Document:

exv10w3

 

Exhibit 10.3

AMENDMENT 1

TO

AMENDED AND RESTATED CHANGE IN CONTROL SEVERANCE AGREEMENT

          This Amendment 1 to Amended and Restated Change in Control Severance Agreement (the
“Amendment”) is dated as of September 1, 2007, between Ciena Corporation (the “Corporation”), and
                     (the “Executive”).

          WHEREAS, the Executive and the Corporation have previously entered into an Amended and
Restated Change in Control Severance Agreement (the
“Agreement”); and

          WHEREAS, the parties desire to enter into this Amendment to incorporate certain terms
that are required or advisable pursuant to Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”), and to make a clarifying amendment relating to the conversion of
performance-based equity awards upon a Triggering Event;

          NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements of the
parties contained herein and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:

          1. Section 1.8 of the Agreement is hereby deleted in its entirety and replaced with the
following new Section 1.8:

     “1.8.
‘Good Reason’ means:

          (i) removal from, or failure to be reappointed or reelected to the Executive’s
principal position immediately prior to the Effective Date (other than as a result of a
promotion);

          (ii) material diminution in the Executive’s position, duties or responsibilities, or
the assignment to the Executive of duties that are inconsistent, in a material respect, with
the scope of duties and responsibilities associated with the Executive’s position
immediately prior to the Effective Date;

          (iii) material reduction in base salary or award opportunity under any corporate
incentive plan (or any successor to any such plan), or a material reduction in the level of
participation in long-term incentive, benefit and other plans for senior executives as in
effect immediately preceding the Effective Date, or their equivalents;

          (iv) relocation of the Executive’s principal workplace without the Executive’s consent
to a location which is more than 50 miles from the Executive’s principal workplace on the
Effective Date; or

          (v) any failure by the Corporation to comply with and satisfy the requirements of
Section 7.5, provided that the successor shall have received at least ten days’ prior
written notice from the Corporation or the Executive of the requirements of Section 7.5;

 

 

     provided, however that (A) the Executive has provided notice to the
Corporation of any of the foregoing conditions within 90 days of the initial existence of
the condition; (B) the
Corporation has been given at least 30 days to cure such condition; and (C) the
Executive actually terminates employment within two years following the initial existence of
the condition.”

          2. Sections 3.4(a) and (b) are hereby deleted in their entirety and replaced with the
following:

	 	(a)	 	upon the Effective Date, (i) the Executive’s Options that are
subject to performance-based vesting, to the extent unvested, shall immediately
be converted into Options with time-based vesting conditions, and (ii) the
Executive’s Performance-Based Restricted Stock, Performance-Adjusted Restricted
Stock and any other similar instruments of equity-based compensation that are
subject to performance-based vesting, to the extent unvested, shall immediately
be converted into Time-Based Restricted Stock; in each case, with vesting as to
the equity awards converted above being deemed to have commenced on the date of
grant and vesting as to 1/16th of the grant at the end of each
three-month period following the date of grant;
	 
	 	(b)	 	upon a Triggering Event, fifty percent of the Executive’s
Options and Time-Based Restricted Stock (including any performance-based equity
awards converted pursuant to Section 3.4(a) above), to the extent unvested,
shall become immediately vested and exercisable in full; and

          3. A new Section 3.6 will be added to the Agreement as follows:

          “3.6 Savings Clause. Each of the cash payments provided pursuant to Article 3 of
the Agreement shall be treated for purposes of Section 409A of the Code as a right to a series
of separate payments. If the Executive is a “specified employee,” as such term is defined
pursuant to Section 409A of the Code and the regulations and guidance issued thereunder, and
to the extent that the cash payments provided pursuant to Article 3 of this Agreement that are
made more than two and one-half months after the end of the calendar year in which the
Executive’s employment terminates but within six months of the Executive’s last day of
employment exceed two times the applicable limits set forth in Section 401(a)(17) of the Code
(such excess amounts, the “Excess Payments”), then such Excess Payments shall not commence
until the earlier of the Executive’s death or 6 months after the Executive’s last day of
employment.”

IN WITNESS WHEREOF, the parties have executed and delivered this Amendment.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	CIENA CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 	 	Name:
	 	 

	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 

2exv10w1

 

Exhibit
10.1

EXECUTION VERSION

U.S. $1,250,000,000

CREDIT AGREEMENT

Dated as of August 30, 2007

among

WESTERN DIGITAL TECHNOLOGIES, INC.

as Borrower

and

THE INITIAL LENDERS NAMED HEREIN

as Initial Lenders

and

GOLDMAN SACHS CREDIT PARTNERS L.P.

as Administrative Agent

and

CITICORP GLOBAL CAPITAL MARKETS and JPMORGAN CHASE BANK, N.A.

as Co-Syndication Agents

and

GOLDMAN SACHS CREDIT PARTNERS L.P.,

CITIGROUP GLOBAL MARKETS INC.

and

J.P. MORGAN SECURITIES INC.

as Arrangers

 

 

Table of Contents

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS	 	 	1	 
	 
	 	 	 	 	 	 
	        SECTION 1.01
	 	Certain Defined Terms	 	 	1	 
	        SECTION 1.02
	 	Computation of Time Periods	 	 	14	 
	        SECTION 1.03
	 	Accounting Terms	 	 	14	 
	 
	 	 	 	 	 	 
	ARTICLE II. AMOUNTS AND TERMS OF THE ADVANCES	 	 	14	 
	 
	 	 	 	 	 	 
	        SECTION 2.01
	 	The Advances	 	 	14	 
	        SECTION 2.02
	 	Making the Advances	 	 	15	 
	        SECTION 2.03
	 	Fees	 	 	16	 
	        SECTION 2.04
	 	Optional Termination or Reduction of the Commitments	 	 	16	 
	        SECTION 2.05
	 	Repayment of Advances	 	 	16	 
	        SECTION 2.06
	 	Interest on Advances	 	 	16	 
	        SECTION 2.07
	 	Interest Rate Determination	 	 	17	 
	        SECTION 2.08
	 	Optional Conversion of Advances	 	 	18	 
	        SECTION 2.09
	 	Optional Prepayments of Advances	 	 	18	 
	        SECTION 2.10
	 	Mandatory Prepayments of Advances	 	 	19	 
	        SECTION 2.11
	 	Increased Costs	 	 	19	 
	        SECTION 2.12
	 	Illegality	 	 	20	 
	        SECTION 2.13
	 	Payments and Computations	 	 	20	 
	        SECTION 2.14
	 	Taxes	 	 	21	 
	        SECTION 2.15
	 	Sharing of Payments, Etc.	 	 	24	 
	        SECTION 2.16
	 	Evidence of Debt	 	 	24	 
	        SECTION 2.17
	 	Use of Proceeds	 	 	25	 
	 
	 	 	 	 	 	 
	ARTICLE III. CONDITIONS TO EFFECTIVENESS AND LENDING	 	 	25	 
	 
	 	 	 	 	 	 
	        SECTION 3.01
	 	Conditions Precedent to Effectiveness of Section 2.01	 	 	25	 
	        SECTION 3.02
	 	Conditions Precedent to Each Borrowing After the	 	 	 	 
	 
	 	Effective Date	 	 	27	 
	        SECTION 3.03
	 	Determinations Under Section 3.01	 	 	27	 
	 
	 	 	 	 	 	 
	ARTICLE IV. REPRESENTATIONS AND WARRANTIES	 	 	28	 
	 
	 	 	 	 	 	 
	        SECTION 4.01
	 	Representations and Warranties	 	 	28	 
	 
	 	 	 	 	 	 
	ARTICLE V. COVENANTS OF THE BORROWER	 	 	30	 
	 
	 	 	 	 	 	 
	        SECTION 5.01
	 	Affirmative Covenants	 	 	30	 
	        SECTION 5.02
	 	Negative Covenants	 	 	33	 
	        SECTION 5.03
	 	Financial Covenants	 	 	38	 

i

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE VI. EVENTS OF DEFAULT	 	 	39	 
	 
	 	 	 	 	 	 
	        SECTION 6.01
	 	Events of Default	 	 	39	 
	 
	 	 	 	 	 	 
	ARTICLE VII. THE AGENT	 	 	41	 
	 
	 	 	 	 	 	 
	        SECTION 7.01
	 	Authorization and Action	 	 	41	 
	        SECTION 7.02
	 	Agent’s Reliance, Etc.	 	 	42	 
	        SECTION 7.03
	 	GSCP and Affiliates	 	 	42	 
	        SECTION 7.04
	 	Lender Credit Decision	 	 	42	 
	        SECTION 7.05
	 	Indemnification	 	 	43	 
	        SECTION 7.06
	 	Successor Agent	 	 	43	 
	        SECTION 7.07
	 	Other Agents	 	 	44	 
	 
	 	 	 	 	 	 
	ARTICLE VIII. MISCELLANEOUS	 	 	44	 
	 
	 	 	 	 	 	 
	        SECTION 8.01
	 	Amendments, Etc.	 	 	44	 
	        SECTION 8.02
	 	Notices, Etc.	 	 	44	 
	        SECTION 8.03
	 	No Waiver; Remedies	 	 	46	 
	        SECTION 8.04
	 	Costs and Expenses	 	 	46	 
	        SECTION 8.05
	 	Right of Set-off	 	 	47	 
	        SECTION 8.06
	 	Binding Effect	 	 	47	 
	        SECTION 8.07
	 	Assignments and Participations	 	 	48	 
	        SECTION 8.08
	 	Confidentiality	 	 	50	 
	        SECTION 8.09
	 	Governing Law	 	 	51	 
	        SECTION 8.10
	 	Execution in Counterparts	 	 	51	 
	        SECTION 8.11
	 	Jurisdiction, Etc.	 	 	51	 
	        SECTION 8.12
	 	Patriot Act Notice	 	 	52	 
	        SECTION 8.13
	 	Waiver of Jury Trial	 	 	52	 
	        SECTION 8.14
	 	No Fiduciary Duty	 	 	52	 

ii

 

Schedules

Schedule I — List of Applicable Lending Offices*

Schedule 5.02(a) — Existing Liens*

Schedule 5.02(d) — Existing Debt*

	 	 	 	 	 
	Exhibits	 	 	 	 
	 
	 	 	 	 
	Exhibit A

	 	—
	 	Form of Note
	 
	 	 	 	 
	Exhibit B

	 	—
	 	Form of Notice of Borrowing*
	 
	 	 	 	 
	Exhibit C

	 	—
	 	Form of Assignment and Acceptance*
	 
	 	 	 	 
	Exhibit D

	 	—
	 	Form of Opinion of Counsel for the Borrower*
	 
	 	 	 	 
	Exhibit E

	 	—
	 	Form of Parent Guaranty*
	 
	 	 	 	 
	Exhibit F

	 	—
	 	Form of Subsidiary Guaranty*

* This annex, exhibit or schedule to the Credit Agreement has been omitted and will be
furnished to the Commission upon request.

iii

 

CREDIT AGREEMENT

Dated as of August 30, 2007

     WESTERN DIGITAL TECHNOLOGIES, INC., a Delaware corporation (the “Borrower”), the
banks, financial institutions and other institutional lenders (the “Initial Lenders”)
listed on the signature pages hereof, CITICORP GLOBAL CAPITAL MARKETS and JPMORGAN CHASE BANK,
N.A., as co-syndication agents, and GOLDMAN SACHS CREDIT PARTNERS L.P. (“GSCP”), as
administrative agent (the “Agent”) for the Lenders (as hereinafter defined), agree as
follows:

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

     SECTION 1.01 Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the terms defined):

     “Acquisition” means the acquisition by the Borrower of all of the outstanding Equity
Interests of Komag pursuant to the Tender Offer and the Merger.

     “Acquisition Agreement” means that certain Agreement and Plan of Merger dated as of
June 28, 2007, among Parent, State M Corporation and Komag, as amended, supplemented or otherwise
modified from time to time in accordance with the provisions hereof and thereof.

     “Advance” means an advance by a Lender to the Borrower as part of a Borrowing and
refers to a Base Rate Advance or a Eurodollar Rate Advance (each of which shall be a “Type”
of Advance).

     “Affiliate” means, as to any Person, any other Person that, directly or indirectly,
controls, is controlled by or is under common control with such Person or is a director or officer
of such Person.

     “Agent’s Account” means the account of the Agent maintained by the Agent at
Citibank NA, ABA 021000089, Acct 40717188, ACCT NAME: Goldman Sachs Credit Partners.

     “Agreement” means this Credit Agreement, as it may be amended, restated, supplemented
or otherwise modified from time to time.

     “Applicable Lending Office” means, with respect to each Lender, such Lender’s Domestic
Lending Office in the case of a Base Rate Advance and such Lender’s Eurodollar Lending Office in
the case of a Eurodollar Rate Advance.

     “Applicable Margin” means (a) for Base Rate Advances as of any date, 0% per annum and
(b) for Eurodollar Rate Advances as of any date, 0.625% per annum.

1

 

     “Arrangers” means Goldman Sachs Credit Partners L.P., Citigroup Global Markets Inc.
and J.P. Morgan Securities Inc.

     “Asset Sale” means a sale, lease or sub-lease (as lessor or sublessor), sale and
leaseback, assignment, conveyance, transfer or other disposition to, or any exchange of property
with, any Person (other than the Borrower or any of its Subsidiaries), in one transaction or a
series of transactions, of all or any part of the Borrower’s or any of its Subsidiaries’
businesses, assets or properties of any kind, whether real, personal, or mixed and whether tangible
or intangible, whether now owned or hereafter acquired, including, without limitation, the Equity
Interests of any of the Borrower’s Subsidiaries, other than (i) inventory (or other assets) sold or
leased in the ordinary course of business (excluding any such sales by operations or divisions
discontinued or to be discontinued), (ii) licenses and sublicenses of intellectual property rights
in the ordinary course of business, (iii) cash or cash equivalents, (iv) sales, assignments,
transfers or dispositions of accounts in the ordinary course of business for purposes of compromise
or collection, (v) leases of real property, (vi) sales of Equity Interests constituting Margin
Stock, and (vii) sales of other assets for aggregate consideration of less than $20,000,000.

     “Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an Eligible Assignee, and accepted by the Agent, in substantially the form of Exhibit C
hereto.

     “Assumed Debt” has the meaning specified in Section 5.02(d)(iv).

     “Base Rate” means a fluctuating interest rate per annum in effect from time to time,
which rate per annum shall at all times be equal to the highest of:

     (a) the rate of interest quoted in The Wall Street Journal, Money Rates Section as the Prime
Rate (currently defined as the base rate on corporate loans posted by at least 75% of the nation’s
thirty (30) largest banks), as in effect from time to time;

     (b) the sum (adjusted to the nearest 1/4 of 1% or, if there is no nearest 1/4 of 1%, to the
next higher 1/4 of 1%) of (i) 1/2 of 1% per annum, plus (ii) the rate obtained by dividing
(A) the latest three-week moving average of secondary market morning offering rates in the United
States for three-month certificates of deposit of major United States money market banks, such
three-week moving average (adjusted to the basis of a year of 360 days) being determined weekly on
each Monday (or, if such day is not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such
publication shall be suspended or terminated, on the basis of quotations for such rates received by
Citibank from three New York certificate of deposit dealers of recognized standing selected by
Citibank, by (B) a percentage equal to 100% minus the average of the daily percentages specified
during such three-week period by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for Citibank with respect to
liabilities consisting of or including (among other liabilities) three-month U.S. dollar
non-personal time deposits in the United States, plus (iii) the average during such three-week
period of the annual assessment rates estimated by Citibank for

2

 

determining the then current annual assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring U.S. dollar deposits of Citibank in the
United States; and

     (c) 1/2 of one percent per annum above the Federal Funds Rate.

     “Base Rate Advance” means an Advance that bears interest as provided in Section
2.06(a)(i).

     “Borrower Information” has the meaning specified in Section 8.08.

     “Borrowing” means a borrowing consisting of simultaneous Advances of the same Type
made by each of the Lenders pursuant to Section 2.01.

     “Business Day” means a day of the year on which banks are not required or authorized
by law to close in New York or California and, if the applicable Business Day relates to any
Eurodollar Rate Advances, on which dealings are carried on in the London interbank market.

     “Capital Expenditures” means, for any period, the aggregate of all expenditures of the
Borrower and its Subsidiaries during such period determined on a consolidated basis that, in
accordance with GAAP, are or should be included in “purchase of property and equipment” or similar
items reflected in the consolidated statement of cash flows of the Borrower and its Subsidiaries.
For purposes of determining compliance with the covenant set forth in Section 5.03(b) as of or for
the periods ended on the last day of the first fiscal quarter of fiscal year 2008, the last day of
the second fiscal quarter of fiscal year 2008 and the last day of the third fiscal quarter of
fiscal year 2008, Capital Expenditures will be deemed to be equal to (i) for the second fiscal
quarter of fiscal year 2007, $110,000,000, (ii) for the third fiscal quarter of fiscal year 2007,
$70,000,000 and (iii) for the fourth fiscal quarter of fiscal year 2007, $85,000,000.

