<PAGE>   1

        If the indebtedness represented by this Note or any part hereof is
collected at law or in equity or in bankruptcy, receivership or other judicial
proceedings, or if this Note is placed in the hands of attorneys for collection
after default, Borrower agrees to pay, in addition to the principal and interest
payable hereon, reasonable attorneys' and collection fees and costs.

        This Note is being delivered in and shall be construed in accordance
with the laws of the State of California.

        IN WITNESS WHEREOF, Borrower has executed this Note as of the day and
year first above written.



                                                   /s/ Michael R. Cannon
                                             -----------------------------------
                                             Michael R. Cannon



                                       2
<PAGE>   2




                      Dated this 9th day of September, 1999




                         CAPITAL ASSISTANCE SCHEME LOAN


                                     BETWEEN


                         MAXTOR PERIPHERALS (S) PTE LTD


                                       AND


                           ECONOMIC DEVELOPMENT BOARD

<PAGE>   3

         THIS AGREEMENT is made the 9th day of September One thousand Nine
Hundred and Ninety [ Nine ] (1999 ) Between:

MAXTOR PERIPHERALS (S) PTE LTD, a company incorporated in Singapore and having
its place of business at 2, Ang Mo Kio Street 63, Ang Mo Kio Industrial Park 3
Singapore 569111 (hereinafter called "the Company") of the one part; And

ECONOMIC DEVELOPMENT BOARD, a Corporate Body established in the Republic of
Singapore by the Economic Development Board Act (Cap. 85) of 250, North Bridge
Road, #24-00 Raffles City Tower Singapore 179101 (hereinafter called "the
Board") of the other part.


WHEREAS:

(1) The Company has applied to the Board for a term loan up to a maximum
aggregate principal amount of Singapore Dollars Forty-Eight Million
(S$48,000,000) under the Capital Assistance Scheme of the Board.

(2) The Board is willing to grant the term loans to the Company, upon the terms
and subject to the conditions hereinafter set forth.


NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:-

1.   DEFINITIONS

1.1  In this Agreement, unless the context otherwise requires, the following
words or expressions shall have the following meanings respectively:-

      (a)   "Business Day" means a day on which banks in Singapore are open for
            business excluding Sunday.

      (b)   "Day" means a calendar day.

      (c)   "Dollars" and the sign "$" respectively mean the lawful currency of
            the Republic of Singapore.

      (d)   "Drawing" means any, each or all (as the context may require) of the
            drawings made by the Company under the Term Loan and includes the
            First Drawing as defined hereof.

      (e)   "Event of Default" and "Events of Default" mean any, each or all (as
            the context may require) of the Events of the Default described in
            Clause 15 hereof.

      (f)   "First Drawing" means the first of the drawing made by the Company
            under the Term Loan.

<PAGE>   4

      (g)   "Fixed Productive Assets" means the building, facilities and
            equipment, for the manufacture and repair of magnetic disk drives
            for desktop computer systems.

      (h)   "Guarantee" means a bank guarantee to be issued by a prime bank in
            Singapore and duly executed under seal and signed by the said bank's
            authorised signatories, in favour of the Board and in the form and
            containing terms acceptable to the Board.

      (i)   "Interest Rate" means the rate of interest determined in accordance
            with Clause 7.2 hereof.

      (j)   "Interest Payment Dates" means the day falling on the first Business
            Day of March or the first Business Day of September as the case may
            be and the first Interest Payment Date shall be the Interest Payment
            Date immediately following the date of the First Drawing of the Term
            Loan.

      (k)   "Interest Period" means the period or periods determined as
            follows:-

            (i)   the Interest Period in relation to the First Drawing shall
                  begin on the date on which that Drawing is made hereunder and
                  shall end on the first Interest Payment Date;

            (ii)  the Interest Period in respect of any subsequent Drawing shall
                  begin on the date on which the relevant subsequent Drawing is
                  made and shall end on the Interest payment Date falling
                  immediately thereafter;

            (iii) each successive Interest Period shall begin on the last
                  Interest Payment Date and shall end on the Interest payment
                  Date falling six (6) months immediately following;

            (iv)  if any Interest Period would otherwise end on a day which is
                  not a Business Day that Interest Period shall be extended to
                  the next succeeding day which is a Business Day;

            (v)   if any Interest Period is extended by the application of (iv)
                  above, the following Interest Period shall (without prejudice
                  to the application of (iv) above) end on the day on which it
                  would have ended if the preceding Interest Period had not been
                  so extended; and

            (vi)  any amount to be repaired under clause 8 shall have a final
                  Interest Period expiring on the relevant Repayment Date

      (l)   "Month" means a calendar month.

