Waiver Agreement for Consolidated Tangible Net Worth Covenant under Bank Guarantee Facility between The Bank of Nova Scotia and Maxtor Peripherals (S) Pte Ltd

Summary

The Bank of Nova Scotia, Singapore Branch, agrees to waive a specific event of default by Maxtor Peripherals (S) Pte Ltd related to a breach of the Consolidated Tangible Net Worth covenant for the third quarter ended September 28, 2002, under an existing SGD17,250,000 Bank Guarantee Facility. This waiver applies only to this specific breach and period, with all other terms of the facility and related security agreements remaining unchanged. Maxtor must pay a US$10,000 waiver fee and provide board approval by October 30, 2002, for the waiver to take effect.

EX-10.5 7 f85499exv10w5.txt EXHIBIT 10.5 Exhibit 10.5 The Bank of Nova Scotia 10 Collyer Quay #15-01 Ocean Building October 22, 2002 Singapore 049315 Maxtor Peripherals (S) Pte Ltd Tel: (65) 535-8688 No. 2 Ang Mo Kio Street 63 Fax: (65) 438-3314 (Credit & Marketing) Ang Mo Kio Street Park 3 Singapore 569111 Attention: Mr. Tiong Chi Sieng, Vice President - Finance Ms. Tan Hui Yah, Director - Finance Dear Sirs: BANK GUARANTEE FACILITY OF SGD17,250,000 WAIVER OF THE CONSOLIDATED TANGIBLE NET WORTH COVENANT FOR 3RD QUARTER ENDED 28 SEPTEMBER 2002 1. We refer to the long-term Bank Guarantee Facility of up to SGD17,250,000 (current outstanding amount) ("the Facility") granted under the Guarantee Facility Agreement dated 31 August 1999 as amended by our letter dated 13 September 1999, an Amendment Agreement dated 23 February 2001, a Supplemental Agreement dated 2 May 2001, a Second Supplementary Agreement dated 29 January 2002 and our Amendment Letter dated 20 June 2002 (the Guarantee Facility Agreement as amended, "the Facility Agreement"), and the Security Over Cash Agreement dated 8 September 1999. 2. Subject to your Company's acceptance of this letter, we are pleased to advise that at your request, The Bank of Nova Scotia, Singapore Branch ("the Bank"), shall waive the event of default which arose from the breach of the Consolidated Tangible Net Worth covenant under Clause 15.1.2 of the Facility Agreement for the 3rd quarter ended 28 September 2002. The foregoing waiver is limited to the specific circumstances set forth in the foregoing sentence, and for the specific date referred to therein, and is not intended to be, nor shall it be deemed to be, a waiver of any other Event of Default or breach of terms and conditions, whether now existing or thereafter occurring. 3. Save for the above, all other terms and conditions stipulated in the Facility Agreement and security document stated in Paragraph 3 above shall remain unchanged. 4. A Waiver Fee of US$10,000 shall be payable to the Bank after your acceptance of this Letter but no later than 8 November 2002. Maxtor Peripherals (S) Pte Ltd October 22, 2002 Bank Guarantee Facility of SGD17,250,000 - -------------------------------------------------------------------------------- 5. If the above are acceptable, please sign and return to us the enclosed copy of this Amendment Letter together with your Company's Board Resolution accepting this Amendment Letter by 30 October 2002, after which this offer shall lapse unless an extension is granted by the Bank in writing. Yours faithfully, /s/ Wah Sun Seong Koon Wah Sun Seong Koon Country Head, VP & Branch Manager - -------------------------------------------------------------------------------- We hereby accept and further undertake to observe all the terms and conditions set out and incorporated in this letter. We also hereby confirm that the existing charges over cash deposits under the Security Over Cash Agreement dated 8 September 1999 shall continue to secure the aforesaid all monies payable in connection with the Facility notwithstanding the amendments set out above, or in the subsequent legal documentation (if any). /s/ Thong Chi Sieng - --------------------------------------------- ------------------------ Company Stamp & Authorized Signatory(ies) Date for and on behalf of Maxtor Peripherals (S) Pte Ltd.