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


                            ASSET PURCHASE AGREEMENT

                                     BETWEEN

                               KOMAG, INCORPORATED

                                       AND

                           WESTERN DIGITAL CORPORATION

                                  April 8, 1999



<PAGE>


<TABLE>
                                                   TABLE OF CONTENTS
<CAPTION>
                                                                                                                   Page
                                                                                                                   ----
<S>      <C>                                                                                                         <C>
ARTICLE I DEFINITIONS.................................................................................................1

         1.1      Definitions.........................................................................................1

ARTICLE II PURCHASE AND SALE TRANSACTION.............................................................................10

         2.1      Purchase and Sale of Acquired Assets...............................................................10
         2.2      Assumption of Liabilities..........................................................................10
         2.3      Purchase Price for Acquired Assets; Post Closing Adjustment........................................12
         2.4      Transfer Taxes.....................................................................................14
         2.5      The Closing........................................................................................14
         2.6      Taking of Necessary Action; Further Action.........................................................15
         2.7      Nonassignability and Consents......................................................................15

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................................16

         3.1      Organization.......................................................................................17
         3.2      Media Business Contained in the Company............................................................17
         3.3      Authority..........................................................................................17
         3.4      No Conflict........................................................................................17
         3.5      Consents...........................................................................................18
         3.6      Financial Matters..................................................................................18
         3.7      No Changes.........................................................................................19
         3.8      Tax Matters........................................................................................20
         3.9      Restrictions on Business Activities................................................................21
         3.10     Title of Properties; Absence of Liens and Encumbrances; Condition of Equipment.....................21
         3.11     Intellectual Property..............................................................................23
         3.12     Agreements, Contracts and Commitments..............................................................25
         3.13     Interested Party Transactions......................................................................27
         3.14     Governmental Authorization.........................................................................27
         3.15     Litigation.........................................................................................27
         3.16     Accounts Receivable................................................................................27
         3.17     Inventories........................................................................................27
         3.18     Minute Books.......................................................................................28
         3.19     Brokers'and Finders'Fees...........................................................................28
         3.20     Employees; Employee Plans and Compensation.........................................................28
         3.21     Insurance..........................................................................................30
         3.22     Environmental Matters..............................................................................31
         3.23     Compliance with Laws...............................................................................32
         3.24     Complete Copies of Materials.......................................................................32
         3.25     Suppliers..........................................................................................32

                                                           i

<PAGE>


                                                   TABLE OF CONTENTS
                                                      (continued)
                                                                                                                   Page
                                                                                                                   ----

         3.26     No Insolvency......................................................................................32
         3.27     Private Placement..................................................................................32
         3.28     Registration Statement Information.................................................................33
         3.29     Representations Complete...........................................................................33

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF KOMAG...................................................................33

         4.1      Organization.......................................................................................33
         4.2      Capital Structure of Komag.........................................................................33
         4.3      Authority..........................................................................................34
         4.4      No Conflict........................................................................................34
         4.5      Consents...........................................................................................35
         4.6      SEC Documents, Komag Financial Statements..........................................................35
         4.7      No Material Adverse Change.........................................................................35
         4.8      Litigation.........................................................................................35
         4.9      Brokers'Fees.......................................................................................36

ARTICLE V CONDUCT PRIOR TO THE CLOSING...............................................................................36

         5.1      Conduct of Business of the Company.................................................................36
         5.2      Review of Capital Budget/Spending Plan.............................................................38
         5.3      No Solicitation....................................................................................38

ARTICLE VI ADDITIONAL AGREEMENTS.....................................................................................38

         6.1      Access to Information..............................................................................38
         6.2      Confidentiality....................................................................................39
         6.3      Public Disclosure..................................................................................39
         6.4      HSR Approval.......................................................................................39
         6.5      Consents...........................................................................................39
         6.6      Commercially Reasonable Efforts....................................................................40
         6.7      Notification of Certain Matters....................................................................40
         6.8      Employee Matters...................................................................................41
         6.9      NMS Listing........................................................................................43

ARTICLE VII CONDITIONS TO OBLIGATION TO CLOSE........................................................................43

         7.1      Conditions to Obligations of each of the Parties...................................................43
         7.2      Additional Conditions to Obligation of Komag.......................................................43
         7.3      Additional Conditions to Obligation of the Company.................................................45

ARTICLE VIII SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ESCROW; INDEMNITY...........................................47

         8.1      Survival of Representations and Warranties.........................................................47
         8.2      Agreement to Indemnify.............................................................................47
         8.3      Limits of Liability................................................................................48

                                                          ii

<PAGE>


                                                   TABLE OF CONTENTS
                                                      (continued)
                                                                                                                   Page
                                                                                                                   ----

         8.4      Indemnification Procedures; Time Limits............................................................48
         8.5      Survival of Environmental Covenants................................................................50

ARTICLE IX TERMINATION...............................................................................................50

         9.1      Termination of Agreement...........................................................................50
         9.2      Effect of Termination..............................................................................51
         9.3      Escrow Agreement; Distribution of Property.........................................................51

ARTICLE X MISCELLANEOUS..............................................................................................51

         10.1     No Third-Party Beneficiaries.......................................................................51
         10.2     Entire Agreement...................................................................................51
         10.3     Succession and Assignment..........................................................................52
         10.4     Counterparts.......................................................................................52
         10.5     Headings...........................................................................................52
         10.6     Notices............................................................................................52
         10.7     Governing Law......................................................................................53
         10.8     Amendments and Waivers.............................................................................53
         10.9     Severability.......................................................................................53
         10.10    Expenses...........................................................................................53
         10.11    Construction.......................................................................................53
         10.12    Incorporation of Exhibits and Schedules............................................................54
         10.13    Other Remedies.....................................................................................54
         10.14    Submission to Jurisdiction.........................................................................54
         10.15    Share Legends......................................................................................54
         10.16    California Corporate Securities Law................................................................55
</TABLE>

                                                          iii

<PAGE>


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


                                INDEX OF EXHIBITS


Exhibit                    Description
-------                    -----------
Exhibit A         List of Acquired Assets
Exhibit B         Excluded Assets
Exhibit C         Cash Prepaid Assets
Exhibit D         Form of Promissory Note
Exhibit E         Form of Assignment and Assumption Agreement
Exhibit F         Form of Bill of Sale
Exhibit G         Form of Volume Purchase Agreement
Exhibit H         Form of Joint Development Agreement
Exhibit I         Form of License Agreement
Exhibit J         Form of Registration Rights Agreement
Exhibit K         Form of Transitional Services Agreement
Exhibit L         Form of Legal Opinion of Counsel to the Company
Exhibit M         Form of Legal Opinion of Counsel to Komag

                                       iv

<PAGE>


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


                                       v

<PAGE>


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


                            ASSET PURCHASE AGREEMENT

         THIS Asset Purchase  Agreement  (this  "Agreement") is made and entered
into as of  April  8,  1999  by and  between  Komag,  Incorporated,  a  Delaware
corporation ("Komag"),  and Western Digital Corporation,  a Delaware corporation
(the  "Company").  Komag and the Company are referred to collectively  herein as
the "Parties."


                                    RECITALS

         A. The Boards of Directors of each of the Company and Komag  believe it
is in the best interests of each company and their respective  stockholders that
Komag acquire (the "Acquisition") substantially all of the assets of the Company
used or  useful  in  connection  with  the  Company's  Santa  Clara  Disk  Media
operations (the "Media Business") and, in furtherance thereof, have approved the
Acquisition.

         B. The  Company  and  Komag  desire  to make  certain  representations,
warranties, covenants and other agreements in connection with the Acquisition.

         C. In connection with the Acquisition,  the Company and Komag desire to
enter into a Volume  Purchase  Agreement  pursuant  to which,  inter  alia,  the
Company  shall  purchase  certain  media  products  from  Komag  for  use in the
Company's disk drive operations.

         NOW,  THEREFORE,  in  consideration  of  the  covenants,  promises  and
representations  set forth  herein,  and as a material  inducement to enter into
that certain Volume Purchase  Agreement (as defined herein),  and for other good
and  valuable  consideration,  the  receipt and  sufficiency  of which is hereby
acknowledged, the Parties agree as follows:


                                    ARTICLE I

                                   DEFINITIONS

         1.1  Definitions.

                  (a) As used in this Agreement,  the following terms shall have
the following meanings, respectively:

                  "AA Net Book  Value"  means the Net Book  Value for all of the
Acquired  Assets (other than Finished  Goods and Cash Prepaid  Assets) as of the
Closing Date.

                  "Accounts Receivable" means all trade accounts receivable, all
evidences of  indebtedness  arising out of sales of Inventory (as defined below)
or other property, assets or services of any Person and, to the extent earned by
performance  which has occurred,  all rights to receive  payments arising out of
sales of Inventory or other property, assets or services to any Person.



<PAGE>


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


                  "Accounts  Payable" means all trade  accounts  payable and all
evidences  of  indebtedness  arising out of  purchases  of  Inventory  and other
property, assets or services by any Person.

                  "Acquired  Assets" means all right,  title and interest in and
to all  of the  assets,  properties  and  rights  under  agreements,  contracts,
permits,  licenses,  leases or otherwise, of any kind and description,  wherever
located,  whether  real,  personal or mixed,  whether  tangible  or  intangible,
belonging to the Company used in, intended for use in, or required to be used in
connection  with,  the operation of the Media  Business as currently  conducted,
other than the Excluded Assets (as defined below), which shall include,  without
limitation,  those assets and properties listed on Exhibit A attached hereto and
the following:

                           (1)  any  and  all  indentures,   leases,  subleases,
licenses,  permits,  authorizations,  commitment obligations or other contracts,
agreements or instruments,  whether written or oral, and rights  thereunder,  to
which the  Company is a party or by which any of the  Acquired  Assets are bound
and which  relate to the  Media  Business  including,  without  limitation,  the
Contracts  (as  defined  below)  marked  with an  asterisk  set forth in Section
3.12(a) of the Company  Disclosure  Schedule (as defined below) and the Purchase
Orders;

                           (2) any of the  following  which  relate to the Media
Business: (i) any and all claims, deposits, refunds, causes of action, rights of
recovery,  rights  of set off and  rights  of  recoupment  and  (ii) any and all
franchises,  approvals, permits, licenses, orders, registrations,  certificates,
variances and similar  rights  obtained from  Governmental  Entities (as defined
below);

                           (3) any  and  all  Inventory  relating  to the  Media
Business,  wherever  located,  owned by the Company or subject to open  Purchase
Orders  consisting of parts or work in progress,  including  the Finished  Goods
(but excluding all other finished media)("Media Inventory");

                           (4) any and all supplies owned by the Company used in
the Media Business;

                           (5) any and all tangible  personal property and fixed
assets  consisting  of  any  equipment,  leasehold  improvements,   fixtures  or
fittings,  furniture,  software,  machinery,  tooling, dies, instruments,  motor
vehicles,  computers,  spare parts, replacements parts and trade fixtures, owned
or leased by the Company, either (i) located on the Leased Real Property or (ii)
used  primarily  in or  intended  for use  primarily  in, or required to be used
primarily in connection  with,  the operation of the Media  Business  (together,
"Fixed Acquired Assets");

                           (6) any  and  all  business  and  financial  records,
books, ledgers, files, plans, documents, supplier lists, correspondence,  lists,
plots,  architectural  plans,  drawings,  notebooks,  specifications,   creative
materials,  studies, reports,  equipment repair,  maintenance or service records
and other proprietary or confidential  information or data relating to the Media
Business or any other Acquired Assets,  whether written or electronically stored
or otherwise recorded;

                                       2

<PAGE>


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


                           (7) any and all rights under any contracts,  licenses
and  agreements  set forth in  Section  3.11(a)(ii)  of the  Company  Disclosure
Schedules;

                           (8) any and all real property,  easements,  rights of
way and other appurtenant  rights thereto (such as appurtenant  rights in and to
public streets), if any, used in, intended for use in, or required to be used in
connection with, the operation of the Media Business;

                           (9) any and all  rights  with  respect  to  leasehold
interests and subleases and rights thereunder  relating to the real and personal
property,  used in,  intended  for use in, or required to be used in  connection
with, the operation of the Media Business;

                           (10) any and all Transferred Prepaid Assets; and

                           (11)  any  and all  other  tangible  property,  real,
personal  or mixed,  which  have been  historically  reflected  in the books and
records  of the  Company  and which are either  (i)  located on the Leased  Real
Property  or  (ii)  currently  used  primarily  in the  operation  of the  Media
Business.

                  "Affiliate"  has the  meaning  set forth in Rule  12b-2 of the
Exchange Act.

                  "Cash" means cash and cash equivalents  (including  marketable
securities and short term investments) calculated in accordance with GAAP.

                  "Code" means the Internal Revenue Code of 1986, as amended, or
any  successor  statute  thereto,  and the  rules  and  regulations  promulgated
thereunder.

                  "Collateral  Documents"  means the Volume Purchase  Agreement,
the Joint Development Agreement,  the Registration Rights Agreement, the License
Agreement,  the Transitional  Services Agreement,  the Assignment and Assumption
Agreement, the Bill of Sale and the Promissory Note.

                  "Continuing  Environmental  Conditions"  shall  mean  (i)  any
Release of any  Hazardous  Materials  that occurred at any time on or before the
Closing Date as a result of Pre-Closing Hazardous Materials Activities and which
Release  continues  to occur  after the Closing  Date from any pipes,  conduits,
structures,  equipment  or other  improvements  which  are on or about any Media
Business  Facility (as defined  below),  to the extent any of the  foregoing are
concealed within or below the  improvements,  foundation,  paving, or subsurface
soils  on  or  about  such  Media  Business  Facility;   (ii)  any  Pre-Existing
Contamination (as defined below) present on or about any Media Business Facility
as of the  Closing  Date  which  continues  to be present on or about such Media
Business Facility after the Closing Date, and (iii) any violation by the Company
of any  Environmental  Laws  applicable to the Pre-Closing  Hazardous  Materials
Activities  conducted on any Media  Business  Facility which occurs on or before
the Closing Date and which continues to occur after the Closing Date.

                                       3

<PAGE>


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


                  "Employee"  means any current,  former,  or retired  employee,
consultant, independent contractor, sales representative, officer or director of
the Company or any ERISA  Affiliate  employed or retained in connection with the
operation of the Media Business.

                  "Employee   Agreement"  means  each   employment,   severance,
consulting,  relocation,  repatriation  and  expatriation or similar  agreement,
contract or understanding,  whether written or oral,  between the Company or any
ERISA Affiliate and any Employee.

                  "Employee  Plan" means any plan,  program,  policy,  practice,
contract, agreement or other arrangement providing for compensation,  severance,
termination  pay,   deferred   compensation,   performance   awards,   stock  or
stock-related awards, fringe benefits or other employee benefits or remuneration
of any kind,  whether formal or informal,  funded or unfunded and whether or not
legally binding,  including,  without  limitation,  any "employee  benefit plan"
(within the meaning of Section 3(3) of ERISA)  which is or has been  maintained,
contributed  to, or required to be  contributed  to, by the Company or any ERISA
Affiliate (as defined  before) for the benefit of any Employee,  and pursuant to
which the Company or any ERISA Affiliate has or may have any material  Liability
or obligation, contingent or otherwise.

                  "Environmental Claim" shall mean any notice, claim, act, cause
of action or  investigation  by any third  party  alleging  potential  Liability
(including   potential  Liability  for  investigatory   costs,   cleanup  costs,
governmental  response  costs,  natural  resources  damages,  property  damages,
personal  injuries or penalties)  arising out of, based on or resulting from (A)
the presence in the environment,  or the Release,  of any Hazardous Materials or
(B) any violation, or alleged violation, of any Environmental Laws.

                  "Environmental Laws" shall mean all federal,  state, local and
foreign  laws,  statutes,  ordinances,  rules and  regulations  relating  to the
protection of human health or the environment  (including  ambient air,  surface
water,  ground  water,  land  surface  or  subsurface  strata)  including  laws,
statutes,  ordinances  and  regulations  relating  to the  Release of  Hazardous
Materials or otherwise  relating to the manufacture,  processing,  distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials.

                  "ERISA" means the Employee  Retirement  Income Security Act of
1974,  as  amended,  or  any  successor  statute  thereto,  and  the  rules  and
regulations promulgated thereunder.

                  "ERISA  Affiliate"  means any other Person (as defined  below)
under common control with the Company within the meaning of Section 414(b), (c),
(m) or (o) of the Code and the rules and regulations promulgated thereunder.

                  "Exchange Act" means the  Securities  Exchange Act of 1934, as
amended,  or any  successor  statute  thereto,  and the  rules  and  regulations
promulgated thereunder.

                  "Excluded Assets" means (i) Cash and Accounts Receivables (and
refunds  due with  respect  to the  Finished  Goods)  which  relate to the Media
Business  for sales (or  importation  with  respect  to the  Finished  Goods) of
products prior to the Closing Date, (ii) general and  administrative

                                       4

<PAGE>


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


management  information  systems of the Company  utilized by the Media Business,
(iii) any of the rights of the Company  under this  Agreement or the  Collateral
Agreements (or under any side agreement  between the Company and Komag,  entered
into on or  after  the date of this  Agreement),  (iv)  Non-Transferred  Prepaid
Assets,  (v)  Intellectual  Property of the Company (other than rights under any
contracts,  licenses  and  agreements  set forth in Section  3.11(a)(ii)  of the
Company Disclosure  Schedules),  (vi) all computers or office equipment owned or
leased by the Company and used in the Media  Business by all  Employees  who are
not Transferred Employees (as defined herein),  (vii) all purchase orders of the
Company which are not Purchase Orders set forth in Section 1.1(b) of the Company
Disclosure  Schedule  and (viii) all other  assets and  properties  set forth on
Exhibit B attached hereto.

                  "Finished  Goods" means any finished media goods  specifically
produced by the Company in  connection  with the Media  Business  which meet the
standards and specifications for the Company's Hunter disk-drive program.

                  "GAAP" means generally  accepted  accounting  principles as in
effect from time to time in the United States of America.

                  "Governmental  Entity"  means  any  government,  or  political
subdivisions thereof,  court,  tribunal,  administrative agency or commission or
any other federal,  state,  province,  county,  local or foreign governmental or
regulatory authority, instrumentality, agency or commission.

                  "Hazardous    Materials"    means    chemicals,    pollutants,
contaminants,  wastes, toxic substances,  radioactive and biological  materials,
asbestos-containing   materials  (ACM),  hazardous  substances,   petroleum  and
petroleum products or any fraction thereof, including, without limitation, those
listed pursuant to the  Comprehensive  Environmental  Response  Compensation and
Liability Act of 1980, as amended,  and the Resource  Conservation  and Recovery
Act of 1976, as amended,  or the rules or  regulations  promulgated  thereunder.
Hazardous  Materials  shall not  include  office  and  janitorial  supplies  and
products properly and safely maintained.

                  "HSR Act" means the Hart-Scott-Rodino  Antitrust  Improvements
Act of 1976, as amended,  or any successor  statute  thereto,  and the rules and
regulations promulgated thereunder.

                  "Inventory"  means  all  inventories  including  all  finished
goods,  work in progress,  stock room inventory,  packaging and raw materials of
whatever nature, wherever located.

                  "Intellectual  Property" means any or all of the following and
all rights in,  arising out of, or associated  therewith:  (i) all United States
and foreign  patents and  applications  therefor  and all  reissues,  divisions,
renewals,  extensions,  provisionals,  continuations  and  continuations-in-part
thereof,  and equivalent or similar  rights  anywhere in the world in inventions
and discoveries  ("Patents");  (ii) all inventions  (whether patentable or not),
invention disclosures,  improvements,  trade secrets,  proprietary  information,
know how,  technology,  technical data and customer lists, and all documentation
embodying or evidencing any of the foregoing;  (iii) all copyrights,  copyrights
registrations  and  applications  therefor  and all other  rights  corresponding
thereto  throughout  the world  ("Copyrights");  (iv) all mask works,  mask work
registrations and applications therefor, and

                                       5

<PAGE>


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


any equivalent or similar rights in semiconductor masks, layouts,  architectures
or topology ("Mask Works"); (v) all industrial designs and any registrations and
applications  therefor throughout the world; (vi) all trade names, logos, common
law trademarks and service marks,  trademark and service mark  registrations and
applications therefor and all goodwill associated therewith throughout the world
("Trademarks");  (vii) all databases and data collections and all rights therein
throughout  the world;  and (viii) all computer  software  including  all source
code, object code,  firmware,  development tools,  files,  records and data, all
media on which  any of the  foregoing  is  recorded;  (ix)  all  World  Wide Web
addresses,  sites  and  domain  names;  and (x) any  similar,  corresponding  or
equivalent rights to any of the foregoing anywhere in the world.

