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                            VOLUME PURCHASE AGREEMENT

         This Volume Purchase  Agreement,  dated as of April 8, 1999, is made by
and between Komag,  Incorporated,  a Delaware corporation  ("Komag") and Western
Digital Corporation, a Delaware corporation ("WDC").


                                   BACKGROUND

         A. Komag and WDC are entering into an Asset Purchase  Agreement of even
date herewith  pursuant to which Komag is acquiring  certain  assets used in the
production of certain product components (the "Asset Purchase Agreement").

         B. The parties  acknowledge that this Volume Purchase Agreement is part
of a significant  strategic  relationship,  in which Komag is purchasing  assets
from WDC to  produce  media  and WDC is  agreeing  to  purchase  certain  of its
requirements  of  media  from  Komag,  and  Komag is  agreeing  to  supply  such
requirements  to WDC, to enable  Komag to spread  costs for media over a greater
volume,  and to enable Komag to incur the  significant  research and development
costs  associated  with the  historically  rapid  technology  advances and short
product  cycles for media,  and to enable WDC to obtain  favorable  pricing on a
consistent  supply of  high-quality,  state-of-the-art  media, all to the mutual
benefit of Komag and WDC.

         C. WDC desires to purchase,  and Komag desires to sell to WDC,  certain
products  manufactured  using  such  acquired  assets as well as other  products
manufactured by Komag,  all in accordance with the terms of this Volume Purchase
Agreement.

         NOW THEREFORE,  for and in consideration of the covenants,  conditions,
and undertakings hereinafter set forth, as well as a portion of the stock issued
pursuant to the Asset Purchase Agreement, the parties agree as follows:


                             ARTICLE 1: DEFINITIONS

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

         1.1  "A-Build"  of a WDC product has the  meaning  assigned  thereto in
WDC's classifications as of the Effective Date, and is the product "build" (e.g.
A-0 build,  A-1 build),  developed  before the Pilot Build or PMT Build has been
developed.



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         1.2  "Active  Program"  means a  Program  for a  Product  that is being
purchased  and sold under this  Agreement  that has not yet  undergone an End of
Life.

         1.3  "Actual  Media  Requirements"  shall have the meaning set forth in
Section 4.2.

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

         1.5 "Component" means a component of a WDC product.

         1.6 "Days" means consecutive calendar days.

         1.7 "Delivery Date" or "Scheduled  Delivery Date" means the agreed date
of delivery of Products as specified in Pull Requests.

         1.8  "Disentanglement"  means a period of no more than [***] Days after
termination  of this  Agreement to allow for (a) the transfer by Komag to WDC of
any  non-proprietary  documentation  of work  processes  and data that  would be
needed to allow WDC to continue to obtain Media  comparable to the Products from
alternate manufacturers; (b) the prompt and orderly conclusion of all work under
this VPA, including without limitation the acknowledgment of Purchase Orders and
the  fulfillment of any Pull Requests during such [***]-Day  period;  (c) [***];
and (d) the prompt ramp-up to full volume production by an alternative  provider
or alternative  providers of Media for WDC's  requirements;  provided,  however,
that nothing in (a) through (d) will be  construed to require  Komag to disclose
or license any  proprietary  information or other  intellectual  property to any
third party.

         1.9 "Effective Date" means the Closing Date, as such term is defined in
the Asset Purchase Agreement.

         1.10 "End of Life" has the meaning set forth in Exhibit D.

         1.11  "Exhibit"   means  an  attachment  to  this  VPA.   Exhibits  are
incorporated herein by reference thereto.

         1.12 "FGI" has the meaning set forth in Section 5.1.

         1.13  "Fiscal  Quarter"  means the fiscal  quarters of WDC set forth on
Exhibit A.

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

                                      -2-

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         1.15  "Inactive  Program"  means a Program that has undergone an End of
Life.

         1.16 "JIT Hub Inventory  Watermark"  means a quantity of Units equal to
the  product  of two times the  quotient  of (a) WDC's  most  recent  forecasted
requirements  for the four full calendar  weeks  following the week in which the
computation is made, divided by (b) four.

         1.17 "JIT Hubs" has the meaning set forth in Section 5.3.

         1.18 "Lead Time" means, for purposes of this VPA, the minimum length of
time prior to a specific Delivery Date that Komag must receive a Pull Request to
ensure delivery by such date.

         1.19  "Material  Default"  shall  mean  the  occurrence  of  any of the
following:

                  1.19.1 Failure of Komag to deliver (subject to Section 6.6) in
a given  Fiscal  Quarter  the  lesser  of (a)  [***]%  of the WDC  Actual  Media
Requirements during such Fiscal Quarter; (b) [***]% of the Units in the Purchase
Order for such Fiscal Quarter delivered by WDC under Section 5.2; (c) the number
of Units of "Fiscal Quarterly Purchase  Requirements" in the chart below for the
year in which such Fiscal  Quarter  falls;  and (d) the number of Units equal to
(i) Units [***] in such Fiscal Quarter; plus (ii) Units [***]. However, any such
failure prior to [***], will not be deemed a Material Default to the extent such
failure is  attributable  to the failure of any Acquired Assets (as such term is
defined in the Asset Purchase Agreement) to be year 2000 compliant;


--------------------------------------------------------------------------------
                                                             FISCAL QUARTERLY
   PERIOD                              PERIOD                   PURCHASE
  BEGINNING                            ENDING                  REQUIREMENTS
--------------------------------------------------------------------------------
Effective Date                Effective Date plus [***]     [***] Units
                              months
--------------------------------------------------------------------------------
Effective Date plus [***]     Effective Date plus [***]     [***] Units
months                        months
--------------------------------------------------------------------------------
Effective Date plus [***]     Effective Date plus [***]     [***] Units
months                        months
----------------------------- ----------------------------- --------------------


                  1.19.2 A material breach by either party (other than breach of
a payment obligation of WDC under Section 6.5) of any obligation,  covenant,  or
condition  under this  Agreement that is susceptible of cure, and the failure by
the breaching party to cure such breach within 30 Days after the breaching party
has  received  notice of such default  (which  notice must  explicitly  assert a

                                      -3-

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Material  Default under Section  1.19.2 of this VPA),  provided that if the cure
requires  more than 30 Days,  the  breaching  party fails to (i)  promptly  take
action to cure such breach as quickly as reasonably possible;  or (ii) cure such
breach  within 60 Days after the  breaching  party has  received  notice of such
default;

                  1.19.3 A failure of WDC to meet its payment  obligations under
Section  6.5,  and the  failure by WDC to meet such  obligations  within 30 Days
after WDC has received notice of Komag's intent to discontinue  shipping Product
pursuant to Section 6.6; or

                  1.19.4 An assignment  or attempted  assignment in violation of
Section 12.4.

         1.20 "Matrix Build" of a WDC product has the meaning  assigned  thereto
in WDC's  classifications  as of the Effective Date, and is a request by WDC for
Media samples with a specified combination or combinations of coercivity and Mrt
values.

         1.21 "Media" means recording disks, manufactured by any entity, as used
in data storage devices.

         1.22 "Pilot Build" of a WDC product has the meaning assigned thereto in
WDC's classifications as of the Effective Date, and is typically the large build
of a new WDC product in  development  before it is released to a WDC  production
facility.

         1.23 "PMT Build" of a WDC product has the meaning  assigned  thereto in
WDC's classifications as of the Effective Date, and is typically the first large
build  of a new WDC  product  after  it has been  released  to a WDC  production
facility.

         1.24 "Price"  means the amount  charged for  Products,  as specified in
Section 6.1.

         1.25 "Product" means the Media manufactured by Komag.

         1.26 "Program" means a WDC product classification, currently including,
for example,  "Hunter" and "Rebel"  disk drives.  A Program may include  various
capacities,  numbers of disks per drive,  drive performance  specifications,  or
drive interfaces (such as SCSI or ATA).