      (m)   "person" shall include a company, body of persons, association or
            body corporate or unincorporated.

<PAGE>   5

      (n)   "Repayment Dates" means the first Day of March and the first Day of
            September of each year.

      (o)   "Term Loan" means the loan facility in the aggregate amount of
            Singapore Dollars Forty-Eight Million (S$48,000,000) to be made
            available to the Company by the Board in accordance with the terms
            and conditions set out in this Agreement and shall also be deemed to
            include the whole or any part thereof.

      (p)   "Year" means a calendar year.


1.2   Unless the context otherwise requires, words importing the singular number
include the plural number and vice versa.

1.3   The words "hereof", "herein", "hereon" and "hereafter" and words of
similar import, when used in this Agreement, refer to this Agreement as a whole
and not to any particular provision of this Agreement.

1.4   The headings to the Clauses hereof shall not be deemed part thereof or be
taken in consideration in the interpretation or construction thereof or of this
Agreement.

1.5   Reference herein to Clauses are references to Clauses of this Agreement.


2.    TERM LOAN

      Subject to the provisions of this Agreement and in particular those of
Clause 3 hereof, the Board will make available to the Company the Term Loan at
the times and in the manner as hereinafter provided. The Term Loan shall be for
a period of 4 years, inclusive of a 1 year grace period for repayment of the
Term Loan as provided in Clause 8 herein.


3.    CONDITIONS PRECEDENT AND AVAILABILITY

      The right of the Company to make any Drawing or Drawings under the Term
Loan, and the obligations of the Board to make available the same shall be
subject to the following conditions precedent, that is to say:-

      (a)   There shall not exist at or prior to any Drawing, any Event of
            Default or any condition, event or act which, with the giving of
            notice or lapse of time, or both, would, constitute such an Event of
            Default.

      (b)   All representations, warranties and statements contained herein, or
            otherwise made in writing in connection herewith or in any
            certificate or statement furnished pursuant to any provision of this
            Agreement or in any document referred to herein made by the Company
            shall be true and

<PAGE>   6

            correct with the same effect as though made on the date on which the
            Drawing is to be made.

      (c)   The Board shall have received, in form and substance satisfactory to
            the Board, the following:-

            (i)   A copy of the Memorandum and Articles of Association of the
                  Company duly certified by a Director and the Secretary of the
                  company to be a true copy thereof;

            (ii)  A copy, certified by a Director and Secretary of the Company,
                  of the resolution of the Board of Directors of the Company,
                  which is in full force and effect, approving the terms and
                  conditions contained in this Agreement and authorising a
                  person or persons to sign this Agreement and any other
                  document to be given to the Board from time to time by the
                  Company;

            (iii) Specimen signatures of the persons authorised to sign this
                  Agreement on behalf of the Company, and to sign the notices of
                  Drawing and any other document to be given from time to time
                  by the Company, such specimens to be certified be a Director
                  or the Secretary of the Company to be the true signatures of
                  such persons respectively; and

            (iv)  The Guarantee relating to the Term Loan to be made and duly
                  executed.

      (d)   All acts, conditions and things required to be done and performed
            and to have happened precedent to the execution and delivery of this
            Agreement and the Guarantee and to constitute this Agreement and the
            Guarantee legal, valid and binding obligations enforceable in
            accordance with their respective terms, shall have been done and
            performed and have happened in compliance with all applicable laws.

      (e)   There is no breach by the Company of any of the terms, conditions
            and undertakings herein contained.