                  "knowledge" or words of similar import means, (i) with respect
to the Company, the knowledge of Charles A. Haggerty,  Michael A. Cornelius,  A.
Keith Plant,  Joseph R. Carrillo,  Ray Bukaty,  Leo Young,  Keith Goodson,  Mark
Schulte,  Jack Van Berkel,  Duston M. Williams,  Thomas Nieto,  Terry Hopp, Matt
Massengill,  Robert Parmelee,  Thomas A. Seche and Russ Krapf, and the knowledge
such Person would have if he or she had performed his or her services and duties
on behalf of such Person in the  ordinary  course of business,  consistent  with
past  practices,  in  a  reasonably  diligent  manner,  but  without  additional
investigation  or inquiry  beyond that  required for the discharge of his or her
duties in the ordinary course of business,  consistent with past practices, in a
reasonably  diligent  manner and (ii) with  respect to Komag,  the  knowledge of
Stephen C. Johnson,  William L. Potts,  Ted Siegler,  Ron Allen,  Kathy Bayless,
Betsy Lamb,  Stacey  Layzell,  Rick Austin,  Chris  Bajorek,  Ray Martin,  Allen
McCarthy,  Beth McKone,  TH Tan,  Eric Tu and Tu Chen,  and the  knowledge  such
Person would have if he or she had  performed  his or her services and duties on
behalf of such Person in the ordinary  course of business,  consistent with past
practices, in a reasonably diligent manner, but without additional investigation
or inquiry  beyond that  required for the  discharge of his or her duties in the
ordinary course of business,  consistent  with past  practices,  in a reasonably
diligent manner.

                  "Komag  Common Stock" means shares of the shares of the common
stock of Komag, par value $0.01 per share.

                  "Liability"  means any  liability,  indebtedness,  obligation,
expense, loss, damage, cost, claim, contingent liability,  deficiency,  guaranty
or  endorsement  (whether  known or unknown,  whether  asserted  or  unasserted,
whether absolute or contingent,  whether direct or indirect,  whether accrued or
unaccrued,  whether  liquidated  or  unliquidated,  and whether due or to become
due), including any liability for Taxes.

                  "Liens" means any mortgage,  pledge,  lien, security interest,
encumbrance,  charge,  claim,  defect in title or other equitable or third-party
interest.

                  "Media  Business   Facilities"  shall  mean  the  Leased  Real
Property listed in Section 3.10(a) of the Company Disclosure Schedule.

                  "Media Intellectual  Property" means any Intellectual Property
that is owned by or licensed to the Company  which is necessary to the operation
of the Media Business,  including the

                                       6

<PAGE>


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


design,  manufacture,  licensing, sale and use of the products or performance of
the services of the Media Business as it currently is conducted.

                  "Multiemployer Plan" means any Pension Plan (as defined below)
which is a "multiemployer plan" (within the meaning of Section 3(37) of ERISA).

                  "Net Book Value" means,  as to any assets,  an amount equal to
the  aggregate  cost  of such  assets  less  the  accumulated  depreciation  and
amortization of such assets.

                  "Non-Transferred  Prepaid  Assets"  means all  Prepaid  Assets
which are not Transferred Prepaid Assets.

                  "Pension  Plan" means each Employee Plan which is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA.

                  "Permitted  Liens"  means (a) Liens for current  taxes not yet
due for which  appropriate  accruals in accordance  with GAAP have been created,
(b) with respect to Leased Real Property  only,  recorded  liens,  encumbrances,
easements,  rights of way, restrictions and other conditions of record affecting
the Leased Real Property excluding,  however,  liens recorded against the Leased
Real Property or as a result of any action or inaction by the Company, (c) Liens
evidenced by UCC-1  financing  statements  recorded with respect to Leased Fixed
Assets by the  lessors of such  Leased  Fixed  Assets and which are set forth in
Section 1.1(a) of the Company Disclosure  Schedule,  and (d) Liens which will be
discharged  by the Company prior to or  concurrently  with the Closing and which
are set forth in Section 1.1(a) of the Company Disclosure Schedule.

                  "Person" means an individual, a partnership,  a corporation, a
limited liability  company,  an association,  a joint stock company,  a trust, a
joint venture,  an unincorporated  organization or a Governmental Entity (or any
department, agency or political subdivision thereof).

                  "Pre-Closing   Hazardous   Materials   Activities"  means  the
transportation,   transfer,   recycling,   storage,  use,  handling,  treatment,
manufacture, removal, investigation, remediation, Release, sale, or distribution
of any  Hazardous  Materials,  or any  product  or  waste  containing  Hazardous
Materials  conducted on any Media Business Facility prior to the Closing Date by
or at the direction of the Company or otherwise  occurring  prior to the Closing
Date in connection with or to benefit the Media Business.

                  "Pre-Existing  Contamination"  means the presence on or before
the Closing Date of any Hazardous  Materials in the soil,  groundwater,  surface
water,  air or building  materials of any Media Business  Facility which results
from  Pre-Closing  Hazardous  Materials  Activities or for which the Company has
contractually assumed liability.

                  "Prepaid  Assets" means prepaid  rentals,  security  deposits,
lease payments,  prepaid sales tax,  utilities,  payroll obligations paid by the
Company  with  respect to periods  after the  Closing  Date,  and other  prepaid
expenses  of the  Company  relating  to the Media  Business  including,  without

                                       7

<PAGE>


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


limitation,  software  licenses,  software  maintenance  fees and property taxes
relating to the fixed assets included within the Acquired Assets.

                  "Purchase  Orders"  means any  purchase  orders of the Company
relating  to the Media  Business  identified  in Section  1.1(b) of the  Company
Disclosure Schedule.

                  "Release"  means  any  release,   spill,  emission,   leaking,
pumping,  injection,  deposit,  disposal,  discharge,   dispersal,  leaching  or
migration into the indoor or outdoor environment, including, without limitation,
the movement of Hazardous  Materials  through ambient air, soil,  surface water,
groundwater, wetlands, land or subsurface strata.

                  "Securities Act" means the Securities Act of 1933, as amended,
or any successor  statute  thereto,  and the rules and  regulations  promulgated
thereunder.

                  "Seller's  Retained   Environmental   Liabilities"  means  any
Liability,  obligation,  judgment,  penalty,  fine,  cost or expense,  including
without  limitation  the cost or expense of fulfilling any  Environmental  Laws,
duty to  investigate,  remediate,  remove,  or take other action with respect to
Hazardous Materials,  or duty to indemnify,  defend or reimburse any Person with
respect  to:  (i)  Pre-Existing  Contamination;  (ii)  Continuing  Environmental
Conditions;  (iii) the  migration at any time prior to or after the Closing Date
of  Pre-Existing  Contamination  to  any  other  real  property,  or  the  soil,
groundwater,  surface  water,  air  or  building  materials  thereof;  (iv)  any
Pre-Closing  Hazardous Materials  Activities;  (v) the exposure of any Person to
Pre-Existing  Contamination  or to Hazardous  Materials in the course of or as a
consequence of any Pre-Closing Hazardous Materials Activities, without regard to
whether any health effect of the exposure has been  manifested as of the Closing
Date; (vi) the violation of any Environmental Laws by the Company or its agents,
employees, predecessors in interest, contractors, invitees or licensees prior to
the Closing  Date or in  connection  with any  Pre-Closing  Hazardous  Materials
Activities  prior to the  Closing  Date;  and (vii) any  actions or  proceedings
brought or threatened by any third party with respect to any of the foregoing.

                  "Transferred  Prepaid Assets" means (i) all Prepaid Assets set
forth on the Closing NBV Statement  ("NBV Prepaid  Assets") and (ii) all Prepaid
Assets listed on Exhibit C attached  hereto  ("Cash  Prepaid  Assets").

                  (b) The following terms are defined in the following  sections
of this Agreement:

                      Terms                                          Sections
                      -----                                          --------
                      Acquisition                                    Preamble
                      Agreement                                      Preamble
                      Assignment and Assumption Agreement            7.2(g)
                      Assumed Liabilities                            2.2(a)
                      Auditors' Letter                               2.3(b)(iv)
                      Authorizations                                 3.14
                      Balance Sheet Date                             3.6(a)
                      Bill of Sale                                   7.2(h)

                                       8

<PAGE>


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


                      Terms                                          Sections
                      -----                                          --------
                      Cash Prepaid Assets Net Book Value             2.3(a)(ii)
                      Charter                                        3.1
                      Closing                                        2.5(a)
                      Closing Date                                   2.5(a)
                      Closing AA Net Book Value                      2.3(b)(iii)
                      Closing CPA Net Book Value                     2.3(b)(iv)
                      COBRA                                          6.8(d)
                      Company                                        Preamble
                      Company Disclosure Schedule                    Article III
                      Company Indemnifiable Claims                   8.2(b)
                      Company Indemnitees                            8.2(b)
                      Company SEC Documents                          3.6(a)
                      Conflict                                       3.4
                      Contract                                       3.12(b)
                      Damages                                        8.2
                      Disposal Sites                                 3.22(e)
                      DOL                                            3.20(b)
                      Environmental Covenants                        8.5
                      Environmental Permits                          3.22(c)
                      Escrow Agreement                               2.7(b)
                      Final Closing NBV Statement                    2.3(b)(iv)
                      Indemnifiable Claim                            8.4(a)
                      Indemnifying Party                             8.4(a)
                      Indemnitee                                     8.3
                      Joint Development Agreement                    7.2(j)
                      Komag                                          Preamble
                      Komag Common Stock                             Preamble
                      Komag Disclosure Schedule                      Article III
                      Komag Financial Statements                     4.6
                      Komag Indemnifiable Claim                      8.2(a)
                      Komag Indemnitee                               8.2(a)
                      Komag SEC Documents                            4.6
                      Labor Representatives                          3.12(a)
                      Leased Fixed Assets                            3.10(b)
                      Leased Real Property                           3.10(a)
                      License Agreement                              7.2(k)
                      Media Business                                 Preamble
                      NBV Accounting Procedures                      2.3(c)(i)
                      Non-Offered Employees                          6.8(c)
                      Non-Transferable Asset                         2.7(a)
                      Note Amount                                    2.3(a)(i)

                                       9

<PAGE>


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


                      Terms                                          Sections
                      -----                                          --------
                      Offered Employees                              6.8(a)
                      Officer's Certificate                          8.4
                      Original Sale Shares                           2.3(c)(ii)
                      Original Note Amount                           2.3(c)(iii)
                      Outside Auditors                               2.3(b)(iv)
                      Parties                                        Preamble
                      Preliminary Closing NBV Statement              2.3(b)(iii)
                      Promissory Note                                2.3(a)(i)
                      Purchase Price                                 2.3(a)
                      Registration Rights Agreement                  7.2(l)
                      Rental Fees                                    2.4
                      Retained Liabilities                           2.2(b)
                      Revised AA Net Book Value                      2.3(b)(iv)
                      Revised CPA Net Book Value                     2.3(b)(iv)
                      Sale Shares                                    2.3(a)(i)
                      Sales Tax                                      2.2(a)
                      SEC                                            3.6(a)
                      Share Amount                                   2.3(a)(i)
                      Share Amount Cap                               2.3(a)(i)
                      Share Price                                    2.3(a)(i)
                      Signing NBV Statement                          2.3(b)(i)
                      Tax                                            3.8(a)
                      Tax Returns                                    3.8(b)
                      Threshold Amount                               8.3
                      Transferred Employees                          6.8(a)
                      Utility Charges                                2.4
                      Volume Purchase Agreement                      7.2(i)
                      WARN Act                                       6.8(c)


                                   ARTICLE II

                          PURCHASE AND SALE TRANSACTION

         2.1 Purchase and Sale of Acquired  Assets.  On and subject to the terms
and conditions of this Agreement, Komag agrees to purchase from the Company, and
the Company agrees to sell,  transfer,  assign,  convey and deliver to Komag, at
the  Closing,  all of the  Company's  rights,  title and  interest in and to the
Acquired  Assets,  free and clear of any and all  Liens,  other  than  Permitted
Liens.

         2.2 Assumption of Liabilities.

                  (a) On and  subject  to  the  terms  and  conditions  of  this
Agreement and except as otherwise  set forth herein,  Komag agrees to assume and
become  responsible  for only the  following

                                       10

<PAGE>


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


Liabilities of the Company:  (i) Liabilities under all Leased Real Property only
to the extent the rights of such real  property  leases  have been  assigned  to
Komag and to the extent such  Liabilities  first arise or accrue on or after the
Closing Date, (ii) Liabilities under all equipment leases with Comdisco, Leasing
Solutions, Inc. and AT&T Corp. which are used or utilized in connection with the
Media Business only to the extent the rights of such equipment  leases have been
assigned to Komag and to the extent such Liabilities first arise or accrue on or
after the Closing Date,  (iii)  Liabilities  under all agreements,  contracts or
Purchase  Orders with all vendors and suppliers  which have been entered into in
the ordinary course of business, consistent with past practices, relating to the
Media  Business only to the extent the rights of such  agreements,  contracts or
purchase  orders have been assigned to Komag and to the extent such  Liabilities
first arise or accrue on or after the Closing Date, (iv)  Liabilities  under all
third party licenses or other similar  agreements related to the Acquired Assets
only to the extent the rights  under such  licenses or similar  agreements  have
been assigned to Komag and to the extent such Liabilities  first arise or accrue
on or after the  Closing  Date,  (v)  Liabilities  under  all other  agreements,
contracts or Purchase  Orders which have been marked with an asterisk in Section
3.12(a) of the Company  Disclosure  Schedule only to the extent the rights under
such agreements, contracts or purchase orders have been assigned to Komag and to
the extent such Liabilities  first arise or accrue on or after the Closing Date,
(vi) Liabilities of any of the Parties for any sales taxes, use taxes,  transfer
taxes, recording fees and similar taxes, charges, fees or expenses ("Sales Tax")
that may become  payable  by reason of or in  connection  with the  Acquisition,
(vii) Liabilities of any of the Parties for any federal, state, local or foreign
Taxes,  duties,  withholdings or other assessments imposed on any of the Parties
as a  result  of  the  movement  by  Komag  or  any  of  its  Affiliates  of the
manufacturing  lines of the Media  Business to Malaysia  following  the Closing,
(viii)  Liabilities which may be sustained,  suffered or incurred under the WARN
Act as specifically allocated to Komag under Section 6.8(c) and (ix) Liabilities
arising  from  the  operation  of  the  Media  Business  following  the  Closing
(together, the "Assumed Liabilities").

                  (b) Komag will not assume or have any responsibility, however,
with respect to any Liability of the Company not included  within the definition
of Assumed  Liabilities,  and such Liabilities  shall be retained by the Company
("Retained  Liabilities").  Without limiting the generality of the foregoing, it
is expressly agreed that Komag shall not assume,  and the definition of Retained
Liabilities  shall include,  any and all (i) Liabilities  for employee  benefits
including,  without  limitation,   vacation  pay  and  similar  accruals,  COBRA
benefits,  severance and  termination  pay owed to all Employees not employed by
Komag  immediately  following  the  Closing  Date,  (ii)  Liabilities  under any
agreements, contracts or commitments of which the Company is a party or by which
the  Company is bound that are not  assigned  to Komag,  (iii)  Liabilities  for
indebtedness of the Company,  (iv)  Liabilities for Taxes due and payable by the
Company  including Taxes with respect to the Media Business and the ownership of
the Acquired  Assets or otherwise for periods  ending on or prior to the Closing
Date (other than Sales Tax that may become payable by reason of or in connection
with the  Acquisition,  Taxes which are the obligation of Komag pursuant to, and
to the extent set forth in,  Section  2.4,  and such other  Taxes  described  in
Section   2.2(a)(vii)),   (v)  Liabilities  for  Accounts   Payable  or  similar
obligations  incurred by the Company in  connection  with the  operation  of the
Media Business on or prior to the Closing, (vi) Seller's Retained  Environmental
Liabilities,  (vii) Liabilities for any claims or litigation (including, without
limitation,  those relating to any infringement of Intellectual  Property) which
are pending or threatened  against the Company or any

                                       11

<PAGE>


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


of the  Acquired  Assets on or prior to the Closing Date or which are brought or
threatened  to be brought  against the Company or the Acquired  Assets after the
Closing  Date,  but which are based upon facts or  circumstances  involving  the
operation of the Media  Business prior to the Closing Date,  (viii)  Liabilities
which may be sustained,  suffered or incurred under the WARN Act as specifically
allocated to the Company under Section 6.8(c); and (ix) Liabilities  relating to
the Excluded Assets.

         2.3 Purchase Price for Acquired Assets; Post Closing Adjustment.

                  (a) Purchase Price. In  consideration  for the purchase of the
Acquired  Assets,  Komag  agrees to pay to the Company at the Closing a purchase
price payable in the following amounts (the "Purchase Price") as follows:

                           (i)  With  respect  to  the  purchase  of  all of the
Acquired Assets (other than the Finished Goods and the Cash Prepaid Assets),

                                    (1) Komag  shall  deliver to the  Company at
the Closing [***] shares of unregistered Komag Common Stock (the "Sale Shares");
and

                                    (2) Komag  shall  deliver to the  Company at
the Closing a promissory  note,  substantially  in the form  attached  hereto as
Exhibit D (the "Promissory  Note"),  in the aggregate  principal amount equal to
$[***].

                           (ii) With respect to the purchase of the Cash Prepaid
Assets,  Komag  shall  deliver to the  Company at the  Closing an amount in cash
equal to the [***].

                           (iii) With  respect to the  purchase of the  Finished
Goods,  Komag shall  deliver to the Company no later than [***] (or such earlier
date as the Parties may mutually agree) an amount in cash equal to $[***], which
the parties  acknowledge and agree  represents  [***] as of the Closing Date for
the Finished Goods.

                  (b) NBV Statements.

                           (i) The  Company has  delivered  to Komag a statement
summarized by financial  statement  caption of the Acquired Assets (the "Signing
NBV Statement") as well as supporting  detail  schedules as of February 20, 1999
which include (A) each item included in the Fixed  Assets,  the Media  Inventory
(excluding  Finished  Goods) and the NBV Prepaid Assets  (excluding Cash Prepaid
Assets), (B) the cost of each of such items of Fixed Assets, the Media Inventory
(excluding  Finished  Goods) and the NBV Prepaid Assets  (excluding Cash Prepaid
Assets) when  purchased by the Company,  (C) the  accumulated  depreciation  and
amortization  applicable to each item of the Fixed Assets,  the Media  Inventory
(excluding  Finished  Goods) and the NBV Prepaid Assets  (excluding Cash Prepaid
Assets),  (D) a detailed  listing of the cost of the Finished Goods and the Cash
Prepaid  Assets  and (E) the AA Net Book Value and the Cash  Prepaid  Assets Net
Book Value.

                                       12

<PAGE>


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


                           (ii) The  Company  represents  and  warrants to Komag
that the Signing NBV  Statement  has been prepared from the books and records of
the Company in accordance with GAAP,  consistent with the accounting  principles
used in the preparation of the Company's  annual audited  financial  statements.
The Company has, and has requested its internal  accountants  to, make available
to Komag and its accountants  copies of all customary  accounting and other work
papers in their respective  possession that were prepared in connection with the
preparation of the Signing NBV Statement.

                           (iii) On the Closing Date,  the Company shall deliver
to Komag an updated version of the Signing NBV Statement  ("Preliminary  Closing
NBV Statement") setting forth the items identified in subsection (b)(i) above as
of the Closing Date including  calculation of the AA Net Book Value ("Closing AA
Net Book Value") and the Cash Prepaid  Assets Net Book Value  ("Closing  CPA Net
Book Value"),  revised in each case, if appropriate,  to include any adjustments
agreed upon between the Parties since the date of the Signing NBV Statement. The
Preliminary  Closing NBV Statement shall be accompanied by a certificate  signed
by a duly  authorized  officer of the Company  certifying as to the accuracy and
completeness  of the  Preliminary  Closing NBV Statement as of the Closing Date.
The  Preliminary  Closing NBV  Statement  shall be  prepared  from the books and
records of the Company in accordance  with GAAP,  consistent with the accounting
principles  used in the  preparation of the Company's  annual audited  financial
statements. The Company will, and will request its internal accountants to, make
available to Komag and its  accountants  copies of all customary  accounting and
other  work  papers  in  their  respective  possession  that  were  prepared  in
connection with the preparation of the Preliminary Closing NBV Statement.

                           (iv) Within thirty (30)  calendar days  following the
Closing,  the Company  shall  submit to Komag in writing any and all changes and
adjustments  to the  Preliminary  Closing  NBV  Statement  necessary  to reflect
properly  the actual AA Net Book Value and the Closing  Prepaid  Assets Net Book
Value, each as of the Closing Date (the "Final Closing NBV Statement"),  revised
in each case, if appropriate, to include any adjustments agreed upon between the
Parties since the date of the Preliminary Closing NBV Statement, together with a
special  purpose report  prepared by the Company's  outside  auditors  ("Outside
Auditors")  which shall confirm that the  calculations  of the AA Net Book Value
and the Closing CPA Net Book Value set forth on the Final  Closing NBV Statement
have been  accurately  derived  from,  and tied to, the books and records of the
Company ("Special Purpose Report"). In preparing the Special Purpose Report, the
Outside  Auditors shall use the procedures set forth in that certain letter (the
"Auditors'  Letter")  from the Outside  Auditors  to the Company  dated April 8,
1999,  a copy of which has been  provided  to  Komag.  The  reasonable  fees and
expenses of the Outside Auditors shall be borne by Komag. The revision of the AA
Net Book Value or the Closing CPA Net Book Value,  as  applicable,  set forth on
the Final Closing NBV Statement  shall be deemed the "Revised AA Net Book Value"
or the "Revised CPA Net Book Value", as applicable.

