your attention in

22 particular to page 4 of that document.

23 And you understand you're here to

24 testify today on behalf of the foreign

25 representatives with respect to each of the


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2 three topics that are listed there?

3 A. [In English] Yes, I understand that.

4 Q. And what did you do to prepare to

5 answer the topics?

6 A. [Through Interpreter] First of all,

7 mostly I knew everything, therefore during the

8 preparation I tried to recall everything because

9 everything that I had already known.

10 Also, for some points that memory was

11 vague, I rechecked with the Elpida members.

12 Q. And who?

13 A. [Through Interpreter] During the

14 preparation session I discussed with Mr. Yugi.

15 Also via email I discussed with counsel at

16 Nagashima Ohno.

17 Q. And who there?

18 A. Ms. Yoshi Ohara and Mr. Kuroda.

19 Q. Did you talk to Mr. Sakamoto in

20 preparation for your deposition?

21 A. [In English] No, I didn't.

22 Q. And did you talk to Mr. Takahashi,

23 the other trustee, in preparation for your

24 deposition?

25 A. [In English] No, I didn't.


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2 (Witness reviewing LiveNote.)

3 A. [In English] Still I...

4 (Interpreter interpreting.)

5 A. [In English] Still I have kind of a

6 difficulty to answer your question because I

7 couldn't catch your meaning of the question.

8 One thing is that of course they have

9 to sign up those documentation from my

10 understanding, because now or currently those

11 two trustees have the only authority to sign up

12 those documents, formal documentation, including

13 the contracts or something like that.

14 Q. So let me back up and I don't want to

15 go into the specifics of the Micron agreements.

16 I'm more interested in the mechanics on how

17 you've been operating since Elpida is in

18 reorganization proceedings.

19 With respect to something like the

20 technology transfer and licensing agreement with

21 Micron, what is the process that Elpida has used

22 to obtain the trustee's consent to enter into

23 transactions? In your experience.


25 A. [In English] For example, Micron, as


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2 you requested to use Micron as an example, I am

3 working for Elpida to decide IP matters and if I

4 came to the occasion or I should say of course I

5 am continuously reporting to Sakamoto-san as

6 well as Kobayashi as to what I'm doing, what is

7 happening, what I'm doing and how he would like

8 to decide, the certain thing is continuously

9 reporting, keep them updated.

10 But Sakamoto-san is mainly he decides

11 or approve what I would like to decide because

12 the co-trustee Kobayashi-san has less

13 experiences in the actual businesses, so that by

14 that process, the two trustee, he will approve,

15 he will send me approve what I would like to do.

16 Q. So how do you go about seeking

17 approval for entering into transactions now?

18 A. [In English] Well, basically email

19 or sometimes call Sakamoto-san directly, so it's

20 kind of usual communication matters I'm using.

21 Q. What responsibility, if any, do you

22 have for Elpida's bankruptcy process either in

23 Japan or in the United States?

24 MR. McCLAMMY: Objection to form.

25 A. [In English] Well, it's very


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2 Are you aware of any communications

3 between you and Mr. Kobayashi regarding the

4 patent license agreement?

5 A. You mean direct communication?

6 Q. Yes.

7 A. I don't recall.

8 Q. Okay. And did you have any

9 communications with Mr. Kobayashi regarding the

10 release of Micron in connection with the PLA?

11 A. No, I didn't.

12 Q. Do you have any specific knowledge as

13 to why Mr. Sakamoto executed the patent license

14 agreement?

15 MR. McCLAMMY: Object to the form.

16 A. What do you mean specific knowledge

17 as to?

18 Q. Did he ever tell you why he was

19 approving this agreement, directly or

20 indirectly?

21 A. He didn't say. He didn't tell me any

22 reason to execute this agreement to me.

23 Q. Okay. And do you have any specific

24 knowledge as to why Mr. Kobayashi executed the

25 patent license agreement?