4.    PURPOSE OF THE TERM LOAN

4.1   Subject to the terms and conditions herein contained and in particular to
those of the Clause 3, the Term Loan will be made available by the Board to the
Company for financing the purchase of machinery and a new building. Under this
Agreement, the Company shall be required to invest a minimum of Singapore
Dollars One Hundred and Sixty-five Million (S$165,000,000) cumulatively in Fixed
Productive Assets (excluding land) by 30 September 2003.

4.2   Upon advance of a Drawing under Clause 5, the Company shall apply all the
proceeds thereof for the purposes described in Clause 4.1 above and for no other
purpose whatsoever.

<PAGE>   7

5.    DRAWINGS OF TERM LOAN

5.1   Subject to the terms and conditions of this Agreement and in particular to
all the conditions of Clause 3 being complied with the Board will make available
drawings under the Term Loan in accordance with a disbursement schedule
submitted by the Company and approved by the Board at least 45 days before the
First Drawing of the Term Loan.

5.2   The Company shall give notice of Drawing to the Board not later than
thirty (30) Business Days prior to the intended date of Drawing and each notice
of Drawing shall be substantially in the form set out in the Appendix I hereto
and shall:-

      (i)   state the date (which must be a Business Day) and the amount of the
            proposed Drawing;

      (ii)  be irrevocable;

      (iii) commit the Company to borrow the amount and on the date stated; and

      (iv)  constitute a representation and warranty that at the date thereof
            the warranties and representations set out in Clause 12 are true and
            no Event of Default and no even or act which with the giving of
            notice or lapse of time or both would constitute such an Event of
            Default has occurred.

5.3   The First Drawing shall be made not later than 31 December 1999 or such
later date as may be approved by chairman EDB or his lawful representative.

6.    AVAILABILITY OF TERM LOAN

      The Term Loan shall be available for Drawing for a period of 18 months
from the date of the First Drawing after which date any part of the Term Loan
not drawn shall be cancelled.


7.    INTEREST

7.1   The Company shall pay to the Board on each Interest Payment Date interest
in arrears on the amounts drawn and outstanding under the term Loan from time to
time in respect of each Interest Period relating thereto determined in
accordance with clause 1.1(k) and at the Interest Rate determined in accordance
with sub-clause 7.2 hereof.

<PAGE>   8

7.2   Interest will be charged by the Board at the rate 1% above the prevailing
CPF lending rate, subject to a minimum of 3.5% per annum (the "Interest Rate")
and shall be payable in arrears at six-monthly intervals, the first payment to
be made on the Interest Payment Date as defined in Clause 1.1 (j) hereof.

7.3   The amount of interest payable on the drawings under the Term Loan from
time to time owing and outstanding shall be calculated at the Interest Rate on
the basis of a year of three hundred and sixty five (365) Days for the actual
number of Days elapsed.

7.4   The certificate of the Board in writing as to the determination of the
amount of interest payable on each Interest Payment Date shall be conclusive and
binding upon the parties hereto, save for manifest error.

7.5   The Company recognises and accepts that it is commercial practice for
interest on amounts in default to be charged and that the rate of interest to be
applied by the Board on the amounts in default shall be three per cent (3%) per
annum above the average prevailing prime interest rate as reported by the
Monetary Authority of Singapore compounded on a monthly basis, which will
represent a genuine estimate of the damage the Board would suffer in the event
of a failure by the Company in the payment on the due date of any principal
and/or interest on the amounts due and payable to the Board.


8.    REPAYMENT OF THE TERM LOAN

      The company shall repay the principal of the amounts drawn under the
Term Loan in 7 consecutive six-monthly instalments on the Repayment Dates. The
first of such instalments shall be paid on the first Repayment Date following 1
year from the date of the First Drawing of the Term Loan or such other later
date as the Board may determine in its absolute discretion.


9.    PAYMENT PROVISIONS

9.1   All payments to be made by the Company under this Agreement shall be made
not later than 11 a.m. (Singapore time) on the relevant day to the Board at its
address described above or at such other address as the Board may from time to
time designate by notice in writing to the Company not less that ten (10)
Business Days prior to the date of any such payment hereunder.