     “Capital Lease” means, as applied to any Person, any lease of any property (whether
real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be
accounted for as a capital lease on the balance sheet of that Person.

     “Citibank” means Citibank, N.A.

     “Commitment” means as to any Lender (a) the Dollar amount set forth opposite such
Lender’s name on Schedule I hereto as such Lender’s “Commitment” or (b) if such Lender has entered
into an Assignment and Acceptance, the Dollar amount set forth for such Lender in the Register
maintained by the Agent pursuant to Section 8.07(d), as such amount may be reduced pursuant to
Section 2.05.

     “Commitment Termination Date” means the earliest of (i) consummation of the Merger,
(ii) 180 days after the Effective Date, (iii) the date that the Borrower terminates the Unused
Commitments in accordance with Section 2.04 and (iv) the date on which the Unused Commitments
terminate in accordance with the terms hereof.

     “Communications” has the meaning specified in Section 8.02(b).

3

 

     “Consolidated” refers to the consolidation of accounts in accordance with GAAP.

     “Convert”, “Conversion” and “Converted” each refers to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.08 or 2.09.

     “Debt” of any Person means, without duplication, (a) all indebtedness of such Person
for borrowed money, (b) all obligations of such Person for the deferred purchase price of property
or services (other than trade payables incurred in the ordinary course of business of such Person
that are (i) not overdue by more than 60 days or (ii) contested in good faith by appropriate
proceedings and as to which appropriate reserves are maintained by such Person), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d)
all obligations of such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all obligations of such Person as lessee under leases
that have been or should be, in accordance with GAAP, recorded as capital leases, (f) all
obligations, contingent or otherwise, of such Person in respect of acceptances, letters of credit
or similar extensions of credit, (g) all net obligations of such Person in respect of Hedge
Agreements entered into with a particular counterparty (determined as of any date as the amount
such Person would be required to pay to its counterparty in accordance with the terms thereof as if
terminated on such date of determination), (h) all Debt of others referred to in clauses (a)
through (g) above or clause (i) below and other payment obligations (collectively, “Guarantied
Debt”) guarantied directly or indirectly in any manner by such Person, or in effect guarantied
directly or indirectly by such Person through an agreement (1) to pay or purchase such Guarantied
Debt or to advance or supply funds for the payment or purchase of such Guarantied Debt, (2) to
purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily
for the purpose of enabling the debtor to make payment of such Guarantied Debt or to assure the
holder of such Guarantied Debt against loss, (3) to supply funds to or in any other manner invest
in the debtor (including any agreement to pay for property or services irrespective of whether such
property is received or such services are rendered) or (4) otherwise to assure a creditor against
loss, and (i) all Debt referred to in clauses (a) through (h) above (including Guarantied Debt)
secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to
be secured by) any Lien on property (including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or become liable for the payment of
such Debt. The amount of any Debt that is only recourse to specific assets of such Person shall be
deemed to be equal to the lesser of (x) the principal amount of such Debt and (y) the fair market
value of the assets of such Person to which such Debt has recourse.

     “Debt for Borrowed Money” means, as at any date of determination, all items that, in
accordance with GAAP, would be classified as indebtedness on a Consolidated balance sheet of Parent
and its Subsidiaries. For the avoidance of doubt, Debt for Borrowed Money does not include
obligations under Hedge Agreements.

     “Default” means any Event of Default or any event that would constitute an Event of
Default but for the requirement that notice be given or time elapse or both.

4

 

     “Domestic Lending Office” means, with respect to any Lender, the office of such Lender
specified as its “Domestic Lending Office” opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender, or such other office of such Lender
as such Lender may from time to time specify to the Borrower and the Agent.

     “Domestic Subsidiary” means any Subsidiary organized under the laws of the United
States of America, any State thereof or the District of Columbia (other than a Subsidiary that is
owned directly or indirectly by a controlled foreign corporation as defined in Section 957(a) of
the Internal Revenue Code).

     “EBITDA” means, for any period, net income (or net loss) plus the sum of the
following, to the extent deducted in determining net income: (a) interest expense, (b) income tax
expense, (c) depreciation expense, (d) amortization expense, (e) other non-cash items reducing net
income (other than any such non-cash item to the extent it represents an accrual of or reserve for
cash expenditures in any further period or amortization of a prepaid cash charge that was paid in a
prior period), and (f) one-time merger, integration and transaction costs payable by the Borrower
or any of its Subsidiaries in connection with the transactions contemplated by the Acquisition
Agreement and the Loan Documents in an amount not to exceed $165,000,000 in the aggregate and
minus the sum of (x) non-cash gains increasing net income for such period (excluding any
such non-cash gain to the extent it represents the reversal of an accrual or reserve for potential
cash gain in any prior period) and (y) interest income, in each case determined in accordance with
GAAP for such period. For purposes of determining compliance with the covenants set forth in
Sections 5.03(a) and (b) as of or for the periods ended on the last day of the first fiscal quarter
of fiscal year 2008, the last day of the second fiscal quarter of fiscal year 2008 and the last day
of the third fiscal quarter of fiscal year 2008, EBITDA will be deemed to be equal to (i) for the
second fiscal quarter of fiscal year 2007, $183,700,000, (ii) for the third fiscal quarter of
fiscal year 2007, $182,800,000 and (iii) for the fourth fiscal quarter of fiscal year 2007,
$154,200,000.

     “EDGAR Website” has the meaning specified in Section 5.01(j).

     “Effective Date” has the meaning specified in Section 3.01.

     “Eligible Assignee” means (i) a Lender; (ii) an Affiliate of a Lender; and (iii) any
other Person approved by the Agent and, unless an Event of Default has occurred and is continuing
at the time any assignment is effected in accordance with Section 8.07, the Borrower, such approval
not to be unreasonably withheld or delayed; provided, however, that neither the
Borrower nor an Affiliate of the Borrower shall qualify as an Eligible Assignee.

     “Environmental Action” means any action, suit, demand, demand letter, claim, notice of
non-compliance or violation, notice of liability or potential liability, investigation, proceeding,
consent order or consent agreement arising pursuant to or based upon any Environmental Law,
Environmental Permit or Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or other actions or
damages and (b) by any governmental or regulatory authority or any third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive relief.

5

 

     “Environmental Law” means any civil or criminal, federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment, decree or judicial or agency
interpretation, policy or guidance relating to pollution or protection of the environment, health,
safety or natural resources, including, without limitation, those relating to the manufacturing,
use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials.

     “Environmental Permit” means any permit, approval, identification number, license or
other authorization required under any Environmental Law.

     “Equity Interests” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all equivalent
ownership interests in a Person (other than a corporation), including partnership interests and
membership interests, and any and all warrants, rights or options to purchase or other arrangements
or rights to acquire any of the foregoing, but excluding debt securities exchangeable into such
Equity Interests.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.

     “ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a member
of the Borrower’s controlled group, or under common control with the Borrower, within the meaning
of Section 414 of the Internal Revenue Code.

     “ERISA Event” means (a) (i) the occurrence of a reportable event, within the meaning
of Section 4043 of ERISA, with respect to any Plan unless the 30-day notice requirement with
respect to such event has been waived by the PBGC, or (ii) the requirements of subsection (1) of
Section 4043(b) of ERISA (without regard to subsection (2) of such Section) are met with respect to
a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event
described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably
expected to occur with respect to such Plan within the following 30 days; (b) the application for a
minimum funding waiver with respect to a Plan; (c) the provision by the administrator of any Plan
of a notice of intent to terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the
cessation of operations at a facility of the Borrower or any ERISA Affiliate in the circumstances
described in Section 4062(e) of ERISA; (e) the withdrawal by the Borrower or any ERISA Affiliate
from a Multiple Employer Plan during a plan year for which it was a substantial employer, as
defined in Section 4001(a)(2) of ERISA; (f) the conditions for the imposition of a lien under
Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the adoption of an
amendment to a Plan requiring the provision of security to such Plan pursuant to Section 307 of
ERISA; or (h) the institution by the PBGC of proceedings to terminate a Plan pursuant to Section
4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a trustee to administer, a Plan.

     “Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to time.

6

 

     “Eurodollar Lending Office” means, with respect to any Lender, the office of such
Lender specified as its “Eurodollar Lending Office” opposite its name on Schedule I hereto or in
the Assignment and Acceptance pursuant to which it became a Lender (or, if no such office is
specified, its Domestic Lending Office), or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Agent.

     “Eurodollar Rate” means, for any Interest Period for each Eurodollar Rate Advance
comprising part of the same Borrowing, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the rate per annum (rounded upward to the nearest whole multiple of 1/16
of 1% per annum) appearing on Reuters Screen LIBOR01 Page (or any successor page) as the London
interbank offered rate for deposits in U.S. dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term comparable to such Interest
Period or, if for any reason such rate is not available, the average (rounded upward to the nearest
whole multiple of 1/16 of 1% per annum, if such average is not such a multiple) of the rate per
annum at which deposits in U.S. dollars are offered by the principal office of each of the
Reference Banks in London, England to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such Interest Period in an amount
substantially equal to such Reference Bank’s Eurodollar Rate Advance comprising part of such
Borrowing to be outstanding during such Interest Period and for a period equal to such Interest
Period by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such
Interest Period. If the Reuters Screen LIBOR01 Page (or any successor page) is unavailable, the
Eurodollar Rate for any Interest Period for each Eurodollar Rate Advance comprising part of the
same Borrowing shall be determined by the Agent on the basis of applicable rates furnished to and
received by the Agent from the Reference Banks two Business Days before the first day of such
Interest Period, subject, however, to the provisions of Section 2.08.

     “Eurodollar Rate Advance” means an Advance that bears interest as provided in Section
2.06(a)(ii).

     “Eurodollar Rate Reserve Percentage” for any Interest Period for all Eurodollar Rate
Advances comprising part of the same Borrowing means the reserve percentage applicable two Business
Days before the first day of such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in New York City with respect
to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to
any other category of liabilities that includes deposits by reference to which the interest rate on
Eurodollar Rate Advances is determined) having a term equal to such Interest Period.

     “Events of Default” has the meaning specified in Section 6.01.

     “Existing Debt” has the meaning specified in Section 5.02(d)(iii).

     “Exposure” means, with respect to any Lender, as of any date of determination, the
outstanding principal amount of the Advances of such Lender plus the Unused Commitments of

7

 

such Lender; provided, at any time prior to the making of the Advances, the Exposure
of any Lender shall be equal to such Lender’s Commitment.

     “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum
equal for each day during such period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such transactions received by the Agent
from three Federal funds brokers of recognized standing selected by it.

     “Fixed Charges” means, for any period, the sum, without duplication, of the amounts
determined for Parent and its Subsidiaries on a consolidated basis equal to (i) Interest Expense
and (ii) Capital Expenditures.

     “GAAP” has the meaning specified in Section 1.03.

     “GSCP” has the meaning specified in the preamble.

     “Guarantied Debt” has the meaning specified in the definition of “Debt.”

     “Guarantor” means each of Parent and any Significant Subsidiary of the Borrower that
is a Domestic Subsidiary.

     “Hazardous Materials” means (a) petroleum and petroleum products, byproducts or
breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls
and radon gas and (b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.

     “Hedge Agreements” means interest rate swap, cap or collar agreements, interest rate
future or option contracts, currency swap agreements, currency future or option contracts and other
similar interest rate or exchange rate hedging agreements.

     “Indemnified Costs” has the meaning specified in Section 7.05.

     “Indemnified Party” has the meaning specified in Section 8.04(b).

     “Interest Expense” means, for any period, total interest expense (including that
portion attributable to Capital Leases in accordance with GAAP and capitalized interest) of Parent
and its Subsidiaries on a consolidated basis with respect to all outstanding Debt for Borrowed
Money of Parent and its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and net costs under Hedge Agreements, excluding any
amount not payable in Cash. For purposes of determining compliance with the covenant set forth in
Section 5.03(b) as of or for the periods ended on the last day of the first fiscal quarter of
fiscal year 2008, the last day of the second fiscal quarter of fiscal year 2008 and the last day of
the third fiscal quarter of fiscal year 2008, Interest Expense will be deemed to be equal to (i)
for

8

 

the second fiscal quarter of fiscal year 2007, $1,245,000, (ii) for the third fiscal quarter
of fiscal year 2007, $787,000 and (iii) for the fourth fiscal quarter of fiscal year 2007,
$885,000.

     “Interest Period” means, for each Eurodollar Rate Advance comprising part of the same
Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of the
Conversion of any Base Rate Advance into such Eurodollar Rate Advance and ending on the last day of
the period selected by the Borrower pursuant to the provisions below and, thereafter, each
subsequent period commencing on the last day of the immediately preceding Interest Period and
ending on the last day of the period selected by the Borrower pursuant to the provisions below.
The duration of each such Interest Period shall be one, two, three or six months as the Borrower
may, upon notice received by the Agent not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the first day of such Interest Period, select; provided,
however, that:

     (a) the Borrower may not select any Interest Period that ends after the Maturity Date;

     (b) Interest Periods commencing on the same date for Eurodollar Rate Advances comprising part
of the same Borrowing shall be of the same duration;

     (c) whenever the last day of any Interest Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that, if such extension would cause the
last day of such Interest Period to occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding Business Day; and

     (d) whenever the first day of any Interest Period occurs on a day of an initial calendar month
for which there is no numerically corresponding day in the calendar month that succeeds such
initial calendar month by the number of months equal to the number of months in such Interest
Period, such Interest Period shall end on the last Business Day of such succeeding calendar month.

     “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.

     “Komag” means Komag, Incorporated, a Delaware corporation.

     “Komag Indenture” means that certain Indenture dated as of March 28, 2007 between
Komag, as issuer, and U.S. Bank National Association, as trustee.

     “Komag Material Adverse Effect” means a “Material Adverse Effect” (as defined in the
Acquisition Agreement).

     “Komag Subordinated Notes” means those certain 2.125% convertible subordinated notes
due 2014 of Komag issued pursuant to the Komag Indenture.

     “Lenders” means each Initial Lender and each Person that shall become a party hereto
pursuant to Section 8.07.

9

 

     “Lien” means any lien, security interest or other charge or encumbrance of any kind,
including, without limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.

     “Loan Documents” means this Agreement, the Notes, if any, the Parent Guaranty, the
Subsidiary Guaranties, if any, and all other documents, instruments or agreements executed and
delivered by Parent, the Borrower or any of its Subsidiaries for the benefit of any Agent or any
Lender in connection herewith.

     “Margin Stock” has the meaning assigned to that term in Regulation U of the Board of
Governors of the Federal Reserve System as in effect from time to time.

     “Material Adverse Change” means any material adverse change in the business, financial
condition or operations of the Borrower and its Subsidiaries taken as a whole.

     “Material Adverse Effect” means a material adverse effect on (a) the business,
financial condition or operations of the Borrower and its Subsidiaries taken as a whole, (b) the
rights and remedies of the Agent or any Lender under this Agreement or any Note or (c) the ability
of the Borrower to perform its obligations under this Agreement or any Note.

     “Maturity Date” means the date 364 days after the Effective Date.

     “Merger” means the merger of State M Corporation with and into Komag, with Komag as
the surviving corporation.

     “Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of
ERISA, to which the Borrower or any ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or accrued an obligation to
make contributions.

     “Multiple Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of the Borrower or any ERISA Affiliate
and at least one Person other than the Borrower and the ERISA Affiliates or (b) was so maintained
and in respect of which the Borrower or any ERISA Affiliate could have liability under Section 4064
or 4069 of ERISA in the event such plan has been or were to be terminated.

     “Net Asset Sale Proceeds” means, with respect to any Asset Sale, an amount equal to:
(i) cash payments (including any cash received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise, but only as and when so received) received by the
Borrower or any of its Subsidiaries from such Asset Sale, minus (ii) any bona fide direct
costs incurred in connection with such Asset Sale, including (a) income or gains taxes payable by
the seller as a result of any gain recognized in connection with such Asset Sale, (b) payment of
the outstanding principal amount of, premium or penalty, if any, and interest on any Debt (other
than the Advances) that is secured by a Lien on the stock or assets in question and that is
required to be repaid under the terms thereof as a result of such Asset Sale and (c) a reasonable
reserve for any indemnification payments (fixed or contingent) attributable to seller’s indemnities

10

 

and representations and warranties to purchaser in respect of such Asset Sale undertaken by the
Borrower or any of its Subsidiaries in connection with such Asset Sale.