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2 A. You can say knowledge or you can say

3 trust because it's teamwork so...

4 Q. I --

5 MR. McCLAMMY: Let him finish.

6 MR. SHORE: Sure.

7 A. So if you can say that the team work

8 was as a trust and trust has knowledge, then

9 yes, I know that Mr. Kobayashi...


11 A. I believe that Mr. Kobayashi

12 understood the structure of the deal and I also

13 believe that Mr. Kobayashi understood the

14 structure of the deal, and I also believe that

15 Mr. Kobayashi understood the meaning of the

16 deal, so in that sense he knows the reason why

17 he is executing this deal.

18 Q. What is your basis for believing he

19 understood the structure of the deal?

20 A. As I said, we have the teamwork

21 structure and the daily report system, so why

22 don't you...

23 Q. Well, did you participate in any of

24 those daily report sessions to Mr. Kobayashi?

25 A. As I said, I don't.


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2 Q. Okay. So you're just assuming that

3 at some point the team, the trustee team, fully

4 briefed Mr. Kobayashi on all the relevant

5 information he needed to know about the patent

6 license agreement.

7 MR. McCLAMMY: Objection.

8 A. If you like to say in that way, you

9 can say that.

10 Q. Well, do you have something other

11 than an assumption that the team briefed him?


13 BY MR. SHORE:

14 Q. That you can testify to.

15 A. Not assumption. This is real fact.

16 Everything is reported, being reported to those

17 teamwork mechanism.

18 Q. How do you know that?

19 A. Because everyone is telling me that

20 is working like that because nobody can attend

21 any of the steps and...

22 Q. So if I wanted to find out exactly --

23 MR. McCLAMMY: Hold on.

24 Were you finished?

25 THE WITNESS: Yes.


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2 the know-how information, it could potentially

3 cause the infringement in their product even

4 though they don't be benefited by those

5 technologies.

6 So we have to give up something to

7 some extent so that's resulting in the five-year

8 patent license.

9 Q. Do you know enough about the process

10 to know that at some point next year that the 80

11 percent scenario that you've been talking about,

12 Micron is going to be closing the sponsorship

13 agreement?

14 A. Just a second. I couldn't catch the

15 last part. Just a second.


17 A. So your question is kind of difficult

18 for me to understand correctly, but probably I

19 can answer that.

20 I was told that the 80 percent for

21 sure that closure would come, but other than

22 that, I don't have any detail of the process of

23 the bankruptcy or restructuring.

24 Q. Okay. What was the reason that you

25 entered into the technology transfer license


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2 agreement prior to the closure of the Micron

3 sponsorship agreement?

4 A. My understanding is I earlier thought

5 the installment of this technology will be

6 beneficial for Elpida so we should not wait up

7 until the closure. So the way it was proposed

8 was very different. This technology is very

9 important for Micron, so Micron would not

10 license this technology other than those company

11 who is very close, who has very close

12 relationship with Micron. So we eager to have

13 that technology and Micron gave us the

14 opportunity to have this earlier than the

15 closure.

16 Q. And how much money did you save?

17 A. We expect that the -- I'm not a

18 planning people, sorry, I don't have the big

19 numbers, but just roughly the cost of the end

20 product is about less than $2. Testing cost is

21 among that, I was told 10 cents or something and

22 we could reduce 10 cents to 5 cents. But it

23 might be kind of ridiculous from outside, but

24 just one cent cost reduction is very critical

25 for us.


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2 Q. Any kind of number? Can you give me

3 any number in yen or dollars that you saved by

4 entering into this transaction in Nakashima-19

5 now as opposed to waiting until next March?


7 A. Well, sorry, I'm not very good at the

8 production number or sales number, but maybe I

9 can ask, but sorry, I don't have the numbers.

10 Q. So could you tell me that you're

11 saving $1 million, $5 million, $50 million, $100

12 billion dollars?

13 Do you have any sense of the amount

14 of money you saved by entering into the

15 technology transfer license now versus the

16 closure of the Micron sponsorship agreement?