         1.27 "Pull  Request"  means a request made by WDC to Komag for delivery
of Products from a JIT Hub.

         1.28 "Purchase Order" means a purchase order placed by WDC to Komag for
Products as contemplated by this VPA.

         1.29 "Purchase  Requirements" means the number of Units WDC is required
to purchase and Komag is required to sell under Section 4.1.

                                      -4-

<PAGE>


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         1.30 "Replacement Products" has the meaning set forth in Exhibit D.

         1.31 "RMA" means returned material authorization.

         1.32 "Section" means a numbered section of this VPA.

         1.33  "Specifications"  means  designs,  drawings,  prints and  written
descriptions, specification reviews and requirements for Products that have been
developed by WDC and Komag as of the date of this VPA, or which may be developed
by WDC and Komag during the term of this VPA.

         1.34 "Stop Ship Order" means a stop ship order under WDC's  established
stop ship  procedure  80-005447-000,  resulting from a Product  failing  quality
parameters.

         1.35  "Subcontract"  means an  arrangement  through  which a disk drive
supplier  has  disk  drives  made or  assembled  by a  subcontractor,  and  such
subcontractor provides such drives to the supplier for sale to third parties.

         1.36 "Target FGI" has the meaning set forth in Section 5.3.

         1.37 "Unit" means a single Product.

         1.38  "VPA"  means  this  Volume  Purchase  Agreement,   including  the
Exhibits.

         1.39 "WIP" means work in process, as such term is generally  understood
in the Media industry.


                         ARTICLE 2: AGREEMENT STRUCTURE

         2.1 Background. Komag and WDC agree that this VPA creates a high degree
of mutual  dependence  between  Komag and WDC.  Each party agrees to  diligently
cooperate with the other party to accomplish the objectives of this VPA.

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

         2.3 Purchase Order. Purchase Orders will be used to convey the Purchase
Orders Price and number of Units,  and accordingly  Purchase Orders must contain
the following: part number, Price, Units ordered, customer name, ship to address
(destination),  bill to address, and Purchase Order number. Delivery Dates shall
be determined in accordance with Section 5.2. The parties  acknowledge that such
Purchase  Orders,  as  well as  confirming  documents,  acknowledgments,  forms,

                                      -5-

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invoices and the like used in the ordinary  course of business may contain other
terms and conditions.  The parties agree that this VPA will take precedence over
any  such  document  or other  communication,  representation  or  understanding
whether oral or written and that any term or  condition  relating to the subject
matter of this VPA that is inconsistent  with this VPA (whether in contradiction
to, in addition  to, or that would result in any  ambiguity  with respect to any
term or  condition  in this  VPA)  will be  deemed  deleted  and be of no force,
including,  but not limited to, any term or  condition  purporting  to supersede
this VPA in whole or in part or purporting to make any offer, acceptance,  term,
condition  or  other  action  conditional  upon  acceptance  of,  or  indicating
agreement  to, any  inconsistent  term or  condition.  The  foregoing may not be
modified or waived  except by written  agreement  of the  parties,  specifically
referencing this VPA, and signed by officers of both parties.  The parties agree
that,  without  limiting  Section 12.1,  the foregoing  shall not be superseded,
altered, or overridden by any provision in the Uniform Commercial Code as it may
have been adopted by any competent jurisdiction.

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

         Exhibit A:        WDC Fiscal Quarters

         Exhibit B:        Initial Prices

         Exhibit C:        Qualification Sample Prices

         Exhibit D:        Supplier Warranty and Replacement Product Terms


                ARTICLE 3: PRODUCT QUALIFICATION AND DEVELOPMENT

         3.1 Qualification  Process.  Each of the parties shall use commercially
reasonable  efforts to qualify  Komag's  Products on all Programs.  Such efforts
will require  qualification  of Products in  combination  with other  Components
(such as multiple  combinations  of Media and recording  heads),  as well as the
subsequent qualification of WDC's disk drives incorporating such combinations at
each  WDC   customer.   Subject  to  Section   4.3,   WDC  agrees  that  Product
qualifications must include sufficient WDC Programs,  Component combinations and
customers to allow WDC to meet its Purchase Requirements for Products under this
VPA,  taking  into  account  that a Product  may fail to qualify in a Program or
Components combination, or for a customer, from time to time.

         3.2  Qualification  Locations.  Following  the  Effective  Date,  Komag
intends to manufacture  Products  under this Agreement  using in-line and static
sputtering  processes  at  factory  locations  in  Santa  Clara  and  San  Jose,
California,  and in  Penang,  Malaysia.  Both  parties  recognize  that WDC must
qualify  Products for its Programs  specifically by process and factory location
in accordance with industry practice.

                                      -6-

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                  3.2.1 Initial Period. To permit a consolidation of WDC's Santa
Clara facilities into Komag's  manufacturing  operations in the most expeditious
manner, (i) WDC and Komag each agree during an initial transition period, not to
exceed [***] months following the Effective Date, to use commercially reasonable
efforts to [***]

                  3.2.2 Subsequent  Period.  After the initial transition period
described  in  Section  3.2.1,  (i) WDC and Komag  each  shall use  commercially
reasonable efforts to [***]

         3.3 Qualification Samples. The prices for qualification sample Products
during the first three years of the term of this VPA are indicated in Exhibit C.

         3.4 Cure of Failure.  In the event the parties fail to qualify Products
pursuant to Section  3.1, or to resolve a Stop Ship Order,  the parties will use
their best efforts to cure such failure until the midpoint of life of the Active
Program.  Thereafter,  the parties  will be  obligated to continue to exert such
efforts only as mutually agreed.


                ARTICLE 4: PRODUCT PURCHASE AND SALE COMMITMENTS

<TABLE>
         4.1 Minimum  Purchases and Sales.  WDC shall purchase Media from Komag,
and Komag shall sell Media to WDC, in the amounts and for the periods  specified
in the following table:

<CAPTION>
------------------------------------------------------------------------------------------------
    PERIOD BEGINNING              PERIOD ENDING                    PURCHASE REQUIREMENTS
------------------------------------------------------------------------------------------------
<S>                          <C>                              <C>
Effective  Date              Effective  Date plus [***]       The lesser of [***] Units and
                             months                           [***]% of WDC's Actual Media
                                                              Requirements.
------------------------------------------------------------------------------------------------
Effective Date plus [***]    Effective Date plus [***]        The lesser of [***] Units and
months                       months                           [***]% of WDC's Actual Media
                                                              Requirements.
------------------------------------------------------------------------------------------------
Effective Date plus [***]    Effective Date plus [***]        The lesser of [***] Units and
months                       months                           [***]% of WDC's Actual Media
                                                              Requirements.
------------------------------------------------------------------------------------------------
</TABLE>


         4.2 Actual Media Requirements. For the avoidance of doubt,

                  4.2.1  "Actual  Media  Requirements"  when used in Section 4.1
includes [***]

                  4.2.2  "Actual  Media  Requirements"  when used in Section 4.1
does not include [***]

                                      -7-

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                  4.2.3  "Actual  Media  Requirements" when used in Section  4.1
includes [***]

         4.3  Composition of Demand. [***].

         4.4  Quarterly   Milestones.   The  Purchase  Requirements  are  annual
requirements. However, without limiting either party's obligations under Section
4.1, WDC shall use commercially  reasonable efforts to purchase, and Komag shall
use commercially  reasonable  efforts to sell to WDC, in each Fiscal Quarter,  a
number of Units consistent with WDC's forecast referenced in Section 5.1.

         4.5 Additional  Demand.  WDC may, but will not be obligated to, request
that Komag provide Units in excess of the Purchase Requirements. Purchase Orders
for such additional  Units may be issued at any time by WDC, but will be subject
to acceptance by Komag in its sole discretion.  Pricing and other terms for such
excess Units shall be  separately  negotiated  and not subject to the Prices and
terms set forth in this VPA.