                  (c)  Determination  of Cash  Prepaid  Assets  Net Book  Value;
Adjustment to Cash Portion of Purchase  Price.  The Cash Prepaid Assets Net Book
Value  utilized  in  calculating  the  amount of cash to be paid by Komag to the
Company  following  the  Closing  shall be deemed to be the Closing CPA Net Book
Value; provided that, following the Closing, if the Cash Prepaid Assets

                                       13

<PAGE>


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


Net Book  Value is  revised  pursuant  to  Sections  2.3(b)(iv)  hereof and such
Revised CPA Net Book Value is less than the Closing CPA Net Book Value, then the
Company shall  promptly,  and in no event more than ten (10) business days after
providing Komag the Final Closing NBV Statement,  pay to Komag an amount in cash
equal to the  difference  between the Closing CPA Net Book Value and the Revised
CPA Net Book Value. No adjustment to the cash portion of the purchase price will
be made if the  Revised  CPA Net Book  Value is  equal  to or  greater  than the
Closing CPA Net Book Value.

                  (d)  Acknowledgment  regarding AA Net Book Value.  The Parties
acknowledge  and agree that the AA Net Book Value and  Closing AA Net Book Value
set  forth  on  the  Signing  NBV  Statement  and  the  Closing  NBV  Statement,
respectively, were utilized to determine the portion of the Purchase Price to be
paid in consideration  for the Acquired Assets (excluding the Finished Goods and
Cash  Prepaid  Assets),  which  the  Parties  acknowledge  to  be  approximately
$65,000,000.  The Parties  further  acknowledge and agree that, if the actual AA
Net Book Value is less than  $65,000,000,  Komag will have  suffered  damages or
losses for which Komag is entitled to seek  indemnification  pursuant to Article
VIII of this  Agreement in such amount that the actual AA Net Book Value is less
than the $65,000,000.

         2.4 Transfer Taxes. Komag shall pay and promptly discharge when due any
and all Sales Taxes that may become  payable by reason of or in connection  with
the  Acquisition;  provided that the Company shall use  commercially  reasonable
efforts to assist  Komag in  minimizing  any  Liability  for such Sales Tax. The
amount of Sales Tax  collectible  from Komag by the Company  shall be reduced by
the amount of the  deduction  to which the  Company is  entitled  for  "Tax-paid
purchases  resold"  as defined in its  California  Sales and Use Tax  Regulation
Section 1707, with respect to the Acquired  Assets.  The Company and Komag shall
prorate  between them (a) secured and unsecured  property  Taxes on all Acquired
Assets, (b) sewer and water rentals and utility charges applicable to the Leased
Real Property ("Utility Charges") and (c) rentals, fees, assessments and similar
charges with respect to the agreements, contracts, licenses and permits included
in the Acquired Assets ("Rental Fees"). In the case of taxable or other relevant
payment  periods  commencing  on or before the Closing Date and ending after the
Closing Date, secured and unsecured  property Taxes,  Utility Charges and Rental
Fees  which  relate to any  period on or before  the  Closing  Date or after the
Closing Date, as  applicable,  shall be in the case of Utility  Charges,  Rental
Fees and secured and unsecured property Taxes (that are not based on net income,
gross  income,  sales,  premiums or gross  receipts),  the total  amount of such
Utility  Charges,  Rental Fees and secured and unsecured Taxes for the period in
question multiplied by a fraction,  the numerator of which is the number of days
in the portion of such period  through the Closing Date or after such date,  and
the denominator of which is the total number of days in such period.

         2.5 The Closing.

                  (a) Closing.  The closing of the transactions  contemplated by
this Agreement (the "Closing") shall take place at the offices of Wilson Sonsini
Goodrich & Rosati, Professional Corporation, in Palo Alto, California commencing
at 9:00 a.m. local time on the second business day following the satisfaction or
waiver of all  conditions to the  obligations  of the Parties to consummate

                                       14

<PAGE>


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


the  transactions  contemplated  hereby (other than  conditions  with respect to
actions the  respective  Parties will take at the Closing  itself) or such other
date as the Parties may mutually determine (the "Closing Date").

                  (b) Deliveries at the Closing. At the Closing, (i) the Company
will  deliver  to Komag the  various  certificates,  instruments  and  documents
referred  to  in  Section  7.2  below  and  will  execute  and  acknowledge  (if
appropriate) and deliver such other  instruments of sale,  transfer,  conveyance
and assignment as Komag and its counsel may reasonably request;  (ii) Komag will
deliver to the Company  the  various  certificates,  instruments  and  documents
referred  to  in  Section  7.3  below  and  will  execute  and  acknowledge  (if
appropriate) and deliver such other instruments of assumption as the Company and
its counsel may reasonably request;  and (iii) Komag will deliver to the Company
stock  certificates  representing  the Sale Shares in the amount  determined  in
accordance with Section 2.3 above.

         2.6 Taking of Necessary Action;  Further Action.  If, at any time after
the Closing Date,  any further action is necessary or desirable to carry out the
purposes  of this  Agreement  and to vest  Komag  with  full  right,  title  and
possession to the Acquired Assets, the officers and directors of the Company are
fully  authorized  in the name the Company or otherwise to take,  and will take,
all such lawful and necessary and/or desirable action.

         2.7 Nonassignability and Consents.

                  (a) To the extent that any asset which would  otherwise  be an
Acquired Asset, or any claim,  right or benefit arising  thereunder or resulting
therefrom,  is not capable of being sold,  conveyed,  assigned,  transferred  or
delivered  without the approval,  consent or waiver of any Person (including any
Governmental  Entity)  other  than the  Company,  or if such  sale,  conveyance,
assignment,  transfer or delivery or  attempted  sale,  conveyance,  assignment,
transfer or delivery would constitute a breach or termination right thereof or a
violation of any law, decree,  order,  regulation or other  governmental  edict,
except  as  expressly  otherwise  provided  herein,  this  Agreement  shall  not
constitute a sale, conveyance,  assignment,  transfer or delivery thereof, or an
attempted sale, conveyance,  assignment,  transfer or delivery thereof. Any such
assets shall be a "Non-Transferable Asset."

                  (b) The  Company  shall  not be  obligated  to  sell,  assign,
transfer,  convey  or  deliver,  or  cause to be  sold,  assigned,  transferred,
conveyed or delivered,  to Komag,  and Komag shall not be obligated to purchase,
any  Non-Transferable  Asset  without first having  obtained all such  consents,
approvals  or  waivers or removed or  eliminated  any such  potential  breach or
termination  of  any  contract,  agreement  or  other  instrument  or  potential
violation of any law, decree, order,  regulation or other governmental edict. To
the extent that at the Closing there are any  Non-Transferable  Assets, from and
after the Closing,  the Parties will  cooperate,  at the Company's  expense,  to
effect a lawful and  mutually  acceptable  arrangement  under  which Komag would
obtain the benefit of such  Non-Transferable  Asset,  including  subcontracting,
sub-licensing,  or sub-leasing such Non-Transferable  Asset to Komag, and Komag,
so long as such benefit is so provided, would satisfy or perform any Liabilities
or obligations under or in connection with such Non-Transferable Asset which may
arise

                                       15

<PAGE>


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


following the Closing which would not otherwise be a Retained  Liability if such
Non-Transferable  Asset were an Acquired Asset. From and after the Closing Date,
the Company will promptly pay to Komag when received all monies  received by the
Company  under any Acquired  Asset or any claim or right or any benefit  arising
thereunder,  except  to the  extent  the  same  represents  an  Excluded  Asset.
Notwithstanding  the foregoing,  nothing contained herein shall in anyway affect
the rights or  obligations  of the Parties under that certain  Escrow  Agreement
dated February 19, 1999 ("Escrow Agreement") with respect to the distribution of
the Property (as defined therein) in accordance with the terms thereof.

                  (c) At any time after Closing, if any  Non-Transferable  Asset
becomes capable of being sold, assigned,  transferred,  conveyed or delivered to
Komag, or if the benefit can be provided to Komag without the required  consent,
approval or waiver of any third party, and if such sale,  assignment,  transfer,
conveyance or delivery,  or the provision of such benefit would not constitute a
breach  or  termination  of any  agreement,  contract  or  other  instrument  or
violation of law, decree,  order,  regulation or other governmental edict, then,
at such time, the Company shall sell,  assign,  transfer,  convey and deliver to
Komag or cause to be sold,  assigned,  transferred,  conveyed  and  delivered to
Komag,  or provide to Komag the  benefit of such asset and,  if such asset is an
agreement,  contract,  instrument,  license or permit,  Komag  shall  assume the
Liabilities  and  obligations  of the  Company  thereunder  to the  extent  such
Liabilities  and  obligations  arise  from  the  performance  of the  agreement,
contract,  instrument,  license or permit from and after the  effective  date of
such assignment and to the extent such  Liabilities  and  obligations  would not
otherwise  be  Retained  Liabilities  if  such  Non-Transferable  Asset  were an
Acquired Asset.

                  (d)  Notwithstanding  anything  contained in this Agreement to
the  contrary,  in  addition  to (and not in lieu of) any of the  other  rights,
remedies and  obligations  of the Parties  hereunder,  (i) in the event that the
Company is unable to obtain  prior to the Closing any of the  consents,  waivers
and approval  referenced in Section 6.5 of this  Agreement  (including,  without
limitation, under any contracts set forth in Section 3.4, 3.5, 3.10(b), 3.10(c),
3.11(a)(ii),  3.12(a) and 3.14 of the Company Disclosure  Schedules) as required
pursuant to this Agreement, the Company shall, within thirty (30) days following
the Closing Date, obtain all such consents,  waivers and approvals,  in form and
substance reasonably  acceptable to Komag and (ii) in the event that the Company
is unable to discharge or remove prior to the Closing any of the Liens set forth
in Section 1.1(a) of the Company  Disclosure  Schedules as required  pursuant to
this Agreement, the Company shall, within thirty (30) days following the Closing
Date,  have all such Liens  discharged  and/or  removed  in a manner  reasonably
acceptable to Komag.


                                  ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company represents and warrants to Komag as of the date hereof, and
as of the  Closing  Date,  except as  specifically  set forth in the  disclosure
schedule  accompanying  this  Agreement  (referring to the  appropriate  section
numbers) (the "Company Disclosure Schedule"), as follows:

                                       16

<PAGE>


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


         3.1 Organization.  The Company is a corporation duly organized, validly
existing  and in good  standing  under  the laws of the State of  Delaware.  The
Company has the corporate  power and authority to own the Acquired Assets and to
carry on the Media  Business as now being  conducted and as  contemplated  to be
conducted.  The Company 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  could have a material  adverse effect on the Acquired Assets
or the Media  Business.  The Company has delivered to Komag and its counsel true
and correct copies of its Certificate of  Incorporation  and Bylaws,  which have
not been amended since November 25, 1998 (together, the "Charter").

         3.2  Media  Business  Contained  in the  Company.  All  of the  assets,
properties  and  rights  under  agreements,   contracts,   licenses  and  leases
constituting the Acquired Assets, and used by or utilized in connection with the
Media Business,  are owned,  leased,  held or licensed by the Company and not by
any subsidiary or Affiliate thereof.

         3.3  Authority.  The  Company  has all  requisite  corporate  power and
authority to enter into this Agreement and each of the Collateral  Documents and
to consummate the transactions  contemplated  hereby and thereby.  The execution
and  delivery of this  Agreement  and each of the  Collateral  Documents  by the
Company,  and the  consummation  of the  transactions  contemplated  hereby  and
thereby by the Company,  have been duly  authorized by all  necessary  corporate
action on the part of the  Company.  This  Agreement  has been,  and each of the
Collateral  Documents  will be at Closing,  duly  executed and  delivered by the
Company and, assuming the due authorization  execution and delivery by the other
parties hereto and thereto,  upon execution,  will constitute  valid and binding
obligations of the Company,  enforceable  against the Company in accordance with
their respective terms,  subject to the laws of general application  relating to
bankruptcy,  insolvency  and the relief of debtors and to rules of law governing
specific performance, injunctive relief or other equitable remedies.

         3.4 No Conflict.  The execution and delivery of this Agreement and each
of the Collateral Documents by the Company does not, and the consummation of the
transactions  contemplated  hereby and thereby by the Company will not, conflict
with, or result in any violation of, or default under (with or without notice or
lapse of time, or both), or give rise to a right of  termination,  cancellation,
modification or acceleration of any obligation or loss of any benefit under (any
such event, a "Conflict") (a) any provision of the Charter,  (b) any Contract or
any other mortgage, indenture, lease, contract or other agreement or instrument,
permit, concession,  franchise or license to which any of the Acquired Assets is
subject  or by which any of the  Acquired  Assets are  bound,  (c) any  material
mortgage,  indenture, lease, contract or other agreement or instrument,  permit,
concession, franchise or license to which the Company is subject or by which the
Company is bound or (d) any judgment,  order, decree,  statute,  law, ordinance,
rule or regulation  applicable to the Company or the Acquired Assets,  assuming,
in each case, compliance with (x) any applicable requirements under the HSR Act,
(y) any  applicable  requirements  under  the  Exchange  Act and (z) such  other
matters set forth in Section 3.4 of the Company Disclosure Schedule.

                                       17

<PAGE>


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


         3.5 Consents. No consent,  waiver, approval, order or authorization of,
or  registration,  declaration  or filing with, any  Governmental  Entity or any
other Person,  including a party to any agreement with the Company (so as not to
trigger  any  Conflict),  is  required  by or with  respect  to the  Company  in
connection  with the  execution  and  delivery of this  Agreement  or any of the
Collateral Documents or the consummation of the transactions contemplated hereby
or thereby by the Company, except for such consents, waivers, approvals, orders,
authorizations,  registrations,  declarations and filings (a) as may be required
under  the HSR  Act,  (b) as may be set  forth  in  Section  3.5 of the  Company
Disclosure  Schedule or (c) which, if not obtained or made, would not materially
impair the ability of the Company to consummate the transactions contemplated by
the Agreement and the Collateral Documents.

         3.6 Financial Matters.

                  (a) The Company has furnished or made  available to Komag true
and complete copies of all reports or registration  statements  filed by it with
the U.S.  Securities and Exchange Commission (the "SEC") under the Exchange Act,
for all periods  subsequent to December 27, 1997,  all in the form so filed (all
of the foregoing being collectively referred to as the "Company SEC Documents").
As of their respective  filing dates, the Company SEC Documents  complied in all
material  respects  with the  requirements  of the Exchange Act, and none of the
Company SEC  Documents  contained  any untrue  statement  of a material  fact or
omitted to state a material fact necessary to make the statements  made therein,
in light of the circumstances in which they were made, not misleading, except to
the extent corrected by a subsequently filed Company SEC Document.

                  (b) The Signing NBV  Statement has been,  and the  Preliminary
Closing NBV Statement and Final  Closing NBV Statement  shall be,  prepared from
the accounting  books and records of the Company.  The Signing NBV Statement has
been, and the Preliminary  Closing NBV Statement and Final Closing NBV Statement
shall be,  prepared in  accordance  with GAAP,  consistent  with the  accounting
principles  used in the  preparation of the Company's  annual audited  financial
statements.  The Signing NBV Statement sets forth,  and the Preliminary  Closing
NBV Statement and the Final  Closing NBV  Statement  shall set forth,  as of the
date  indicated  therein,  a true and accurate  summary by  financial  statement
caption as well as  supporting  detail  schedules  which  include  (A) each item
included in the Fixed Assets, the Media Inventory (excluding Finished Goods) and
the NBV Prepaid Assets (excluding Cash Prepaid Assets),  (B) the cost of each of
such items of Fixed Assets, the Media Inventory  (excluding  Finished Goods) and
the NBV Prepaid  Assets  (excluding  Cash Prepaid  Assets) when purchased by the
Company,  (C) the accumulated  depreciation and amortization  applicable to each
item of the Fixed Assets, the Media Inventory (excluding Finished Goods) and the
NBV Prepaid Assets  (excluding Cash Prepaid  Assets),  (D) a detailed listing of
the cost of the Finished  Goods and the Cash  Prepaid  Assets and (E) the AA Net
Book Value and the Cash Prepaid Assets Net Book Value.  The balance sheet of the
Company,  including the notes thereto, included in the Company's Form 10-Q filed
with the SEC for the period ended  December 26, 1998 (the "Balance  Sheet Date")
complies  as to  form  in  all  material  respects  with  applicable  accounting
requirements  of the Exchange Act, and with the published  rules and regulations
of the SEC with  respect  thereto,  has been  prepared in  accordance  with GAAP
(except for

                                       18

<PAGE>


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


fiscal year-end  adjustments)  and presents fairly in all material  respects the
financial position of the Company as of the date indicated therein.

         3.7 No Changes.  Since the Balance  Sheet Date,  except as set forth in
Section 3.7 of the Company Disclosure Schedule,  there has not been, occurred or
arisen any:

                  (a)  transaction  related to or otherwise  affecting the Media
Business,  except in the  ordinary  course  of  business,  consistent  with past
practices;

                  (b)  expenditure or commitment for  expenditure by the Company
related to or otherwise  affecting  the Media  Business  exceeding  $500,000 per
transaction  except to the extent such expenditure or commitment for expenditure
has been previously approved in writing by Komag;

                  (c) labor trouble or claim of wrongful  discharge of which the
Company has  received  written  notice or of which the Company is aware or other
unlawful labor practice or action  relating to or otherwise  affecting the Media
Business;

                  (d) change in accounting  methods or practices  (including any
change in depreciation or amortization policies or rates) by the Company;

                  (e) revaluation by the Company of any of the Acquired  Assets,
other than  depreciation and amortization as required by GAAP which is reflected
on the Signing NBV Statement;

                  (f) increase in the salary or other compensation payable or to
become  payable by the  Company to any of its  officers,  employees  or advisors
engaged in the Media Business or otherwise expected to become any employee of or
advisor to Komag as a result of the Acquisition, or the declaration,  payment or
commitment or obligation of any kind for the payment,  by the Company of a bonus
or other additional  salary or compensation to any such Person,  except, in each
case, in the ordinary course, consistent with past practices;

                  (g) sale,  lease,  license or other  disposition of any of the
assets  or  properties  of any of the  Acquired  Assets,  except  sales of Media
Inventory in the ordinary course of business, consistent with past practices;

                  (h) amendment or termination or violation of any  distribution
agreement or any material contract,  agreement,  Environmental  Permit, lease or
license to which the Company is a party which  relates to the Media  Business or
by which any of the  Acquired  Assets is bound,  other than  termination  by the
Company  pursuant  to the terms  thereof  in the  ordinary  course of  business,
consistent with past practices;

                  (i) loan by the Company to any  Transferred  Employees,  other
than advances to Transferred  Employees for travel and business  expenses in the
ordinary course of business, consistent with past practices;

                                       19

<PAGE>


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


                  (j) waiver or release of any material  right or claim  arising
from or related to the Media Business or the Acquired Assets;

                  (k) commencement,  notice or, to the knowledge of the Company,
threat of commencement of any lawsuit or proceeding  against or investigation of
the Company or its affairs  arising from or related to the Media Business or any
of the Acquired Assets;

                  (l) notice of any claim of  ownership  by a third party of any
Media  Intellectual  Property or, notice of  infringement  by the Company in the
operation  of the Media  Business  of any third  party's  intellectual  property
rights;

                  (m) any event or condition of any character  that has or could
be reasonably  expected to have a material adverse effect on the Acquired Assets
or the Media Business; or

                  (n)  negotiation  or agreement by the Company to do any of the
things  described  in the  preceding  clauses  (a)  through  (l) (other  than by
negotiations  with Komag and their  representatives  regarding the  transactions
contemplated  by this Agreement or the  Collateral  Documents and acts otherwise
permitted by such clauses (a) through (l)).

         3.8 Tax Matters.

                  (a) Definition of Taxes.  For the purposes of this  Agreement,
"Tax" or, collectively, "Taxes," means (i) any and all federal, state, province,
local and foreign taxes,  assessments and other  governmental  charges,  duties,
impositions and Liabilities,  wherever imposed,  including,  without limitation,
taxes based upon or measured by gross receipts,  income, profits, sales, use and
occupation,  and  value  added,  ad  valorem,  goods  and  services,   transfer,
franchise,  withholding,  payroll,  recapture,  employment,  excise and property
taxes, together with all interest,  penalties and additions imposed with respect
to such  amounts;  (ii) any Liability for the payment of any amounts of the type
described  in  clause  (i) as a  result  of  being a  member  of an  affiliated,
consolidated,  combined or unitary group for any period; and (iii) any Liability
for the payment of any amounts of the type  described in clause (i) or (ii) as a
result of any express or implied  obligation to indemnify any other Person or as
a result of any obligations  under any agreements or arrangements with any other
Person with respect to such amounts and  including  any Liability for taxes of a
predecessor entity.