18 A. Let me calculate. Let me calculate.

19 Let's assume our yearly sales will be (speaking

20 Japanese) about $5 billion U.S. and our, let's

21 say our profit is 10 percent. So let's say the

22 cost will be 90 percent of $5 billion, then I

23 told you about $2 and the 5 cents will be cut

24 off. That means how much percent?

25 Q. Two-and-a-half percent?


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2 A. Yeah, 2-and-a-half percent.

3 So what 3 --

4 Q. Two-and-a-half percent of

5 $4.5 billion annually.

6 A. Annually, yes. That's our target.

7 Q. When you say "That's our target," do

8 you know that to be your target or that's your

9 calculation as you sit here today?

10 A. Oh, I'm sorry. What I was told was

11 the cost structure so the target was cut off the

12 five cents. You can understand that.

13 Q. Um-hmm.

14 A. Now I'm just trying to calculate that

15 five cents means what so... Sorry, I might

16 confuse you but...

17 Q. So it sounds like about $20 million

18 annually; is that right?

19 I was going to do my math.

20 A. One percent of one billion would be 1

21 million? Ten million?

22 Q. Ten million.

23 A. Then the 2.5 will be 20, $30 million

24 per year.

25 Q. Right.


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2 A. Okay.

3 Q. You were asked some questions earlier

4 about the inclusion of provision 9.9.

5 A. Yes.

6 Q. Do you know or do you recall whether

7 or not there was -- whether or not the same or

8 similar provision appears also in the license

9 agreement between Rambus and Micron? Between

10 Rambus and Elpida?


12 A. Original license, I don't think so.

13 I have to recall about the amendment,

14 but probably there will be a similar provision.

15 Q. You were also asked some questions

16 earlier about whether or not you've been told

17 directly by Mr. Sakamoto what his reasons were

18 for entering into or signing the Patent Purchase

19 Agreement on behalf of Elpida.

20 Do you recall that?

21 A. Yes, I recall that.

22 Q. Do you believe that you would need to

23 be -- do you believe that you would need to be

24 told specifically by Mr. Sakamoto what his

25 reasons were for signing the Patent Purchase


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2 Agreement to have an understanding as to why he

3 signed the agreement on behalf of Elpida?

4 MR. SHORE: Objection to form.

5 A. No, I don't believe so, because our

6 team, including me, reported the basis and the

7 contents of the agreement, so it is very strange

8 that if he specifically told me the reason why

9 he is signing this agreement.

10 Q. And what are the reasons, as you

11 understand them, as to why Elpida has agreed to

12 the terms of the Patent Purchase Agreement?

13 MR. SHORE: Objection to the form.


15 A. As I told Mr. Shore, this is a set

16 deal of the amendment to the license agreement

17 and at least from the Elpida's perspective, this

18 is effectively the cashout based on the Rambus

19 agreement. That's the reason.

20 Q. I believe you were asked similar

21 questions with respect to whether or not the

22 trustees needed to specifically tell you why

23 they approved of the technology transfer and

24 license agreement.

25 Do you recall that?


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2 A. Yes, I do.

3 Q. And do you believe that trustees

4 needed to specifically to tell you why they

5 approved of Elpida entering into the technology

6 transfer and licensing agreement in order to

7 have an understanding of why they approved of

8 that agreement?


10 A. No, I don't because, again, this is

11 the same similar answer; they had been already

12 sufficiently informed the purpose, the contents

13 of the agreement, so it would be very strange

14 that they would tell me the reason of the

15 approval.

16 Q. And what is your understanding as to

17 why Elpida entered into the technology transfer

18 and license agreement at the time that it did?


20 A. My understanding is first entering

21 into the TTLA is expected to give Elpida a

22 benefit of the substantial cost down in testing.

23 That's essentially the reason.

24 MR. McCLAMMY: I have no further

25 questions.


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