Common use of Certain Transfer Restrictions Clause in Contracts

Certain Transfer Restrictions. (a) From the date hereof to the date of the next annual meeting of the stockholders of the Company in May, 1997, neither the Swiss Re Stockholders nor the Reliance Stockholders shall be permitted to transfer any Shares to a third party unless, prior to any proposed transfer the Swiss Re Stockholders or Reliance Stockholders (as the case may be, a "Selling Stockholder") has given written notice of the proposed transfer of such Shares (the "Notice of Intention") to the Company specifying the type and number of Shares which such Selling Stockholder wishes to transfer, the proposed purchase price (the "Offer Price") therefore and all other material terms and conditions of the proposed transfer. For a period of thirty (30) days following its receipt of the Notice of Intention, the Company or its designees shall have the right to purchase all or (with the consent of the Selling Stockholder) any portion of the Shares offered by such Selling Stockholder at the Offer Price and on the other terms specified in the Notice of Intention, exercisable by delivery of an irrevocable notice (the "Company Notice") to the Selling Stockholder specifying the number of offered Shares with respect to which the Company or its designees is exercising its option. If all notices required to be given pursuant to this Section have been duly given and the Company or its designees do not exercise the option to purchase the offered Shares at the Offer Price and on the other terms specified in the Notice of Intention or determined, with the consent of the Selling Stockholder, to exercise its option to purchase a portion of the offered Shares, then the Selling Stockholder shall have the right, at any time thereafter to sell to a third party the offered Shares remaining unsold under this Section at a price not less than the Offer Price and on other terms which shall not be materially more favorable to such third party in the aggregate than those terms set forth in the Notice of Intention. (b) From and after May, 1997, the Reliance Stockholders and the Swiss Re Stockholders may freely transfer, sell, assign, pledge, hypothecate, mortgage, encumber, dispose of by gift, bequeath or otherwise transfer or dispose of any right, title or interest in any or all Shares, provided that any such disposition shall comply with all applicable laws and provided further that any transferee obtaining such Shares shall become a Stockholder hereunder and shall

Certain Transfer Restrictions. (a) From the date hereof No Other Stockholder shall sell, transfer, assign, pledge or otherwise dispose of (whether with or without consideration and whether voluntarily or involuntarily or by operation of law) any interest in any Stockholder Shares (a "Transfer"), except pursuant to the date of the next annual meeting of the stockholders a Public Sale or a Sale of the Company in May(an "Exempt Transfer") or the provisions of this paragraph 3. Prior to making any Transfer other than an Exempt Transfer, 1997, neither the Swiss Re Stockholders nor the Reliance Stockholders shall be permitted to transfer Other Stockholder transferring any Stockholder Shares to a third party unless, prior to any proposed transfer the Swiss Re Stockholders or Reliance Stockholders (as the case may be, a "Selling Transferring Stockholder") has given shall deliver a written notice of the proposed transfer of such Shares (the a "Notice of IntentionSale Notice") to the Company specifying and to Komag and each of the type and Investors (collectively, the "Significant Stockholders"). The Sale Notice shall disclose in reasonable detail the identity of the prospective transferee(s), the number of Stockholder Shares which such Selling Stockholder wishes to transfer, be transferred and the proposed purchase price (the "Offer Price") therefore and all other material terms and conditions of the proposed transfer. For a period of thirty Transfer. (30b) days following its receipt The Company may elect to purchase all or any portion of the Transferring Stockholder's Stockholder Shares to be transferred upon the same terms and conditions as those set forth in the Sale Notice by delivering a written notice of Intentionsuch election to such Transferring Stockholder and the Significant Stockholders within 20 days after the Sale Notice has been delivered to the Company. If the Company does not elect to purchase all or any portion of the Transferring Stockholder Shares to be transferred, the Company or its designees Significant Stockholders shall have the right to elect to purchase all or (with the consent of the Selling Stockholder) any portion of the remaining Transferring Stockholder's Stockholder Shares offered to be transferred upon the same terms and conditions as those set forth in the sale notice by delivering written notice of such Selling election to such Transferring Stockholder at on or before the Offer Price and on 30th day after the other terms delivery of the Sale Notice to the Company (the "Final Election Date"). If more than one of the Significant Stockholders elects to purchase