                     ARTICLE 5: PURCHASE OF PRODUCTS BY WDC

         5.1 Forecasts and Planning Schedules.  By the Effective Date, WDC shall
provide to Komag a current  written  forecast of demand for Products WDC expects
to purchase  during the first twelve months of the term of this VPA.  Thereafter
during the term of this VPA, on a monthly  basis,  WDC shall  provide an updated
forecast  for any  quantities  of such  Product  WDC  expects to purchase in the
following  twelve months.  The most recently  issued forecast will supersede all
previous  forecasts.  No less than five Days from receipt of each of the monthly
WDC  forecasts,  Komag shall  confirm  supply for a rolling  three month  period
(current month plus two). During the term of this VPA on a monthly basis,  Komag
shall provide to WDC a current  written  summary of the Product  finished  goods
inventory   ("FGI")   intended  for  WDC.  This  summary  shall  list  by  Komag
manufacturing  site and JIT Hub location the amounts and types of FGI being held
by Komag for each of WDC's Programs.

         5.2 Issuing  Purchase Orders and Pull Requests.  WDC shall, at least 30
Days before the  beginning  of each Fiscal  Quarter,  submit to Komag a Purchase
Order for such Fiscal  Quarter for all Units WDC has  forecasted  it may require
during such Fiscal Quarter. No less than two Business Days after receipt of each
Purchase Order, Komag shall issue an acknowledgement confirming the quantity and
other terms  thereof.  WDC shall  transmit a Pull  Request by facsimile or other
agreed upon means to communicate  to Komag,  at the applicable JIT Hub, the part
number,  quantity and Delivery  Date and time of each  Product  required.  WDC's
transmission  of a Pull Request is  authorization  for Komag to ship and invoice
WDC against the Purchase  Order for the part numbers and quantities set forth in
the Pull Request.  Komag shall deliver  Product from the JIT Hub upon receipt of
the Pull Request,  in accordance with Lead Times. WDC and Komag shall,  prior to
the  commencement of each Fiscal  Quarter,  establish  mutually  acceptable Lead
Times for Pull Requests, which Lead Times shall in no event exceed eight hours.

                                      -8-

<PAGE>


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         5.3 Komag  Production and  Inventory.  During the term of this VPA, WDC
will be issuing forecasts and Purchase Orders and Komag will be producing FGI to
meet WDC's needs shown in the  Purchase  Orders.  WDC's  forecast  for a certain
Fiscal Quarter are not commitments by WDC to buy a specific amount of Product in
a specific  period of time.  Komag will use WDC's  forecast  for planning of its
production capacity to support WDC. Unless given written  authorization by a WDC
Materials  manager to make a temporary  exception,  Komag shall manage and limit
its  production  of FGI so that on any given date FGI does not exceed WDC's most
current forecasted  requirements of FGI for the subsequent four week period (the
"Target FGI").  Komag shall maintain  Products in inventory for WDC at locations
close to WDC factories ("JIT Hubs"). Provided WDC has issued a relevant Purchase
Order,  Komag  shall,  promptly  after  the  Effective  Date,  use  commercially
reasonable efforts to establish a level of Product inventory for each Program at
each JIT Hub equal to the JIT Hub  Inventory  Watermark  and to  replenish  each
reduction  requested by WDC from such inventory  within four weeks from the date
of such reduction.

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

         5.5  Liability  on  Cancellation.  Subject to WDC's  obligations  under
Section  4, WDC shall  have the right to cancel  Purchase  Orders  for  Products
(except the final  Purchase  Order  issued  under  Section 9.1) , in whole or in
part,  placed in accordance  with the provisions of this VPA upon written notice
to Komag.  WDC's maximum liability to Komag for FGI upon such cancellation shall
be limited to [***].

         Notwithstanding  the foregoing,  during the ramp period of any Product,
not to exceed six weeks,  the  parties  shall first meet and agree on the number
equal to "IW" for the purpose of  calculating  liability  under this Section 5.5
for any cancellation of a Purchase Order which occurs during any portion of such
a ramp period. Komag shall (i) use all commercially reasonable efforts to find a
substitute  buyer and mitigate any potential loss; (ii)  participate in an audit
of lead time efficiency as reasonably requested by WDC; and (iii) negotiate with
WDC to adjust the above  formula for  reductions  in the lead time to  fabricate
Media that are achieved by Komag.


                ARTICLE 6: PRICE AND PAYMENT TERMS FOR PRODUCTS

         6.1 Product Pricing.  The initial Unit Prices WDC will pay for Products
purchased during the first [***] months of the term of this VPA are set forth in
Exhibit B. Commencing with the first [***] after such [***] period,  the parties
shall,  beginning  no later than [***] Days before the  beginning of such [***],
negotiate  Prices for the Products on a [***] basis (the "Prices").  The parties
shall conclude such  negotiations  no later than [***] Days before the beginning
of such [***].  Komag  shall,  no later than [***] Days before the  beginning of
each such [***],  notify WDC of the agreed-upon  Prices applicable to such [***]
by means of a pricing letter. [***]  Notwithstanding the foregoing,  the parties
agree that the review of such  prices and terms  shall not  require  the parties
[***]. [***].

                                      -9-

<PAGE>


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


         6.2  Pricing  Disputes.  In the event the  parties  cannot  agree  upon
pricing as described in Section 6.1,  either party may,  upon written  notice to
the other,  submit such dispute to the Chief Executive Officer of Komag; and the
Chief Executive Officer of WDC, or their respective designees, who shall meet to
attempt to resolve  the  dispute  by good faith  negotiations.  In the event the
parties are unable to come to  agreement  upon  Prices  within 5 Days after such
notice is given,  either  party may proceed  with  arbitration  as follows.  The
parties  will  submit  the  matter of  pricing  to  binding  arbitration  in San
Francisco,  California,  in accordance with the Commercial  Arbitration Rules of
the  American  Arbitration  Association  ("AAA").  Each party shall  appoint one
arbitrator,  and  the  two  arbitrators  thus  appointed  will  appoint  a third
arbitrator.  The parties shall instruct the  arbitrators to make a determination
of pricing using the standards set forth in Section 6.1, but in no event outside
of the range of the "bid"  and  "asked"  prices  established  by the  respective
positions of the parties in the last good faith  negotiations  prior to referral
to  arbitration.  The  parties  shall also  instruct  them to come to a decision
within 20 Days  after  submission  of the  dispute  to  arbitration.  During the
pendency  of such  arbitration,  the  Prices in effect  immediately  before  the
arbitration shall remain in effect. If a price change is awarded,  the party, if
any,  which owes a balance shall pay such  balance;  and in the event such party
fails to pay such balance within ten Days after the date of the award,  interest
will accrue  beginning ten Days after the date of the award, at the maximum rate
permitted by law in California.  Each party shall bear its own arbitration costs
and expenses;  provided, however, that the arbitrators may modify the allocation
of fees, costs and expenses in the award in those cases where fairness  dictates
other than each party bearing its own fees, costs and expenses.  The award shall
be final and binding on the parties, and judgment on the award may be entered in
and enforced by any court of competent jurisdiction.

         6.3 Taxes and Duties.  Unless otherwise  specifically  provided herein,
the  amount  of any  present  or  future  sales,  revenue,  excise  or other tax
applicable to the Products,  will be added to the Price and will be paid by WDC,
or in lieu  thereof WDC shall  provide  Komag with a tax  exemption  certificate
acceptable to the taxing authorities.  In the event Komag is required to pay any
such tax, fee, or charge, at the time of sale or thereafter, WDC shall reimburse
Komag therefor.  Notwithstanding the foregoing,  WDC will not be responsible for
any taxes on Komag's income.