     “Note” means a promissory note of the Borrower payable to the order of any Lender,
delivered pursuant to a request made under Section 2.16 in substantially the form of Exhibit A
hereto, evidencing the aggregate indebtedness of the Borrower to such Lender resulting from the
Advances made by such Lender.

     “Notice” has the meaning specified in Section 8.02(c).

     “Notice of Borrowing” has the meaning specified in Section 2.02(a).

     “Obligations” means all obligations of every nature of the Borrower under the Loan
Documents, including obligations from time to time owed to the Agent (including any former Agent),
the Lenders or any of them, under any Loan Document, whether for principal, interest (including
interest which, but for the filing of a petition in bankruptcy with respect to such Loan Party,
would have accrued on any Obligation, whether or not a claim is allowed against the Borrower for
such interest in the related bankruptcy proceeding), fees, expenses, indemnification or otherwise.

     “Parent” means Western Digital Corporation, a Delaware corporation.

     “Parent Guaranty” means that certain Guaranty in the form attached as Exhibit E, to be
executed by Parent in favor of the Agent, as it may be amended, restated, supplemented or otherwise
modified from time to time.

     “Participant Register” has the meaning specified in Section 8.07(e).

     “Patriot Act” means the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, signed into law
October 26, 2001.

     “PBGC” means the Pension Benefit Guaranty Corporation (or any successor).

     “Permitted Liens” means such of the following as to which no enforcement, collection,
execution, levy or foreclosure proceeding shall have been commenced: (a) Liens for taxes,
assessments and governmental charges or levies to the extent not required to be paid under Section
5.01(b) hereof; (b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’,
warehousemen’s, workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary
course of business securing obligations that are not overdue for a period of more than 30 days or
that are being contested in good faith and by appropriate proceedings and, if not bonded, for which
any reserves required by GAAP have been established; (c) pledges or deposits to secure obligations
under workers’ compensation laws or similar legislation or to secure public or statutory
obligations; (d) easements, rights of way and other encumbrances on title to real property that do
not render title to the property encumbered thereby unmarketable or materially adversely affect the
use of such property for its present purposes; (e) Liens to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of

11

 

business; (f) landlords’ Liens under leases to which such Person is a party; (g) Liens consisting of leases, subleases, licenses
or sublicenses granted to others and not interfering in any material respect with the business of
the Borrower and its Subsidiaries, taken as a whole, and any interest or title of a lessor or licensor under any lease or license, as applicable; (h) Liens arising
solely by virtue of any statutory or common law provision relating to banker’s Liens, rights of
set-off or similar rights and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; (i) Liens securing judgments for the payment of money not
constituting an Event of Default under Section 6.01(f) or securing appeal or other surety bonds
related to such judgments; and (j) restrictions on funds held for payroll customers pursuant to
obligations to such customers.

     “Person” means an individual, partnership, corporation (including a business trust),
joint stock company, trust, unincorporated association, joint venture, limited liability company or
other entity, or a government or any political subdivision or agency thereof.

     “Plan” means a Single Employer Plan or a Multiple Employer Plan.

     “Platform” has the meaning specified in Section 8.02(b).

     “Pro Forma Basis” means, with respect to compliance with any test or covenant
hereunder, compliance with such test or covenant after giving effect to (i) any acquisition other
than the Acquisition, (ii) any incurrence of Debt or (iii) any Asset Sale (including (a) pro forma
adjustments arising out of events which are directly attributable to any proposed acquisition, any
incurrence of Debt or any Asset Sale, are factually supportable and are expected to have a
continuing impact, in each case as determined on a basis consistent with Article 11 of Regulation
S-X of the Securities Act of 1933, as amended, as interpreted by the staff of the Securities and
Exchange Commission, (b) pro forma adjustments reasonably acceptable to the Agent arising out of
operating expense reductions attributable to such transaction being given pro forma effect that (1)
have been realized or (2) will be implemented following such transaction and are supportable and
quantifiable and, in each case, including, but not limited to, (A) reduction in personnel expenses,
(B) reduction of costs related to administrative functions, (C) reduction of costs related to
leased or owned properties and (D) reductions from the consolidation of operations and streamlining
of corporate overhead, and (c) such other adjustments as are reasonably satisfactory to the Agent,
in each case as certified by an officer of the Borrower) using, for purposes of determining such
compliance, the historical financial statements of all entities or assets so acquired and the
consolidated financial statements of Parent and its Subsidiaries and assuming that all acquisitions
(other than the Acquisition) that have been consummated during the period, any Asset Sale and any
Debt or other liabilities repaid in connection therewith had been consummated and incurred or
repaid at the beginning of such period (and assuming that such Debt to be incurred bears interest
during any portion of the applicable measurement period prior to the relevant acquisition at the
interest rate which is or would be in effect with respect to such Debt as at the relevant date of
determination).

     “Ratable Share” of any amount means, with respect to any Lender at any time, the
product of such amount times a fraction the numerator of which is the Exposure of that
Lender at such time and the denominator of which is the aggregate Exposure of all Lenders at such
time.

12

 

     “Reference Banks” means Citicorp USA, Inc. and JPMorgan Chase Bank, N.A.

     “Register” has the meaning specified in Section 8.07(d).

     “Required Lenders” means at any time one or more Lenders having or holding Exposure
representing more than 50% of the aggregate Exposure of all Lenders.

     “Restricted Junior Payment” means (i) any dividend or other distribution, direct or
indirect, on account of any shares of any class of stock of the Borrower now or hereafter
outstanding, except a dividend payable solely in shares of that class of stock to the holders of
that class; (ii) any redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock of the Borrower now
or hereafter outstanding; and (iii) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of stock of the
Borrower now or hereafter outstanding.

     “Significant Subsidiary” has the meaning specified in Regulation S-X promulgated under
the Securities Act of 1933, as amended.

     “Single Employer Plan” means a single employer plan, as defined in Section 4001(a)(15)
of ERISA, that (a) is maintained for employees of the Borrower or any ERISA Affiliate and no Person
other than the Borrower and the ERISA Affiliates or (b) was so maintained and in respect of which
the Borrower or any ERISA Affiliate could have liability under Section 4069 of ERISA in the event
such plan has been or were to be terminated.

     “Solvent” means, with respect to any Person on a particular date, that on such date
(a) the fair value of the property of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur debts or liabilities beyond such
Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in business or a transaction, for
which such Person’s property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in the light of all the
facts and circumstances existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability.

     “Subsidiary” of any Person means any corporation, partnership, joint venture, limited
liability company, trust or estate of which (or in which) more than 50% of (a) the issued and
outstanding capital stock having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time capital stock of any other class
or classes of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such limited liability company,
partnership or joint venture or (c) the beneficial interest in such trust or estate is at the time
directly or indirectly owned or controlled by such Person, by such Person and one or more of its
other Subsidiaries or by one or more of such Person’s other Subsidiaries. Notwithstanding the

13

 

foregoing, other than with respect to the representations and warranties set forth in the officer’s
certificate required under Section 3.01(g)(vi) or in Sections 4.01(b)(ii) and 4.01(j) made on the
Effective Date, Komag shall not be deemed to be a Subsidiary of the Borrower until consummation of
the Merger.

     “Subsidiary Guaranty” means that certain Subsidiary Guaranty in the form attached as
Exhibit F, to be executed by any Significant Subsidiary of the Borrower that is a Domestic
Subsidiary in favor of the Agent pursuant to Section 5.01(k), as it may be amended, restated,
supplemented or otherwise modified from time to time.

     “Tender Offer” means the cash tender offer made by State M Corporation to acquire all
of the outstanding Equity Interests of Komag for $32.25 net per share pursuant to the Tender Offer
Documents.

     “Tender Offer Documents” means the Offer to Purchase, the Letter of Transmittal, the
Schedule TO and any other documents related thereto, as amended, supplemented or otherwise modified
from time to time in accordance with the provisions hereof and thereof.

     “Type” has the meaning specified in the definition of “Advance.”

     “Unused Commitment” means, with respect to each Lender at any time, (a) such Lender’s
Commitment at such time minus (b) the aggregate principal amount of all Advances made by
such Lender (in its capacity as a Lender) and outstanding at such time.

     “Voting Stock” means capital stock issued by a corporation, or equivalent interests in
any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to
vote for the election of directors (or persons performing similar functions) of such Person, even
if the right so to vote has been suspended by the happening of such a contingency.

     SECTION 1.02 Computation of Time Periods. In this Agreement in the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including” and the words “to” and “until” each mean
“to but excluding”.

     SECTION 1.03 Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with
generally accepted accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(e) (“GAAP”).

ARTICLE II.

AMOUNTS AND TERMS OF THE ADVANCES

     SECTION 2.01 The Advances. Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make up
to three Advances to the Borrower from time to time on any Business Day during the period from the
Effective Date until the Commitment Termination Date; provided that the first two Advances
shall be made no later than 90 days after the Effective Date. Each such Advance made by a Lender
shall be in an amount not to exceed such Lender’s Unused Commitment, and all such Advances made by
such Lender shall not

14

 

exceed such Lender’s Commitment. Each Borrowing shall be in an aggregate amount of $100,000,000 or an integral multiple of
$1,000,000 in excess thereof and shall consist of Advances of the same Type made on the same day by
the Lenders ratably according to their respective Commitments. Any amount borrowed under this
Section 2.01 and subsequently repaid or prepaid may not be reborrowed.

     SECTION 2.02 Making the Advances. (a) Each Borrowing shall be made on notice, given not later than (x) 11:00 A.M. (New York
City time) on the third Business Day prior to the date of the proposed Borrowing (or such shorter
period as may otherwise be agreed to by the Arrangers) in the case of a Borrowing consisting of
Eurodollar Rate Advances or (y) 11:00 A.M. (New York City time) on the date of the proposed
Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the Borrower to the
Agent, which shall give to each Lender prompt notice thereof by telecopier. Each such notice of a
Borrowing (a “Notice of Borrowing”) shall be by telephone, confirmed immediately in
writing, or telecopier in substantially the form of Exhibit B hereto, specifying therein the
requested (i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii)
aggregate amount of such Borrowing, and (iv) in the case of a Borrowing consisting of Eurodollar
Rate Advances, initial Interest Period for each such Advance. Each Lender shall, before 1:00 P.M.
(New York City time) on the date of such Borrowing make available for the account of its Applicable
Lending Office to the Agent at the Agent’s Account, in same day funds, such Lender’s ratable
portion of such Borrowing. After the Agent’s receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Agent will make such funds available to the
Borrower at the Agent’s address referred to in Section 8.02.

          (b) Each Notice of Borrowing shall be irrevocable and binding on the Borrower. In the case of
any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by
such Lender as a result of any failure to fulfill on or before the date specified in such Notice of
Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without
limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.

          (c) Unless the Agent shall have received notice from a Lender prior to the time of any
Borrowing that such Lender will not make available to the Agent such Lender’s ratable portion of
such Borrowing, the Agent may assume that such Lender has made such portion available to the Agent
on the date of such Borrowing in accordance with subsection (a) of this Section 2.02 and the Agent
may, in reliance upon such assumption, make available to the Borrower on such date a corresponding
amount. If and to the extent that such Lender shall not have so made such ratable portion
available to the Agent, such Lender and the Borrower severally agree to repay to the Agent
forthwith on demand such corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, the interest rate applicable at the time to Advances
comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall repay to the Agent such corresponding

15

 

amount, such amount so repaid shall constitute such Lender’s Advance as part of such Borrowing
for purposes of this Agreement.

          (d) The failure of any Lender to make the Advance to be made by it as part of any Borrowing
shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the
date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to
make the Advance to be made by such other Lender on the date of any Borrowing.

     SECTION 2.03 Fees. (a) Facility Fee. The Borrower agrees to pay to the Agent for the account of each
Lender a facility fee on the aggregate amount of such Lender’s Unused Commitment from the Effective
Date in the case of each Initial Lender and from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender in the case of each other Lender until the
Commitment Termination Date at a rate per annum equal to 0.125%, payable in arrears quarterly on
the last day of each March, June, September and December, commencing March 31, 2007, and on the
Commitment Termination Date.

          (b) Agent’s Fees. The Borrower shall pay to the Agent for its own account such fees
as may from time to time be agreed between the Borrower and the Agent.

     SECTION 2.04 Optional Termination or Reduction of the Commitments. The Borrower shall have the right, upon at least three Business Days’ notice to the Agent,
to terminate in whole or permanently reduce ratably in part the Unused Commitments of the Lenders,
provided that each partial reduction shall be in the aggregate amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof.

     SECTION 2.05 Repayment of Advances. The Borrower shall repay to the Agent for the ratable account of each Lender on the
Maturity Date the aggregate principal amount of the Advances made by such Lender and then
outstanding.

     SECTION 2.06 Interest on Advances. (a) Scheduled Interest. The Borrower shall pay interest on the unpaid principal
amount of each Advance owing to each Lender from the date of such Advance until such principal
amount shall be paid in full, at the following rates per annum:

     (i) Base Rate Advances. During such periods as such Advance is a Base
Rate Advance, a rate per annum equal at all times to the sum of (x) the Base Rate in
effect from time to time plus (y) the Applicable Margin, payable in arrears
quarterly on the last day of each March, June, September and December during such
periods and on the date such Base Rate Advance shall be Converted or paid in full.

     (ii) Eurodollar Rate Advances. During such periods as such Advance is
a Eurodollar Rate Advance, a rate per annum equal at all times during each Interest
Period for such Advance to the sum of (x) the Eurodollar Rate for such Interest
Period for such Advance plus (y) the Applicable Margin, payable in arrears
on the last day of such Interest Period and, if such Interest Period has a duration
of more than three months, on the day that is three months after the first

16

 

day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted
or paid in full.

          (b) Default Interest. Upon the occurrence and during the continuance of an Event of
Default under Section 6.01(a), the Agent may, and upon the request of the Required Lenders shall,
require the Borrower to pay interest (“Default Interest”) on (i) the unpaid principal
amount of each Advance owing to each Lender, payable in arrears on the dates referred to in clause
(a)(i) or (a)(ii) above, at a rate per annum equal at all times to 2% per annum above the rate per
annum required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to
the fullest extent permitted by law, the amount of any interest, fee or other amount payable
hereunder that is not paid when due, from the date such amount shall be due until such amount shall
be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at
a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on
Base Rate Advances pursuant to clause (a)(i) above, provided, however, that
following acceleration of the Advances pursuant to Section 6.01, Default Interest shall accrue and
be payable hereunder whether or not previously required by the Agent.

     SECTION 2.07 Interest Rate Determination. (a) Each Reference Bank agrees to furnish to the Agent timely information for the purpose
of determining each Eurodollar Rate. If any one or more of the Reference Banks shall not furnish
such timely information to the Agent for the purpose of determining any such interest rate, the
Agent shall determine such interest rate on the basis of timely information furnished by the
remaining Reference Banks. The Agent shall give prompt notice to the Borrower and the Lenders of
the applicable interest rate determined by the Agent for purposes of Section 2.06(a)(i) or (ii),
and the rate, if any, furnished by each Reference Bank for the purpose of determining the interest
rate under Section 2.06(a)(ii).

          (b) If, with respect to any Eurodollar Rate Advances, the Required Lenders notify the Agent
that the Eurodollar Rate for any Interest Period for such Advances will not adequately reflect the
cost to such Required Lenders of making, funding or maintaining their respective Eurodollar Rate
Advances for such Interest Period, the Agent shall forthwith so notify the Borrower and the
Lenders, whereupon (i) each Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance, and (ii) the obligation of the
Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended until the
Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no
longer exist.

          (c) If the Borrower shall fail to select the duration of any Interest Period for any
Eurodollar Rate Advances in accordance with the provisions contained in the definition of “Interest
Period” in Section 1.01, the Agent will forthwith so notify the Borrower and the
Lenders and such Advances will automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances.

          (d) On the date on which the aggregate unpaid principal amount of Eurodollar Rate Advances
comprising any Borrowing shall be reduced, by payment or prepayment or otherwise, to less than
$5,000,000, such Advances shall automatically Convert into Base Rate Advances.

17

 

          (e) Upon the occurrence and during the continuance of any Event of Default, (i) each
Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended.

          (f) If Reuters Screen LIBOR01 Page is unavailable and fewer than two Reference Banks furnish
timely information to the Agent for determining the Eurodollar Rate for any Eurodollar Rate
Advances,

     (i) the Agent shall forthwith notify the Borrower and the Lender that the
interest rate cannot be determined for such Eurodollar Rate Advances,

     (ii) each Eurodollar Rate Advance will automatically, on the last day of the
then existing Interest Period therefor, Convert into a Base Rate Advance, and

     (iii) the obligation of the Lenders to make Eurodollar Rate Advances or to
Convert Advances into Eurodollar Rate Advances shall be suspended until the Agent
shall notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.