such Stockholder Shares, the Stockholder Shares available to be sold shall be allocated among the Significant Stockholders pro rata according to the number of shares of Underlying Common Stock held by 117 each such Significant Stockholders. If the Significant Stockholders have not so elected to purchase all of the Stockholder Shares specified in the Sale Notice, such Transferring Stockholder may Transfer all of the Stockholder Shares specified in the Sale Notice (subject to the provisions of Intentionsubparagraph (c) below) and not purchased by the Significant Stockholders at a price and on terms no more favorable to the transferee(s) thereof than specified in the Sale Notice during the 60-day period immediately following the Final Election Date. Any such Stockholder Shares not transferred within such 60-day period shall be subject to the provisions of this paragraph 3 upon subsequent Transfer. If the Company and/or the Significant Stockholders have elected to purchase all or any portion of the Stockholder Shares to be transferred pursuant to this right of first refusal, exercisable by the Transfer of such Stockholder Shares shall be consummated as soon as practical after the delivery of the election notice(s) to the Transferring Stockholder, but in any event within 15 days after the Final Election Date. (c) If any Stockholder proposes to make any Transfer (other than an irrevocable notice Exempt Transfer) of Stockholder Shares, such Stockholder (the "Company Proposing Stockholder") shall deliver a written notice (a "Proposed Sale Notice") to each Significant Stockholder, which Proposed Sale Notice shall disclose in reasonable detail the Selling Stockholder specifying identity of the prospective transferee(s), the number of offered Stockholder Shares to be transferred and the terms and conditions of the proposed Transfer. Each such Significant Stockholder may elect to participate in the contemplated Transfer by delivering written notice to the Proposing Stockholder and the Company within 20 days after receipt by such Person of the Proposed Sale Notice. If a Proposing Stockholder has elected to participate in such Transfer, the Proposing Stockholder and the Significant Stockholders so electing to participate shall be entitled to sell in the contemplated Transfer, at the same price and on the same terms and conditions contained in the Proposed Sale Notice, a number of Stockholder Shares equal to the product of (i) the quotient determined by dividing the percentage of Stockholder Shares held by such Significant Stockholder by the aggregate percentage of Stockholder Shares held by the Proposing Stockholder and all electing Significant Stockholders, and (ii) the number of Stockholder Shares to be sold in the contemplated Transfer (and, for avoidance of doubt in the case of a Transfer of Common Stock, a number of shares of Underlying Common Stock held by such Significant Stockholder equal to the product of (i) the quotient determined by dividing the percentage of Common Stock that the Underlying Common Stock held by such Significant Stockholder represents by the sum of the aggregate percentage of Common Stock (on a fully-diluted basis) held by the Proposing Stockholder and the aggregate percentage of Common Stock that the Underlying Common held by all electing Significant Stockholders represents and (ii) the number of shares of Common Stock to be sold in the contemplated Transfer). For example, if the Sale Notice contemplated a sale of 100 Stockholder Shares, and if the Proposing Stockholder was at such time the holder of 30% of all Stockholder Shares and if one Investor elected to participate and such Investor held 20% of all Stockholder Shares, the Proposing Stockholder would be entitled to sell 60 Stockholder Shares (30% / 50% x 100 Stockholder Shares) and the electing Investor would be entitled to sell 40 Stockholder Shares (20% / 50% x 100 Stockholder Shares). The Proposing Stockholder shall use his, her or its best efforts to obtain the agreement of the prospective transferee(s) to the participation of the Significant Stockholders in the contemplated 118 Transfer and shall not Transfer any Stockholder Shares to the prospective transferee(s) if such transferee(s) refuses to allow the participation of the Significant Stockholders. (d) Komag agrees that it shall not, prior to the termination of the restrictions contained in this paragraph 3 as set forth in subparagraph (f) below, Transfer any interest in any Stockholder Shares to any of the holders of its capital stock or other equity securities, without the prior written consent of the Board (with the Komag Directors not participating in such decision). Additionally, Komag agrees that it shall not, prior to the second anniversary of the date of this Agreement, Transfer any interest in any Stockholder Shares to any Person, without the prior written consent of the Board (with the Komag Directors not participating in such decision). (e) The restrictions contained in this paragraph 3 shall not apply with respect to which any Transfer of Stockholder Shares by any Other Stockholder (i) in the Company case of any Other Stockholder