                  (b) To the  extent a failure to do so would  adversely  impact
Komag,  the Media  Business,  the Acquired Assets or Komag's use of the Acquired
Assets,  (a) the Company has timely filed within the time period for filing,  or
any  extension  granted  with respect  thereto,  all  required  federal,  state,
province,  local and foreign  returns,  estimates,  information  statements  and
reports ("Tax  Returns")  which it is required to file relating or pertaining to
any and all Taxes  attributable  to or levied  upon the  Media  Business  or the
Acquired  Assets  and (b)  paid  any  and all  Taxes  it is  required  to pay in
connection with the taxable periods to which such Tax Returns relate.  There are
(and  immediately  following  the  Closing  there  will be) no Liens or  similar
encumbrances on the Acquired Assets relating or pertaining to Taxes, except with
respect to Taxes not yet due and  payable.  The Company has no  knowledge of any
basis for the  assertion of any claims  which,  if

                                       20

<PAGE>


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


adversely  determined,  would  result  in a Lien  or  other  encumbrance  on the
Acquired Assets or otherwise  adversely  effect Komag, the Media Business or the
Acquired Assets.

                  (c) To the  extent  relevant  to the  Acquired  Assets and the
Media Business,  the Company shall (i) provide Komag with such assistance as may
reasonably be required in connection  with the preparation of any Tax Return and
the conduct of any audit or other  examination by any Governmental  Entity or in
connection with judicial or administrative proceedings relating to any Liability
for  Taxes  and  (ii)  retain  and  provide  Komag  with  all  records  or other
information  that may be relevant to the preparation of any Tax Returns,  or the
conduct of any audit or examination,  or other tax proceeding. The Company shall
retain all relevant  documents,  including prior year's Tax Returns,  supporting
work  schedules  and other records or  information  that may be relevant to such
returns and shall not destroy or otherwise dispose of any such records,  without
the prior  written  consent of Komag,  until the  expiration  of the  applicable
statute of limitations.

         3.9  Restrictions  on  Business  Activities.   There  is  no  agreement
(noncompete or otherwise),  commitment, judgment, injunction, order or decree to
which the Company or, to the Company's knowledge, any of its officers is a party
or otherwise binding upon the Company or, to the Company's knowledge, any of its
officers  that  has or  reasonably  could be  expected  to have  the  effect  of
prohibiting or materially  impairing the  Acquisition,  the conduct of the Media
Business by Komag or the  performance  of the Company's  obligations  under this
Agreement or the Collateral Documents.

         3.10 Title of Properties; Absence of Liens and Encumbrances;  Condition
of Equipment.

                  (a) Section  3.10(a) of the Company  Disclosure  Schedule sets
forth a list of all real property  currently  leased by the Company in which the
Media  Business is conducted and which is to be  transferred  to Komag  ("Leased
Real  Property")  and the name of the  lessor,  the date of the  lease  and each
amendment  thereto  and the  aggregate  annual  rental and a schedule  of future
monthly  rental and/or other fees payable  under any such lease.  The leases and
amendments  thereto listed on the Company  Disclosure  Schedule set forth all of
the terms and conditions of each such lease, and there are no other  agreements,
written or oral, between lessor and lessee with respect thereto. All such leases
are in full force and  effect and are valid and  effective  in  accordance  with
their respective terms, and there is not, under any of such leases, any existing
material  default or event of  material  default  (or event which with notice or
lapse of time, or both, would constitute a material  default) by the Company or,
to the  Company's  knowledge,  any other party  thereto.  Except as set forth in
Section 3.10(a) of the Company Disclosure Schedule or as otherwise expressly set
forth in such leases, there are no restrictions,  preconditions, prohibitions or
limitations on the ability to assign, transfer, pledge, hypothecate or otherwise
convey or dispose of the interest of the Company under such leases.

                  (b) Section  3.10(b) of the Company  Disclosure  Schedule sets
forth a list of all the Fixed Acquired  Assets  currently  leased by the Company
("Leased  Fixed  Assets") and the name of the lessor,  the date of the lease and
each amendment  thereto and the aggregate annual rental and a schedule of future
monthly rental and/or other fees payable under any such lease. The leases and

                                       21

<PAGE>


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


amendments  thereto listed on the Company  Disclosure  Schedule set forth all of
the terms and conditions of each such lease, and there are no other  agreements,
written or oral, between lessor and lessee with respect thereto. All such leases
are in full force and  effect and are valid and  effective  in  accordance  with
their respective terms, and there is not, under any of such leases, any existing
material  default or event of  material  default  (or event which with notice or
lapse of time, or both, would constitute a material  default) by the Company or,
to the  Company's  knowledge,  any other party  thereto.  Except as set forth on
Section 3.10(b) of the Company Disclosure Schedule or as otherwise expressly set
forth in such leases, there are no restrictions,  preconditions, prohibitions or
limitations on the ability to assign, transfer, pledge, hypothecate or otherwise
convey or dispose of the interest of the Company under such leases.

                  (c) Section  3.10(c) of the Company  Disclosure  Schedule sets
forth all of the Fixed Acquired Assets owned by the Company  included within the
Acquired Assets, other than any Fixed Acquired Assets which (i) are not material
to the Media  Business  and (ii) are,  individually,  less than $5,000 in value.
Except as set forth in Section 3.10(c) of the Company Disclosure Schedule, there
are no  restrictions,  prohibitions,  or limitations on the ability to transfer,
convey or dispose of any of the Fixed Acquired Assets. All Fixed Acquired Assets
and all Leased Fixed Assets  currently  being used,  or to be used, in the Media
Business,  or used in the Media Business within six (6) months prior to the date
hereof,  are in good  operating  condition,  subject to normal wear and tear and
have been reasonably maintained.

                  (d) The  Company  has good and valid title to, or, in the case
of leased properties and assets,  valid and enforceable  leasehold interests in,
all of the Acquired  Assets,  free and clear of any Liens,  except for Permitted
Liens or as  otherwise  reflected in Section  3.10(d) of the Company  Disclosure
Schedule.  All of the Acquired Assets are reflected on the Signing NBV Statement
or were  acquired  since  the  date of the  Signing  NBV  Statement.  All of the
properties and assets owned,  leased or licensed by the Company  included within
the Acquired Assets are adequate to conduct the Media Business as now conducted.
Upon the consummation of the Acquisition,  Komag shall have good and valid title
to, or in the case of  leased  properties  and  assets,  valid  and  enforceable
leasehold interests in, all of the Acquired Assets, free and clear of any Liens,
other than Permitted Liens (provided,  that, any Liens which are Permitted Liens
and  which are  required  to be  discharged  prior to or  concurrently  with the
Closing shall have been removed prior to or concurrently with the Closing) or as
otherwise reflected in Section 3.10(d) of the Company Disclosure Schedule.

                  (e) To the knowledge of the Company,  there are no, and at the
time of Closing there will not be, any material  physical or mechanical  defects
of the Leased Real  Property.  To the  knowledge of the  Company,  except as set
forth in Section  3.10(e) of the Company  Disclosure  Schedule,  the  buildings,
structures  and  improvements  located on the Leased Real  Property,  including,
without  limitation,   the  roofs,   parking  lots,   plumbing,   heating,   air
conditioning,  water, sewer, gas, electrical and life safety systems are in good
condition  and  repair  and are in  compliance  in all  material  respects  with
applicable laws. The Company has no outstanding claims or Liabilities in respect
of the construction  thereof. All public utilities,  including water,  electric,
sewage or subsurface disposal systems,  required for the normal operation of the
Media  Business as currently  conducted,  connect into the Leased Real  Property
through  adjoining public roads or, if they pass

                                       22

<PAGE>


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


through  adjoining  private  land,  do so in  accordance  with valid  permits or
easements,  all installation and connection charges due and payable with respect
thereto have been paid in full or are provided  for and all such  utilities  are
sufficient  for the operation of the Media Business as currently  conducted.  To
the  knowledge of the  Company,  all  improvements  forming a part of any of the
Leased Real Property are located wholly within the boundaries of the Leased Real
Property and do not encroach upon any  registered or  unregistered  easements or
rights  of way  affecting  any of the  Leased  Real  Property  except  with  the
agreement or consent of the owner of the affected property.  Except as set forth
in Section 3.10(e) of the Company Disclosure Schedule,  there are no pending or,
to the  knowledge  of the Company,  threatened  condemnations,  eminent  domain,
expropriation, environmental, zoning, land-use or similar proceedings that would
affect all or any  portion  of the  Leased  Real  Property  nor has the  Company
received  notice  of any  proceedings  to  impose  any new  taxes  or  operating
restrictions  upon any of the Leased Real  Property.  The Company  shall  notify
Komag promptly of any such  proceedings of which the Company becomes aware prior
to the  Closing.  To the  knowledge  of the  Company,  the Leased Real  Property
complies  in all  material  respects  with  any  private  covenant,  conditions,
restrictions, and approvals applicable thereto.

                  (f) On the Closing Date there will be no  outstanding  written
or oral contracts made by the Company for any  alterations or improvements on or
to the Leased Real  Property,  which have not been fully  paid,  and the Company
shall cause to be discharged all mechanics' and materialmen's liens arising from
any labor or  materials  furnished  to the  Leased  Real  Property  prior to the
Closing Date.

         3.11 Intellectual Property.

                  (a) Intellectual Property Contracts.

                           (i)  The   contracts,   licenses,   sublicenses   and
agreements  listed on Section  3.11(a)(i)  of the  Company  Disclosure  Schedule
include all material  contracts,  licenses and agreements  pursuant to which any
Person,  including any Affiliate of the Company, has licensed or transferred any
Intellectual   Property  to  or  from  the  Company  related  to  magnetic  disk
technology,  including  the design or  manufacture  of any products of the Media
Business.

                           (ii)  The  contracts,   licenses,   sublicenses   and
agreements  listed on Section  3.11(a)(ii)  of the Company  Disclosure  Schedule
include all  contracts,  licenses and  agreements  pursuant to which any Person,
including any Affiliate of the Company,  has licensed any Intellectual  Property
to the Company  related to magnetic  disk  technology,  including  the design or
manufacture of any products of the Media  Business,  which are to be assigned to
the  Company  under  the  terms  of this  Agreement.  All  contracts,  licenses,
sublicenses  and  agreements  listed  on  Section  3.11(a)(ii)  of  the  Company
Disclosure  Schedule  are in full force and effect.  Neither the  execution  nor
delivery  of  the  Agreement  or  any  of  the  Collateral   Documents  nor  the
consummation of the transactions  contemplated hereby or thereby will violate or
result in the breach, modification,  cancellation, termination, or suspension of
the  contracts,   licenses,   sublicenses  and  agreements   listed  on  Section
3.11(a)(ii)  of the Company  Disclosure  Schedule.  The Company is in compliance
with, and has not breached any term of, the  contracts,  licenses and agreements
listed on Section  3.11(a)(ii) of the Company Disclosure  Schedule,  and, to the
knowledge  of  the  Company,  all  other  parties  to the  contracts,  licenses,
sublicenses  and  agreements  listed  on  Section  3.11(a)(ii)

                                       23

<PAGE>


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


of the Company Disclosure Schedule are in compliance with, and have not breached
any term of, such contracts, licenses, sublicenses and agreements. Following the
Closing Date,  Komag will be permitted to exercise all of the  Company's  rights
under the contracts,  licenses,  sublicenses  and  agreements  listed in Section
3.11(a)(ii)  of the  Company  Disclosure  Schedule  without  the  payment of any
additional  amounts or  consideration  other than  ongoing  fees,  royalties  or
payments which the Company would otherwise be required to pay.

                           (iii) Except as listed on Section 3.11(a)(iii) of the
Company Disclosure Schedule, there are no contracts,  licenses,  sublicenses and
agreements  between the Company and any other  Person with  respect to the Media
Intellectual  Property,  including  those listed on Section  3.11(a)(ii)  of the
Company  Disclosure  Schedule,  under which  there is any  dispute  known to the
Company regarding the scope of such contract,  license, sublicense or agreement,
or performance under such contract, license, sublicense or agreement,  including
with respect to any payments to be made or received by the Company thereunder.

                  (b) Intentionally Omitted.

                  (c) Infringement of Third Party Intellectual Property.  Except
as set forth in Section 3.11(c) of the Company Disclosure Schedule,  the Company
has not received notice from any Person claiming that such operation or any act,
product,   technology   or  service   of  the  Media   Business   infringes   or
misappropriates  the Intellectual  Property of any Person or constitutes  unfair
competition or trade  practices under the laws of any  jurisdiction  (nor is the
Company aware of any basis therefor).

                  (d)  Restrictions of Use of Media  Intellectual  Property.  No
Media  Intellectual  Property,  or product,  technology  or service of the Media
Business, is subject to any proceeding or outstanding decree,  order,  judgment,
or stipulation  restricting in any manner the use, transfer or licensing thereof
by the Company or which may affect the validity,  use or  enforceability of such
Media Intellectual Property.

                  (e) Protection of Media Intellectual Property. The Company has
taken all steps that are  reasonable  under the  circumstances  to  protect  the
confidentiality  and trade secret  status of the Media  Business's  confidential
information and trade secrets or any trade secrets or  confidential  information
of third parties provided to the Company related thereto,  and, without limiting
the foregoing, the Company has and enforces a policy requiring each Employee and
contractor to execute  proprietary  information and  confidentiality  agreements
substantially  in the  Company's  standard  forms  and all  current  and  former
Employees and  contractors  of the Company  conducting  the Media  Business have
executed such an  agreement.  The Company knows of no basis on which it could be
claimed  that the  Company  has failed to  protect  the  confidentiality  of any
material confidential information of the Company relating to the Media Business.

                  (f) No Obligations  Resulting from  Transaction.  Neither this
Agreement nor the  transactions  contemplated by this  Agreement,  including the
assignment to Komag by operation of

                                       24

<PAGE>


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


law or otherwise of any contracts or agreements to which the Company is a party,
will  result in (i)  Komag's  granting  to any third  party any right to or with
respect to any Intellectual Property or Intellectual Property right owned by, or
licensed to,  either of them,  (ii)  Komag's  being bound by, or subject to, any
non-compete or other  restriction on the operation or scope of their  respective
businesses  or (iii)  Komag's  being  obligated  to pay any  royalties  or other
amounts  to any third  party in excess of those  payable  by Komag  prior to the
Closing.

                  (g)  Year  2000  Compliant.  Section  3.11(g)  of the  Company
Disclosure  Schedule sets forth the Company's  Year 2000 Project  Schedules with
respect to the Media  Business which reflect the current status of the Company's
efforts to address  operating and product line issues  related to the "Year 2000
Issue".

                  (h)   Effect  of   Transaction.   The   consummation   of  the
transactions  contemplated  by this Agreement will not result in the loss of, or
otherwise  adversely  affect,  any ownership  rights of the Company in any Media
Intellectual  Property or result in the breach or  termination  of any  license,
contract or  agreement to which the Company is a party  respecting  any material
Media Intellectual Property.

         3.12 Agreements, Contracts and Commitments.

                  (a)  Except as set forth in  Section  3.12(a)  of the  Company
Disclosure Schedule, the Company does not have any continuing obligations under,
is not a party to or is not bound by:

                           (i)  any  collective  bargaining  agreements,  or any
contract with or commitment to any trade unions,  employee  bargaining  agent or
affiliated bargaining agent (collectively, "labor representatives") which relate
to Employees  employed in connection  with, or providing  services to, the Media
Business, and the Company has not conducted any negotiations with respect to any
such future contracts or commitments;

                           (ii)  any  bonus,  deferred  compensation,   pension,
profit  sharing or  retirement  plans,  or any other  employee  benefit plans or
arrangements  which  relates  to  Employees  employed  in  connection  with,  or
providing services to, the Media Business;

                           (iii)  any   employment  or   consulting   agreement,
contract or commitment with an Employee or individual consultant employed by, or
providing services to, the Media Business or consulting  agreement,  contract or
commitment with a firm or other organization relating to the Media Business;

                           (iv) any  agreement  or  plan,  including  any  share
option plan, share appreciation rights plan or share purchase plan which relates
to any Employee employed by, or providing services to, the Media Business;

                           (v) any  fidelity or surety bond or  completion  bond
relating to, or arising in  connection  with,  the Acquired  Assets or the Media
Business;

                                       25

<PAGE>


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


                           (vi) any lease of real or personal  property relating
to, or arising in connection with, the Acquired Assets or the Media Business;

                           (vii) any agreement of  indemnification,  guaranty or
environmental  corrective action or clean up obligation  relating to, or arising
in connection with, the Acquired Assets or the Media Business;

                           (viii)  any   agreement,   contract   or   commitment
containing  any  covenant  limiting  the freedom of the Company to engage in any
line of  business  or to compete  with any  Person,  relating  to, or arising in
connection with, the Acquired Assets or the Media Business;

                           (ix) any agreement,  contract or commitment  relating
to capital  expenditures  and  involving  future  payments in excess of $500,000
arising in connection with the Acquired Assets or the Media Business;

                           (x) any agreement, contract or commitment relating to
the  disposition of any Acquired Assets or the acquisition of material assets or
any interest in any business enterprise outside the ordinary course of business,
consistent with past practices,  relating to, or arising in connection with, the
Acquired Assets or the Media Business;

                           (xi)  any  mortgages,  indentures,  loans  or  credit
agreements,  security agreements or other agreements or instruments  relating to
the borrowing of money or extension of credit  arising in connection  with,  the
Acquired Assets or the Media Business;

                           (xii) any Purchase Order or contract for the purchase
of raw materials relating to, or arising in connection with, the Acquired Assets
or the Media Business;

                           (xiii)   any   distribution,   joint   marketing   or
development  agreement  relating to, or arising in connection with, the Acquired
Assets or the Media Business;

                           (xiv) any other  agreement,  contract  or  commitment
that involves  $100,000 or more relating to, or arising in connection  with, the
Acquired Assets or the Media Business; or

                           (xv) any  agreement,  contract or commitment  that is
not cancelable  without material penalty within thirty (30) days relating to, or
arising in connection with, the Acquired Assets or the Media Business.

                  (b)  Except  as  noted  in  Section  3.12(b)  of  the  Company
Disclosure Schedule, the Company has not breached,  violated or defaulted under,
or received notice that it has breached, violated or defaulted under, any of the
material terms or conditions of any agreement,  contract or commitment  required
to  be  set  forth  in  Section  3.12(a)  of  the  Company  Disclosure  Schedule
(collectively,  "Contracts"  and each,  a  "Contract"),  nor,  to the  Company's
knowledge,  are there any events or  circumstances  that would in the  Company's
opinion be reasonably likely to give rise to such a breach, violation or default
with the lapse of time, giving of notice or both. Each Contract is in full force
and effect and, except as otherwise disclosed in Section 3.12(b) of the Company

                                       26

<PAGE>


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


Disclosure  Schedule,  is not  subject to any  default  thereunder  of which the
Company is aware by any party obligated to the Company pursuant thereto.

         3.13 Interested Party Transactions. Except as set forth in Section 3.13
of the Company Disclosure Schedule,  to the Company's  knowledge,  no officer or
director of the Company (nor any spouse or member of the immediate family of any
of such Persons,  or any trust,  partnership or corporation in which any of such
Persons has or has had a material interest),  has or had, directly or indirectly
(a) any legal or  beneficial  interest in any Person that sells or  furnishes to
the  Company any goods or  services  relating  to the Media  Business or (b) any
legal or  beneficial  interest in any  Contract set forth in Section 3.12 of the
Company Disclosure  Schedule;  provided,  that passive ownership of no more than
five  percent (5%) of the  outstanding  stock of a publicly  traded  corporation
shall not be deemed an  "interest  in any entity" for  purposes of this  Section
3.13.

         3.14 Governmental Authorization. Section 3.14 of the Company Disclosure
Schedule accurately lists each material consent, license, permit, grant or other
authorization  issued to the Company by a  Governmental  Entity (a)  pursuant to
which  the  Company  currently  operates  or holds  any  interest  in any of the
Acquired Assets or (b) which is required for the operation of the Media Business
or  the  holding  of  any  interest  in  the  Acquired   Assets   (collectively,
"Authorizations").   All  Authorizations  are  in  full  force  and  effect  and
constitute  all  Authorizations  required  to permit  the  Company to operate or
conduct the Media Business as currently conducted or to hold any interest in the
Acquired Assets.