         6.4 Tax  Minimization.  The parties  acknowledge that Komag's Malaysian
manufacturing  operations,  including the tax holiday status of such operations,
provide a path to the  industry's  lowest  cost  structure.  To ensure that both
parties  derive  benefit  from this  advantageous  manufacturing  location,  the
parties  shall adopt  business  practices  (e.g.  sales  terms,  title  passage,
importer of record,  and  warehousing  practices)  that maximize the benefits of
Komag's tax holiday  position  in Malaysia to the extent not  inconsistent  with
WDC's reasonable business objectives.

         6.5 Payment Terms.  For shipments  through Komag's  designated JIT Hub,
Komag shall invoice WDC upon delivery of Product to the receiving  dock of WDC's
manufacturing locations in Malaysia and Singapore.  For shipments direct to WDC,
Komag will invoice upon shipment.  Terms for payment of all invoices will be net
[***] Days from date of invoice.  In the event  payment is not received by Komag
within such period,  Komag shall notify WDC and WDC shall make prompt

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payment  of the  amount  due.  WDC will be liable for  interest  on any  overdue
payment  under any such  invoice,  up to the maximum  legal rate in  California.
Notwithstanding the foregoing,  payment terms shall be payment in advance in the
event of the  bankruptcy or insolvency of WDC or in the event any  proceeding is
brought (a)  voluntarily by WDC under the bankruptcy or insolvency  laws; or (b)
involuntarily  against WDC under the  bankruptcy  or  insolvency  laws,  and not
dismissed within 90 Days.

         6.6 Late  Payments.  If (a) WDC's account with Komag is past due in any
amount,  by more than [***]  Days;  (b) WDC does not make  payment in advance as
required  under  Section 6.5; or (c) if WDC's  account with Komag is past due in
any amount in excess of the  greater  of (i)  $[***];  and (ii)  [***]% of WDC's
total accounts receivable balance under this Agreement; by more than [***] Days;
then Komag may  discontinue  shipping  Products upon [***] Days' advance written
notice to WDC and  opportunity  for WDC to cure  within such  [***]-Day  period.
Units that Komag does not ship in  accordance  with this  Section  6.6 shall not
count towards the Units  purchased by WDC to fulfill its Purchase  Requirements,
until such Units are shipped by Komag.  The parties agree that a senior  officer
designated  by each party will meet to resolve  any issues  relating  to overdue
amounts.


                  ARTICLE 7: SHIPMENT AND DELIVERY OF PRODUCTS

         7.1 Shipment of Product.  Except as otherwise specified with respect to
direct  shipments  under Section 6.5,  Delivery will be made DDU (i.e.,  the ICC
standard  shipping  term for delivery  duty  unpaid),  and liability for loss or
damage to Products  will pass to WDC upon  Komag's  delivery of the  Products to
WDC. As between the parties,  Komag will bear the cost for insurance relating to
delivery of the Products.  For deliveries within Malaysia or Singapore,  Western
Digital   Malaysia  SDN.  BHD.  or  Western   Digital   (Singapore  Pte.  Ltd.),
respectively,  will be the "importer of record" for GST  purposes.  The Products
shall be  delivered  to WDC from a Komag  JIT Hub to a WDC  factory.  Komag  may
deliver the Products in installments  subject to Section 5.2.  Unless  otherwise
agreed,  all Products will be packaged,  and packed in  accordance  with Komag's
normal  practices.  All Product  packages  shall be labeled in  accordance  with
applicable customs regulations. Komag may ship, determine freight forwarder, and
provide  delivery  support by the method it deems most  advantageous.  WDC shall
ensure   that  the   freight   forwarder   selected   by  Komag  may  use  WDC's
"Manufacturer's  Export Status" for shipments on behalf of WDC to Singapore,  so
long as the parties mutually agree.  Transportation  charges are included in the
Unit Price.  Komag shall  deliver,  upon  request from WDC,  appropriate  import
certificates  for duties paid on Media  purchased from Komag,  imported by Komag
into the United States and delivered to WDC in the United States.

         7.2 On Time Delivery.  Komag shall use commercially  reasonable efforts
to maintain 100% on-time delivery of each Pull Request from a JIT Hub.

         7.3 Late Delivery. Komag shall notify WDC immediately if for any reason
Komag fails to comply or  anticipates  that it may fail to comply with the terms
of a Pull  Request  (including,  but not limited to,  failure to meet a Delivery
Date or delivery of less than the ordered Units). In the event of

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a late  delivery,  the parties  will  cooperate  in good faith to  minimize  the
disruption caused to WDC by such late delivery.

         7.4 Export  Regulations.  WDC and Komag  shall  comply  with all export
control laws and regulations applicable to the export or reexport of Products or
any related  technology.  The party undertaking such export or reexport shall be
responsible for obtaining any required  documents,  authorizations and approvals
prior to any such export or reexport.


          ARTICLE 8: WARRANTIES AND INTELLECTUAL PROPERTY INFRINGEMENT

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

         8.2 Product Limited Warranty.  Komag's warranty for Products under this
Agreement, and the remedies for breach of such warranty, will be as set forth in
Exhibit D.

         8.3  Disclaimer.  THE WARRANTIES AND  OBLIGATIONS OF THIS SECTION 8 AND
EXHIBIT  D WILL BE  EXCLUSIVE  AND IN LIEU  OF ANY  AND  ALL  OTHER  WARRANTIES,
EXPRESS,  IMPLIED OR STATUTORY,  INCLUDING BUT NOT LIMITED TO THE  WARRANTIES OF
MERCHANTABILITY,  FITNESS FOR A PARTICULAR  PURPOSE AND  NONINFRINGMENT,  ALL OF
WHICH ARE HEREBY EXPRESSLY DISCLAIMED.

         8.4 Infringement Indemnity

                  8.4.1  Indemnification.  Komag shall defend any claim, suit or
proceeding brought against WDC to the extent such suit or proceeding is based on
a claim that any Product furnished hereunder,  alone and not in combination with
any  other  product,  constitutes  an  infringement  of any U.S.  patent or U.S.
copyright,  provided  WDC gives Komag prompt  notice of any such claim,  suit or
proceeding,  in writing and authorizes Komag to settle or defend any such claim,
suit or  proceeding  and  assists  Komag in so doing (at Komag's  expense)  upon
request  by  Komag.  Komag  shall pay WDC's  reasonable  attorneys  fees and all
damages  and costs  awarded  against  WDC  arising  out of such  claim,  suit or
proceeding.

                  8.4.2 Limited  Remedies.  If the use of a Product is enjoined,
Komag shall, in its sole  discretion and at its own expense,  either (a) procure
for WDC the right to  continue  using  such  Product;  (b)  replace  same with a
noninfringing  product; (c) modify the Product so that it becomes noninfringing;
or (d) if Komag is unable to  reasonably  do any of the above,  refund the Price
for such Product.

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                  8.4.3 Exclusions. Komag shall not be liable for, and WDC shall
indemnify,  defend and hold Komag harmless from, any expenses, damages, costs or
losses resulting from any suit or proceeding based upon a claim arising from (a)
compliance  with  WDC's  designs,   specifications,   or  instructions;   (b)  a
modification  of the  Product by a party  other than  Komag;  (c) the use of any
Product  or part  thereof  furnished  hereunder  in  combination  with any other
product;; or (d) intellectual  property  infringements to the extent arising out
of the use of the  Acquired  Assets  (as such  term is  defined  under the Asset
Purchase  Agreement),  or any technology or  intellectual  property  licensed or
otherwise  provided to Komag in  connection  with the Acquired  Assets under the
Asset Purchase Agreement,  if such infringements would not have arisen using the
assets,  technology  and  intellectual  property  used  by  Komag  prior  to the
Effective Date. WDC shall pay Komag's reasonable  attorneys fees and all damages
and costs awarded against Komag arising out of such claim, suit or proceeding.

                  8.4.4  License.  Sale of any  Product  or any part  thereof by
Komag  does  not  confer  upon  WDC any  license  under  any  patent  rights  or
copyrights.