that is an individual, pursuant to applicable laws of descent and distribution or its designees is exercising its option. If all notices required among such Other Stockholder's Family Group, (ii) in the case of Komag, to any Person approved in accordance with subparagraph (d) above, or (iii) in the case of any Investor, to any other Investor or any Affiliate of any Investor (the permitted recipients in the foregoing clauses (i) and (ii) being referred to herein collectively as "Permitted Transferees"); provided that such restrictions shall continue to be given pursuant applicable to this Section have been duly given the Stockholder Shares after any such Transfer and the Company or its designees do not exercise transferees of such Stockholder Shares shall agree in writing to be bound by the option to purchase provisions of this Agreement affecting the offered Stockholder Shares at the Offer Price so transferred (and on the other terms specified execute a Consent and Community Property Waiver (in the Notice form attached hereto), in the case of Intention any individual that resides in California or determinedanother community property State) as a condition precedent to any such Transfer. For purposes of this Agreement, with "Family Group" means an individual's spouse and descendants (whether natural or adopted) or any trust established solely for the consent benefit of such individual and/or such individual's spouse and/or descendants (but only so long as such Stockholder retains the power to vote and dispose of the Selling StockholderStockholder Shares held by any such trust and, if such power is not retained or is lost, any such Transfer shall be subject to exercise its option to purchase a portion of the offered Shares, then the Selling Stockholder shall have the right, at any time thereafter to sell to a third party the offered Shares remaining unsold under this Section at a price not less than the Offer Price and on other terms which shall not be materially more favorable to such third party in the aggregate than those terms restrictions set forth in the Notice of Intentionthis paragraph 3). (b) From and after May, 1997, the Reliance Stockholders and the Swiss Re Stockholders may freely transfer, sell, assign, pledge, hypothecate, mortgage, encumber, dispose of by gift, bequeath or otherwise transfer or dispose of any right, title or interest in any or all Shares, provided that any such disposition shall comply with all applicable laws and provided further that any transferee obtaining such Shares shall become a Stockholder hereunder and shall

Certain Transfer Restrictions. (a) From the date hereof to the date of the next annual meeting of the stockholders of the Company in May, 1997, neither the Swiss Re Stockholders nor the Reliance Stockholders shall be permitted to transfer any Shares to a third party unless, prior to any proposed transfer the Swiss Re Stockholders or Reliance Stockholders (as the case may be, a "Selling Stockholder") has given written notice of the proposed transfer of such Shares (the "Notice of Intention") to the Company specifying the type and number of Shares which such Selling Stockholder wishes to transfer, the proposed purchase price (the "Offer Price") therefore and all other material terms and conditions of the proposed transfer. For a period of thirty (30) days following its receipt of the Notice of Intention, the Company or its designees shall have the right to purchase all or (with the consent of the Selling Stockholder) any portion of the Shares offered by such Selling Stockholder at the Offer Price and on the other terms specified in the Notice of Intention, exercisable by delivery of an irrevocable notice (the "Company Notice") to the Selling Stockholder specifying the number of offered Shares with respect to which the Company or its designees is exercising its option. If all notices required to be given pursuant to this Section have been duly given and the Company or its designees do not exercise the option to purchase the offered Shares at the Offer Price and on the other terms specified in the Notice of Intention or determined, with the consent of the Selling Stockholder, to exercise its option to purchase a portion of the offered Shares, then the Selling Stockholder shall have the right, at any time thereafter to sell to a third party the offered Shares remaining unsold under this Section at a price not less than the Offer Price and on other terms which shall not be materially more favorable to such third party in the aggregate than those terms set forth in the Notice of Intention. (b) From and after May, 1997, the Reliance Stockholders and the Swiss Re Stockholders may freely transfer, sell, assign, pledge, hypothecate, mortgage, encumber, dispose of by gift, bequeath or otherwise transfer or dispose of any right, title or interest in any or all Shares, provided that any such disposition shall comply with all applicable laws and provided further that any transferee obtaining such Shares shall become a Stockholder hereunder and shallshall execute a signature page in the form of Annex A and shall be bound by the terms of this Agreement.