         3.15  Litigation.  Except as set forth in Section  3.15 of the  Company
Disclosure Schedule,  there is no action, suit, claim, proceeding or arbitration
of any nature  pending or, to the knowledge of the Company,  threatened  against
the Media Business, any of the Acquired Assets or any of its officers, directors
or stockholders in respect of the Media Business or the Acquired  Assets.  There
is no  investigation  pending or, to the  knowledge of the  Company,  threatened
against  the  Media  Business,  the  Acquired  Assets  or any  of its  officers,
directors  or  stockholders  in respect of the Media  Business  or the  Acquired
Assets  by or  before  any  Governmental  Entity.  No  Governmental  Entity  has
challenged or questioned the legal right of the Company to manufacture, offer or
sell any of the  products of the Media  Business in the present  manner or style
thereof.

         3.16  Accounts  Receivable.  Except as set forth in Section 3.16 of the
Company Disclosure Schedule, the Company has no Accounts Receivable which relate
to the Media Business other than intercompany Accounts Receivable.

         3.17  Inventories.  All of the Media  Inventory  are  reflected  on the
Signing NBV  Statement  and will be  reflected  on the  Preliminary  Closing NBV
Statement and the Final Closing NBV Statement as of the dates indicated therein.
All such Media  Inventory  was  purchased,  acquired or produced in the ordinary
course of business,  consistent with past practices,  and in a manner consistent
with  the  Company's  regular  inventory  practices  and  are set  forth  on the
Company's  books and records in accordance  with GAAP. The  presentation  of the
Media Inventory on the Signing NBV Statement was, and on the Preliminary Closing
NBV Statement and the Final Closing NBV Statement will be, thereon in accordance
with GAAP, consistent with the accounting principles used

                                       27

<PAGE>


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


in the  preparation of the Company's  audited  financial  statements.  The Media
Inventory as presented on the Signing NBV Statement  is, and on the  Preliminary
Closing NBV Statement and the Final Closing NBV Statement will be, stated at the
lower  of  cost  (determined  using  the  first-in,  first-out  method)  or  net
realizable  value, and such value reflects  applicable  reserves and write-downs
for  defective  or  obsolete  items to the  extent  GAAP would so  provide.  The
reserves  against such Media Inventory have been  established in accordance with
GAAP.  Except as set forth in Section 3.17 of the Company  Disclosure  Schedule,
the Company does not hold any items of Media  Inventory on  consignment  or have
title to any items of Media Inventory in the possession of others,  except items
of Media  Inventory  in  shipment  to the  Company.  All of items of such  Media
Inventory  are and,  from the date hereof  until the Closing  Date will be, of a
quality  and  quantity  that are  salable in the  ordinary  course of  business,
consistent  with past  practices  (except  for  damaged,  defective  or obsolete
Inventory which, as of the Closing Date, will not exceed $10,000).

         3.18 Minute Books.  The minutes of the Company  provided to counsel for
Komag  contain,  to the extent  applicable to the Media Business or the Acquired
Assets, an accurate summary of all meetings of directors (or committees thereof)
of the Company or actions by written  consent of such  directors and  committees
since March 1, 1998.

         3.19 Brokers' and Finders' Fees. The Company has not incurred, nor will
it incur,  directly or indirectly,  any Liability for brokerage or finders' fees
or agents'  commissions or any similar charges in connection with this Agreement
or any transaction contemplated hereby.

         3.20 Employees; Employee Plans and Compensation.

                  (a)  Schedule.  Section  3.20(a)  of  the  Company  Disclosure
Schedule  contains an accurate and complete  list of each Employee Plan and each
material Employee  Agreement.  The Company does not have any plan or commitment,
whether  legally  binding or not, to establish any new Employee Plan or Employee
Agreement,  to modify any  Employee  Plan or Employee  Agreement  (except to the
extent  required  by law or to  conform  any  such  Employee  Plan  or  Employee
Agreement  to the  requirements  of any  applicable  law,  or to enter  into any
Employee  Plan  or  Employee  Agreement,  nor  does  it have  any  intention  or
commitment to do any of the foregoing.

                  (b) Documentation. The Company has made available to Komag (i)
correct and complete  copies of all documents  embodying  each Employee Plan and
each Employee Agreement including all amendments thereto and copies of all forms
of  agreement  and  enrollment  used  therewith;  (ii)  the most  recent  annual
actuarial  valuations,  if any,  prepared for each Employee Plan; (iii) the most
recent  summary  plan  description,  together  with the most  recent  summary of
material  modifications,  if any,  required  under  ERISA  with  respect to each
Employee  Plan,  (iv) all IRS  determination  letters  and  rulings  relating to
Employee Plans and copies of all applications and  correspondence to or from the
IRS or the  Department of Labor ("DOL") with respect to any Employee  Plan,  (v)
all  communications  material  to any  Employee  or  Employees  relating  to any
Employee Plan and any proposed  Employee  Plans,  in each case,  relating to any
amendments,  terminations,  establishments,  increases or decreases in benefits,
acceleration of payments or vesting schedules or other events which would result
in any material  liability to the Company;  and (vi) each

                                       28

<PAGE>


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


Employee  Plan  intended to qualify  under  Section  401(a) of the Code and each
trust  intended  to  qualify  under  Section  501(a) of the Code that has either
received a favorable  determination,  opinion,  notification  or advisory letter
from the IRS with respect to each such Plan as to its qualified status under the
Code,  including  all  amendments  to the Code effected by the Tax Reform Act of
1986  and  subsequent  legislation,  or has  remaining  a period  of time  under
applicable Treasury regulations or IRS pronouncements in which to apply for such
a letter and make any amendments  necessary to obtain a favorable  determination
as to the qualified status of each such Employee Plan.

                  (c) Employee Plan  Compliance.  Except as set forth in Section
3.20(c) of the Company  Disclosure  Schedule,  (i) the Company has performed all
material obligations required to be performed by it under each Employee Plan and
each Employee Plan has been established and maintained in all material  respects
in  accordance  with its  terms  and in  compliance  with all  applicable  laws,
statutes, orders, rules and regulations including, without limitation, ERISA and
the Code; (ii) there are no audits,  inquiries or proceedings pending or, to the
knowledge of the Company or any ERISA  Affiliate,  threatened  by the IRS or DOL
with  respect to any Employee  Plan and (iii)  neither the Company nor any ERISA
Affiliate  is subject to any penalty or tax with  respect to any  Employee  Plan
under Section 402(i) of ERISA or Sections 4975 through 4980 of the Code.

                  (d) Pension Plans.  The Company does not now, nor has it ever,
maintained,  established,  sponsored,  participated  in or  contributed  to, any
Pension  Plan  affecting  any of the  Employees  which is  subject  to Part 3 of
Subtitle B of Title I of ERISA, Title IV of ERISA or Section 412 of the Code.

                  (e)   Multiemployer   Plans.   At  no  time  has  the  Company
contributed to or been requested to contribute to any Multiemployer Plan.

                  (f) No Post-Employment Obligations. No Employee Plan provides,
or has any  Liability  to provide,  life  insurance,  medical or other  employee
benefits to any  Transferred  Employee upon his or her retirement or termination
of  employment  for any reason,  except as may be  required by statute,  and the
Company has not represented,  promised or contracted (whether in oral or written
form)  to  any  Transferred  Employee  (either  individually  or to  Transferred
Employees as a group) that such Transferred  Employee(s)  would be provided with
life insurance, medical or other employee welfare benefits upon their retirement
or termination of employment, except to the extent required by statute.

                  (g)  Effect of  Transaction.  Except  as set forth on  Section
3.20(g) of the  Disclosure  Schedule,  the  execution of this  Agreement and the
Collateral  Documents  and the  consummation  of the  transactions  contemplated
hereby  and  thereby  will  not  (either  alone or upon  the  occurrence  of any
additional or subsequent  events)  constitute an event under any Employee  Plan,
Employee  Agreement,  trust  or loan  that  will or may  result  in any  payment
(whether  of  severance  pay  or   otherwise),   acceleration,   forgiveness  of
indebtedness,  vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any  Employee.  No payment or benefit which will or may
be made by the  Company  or  Komag or any of their  respective  Affiliates  with
respect to any

                                       29

<PAGE>


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


Employee will be characterized  as a "parachute  payment," within the meaning of
Section 280G(b)(2) of the Code.

                  (h)  Employment  Matters.  The Company (i) is in compliance in
all material respects with all applicable laws, rules and regulations respecting
employment,  employment practices,  terms and conditions of employment and wages
and hours,  in each case,  with  respect to  Employees;  (ii) has  withheld  all
amounts required by law or by agreement to be withheld from the wages,  salaries
and other payments to Employees; (iii) is not liable for any arrears of wages or
any Taxes or any penalty for  failure to comply with any of the  foregoing;  and
(iv)  is not  liable  for any  payment  to any  trust  or  other  fund or to any
Governmental Entity, with respect to unemployment  compensation benefits, social
security or other benefits for Employees (other than routine payments to be made
in the ordinary course of business, consistent with past practices).

                  (i)  Labor.  No work  stoppage  or labor  strike  against  the
Company is pending or, to the knowledge of the Company,  threatened with respect
to the Media Business or involving or relating to any of the current  Employees.
The Company is not involved in or threatened  with any labor dispute,  grievance
or litigation relating to labor, safety or discrimination  matters involving any
Employee,   including  charges  of  unfair  labor  practices  or  discrimination
complaints,  which,  if  adversely  determined,  would,  individually  or in the
aggregate,  result in Liability  to the Company.  The Company has not engaged in
any unfair labor  practices  within the meaning of the National Labor  Relations
Act with  respect to the Media  Business or  involving or relating to any of the
current  Employees which could,  individually  or in the aggregate,  directly or
indirectly  result in a Liability to the Company.  The Company is not presently,
nor has it been in the past, a party to, or bound by, any collective  bargaining
agreement, contract with or commitment to any labor representatives with respect
to the Media Business or involving or relating to any of the current  Employees,
and the Company has not conducted  negotiations  with respect to any such future
contracts or commitments;  no labor  representatives hold bargaining rights with
respect to any  Employees;  and there are no current or, to the knowledge of the
Company,  threatened  attempts  to  organize  or  establish  any trade  union or
employee  association  with respect to the Company  involving or relating to the
Media Business or any of the current  Employees.  The Company has provided Komag
with all information Komag has requested with respect to the names, date of hire
or compensation of Employees.

         3.21  Insurance.  All of the  Acquired  Assets that are of an insurable
nature are insured in amounts  normally  insured against by Persons  carrying on
the  same  classes  of  business  as the  Media  Business,  and the  Company  is
adequately  covered  against  accident,   damage,  injury,  third  party  public
liability,  loss of profits and other risks normally  insured against by Persons
carrying  on the same  classes  of  business  as the  Media  Business.  All such
policies  are,  and will at Closing be, in full force and effect and nothing has
been done or omitted to be done by the  Company  which  would make any policy of
insurance void or voidable. All of such insurance policies are listed in Section
3.21 of the  Company  Disclosure  Schedule.  There is no  material  claim by the
Company  pending  under any of such  policies  or bonds.  All  premiums  due and
payable  under all such  policies  and bonds have been paid,  and the Company is
otherwise in material  compliance  with the terms of such policies and bonds (or
other policies and bonds providing  substantially  similar insurance  coverage).
The  Company  has no  knowledge  of any  threatened  termination  of any of such
policies.

                                       30

<PAGE>


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


         3.22 Environmental Matters.

                  (a)  Underground  Tanks.  No underground  storage tank,  dump,
landfill  or waste pile  containing  or used to  dispose or store any  Hazardous
Materials is present in, on or under any Media Business Facility,  including the
land and the improvements, ground water and surface water thereof.

                  (b)  Hazardous  Materials  Activities.  Except as set forth in
Section  3.22(b) of the  Company  Disclosure  Schedule,  at no time prior to the
Closing has the Company  transported  (or arranged for the  transport),  stored,
used, manufactured,  disposed of, released,  leaked, emitted or entered into the
atmosphere, ground, soil, surface water, ground water or sewer system or exposed
its employees or others to Hazardous Materials in violation of any Environmental
Law. No  Pre-Closing  Hazardous  Materials  Activities  have been  conducted  in
violation of any Environmental Laws.

                  (c) Permits.  The Company  currently  holds all  environmental
approvals,  permits,  licenses,  clearances  and  consents  (the  "Environmental
Permits") necessary for the conduct of its Hazardous Material Activities as such
activities are currently being  conducted.  All such  Environmental  Permits are
listed in Section 3.22(c) of the Company Disclosure Schedule.

                  (d) Environmental Liabilities.  Except as set forth in Section
3.22(d) of the  Company  Disclosure  Schedule,  the  Company is not in  material
violation  of any  Environmental  Laws  applicable  to the Media  Business,  and
neither the Company nor any of its Employees has engaged in any conduct that has
given or will give rise to any Environmental Claims, losses or Liabilities under
any such laws for which  Komag may be held  responsible.  Except as set forth in
Section 3.22(d) of the Company Disclosure Schedule, the Company has not received
any  written or oral  communication  from any  Governmental  Entity or any other
Person  alleging that the Company is not currently in compliance in any material
respect  with,  or  has  a  Liability  under   (including  being  a  potentially
responsible  party or allegedly  liable for costs  associated for remediation of
any site),  any such laws in connection with the Media  Business.  Except as set
forth  in  Section  3.22(d)  of the  Company  Disclosure  Schedule,  no  action,
proceeding,  revocation  proceeding,  amendment procedure,  writ,  injunction or
claim is pending, or, to the knowledge of the Company, threatened concerning any
Environmental Permit,  Hazardous Material or any Pre-Closing Hazardous Materials
Activity of the Company.  Except as set forth in Section  3.22(d) of the Company
Disclosure Schedule,  the Company is not aware of any fact or circumstance which
could  involve the Company in any  environmental  litigation  or impose upon the
Company any material environmental Liability.

                  (e)  Offsite  Hazardous  Material  Disposal.  The  Company has
transferred  or released (or arranged for the transfer or release of)  Hazardous
Materials only to those treatment, storage, transfer or disposal sites described
in Section 3.22(e) of the Company Disclosure  Schedule ("Disposal Sites") and no
action,  proceeding,  liability  or claim  exists  or, to the  knowledge  of the
Company,  is  threatened  against  any such listed  disposal  site or against or
involving  the Company  with  respect to any  transfer  or release of  Hazardous
Materials to such Disposal Sites.

                  (f) Environmental Reporting. The Company has not, with respect
to any Media Business Facility or Acquired Assets,  filed and does not intend to
file any notice or report under any

                                       31

<PAGE>


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


Environmental  Laws  reporting  a  violation  of any  Environmental  Laws or any
Release of Hazardous Materials to the environment.

                  (g)  Asbestos  Containing  Material.  Any  asbestos-containing
material  which is  known to the  Company  to be on or part of any  Leased  Real
Property is in good repair  according  to the current  standards  and  practices
governing  such  material,  and its presence or  condition  does not violate any
applicable Environmental Laws.

                  (h) Environmental  Records. The Company has delivered to Komag
or made  available  for  inspections  by Komag  all  records  pertaining  to the
Pre-Closing  Hazardous Materials Activities associated with the Acquired Assets,
the  Media  Business  or any  Media  Business  Facility  and all  draft or final
non-privileged  environmental  audits and environmental  assessments relating to
the Media  Business or of any Media Business  Facility  conducted at the request
of, or otherwise in the possession or control of the Company.

         3.23  Compliance  with Laws. The Company and its officers and employees
have  complied  in all  material  respects  with,  are not in  violation  in any
material respect of, and have not received any notices of violation with respect
to, any foreign,  federal,  state,  province or local statute, law or regulation
with respect to the conduct of the Media  Business or the ownership or operation
of the Acquired Assets.

         3.24 Complete  Copies of Materials.  The Company has delivered to Komag
true and  complete  copies  of each  agreement,  contract,  commitment  or other
document  referred  to in the  Company  Disclosure  Schedule  and  that has been
requested by Komag or its counsel.

         3.25 Suppliers.  Section 3.25 of the Company  Disclosure  Schedule sets
forth a true  and  complete  list of the  names  and  addresses  of the ten (10)
suppliers  which each account for the largest net sales to the Company  relating
to the Media Business. There exists no actual termination or cancellation of the
business  relationship  of the Company  with any  supplier or group of suppliers
listed in Section 3.25 of the Company Disclosure Schedule.

         3.26 No Insolvency.  The Company will not be rendered  insolvent by the
sale,  transfer and assignment of the Acquired  Assets  pursuant to the terms of
this Agreement.

         3.27 Private  Placement.  The Company is acquiring  the Sale Shares for
investment for its own account, not as a nominee or agent, and not with the view
to, or for resale in connection  with,  any  distribution  thereof.  The Company
acknowledges   that  the  Sale  Shares  to  be  received  are  characterized  as
"Restricted  Securities"  and  must be  held  indefinitely  unless  subsequently
registered  under the Securities Act or an exemption from such  registration  is
available.  The Company is aware of the provisions of Rule 144 promulgated under
the Securities Act.  Representatives  of the Company have had the opportunity to
ask  questions  of and  receive  answers  from  Komag or a Person  acting on the
Company's behalf concerning the terms and conditions of this transaction as well
as to obtain any information requested by such  representatives.  The Company is
an  "Accredited  Investor" as that term is defined in Rule 501 of  Regulation D,
promulgated by the SEC under the Securities Act.

                                       32

<PAGE>


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


         3.28 Registration  Statement  Information.  The information supplied by
the Company for  inclusion in the  registration  statement  contemplated  by the
Registration  Rights  Agreement,  does not contain,  and will not contain at the
effective date of such registration statement,  any untrue statement of material
fact or  omit,  and will not  omit at the  effective  date of such  registration
statement,  to state any material fact necessary in order to make the statements
therein not misleading.

         3.29 Representations Complete. To the knowledge of the Company, none of
the  representations  or warranties made in this Article III (as modified by the
Company Disclosure Schedule),  nor any statement made in any Collateral Document
or any Section of the Company  Disclosure  Schedule furnished by or on behalf of
the Company heretofore  pursuant to this Agreement contains any untrue statement
of a material fact, or omits to state a material fact necessary in order to make
the statements  contained herein or therein,  in the light of the  circumstances
under which made, not misleading.  To the knowledge of the Company,  there is no
event,  fact or  condition  that  materially  and  adversely  affects  the Media
Business or the Acquired Assets that has not been set forth in this Agreement or
in the Company Disclosure Schedule.


                                   ARTICLE IV

                     REPRESENTATIONS AND WARRANTIES OF KOMAG

         Komag represents and warrants to the Company as of the date hereof, and
as of the  Closing  Date,  except as  specifically  set forth in the  disclosure
schedule  accompanying  this  Agreement  (referring to the  appropriate  section
numbers) (the "Komag Disclosure Schedule") as follows:

         4.1  Organization.  Komag  is a  corporation  duly  organized,  validly
existing and in good standing under the laws of the State of Delaware. Komag 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.  Komag 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
could  have a  material  adverse  effect on Komag.  Komag has  delivered  to the
Company  or  its  counsel  true  and  correct  copies  of  its   Certificate  of
Incorporation and Bylaws, which have not been amended since July 22, 1998.

         4.2 Capital Structure of Komag.

                  (a) The  authorized  capital of Komag  consists of 150,000,000
shares of Common Stock, of which 53,920,660 shares are issued and outstanding as
of the date  hereof,  and  1,000,000  shares of Preferred  Stock,  none of which
shares are issued and  outstanding as of the date hereof.  All of the issued and
outstanding  capital stock of Komag have been duly authorized and validly issued
and are fully paid and  nonassessable,  and were not issued in  violation  of or
subject to any  preemptive  right or other rights to  subscribe  for or purchase
shares created by statute,  the Certificate of  Incorporation or Bylaws of Komag
or any  agreement  to which Komag is a party or by which it is bound.  Komag has
reserved  18,140,000  shares  of Common  Stock for  issuance  to  employees  and
consultants pursuant to the 1987 Incentive Stock Option Plan, of which 5,754,874
shares are  subject

                                       33

<PAGE>


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


to outstanding,  unexercised  options;  Komag has reserved  6,100,000  shares of
Common  Stock for  issuance to employees  and  consultants  pursuant to the 1997
Supplemental  Stock  Option  Plan,  of which  5,102,340  shares  are  subject to
outstanding,  unexercised  options;  and Komag has reserved  7,400,000 shares of
Common  Stock for  issuance to employees  and  consultants  pursuant to the 1988
Employee  Stock Purchase Plan, of which  3,284,927  shares remain  available for
sale. Except for the options described in this Section 4.2(a) or as set forth on
Section 4.2(a) of the Komag Disclosure Schedule, there are no options, warrants,
calls, rights,  commitments or agreements of any character,  written or oral, to
which  Komag  is a party or by which  it is  bound  obligating  Komag to  issue,
deliver,  sell,  repurchase or redeem, or cause to be issued,  delivered,  sold,
repurchased  or redeemed,  any shares of the capital stock of Komag or to grant,
extend, accelerate the vesting of, change the price of, otherwise amend or enter
into any such option, warrant, call, right, commitment or agreement.