                  8.4.5 SOLE  LIABILITY.  THIS  PROVISION  8.4 IS IN LIEU OF ALL
OTHER EXPRESS,  IMPLIED OR STATUTORY WARRANTIES AGAINST INFRINGEMENT AND WILL BE
THE SOLE AND EXCLUSIVE  REMEDY FOR  INTELLECTUAL  PROPERTY  INFRINGEMENT  OF ANY
KIND. IN NO EVENT SHALL KOMAG'S TOTAL LIABILITY FOR SUCH INFRINGEMENT EXCEED THE
AGGREGATE SUM PAID BY WDC FOR THE ALLEGEDLY INFRINGING PRODUCTS.


                         ARTICLE 9: TERM AND TERMINATION

         9.1 Term.  This VPA will continue in force for an initial term of three
years after the Effective  Date,  and will  terminate at the end of such initial
term unless  otherwise  agreed by the Parties in writing.  In the event WDC does
not wish to renew the term of this Agreement  after such initial term, WDC shall
notify  Komag no later than 30 Days  before the  beginning  of the final  Fiscal
Quarter of such initial term,  and issue to Komag a binding final Purchase Order
for such Fiscal Quarter.

         9.2 Termination  for Cause.  Either party may terminate this VPA in the
event of a Material Default of this VPA by the other party,  upon notice to such
other party, which notice must describe the reason for such termination and must
specify the termination  date, which  termination date must be no earlier than 5
Days after the date of such notice.  The parties  acknowledge that neither party
will  have the  right to  terminate  this  Agreement  due to any  breach of this
Agreement other than a Material  Default;  and in the case of such other breach,
subject to Sections 10.2 and 11.6, the  non-breaching  party's only remedy under
this Agreement will be an action for damages.

         9.3 Termination  for  Insolvency.  This VPA may be terminated by either
party by notice to the other party upon (i) the  commencement by the other party
of a voluntary or involuntary

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proceeding  under any federal,  state,  provincial or foreign  bankruptcy law or
similar law which is not dismissed  within 90 Days; (ii) the appointment for the
other party of a receiver,  trustee or similar official or a general  assignment
for the benefit of such party's  creditors;  (iii) the winding up or liquidation
of the other  party;  or (iv) a party  becomes  unable  to pay its debts  either
because it is subject to a Suspension of Payments  order,  bankruptcy,  or other
insolvency proceeding. In the case of (i) to (iv) above, termination may also be
effected by serving notice on the liquidator, administrator, or receiver, as the
case may be.

         9.4 Rights Upon Termination. Upon termination, Komag shall complete and
WDC shall pay for all  Products in  accordance  with Section 6.5 and Komag shall
continue to perform its obligations  with respect to Replacement  Products under
Exhibit D. Komag and WDC shall  cooperate to perform an orderly  Disentanglement
following termination.

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


                       ARTICLE 10: LIMITATION OF LIABILITY

         10.1 Limitation of Liability.  EXCEPT FOR ARTICLE 11 (CONFIDENTIALITY),
NEITHER  PARTY  SHALL  BE  LIABLE  TO THE  OTHER  FOR  CONSEQUENTIAL,  INDIRECT,
INCIDENTAL,  SPECIAL OR PUNITIVE  DAMAGES EVEN IF ADVISED OF THE  POSSIBILITY OF
SUCH DAMAGES.

         10.2 Performance.  Notwithstanding the foregoing,  in light of the fact
each of the parties  entered into the Asset  Purchase  Agreement and this VPA in
reliance  on the  full  and  faithful  performance  by the  other  party  of its
obligations  (including  but not  limited  to  purchase  and  sale  obligations)
hereunder,  the parties agree that damages  would be an inadequate  compensation
for the breach by the parties of such obligations and accordingly, upon any such
breach, in addition to monetary damages,  a party shall be entitled to obtain an
order  for  specific  performance  of  such  obligations  at  any  court  having
jurisdiction over the other party.

         10.3 Year 2000 Liability. Except for WDC's right to purchase from other
suppliers  as  provided  under  Section  4.3,  in no event  shall Komag have any
liability for any failure to provide  Products  hereunder prior to July 1, 2000,
if such failure is  attributable  to the failure of any Acquired Assets (as such
term is defined in the Asset Purchase Agreement) to be year 2000 compliant.


                          ARTICLE 11: CONFIDENTIALITY

         11.1 "Confidential  Information" means any information disclosed by one
party (the "Disclosing  Party") to the other (the "Receiving Party") in relation
to this VPA, which, if in written,  graphic,  machine-readable or other tangible
form is marked as "Confidential" or "Proprietary," or which, if disclosed orally
or by  demonstration,  is  identified  at the  time  of  initial

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disclosure as confidential  and reduced to a writing marked  "Confidential"  and
delivered to the Receiving Party within 30 Days of such disclosure.

         11.2 Exclusions. Notwithstanding Section 11.1, Confidential Information
will exclude information that the Receiving Party can demonstrate:

                  11.2.1 was  independently  developed  by the  Receiving  Party
without any use of the  Disclosing  Party's  Confidential  Information or by the
Receiving Party's employees or other agents (or independent contractors hired by
the  Receiving  Party)  who have  not been  exposed  to the  Disclosing  Party's
Confidential Information;

                  11.2.2   becomes  known  to  the  Receiving   Party,   without
restriction,  from a source other than the  Disclosing  Party without  breach of
this VPA and that had a right to disclose it;

                  11.2.3 was in the public  domain at the time it was  disclosed
or becomes in the public  domain  through no act or  omission  of the  Receiving
Party; or

                  11.2.4 was rightfully  known to the Receiving  Party,  without
restriction, at the time of disclosure.

         11.3 Compelled  Disclosure.  If a Receiving Party believes that it will
be compelled by a court or other authority to disclose Confidential  Information
of the  Disclosing  Party,  it shall give the  Disclosing  Party prompt  written
notice so that the  Disclosing  Party may take steps to oppose such  disclosure,
and the  Receiving  Party  shall  assist  in  opposing  such  disclosure  at the
Disclosing Party's expense.

         11.4 Confidentiality Obligation.  During the term of this VPA and for a
period  of  five  years   thereafter,   the  Receiving  Party  shall  keep  such
Confidential  Information  in strict  confidence  and shall  not  disclose  such
Confidential Information to any third party without prior written consent of the
Disclosing Party.

         11.5 Confidentiality of Agreement. Each party agrees that the terms and
conditions,  but not the  existence,  of this VPA will be treated as the other's
Confidential  Information  and that no reference to the terms and  conditions of
this VPA or to activities  pertaining  thereto can be made in any form of public
or commercial  advertising without the prior written consent of the other party;
provided, however, that each party may disclose the terms and conditions of this
VPA: (i) subject to the  provisions  of Section 11.3 as required by any court or
other  governmental  body;  (ii) as  otherwise  required by law;  (iii) to legal
counsel of the parties;  (iv) in connection  with the  requirements  of a public
offering,  secondary  offering,  debt  offering,  or  securities  filing  of the
parties,  or otherwise as obligated by law; (v) in confidence,  to  accountants,
banks,  and financing  sources and their  advisors;  or (vi) in  confidence,  in
connection with the enforcement of this VPA or rights under this VPA.

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         11.6  Remedies.  Unauthorized  use  by a  party  of the  other  party's
Confidential Information will diminish the value of such information. Therefore,
if a party breaches any of its obligations  with respect to  confidentiality  or
use of Confidential  Information hereunder,  the other party will be entitled to
seek  equitable  relief to protect its interest  therein,  including  injunctive
relief, as well as money damages.

         11.7 Non-disclosure  Agreements.  Each party shall obtain the execution
of proprietary  nondisclosure agreements with its Affiliates,  including but not
limited to the party's  and/or  Affiliates'  respective  agents and  consultants
having access to Confidential  Information of the other party,  shall diligently
enforce such agreements with respect to the Confidential Information,  and shall
exercise due care to control the actions of such Affiliates,  employees,  agents
and consultants in this respect so long as they have a working relationship with
the party obligated hereunder to obtain such nondisclosure agreements.