     SECTION 2.08 Optional Conversion of Advances. The Borrower may on any Business Day, upon notice given to the Agent not later than 11:00
A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion
and subject to the provisions of Sections 2.07 and 2.12, Convert all Advances of one Type
comprising the same Borrowing into Advances of the other Type; provided, however,
that any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made only on the
last day of an Interest Period for such Eurodollar Rate Advances, any Conversion of Base Rate
Advances into Eurodollar Rate Advances shall be in an amount not less than the minimum amount
specified in Section 2.02(b) and no Conversion of any Advances shall result in more separate
Borrowings than permitted under Section 2.02(b). Each such notice of a Conversion shall, within
the restrictions specified above, specify (i) the date of such Conversion, (ii) the Advances to be
Converted, and (iii) if such Conversion is into Eurodollar Rate Advances, the duration of the
initial Interest Period for each such Advance. Each notice of Conversion shall be irrevocable and
binding on the Borrower.

     SECTION 2.09 Optional Prepayments of Advances. The Borrower may, upon notice at least three Business Days’ prior to the date of such
prepayment, in the case of Eurodollar Rate Advances, and not later than 11:00 A.M. (New York City
time) on the date of such prepayment, in the case of Base Rate Advances, to the Agent stating the
proposed date and aggregate principal amount of the prepayment, and if such notice is given the
Borrower shall, prepay the outstanding principal amount of the Advances comprising part of the same
Borrowing in whole or ratably in part, together with accrued interest to the date of such
prepayment on the principal amount prepaid; provided, however, that (x) each
partial prepayment shall be in an aggregate principal amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof and (y) in the event of any such prepayment of a Eurodollar Rate
Advance, the Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant
to Section 8.04(c).

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     SECTION 2.10 Mandatory Prepayments of Advances.

          (a) Asset Sales. No later than the first Business Day following the date of receipt
by the Borrower or any of its Subsidiaries of any Net Asset Sale Proceeds, the Borrower shall
prepay the Advances as set forth in Section 2.10(e) in an aggregate amount equal to such Net Asset
Sale Proceeds; provided, so long as no Default or Event of Default shall have occurred and be
continuing, the Borrower shall have the option, directly or through one or more of its
Subsidiaries, to invest Net Asset Sale Proceeds within one year of receipt thereof (or 18 months of
receipt thereof if committed to be reinvested within one year of receipt thereof) in assets of the
general type used in the business of the Borrower and its Subsidiaries.

          (b) Issuance of Equity Securities. No later than one Business Day after the date of
receipt by the Borrower of any cash proceeds from the issuance of any Equity Securities of the
Borrower or any of its Subsidiaries (other than pursuant to any employee stock or stock option
compensation plan), the Borrower shall prepay the Advances as set forth in Section 2.10(e) in an
aggregate amount equal to 100% of such proceeds, net of underwriting discounts and commissions and
other reasonable costs and expenses associated therewith, including reasonable legal fees and
expenses.

          (c) Issuance of Debt. No later than one Business Day after the date of receipt by the
Borrower or any of its Subsidiaries of any cash proceeds from the incurrence of any Debt of the
Borrower or any of its Subsidiaries (other than with respect to any Debt permitted to be incurred
pursuant to Section 5.02(d)), the Borrower shall prepay the Advances as set forth in Section
2.10(e) in an aggregate amount equal to 100% of such proceeds, net of underwriting discounts and
commissions and other reasonable costs and expenses associated therewith, including reasonable
legal fees and expenses.

          (d) Prepayment Certificate. Concurrently with any prepayment of the Loans pursuant to
Sections 2.14(a) through 2.14(c), the Borrower shall deliver to Administrative Agent a certificate
of an Authorized Officer demonstrating the calculation of the amount of the applicable net
proceeds. In the event that the Borrower shall subsequently determine that the actual amount
received exceeded the amount set forth in such certificate, the Borrower shall promptly make an
additional prepayment of the Loans in an amount equal to such excess, and the Borrower shall
concurrently therewith deliver to Administrative Agent a certificate of an Authorized Officer
demonstrating the derivation of such excess.

          (e) Application of Prepayments of Advances to Base Rate Advances and Eurodollar Rate
Advances. Any prepayment of Advances shall be applied first to Base Rate Advances to the full
extent thereof before application to Eurodollar Rate Advances, in each case in a manner which
minimizes the amount of any payments required to be made by the Borrower pursuant to Section
8.04(c).

     SECTION 2.11 Increased Costs. (a) If, due to either (i) the introduction of or any change in or in the interpretation of
any law or regulation or (ii) the compliance with any guideline or request made or issued after the
date hereof from any central bank or other governmental authority (whether or not having the force
of law), there shall be any increase in the cost to any Lender of agreeing to make or making,
funding or maintaining Eurodollar Rate

19

 

Advances (excluding for purposes of this Section 2.11 any
such increased costs resulting from excluded taxes described in Section 2.14(a), then the Borrower
shall from time to time, upon demand by such Lender (with a copy of such demand to the Agent), pay
to the Agent for the account of such Lender additional amounts sufficient to compensate such Lender
for such increased cost; provided, however, that before making any such demand,
each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Applicable Lending Office if the making of such a
designation would avoid the need for, or materially reduce the amount of, such increased cost and
would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
A certificate as to the amount of such increased cost, submitted to the Borrower and the Agent by
such Lender, shall be conclusive and binding for all purposes, absent manifest error.

          (b) If any Lender determines that compliance with any law or regulation or any guideline or
request from any central bank or other governmental authority (whether or not having the force of
law) affects or would affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and that the amount of such capital is increased
by or based upon the existence of such Lender’s commitment to lend hereunder and other commitments
of such type, then, upon demand by such Lender (with a copy of such demand to the Agent), the
Borrower shall pay to the Agent for the account of such Lender, from time to time as specified by
such Lender, additional amounts sufficient to compensate such Lender or such corporation in the
light of such circumstances, to the extent that such Lender reasonably determines such increase in
capital to be allocable to the existence of such Lender’s commitment to lend hereunder. A
certificate as to such amounts submitted to the Borrower and the Agent by such Lender shall be
conclusive and binding for all purposes, absent manifest error.

     SECTION 2.12 Illegality. Notwithstanding any other provision of this Agreement, if any Lender shall notify the Agent
that the introduction of or any change in or in the interpretation of any law or regulation makes
it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for
any Lender or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar
Rate Advances or to fund or maintain Eurodollar Rate Advances hereunder, (a) each Eurodollar Rate
Advance will automatically, upon such demand, Convert into a Base Rate Advance or an Advance that
bears interest at the rate set forth in Section 2.06(a)(i), as the case may be, and (b) the
obligation of the Lenders to make Eurodollar Rate Advances or to Convert Advances into Eurodollar
Rate Advances shall be suspended until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.

     SECTION 2.13 Payments and Computations. (a) The Borrower shall make each payment hereunder, irrespective of any right of
counterclaim or set-off, not later than 1:00 P.M. (New York City time) on the day when due in U.S.
dollars to the Agent at the Agent’s Account in same day funds. The Agent will promptly thereafter
cause to be distributed like funds relating to the payment of principal or interest, fees or
commissions ratably (other than amounts payable pursuant to Section 2.11, 2.14 or 8.04(c)) to the
Lenders for the account of their respective Applicable Lending Offices, and like funds relating to
the payment of any other amount payable to any Lender to such Lender for the account of its
Applicable Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment

20

 

and Acceptance and recording of the information
contained therein in the Register pursuant to Section 8.07(c), from and after the effective date
specified in such Assignment and Acceptance, the Agent shall make all payments hereunder and under
the Notes in respect of the interest assigned thereby to the Lender assignee thereunder, and the
parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments
for periods prior to such effective date directly between themselves.

          (b) All computations of interest based on the Base Rate shall be made by the Agent on the
basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on
the Eurodollar Rate or the Federal Funds Rate and of fees shall be made by the Agent on the basis
of a year of 360 days, in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest, fees or commissions are
payable. Each determination by the Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.

          (c) Whenever any payment hereunder or under the Notes shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of payment of interest, fee or
commission, as the case may be; provided, however, that, if such extension would
cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding Business Day.

          (d) Unless the Agent shall have received notice from the Borrower prior to the date on which
any payment is due to the Lenders hereunder that the Borrower will not make such payment in full,
the Agent may assume that the Borrower has made such payment in full to the Agent on such date and
the Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due
date an amount equal to the amount then due such Lender. If and to the extent the Borrower shall
not have so made such payment in full to the Agent, each Lender shall repay to the Agent forthwith
on demand such amount distributed to such Lender together with interest thereon, for each day from
the date such amount is distributed to such Lender until the date such Lender repays such amount to
the Agent, at the Federal Funds Rate.

     SECTION 2.14 Taxes. (a) Any and all payments by the Borrower to or for the account of any Lender or the Agent
hereunder or under the Notes or any other documents to be delivered hereunder shall be made, in
accordance with Section 2.13 or the applicable provisions of such other documents, free and clear of and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto, excluding,
in the case of each Lender and the Agent or any other recipient of any payment made by or on
account of any obligation of the Borrower hereunder, in each case inclusive of all liabilities with
respect thereof, (i) all taxes imposed on or measured by its overall net income (however
denominated), franchise taxes imposed on it in lieu of net income taxes and branch profits taxes
imposed on it (A) by the jurisdiction (or any political subdivision thereof) under the laws of
which such Lender or the Agent (as the case may be) is organized or has its principal place of
business, (B) by a jurisdiction solely as a result of a present or former connection between the
Agent or such Lender and such jurisdiction (other than any such connection arising from such
recipient having executed, delivered or performed its obligations or received a

21

 

payment under, or enforced, or otherwise with respect to, any of the Loan Documents), or (C) in the case of each
Lender, by the jurisdiction of such Lender’s Applicable Lending Office or any political subdivision
thereof, (ii) any withholding or backup withholding tax that (A) is imposed under a law in effect
at the time such Lender becomes a party hereto or otherwise acquires an interest herein (or
designates a new lending office) or (B) is attributable to such Lender’s failure (or unreasonable
delay) to comply with Section 2.14(e) or Section 2.14(f), except to the extent that such Lender (or
its assignor, if any) was otherwise entitled, at the time of designation of a new lending office
(or assignment), to receive additional amounts from the Borrower with respect to such withholding
tax pursuant to this Section 2.14(a), and (iii) any tax that results from a recipient’s gross
negligence or willful misconduct (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as “Taxes”). If the Borrower shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder or under any Note or any other documents
to be delivered hereunder to any Lender or the Agent, (i) the sum payable shall be increased as may
be necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.14) such Lender or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with applicable law.

          (b) In addition, the Borrower shall pay any present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies that arise from any payment made
hereunder or under the Notes or any other documents to be delivered hereunder or from the
execution, delivery or registration of, performing under, or otherwise with respect to, this
Agreement or the Notes or any other documents to be delivered hereunder (hereinafter referred to as
“Other Taxes”).

          (c) The Borrower shall indemnify each Lender and the Agent for and hold it harmless against
the full amount of Taxes or Other Taxes (including, without limitation, taxes of any kind imposed
or asserted by any jurisdiction on amounts payable under this Section 2.14) imposed on or paid by
such Lender or the Agent (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. A certificate of the Agent or a Lender
setting forth in reasonable detail the amount or amounts necessary to compensate the Agent or such
Lender shall be delivered to the Borrower by the applicable Lender (with a copy to the Agent), or
by the Agent on its own behalf or on behalf of the applicable Lender. This indemnification shall be made within 30 days from the date such
Lender or the Agent (as the case may be) delivers such certificate therefor.

          (d) Within 30 days after the date of any payment of Taxes, the Borrower shall furnish to the
Agent, at its address referred to in Section 8.02, the original or a certified copy of a receipt
evidencing such payment to the extent such a receipt is issued therefor, or other written proof of
payment thereof that is reasonably satisfactory to the Agent. For purposes of subsection (e) and
subsection (f), the terms “United States” and “United States person” shall have the
meanings specified in Section 7701 of the Internal Revenue Code.

22

 

          (e) Each Lender organized under the laws of a jurisdiction outside the United States, on or
prior to the date of its execution and delivery of this Agreement in the case of each Initial
Lender and on the date of the Assignment and Acceptance pursuant to which it becomes a Lender in
the case of each other Lender, and from time to time thereafter as reasonably requested in writing
by the Borrower (but only so long as such Lender remains lawfully able to do so), shall provide
each of the Agent and the Borrower with two original Internal Revenue Service Forms W-8BEN or
W-8ECI, as appropriate, or any successor or other form prescribed by the Internal Revenue Service,
certifying that such Lender is exempt from or entitled to a reduced rate of United States
withholding tax on payments pursuant to this Agreement or the Notes. If the form provided by a
Lender at the time such Lender first becomes a party to this Agreement indicates a United States
interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered
excluded from Taxes unless and until such Lender provides the appropriate forms certifying that a
lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered
excluded from Taxes for periods governed by such form. If any form or document referred to in this
subsection (e) requires the disclosure of information, other than information necessary to compute
the tax payable and information required on the date hereof by Internal Revenue Service Form W-8BEN
or W-8ECI, that the Lender reasonably considers to be confidential, the Lender shall give notice
thereof to the Borrower and shall not be obligated to include in such form or document such
confidential information.

          (f) Any Lender that is a United States person and has not otherwise established to the
reasonable satisfaction of the Borrower and the Agent that it is an exempt recipient (as defined in
section 6049(b)(4) of the Internal Revenue Code and the United States Treasury Regulations
thereunder) shall deliver to the Borrower and the Agent (in such number of copies as shall be
reasonably requested by the recipient) on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the request of the Borrower or
the Agent or as otherwise prescribed by applicable law, but only if such Lender is legally entitled
to do so), duly executed and properly completed copies of Internal Revenue Service Form W-9.

          (g) Any Lender claiming any additional amounts payable pursuant to this Section 2.14 agrees to
use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions)
to change the jurisdiction of its Eurodollar Lending Office if the making of such a change would
avoid the need for, or materially reduce the amount of, any such additional amounts that may
thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.

          (h) If the Agent or a Lender determines, in its good faith discretion, that it has received a
refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay to
the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section with respect to Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the Agent or such Lender and
without interest (other than any interest paid by the relevant governmental authority with respect
to such refund); provided that the Borrower, upon the request of the Agent or such Lender,
agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant governmental authority) to the

23

 

Agent or such Lender in the event the Agent or such Lender is required to repay such refund to such governmental authority. This paragraph
shall not be construed to require the Agent or any Lender to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to the Borrower or any other
person.

     SECTION 2.15 Sharing of Payments, Etc. If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) on account of the Advances owing to it (other than (x)
pursuant to Section 2.11, 2.14 or 8.04(c)) in excess of its ratable share of payments on account of
the Advances obtained by all the Lenders, such Lender shall forthwith purchase from the other
Lenders such participations in the Advances owing to them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them; provided,
however, that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such recovery together with an
amount equal to such Lender’s ratable share (according to the proportion of (i) the amount of such
Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Lender so purchasing a participation from
another Lender pursuant to this Section 2.15 may, to the fullest extent permitted by law, exercise
all its rights of payment (including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount of such
participation.

     SECTION 2.16 Evidence of Debt. (a) Each Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Advance
owing to such Lender from time to time, including the amounts of principal and interest payable and
paid to such Lender from time to time hereunder in respect of Advances. The Borrower agrees that
upon notice by any Lender to the Borrower (with a copy of such notice to the Agent) to the effect
that a Note is required or appropriate in order for such Lender to evidence (whether for purposes
of pledge, enforcement or otherwise) the Advances owing to, or to be made by, such Lender, the
Borrower shall promptly execute and deliver to such Lender a Note payable to the order of such
Lender in a principal amount equal to the Commitment of such Lender.

          (b) The Register maintained by the Agent pursuant to Section 8.07(d) shall include a control
account, and a subsidiary account for each Lender, in which accounts (taken together) shall be
recorded (i) the date and amount of each Borrowing made hereunder, the Type of Advances comprising
such Borrowing and, if appropriate, the Interest Period applicable thereto, (ii) the terms of each
Assignment and Acceptance delivered to and accepted by it, (iii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each Lender hereunder
and (iv) the amount of any sum received by the Agent from the Borrower hereunder and each Lender’s
share thereof.

          (c) Entries made in good faith by the Agent in the Register pursuant to subsection (b) above,
and by each Lender in its account or accounts pursuant to subsection (a) above, shall be
prima facie evidence of the amount of principal and interest due and payable or to
become due and payable from the Borrower to, in the case of the Register, each Lender and, in

24

 

the case of such account or accounts, such Lender, under this Agreement, absent manifest error;
provided, however, that the failure of the Agent or such Lender to make an entry,
or any finding that an entry is incorrect, in the Register or such account or accounts shall not
limit or otherwise affect the obligations of the Borrower under this Agreement.