                  (b) The Sale Shares to be issued  pursuant to the  Acquisition
will be, at the Closing  Date,  duly  authorized,  validly  issued,  fully paid,
nonassessable, and not subject to any call, preemptive or similar rights.

         4.3 Authority. Komag has all requisite corporate power and authority to
enter into this Agreement and each of the Collateral  Documents to which it is a
party, and to consummate the transactions  contemplated hereby and thereby.  The
execution and delivery of this Agreement and each of the Collateral Documents to
which  it  is a  party  by  Komag  and  the  consummation  of  the  transactions
contemplated  hereby  and  thereby  by Komag  have been duly  authorized  by all
necessary  corporate  action on the part of Komag.  This Agreement has been, and
each of the Collateral  Documents to which it is a party will be at the Closing,
duly  executed  and  delivered  by Komag and,  assuming  the due  authorization,
execution and delivery by the other parties hereto and thereto,  upon execution,
will  constitute  valid  and  binding  obligations  of  Komag,   enforceable  in
accordance  with  their  respective  terms,  subject  to  the  laws  of  general
application relating to bankruptcy,  insolvency and the relief of debtors and to
rules  of  law  governing  specific  performance,  injunctive  relief  or  other
equitable remedies.

         4.4 No Conflict.  The execution and delivery of this Agreement and each
of the  Collateral  Documents to which it is a party by Komag does not, and, the
consummation of the transactions  contemplated  hereby and thereby by Komag will
not,  Conflict with (a) any provision of the  Certificate  of  Incorporation  or
Bylaws of Komag,  (b)(i) any material mortgage,  indenture,  lease,  contract or
other agreement or instrument, permit, concession, franchise or license to which
Komag is subject or by which it is bound  (other than any  mortgage,  indenture,
lease, contract or other agreement or instrument, permit, concession,  franchise
or  license  to which  Komag is  subject  or by which it is bound  set  forth on
Section  4.4(b)(ii)  of the  Komag  Disclosure  Schedule)  or (ii) any  material
mortgage,  indenture, lease, contract or other agreement or instrument,  permit,
concession,  franchise  or license  to which  Komag is subject or by which it is
bound set forth on Section  4.4(b)(ii) of the Komag  Disclosure  Schedule or (c)
any  judgment,  order,  decree,  statute,  law,  ordinance,  rule or  regulation
applicable  to  Komag or its  properties  or  assets,  assuming,  in each  case,
compliance  with (x) any  applicable  requirements  under  the HSR Act,  (y) any
applicable  requirements  under the

                                       34

<PAGE>


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


Exchange Act and (z) such other matters set forth in Section 4.4(z) of the Komag
Disclosure Schedule.

         4.5 Consents. No consent,  waiver, approval, order or authorization of,
or  registration,  declaration  or filing with, any  Governmental  Entity or any
other  Person,  including  a party to any  agreement  with  Komag  (so as not to
trigger any  Conflict),  is required by or with  respect to Komag in  connection
with the  execution  and  delivery of this  Agreement  or any of the  Collateral
Documents  to  which  it is a  party  or the  consummation  of the  transactions
contemplated hereby or thereby,  except for such consents,  waivers,  approvals,
orders,  authorizations,  registrations,  declarations and filings (a) as may be
required under the HSR Act, (b) as may be required under applicable  federal and
state  securities  laws,  (c) as may be set  forth in  Section  4.5 of the Komag
Disclosure  Schedule or (d) which if not obtained or made,  would not materially
impair the ability of Komag to consummate the transactions  contemplated by this
Agreement or the Collateral Documents.

         4.6 SEC Documents,  Komag Financial Statements.  Komag has furnished or
made  available  to the  Company  true and  complete  copies of all  reports  or
registration statements filed by it with the SEC under the Exchange Act, for all
periods  subsequent  to December 28, 1997,  all in the form so filed (all of the
foregoing being  collectively  referred to as the "Komag SEC Documents").  As of
their respective filing dates, the Komag SEC Documents  complied in all material
respects  with the  requirements  of the Exchange Act, and none of the Komag SEC
Documents  contained any untrue statement of a material fact or omitted to state
a material fact necessary to make the statements  made therein,  in light of the
circumstances  in which they were  made,  not  misleading,  except to the extent
corrected by a subsequently filed Komag SEC Document.  The financial  statements
of Komag, including the notes thereto,  included in the Komag SEC Documents (the
"Komag Financial  Statements"),  comply as to form in all material respects with
applicable  accounting  requirements of the Exchange Act, and with the published
rules and  regulations  of the SEC with respect  thereto,  have been prepared in
accordance  with GAAP  (except as may be indicated  in the notes  thereto),  and
present fairly in all material respects the financial  position,  the results of
operation  and,  where  applicable,  the cash  flows and  changes  in  financial
position  of Komag as of the dates and  during  the  periods  indicated  therein
(subject, in the case of unaudited statements, to normal audit adjustments).

         4.7 No Material  Adverse Change.  Since  September 27, 1998,  Komag has
conducted  its business in the ordinary  course and,  other than as disclosed in
the Komag SEC  Documents  filed  with the SEC,  there has not  occurred  (a) any
material  adverse  change in the  business,  financial  condition  or results of
operation of Komag or (b) any damage to or  destruction or loss of any assets of
Komag  (whether or not  covered by  insurance)  that  materially  and  adversely
affects the financial condition or business of Komag.

         4.8  Litigation.  Except  as set  forth  in  Section  4.8 of the  Komag
Disclosure Schedule,  there is no action, suit, claim, proceeding or arbitration
of any nature pending or, to the knowledge of Komag, threatened against Komag or
any of its  properties  or any of its  officers,  directors or  stockholders  in
respect of Komag.  There is no  investigation  pending or, to the  knowledge  of
Komag, threatened against Komag or any of its assets or properties or any of its
officers,  directors  or  stockholders  in  respect  of Komag by or  before  any
Governmental Entity. No Governmental Entity

                                       35

<PAGE>


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


has challenged or questioned the legal right of Komag to  manufacture,  offer or
sell any of its products in the present manner or style thereof.

         4.9 Brokers' Fees. Komag has not incurred,  nor will it incur, directly
or  indirectly,  any  Liability  for  brokerage  or  finders'  fees  or  agents'
commissions  or any similar  charges in  connection  with this  Agreement or any
transaction contemplated hereby.


                                    ARTICLE V

                          CONDUCT PRIOR TO THE CLOSING

         5.1 Conduct of Business of the Company. During the period from the date
of this  Agreement and  continuing  until the earlier of (i) the  termination of
this  Agreement and (ii) the Closing,  the Company  agrees (except to the extent
that Komag shall otherwise consent in writing) to carry on the Media Business in
the normal and  ordinary  course,  to pay the debts  related  thereto  including
Accounts  Payable and similar  obligations  in the normal and  ordinary  course,
consistent with past practice,  to use all  commercially  reasonable  efforts to
preserve intact the Media Business organization,  to keep available the services
of the present  Employees  (except  Non-Offered  Employees)  and to preserve its
relationships  with suppliers and others having  business  dealings with it, all
with the  goal of  preserving  unimpaired  the  Acquired  Assets  and the  Media
Business at the Closing,  together with the goodwill associated  therewith.  The
Company shall promptly  notify Komag of any event or occurrence or emergency not
in the ordinary course of business and any material event involving the Acquired
Assets or the Media Business. Except as expressly contemplated by this Agreement
or  disclosed  in Section 5.1 of the Company  Disclosure  Schedule,  the Company
shall not,  without the prior written  consent of Komag (which consent shall not
be unreasonably withheld):

                  (a) Waive or release any material  right or claim arising from
or related to the Media Business or the Acquired Assets;

                  (b)  Enter  into  any  commitment  or  transaction  involving,
relating to or affecting  the Acquired  Assets or the Media  Business not in the
ordinary course of business;

                  (c) Make any  expenditures or commitments for expenditures for
the  acquisition  of  Inventory  or other  assets  in  excess  of  $500,000  per
transaction to the extent that such expenditures or commitments for expenditures
involves, relates to or affects the Acquired Assets or Media Business;

                  (d)   Transfer   to  any   Person  any  rights  to  the  Media
Intellectual  Property which are to be included within the Acquired Assets or to
be  licensed  to Komag  pursuant to the  License  Agreement;  provided  that the
Company  may  license  any Media  Intellectual  Property to be licensed to Komag
pursuant  to the  License  Agreement  to the  extent  that so  doing  would  not
materially adversely affect Komag or the operation of the Acquired Assets or the
Media Business following the Closing;

                                       36

<PAGE>


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


                  (e) Enter into or amend any  agreements  pursuant to which any
other Person is granted marketing, distribution or similar rights of any type or
scope with respect to any products of the Company  produced in  connection  with
the Media Business;

                  (f) Amend or  otherwise  modify in any  material  respect  (or
agree to do so),  or  violate  the terms of, any of the  agreements,  contracts,
licenses, permits, leases or Environmental Permits set forth or described in the
Company Disclosure Schedule;

                  (g) Commence or settle any litigation that could reasonably be
expected to adversely affect the Acquired Assets or Media Business;

                  (h)  Acquire or agree to  acquire by merging or  consolidating
with,  or by  purchasing  any  assets or equity  securities  of, or by any other
manner,  any  business or any  corporation,  partnership,  association  or other
business  organization  or  division  thereof  that  includes  assets that would
constitute  Acquired Assets under this Agreement,  or otherwise acquire or agree
to  acquire  any  assets  that  would  constitute  Acquired  Assets  under  this
Agreement, other than in the ordinary course of business;

                  (i)  Sell,  lease,  license,  grant  any Lien on or  otherwise
dispose of or encumber any of the Acquired Assets,  except for intercompany sale
of Media Inventory in the ordinary course of business;

                  (j) Adopt or amend any employee  benefit  plan,  or enter into
any employment  contract or extend  employment  offers (in each case only to the
extent  affecting  Employees),  pay or agree to pay any special bonus or special
remuneration  to any  Employee,  or increase  the  salaries or wage rates of the
Employees, except, in each case, in the ordinary course of business,  consistent
with past practices or to the extent  required by law or to conform any Employee
Benefit Plan or Employee Agreement to the requirements of applicable law;

                  (k) Revalue any of the  Acquired  Assets,  except as expressly
required by the Agreement;

                  (l) To the extent it may affect the Acquired Assets, the Media
Business or the Liability of Komag for Taxes under the terms of this  Agreement,
make or change any  material  election in respect of Taxes,  adopt or change any
accounting method in respect of Taxes, enter into any closing agreement,  settle
any claim or  assessment  in respect of Taxes,  or consent to any  extension  or
waiver of the limitation period applicable to any claim or assessment in respect
of Taxes;

                  (m) Enter into any strategic  alliance,  development  or joint
marketing agreement  involving,  relating to or affecting the Acquired Assets or
the Media Business;

                  (n) Fail to comply  in all  material  respects  with any laws,
rules or regulations applicable to the Acquired Assets or the Media Business; or

                                       37

<PAGE>


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


                  (o) Take, or agree in writing or otherwise to take, any of the
actions described in Sections 5.1(a) through (n) above, or any other action that
would  prevent the Company from  performing  or cause the Company not to perform
its covenants hereunder or under the Collateral Documents.

         5.2 Review of Capital Budget/Spending Plan. The Company has provided to
Komag and its  representatives  for their review all current capital budgets and
spending  plans  relating  to the  Media  Business.  As  reasonably  practicable
following  the  date  hereof,  the  Company  shall  provide  to  Komag  and  its
representatives  for their  review all  updates  or  amendments  to its  current
capital budgets and spending plans relating to the Media Business.

         5.3 No Solicitation.  Until the earlier of (i) the Closing and (ii) the
date of termination of this Agreement  pursuant to the provisions of Section 9.1
hereof,  the Company will not (nor will the Company  permit any of the Company's
officers,  directors,  agents,  representatives  or  affiliates  to) directly or
indirectly,  take any of the  following  actions with any party other than Komag
and its designees: (a) solicit, encourage, conduct discussions with or engage in
negotiations  with any  Person,  other  than  Komag,  relating  to the  possible
acquisition of all or any part of the Media Business  (whether by way of merger,
purchase  of  capital  stock,  purchase  of assets or  otherwise),  (b)  provide
information  with  respect to it to any Person,  other than  Komag,  relating to
possible acquisition of all or any part of the Media Business (whether by way of
merger,  purchase of capital stock, purchase of assets or otherwise),  (c) enter
into an agreement with any Person, other than Komag,  providing for the possible
sale  of all or any  part  of the  Media  Business  (whether  by way of  merger,
purchase  of capital  stock,  purchase  of assets or  otherwise)  or (d) make or
authorize  any  statement,  recommendation  or  solicitation  in  support of any
possible  sale  of all or any  part of the  Media  Business  (whether  by way of
merger,  purchase  of capital  stock,  purchase of assets or  otherwise)  to any
Person, other than by Komag.


                                   ARTICLE VI

                              ADDITIONAL AGREEMENTS

         6.1 Access to Information.

                  (a)  Subject  to any  applicable  contractual  confidentiality
obligations (which the Company shall use all commercially  reasonable efforts to
cause to be waived), the Company shall afford Komag and its accountants, counsel
and other representatives, reasonable access during normal business hours during
the period prior to the Closing to (a) all of its properties,  employees, books,
contracts, agreements and records relating to the Media Business or the Acquired
Assets and (b) all other  information  concerning  the business,  properties and
personnel (subject to restrictions imposed by applicable law) of it as Komag may
reasonably  request for the purpose of conducting a due diligence  review of the
Media Business and the Acquired Assets. No information or knowledge  obtained in
any  investigation  pursuant to this Section 6.1(a) shall affect or be deemed to
modify any representation or warranty contained herein.

                                       38

<PAGE>


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


                  (b)  Subject  to any  applicable  contractual  confidentiality
obligations (which Komag shall use all commercially  reasonable efforts to cause
to be waived),  Komag shall afford the Company and its accountants,  counsel and
other representatives, reasonable access during normal business hours during the
period  prior  to  the  Closing  to all  information  concerning  the  business,
properties and personnel (subject to restrictions  imposed by applicable law) of
it as the  Company may  reasonably  request  for the  purpose of  evaluating  an
investment in Komag Common Stock.  No information  or knowledge  obtained in any
investigation  pursuant  to this  Section  6.1(b)  shall  affect or be deemed to
modify any representation or warranty contained herein.

                  (c) Subject to any required  consents or approvals,  Komag and
its agents, representatives or consultants shall be permitted reasonable access,
during normal  business  hours and without  material  interference  to the Media
Business,  to all Leased Real Property prior to the Closing Date for the purpose
of performing such  investigations  of the condition of the Leased Real Property
as Komag shall deem necessary,  including,  but not limited to, investigation of
the condition of the subsurface soils and groundwater.

         6.2  Confidentiality.  Each of the parties  hereto hereby agrees to and
reaffirms the terms and  provisions  of the  Confidentiality  and  Nondisclosure
Agreement between Komag and the Company dated as of April 6, 1999.

         6.3 Public  Disclosure.  Unless  otherwise  required by law (including,
without limitation,  securities laws) or by the rules and regulations of the New
York  Stock  Exchange,  Inc.  or the  NASDAQ  Stock  Market or other  securities
exchange,  prior to the Closing, no disclosure (whether or not in response to an
inquiry)  of the  subject  matter of this  Agreement  shall be made by any Party
hereto unless approved by Komag and the Company prior to release;  provided that
such  approval  shall  not be  unreasonably  withheld.  In the  event  any  such
disclosure is required by law or by the rules and  regulations  of such exchange
or market,  the disclosing Party shall afford the other Party a reasonable prior
opportunity to review the comment on such disclosure.

         6.4 HSR Approval.  The Parties hereto have filed with the United States
Federal  Trade  Commission  and the United  States  Department  of  Justice  the
pre-merger  notifications  and reports  required to be filed pursuant to the HSR
Act. The Parties hereto shall provide any  supplemental  information that may be
requested in connection  therewith and shall  request early  termination  of the
waiting period. All such notifications, reports and supplemental information, if
any, at the time so filed or provided,  shall comply, in all material  respects,
with the  requirements  of the HSR Act. Each Party shall provide such assistance
to the other as it may  reasonably  request to assist  the other in making  such
filings. The Company and Komag shall each bear fifty percent (50%) of the filing
fees required by the HSR Act.

         6.5 Consents. The Company shall use all commercially reasonable efforts
to obtain the  consents,  waivers and  approvals  under any of the Contracts set
forth in Sections 3.4, 3.5, 3.10(b), 3.10(c),  3.11(a)(ii),  3.12(a) and 3.14 of
the  Company  Disclosure  Schedule as may be  required  in  connection  with the
Acquisition  so as to assign to Komag all rights of the Company to the  Acquired
Assets and the Media  Business  including,  without  limitation,  the  consents,
waivers and approvals of

                                       39

<PAGE>


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


all  equipment  lessors  to  allow  Komag to move  all  manufacturing  equipment
included  within  the  Acquired  Assets  to  Malaysia  on terms  and  conditions
acceptable to the Company and Komag. Komag shall use all commercially reasonable
efforts to obtain the consents and  approvals  under any  contracts set forth in
Sections 4.4 and 4.5 of the Komag Disclosure Schedule.  Each Party agrees to pay
all fees and costs  necessary  to obtain the  consents,  waivers  and  approvals
required to be obtained by it;  provided that,  all fees and costs  necessary to
obtain any consents,  waivers and  approvals of any of the equipment  lessors or
landlords pursuant to any equipment leases or real property leases identified on
the  Company  Disclosure  Schedules  shall  be  paid by the  Company;  provided,
further,  however,  that if the fees and costs  necessary to obtain a particular
consent,  waiver or approval of any such  equipment  lessor or landlord  exceeds
$1,500  the  parties  shall  allocate  the fees and costs  with  respect to such
consent, waiver or approval, after good faith negotiations, in a manner mutually
agreeable  to the  parties.  Notwithstanding  anything  contained  herein to the
contrary,  if any of the equipment  lessors  require Komag to issue letter(s) of
credit on behalf  of such  equipment  lessor(s)  in  connection  with any of the
equipment leases identified on the Company Disclosure Schedules, Komag shall use
commercially  reasonable  efforts to obtain such  letter(s) of credit;  provided
that,  if Komag is unable to obtain the  letter(s)  of credit in the full amount
required  by such  equipment  lessor(s),  the Company  shall  obtain one or more
letter(s) of credit on behalf of such  equipment  lessor(s) in the amount of any
such  shortfall  up to a maximum  aggregate  amount of the  lesser of (i) twenty
percent  (20%)  of the  value  of the  letter(s)  of  credit  requested  by such
equipment lessor(s) and (ii) $5,000,000.

         6.6 Commercially  Reasonable Efforts;  Access to Warehouse.  Subject to
the terms and conditions provided in this Agreement,  each of the Parties hereto
shall use all commercially  reasonable efforts to take promptly,  or cause to be
taken,  all  actions,  and to do  promptly,  or  cause to be  done,  all  things
necessary,  proper  or  advisable  under  applicable  laws  and  regulations  to
consummate and make effective the transactions contemplated hereby to obtain all
necessary   waivers,   consents  and  approvals  and  to  effect  all  necessary
registrations  and filings and to remove any injunctions or other impediments or
delays,  legal or  otherwise,  in order to  consummate  and make  effective  the
transactions  contemplated  by this Agreement for the purpose of securing to the
Parties hereto the benefits contemplated by this Agreement;  provided that Komag
shall not be  required  to agree to any  divestiture  by Komag or any of Komag's
subsidiaries or Affiliates of shares of capital stock or of any business, assets
or  property  of Komag or its  subsidiaries  or  Affiliates  including,  without
limitation,  the Media Business or any of the Acquired Assets, or the imposition
of any  material  limitation  on the  ability  of any of them to  conduct  their
businesses or to own or exercise control of such assets,  properties and capital
stock.  For a period of thirty (30) days following the Closing Date, the Company
shall provide Komag and its employees and agents with reasonable access,  during
normal  business  hours and with prior notice,  from time to time, to enter into
the Five  Star  Warehouse  and the TWI  Warehouse  in order to  determine  which
equipment and other items it wishes to include within the Acquired Assets and to
remove from the warehouses such equipment and other items so designated.

         6.7  Notification  of Certain  Matters.  The Company  shall give prompt
notice to Komag,  and Komag shall give prompt notice to the Company,  of (i) the
occurrence or  non-occurrence  of any event, the occurrence or non-occurrence of
which is likely to cause any representation or warranty of

                                       40

<PAGE>


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


the  Company  and  Komag,  respectively,  contained  in  this  Agreement  to  be
materially   untrue  or  inaccurate  at  or  prior  to  the  Closing  except  as
contemplated by this Agreement  (including the Company Disclosure  Schedule) and
(ii) any failure of the Company or Komag,  as the case may be, to comply with or
satisfy in any  material  respect any  covenant,  condition  or  agreement to be
complied with or satisfied by it hereunder; provided, however, that the delivery
of any notice  pursuant to this Section 6.7 shall not limit or otherwise  affect
any remedies available to the party receiving such notice.