9.2   If any sum becomes due for payment under this Agreement on a day which is
not a Business Day, such payment shall be made on the next succeeding Business
Day and all calculation of interest shall be adjusted accordingly.


10.   PREPAYMENT

10.1  The Company may prepay in the inverse order of maturity any part of the
Term Loan or the entire Term Loan before maturity on paying a fee amounting to a
quarter of

<PAGE>   9

one percent (1/4 of 1%) of the amount prepaid for every period of six (6) months
or any lesser period before maturity or one percent (1%) of the amount prepaid,
whichever is the lesser amount.


10.2  The Company shall give the Board seven (7) Days' prior written notice of
the intention to prepay any amount described in Clause 10.1.

10.3  In the event the Company is required to prepay the principal sum owing
under the Term Loan pursuant to Clause 15.2 (a) hereof the Company shall pay to
the Board the fee at the rate described in Clause 10.1 above on the principal
sum owing.


11.   SECURITY

      Prior to each Drawing of the Term Loan, the Company shall procure the
requisite Guarantee from a Prime Bank with a credit rating which satisfies the
Board's requirements and in the event that during the currency of this Agreement
the credit rating of the Prime Bank falls below the Board's requirements, the
Company shall immediately take steps to replace the Guarantee with one from an
approved Prime Bank with the requisite rating. It is also agreed that should the
coverage given by the Guarantee(s) be in the Board's opinion insufficient to
secure the principal amount, interest and default interest, the Board reserves
the right to demand that the Company, within a reasonable time after
notification by the Board, furnish fresh security by way of guarantee from an
approved Prime Bank(s) for any outstanding amounts. Any failure to meet this
demand within the time period allowed by the Board shall constitute an Event of
Default under Clause 15 of this Agreement. It is further agreed that if the
validity period of the Guarantee is shorter than the length of the Term Loan as
defined in Clause 2 of this Agreement, the Company shall furnish a fresh
Guarantee at least 6 months prior to the expiration of the existing Guarantee. A
failure to replace the Guarantee in the specified time or such other time agreed
to by the Board shall result in the entire Term Loan and all outstanding
interest amounts becoming immediately due and payable to the Board upon receipt
of the Board's written notice for such payment.

12.   WARRANTIES AND REPRESENTATIONS

12.1  The Company hereby warrants and represents to the Board as follows:-

      (a)   that it is lawfully incorporated, validly existing and in good
            standing under the laws of the Republic of Singapore;

      (b)   that it has the corporate power and authority to carry on the
            business as now being conducted;

      (c)   that it has the corporate power to execute and perform this
            Agreement and to borrow hereunder;

      (d)   that the execution, delivery and performance of the Agreement and
            the borrowings hereunder have been duly authorised by all requisite

<PAGE>   10

            corporate action and will not violate any provision of any agreement
            or other instrument to which the Company is a party;

      (e)   that its latest balance sheet and financial statements submitted to
            the Board are correct and complete and accurately represent the
            financial condition of the Company on the date thereof and the
            results of its operation for the period then ended and each such
            balance sheet shows all known present and future liabilities, direct
            or contingent, of the Company as of the date thereof and each
            financial statement referred to herein was prepared in accordance
            with generally accepted accounting principles;

      (f)   that there has been no material adverse change in the business
            activities, operations or financial condition of the Company since
            the date of the latest financial statements referred to in
            sub-paragraph (e) above;

      (g)   save as otherwise disclosed to the Board, there are no actions,
            suits or proceedings pending or, to the knowledge of the Company
            threatened against the Company or its parent or any of its
            subsidiaries at law or in equity (whether or not purportedly on
            behalf of the Company, its parent or any of its subsidiaries) before
            any court or competent body adjudicating such matters, which involve
            the possibility of an judgement or liability which may result in any
            material adverse change in the business, operations, properties or
            assets, or in the condition, financial or otherwise of the Company
            or its parent or any of its subsidiaries an d adversely affect the
            Company's ability to make repayment of the Term Loan;

      (h)   that to the best of the knowledge of the Company no steps have been
            taken or are being taken to appoint a receiver and/or manager or
            judicial manager or liquidator or any other person over it or any of
            its assets or in any winding up action

12.2  Each of the warranties and representations contained in the preceding
sub-clause shall survive and continue to have full force and effect after the
execution of this Agreement and that they will be true and correct and fully
observed as though made on the date of Drawing or each Interest Payment Date
with reference to the facts and circumstances then subsisting.