     SECTION 2.17 Use of Proceeds. The proceeds of the Advances (a) shall be contributed to State M Corporation and used by
State M Corporation to fund the Tender Offer and the Acquisition (including paying fees,
commissions and expenses in connection with the Tender Offer and the Acquisition) and (b) may be
used to repurchase the Komag Subordinated Notes.

ARTICLE III.

CONDITIONS TO EFFECTIVENESS AND LENDING

     SECTION 3.01 Conditions Precedent to Effectiveness of Section 2.01. Section 2.01 of this Agreement shall become effective on and as of the first date (the
“Effective Date”) on which the following conditions precedent have been satisfied:

     (a) There shall have occurred no Komag Material Adverse Effect since April 1, 2007.

     (b) The Minimum Tender Condition (as defined in the Acquisition Agreement) shall have
been satisfied. The Tender Offer shall have been consummated pursuant to the Acquisition
Agreement and the Tender Offer Documents, and all conditions precedent to the consummation
of the Tender Offer shall have been satisfied or waived (with the prior consent of the
Arrangers if the Arrangers determine such waiver is materially adverse to the Lenders).

     (c) All governmental and third party consents and approvals necessary in connection
with the transactions contemplated hereby shall have been obtained (without the imposition
of any conditions that are not acceptable to the Lenders) and shall remain in effect, and no
law or regulation shall be applicable in the reasonable judgment of the Lenders that restrains, prevents or imposes materially adverse conditions upon the
transactions contemplated hereby.

     (d) The Borrower shall have notified each Lender and the Agent in writing as to the
proposed Effective Date.

     (e) The Borrower shall have paid all accrued fees and all reasonable documented out of
pocket costs and expenses of the Agent and the Lenders (including the accrued fees and
expenses of counsel to the Agent).

     (f) On the Effective Date, the following statements shall be true and the Agent shall
have received for the account of each Lender a certificate signed by a duly authorized
officer of the Borrower, dated the Effective Date, stating that:

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     (i) (A) The representations and warranties made by or with respect to Komag and
its Subsidiaries in the Acquisition Agreement (but only to the extent that Parent or
State M Corporation has the right to terminate its obligations under the Acquisition
Agreement as a result of a breach of such representations in the Acquisition
Agreement) are correct, (B) the representations and warranties relating to Komag and
its Subsidiaries set forth in Sections 4.01(b)(ii) and (j) are correct, and (C) the
representations and warranties relating to the Borrower and its Subsidiaries
contained in Section 4.01 are correct in all material respects, in each case on and
as of the Effective Date, except to the extent that they were made as of an earlier
date, in which case they shall be correct (or, in the case of clause (C) above,
correct in all material respects) as of that earlier date (provided that the
representations and warranties in Section 4.01(b), (d), (g), (h) and (j) and any
representations and warranties in Section 4.01 that are qualified by materiality or
a Material Adverse Effect shall be correct in all respects), and

     (ii) No event has occurred and is continuing that constitutes a Default.

     (g) The Agent shall have received on or before the Effective Date the following, in
form and substance satisfactory to the Agent and (except for the Notes) in sufficient copies
for each Lender:

     (i) This Agreement and the Parent Guaranty, originally executed and delivered
by the Borrower and Parent, respectively.

     (ii) The Notes to the order of the Lenders to the extent requested by any
Lender pursuant to Section 2.16.

     (iii) Certified copies of the resolutions of the Board of Directors of (i)
Parent approving the Parent Guaranty and (ii) the Borrower approving this Agreement
and the Notes, and of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement, the Notes and the
Parent Guaranty.

     (iv) A certificate of the Secretary or an Assistant Secretary of each of Parent
and the Borrower certifying the names and true signatures of the officers of Parent
and the Borrower, respectively, authorized to sign this Agreement, the Notes, the
Parent Guaranty and the other documents to be delivered hereunder.

     (v) A favorable opinion of O’Melveny & Myers LLP, counsel for the Borrower and
Parent, substantially in the form of Exhibit D hereto.

     (vi) A certificate from the Parent dated the Effective Date and addressed to
the Agent and the Lenders, and in form, scope and substance satisfactory to the
Agent, with appropriate attachments and demonstrating that after giving effect to
the consummation of the Tender Offer, the Parent and its Subsidiaries are and will
be Solvent on a consolidated basis.

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     (vii) All documentation and other information required by bank regulatory
authorities under applicable “know-your-customer” and anti-money laundering rules
and regulations, including the Patriot Act.

     (h) All pre-existing Debt of the Borrower and its Subsidiaries (other than the Komag
Subordinated Notes and certain other Debt disclosed to and approved by the Arrangers) shall
have been repaid or repurchased in full, all commitments relating thereto shall have been
terminated, and all Liens related thereto (other than certain Liens disclosed to and
approved by the Arrangers) shall have been terminated or released, in each case on terms
satisfactory to the Arrangers.

     (i) During the period from and including the date of execution of this Agreement to and
including the Effective Date, each of the Borrower (or Parent) and Komag shall have filed
with the Securities and Exchange Commission all required reports on Form 10-K and Form 10-Q
in a timely manner.

     SECTION 3.02 Conditions Precedent to Each Borrowing After the Effective Date. The obligation of each Lender to make an Advance on the occasion of each Borrowing (other
than the initial Borrowing on the Effective Date) shall be subject to the conditions precedent that
the Effective Date shall have occurred and on the date of such Borrowing, the following statements
shall be true (and each of the giving of the applicable Notice of Borrowing and the acceptance by
the Borrower of the proceeds of such Borrowing shall constitute a representation and warranty by
the Borrower that on the date of such Borrowing such statements are true):

     (a) the representations and warranties contained in Section 4.01 are correct in all
material respects on and as of such date, or if made as of an earlier date, they shall be
correct in all material respects as of such earlier date, before and after giving effect to
such Borrowing and to the application of the proceeds therefrom, as though made on and as of
such date (provided that the representations and warranties in Section 4.01(b), (d), (g),
(h) and (j) and any representations and warranties in Section 4.01 that are qualified by
materiality or a Material Adverse Effect shall be correct in all respects), and

     (b) no event has occurred and is continuing, or would result from such Borrowing, that
constitutes a Default.

     SECTION 3.03 Determinations Under Section 3.01. For purposes of determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be satisfied with each
document or other matter required thereunder to be consented to or approved by or acceptable or
satisfactory to the Lenders unless an officer of the Agent responsible for the transactions
contemplated by this Agreement shall have received notice from such Lender prior to the date that
the Borrower, by notice to the Lenders, designates as the proposed Effective Date, specifying its
objection thereto. The Agent shall promptly notify the Lenders of the occurrence of the Effective
Date.

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ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

SECTION 4.01 Representations and Warranties. The Borrower represents and warrants as follows:

     (a) The Borrower is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.

     (b) The execution, delivery and performance by the Borrower of this Agreement and the
Notes to be delivered by it, and the consummation of the transactions contemplated hereby,
are within the Borrower’s corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene (i) the Borrower’s charter or by-laws, (ii) the
Komag Indenture or (iii) applicable law or any other contractual restriction binding on or
affecting the Borrower or its Subsidiaries, other than violations of contractual
restrictions that could not reasonably be expected to result in a Material Adverse Effect or
result in the imposition of any Lien on any asset of the Borrower or any of its Subsidiaries
other than Liens permitted hereunder.

     (c) No authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or any other third party is required for the
due execution, delivery and performance by the Borrower of this Agreement or the Notes to be
delivered by it.

     (d) This Agreement has been, and each of the Notes to be delivered by it when delivered
hereunder will have been, duly executed and delivered by the Borrower. This Agreement is,
and each of the Notes when delivered hereunder will be, the legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance with their
respective terms subject to (i) bankruptcy, insolvency, reorganization, moratorium and other
similar laws of general application affecting the rights and remedies of creditors and (ii)
general principles of equity, regardless of whether applied in proceedings in equity or at
law.

     (e) (i) The Consolidated balance sheet of Parent and its Subsidiaries as at June 30,
2006, and the related Consolidated statements of income and cash flows of Parent and its
Subsidiaries for the fiscal year then ended, accompanied by an opinion of KPMG LLP,
independent public accountants, (ii) the Consolidated balance sheet of Parent and its
Subsidiaries as at September 29, 2006, and the related Consolidated statements of income and
cash flows of Parent and its Subsidiaries for the three months then ended, (iii) the
Consolidated balance sheet of Parent and its Subsidiaries as at December 29, 2006, and the
related Consolidated statements of income and cash flows of Parent and its Subsidiaries for
the six months then ended, and (iv) the Consolidated balance sheet of Parent and its
Subsidiaries as at March 30, 2007, and the related Consolidated statements of income and
cash flows of Parent and its Subsidiaries for the nine months then ended, in each case duly
certified by the chief financial officer of Parent as contemplated by Item 601(b)(31)(i) of
Regulation S-K under the Securities Exchange Act of 1934, as

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amended, copies of which have been furnished to each Lender, fairly present, subject, in the case of said balance sheets
as at September 29, 2006, December 29, 2006 and March 30, 2007, and said statements of
income and cash flows for the three, six and nine months, respectively, then ended, to
year-end audit adjustments, the Consolidated financial condition of Parent and its
Subsidiaries as at such dates and the Consolidated results of the operations of Parent and
its Subsidiaries for the periods ended on such dates, all in accordance with generally
accepted accounting principles consistently applied. Since March 30, 2007, there has been
no Material Adverse Change.

     (f) There is no pending or threatened action, suit, investigation, litigation or
proceeding, including, without limitation, any Environmental Action, affecting the Borrower
or any of its Subsidiaries before any court, governmental agency or arbitrator that (i)
would have a Material Adverse Effect or (ii) could reasonably be expected to affect the
legality, validity or enforceability of this Agreement or any Note or the consummation of
the transactions contemplated hereby.

     (g) The Borrower is not engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock (within the meaning of Regulation U issued by the Board
of Governors of the Federal Reserve System).

     (h) The Borrower is not an “investment company”, or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940, as amended.

     (i) No information, exhibits and reports furnished by or on behalf of the Borrower to
the Agent or any Lender in connection with the negotiation and syndication of this Agreement
or pursuant to the terms of this Agreement, taken as a whole, contain any untrue statement
of a material fact and do omit to state a material fact necessary to make the statements
made therein not misleading; provided that with respect to any projected financial
information, the Borrower represents only that such information was prepared in good faith
based on assumptions believed to be reasonable at the time made.

     (j) The Parent and its Subsidiaries are Solvent on a consolidated basis.

     (k) To the extent applicable, the Borrower is in compliance, in all material respects,
with the (i) Trading with the Enemy Act, as amended, and each of the foreign assets control
regulations of the Untied States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) and any other enabling legislation or executive order relating thereto, and (ii)
Patriot Act. No part of the proceeds of the Advances will be used, directly or indirectly,
for any payments to any governmental official or employee, political party, official of a
political party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper advantage, in
violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

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ARTICLE V.

COVENANTS OF THE BORROWER

     SECTION 5.01 Affirmative Covenants. So long as any Advance shall remain unpaid or any Lender shall have any Commitment
hereunder, the Borrower will:

     (a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to
comply, in all material respects, with all material applicable laws, rules, regulations and
orders, such compliance to include, without limitation, compliance with ERISA, Environmental
Laws and the Patriot Act.

     (b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges or levies imposed upon it or upon its property and (ii)
all lawful claims that, if unpaid, might by law become a Lien upon its property; provided,
however, that neither the Borrower nor any of its Subsidiaries shall be required to pay or
discharge any such tax, assessment, charge or claim that is being contested in good faith
and by proper proceedings and as to which appropriate reserves under GAAP are being
maintained, unless and until any Lien resulting therefrom attaches to its property and
becomes enforceable against its other creditors.

     (c) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible and reputable insurance companies or associations in
such amounts and covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which the Borrower or
such Subsidiary operates; provided, however, that the Borrower and its
Subsidiaries may self-insure to the same extent as other companies engaged in similar
businesses and owning similar properties in the same general areas in which the Borrower or
such Subsidiary operates and to the extent consistent with prudent business practice.

     (d) Preservation of Corporate Existence, Etc. Preserve and maintain, and cause
each of its Subsidiaries to preserve and maintain, its corporate existence, rights (charter and statutory) and franchises; provided, however, that the
Borrower and its Subsidiaries may consummate any merger or consolidation permitted under
Section 5.02(b) and provided further that neither the Borrower nor any of
its Subsidiaries shall be required to preserve any right or franchise, or the corporate
existence of any Subsidiary, if the Board of Directors of the Borrower or such Subsidiary
shall determine that the preservation thereof is no longer desirable in the conduct of the
business of the Borrower or such Subsidiary, as the case may be, and that the loss thereof
is not disadvantageous in any material respect to the Borrower, such Subsidiary or the
Lenders.

     (e) Visitation Rights. At any reasonable time and from time to time, and so
long as no Event of Default has occurred and is continuing, no more than once per calendar
year, permit the Agent or any of the Lenders or any agents or representatives thereof, to
examine and make copies of and abstracts from the records and books of

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account of, and visit the properties of, the Borrower and any of its Subsidiaries, and to discuss the affairs,
finances and accounts of the Borrower and any of its Subsidiaries with any of their officers
or directors and with their independent certified public accountants.

     (f) Keeping of Books. Keep, and cause each of its Subsidiaries to keep, proper
books of record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Borrower and each such Subsidiary
in accordance with, and to the extent required by, GAAP in effect from time to time (or
local accounting requirements).

     (g) Maintenance of Properties, Etc. Maintain and preserve, and cause each of
its Subsidiaries to maintain and preserve, all of its properties that are used or useful in
the conduct of its business in good working order and condition, ordinary wear and tear
excepted, except to the extent that failure to comply with the foregoing could not
reasonably be expected to have a Material Adverse Effect.

     (h) Transactions with Affiliates. Conduct, and cause each of its Subsidiaries
to conduct, all material transactions otherwise permitted under this Agreement with any of
their Affiliates on terms that are fair and reasonable and no less favorable to the Borrower
or such Subsidiary than it would obtain in a comparable arm’s-length transaction with a
Person not an Affiliate, other than (i) transactions between the Borrower and its
Subsidiaries, or between two or more Subsidiaries, (ii) compensation arrangements for
directors or executive officers approved by the Board of Directors or the compensation
committee of the board of directors and (iii) transactions incurred in the ordinary course
of business with Persons that have directors who are also directors or executive officers of
the Borrower.

     (i) Reporting Requirements. Furnish to the Agent:

     (i) as soon as available and in any event within 45 days after the end of each
of the first three quarters of each fiscal year of Parent, the Consolidated balance
sheet of Parent and its Subsidiaries as of the end of such quarter and Consolidated
statements of income and cash flows of Parent and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end of such quarter, duly certified (subject to year-end audit adjustments)
by the chief financial officer of Parent as having been prepared in accordance with
GAAP (subject to normal year-end audit adjustments and the absence of footnotes) and
certificates of the chief financial officer, chief accounting officer, controller or
treasurer of the Borrower as to compliance with the terms of this Agreement and
setting forth in reasonable detail the calculations necessary to demonstrate
compliance with Section 5.03, provided that in the event of any change in GAAP used
in the preparation of such financial statements, the Borrower shall also provide, if
necessary for the determination of compliance with Section 5.03, a statement of
reconciliation conforming such financial statements to GAAP;

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     (ii) as soon as available and in any event within 90 days after the end of each
fiscal year of Parent, a copy of the annual audit report for such year for Parent
and its Subsidiaries, containing the Consolidated balance sheet of Parent and its
Subsidiaries as of the end of such fiscal year and Consolidated statements of income
and cash flows of Parent and its Subsidiaries for such fiscal year, in each case
accompanied by an opinion by KPMG LLP or other independent public accountants of
recognized national standing (that does not include any “going concern” or similar
qualification, or any qualification as to the scope of their audit) and certificates
of the chief financial officer, chief accounting officer, controller or treasurer of
the Borrower as to compliance with the terms of this Agreement and setting forth in
reasonable detail the calculations necessary to demonstrate compliance with Section
5.03, provided that in the event of any change in GAAP used in the preparation of
such financial statements, the Borrower shall also provide, if necessary for the
determination of compliance with Section 5.03, a statement of reconciliation
conforming such financial statements to GAAP;

     (iii) as soon as possible and in any event within five days after the
occurrence of each Default continuing on the date of such statement, a statement of
the chief financial officer of the Borrower setting forth details of such Default
and the action that the Borrower has taken and proposes to take with respect
thereto;

     (iv) promptly after the sending or filing thereof, copies of all reports that
Parent sends to its securityholders generally, and copies of all reports on Form
10-K, 10-Q or 8-K (other than pursuant to Rule 14a-12 of the Securities Exchange Act
of 1934, as amended) and registration statements for the public offering (other than
pursuant to employee Plans) of securities of Parent that Parent or any Subsidiary
files with the Securities and Exchange Commission or any national securities
exchange;

     (v) promptly after the commencement thereof, notice of all actions and
proceedings before any court, governmental agency or arbitrator affecting the
Borrower or any of its Subsidiaries of the type described in Section 4.01(f); and

     (vi) such other information respecting the Borrower or any of its Subsidiaries
as any Lender through the Agent may from time to time reasonably request.