                              ARTICLE 12: GENERAL

         12.1 Governing Law and Jurisdiction.  This VPA will be interpreted, and
the rights and liabilities of the parties hereto determined,  in accordance with
the laws of the State of California applicable to agreements executed, delivered
and performed  within such State,  without regard to the principles of conflicts
of laws thereof.  Each of the parties hereby consents to the jurisdiction of any
state or federal court located  within the county of Santa Clara in the State of
California  (except for  resolution of pricing  disputes as described in Section
6.2), and each of the parties  hereby:  (i) waives any objection to venue of any
action  instituted  under this VPA,  and (ii)  consents to the  granting of such
legal or equitable relief as is deemed appropriate by any aforementioned court.

         12.2 Force Majeure.  A defaulting party shall provide the nondefaulting
party immediate notice of any anticipated  delay or failure of compliance due to
a Force Majeure Event; provided, however, that any such act will not relieve the
defaulting party's obligations hereunder.

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

         12.4 Assignment. Except as set forth in this Section 12.4, neither this
Agreement,  nor any of the rights or  obligations  hereunder,  may be  assigned,
transferred,  subcontracted  or  delegated by a party hereto to any third party,
including  without  limitation,  by  operation of law or pursuant to a Change of
Control (as defined below).  Notwithstanding the foregoing, (a) Komag may assign
this  Agreement,  and the rights and  obligations  hereunder,  without the prior
consent of WDC, in connection  with a Change of Control,  except to a Prohibited
Assignee (as defined below); (b) Komag may assign all or part of this Agreement,
or the rights and obligations hereunder, without

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the prior  consent of WDC, to Komag USA  (Malaysia)  SDN; and (c) WDC may assign
this  Agreement,  and the rights and  obligations  hereunder,  without the prior
consent of Komag,  to a third party in connection  with a Change of Control;  so
long as WDC  assigns  all  obligations  under this  Agreement  to any party that
succeeds to all or substantially  all of WDC's disk drive  production  business.
For purposes of this Section 12.4,  "Change of Control" shall mean (i) any sale,
lease, exchange or other transfer (in one transaction or series of transactions)
of  all,  or  substantially   all,  of  the  assets  of  such  party,  (ii)  any
consolidation  or merger or other  combination of a party in which such party is
not the continuing or surviving  corporation or pursuant to which shares of such
party's common stock would be converted into cash,  securities or other property
(other than a merger of such party in which the holders of such  party's  common
stock  immediately  prior  to  the  merger  hold  at  least  a  majority  of the
outstanding  securities of the combined  entity),  or (iii) any  transaction (or
series of related  transactions)  pursuant  to which any  person (as  defined in
Section 13 of the  Securities  Exchange Act of 1934,  as amended (the  "Exchange
Act"), becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act),  directly or  indirectly,  of [***]% or more of such  party's  outstanding
common stock.  For purposes of this Section 12.4,  "Prohibited  Assignee"  shall
mean any third party who (x) [***] Any  purported  assignment of this VPA or the
rights or  obligations  of a party under this VPA in  violation  of this Section
12.4 shall be null, void and of no further force or effect and shall  constitute
a Material Default.

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

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

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

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

         12.9   Counterparts.   This  VPA  may  be   executed  in  one  or  more
counterparts,  each of which will be deemed to be an original,  but all of which
will be considered one and the same instrument.

         12.10  Notices.  Except  as  otherwise  provided  herein,  all  notices
hereunder  will be deemed given if (a) in writing and delivered  personally;  or
(b) sent by facsimile  transmission  that is

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confirmed  by return  facsimile  or  e-mail;  to the  parties  at the  following
addresses (or at such other addresses as will be specified by like notice):

         (i)      if to WDC, to:

                  Western Digital Corporation
                  8105 Irvine Center Drive
                  Irvine CA  92618
                  Attention: Michael A. Cornelius, VP, Law & Administration,
                  Secretary
                  Fax No.: (949) 932-7837

         (ii)     if to Komag to:

                  Komag, Incorporated
                  1704 Automation Parkway
                  San Jose, California 95131

                  Attention: Chief Financial Officer
                  Fax No.: 408 944-9234

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

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

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

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

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


         Western Digital Corporation,         Komag, Incorporated,
         a Delaware corporation.              a Delaware corporation


         ___________________________          ___________________________

         Name:______________________          Name:______________________

         Title:_____________________          Title:_____________________

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                                    EXHIBIT A

                               WDC FISCAL QUARTERS


      FY'99
      MONTH                Start Date        End Date     Weeks in Qtr.
      -----------------------------------------------------------------
      Q4                                                  14
      April                 03/28/99         04/24/99           4
      May                   04/25/99         05/29/99           5
      June                  05/30/99         07/03/99           5


      FY'00
      MONTH                Start Date        End Date     Weeks in Qtr.
      -----------------------------------------------------------------
      Q1                                                  13
      July                  07/04/99         07/31/99           4
      August                08/01/99         08/28/99           4
      September             08/29/99         10/02/99           5

      Q2                                                  13
      October               10/03/99         10/30/99           4
      November              10/31/99         11/27/99           4
      December              11/28/99         01/01/00           5

      Q3                                                  13
      January               01/02/00         01/29/00           4
      February              01/30/00         02/26/00           4
      March                 02/27/00         04/01/00           5

      Q4                                                  13
      April                 04/02/00         04/29/00           4
      May                   04/30/00         05/27/00           4
      June                  05/28/00         07/01/00           5


      FY'01
      MONTH                Start Date        End Date     Weeks in Qtr.
      -----------------------------------------------------------------

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      Q1                                                  13
      July                  07/02/00         07/29/00           4
      August                07/30/00         08/26/00           4
      September             08/27/00         09/30/00           5

      Q2                                                  13
      October               10/01/00         10/28/00           4
      November              10/29/00         11/25/00           4
      December              11/26/00         12/30/00           5

      Q3                                                  13
      January               12/31/00         01/27/01           4
      February              01/28/01         02/24/01           4
      March                 02/25/01         03/31/01           5

      Q4                                                  13
      April                 04/01/01         04/28/01           4
      May                   04/29/01         05/26/01           4
      June                  05/27/01         06/30/01           5


      FY'02
      MONTH                Start Date        End Date     Weeks in Qtr.
      -----------------------------------------------------------------
      Q1                                                  13
      July                  07/01/01         07/28/01           4
      August                07/29/01         08/25/01           4
      September             08/26/01         09/29/01           5

      Q2                                                  13
      October               09/30/01         10/27/01           4
      November              10/28/01         11/24/01           4
      December              11/25/01         12/29/01           5

      Q3                                                  13
      January               12/30/01         01/26/02           4
      February              01/27/02         02/23/02           4
      March                 02/24/02         03/30/02           5

      Q4                                                  13
      April                 03/31/02         04/27/02           4
      May                   04/28/02         05/25/02           4

                                      -21-

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      June                  05/26/02         06/29/02           5

         Note:   WDC's fiscal year is reported in a  52/53-week  period and will
                 end on the  Saturday  closest to June 30. Each fiscal year will
                 be divided  into four  quarters.  Each  quarter will consist of
                 three months,  the first and second of which will be four weeks
                 long and the last,  five weeks.  Each week will begin on Sunday
                 and end on Saturday.

                                      -22-

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                                    EXHIBIT B
                               Initial Unit Prices


WD Fiscal Quarter:
         Fiscal Quarter ending [***]                 Fiscal Quarter Ending [***]

Double Sided Disks ("DSD"):

[***]

Single Sided
[***]


Notes:

1. Above prices are based on WDC specification and Komag  specification  reviews
that exist as of 3/5/99.

2. The above prices are dependent on terms listed herein.

                                      -23-

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                                    EXHIBIT C
                    Prices for Qualification Sample Products

Year                                  1999              2000             2001
[***]                                 [***]             [***]            [***]


                                      -24-

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                                    EXHIBIT D
                 SUPPLIER WARRANTY AND REPLACEMENT PRODUCT TERMS

This Exhibit D sets forth the terms of warranty  for  Products  sold by Komag to
WDC under the VPA.  Further,  this Exhibit D sets forth certain of the terms for
Komag's supply to WDC of Products used by WDC to replace  Product which may have
failed,  or  which  may be  required  due to  failure  of WDC  disk  drives,  or
Components of WDC's disk drives other than the  Products.  All terms not defined
in this Exhibit D will have the meaning  assigned them in the VPA. The terms and
conditions of this Exhibit D will  supersede any  conflicting  terms in the VPA,
but only with  respect to  Replacement  Products.


                             ARTICLE I: DEFINITIONS

         1.1  "Replacement  Product"  means a Unit  ordered  by WDC,  to replace
another Unit, which is identical to the Unit being replaced in design,  process,
and location, and either (a) due to a defect in manufacture or workmanship,  did
not, at the time of delivery to WDC, conform to the  Specifications in effect at
the time the  Purchase  Order for such Unit was issued;  or (b) due to any other
cause, including without limitation a failure of or damage by WDC disk drives or
any Components  thereof,  fails or no longer conforms to the  Specifications  in
effect at the time the Purchase Order for such Unit was issued.

         1.2  "End of  Life"  of a WDC  Program  means  the  earlier  of (a) the
beginning of the first of two sequential  Fiscal Quarters when WDC  discontinues
high  volume  purchasing  of a Product  for such  Program,  where high volume is
defined as greater  than [***] Units per Fiscal  Quarter;  or (b) when WDC first
begins to  purchase  a Product  used in such  Program  primarily  for disk drive
repair purposes.

         1.3 "Replacement Product Period" means the relevant Replacement Product
Period as set forth in Section 3.3.


                          ARTICLE II: LIMITED WARRANTY

         2.1 Limited Warranty. Komag warrants that during the period of one year
after the WDC disk drive  build  date (but in no event  later than 15 Days after
the date of Komag's  invoice) for a Unit of a Product  ("Warranty  Term"),  each
such Unit shall (a) be new and  conform to the  Specifications  in effect at the
time the Purchase Order for such Unit is issued; and (b) be free from defects in
materials,  workmanship  and title under normal use and operation  (the "Limited
Warranty").  WDC's sole remedy for a breach of the  foregoing  warranty  will be
limited to Komag issuing a credit to WDC in accordance  with the terms set forth
in Section 3.8. OTHER THAN AS SET FORTH IN THIS SECTION 2.1, KOMAG DISCLAIMS ANY
WARRANTY,  EXPRESS,  IMPLIED OR  STATUTORY,  INCLUDING  WITHOUT  LIMITATION  THE
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR



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PURPOSE.  THE WARRANTY IN THIS SECTION 2.1 NEITHER  ASSUMES NOR  AUTHORIZES  ANY
OTHER PERSON TO ASSUME FOR KOMAG ANY OTHER  LIABILITIES  IN CONNECTION  WITH THE
SALE OF THE PRODUCTS.  The aforesaid warranty and WDC's remedies  thereunder are
solely for the benefit of WDC and its  subsidiaries  and will not be extended or
construed to extend to any other entity whatsoever.

         2.2 Limitation of Liability. EXCEPT AS SPECIFICALLY PROVIDED IN SECTION
5.2 OF THIS EXHIBIT D,  INDEPENDENTLY OF ANY OTHER REMEDY  LIMITATION HEREOF AND
NOTWITHSTANDING ANY FAILURE OF THE ESSENTIAL PURPOSE OF ANY SUCH LIMITED REMEDY,
KOMAG  WILL NOT BE LIABLE FOR ANY  LIABILITY  UNDER  THIS  EXHIBIT D,  INCLUDING
WITHOUT LIMITATION LOST PROFITS,  COST OF PROCUREMENT OF SUBSTITUTE GOODS OR FOR
ANY SPECIAL,  INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING WITHOUT
LIMITATION  LOSS OF DATA  HOWEVER  CAUSED  AND  UNDER ANY  THEORY  OF  LIABILITY
RESULTING FROM THIS EXHIBIT D OR FROM THE USE OF THE PRODUCTS IN ANY MANNER, AND
WHETHER OR NOT KOMAG HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

         2.3 Warranty Procedure.  The parties agree to use the process described
in the Warranty  Verification and Disposition flow chart set forth in Attachment
1 to manage and dispose of the Products returned to WDC under warranty.


                       ARTICLE III: REPLACEMENT PRODUCTS

         3.1  Prices.   On  a  quarterly  basis,  the  parties  shall  agree  to
Replacement  Product  prices  for  the  upcoming  Fiscal  Quarter,   within  the
parameters set forth in Attachment 2 hereto.

         3.2  Procedure for Returns.  WDC shall return or destroy,  according to
Komag's instruction, all Units for which WDC seeks replacement by Komag, whether
or not such Units are covered by the Limited Warranty.  Komag shall issue an RMA
for all Units WDC wishes to return.


         3.3 Replacement  Product Period.  During the Replacement Product Period
for each Product,  Komag shall make available  Replacement Products to WDC under
the terms of this Exhibit D. The  Replacement  Product  Periods for the Products
and  Programs  listed on  Attachment  2 will be as  indicated  therein.  For any
Products or Programs whose  Replacement  Product  Period is not listed  therein,
Komag shall provide Replacement Products for two years following the End of Life
of the applicable Program.  Notwithstanding the foregoing, (a) upon the occasion
of a major process change,  or a change that requires Komag to maintain a set of
equipment which is not being used for volume production of other Komag products;
or (b) if Komag intends to discontinue operation of a factory or production line
for such Product or Program;  then (w) Komag shall notify WDC as soon in advance
as  reasonably  practical;  (x) the parties  shall meet

                                      -2-

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and  agree  on  a  one-time,  firm,   non-cancelable  purchase  order  for  such
Replacement Products;  (y) notwithstanding the provisions of Section 4.2 of this
Exhibit  D,  such  purchase  order  may be for less  than the  minimum  of Units
required  in Section 4.2 of this  Exhibit D, but the maximum  prices and maximum
price  increases of  Attachment  2 will  nevertheless  apply;  and (z) WDC shall
purchase all the Units ordered  thereunder within an agreed-upon period of time.
Thereafter,  Komag shall have no obligation to supply such Replacement Products.
The parties  acknowledge that for the Products listed in Attachment 2, there may
be occasions which, due to material changes in Komag's  production process (such
as the shift from Tucson / Phase 0 to Chandler / ILE; or aluminum  substrate  to
glass substrate) may require a change in the Replacement  Product Period, and if
so, the parties shall negotiate in good faith a Replacement  Product Period that
reflects such material change.

         3.4  Tracking.  The  parties  acknowledge  that  pursuant  to the Asset
Purchase  Agreement,  at Closing (as such term is defined in the Asset  Purchase
Agreement),  Komag  will  take  over  from WDC  production  of  certain  Product
inventory  and WIP. On or before  Closing,  WDC shall  develop a method to track
Media made by those  processes used by WDC at its "Santa Clara Media  Operation"
prior to the Closing  ("WDC  Processes"),  sufficient to  differentiate  between
Media made by the WDC  Processes  prior to Closing  (such  units,  "Santa  Clara
Pre-Closing  Units") and Product made by the WDC Processes  after Closing.  Such
method will include  [***] Until WDC  establishes  such method of tracking,  all
Units that Komag and WDC reasonably  determine are made using WDC Processes will
be deemed Santa Clara Pre-Closing Units.

         3.5 Supply of Replacement  Product for Santa Clara  Pre-Closing  Units.
For Santa Clara  Pre-Closing  Units of Products  included in Attachment 2, Komag
will supply Replacement Product as indicated therein.  The terms of this Exhibit
D with respect to  forecasting,  placement  of purchase  orders and pricing will
apply to such Replacement  Product.  Notwithstanding  the foregoing,  nothing in
this VPA shall require Komag to supply the following Products to WDC: [***].

         3.6   Calculating   the  Percentage  of  WDC  Liability.   The  parties
acknowledge  that  Units may not  conform to the  Specifications  due to various
causes, including without limitation (a) defects covered by the Limited Warranty
and occurring  within the Warranty  Term; (b) damage to such Units caused by WDC
disk drives or by Components thereof other than the Products; and (c) defects or
damage not occurring  within the Warranty Term. For Units that do not conform to
the  Specifications,  for whatever reason,  during the Replacement Product Term,
WDC shall  provide  reasonably  sufficient  data on Units that are removed  from
failed  drives to assess  (x) cause of  failure  and (y)  whether  the Units are
within the Warranty Term. By mutual  engineering  analysis of such data, WDC and
Komag  shall  agree  on the  percentage  of  WDC's  liability  ("%BL")  for such
failures.  Such  determination will be based on a percentage equal to the number
of Units of a Product  that fail,  due to all causes  other than  failure of the
Units to conform to the Limited  Warranty  during the Warranty Term,  divided by
the total Units of a Product that fail.  %BL will be determined for each Program
through  the use of the Media  Warranty  Verification  and  Disposition  Process
specified in Attachment 1. Any Unit that is

                                      -3-

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modified,  misused,  or  damaged  after  delivery  of such  Unit to WDC  will be
included in the numerator of fraction that determines the %BL.

         3.7 Pricing for Replacement  Product.  Prices for Replacement  Products
("Base Line Price" or "BP"),  whether  such  Products are subject to the Limited
Warranty or not, will be [***].

         3.8 Credit Value.  The credit value ("CV") will be calculated  for each
Product and Program as shown below. [***]

         3.9 Issuance of Credit Voucher.  No later than seven days after the end
of each month, Komag shall issue to WDC a credit voucher in the amount of the CV
for Units returned during such month.


            ARTICLE IV: FORECASTING, PURCHASE ORDERS AND FULFILLMENT

         4.1  Replacement  Product  Forecast.   Each  month  commencing  on  the
Effective  Date,  for each  Product,  WDC shall provide Komag with a forecast of
WDC's requirements for each Replacement  Product during the Replacement  Product
Period,  which  forecast  must be based  on an  estimated  failure  rate for the
relevant  Product.  WDC's  Replacement  Product  forecast  will  include  weekly
requirements for the first 13 weeks,  monthly  requirements for the 14th to 26th
weeks,  and Fiscal  Quarterly  requirements  for the balance of the  Replacement
Product Period. This Replacement Product forecast does not constitute a purchase
order.  Within five  Business  Days of  receiving  WDC's  forecast,  Komag shall
provide  feedback to WDC to support or challenge  the validity of the  forecast,
including a tentative delivery schedule.

         4.2  Purchase  Orders.  WDC  shall,  no later  than 60 Days  before the
beginning  of each  Fiscal  Quarter,  submit  to  Komag  a firm,  non-cancelable
purchase order for Replacement Products for such Fiscal Quarter.  Komag will not
be obligated to supply Units of Replacement Products ordered for each Program by
WDC for any  Fiscal  Quarter,  in excess  of 25% over the  Units of  Replacement
Products  forecasted  by WDC for such Program for such  Replacement  Product for
such Fiscal  Quarter,  but Komag shall use  commercially  reasonable  efforts to
supply such Replacement Products. Except as otherwise expressly provided herein,
each  purchase  order for a particular  Product  shall be for at least (a) [***]
Units for Products  made using  in-line  sputtering;  and (b) [***] for Products
made using  static  sputtering.  Except as  otherwise  provided  in Section  3.3
following Komag's notice as required  therein,  in the event that WDC desires to
place an order  for a  last-time  buy of fewer  than such  number of Units,  the
parties shall first agree to an appropriate Price for such purchase order, which
Price shall not be limited by the maximum percentage price increases and maximum
prices set forth in Attachment 2.

         4.3 Liability Limitation.  WDC's liability for cancellation of purchase
orders for  Replacement  Products  shall not exceed  the  quantities  and Prices
specified in the applicable purchase order.

                                      -4-

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                         ARTICLE V: DELIVERY OBLIGATIONS

         5.1 Komag Failure  Analysis  Obligations.  Komag shall use commercially
reasonable efforts to ensure that Komag is capable of executing failure analysis
for Products  corresponding  to the  relevant  Replacement  Products  during the
Replacement Product Period.

         5.2 [***]

         5.3 Increased  Forecasts.  If WDC's  Replacement  Product  requirements
forecasted under Section 4.1 of this Exhibit D for a Fiscal Quarter increases by
more than [***]% from the previous Fiscal Quarter's forecast, then [***]

         5.4 [***]  Exception.  Section 5.2 of this  Exhibit D will apply to the
[***] Program for only so long as WDC places  purchase  orders for and purchases
[***] Units or more of Replacement Product for the [***] in each Fiscal Quarter.
In the event that WDC does not do so,  Komag will notify WDC that WDC may make a
last-time  buy and will not be obligated to reimburse  WDC under  Section 5.2 of
this Exhibit D for forecasts  based on sales of disk drives in the [***] for any
cost in or after the first  Fiscal  Quarter  in which WDC fails to do so. In the
event that WDC desires to place an order for a last-time buy of fewer than [***]
of such Units,  the parties shall first agree to an  appropriate  Price for such
purchase order, which Price shall not be limited by the maximum percentage price
increases and maximum prices set forth in Attachment 2.

                                      -5-

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                                  ATTACHMENT 1
                Warranty verification and disposition flow chart

                                      [***]

                                      -6-

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                                                       ATTACHMENT 2
                                                    Media-Pricing Table

<CAPTION>
---------------- -------------------- ---------------- ----------------------------------------------- -------------------
    Program       Price at Start of      Maximum %         Start of Replacement Product Period           Maximum Price
                 End of Life Period    Price Increase       End of Replacement Product Period                During
                                        per Fiscal                                                        Replacement
                                          Quarter                                                        Product Period
---------------- -------------------- ---------------- ----------------------------------------------- -------------------
<S>              <C>                  <C>              <C>                       <C>                   <C>
     [***]              [***]              [***]                [***]                   [***]                [***]
---------------- -------------------- ---------------- ------------------------- --------------------- -------------------
     [***]              [***]              [***]                [***]                   [***]                [***]
---------------- -------------------- ---------------- ------------------------- --------------------- -------------------
     [***]              [***]              [***]                [***]                   [***]                [***]
---------------- -------------------- ---------------- ------------------------- --------------------- -------------------
     [***]              [***]              [***]                [***]                   [***]                [***]
---------------- -------------------- ---------------- ------------------------- --------------------- -------------------
     [***]              [***]              [***]                [***]                   [***]                [***]
---------------- -------------------- ---------------- ------------------------- --------------------- -------------------
     [***]              [***]              [***]                [***]                   [***]                [***]
---------------- -------------------- ---------------- ------------------------- --------------------- -------------------
     [***]              [***]              [***]                [***]                   [***]                [***]
---------------- -------------------- ---------------- ------------------------- --------------------- -------------------
     [***]              [***]              [***]                [***]                   [***]                [***]
---------------- -------------------- ---------------- ------------------------- --------------------- -------------------
     [***]              [***]              [***]                [***]                   [***]                [***]
---------------- -------------------- ---------------- ------------------------- --------------------- -------------------
     [***]              [***]              [***]                [***]                   [***]                [***]
---------------- -------------------- ---------------- ------------------------- --------------------- -------------------
</TABLE>


[***]

                                                           -7-