13.   AFFIRMATIVE UNDERTAKING

      The Company hereby undertakes and agrees with the Board as follows:-

      (a)   that the Term Loan granted by the Board under the provisions of this
            Agreement and every part thereof shall be used solely for the
            purpose and in the manner hereinbefore stipulated and not for any
            other purpose or manner save with the prior written consent of the
            Board.

<PAGE>   11

      (b)   that it will carry on and conduct its business and affairs with due
            diligence and efficiency in accordance with sound technical
            financial industrial and managerial standards and practices
            including the maintenance of adequate records with qualified
            personnel and in accordance with its Memorandum and Articles of
            Association.

      (c)   that it will furnish and provide the Board with and permit the Board
            to obtain all such statements information explanation and data,
            except information of a confidential nature, as the Board may
            reasonably require, by prior written notice, regarding the affairs
            operations administration financial of other whatsoever state or
            condition of the Company or any of the matters in the Clause
            mentioned.

      (d)   that it will furnish to the Board particulars of any kind of
            immovable property hereafter acquired by the Company.

      (e)   that the Board shall have the right as it may reasonably request, by
            prior written notice, to inspect any land or premises where the
            Company carries on its business and inspect the same and all
            property and assets whatsoever therein or thereon and all accounts
            records and statements wherever the same may be situate and to make
            inventories and record thereof.

      (f)   that it will supply to the Board certified copies of all resolutions
            passed which materially affect the financial state and condition of
            the Company at general and/or special meetings of the Company within
            seven (7) Days from the date of the passing of such resolutions.

      (g)   that it will deliver to the Board every year immediately after the
            issue of a copy of the Company's audited balance sheet and profit
            and loss accounts audited by a firm of auditors of international
            reputed together with Auditors' and Directors' Reports and will also
            deliver to the Board a copy of the annual return which the Company
            is required by law to file with the Registrar of Companies.

      (h)   that it shall punctually pay all rents rates assessments taxes and
            all outgoings payable in respect of any land/or premises belonging
            to the Company or at which it carries on business and obtain all
            necessary licences and comply with all regulations rules and orders
            relating to the carrying on of its business on such premises.

      (i)   that it will keep all its plant machinery equipment buildings
            constructions fixtures fittings implements and other effects in good
            and substantial repair and proper working condition to the
            satisfaction of the Board.

      (j)   that it shall not dismantle pull down or remove any part of the
            buildings fixtures plant machinery and equipment, except in cases
            where such dismantling pulling down or removal shall in the opinion
            of the Company be rendered necessary by reason of the same being
            obsolete

<PAGE>   12

            worn out or damaged, in which case the Company shall give sufficient
            written notice to the Board and will replace such property by
            property of similar nature and value after giving intimation to the
            Board.

      (k)   that it shall give to the Board such written authorities or other
            directions and provide such facilities and access as the Board may
            require for the aforesaid inspection and shall pay all costs fees
            travelling and other out-of-pocket expenses whether legal or
            otherwise in respect of such inspection.

      (l)   that insofar as may be necessary the Company shall amend its
            Memorandum and Articles of Association so as to enable it to observe
            and perform all the covenants undertakings terms stipulations
            conditions and other provisions of this Agreement.


14.   NEGATIVE UNDERTAKINGS

      The Company hereby undertakes and agrees with the Board that it shall
not without the written consent of the Board, which consent shall not be
unreasonably withheld:-

      (a)   embark on any new project or substantial expansion or
            diversification of its present business and operations, which are
            not related to its present business activities;

      (b)   invest its funds by way of deposits (other than deposits with banks
            licensed by the Monetary Authority of Singapore), loans, share
            capital or otherwise in any other concern or issue or give
            guarantees for the account or on behalf of any person or otherwise
            become contingently liable for on in connection with any obligations
            or indebtedness of any person;