     (j) Delivery. Documents required to be delivered pursuant to Section
5.01(i)(i), (i)(ii) and (i)(iv) (to the extent any such documents are included in materials
otherwise filed with the Securities and Exchange Commission) may be delivered electronically
and if so delivered, shall be deemed to have been delivered on the date (i) on which Parent
posts such documents, or provides a link thereto on Parent’s website on the Internet at the
website address www.wdc.com or another website address provided by the Borrower in a written
notice to the Agent; (ii) on which such documents are posted on a publicly available website
maintained by or on behalf of the Securities and Exchange

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Commission for access to documents
filed in the EDGAR database (the “EDGAR Website”), or (iii) on which such documents
are posted on behalf of the Borrower or Parent on an Internet or intranet website, if any,
to which each Lender and the Agent have access (whether a commercial, third-party website or
whether sponsored by the Agent); provided that: (i) the Borrower shall deliver paper copies
of such documents to the Agent, for delivery by the Agent to any Lender that requests the
Borrower to deliver such paper copies until a written request to cease delivering paper
copies is given by the Agent and (ii) except with respect to documents posted on the EDGAR
Website, the Borrower shall notify the Agent (by telecopier or electronic mail) of the
posting of any such documents and, if requested by the Agent, provide to the Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.

     (k) Subsidiary Guaranty. Cause any of its Domestic Subsidiaries that (i) is a
Significant Subsidiary created or acquired after the Effective Date or (ii) to which it or
any of its other Subsidiaries transfers assets resulting in such Domestic Subsidiary
becoming a Significant Subsidiary after the Effective Date, in either case, to guaranty the
Obligations pursuant to the Subsidiary Guaranty.

     SECTION 5.02 Negative Covenants. So long as any Advance shall remain unpaid or any Lender shall have any Commitment
hereunder, the Borrower will not:

     (a) Liens, Etc. Create or suffer to exist, or permit any of its Subsidiaries
to create or suffer to exist, any Lien on or with respect to any of its properties, whether
now owned or hereafter acquired, or assign, or permit any of its Subsidiaries to assign, any
right to receive income, other than:

     (i) Permitted Liens;

     (ii) Liens securing Debt permitted pursuant to Section 5.02(d)(v); provided
that (x) such Liens attach at all times only to the assets so financed except for
accessions to the property that is affixed or incorporated into the property covered
by such Lien or financed with the proceeds of such Debt and the proceeds and the
products thereof and (y) individual financings or leases of equipment provided by one lender or lessor may be cross collateralized to other
financings of equipment provided by such lender or lessor;

     (iii) the Liens existing on the Effective Date and described on Schedule
5.02(a) hereto;

     (iv) Liens on property of a Person existing at the time such Person is merged
into or consolidated with the Borrower or any Subsidiary of the Borrower or becomes
a Subsidiary of the Borrower; provided that such Liens were not created in
contemplation of such merger, consolidation or acquisition and do not extend to any
assets other than those of the Person so merged into or consolidated with the
Borrower or such Subsidiary or acquired by the Borrower or such Subsidiary;

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     (v) Liens on cash collateral or government securities to secure obligations
under Hedge Agreements, letters of credit and bank guaranties, provided that the
aggregate value of any collateral so pledged does not exceed $10,000,000 in the
aggregate at any time;

     (vi) assignments of the right to receive income effected as a part of the sale
of a business unit or for collection purposes;

     (vii) Liens that are contractual rights of set-off (A) relating to the
establishment of depository relations with banks not given in connection with the
issuance of Debt (other than as described in clause (i) of the definition thereof),
(B) relating to pooled deposit or sweep accounts of the Borrower or any of its
Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in
the ordinary course of business of the Borrower and its Subsidiaries or (C) relating
to purchase orders and other agreements entered into with customers of the Borrower
or any of its Subsidiaries in the ordinary course of business;

     (viii) Liens encumbering customary initial deposits and margin deposits and
similar Liens attaching to commodity trading accounts or other brokerage accounts
incurred in the ordinary course of business and not for speculative purposes;

     (ix) other Liens securing Debt in an aggregate principal amount not to exceed
the amount specified in Section 5.02(d)(xxii) at any time outstanding;

     (x) Liens on Margin Stock; and

     (xi) the replacement, extension or renewal of any Lien permitted by clause
(iii) or (iv) above upon or in the same property theretofore subject thereto or the
replacement, extension or renewal (without increase in the amount or change in any
direct or contingent obligor) of the Debt secured thereby.

     (b) Mergers, Etc. Merge or consolidate with or into, or convey, transfer,
lease or otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether now owned or hereafter acquired) to, any
Person, or permit any of its Subsidiaries to do so, except that (i) any Subsidiary of the
Borrower may merge or consolidate with or into, or convey, transfer, lease or otherwise
dispose of assets to, any other Subsidiary of the Borrower, (ii) any Subsidiary of the
Borrower may merge or consolidate with or into, or convey, transfer, lease or otherwise
dispose of assets to, the Borrower, (iii) any Subsidiary of the Borrower may merge or
consolidate with or into, or convey, transfer, lease or otherwise dispose of assets to, any
other Person so long as the Borrower delivers to the Agent a certificate demonstrating
compliance on a Pro Forma Basis with Section 5.03 after giving effect to such transaction,
(iv) any Subsidiary of the Borrower may merge or consolidate with or into any other Person
so long as such Subsidiary is the surviving corporation, (v) the Borrower may merge or
consolidate with or into any other Person so long as the Borrower is the surviving
corporation and (vi) the

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Merger may be consummated, provided, in each case, that no
Default shall have occurred and be continuing at the time of such proposed transaction or
would result therefrom.

     (c) Accounting Changes. Make or permit, or permit any of its Subsidiaries to
make or permit, any change in accounting policies or reporting practices, except as required
or permitted by GAAP.

     (d) Debt. Create or suffer to exist, or permit any Subsidiary to create or
suffer to exist, any Debt other than:

     (i) the Obligations;

     (ii) Debt owed to the Borrower or to a wholly owned (other than directors’
qualifying shares) Subsidiary of the Borrower;

     (iii) Debt existing on the Effective Date and described on Schedule 5.02(d)
hereto (the “Existing Debt”), and any Debt extending the maturity of, or
refunding or refinancing, in whole or in part, the Existing Debt, provided
that the principal amount of such Existing Debt shall not be increased above the
principal amount thereof outstanding immediately prior to such extension, refunding
or refinancing, and the direct and contingent obligors therefor shall not be
changed, as a result of or in connection with such extension, refunding or
refinancing (other than by increasing such amount by fees and expenses in connection
with any refinancing);

     (iv) Debt of a Person existing at the time such Person is merged into or
consolidated with any Subsidiary of the Borrower or becomes a Subsidiary of the
Borrower (the “Assumed Debt”) and any Debt extending the maturity of, or
refunding or refinancing, in whole or in part, the Assumed Debt; provided
that (A) such Debt was not created in contemplation of such merger, consolidation or
acquisition and (B) the principal amount of such Assumed Debt shall not be increased
above the principal amount thereof outstanding immediately prior to such extension,
refunding or refinancing, and the direct and contingent obligors therefor shall not
be changed (other than as expressly permitted hereunder), as a result of or in
connection with such extension, refunding or refinancing (other than by increasing such amount by fees and expenses in connection with any
refinancing);

     (v) purchase money obligations (including obligations in respect of mortgage,
industrial revenue bond, industrial development bond, and similar financings) (x) in
respect of Capital Leases or (y) incurred to finance the acquisition, construction
or improvement of any fixed or capital assets, and modifications, extensions,
renewals, refundings, replacements and extensions of any such Debt that do not
increase the outstanding principal amount thereof;

     (vi) endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business;

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     (vii) Debt incurred by the Borrower or any of its Subsidiaries arising
from guaranties, letters of credit or bank guaranties in the ordinary course of
business;

     (viii) Debt incurred by the Borrower or any of its Subsidiaries in respect of
surety, performance, statutory or appeal bonds or similar obligations (including
those issued in respect of workers’ compensation, unemployment insurance and other
types of social security) in the ordinary course of business;

     (ix) Debt in respect of netting services, overdraft protections and otherwise
in connection with deposit accounts;

     (x) guaranties in the ordinary course of business of the obligations of
suppliers, customers, franchisees and licensees of the Borrower and its
Subsidiaries;

     (xi) guaranties by the Borrower of Debt of any Subsidiary or guaranties by a
Subsidiary of the Borrower of Debt of the Borrower or any Subsidiary with respect,
in each case, to Debt otherwise permitted to be incurred pursuant to this Section
5.02(d);

     (xii) guaranties by the Borrower or any of its Subsidiaries of the Komag
Subordinated Notes;

     (xiii) guaranties by the Borrower or any of its Subsidiaries of the obligations
under Hedge Agreements entered into in the ordinary course of business;

     (xiv) customary indemnification and purchase price adjustment obligations
incurred in connection with sales of assets and acquisitions;

     (xv) contingent obligations consisting of take or pay obligations contained in
supply agreements, in each case incurred in the ordinary course of business;

     (xvi) Debt representing deferred compensation to employees;

     (xvii) Debt consisting of promissory notes issued to future, present or former
directors, officers, members of management, employees or consultants of Parent or
any of its Subsidiaries or their respective estates, heirs, family members, spouses
or former spouses to finance the purchase or redemption of Equity Interests of
Parent or any of its direct or indirect parent companies;

     (xviii) Debt consisting of the financing of insurance premiums;

     (xix) Debt permitted under Section 5.02(e);

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     (xx) warranty obligations of the Borrower or any of its Subsidiaries incurred
in the ordinary course of business;

     (xxi) obligations of the Borrower or any of its Subsidiaries incurred in
connection with rebate programs; and

     (xxii) other Debt in an amount not to exceed 5% of Consolidated total assets of
Parent and its Subsidiaries at any time outstanding (determined as of the date such
Debt was incurred).

     (e) Speculative Transactions. Engage, or permit any of its Subsidiaries to
engage, in any transaction involving commodity options or futures contracts or Hedge
Agreements except in the ordinary course of business and not for speculative purposes.

     (f) Change in Nature of Business. Make, or permit any of its Subsidiaries to
make, any material change in the nature of the business carried on by the Borrower and its
Subsidiaries considered as a whole at the date hereof.

     (g) Restricted Junior Payments. Directly or indirectly, declare, order, pay,
make or set apart, or agree to declare, order, pay, make or set apart, or permit any of its
Subsidiaries through any manner or means or through any other Person to directly or
indirectly declare, order, pay, make or set apart, or agree to declare, order, pay, make or
set apart, any sum for any Restricted Junior Payment except:

     (i) the Borrower may make Restricted Junior Payments to Parent to the extent
necessary to permit Parent to purchase or redeem Equity Interests of Parent
(including related stock appreciation rights or similar securities) (A) held by then
present or former directors, consultants, officers or employees of the Borrower,
Parent or any of their respective Subsidiaries or by any employee compensation and
incentive arrangements upon such person’s death, disability, retirement or
termination of employment or under the terms of any such employee compensation and
incentive arrangements or any other agreement under which such shares of stock or
related rights were issued or (B) held by present or former officers, directors or
employees of the Borrower, Parent or any of their respective Subsidiaries at any
time in order to provide liquidity to such officers in the ordinary course of
business; provided that the aggregate amount of such purchases or redemptions under
this paragraph (i) shall not exceed $100,000,000 (plus, in the case of either
subclause (A) or (B), the amount of net proceeds received by the Borrower or Parent
during such fiscal year from (x) sales of Equity Interests of Parent to directors,
officers or employees of the Borrower, Parent or any of their respective
Subsidiaries in connection with employee compensation and incentive arrangements and
(y) third-party insurers under key-man life insurance policies that were not already
applied under this clause (i)) which, if not used in any year, may be carried
forward to any subsequent fiscal year;

37

 

     (ii) repurchases of common stock of Parent in open market transactions,
pursuant to the existing stock repurchase program approved by the governing body of
Parent, in an aggregate amount not to exceed $62,000,000; and

     (iii) noncash repurchases of Equity Interests deemed to occur upon exercise of
stock options if such Equity Interests represent a portion of the exercise price of,
and any required tax withholdings in respect of, such options.

     SECTION 5.03 Financial Covenants. So long as any Advance shall remain unpaid or any Lender shall
have any Commitment hereunder, the Borrower will:

     (a) Leverage Ratio. Maintain, as of the last day of each fiscal quarter set
forth in the table below, a ratio, calculated on a Pro Forma Basis, of Consolidated Debt for
Borrowed Money as at the last day of such period to Consolidated EBITDA of Parent and its
Subsidiaries for the period of four consecutive fiscal quarters then ended of not greater
than the levels set forth in the table below:

	 	 	 
	Fiscal Quarter	 	Leverage Ratio
	1st fiscal quarter of fiscal year 2008
	 	1.95:1.00
	2nd fiscal quarter of fiscal year 2008
	 	2.05:1.00
	3rd fiscal quarter of fiscal year 2008
	 	2.30:1.00
	4th fiscal quarter of fiscal year 2008
	 	2.40:1.00

     (b) Fixed Charge Coverage Ratio. Maintain, as of the last day of each fiscal
quarter set forth in the table below, a ratio, calculated on a Pro Forma Basis, of
Consolidated EBITDA of Parent and its Subsidiaries for the period of four consecutive fiscal
quarters then ended to Consolidated Fixed Charges of Borrower and its Subsidiaries for such
period of not less than the levels set forth in the table below:

	 	 	 
	Fiscal Quarter	 	Fixed Charge Coverage Ratio
	1st fiscal quarter of
fiscal year 2008
	 	1.45:1.00
	2nd fiscal quarter of
fiscal year 2008
	 	1.20:1.00
	3rd fiscal quarter of
fiscal year 2008
	 	0.85:1.00
	4th fiscal quarter of
fiscal year 2008
	 	0.65:1.00

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ARTICLE VI.