         6.8 Employee Matters.

                  (a) Selection of Employees. Komag has made, and is prepared to
make further,  written offers of employment to those  Employees at the Company's
Santa  Clara,  California  and San Jose,  California  facilities  as Komag deems
necessary,  in its sole  discretion,  to operate the Media Business  efficiently
after the Closing and to meet the Company's volume requirements set forth in the
Volume Purchase  Agreement  (conditional  upon the closing of the  Acquisition);
provided,  that  Komag  shall not be  obligated  to  employ,  and shall  have no
Liability with respect to the continued employment of, any of the Employees. The
Company  hereby  waives,  releases and discharges all Employees who shall accept
employment from Komag ("Transferred Employees") from any and all noncompetition,
confidentiality  or employment  restrictions,  obligations or agreements entered
into by such  Transferred  Employees  with the  Company to the extent  that such
Transferred  Employees are performing services related to the Media Business for
Komag or any of its  Affiliates.  The  Company  agrees  that any  disclosure  of
confidential  information  relating  to  the  Media  Business  by a  Transferred
Employee to Komag or any of its Affiliates  shall not constitute a breach of any
confidentiality agreement between such Transferred Employee and the Company.

                  (b)  Employee   Plans.   Komag  shall  use  all   commercially
reasonable efforts to (i) provide all Transferred Employees with employee health
benefits  substantially  similar in the aggregate in coverage and benefits as to
those provided as of the date hereof by the Company, (ii) waive any pre-existing
condition  requirements  or waiting  period  requirements  under  such  Person's
Employee Plans to the extent  permitted by the insurance  carrier,  (iii) credit
previous  service  by the  Transferred  Employees  with the  Company  under such
Person's  comparable  employee  benefit  plans,  including  but not limited to a
401(k)  savings  plan,  for  purposes  of  eligibility  to  participate,   early
commencement  of  benefits  and  vesting  and (iv) apply  toward any  deductible
requirement or  "out-of-pocket"  maximum limit under any such Person's  employee
benefit plans any amounts paid (or accrued) by each  Transferred  Employee under
any  Employee  Plan,  to the  extent  that the plan years of the  relevant  plan
overlap.

                  (c) 401(k) Plan Rollovers.  The Company and Komag agree to use
their best  efforts to enable  individual  rollovers of  Transferred  Employees'
account  balances in the  Company's  401(k) Plan to Komag's  401(k) Plan,  which
balances may include plan loans.  In  furtherance  and not in  limitation of the
foregoing,  provided that  Transferred  Employees  have  completed the Company's
401(k) termination distribution request form, the Company shall complete Komag's
standard rollover form for each Transferred Employee electing to rollover his or
her account  balance into Komag's 401(k) Plan in a timely  manner.  In addition,
the Company will provide Komag with a

                                       41

<PAGE>


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


discussion of facts in support of the Company's  view that the sale of the Media
Business  by the  Company  to  Komag is the  sale of  "substantially  all of the
assets" used in a "trade or business"  within the meaning of section  401(k)(10)
of the Code.

                  (d) WARN Act. The Company has sent out a notification pursuant
to the Workers  Adjustment and Retraining  Notification  Act of 1988, as amended
("WARN  Act"),  to all  Employees  who are not Offered  Employees  ("Non-Offered
Employees") to commence the sixty (60) day  notification  period  required under
the WARN  Act.  All  Liabilities  relating  to the  employment,  termination  or
employee benefits of Employees  including,  without limitation,  all termination
obligations in connection with the WARN Act shall be the  responsibility  of the
Company;  provided  that Komag  shall be  responsible  for all such  termination
obligations under the WARN Act with respect to (i) Employees who were designated
as Offered  Employees  by Komag but whose offers of  employment  were revoked by
Komag  prior to the Closing and (ii)  Offered  Employees  who are hired by Komag
following  the Closing to the extent such  obligations  under the WARN Act arise
from actions of Komag following the Closing;  provided,  further,  however, that
Komag shall not be responsible  for termination  obligations  under the WARN Act
with respect to Offered  Employees who do not accept  offers of employment  from
Komag.  In addition,  the Company shall give advance  notice to all  Non-Offered
Employees under any state statute analogous to the WARN Act.

                  (e)  COBRA.  The  Company  shall  be  solely  responsible  for
providing  continuation  health  coverage,  to the  extent  required  under  the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), to
all Offered and  Non-Offered  Employees and their  eligible  dependents who have
experienced  a qualifying  event before or on the Closing Date and who (i) elect
continuation  coverage  within the time period  prescribed by COBRA and (ii) who
are otherwise qualified  beneficiaries (as defined in Section 4980B(g)(1) of the
Code),  and the  Company  shall  indemnify  Komag for any and all loss,  cost or
expense relating to any and all outstanding obligations,  Liabilities and claims
arising under COBRA.

                  (f)  Nonsolicitation  of Employees.  Notwithstanding  anything
else contained  herein to the contrary,  (a) unless this Agreement is terminated
prior to the Closing for any reason, the Company shall not solicit the continued
employment  of any of the  Transferred  Employees  for a period of  twelve  (12)
months following the date Komag  designated such Employees as Offered  Employees
and (b) in the event that this Agreement is terminated  prior to Closing for any
reason, Komag shall not continue to solicit the employment of any of the Offered
Employees  for a  period  of  twelve  (12)  months  following  the  date  of the
termination of the Agreement;  provided that, the foregoing  restrictions  shall
not prohibit any of the parties from making general  solicitations of employment
not specifically directed to the Employees.

                  (g)  No  Third  Party  Beneficiary   Rights.   Notwithstanding
anything  contained  herein to the  contrary,  no  provision in this Section 6.8
shall  create  any third  party  beneficiary  or other  rights  to any  Employee
(including  any  beneficiary  or  dependent  thereof)  in respect  of  continued
employment  (or  resumed  employment)  with the  Company,  Komag or any of their
Affiliates,  and no provision in this Section 6.8 shall create any rights in any
such  Person in  respect  of any  benefits  that may be  provided,  directly  or
indirectly, under any Employee Plan or arrangement

                                       42

<PAGE>


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


established by Komag or its  Affiliates.  No provision of this  Agreement  shall
constitute  a  limitation  on the  rights of Komag or its  Affiliates  to amend,
modify or terminate after the Closing Date any such plans or arrangements.

         6.9 NMS  Listing.  Komag  shall  authorize  for  listing  on the Nasdaq
National  Market the Sale Shares  issuable in connection  with the  Acquisition,
upon official notice of issuance.


                                   ARTICLE VII

                        CONDITIONS TO OBLIGATION TO CLOSE

         7.1 Conditions to  Obligations  of each of the Parties.  The respective
obligations of each Party to this Agreement to consummate the Acquisition  shall
be  subject to the  satisfaction  at or prior to the  Closing  of the  following
conditions:

                  (a)  HSR  Approval.  The  waiting  period  applicable  to  the
consummation of the Acquisition  under the HSR Act shall have been terminated or
shall have expired without the threat of litigation by a Governmental Entity.

                  (b)  No  Injunctions  or  Restrains  on  the  Conduct  of  the
Business. No temporary restraining order, preliminary or permanent injunction or
other  order  issued by any court of  competent  jurisdiction  or other legal or
regulatory restraint or provision challenging the Acquisition shall be in effect
nor shall any proceeding brought by a Governmental  Entity seeking the foregoing
be pending.

         7.2  Additional  Conditions to Obligation of Komag.  The  obligation of
Komag to consummate the  transactions  to be performed by it in connection  with
the Closing is subject to satisfaction of the following conditions, any of which
may be waived in writing exclusively by Komag:

                  (a)  Representations  and Warranties.  The representations and
warranties of the Company  contained in this Agreement  shall have been true and
correct in all material respects as of the date of this Agreement.  In addition,
the  representations  and warranties of the Company  contained in this Agreement
shall be true and  correct in all  material  respects  on and as of the  Closing
Date, except for those representations and warranties which address matters only
as of a  particular  date (which  shall  remain true and correct in all material
respects as of such particular  date), with the same force and effect as if made
on and as of the Closing  Date,  except in such cases  (other than  Sections 3.1
through 3.3 and 3.27  through  3.29) where the failure to be so true and correct
would  not,  in the  aggregate,  have a  material  adverse  effect  on the Media
Business  or the value of the  Acquired  Assets.  Komag  shall  have  received a
certificate with respect to the foregoing signed on behalf of the Company by the
Vice  President,  Business  Operations  and the Chief  Financial  Officer of the
Company.

                                       43

<PAGE>


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


                  (b) Agreements and Covenants. The Company shall have performed
and complied in all material respects with all agreements and covenants required
by this  Agreement  to be performed  and complied  with by it on or prior to the
Closing Date,  and Komag shall have received a certificate to such effect signed
on behalf of the  Company by the Vice  President,  Business  Operations  and the
Chief Financial Officer of the Company.

                  (c) Consents and  Approvals of the Company.  The Company shall
have furnished  evidence to Komag  satisfactory,  in its reasonable  discretion,
that all of the third  party  consents,  approvals  and  waivers  referenced  in
Section   6.5  have   been   obtained   including,   without   limitation,   (i)
acknowledgements  and waivers from the landlords under each of the real property
leases to be assigned to Komag  stating that,  among other  things,  there is no
default (and the  Acquisition has not caused a default) under such real property
lease,  (ii) the consents of all equipment lessors of the Leased Fixed Assets to
allow Komag to move all  manufacturing  equipment  included  within the Acquired
Assets to Malaysia on terms and  conditions  acceptable to Komag and the Company
and (iii) the  consent  of Bank of Boston  under  the  Company's  senior  credit
facility and the removal of all Liens granted to the Bank of Boston with respect
to any of the Acquired Assets.

                  (d) Consents and Approvals of Komag. Komag shall have received
the written  consents,  approvals  and/or  waivers of each of those  Persons set
forth in Sections 4.4 and 4.5 of the Komag Disclosure Schedule.

                  (e) No  Litigation.  No action,  suit, or proceeding  shall be
pending or threatened  before any  Governmental  Entity  wherein an  unfavorable
injunction,  judgment,  order,  decree,  ruling,  or charge  would  (A)  prevent
consummation  of any of the  transactions  contemplated by this Agreement or the
Collateral  Documents,  (B) cause any of the  transactions  contemplated by this
Agreement or the Collateral Documents to be rescinded following  consummation of
the  Acquisition,  or (C)  materially  affect in an adverse  manner the right of
Komag to own the Acquired Assets, and to operate the Media Business (and no such
injunction, judgment, order, decree, ruling, or charge shall be in effect).

                  (f) No  Material  Adverse  Effect.  Since  the  date  of  this
Agreement,  there shall not have  occurred  any material  adverse  effect on the
Media Business,  any of the Acquired Assets or the financial condition,  results
of operation or business of the Company.

                  (g)  Assignment and  Assumption  Agreement.  The Company shall
have entered into an Assignment and Assumption Agreement,  in the form set forth
in Exhibit E attached hereto (the "Assignment and Assumption Agreement").

                  (h) Bill of Sale.  The Company  shall have  executed a Bill of
Sale, in the form set forth in Exhibit F attached hereto ("Bill of Sale").

                  (i) Volume Purchase Agreement.  The Company shall have entered
into a Volume Purchase Agreement with Komag and/or Komag USA (Malaysia) Sdn., in
the  form  set  forth  in  Exhibit  G  attached  hereto  (the  "Volume  Purchase
Agreement").

                                       44

<PAGE>


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


                  (j)  Joint  Development  Agreement.  The  Company  shall  have
entered into a Joint  Development  Agreement with Komag in the form set forth in
Exhibit H attached hereto (the "Joint Development Agreement").

                  (k) License  Agreement.  The Company shall have entered into a
License  Agreement with Komag and/or Komag USA  (Malaysia)  Sdn. in the form set
forth in Exhibit I attached hereto (the "License Agreement").

                  (l)  Registration  Rights  Agreement.  The Company  shall have
entered into a Registration  Rights  Agreement with Komag, in the form set forth
in Exhibit J attached hereto (the "Registration Rights Agreement").

                  (m) Transitional  Services  Agreement.  The Company shall have
entered into a Transitional Services Agreement with Komag, in the form set forth
in Exhibit K attached hereto (the "Transitional Services Agreement").

                  (n) Preliminary Closing NBV Statement.  The Company shall have
delivered to Komag the Preliminary Closing NBV Statement.

                  (o) Legal  Opinion  of  Company's  Counsel.  Komag  shall have
received  from  counsel to the Company  and the  general  counsel of the Company
opinions,  in the form set forth in  Exhibit L  attached  hereto,  addressed  to
Komag, and dated as of the Closing Date.

                  (p)   Environmental   Audit.   Komag   shall  have   obtained,
investigated and approved,  in its sole discretion,  no later than five (5) days
prior  to the  Closing  Date,  a  report  of any  consultant  selected  by Komag
regarding the Pre-Closing  Hazardous Materials  Activities;  the exposure of the
Company's  employees  or customers  to  Hazardous  Materials  arising out of the
operation  of the Media  Business  prior to the Closing  Date;  the  presence or
absence of Hazardous Materials on any real property as a result of the operation
of the Media Business;  or the likelihood that Hazardous  Materials will migrate
onto any Leased Real Property.

         7.3 Additional  Conditions to Obligation of the Company. The obligation
of  the  Company  to  consummate  the  transactions  to  be  performed  by it in
connection  with  the  Closing  is  subject  to  satisfaction  of the  following
conditions, any of which may be waived in writing exclusively by the Company:

                  (a)  Representations  and Warranties.  The representations and
warranties of Komag contained in this Agreement shall have been true and correct
in all material  respects as of the date of this  Agreement.  In  addition,  the
representations  and warranties of Komag  contained in this  Agreement  shall be
true and correct in all material  respects on and as of the Closing Date, except
for those  representations  and  warranties  which address  matters only as of a
particular date (which shall remain true and correct in all material respects as
of such particular date), with the same force and effect as if made on and as of
the Closing  Date,  except in such cases (other than Sections 4.2 and 4.3) where
the  failure to be so true and  correct  would  not,  in the  aggregate,  have a
material  adverse  effect on the  financial  condition,  results of operation or
business of Komag. The Company shall have

                                       45

<PAGE>


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


received a certificate  with respect to the foregoing  signed on behalf of Komag
by its President and Chief Financial Officer.

                  (b) Agreements  and Covenants.  Komag shall have performed and
complied in all material respects with all agreements and covenants  required by
this  Agreement  to be  performed  and  complied  with by it on or  prior to the
Closing Date,  and the Company shall have received a certificate  to such effect
signed on behalf of Komag by its President and Chief Financial Officer.

                  (c) Consents and  Approvals of the Company.  The Company shall
have   obtained   the   following   consents,   approvals   and   waivers:   (i)
acknowledgements  and waivers from the landlords under each of the real property
leases to be assigned to Komag  stating that,  among other  things,  there is no
default (and the  Acquisition has not caused a default) under such real property
lease,  (ii) the consents of all equipment lessors of the Leased Fixed Assets to
allow Komag to move all  manufacturing  equipment  included  within the Acquired
Assets to Malaysia on terms and  conditions  acceptable to Komag and the Company
and (iii) the  consent  of Bank of Boston  under  the  Company's  senior  credit
facility.

                  (d) No  Litigation.  No action,  suit, or proceeding  shall be
pending  before  any  Governmental  Entity  wherein an  unfavorable  injunction,
judgment,  order, decree, ruling or charge would (A) prevent consummation of any
of the transactions  contemplated by this Agreement or the Collateral  Documents
or (B) cause  any of the  transactions  contemplated  by this  Agreement  or the
Collateral  Documents to be rescinded following  consummation of the Acquisition
(and no such injunction,  judgment, order, decree, ruling, or charge shall be in
effect).

                  (e)  Assignment  and  Assumption  Agreement.  Komag shall have
entered into the Assignment and Assumption Agreement.

                  (f) Volume Purchase  Agreement.  Komag shall have entered into
the Volume Purchase Agreement.

                  (g) Joint Development Agreement. Komag shall have entered into
the Joint Development Agreement.

                  (h)  License  Agreement.  Komag  shall have  entered  into the
License Agreement.

                  (i) Registration  Rights  Agreement.  Komag shall have entered
into the Registration Rights Agreement.

                  (j) Transitional Services Agreement.  Komag shall have entered
into the Transitional Services Agreement.

                  (k) No Material Adverse Effect.  There shall not have occurred
any material  adverse change in the business,  results of operation or financial
condition  of Komag since the date  hereof;  provided  that,  a reduction in the
trading price of Komag Common Stock, whether occurring

                                       46

<PAGE>


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


at any time or from time to time,  as  reported  by the Nasdaq  National  Market
shall not constitute a material adverse change.

                  (l) Promissory Note. Komag shall have delivered to the Company
the Promissory Note.

                  (m) Legal Opinion of Komag's  Counsel.  The Company shall have
received  from  counsel  to Komag an  opinion,  in form set  forth in  Exhibit M
attached hereto, addressed to the Company, and dated as of the Closing Date.

                  (n) Value of Sale Shares.  The Share Amount Cap shall not have
been applied to determine the Share Amount.


                                  ARTICLE VIII

          SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ESCROW; INDEMNITY

         8.1 Survival of Representations and Warranties.  Except as set forth in
Section 8.5 hereof, all of the  representations and warranties in this Agreement
or in any  certificate  delivered  pursuant to this Agreement  shall survive the
Acquisition  and continue for a period  ending on the [***]  anniversary  of the
Closing.

         8.2 Agreement to Indemnify.

                  (a) The Company agrees to indemnify and hold Komag and each of
its Affiliates,  officers, directors,  employees and shareholders (collectively,
the "Komag Indemnitees") harmless against any and all losses,  claims,  damages,
costs,  expenses or other liabilities  (including reasonable attorneys' fees and
expenses and expenses of investigation  and defense)  (collectively,  "Damages")
resulting  from (i) any  breach  of or  inaccuracy  in any  representations  and
warranties of the Company set forth in this  Agreement,  the Company  Disclosure
Schedule or in any other  certificate  delivered  by or on behalf of the Company
pursuant  to this  Agreement,  (ii) any breach or default by the  Company of any
covenant,  obligation  or  other  agreement  of the  Company  set  forth in this
Agreement, the Company Disclosure Schedule or any other certificate delivered by
or on behalf of the  Company  pursuant  to this  Agreement  and (iii) any of the
Retained Liabilities (each, a "Komag Indemnifiable Claim").

                  (b) Komag agrees to indemnify and hold the Company and each of
its Affiliates,  officers, directors,  employees and shareholders (collectively,
the "Company  Indemnitees")  harmless against any and all Damages resulting from
(i) any breach of or inaccuracy in any  representations  and warranties of Komag
set forth in this  Agreement,  the  Komag  Disclosure  Schedule  or in any other
certificate delivered by or on behalf of

                                       47

<PAGE>


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


the Company  pursuant to this Agreement,  (ii) any breach or default by Komag of
any  covenant,  obligation  or  other  agreement  of  Komag  set  forth  in this
Agreement,  the Komag Disclosure Schedule, or any other certificate delivered by
or on behalf of the  Company  pursuant  to this  Agreement  and (iii) any of the
Assumed Liabilities (each, a "Company Indemnifiable Claim").

         8.3 Limits of  Liability.  In no event  shall any Komag  Indemnitee  or
Company Indemnitee, as applicable ("Indemnitee"),  be reimbursed for any Damages
under this Article VIII until the aggregate of all Damages incurred by all Komag
Indemnitees  or  Company  Indemnitees,  as  the  case  may  be,  exceeds  $[***]
("Threshold  Amount")  (after  which the amount of all Damages,  including  such
$[***],  shall become payable in accordance  with the provisions of this Article
VIII);  provided that, (i) the Threshold Amount shall not apply to [***] or (ii)
the  Threshold  Amount shall not apply to [***].  Notwithstanding  anything else
contained in this Agreement to the contrary,  the maximum aggregate amount which
Komag  Indemnitees or the Company  Indemnitees,  as the case may be, may recover
pursuant to this Article VIII is $[***]; provided that, the indemnities provided
in Sections  8.2(a)(iii) and  8.2(b)(iii)  shall not be limited by the foregoing
$[***] maximum.

         8.4 Indemnification Procedures; Time Limits.

                  (a) If any Indemnitee shall incur any Damages,  there shall be
delivered  to the  Company  or  Komag,  as the  case  may be (the  "Indemnifying
Party"), a certificate signed in good faith by the Company or Komag, as the case
may be, on behalf of such Indemnitee (an "Officer's  Certificate")  stating that
such Indemnitee has paid,  properly  accrued or reasonably  anticipates  that it
will have to pay or accrue  Damages  in an amount  specified  in such  Officer's
Certificate,  specifying in reasonable  detail the  individual  items of Damages
included  in the amount so stated,  the date each such item was paid or properly
accrued,  or the basis for such anticipated  Liability,  and the nature of Komag
Indemnifiable  Claim or  Company  Indemnifiable  Claim,  as the case may be (the
"Indemnifiable  Claim"),  to which such item is related.  The Indemnifying Party
shall,  within  thirty  (30) days after  receipt of the  Officer's  Certificate,
subject to the provisions of Section 8.4(c) hereof,  deliver to such  Indemnitee
in immediately available funds (U.S. Dollars) an amount equal to such Damages.