      (c)   effect any form of reconstruction including amalgamation with
            another company which will result in a change in the control of the
            Company;

      (d)   create or permit to arise or subsist, any mortgage, charge (whether
            fixed or floating), pledge, lien or other encumbrances whatsoever
            (except those which have been specifically disclosed to and approved
            by the Board respectively) on any of its properties or assets, both
            present and future whatsoever and wheresoever situate;

      (e)   declare or pay any dividend or make any income or capital
            distribution, whether in cash or in specie, to its shareholders or
            any of them; or

      (f)   raise, borrow, take, make, issue or give as the case may be, any
            loans, debentures, bonds or credits from or to any persons.


15.   EVENTS OF DEFAULT

<PAGE>   13

15.1  If any one or more of the following Events of Default shall occur, that
is to say:

      (a)   save as otherwise approved by the Board, if the Company shall fail
            to pay or otherwise discharge when due any sums of money, whether
            principal, interest, fees otherwise, payable under this Agreement;

      (b)   if the Company shall default in the payment of (a) any principal or
            interest beyond any period of grace provided in respect thereof of
            any commercial loans from banks or financial institutions or (b) any
            other indebtedness to its creditors which the Board has determined
            that such is unjustified in law or circumstance;

      (c)   if any representation or warranty made in or in pursuance of this
            Agreement or in any certificate, statement or other document
            delivered in connection with the execution and delivery hereof or in
            pursuance of this Agreement shall be or become incorrect in any
            material respect;

      (d)   if the Company defaults in the due performance of any undertaking,
            condition or obligation on its part to be performed and observed
            hereunder (other than the payment of any sum due hereunder) and such
            default (if capable of being rectified) shall not be rectified for a
            period of thirty (30) Days after the date of receipt by the Company
            of written notice of such default from the Board;

      (e)   if a petition is presented in any court of competent jurisdiction of
            a resolution is passed for the winding-up of the Company or its
            parent or for the filing or any application for placing the Company
            or its parent under judicial management or any similar or analogous
            proceedings are taken against any of them and are not withdrawn
            within thirty (30) Days after being presented;

      (f)   if any encumbrancer or lessor shall take possession or a receiver
            and/or manager, judicial manager, liquidator or other similar
            officer is appointed of the whole of the undertaking, property or
            assets, or any part thereof, of the Company or its parent;

      (g)   if a distress or execution is levied or enforced upon or sued out
            against any part of the property or assets of the Company and is not
            discharged within thirty (30) Days of being levied and the Board is
            of the reasonable opinion that such an event will be materially
            prejudicial to the interests of the Board;

      (h)   if a judgement or order is made against the Company and is not
            discharged within sixty (60) Days or if legal proceedings suits or
            actions of any kind whatsoever (whether criminal or civil) shall be
            instituted against the parent of the Company and the Board is in
            that case of the reasonable opinion that the said legal proceedings
            suits or actions will materially affect the Company's ability to
            perform and observe its obligations under this Agreement;

<PAGE>   14

      (i)   if the Company becomes insolvent or is unable or deemed unable to
            pay its debts or admits in writing its inability to pay its debts,
            as they mature, or enters into composition, compromise or
            arrangement with its creditors or makes a general assignment for the
            benefit of its creditors and the Board is of the opinion that any
            such event will be materially prejudicial to the interests of the
            Board;

      (j)   if a winding -up petition is presented by or against the guarantor
            of any Guarantee or analogous proceedings shall be taken by or
            against it and is not discharged within thirty (30) Days after being
            presented;

      (k)   if the Company ceases or threatens to cease to carry on its business
            and the Board is of the opinion that it will materially affect the
            ability of the Company to perform and observe its obligations under
            this Agreement;

      (l)   if any license, consent or approval of any authority at any time
            necessary to enable to Company to comply with and perform its
            obligations under this Agreement to a material extent shall be
            revoked, withheld or materially modified or shall otherwise not be
            granted or fail to remain in full force and effect;

      (m)   if any of the consents, authorities, approvals, waivers or
            resolutions referred to in Clause 3 shall be modified in a manner
            unacceptable to the Board or shall be wholly or partly revoked,
            withdrawn, suspended or terminated or shall expire and not be
            renewed or shall otherwise fail to remain in full force and its
            effect and such circumstances are considered by the Board to be
            material;

      (n)   if without the prior written consent of the Board there is any
            change in the shareholding of the Company which will result in a
            change in the control of the Company;

      (o)   if a situation shall have arisen, which in the Board's opinion makes
            it unlikely that the Company will be able to perform its obligations
            under this Agreement;

      (p)   if the Board determines in its discretion that its interests under
            the Guarantee is or are in jeopardy;

then and in any of such event, the Board may, by notice in writing to the
Company declare that an Event of Default has occurred and such declaration shall
be deemed to take effect from the date of such an Event of Default.

15.2  Upon the declaration by the Board that an Event of Default has occurred:-

      (a)   the whole of the principal sum drawndown and owing under the Term
            Loan, interest thereon and all other sums agreed to be paid this
            Agreement shall immediately become due and payable without any
            demand or notice of any kind by the Board to the Company; and

<PAGE>   15

      (b)   it shall be lawful for the Board to exercise all or any rights,
            powers or remedies under this Agreement, the Guarantee given to the
            Board or any one or more of them.

15.3  In the event on an occurrence of an Event of Default before the Term Loan
shall have been fully drawn or utilised hereunder, the Board's obligations
hereunder shall automatically and forthwith cease.

15.4  After the declaration by the Board that an event of an Event of Default
has occurred, all moneys received or recovered by the Board (whether such moneys
shall have been received or recovered as a result of or arising from its
exercise of all or any rights, powers or remedies under this Agreement, the
Guarantee or any one or more of them or by way of a set-off or otherwise) shall
be held by it and shall be applied as follows:-

      (a)   Firstly, in or towards payment of all costs charges and expenses, if
            any, incurred in enforcing this Agreement, the Guarantee or any one
            or more of them.

      (b)   Secondly, in or towards payment to the Board of all moneys and
            liabilities for the time being due, owing or outstanding under this
            Agreement and where such moneys and liabilities are of a contingent
            nature, in or towards making full and adequate provisions for
            payment of such moneys and liabilities as and when they become due
            and payable; and

      (c)   Thirdly, any surplus shall be paid to the Company.


16.   NOTICES

16.1  Except as otherwise expressly provided herein, any notice, request, demand
or other communication to be given or served hereunder by one of the parties
hereto to or on the other or others may be delivered at or sent by prepaid
registered post or by facsimile to the address or addresses herein specified of
the other party or parties and shell be deemed to be duly served:

      (a)   if it is delivered, at the time of delivery,

      (b)   if it is sent by prepaid registered post, one (1) Day after posting
            thereof, or

      (c)   if it is sent by facsimile, immediately after transmission thereof,
            if the date of transmission is a Business Day, and if such a date is
            not a Business Day, then the notice by facsimile shall be deemed to
            be served on the next succeeding Business Day.

<PAGE>   16

Except as otherwise expressly provided herein, all notices, requires, demands or
other communications which are required by this Agreement to be in writing may
be made by facsimile.

16.2  For the purpose of this Clause 16 each of the parties hereto shall from
time to time notify the other party in writing of an address in Singapore where
such notice, request, demand or other communications as aforesaid can be given
or served and such notification shall be effective only when it is actually
received. In the absence of such notification, the notice, request, demand or
other communication aforesaid may be given or served at the addresses or the
respective parties as stated above.


17.   WAIVER NOT TO PREJUDICE RIGHT OF BOARD

      The board may from time to time and at any time waive either
unconditionally or on such terms and conditions as it may deem fit any breach by
the Company of any of the undertakings stipulations terms and conditions herein
contained and any modification thereof but without prejudice to its powers
rights and remedies for enforcement thereof, provided always that:-

      (a)   no neglect of forbearance of the Board to require and enforce and
            enforce payment of any moneys hereunder or the performance and
            observance of any undertaking stipulation term or condition herein
            contained, nor any time which may be given powers or remedies of the
            Board at any time afterwards to act strictly in accordance with the
            provisions hereof;

      (b)   no such waiver of any such breach as aforesaid shall prejudice the
            rights of the Board in respect of any other or subsequent breach of
            any of the undertakings stipulations terms or conditions aforesaid.

18.   INDULGENCE OF THE BOARD

      The liability of the Company hereunder shall not be impaired or
discharged by reason of any time or other indulgence being granted by or with
the consent of the Board to any person who or which may be in any way liable to
pay any of the moneys secured hereby by any other security in favour of the
Board or by reason of any arrangement being entered into or composition accepted
by the Board which has the effect of modifying the operation of law or otherwise
its rights and remedies under the provisions of the Agreement.


19.   SEVERABILITY

      In case any provision in this Agreement shall be, or at any time shall
become invalid, illegal or unenforceable in any respect under any law, such
invalidity, illegality or unenforceability shall not in any way affect or impair
the other provisions of this

<PAGE>   17

Agreement but this Agreement shall be construed as if such invalid or illegal or
unenforceable provision contained herein or therein did not form a part of this
Agreement.


20.   GOVERNING LAW

      This Agreement shall be governed by and construed in all respects in
accordance with the laws of the Republic of Singapore.


21.   MISCELLANEOUS

21.1  All legal and other professional fees, out-of-pocket expenses, charges and
expenses of and in connection with this Agreement shall be paid by the Company.

21.2  The Company shall further pay all legal fees as between solicitor and
client and other costs and disbursements incurred in connection with or
demanding and enforcing payment of moneys due under this Agreement and Guarantee
and otherwise howsoever in enforcing the performance of any other undertakings
stipulations terms conditions or provisions of hereof and thereof.

21.3  A certificate signed by a duly authorised officer for the time being of
the Board as to the amount of moneys and liabilities for the time being due to
the Board or incurred by the Board under this Agreement and Guarantee shall be
conclusive and binding on the Company, save for any computation or clerical
error.

21.4  This Agreement shall be binding upon the successor of the Company and
shall ensure to the benefit of the Board and its successors and assigns.

<PAGE>   18

         IN WITNESS WHEREOF the parties hereto have hereunto affixed their
respective common seals.


The Common Seal of
MAXTOR PERIPHERALS (S) PTE LTD
was hereunto affixed in the
presence of:-



                                    -----------------
                                    TEH KEE HONG
                                    Director


                                    -----------------
                                    PATRICIA SEET
                                    Secretary




The Common Seal of the ECONOMIC
DEVELOPMENT BOARD was
hereunto affixed in the presence of:-



                                    -----------------
                                    Philip Yeo
                                    Chairman



                                    -----------------
                                    SUSAN WANG
                                    Secretary

<PAGE>   19
                                                                      APPENDIX 1


ECONOMIC DEVELOPMENT BOARD
250 North Bridge Road
#24-00 Raffles City tower
Singapore 179101


Dear Sirs,

NOTICE OF DRAWING
TERM LOAN OF S$ [          ]

Pursuant to Clause 5 of the EDB Loan Agreement dated          199[ ] in respect
of the above Term Loan we hereby give you notice for a Drawing of Dollars [ ]
($ ) on 19

We confirm--

      (i)   that the conditions precedent under Clause 3 of the EDB Loan
            Agreement have been complied with in every respect;

      (ii)  that each of the representations and warranties contained in Clause
            12 of the EDB Loan Agreement are true and accurate in all respects
            as though made on the date of this Notice with reference to facts
            and circumstances presently subsisting and will be true and accurate
            in all respects on the date of the intended Drawing as though made
            on the date of the intended Drawing with reference to facts and
            circumstances then subsisting; and

      (iii) that as at the date hereof no Event of Default has occurred and no
            event has occurred which, with the giving of notice and/or the lapse
            of time and/or upon you making any necessary determination under
            Clause 15 of the EDB Loan Agreement, might constitute an Event of
            Default, and we undertake that no Event of Default and none of the
            events aforesaid will exist at the date of the intended Drawing.


In addition to the above documents kindly let us know if you require copies of
any opinion approval or other documents.

Dated this __ day of _____________19

Yours faithfully


Director/Authorised Signatory

                                       19