EVENTS OF DEFAULT

     SECTION 6.01 Events of Default. If any of the following events (“Events of Default”) shall
occur and be continuing:

     (a) The Borrower shall fail to pay any principal of any Advance when the same becomes
due and payable; or the Borrower shall fail to pay any interest on any Advance or make any
other payment of fees or other amounts payable under this Agreement or any Note within three
Business Days after the same becomes due and payable; or

     (b) Any representation or warranty made by the Borrower or any Guarantor herein or in
any other Loan Document or by the Borrower or any Guarantor (or any of their respective
officers) in connection with this Agreement or any other Loan Document shall prove to have
been incorrect in any material respect when made; or

     (c) (i) The Borrower shall fail to perform or observe any term, covenant or agreement
contained in Section 5.01(d), (e), (h) or (i)(iii), 5.02 or 5.03, or (ii) the Borrower or
any Guarantor shall fail to perform or observe any other term, covenant or agreement
contained in this Agreement or any other Loan Document on its part to be performed or
observed if such failure shall remain unremedied for 30 days after written notice thereof
shall have been given to the Borrower by the Agent or any Lender; or

     (d) Parent, the Borrower or any of their respective Significant Subsidiaries shall fail
to pay any principal of or premium or interest on any Debt that is outstanding in a
principal or notional amount of at least $50,000,000 in the aggregate (but excluding Debt
outstanding hereunder) of Parent, the Borrower or such Significant Subsidiary (as the case
may be), when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument relating to such
Debt; or any other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such event or condition
is to cause, or to permit the holder or holders of that Debt (or a trustee on behalf of such
holder or holders) to cause, that Debt to become or be declared due and payable (or
redeemable) prior to the stated maturity thereof; or

     (e) Parent, the Borrower or any of their respective Significant Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against Parent, the Borrower or
any of their respective Significant Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment,

39

 

protection, relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding shall remain
undismissed or unstayed for a period of 30 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or Parent, the Borrower or any of their
respective Significant Subsidiaries shall take any corporate action to authorize any of the
actions set forth above in this subsection (e); or

     (f) Judgments or orders for the payment of money in excess of $50,000,000 in the
aggregate shall be rendered against Parent, the Borrower or any of their respective
Significant Subsidiaries and either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order or (ii) there shall be any period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; provided, however, that any
such judgment or order shall not be an Event of Default under this Section 6.01(f) if and
for so long as (i) the amount of such judgment or order is covered by a valid and binding
policy of insurance between the defendant and the insurer covering payment thereof and (ii)
such insurer, which shall be rated at least “A” by A.M. Best Company, has been notified of,
and has not disputed the claim made for payment of, the amount of such judgment or order; or

     (g) (i) Any Person or two or more Persons acting in concert shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting
Stock of the Borrower (or other securities convertible into such Voting Stock) representing
35% or more of the combined voting power of all Voting Stock of the Borrower; or (ii) during
any period of up to 24 consecutive months, commencing after the Effective Date, individuals
who at the beginning of such 24-month period were directors of the Borrower shall cease for
any reason to constitute a majority of the board of directors of the Borrower; or (iii) any
Person or two or more Persons acting in concert shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement that, upon consummation,
will result in its or their acquisition of the power to direct the management or policies of
the Borrower; or

     (h) The Borrower or any of its ERISA Affiliates shall incur, or shall be reasonably
likely to incur liability in excess of $50,000,000 in the aggregate as a result of one or
more of the following: (i) the occurrence of any ERISA Event; (ii) the partial or complete
withdrawal of the Borrower or any of its ERISA Affiliates from a Multiemployer Plan; or
(iii) the reorganization or termination of a Multiemployer Plan; or

     (i) At any time after the execution and delivery thereof, (i) the Parent Guaranty or
the Subsidiary Guaranty for any reason, other than the satisfaction in full of all
Obligations, shall cease to be in full force and effect (other than in accordance with its

40

 

terms) or shall be declared to be null and void or any Guarantor shall repudiate its
obligations thereunder, (ii) this Agreement ceases to be in full force and effect (other
than by reason of the satisfaction in full of the Obligations in accordance with the terms
hereof) or shall be declared null and void, or (iii) the Borrower or any Guarantor shall
contest the validity or enforceability of any Loan Document in writing or deny in writing
that it has any further liability, including with respect to future Advances by Lenders,
under any Loan Document to which it is a party;

then, and in any such event, the Agent (i) shall at the request, or may with the consent, of the
Required Lenders, by notice to the Borrower, declare the obligation of each Lender to make Advances
to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or
may with the consent, of the Required Lenders, by notice to the Borrower, declare the Advances, all
interest thereon and all other amounts payable under this Agreement to be forthwith due and
payable, whereupon the Advances, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; provided, however, that in
the event of an actual or deemed entry of an order for relief with respect to the Borrower under
the Federal Bankruptcy Code, (A) the obligation of each Lender to make Advances shall automatically
be terminated and (B) the Advances, all such interest and all such amounts shall automatically
become and be due and payable, without presentment, demand, protest or any notice of any kind, all
of which are hereby expressly waived by the Borrower.

ARTICLE VII.

THE AGENT

     SECTION 7.01 Authorization and Action. Each Lender hereby appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers and discretion under this
Agreement as are delegated to the Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the Notes), the Agent
shall not be required to exercise any discretion or take any action, but shall be required to act
or to refrain from acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be binding upon all
Lenders and all holders of Notes; provided, however, that the Agent shall not be required to take
any action that exposes the Agent to personal liability or that is contrary to this Agreement or
applicable law. The Agent agrees to give to each Lender prompt notice of each notice given to it
by the Borrower pursuant to the terms of this Agreement. In performing its functions and duties
hereunder, the Agent shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust with or for the
Borrower or any of its Subsidiaries. The Agent shall not have, by reason hereof or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender; and nothing herein or any
of the other Loan Documents, expressed or implied, is intended to or shall be so construed as to impose upon the
Agent any obligations in respect hereof or any of the other Loan Documents except as expressly set
forth herein or therein.

41

 

     SECTION 7.02 Agent’s Reliance, Etc. Neither the Agent nor any of its directors, officers, agents
or employees shall be liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may treat the Lender that
made any Advance as the holder of the Debt resulting therefrom until the Agent receives and accepts
an Assignment and Acceptance entered into by such Lender, as assignor, and an Eligible Assignee, as
assignee, as provided in Section 8.07; (ii) may consult with legal counsel (including counsel for
the Borrower), independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements, warranties or representations
(whether written or oral) made in or in connection with this Agreement; (iv) shall not have any
duty to ascertain or to inquire as to the performance, observance or satisfaction of any of the
terms, covenants or conditions of this Agreement on the part of the Borrower or the existence at
any time of any Default or to inspect the property (including the books and records) of the
Borrower; (v) shall not be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or
security interest created or purported to be created under or in connection with, this Agreement or
any other instrument or document furnished pursuant hereto; and (vi) shall incur no liability under
or in respect of this Agreement by acting upon any notice, consent, certificate or other instrument
or writing (which may be by telecopier or telegram) believed by it to be genuine and signed or sent
by the proper party or parties.

     SECTION 7.03 GSCP and Affiliates. With respect to its Commitments, the Advances made by it and the
Note, if any, issued to it, GSCP shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though it were not the Agent; and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated, include GSCP in its individual capacity.
GSCP and its Affiliates may accept deposits from, lend money to, act as trustee under indentures
of, accept investment banking engagements from and generally engage in any kind of business with,
the Borrower, any of its Subsidiaries and any Person who may do business with or own securities of
the Borrower or any such Subsidiary, all as if GSCP were not the Agent and without any duty to
account therefor to the Lenders. The Agent shall have no duty to disclose any information obtained
or received by it or any of its Affiliates relating to the Borrower or any of its Subsidiaries to
the extent such information was obtained or received in any capacity other than as Agent. In the
event that GSCP or any of its Affiliates shall be or become an indenture trustee under the Trust
Indenture Act of 1939 (as amended, the “Trust Indenture Act”) in respect of any securities
issued or guarantied by the Borrower, the parties hereto acknowledge and agree that any payment or
property received in satisfaction of or in respect of any obligation of the Borrower hereunder or
under any other Loan Document by or on behalf of GSCP in its capacity as the Agent for the benefit of any Lender under this Agreement or any Note (other than GSCP
or an Affiliate of GSCP) and which is applied in accordance with this Agreement shall be deemed to
be exempt from the requirements of Section 311 of the Trust Indenture Act pursuant to Section
311(b)(3) of the Trust Indenture Act.

     SECTION 7.04 Lender Credit Decision. Each Lender acknowledges that it has, independently and
without reliance upon the Agent or any other Lender and based on the

42

 

financial statements referred
to in Section 4.01 and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that
it will, independently and without reliance upon the Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement.

     SECTION 7.05 Indemnification.

          (a) The Lenders agree to indemnify the Agent (to the extent not reimbursed by the Borrower),
ratably according to the sum of the respective principal amounts of the Advances then owed to each
of them and the Unused Commitments of each of them (or if no Advances are at the time outstanding,
ratably according to the respective amounts of their Commitments), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out of this Agreement or any action taken or
omitted by the Agent in its capacity as such under this Agreement (collectively, the
“Indemnified Costs”), provided that no Lender shall be liable for any portion of
the Indemnified Costs resulting from the Agent’s gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees) incurred by the Agent in
connection with the preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, to the extent that the Agent is not
reimbursed for such expenses by the Borrower. In the case of any investigation, litigation or
proceeding giving rise to any Indemnified Costs, this Section 7.05 applies whether any such
investigation, litigation or proceeding is brought by the Agent, any Lender or a third party.

          (b) The failure of any Lender to reimburse the Agent promptly upon demand for its Ratable
Share of any amount required to be paid by the Lenders to the Agent as provided herein shall not
relieve any other Lender of its obligation hereunder to reimburse the Agent for its Ratable Share
of such amount, but no Lender shall be responsible for the failure of any other Lender to reimburse
the Agent for such other Lender’s Ratable Share of such amount. Without prejudice to the survival
of any other agreement of any Lender hereunder, the agreement and obligations of each Lender
contained in this Section 7.05 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under the Notes. The Agent agrees to return to the Lenders their respective Ratable Shares of any amounts paid under this
Section 7.05 that are subsequently reimbursed by the Borrower.

     SECTION 7.06 Successor Agent. The Agent may resign at any time by giving written notice thereof to
the Lenders and the Borrower and may be removed at any time with or without cause by the Required
Lenders. Upon any such resignation or removal, the Required Lenders shall have the right to appoint
a successor Agent with the consent of the Borrower, not to be unreasonably withheld or delayed. If
the Required Lenders have not appointed a successor Agent, the Agent shall have the right to
appoint a financial institution to act as Agent hereunder with the consent of the Borrower, not to
be unreasonably withheld or delayed, and in any case,

43

 

the Agent’s resignation shall become
effective on the thirtieth day after such notice of resignation. If neither the Required Lenders
nor the Agent have appointed a successor Agent, the Required Lenders shall be deemed to succeed to
and become vested with all the rights, powers, privileges and duties of the retiring Agent. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers, discretion, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent’s resignation or removal hereunder as
Agent, the provisions of this Article VII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.

     SECTION 7.07 Other Agents. Each Lender hereby acknowledges that neither syndication agent nor any
other Lender designated as any “Agent” on the signature pages hereof has any liability hereunder
other than in its capacity as a Lender.

ARTICLE VIII.

MISCELLANEOUS

     SECTION 8.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement or the
Notes, nor consent to any departure by the Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders, do any of the following: (a) waive any of the conditions
specified in Section 3.01, (b) increase the Commitments of the Lenders, (c) reduce the principal
of, or interest on, the Advances or any fees or other amounts payable hereunder, (d) postpone any
date fixed for any payment of principal of, or interest on, the Advances or any fees or other
amounts payable hereunder, (e) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Advances, or the number of Lenders, that shall be required for the Lenders
or any of them to take any action hereunder or (f) amend this Section 8.01; and provided
further that no amendment, waiver or consent shall, unless in writing and signed by the
Agent in addition to the Lenders required above to take such action, affect the rights or duties of the Agent under
this Agreement or any Note.

     SECTION 8.02 Notices, Etc. (a) All notices and other communications provided for hereunder shall
be either (x) in writing (including telecopier or telegraphic communication) and mailed, telecopied
or delivered or (y) as and to the extent set forth in Section 8.02(b) and in the proviso to this
Section 8.02(a), if to the Borrower, at its address at 20511 Lake Forest Drive, Lake Forest,
California 92630-7741, Attention: Tim Leyden and Raymond Bukaty, Telecopier: (949) 672-7589; if to
any Initial Lender, at its Domestic Lending Office specified opposite its name on Schedule I
hereto; if to any other Lender, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender; and if to the Agent, at its address at Goldman
Sachs Credit Partners L.P., c/o Goldman, Sachs & Co., 30 Hudson Street, 17th Floor, Jersey City,
New Jersey 07302, Attention: SBD Operations, Attention: Pedro Ramirez, Telecopier: (212)
357-4597, Email and for delivery of final financial statements for posting: gsd.link@gs.com, with a
copy to Goldman Sachs Credit Partners L.P., 1 New York

44

 

Plaza, New York, New York 10004, Attention:
James Balcom, Telecopier: (212) 902-3000; or, as to the Borrower or the Agent, at such other
address as shall be designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in a written notice to
the Borrower and the Agent, provided that materials required to be delivered pursuant to
Section 5.01(i)(i), (ii) or (iv) shall be delivered to the Agent as specified in Section 8.02(b) or
as otherwise specified to the Borrower by the Agent. All such notices and communications shall,
when mailed, telecopied or e-mailed, be effective when deposited in the mails, telecopied or
confirmed by e-mail, respectively, except that notices and communications to the Agent pursuant to
Article II, III or VII shall not be effective until received by the Agent. Delivery by telecopier
of an executed counterpart of any amendment or waiver of any provision of this Agreement or the
Notes or of any Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of a manually executed counterpart thereof.

          (b) So long as GSCP or any of its Affiliates is the Agent, materials required to be delivered
pursuant to Section 5.01(i)(i), (ii) and (iv) shall be delivered to the Agent in an electronic
medium in a format acceptable to the Agent and the Lenders by e-mail at gsd.link@gs.com. The
Borrower agrees that the Agent may make such materials, as well as any other written information,
documents, instruments and other material relating to the Borrower, any of its Subsidiaries or any
other materials or matters relating to this Agreement, the Notes or any of the transactions
contemplated hereby (collectively, the “Communications”) available to the Lenders by
posting such notices on Intralinks or a substantially similar electronic system (the
“Platform”). The Borrower acknowledges that (i) the distribution of material through an
electronic medium is not necessarily secure and that there are confidentiality and other risks
associated with such distribution, (ii) the Platform is provided “as is” and “as available” and
(iii) neither the Agent nor any of its Affiliates warrants the accuracy, adequacy or completeness
of the Communications or the Platform and each expressly disclaims liability for errors or
omissions in the Communications or the Platform. No warranty of any kind, express, implied or
statutory, including, without limitation, any warranty of merchantability, fitness for a particular
purpose, non-infringement of third party rights or freedom from viruses or other code defects, is
made by the Agent or any of its Affiliates in connection with the Platform.

          (c) The Borrower and each Lender acknowledge that certain of the Lenders may be “public-side”
Lenders (Lenders that do not wish to receive material non-public information with respect to the
Borrower, its Subsidiaries or their securities) and, if documents or notices required to be
delivered pursuant to this Agreement or otherwise are being distributed through the Platform, any
document or notice that the Borrower has indicated contains material non-public information with
respect to the Borrower, its Subsidiaries or their securities shall not be posted on that portion
of the Platform designated for such public-side Lenders. If the Borrower has not indicated whether
a document or notice delivered pursuant to this Agreement contains any such material non-public
information, the Agent reserves the right to post such document or notice solely on that portion of
the Platform designated for Lenders who wish to receive material nonpublic information with respect
to the Borrower, its Subsidiaries and their securities.

          (d) Each Lender agrees that notice to it (as provided in the next sentence) (a
“Notice”) specifying that any Communications have been posted to the Platform shall

45

 

constitute effective delivery of such information, documents or other materials to such Lender for
purposes of this Agreement; provided that if requested by any Lender the Agent shall deliver a copy
of the Communications to such Lender by email or telecopier. Each Lender agrees (i) to notify the
Agent in writing of such Lender’s e-mail address to which a Notice may be sent by electronic
transmission (including by electronic communication) on or before the date such Lender becomes a
party to this Agreement (and from time to time thereafter to ensure that the Agent has on record an
effective e-mail address for such Lender) and (ii) that any Notice may be sent to such e-mail
address.

     SECTION 8.03 No Waiver; Remedies. No failure on the part of any Lender or the Agent to exercise,
and no delay in exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

     SECTION 8.04 Costs and Expenses. (a) The Borrower agrees to pay on demand all reasonable
documented out of pocket costs and expenses of the Agent in connection with the preparation,
execution, delivery, modification and amendment of this Agreement, the Notes and the other
documents to be delivered hereunder, including, without limitation, (A) all due diligence,
syndication (including printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, consultant, and audit expenses and (B) the reasonable fees and expenses of
counsel for the Agent with respect thereto and with respect to advising the Agent as to its rights
and responsibilities under this Agreement. The Borrower further agrees to pay on demand all costs
and expenses of the Agent and the Lenders, if any (including, without limitation, reasonable
counsel fees and expenses), in connection with the enforcement (whether through negotiations, legal
proceedings or otherwise) of this Agreement, the Notes and the other documents to be delivered
hereunder, including, without limitation, reasonable fees and expenses of counsel for the Agent and
each Lender in connection with the enforcement of rights under this Section 8.04(a).

          (b) The Borrower agrees to indemnify and hold harmless the Agent and each Lender and each of
their Affiliates and their officers, directors, partners, employees, agents and advisors (each, an
“Indemnified Party”) from and against any and all claims, damages, losses, penalties,
liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel)
incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection with any
investigation, litigation or proceeding or preparation of a defense in connection therewith) (i)
the Notes, this Agreement, any of the transactions contemplated herein or the actual or proposed
use of the proceeds of the Advances or (ii) the actual or alleged presence of Hazardous Materials
on any property of the Borrower or any of its Subsidiaries or any Environmental Action relating in
any way to the Borrower or any of its Subsidiaries, except to the extent such claim, damage, loss,
liability or expense has resulted from such Indemnified Party’s gross negligence or bad faith. In
the case of an investigation, litigation or other proceeding to which the indemnity in this Section
8.04(b) applies, such indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by the Borrower, its directors, equityholders or creditors or an Indemnified
Party or any other Person, whether or not any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. The

46

 

Borrower also agrees not to assert any claim for special, indirect, consequential or punitive damages against the Agent, any
Lender, any of their Affiliates, or any of their respective directors, officers, partners,
employees, attorneys and agents, on any theory of liability, arising out of or otherwise relating
to the Notes, this Agreement, any of the transactions contemplated herein or the actual or proposed
use of the proceeds of the Advances. To the extent duplicative of the provisions of Section 2.14,
this Section 8.04 shall not apply to Taxes or Other Taxes.

          (c) If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by
the Borrower to or for the account of a Lender other than on the last day of the Interest Period
for such Advance, as a result of a payment or Conversion pursuant to Section 2.07(d) or (e), 2.10
or 2.12, acceleration of the maturity of the Notes pursuant to Section 6.01 or for any other
reason, or by an Eligible Assignee to a Lender other than on the last day of the Interest Period
for such Advance upon an assignment of rights and obligations under this Agreement pursuant to
Section 8.07 as a result of a demand by the Borrower pursuant to Section 8.07(a), the Borrower
shall, upon demand by such Lender (with a copy of such demand to the Agent), pay to the Agent for
the account of such Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses that it may reasonably incur as a result of such payment or Conversion,
including, without limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.

          (d) Without prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in Sections 2.11, 2.14 and 8.04 shall survive
the payment in full of principal, interest and all other amounts payable hereunder and under the
Notes.

     SECTION 8.05 Right of Set-off. Upon either (a) the occurrence and during the continuance of any
Event of Default under Section 6.01(a) or 6.01(e) or (b) (i) the occurrence and during the
continuance of any other Event of Default and (ii) the making of the request or the granting of the consent specified
by Section 6.01 to authorize the Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender and each of its Affiliates is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender or such Affiliate to or for the credit or the account
of the Borrower against any and all of the obligations of the Borrower now or hereafter existing
under this Agreement and the Note held by such Lender, whether or not such Lender shall have made
any demand under this Agreement or such Note and although such obligations may be unmatured. Each
Lender agrees promptly to notify the Borrower after any such set-off and application,
provided that the failure to give such notice shall not affect the validity of such set-off
and application. The rights of each Lender and its Affiliates under this Section are in addition to
other rights and remedies (including, without limitation, other rights of set-off) that such Lender
and its Affiliates may have.

     SECTION 8.06 Binding Effect. This Agreement shall become effective (other than Section 2.01, which
shall only become effective upon satisfaction of the conditions precedent set forth in Section
3.01) when it shall have been executed by the Borrower and the Agent and when the Agent shall have
been notified by each Initial Lender that such Initial Lender has executed it

47

 

and thereafter shall
be binding upon and inure to the benefit of the Borrower, the Agent and each Lender and their
respective successors and assigns, except that the Borrower shall not have the right to assign its
rights hereunder or any interest herein without the prior written consent of the Lenders.

     SECTION 8.07 Assignments and Participations. (a) Each Lender may and, if demanded by the Borrower
(so long as no Default shall have occurred and be continuing and following a demand by such Lender
pursuant to Section 2.11 or 2.14) upon at least five Business Days’ notice to such Lender and the
Agent, will, assign to one or more Persons all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Commitment, the Advances
owing to it and the Note or Notes held by it); provided, however, that (i) each such assignment
shall be of a constant, and not a varying, percentage of all rights and obligations under this
Agreement, (ii) except in the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender’s rights and obligations under this
Agreement, the amount of the Commitment of the assigning Lender being assigned pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $5,000,000 or an integral multiple of $1,000,000 in
excess thereof, (iii) each such assignment shall be to an Eligible Assignee, (iv) each such
assignment made as a result of a demand by the Borrower pursuant to this Section 8.07(a) shall be
arranged by the Borrower after consultation with the Agent and shall be either an assignment of all
of the rights and obligations of the assigning Lender under this Agreement or an assignment of a
portion of such rights and obligations made concurrently with another such assignment or other such
assignments that together cover all of the rights and obligations of the assigning Lender under
this Agreement, (v) no Lender shall be obligated to make any such assignment as a result of a
demand by the Borrower pursuant to this Section 8.07(a) unless and until such Lender shall have received one or more payments from either the Borrower or one or
more Eligible Assignees in an aggregate amount at least equal to the aggregate outstanding
principal amount of the Advances owing to such Lender, together with accrued interest thereon to
the date of payment of such principal amount and all other amounts accrued or payable to such
Lender under this Agreement, and (vi) the parties to each such assignment shall execute and deliver
to the Agent, for its acceptance and recording in the Register, an Assignment and Acceptance,
together with any Note subject to such assignment and a processing and recordation fee of $3,500
payable by the parties to each such assignment, provided, however, that in the case
of each assignment made as a result of a demand by the Borrower, such recordation fee shall be
payable by the Borrower except that no such recordation fee shall be payable in the case of an
assignment made at the request of the Borrower to an Eligible Assignee that is an existing Lender.
Upon such execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder and (y) the Lender
assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its rights (other than its rights
under Sections 2.11, 2.14 and 8.04 to the extent any claim thereunder relates to an event arising
prior to such assignment) and be released from its obligations (other than its obligations under
Section 7.05 to the extent any claim thereunder relates to an event arising prior to such
assignment) under this Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning

48

 

Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).

          (b) By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder
and the assignee thereunder confirm to and agree with each other and the other parties hereto as
follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created under or in connection
with, this Agreement or any other instrument or document furnished pursuant hereto; (ii) such
assigning Lender makes no representation or warranty and assumes no responsibility with respect to
the financial condition of the Borrower or the performance or observance by the Borrower of any of
its obligations under this Agreement or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in Section 4.01 and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter into such Assignment
and Acceptance; (iv) such assignee will, independently and without reliance upon the Agent, such
assigning Lender or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers and discretion as are reasonably incidental thereto; and (vii)
such assignee agrees that it will perform in accordance with their terms all of the obligations that by the
terms of this Agreement are required to be performed by it as a Lender.

          (c) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an
assignee representing that it is an Eligible Assignee, together with any Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice thereof to the
Borrower.

          (d) The Agent, acting for this purpose as an agent of the Borrower, shall maintain at its
address referred to in Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Advances owing to, each Lender from time to time (the
“Register”). The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Agent and the Lenders may treat each Person whose name
is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.

          (e) Each Lender may sell participations to one or more banks or other entities (other than the
Borrower or any of its Affiliates) in or to all or a portion of its rights and

49

 

obligations under
this Agreement (including, without limitation, all or a portion of its Commitment, the Advances
owing to it and any Note or Notes held by it); provided, however, that (i) such
Lender’s obligations under this Agreement (including, without limitation, its Commitment to the
Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) such Lender shall remain the
holder of any such Note for all purposes of this Agreement, (iv) the Borrower, the Agent and the
other Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any provision of this
Agreement or any Note, or any consent to any departure by the Borrower therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such
participation, or postpone any date fixed for any payment of principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such
participation. Each Lender shall, acting for this purpose as an agent of the Borrower, maintain at
one of its offices a register substantially similar to the Register (the “Participant
Register”) for the recordation of the names and addresses of its participants, and the amount
and terms of its participations; provided that no Lender shall be required to disclose or
share the information contained in its Participant Register with the Borrower or any other person,
except as required by applicable law. No sale of participating interests in the rights of a Lender
hereunder and under the other Loan Documents shall be effective until properly recorded in the
Participant Register.

          (f) Any Lender may, in connection with any assignment or participation or proposed assignment
or participation pursuant to this Section 8.07, disclose to the assignee or participant or proposed assignee or participant, any information relating to the Borrower
furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such
disclosure, the assignee or participant or proposed assignee or participant shall agree to preserve
the confidentiality of any Borrower Information relating to the Borrower received by it from such
Lender.

          (g) Notwithstanding any other provision set forth in this Agreement, any Lender may at any
time create a security interest in all or any portion of its rights under this Agreement
(including, without limitation, the Advances owing to it and any Note or Notes held by it) in favor
of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.

     SECTION 8.08 Confidentiality. Neither the Agent nor any Lender may disclose to any Person any
confidential, proprietary or non-public information of the Borrower furnished to the Agent or the
Lenders by the Borrower and identified as such in writing (such information being referred to
collectively herein as the “Borrower Information”), except that each of the Agent and each
of the Lenders may disclose Borrower Information (i) to its and its affiliates’ employees,
officers, directors, agents and advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such Borrower Information and
instructed to keep such Borrower Information confidential on substantially the same terms as
provided herein), (ii) to the extent requested by any regulatory authority, (iii) to the extent
required by applicable laws or regulations or by any subpoena or similar legal process, (iv) to

50

 

any other party to this Agreement, (v) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (vi)
subject to an agreement containing provisions substantially the same as those of this Section 8.08,
to any assignee or participant or prospective assignee or participant or to any direct, indirect,
actual or prospective counterparty (and its advisor) to any swap, derivative or securitization
transaction related to the obligations of the Borrower under this Agreement, (vii) to the extent
such Borrower Information (A) is or becomes generally available to the public on a non-confidential
basis other than as a result of a breach of this Section 8.08 by the Agent or such Lender, or (B)
is or becomes available to the Agent or such Lender on a nonconfidential basis from a source other
than the Borrower and (viii) with the consent of the Borrower. In addition, the Agent and each
Lender may disclose the existence of this Agreement and the information about this Agreement to
market data collectors, similar services providers to the lending industry, and service providers
to the Agent and the Lenders in connection with the administration and management of this Agreement
and the other Loan Documents.

     SECTION 8.09 Governing Law. This Agreement and the other Loan Documents (except as otherwise
expressly set forth in any such Loan Document), and the rights and obligations of the parties
hereunder and thereunder, shall be governed by, and shall be construed and enforced in accordance
with, the laws of the State of New York.

     SECTION 8.10 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this Agreement.

     SECTION 8.11 Jurisdiction, Etc. (a) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New
York State court or federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the Notes, or for recognition or enforcement of any judgment, and each of the parties
hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action
or proceeding may be heard and determined in any such New York State court or, to the extent
permitted by law, in such federal court. The Borrower hereby further consents to the service of
process in any action or proceeding in such courts by the mailing thereof by any parties hereto by
registered or certified mail, postage prepaid, to the Borrower at its address specified pursuant to
Section 8.02. Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Agreement shall affect any right that any
party may otherwise have to bring any action or proceeding relating to this Agreement or the Notes
in the courts of any jurisdiction.

          (b) Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection that it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this Agreement or the
Notes in any New York State or federal court. Each of the parties hereto

51

 

hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

     SECTION 8.12 Patriot Act Notice. Each Lender and the Agent (for itself and not on behalf of any
Lender) hereby notifies the Borrower that pursuant to the requirements of the Patriot Act, it is
required to obtain, verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will allow such Lender or
the Agent, as applicable, to identify the Borrower in accordance with the Patriot Act. The
Borrower shall provide, to the extent commercially reasonable, such information and take such
actions as are reasonably requested by the Agent or any Lenders in order to assist the Agent and
the Lenders in maintaining compliance with the Patriot Act.

     SECTION 8.13 Waiver of Jury Trial. Each of the Borrower, the Agent and the Lenders hereby
irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether
based on contract, tort or otherwise) arising out of or relating to this Agreement or the Notes or the actions of the
Agent or any Lender in the negotiation, administration, performance or enforcement thereof.

     SECTION 8.14 No Fiduciary Duty. The Agent, each Lender and their Affiliates
(collectively, solely for purposes of this paragraph, the “Lenders”), may have economic
interests that conflict with those of the Borrower. The Borrower agrees that nothing in the Loan
Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or
fiduciary or other implied duty between the Lenders and the Borrower, its stockholders or its
affiliates. The Borrower acknowledges and agrees that (i) the transactions contemplated by the
Loan Documents are arm’s-length commercial transactions between the Lenders, on the one hand, and
the Borrower, on the other, (ii) in connection therewith and with the process leading to such
transaction each of the Lenders is acting solely as a principal and not the agent or fiduciary of
the Borrower, its management, stockholders, creditors or any other person, (iii) no Lender has
assumed an advisory or fiduciary responsibility in favor of the Borrower with respect to the
transactions contemplated hereby or the process leading thereto (irrespective of whether any Lender
or any of its affiliates has advised or is currently advising the Borrower on other matters) or any
other obligation to the Borrower except the obligations expressly set forth in the Loan Documents
and (iv) the Borrower has consulted its own legal and financial advisors to the extent it deemed
appropriate. The Borrower further acknowledges and agrees that it is responsible for making its
own independent judgment with respect to such transactions and the process leading thereto. The
Borrower agrees that it will not claim that any Lender has rendered advisory services of any nature
or respect, or owes a fiduciary or similar duty to the Borrower, in connection with such
transaction or the process leading thereto.

52

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first above written.

	 	 	 	 	 
	 	WESTERN DIGITAL TECHNOLOGIES, INC.

 	 
	 	By  	/s/ Timothy M. Leyden	 
	 	 	Name:  Timothy M. Leyden	 	 
	 	 	Title:  Executive Vice President, Finance	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Agent

 	 
	 	By  	 /s/
Walter A. Jackson	 
	 	 	Walter A. Jackson	 	 
	 	 	Authorized Signatory	 	 

2

 

	 	 	 	 	 

	 	 	 	 	 
	 	Initial Lenders 

GOLDMAN SACHS CREDIT PARTNERS L.P.

 	 
	 	By  	/s/
Walter A. Jackson 	 
	 	 	Walter A. Jackson	 	 
	 	 	Authorized Signatory	 	 

3

 

	 	 	 	 	 

	 	 	 	 	 
	 	CITICORP NORTH AMERICA, INC.

 	 
	 	By  	/s/ J. Gregory Davis	 
	 	 	Name:  J. Gregory Davis	 	 
	 	 	Title:  Authorized Signatory	 	 

4

 

	 	 	 	 	 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.

 	 
	 	By  	/s/
David F. Gibbs 	 
	 	 	Name:  	David F. Gibbs 	 
	 	 	Title:  	Managing Director 	 
	 

5

 

EXHIBIT A — FORM OF NOTE

U.S.$ ____________________

Dated: ___________, 2007

     FOR VALUE RECEIVED, the undersigned, WESTERN DIGITAL TECHNOLOGIES, INC., a Delaware
corporation (the “Borrower”), HEREBY PROMISES TO PAY to the order of ___(the
“Lender”) for the account of its Applicable Lending Office on the Maturity Date (each as
defined in the Credit Agreement referred to below) the principal sum of U.S.$[amount of the
Lender’s Commitment in figures] or, if less, the unpaid principal amount of all Advances made by
the Lender to the Borrower pursuant to the Credit Agreement dated as of August 30, 2007 among the
Borrower, the Lender and certain other lenders party thereto, Citicorp Global Capital Markets and
JPMorgan Chase Bank, N.A., as co-syndication agents, and Goldman Sachs Credit Partners L.P., as
Agent for the Lender and such other lenders (as amended, supplemented or otherwise modified from
time to time, the “Credit Agreement”; the terms defined therein and not otherwise defined
herein being used herein as therein defined).

     The Borrower promises to pay interest on the unpaid principal amount of each Advance from the
date of such Advance until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement.

     Both principal and interest are payable in lawful money of the United States of America to
GSCP, as Agent, at the Agent’s Account, in same day funds. Each Advance owing to the Lender by the
Borrower pursuant to the Credit Agreement, and all payments made on account of principal thereof,
shall be recorded by the Lender and, prior to any transfer hereof, endorsed on the grid attached
hereto which is part of this Promissory Note.

     This Promissory Note is one of the Notes referred to in, and is entitled to the benefits of,
the Credit Agreement. The Credit Agreement, among other things, (i) provides for the making of
Advances by the Lender to the Borrower from time to time in an aggregate amount not to exceed at
any time outstanding the U.S. dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Promissory Note and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of an Event of Default and
also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified.

     Whenever any payment on this Promissory Note shall be stated to be due on a day other than a
Business Day, such payment shall be made on the next succeeding Business Day, and such extension of
time shall be included in the computation of the payment of interest on this Promissory Note;
provided, however, that if such extension would cause payment of interest on or principal of
Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be
made on the next preceding Business Day.

     This Promissory Note is subject to restrictions on transfer or assignment as provided in the
Credit Agreement.

1

 

     This Promissory Note and the rights and obligations of the Borrower and the Lender hereunder
shall be governed by, and shall be construed and enforced in accordance with, the laws of the State
of New York.

	 	 	 	 	 
	 	WESTERN DIGITAL TECHNOLOGIES, INC.

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 

2

 

	 	 	 	 	 

ADVANCES AND PAYMENTS OF PRINCIPAL

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Amount of	 	 	 	 	 	 	 
	 	 	Amount of	 	 	Principal Paid	 	 	Unpaid Principal	 	 	Notation	 
	Date	 	Advance	 	 	or Prepaid	 	 	Balance	 	 	Made By	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

3

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