                  (b) For a period of thirty (30) days after the receipt of such
Officer's Certificate by the Indemnifying Party, the Indemnifying Party shall be
entitled to review the Officer's  Certificate and the basis of the Indemnifiable
Claim. If the Indemnifying  Party desires to dispute the Indemnifiable  Claim or
the Damages set forth in the Officer's  Certificate,  the Indemnifying Party may
do so by providing  written  notice of such dispute to the Company or Komag,  as
the case may be, on behalf of the  Indemnitee  prior to the  expiration  of such
thirty (30) day period.

                  (c) If the  Indemnifying  Party  shall so object in writing to
any claim or claims made in any Officer's  Certificate,  the Indemnifying  Party
and the Company or Komag, as the case may be, on behalf of the Indemnitee  shall
attempt in good faith to agree upon the rights of the  respective  parties  with
respect to each of such  claims.  If the  Indemnifying  Party and the Company or
Komag,  as the case may be,  on  behalf of the  Indemnitee,  should so agree,  a
memorandum  setting forth such agreement  shall be prepared and signed by Komag,
the Company and the  Indemnitee  and the  parties  shall  resolve the dispute in
accordance with such memorandum.  If no such agreement can be reached after good
faith negotiation, either the Indemnifying Party or the Company or Komag, as

                                       48

<PAGE>


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


the case may be, on behalf of the  Indemnitee,  may  demand  arbitration  of the
matter unless the amount of the damage or loss is at issue in pending litigation
with a third party, in which event arbitration shall not be commenced until such
amount is ascertained or the Indemnifying Party and Komag or the Company, as the
case may be, on behalf of the Indemnitee,  agree to  arbitration;  and in either
such  event the  matter  shall be  settled  by  arbitration  conducted  by three
arbitrators.  The Indemnifying  Party and Komag or the Company,  as the case may
be, on behalf of the Indemnitee,  shall each select one arbitrator,  and the two
arbitrators  so  selected  shall  select  a  third  arbitrator,  each  of  which
arbitrators  shall be  independent.  The  arbitrators  shall set a limited  time
period  and  establish  procedures  designed  to  reduce  the  cost and time for
discovery  while  allowing  the  parties an  opportunity,  adequate  in the sole
judgment of the arbitrators,  to discover relevant information from the opposing
parties about the subject matter of the dispute. The arbitrators shall rule upon
motions  to compel or limit  discovery  and shall have the  authority  to impose
sanctions,  including  attorneys  fees and  costs,  to the  extent as a court of
competent law or equity,  should the  arbitrators  determine  that discovery was
sought  without  substantial  justification  or that  discovery  was  refused or
objected to without substantial justification. The decision of a majority of the
three  arbitrators  as to the validity and amount of any claim in such Officer's
Certificate  shall be binding and conclusive  upon the parties to this Agreement
and all other Indemnitees. Such decision shall be written and shall be supported
by written  findings  of fact and  conclusions  which shall set forth the award,
judgment, decree or order awarded by the arbitrators.

                  (d) Judgment upon any award rendered by the arbitrators may be
entered in any court having jurisdiction.  Any such arbitration shall be held in
Santa Clara  County,  California  under the rules then in effect of the Judicial
Arbitration  and Mediation  Services,  Inc. For purposes of this Section 8.4, in
any arbitration hereunder in which any claim or the amount thereof stated in the
Officer's  Certificate  is at issue,  the  Indemnitee  shall be deemed to be the
non-prevailing  party of the arbitration in the event that the arbitrators award
the Indemnitee  less than the sum of one-half (1/2) of the disputed  amount plus
any amounts not in dispute; otherwise, the Indemnifying Party shall be deemed to
be the non-prevailing  party. The  non-prevailing  party to an arbitration shall
pay its own expenses,  the fees of each arbitrator,  the administrative costs of
the arbitration,  and the expenses,  including  without  limitation,  reasonable
attorneys' fees and costs, incurred by the other party to the arbitration.

                  (e) In the event any Indemnitee becomes aware of a third-party
claim which such Indemnitee believes may result in an Indemnifiable  Claim, such
Indemnitee  shall promptly  notify the  Indemnifying  Party of such claim,  and,
provided  that  the  Indemnifying  Party  acknowledges  that  such  claim  is an
Indemnifiable   Claim,  the  Indemnifying  Party  shall  be  entitled,   at  the
Indemnifying  Party's expense,  to participate in any defense of such claim. The
Indemnitee shall have the right in its sole discretion to settle any such claim;
provided,  however,  that, except with the consent of the Indemnifying Party, no
settlement  of  any  such  claim  with  third-party  claimants  shall  alone  be
determinative  of the amount of any  Indemnifiable  Claim. In the event that the
Indemnifying  Party has consented to any such settlement and  acknowledged  that
the claim is a Indemnifiable  Claim, the Indemnifying  Party shall have no power
or authority to object under any provision of this Article VIII to the amount of
any Indemnifiable Claim by such Indemnitee with respect to such settlement.

                                       49

<PAGE>


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


         8.5 Survival of Environmental  Covenants. The obligations and rights of
Komag  and  Company  with  respect  to  (i)  Seller's   Retained   Environmental
Liabilities   and  (ii)  the   representations   made  in  Section  3.22  hereof
(collectively  the  "Environmental  Covenants") are in addition to,  independent
from,  and severable  from the rights and  obligations  of the Parties under all
other provisions of this Agreement.  It is expressly acknowledged by all Parties
hereto that neither the acts or omissions of any Party  hereto,  nor any failure
of any condition or breach of a representation contained in the Agreement or any
related agreements, shall impair the right of Komag to enforce the Environmental
Covenants  for  their  benefit,  it  being  understood  that  the  Environmental
Covenants  are being  given  consideration  of the  closing of the  transactions
contemplated by the Agreement and not in consideration of future  performance or
any  representation,  and are  intended to  allocate  risk of loss and to create
rights and obligations with respect to the matters covered by the  Environmental
Covenants  between the Parties  without regard to the conduct of any Person.  No
failure of any Person to exercise its rights under the  Environmental  Covenants
and no delay in exercising any right or remedy  hereunder,  at law or in equity,
shall  operate  as a waiver of the  agreements  contained  in the  Environmental
Covenants; nor shall the Parties be estopped from exercising any right or remedy
at any future time because of any such failure or delay; nor shall any single or
partial  exercise  of any such  right or  remedy  preclude  any  other or future
exercise thereof or the exercise of any other right or remedy. The Environmental
Covenants shall survive the sale, transfer,  assignment, or hypothecation of any
ownership  interest in a party benefited  hereby or obligated  hereunder and the
sale, transfer, assignment, or hypothecation of the Acquired Assets or any Media
Business Facility,  or any portion thereof or interest therein,  by Komag to any
Person.


                                   ARTICLE IX

                                   TERMINATION

         9.1  Termination of Agreement.  This Agreement may be terminated at any
time prior to the Closing as provided below:

                  (a) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Closing;

                  (b) Komag  may  terminate  this  Agreement  by giving  written
notice  to the  Company  at any  time  prior to the  Closing  if Komag is not in
material  breach of its  obligations  under this  Agreement and there has been a
breach of any representation,  warranty, covenant or agreement contained in this
Agreement  on the  part  of the  Company  and as a  result  of such  breach  the
condition set forth in Section  7.2(a) or 7.2(b),  as the case may be, would not
then be  satisfied;  provided,  however,  that if such  breach is curable by the
Company  within  thirty  (30) days  through  the  exercise  of its  commercially
reasonable  efforts,  then for so long as the Company continues to exercise such
commercially  reasonable  efforts Komag may not terminate this  Agreement  under
this Section 9.1 unless such breach has not been cured  within  thirty (30) days
(but no cure period shall be required for a breach which by its nature cannot be
cured);

                                       50

<PAGE>


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


                  (c) the Company may terminate this Agreement by giving written
notice  to Komag  at any time  prior to the  Closing  if the  Company  is not in
material  breach of its  obligations  under this  Agreement and there has been a
breach of any representation,  warranty, covenant or agreement contained in this
Agreement on the part of Komag and as a result of such breach the  condition set
forth in  Section  7.3(a)  or  7.3(b),  as the case  may be,  would  not then be
satisfied;  provided,  however,  that if such breach is curable by Komag  within
thirty (30) days through the exercise of its  commercially  reasonable  efforts,
then for so long as Komag  continues to exercise  such  commercially  reasonable
efforts the Company may not  terminate  this  Agreement  under this  Section 9.1
unless  such  breach has not been  cured  within  thirty  (30) days (but no cure
period shall be required for a breach which by its nature cannot be cured); or

                  (d) either Party may terminate  this Agreement at any time, if
there shall be any action  taken,  or any  statute,  rule,  regulation  or order
enacted,  promulgated or issued or deemed  applicable to the  Acquisition by any
Governmental Entity, which would: (i) prohibit Komag's ownership or operation of
all or any material portion of the Media Business or the Acquired  Assets,  (ii)
compel  Komag to dispose of or hold  separate  all or a material  portion of the
Media Business or the Acquired Assets or other  businesses or assets of Komag as
a result of the Acquisition or (iii) materially  limit the benefits  accruing to
such Party under the Volume Purchase Agreement.

         9.2  Effect  of  Termination.  In the  event  of  termination  of  this
Agreement as provided in Section 9.1,  this  Agreement  shall  forthwith  become
void,  and there shall be no liability or obligation on the part of Komag or the
Company, or their respective officers, directors or shareholders;  provided that
each party shall remain liable for any breaches of this  Agreement  prior to its
termination;  and provided  further that,  the  provisions of Sections 6.2, 6.3,
6.8(e),  10.10 and 10.14 and Article VIII of this Agreement shall remain in full
force and effect and survive any termination of this Agreement.

         9.3  Escrow  Agreement;   Distribution  of  Property.   Notwithstanding
anything  contained in this Agreement to the contrary,  upon consummation of the
Acquisition, the Property (as defined in the Escrow Agreement) shall immediately
be  distributed  to  Komag;  provided,  however,  that,  if  this  Agreement  is
terminated prior to the  consummation of the Acquisition,  the Property shall be
distributed in accordance with Section 14(b) of the Escrow Agreement.


                                    ARTICLE X

                                  MISCELLANEOUS

         10.1 No Third-Party Beneficiaries. Except as expressly provided in this
Agreement,  this  Agreement  shall not confer any  rights or  remedies  upon any
Person other than the Parties, their respective successors and permitted assigns
and, with respect to Sections 7.2(i) and 7.2(k) Komag USA (Malaysia) Sdn.

         10.2  Entire  Agreement.   This  Agreement  (including  the  Disclosure
Schedules  and other  documents  referred  to  herein)  constitutes  the  entire
agreement  between the Parties  with  respect to the

                                       51

<PAGE>


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


subject  matter hereof and supersedes  any prior  understandings,  agreements or
representations  by or between the Parties,  written or oral, to the extent they
related in any way to the subject matter hereof.

         10.3  Succession and Assignment.  Except as expressly  provided in this
Agreement,  this Agreement shall be binding upon and inure to the benefit of the
Parties named herein and their respective  successors and permitted assigns.  No
Party may assign  either  this  Agreement  or any of its rights,  interests,  or
obligations hereunder by operation of law or otherwise without the prior written
approval of each other Party;  provided,  however, that Komag may (i) assign any
or all of its rights and  interests  hereunder to one or more of its  Affiliates
and (ii)  designate  one or more of its  Affiliates  to perform its  obligations
hereunder  (in  any  or  all of  which  cases  Komag  nonetheless  shall  remain
responsible for the performance of all of its obligations hereunder).

         10.4  Counterparts.  This  Agreement  may  be  executed,  including  by
facsimile signature, in one or more counterparts,  each of which shall be deemed
an  original  but all of  which  together  will  constitute  one  and  the  same
instrument.

         10.5  Headings.  The Section  headings  contained in this Agreement are
inserted  for  convenience  only and shall not affect in any way the  meaning or
interpretation of this Agreement.

         10.6  Notices.  All  notices  and  other  communications   required  or
permitted  under this Agreement shall be deemed to have been duly given and made
if in writing and if served  either by personal  delivery or by facsimile  (with
telephonic  confirmation of receipt) to the Party for whom intended (which shall
include delivery by Federal Express or similar nationally recognized service) or
three  business  days after  being  deposited,  postage  prepaid,  certified  or
registered mail, return receipt requested, in the United States mail bearing the
address shown in this  Agreement for, or such other address as may be designated
in writing hereafter by, such Party:

         If to the Company:                 Western Digital Corporation
                                            8105 Irvine Center Drive
                                            Irvine, California 92618
                                            Attn:  Michael A. Cornelius
                                            Telephone:  (949) 932-5000
                                            Facsimile:   (949) 932-3820

         With a Copy to:                    Gibson, Dunn & Crutcher LLP
                                            1520 Page Mill Road
                                            Palo Alto, California 94304-1125
                                            Attn: Gregory T. Davidson, Esq.
                                            Telephone:      (650) 849-5300
                                            Facsimile:      (650) 849-5333

         If to Komag:                       Komag, Incorporated
                                            1704 Automation Parkway
                                            San Jose, CA 95131
                                            Attn:  Chief Financial Officer

                                       52

<PAGE>


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


                                            Telephone:      (408) 576-2200
                                            Facsimile:      (408) 944-9255

         With a Copy to:                    Wilson Sonsini Goodrich & Rosati
                                            Professional Corporation
                                            650 Page Mill Road
                                            Attn:  Steven V. Bernard, Esq.
                                            Telephone:      (650) 493-9300
                                            Facsimile:      (650) 493-6811

         Any Party may change the address to which notices,  requests,  demands,
claims and other  communications  hereunder  are to be  delivered  by giving the
other Party notice in the manner herein set forth.

         10.7 Governing Law. This Agreement  shall be governed by, and construed
and enforced in accordance with, the internal laws of the State of Delaware.

         10.8  Amendments  and Waivers.  No  amendment of any  provision of this
Agreement shall be valid unless the same shall be in writing and signed by Komag
and the Company.  No waiver of any provisions of this  Agreement  shall be valid
unless the same shall be in writing and signed by the waiving  party.  No waiver
by any  Party of any  default,  misrepresentation,  or  breach  of  warranty  or
covenant hereunder, whether intentional or not, shall be deemed to extend to any
prior or  subsequent  default,  misrepresentation,  or  breach  of  warranty  or
covenant  hereunder  or affect in any way any  rights  arising  by virtue of any
prior or subsequent such occurrence.

         10.9 Severability. In the event that any provision of this Agreement or
the  application  thereof,  becomes  or is  declared  by a  court  of  competent
jurisdiction  to be  illegal,  void  or  unenforceable,  the  remainder  of this
Agreement  will  continue in full force and effect and the  application  of such
provision to other persons or circumstances  will be interpreted so as to effect
the intent of the parties hereto. The parties further agree to replace such void
or  unenforceable  provision  of this  Agreement  with a valid  and  enforceable
provision that will achieve, to the extent possible, the economic,  business and
other purposes of such void or unenforceable provision.

         10.10 Expenses. Whether or not the Acquisition is consummated, all fees
and expenses  incurred in connection  with the  Acquisition  including,  without
limitation, all legal, accounting,  financial advisory, consulting and all other
fees and expenses of third parties  incurred by a party in  connection  with the
negotiation  and  effectuation of the terms and conditions of this Agreement and
the Collateral  Documents and the transactions  contemplated hereby and thereby,
shall  be the  obligation  of the  respective  party  incurring  such  fees  and
expenses;  provided  that the  accounting  fees and  expenses  of the Company in
connection with the preparation of audited financial  statements with respect to
the Media  Business,  if audited  financial  statements  are requested by Komag,
shall be borne by Komag.

         10.11  Construction.  The  Parties  have  participated  jointly  in the
negotiation  and  drafting  of this  Agreement.  In the  event an  ambiguity  or
question of intent or interpretation arises, this

                                       53

<PAGE>


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


Agreement  shall be  construed  as if  drafted  jointly  by the  Parties  and no
presumption or burden of proof shall arise favoring or disfavoring  any Party by
virtue  of the  authorship  of any of the  provisions  of  this  Agreement.  Any
reference  to any  federal,  state,  local,  or foreign  statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context  requires  otherwise.  The word  "including"  shall mean  "including
without  limitation."  The word  "agreement" when used herein shall be deemed in
each case to mean any contract,  commitment or other agreement,  whether oral or
written,  which is legally  binding.  Words using the singular or plural  number
also include the plural or singular number, respectively.

         10.12  Incorporation  of  Exhibits  and  Schedules.  The  Exhibits  and
Schedules  identified in this Agreement are incorporated herein by reference and
made a part hereof.

         10.13 Other Remedies.  Except as otherwise  expressly  provided herein,
any and all  remedies  herein  expressly  conferred  upon a Party will be deemed
cumulative with and not exclusive of any other remedy  conferred  hereby,  or by
law or equity  upon such  Party,  and the  exercise by a Party of any one remedy
will not preclude the exercise of any other remedy.

         10.14  Submission  to  Jurisdiction.  Each of the  Parties  irrevocably
consents to the exclusive  jurisdiction  and venue of any state or federal court
sitting in Santa Clara County,  California,  in any action or proceeding arising
out of or  relating  to this  Agreement  and agrees  that,  except as  otherwise
provided in Section 8.4, all claims in respect of the action or  proceeding  may
be heard and  determined  in any such  court.  Each of the  Parties  waives  any
defense of inconvenient  forum to the maintenance of any action or proceeding so
brought and waives any bond, surety, or other security that might be required of
any other party with respect thereto. Each Party agrees that a final judgment in
any action or proceeding  so brought shall be conclusive  and may be enforced by
suit on the judgment or in any other manner provided by law or in equity.

         10.15 Share Legends. All certificates representing any of the shares of
Komag Common Stock to be issued  pursuant to this Agreement  shall have endorsed
thereon a restrictive legend substantially as follows:

                  (a)  "THESE  SECURITIES  HAVE NOT BEEN  REGISTERED  UNDER  THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS. THEY MAY
NOT BE SOLD,  OFFERED  FOR SALE,  PLEDGED OR  HYPOTHECATED  IN THE ABSENCE OF AN
EFFECTIVE  REGISTRATION  STATEMENT  AS TO THE  SECURITIES  UNDER  SAID ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED."

                  (b) Any legend  required  to be placed  thereon by  applicable
blue sky laws of any state.

                  (c) "THESE  SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFER
AND  MAY NOT BE  EXCHANGED,  TRANSFERRED,  PLEDGED,  HYPOTHECATED  OR  OTHERWISE
DISPOSED  OF  EXCEPT  IN  ACCORDANCE  WITH AND  SUBJECT  TO ALL OF THE TERMS AND
CONDITIONS OF THAT CERTAIN

                                       54

<PAGE>


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


REGISTRATION  RIGHTS  AGREEMENT  DATED AS OF APRIL 8, 1999 BY AND BETWEEN KOMAG,
INCORPORATED   AND  WESTERN  DIGITAL   CORPORATION,   A  COPY  OF  WHICH  KOMAG,
INCORPORATED  WILL  FURNISH TO THE HOLDER OF THIS  CERTIFICATE  UPON REQUEST AND
WITHOUT CHARGE."

         10.16 California  Corporate  Securities Law. THE SALE OF THE SECURITIES
WHICH  ARE THE  SUBJECT  OF THIS  AGREEMENT  HAS NOT  BEEN  QUALIFIED  WITH  THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE  CONSIDERATION  THEREFOR
PRIOR TO SUCH  QUALIFICATION IS UNLAWFUL UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM THE  QUALIFICATION  BY SECTION  25100,  25102,  OR 25105 OF THE  CALIFORNIA
CORPORATIONS  CODE.  THE RIGHTS OF ALL PARTIES TO THIS  AGREEMENT  ARE EXPRESSLY
CONDITIONED  UPON  SUCH  QUALIFICATION  BEING  OBTAINED,  UNLESS  THE SALE IS SO
EXEMPT.


                  [Remainder of page intentionally left blank]


                                       55

<PAGE>


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


         IN WITNESS WHEREOF,  the Parties hereto have executed this Agreement as
of the date first above written.


                                             KOMAG, INCORPORATED

                                             By: _______________________________
                                             Name:
                                             Title:



                                             WESTERN DIGITAL CORPORATION

                                             By: _______________________________
                                             Name:
                                             Title:

         The undersigned,  Komag USA (Malaysia) Sdn.,  agrees to be bound by the
terms contained in Sections 7.2(i), 7.2(k) and 10.1 of this Agreement.


                                             KOMAG USA (MALAYSIA) SDN.

                                             By: _______________________________
                                             Name:
                                             Title: