QUANTUM CORP /DE/
EXHIBIT 10.8
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<FILENAME>exhibit10_8.htm
<DESCRIPTION>EXHIBIT 10.8
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<p><b><font size="3" face="Times New Roman">Exhibit 10.8</font></b></p>

<p align="center"><b><font size="3" face="Times New Roman">&nbsp;</font></b></p>

<p align="center"><b><font size="3" face="Times New Roman">SECOND AMENDMENT<br>
TO<br>
PARTICIPATION AGREEMENT</font></b></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS SECOND AMENDMENT TO PARTICIPATION AGREEMENT dated as of December 17, 2002 (this "Amendment") is dated as of July&nbsp;21, 2003, by and among QUANTUM CORPORATION,
a Delaware corporation, as Lessee (together with its permitted successors and assigns, the "Lessee"); SELCO SERVICE CORPORATION, an Ohio corporation, as Lessor (together with its permitted successors and assigns, the "Lessor"); COMERICA BANK-CALIFORNIA, FLEET
NATIONAL BANK and KEYBANK NATIONAL ASSOCIATION as Participants (together with their permitted successors and assigns and SELCO SERVICE CORPORATION, in its capacity as a Participant, each a "Participant" and collectively the "Participants"); and KEYBANK NATIONAL
ASSOCIATION (in such capacity, together with its successors in such capacity, the "Agent") for the Participants.</font></p>

<p align="center"><u><font size="3" face="Times New Roman">RECITALS</font></u></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;Lessee, Lessor, Agent and Participants are parties to a Participation Agreement dated as of December 17, 2002, as amended by a First
Amendment to Participation Agreement (together, the "Participation Agreement").</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;Lessee has requested that the Lessor, Agent and Participants amend the Participation Agreement and certain other of the Operative Documents,
and Lessor, Agent and Participants have agreed, subject to satisfaction of the conditions set forth herein, to add or modify certain definitions and to modify certain covenants of Lessee to:&nbsp; (i) permit an increase in the principal amount of Subordinated Debt of
Lessee that may be outstanding for a period of time as specified herein in order to allow Lessee to issue new convertible subordinated notes and use the proceeds therefrom (together with funds required to be provided by Maxtor Corporation pursuant to the Maxtor
Reimbursement Agreement (the "Maxtor Funds")) to redeem up to $287,500,000 of the Convertible Subordinated Debentures now outstanding (plus any redemption premium owing in connection with such redemption); (ii) permit Lessee to use up to $50,000,000 of cash to redeem
existing Convertible Subordinated Debentures to the extent that the net proceeds of the newly issued convertible subordinated notes are insufficient to redeem up to $287,500,000 of the Convertible Subordinated Debentures now outstanding (plus any redemption premium
owing in connection with such redemption) in accordance with the Redemption Notice; (iii) reduce Lessee&rsquo;s minimum Consolidated EBITDA requirement for the fiscal quarters ending June 29, 2003 and September&nbsp;30, 2003; and (iv) modify the calculation of
Lessee&rsquo;s Consolidated EBITDA for Lessee&rsquo;s fiscal quarters ending September 30, 2003, December 31, 2003 and March 31, 2004 to permit Lessee to include in such calculation certain restructuring charges in an amount not to exceed $2,000,000 for the fiscal
quarter ending September 30, 2003, and not to exceed $10,000,000 in the aggregate for all such fiscal quarters combined.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;Each capitalized term used but not otherwise defined herein shall have the meaning ascribed thereto in <u>Appendix 1 to the Participation
Agreement</u>, as amended by this Amendment.</font></p>

<p><font size="3" face="Times New Roman">NOW, THEREFORE, the parties hereto agree as follows:</font></p>

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<p align="center"><font size="3" face="Times New Roman">ARTICLE 1<br>
AMENDMENTS TO PARTICIPATION AGREEMENT</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Amendment shall be deemed to be an amendment to the Participation Agreement and shall not be construed in any way as a replacement or substitution
therefor.&nbsp; All of the terms and conditions of, and terms defined in, this Amendment are hereby incorporated by reference into the Participation Agreement as if such terms and provisions were set forth in full therein.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1&nbsp;&nbsp;&nbsp;&nbsp;Section 10.2(a)(iv) of the Participation Agreement is amended and restated in its entirety as follows:</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Indebtedness of Lessee under the Convertible Subordinated Debentures and the
New Convertible Subordinated Notes;&rdquo;</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2&nbsp;&nbsp;&nbsp;&nbsp;Section 10.2(a)(x) of the Participation Agreement is amended and restated in its entirety as follows:</font></p>

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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Subordinated Indebtedness of Lessee to any Person, provided that (A) such Indebtedness contains subordination
provisions no less favorable to Agent and the Participants than those set forth in <u>Exhibit O</u> or as otherwise approved by the Required Participants and (B) the aggregate principal amount of all Subordinated Debt of Lessee outstanding (including the Convertible
Subordinated Debentures and the New Convertible Subordinated Notes) does not exceed $525,000,000 during the Refunding Period and does not exceed $350,000,000 at any other time, and"</font></p>
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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3&nbsp;&nbsp;&nbsp;&nbsp;Section 10.2(j) of the Participation Agreement is amended and restated in its entirety as follows:</font></p>

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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certain Indebtedness Payments, Etc.&nbsp; Neither Lessee nor any of its Subsidiaries shall pay, prepay, redeem, purchase, defease
or otherwise satisfy in any manner prior to the scheduled payment thereof any Subordinated Debt except as otherwise permitted under this Section 10.2(j); amend, modify or otherwise change the terms of any document, instrument or agreement evidencing Subordinated Debt
such that such amendment, modification or change would (i) cause the outstanding aggregate principal amount of all such Subordinated Debt so amended, modified or changed to be increased as a consequence of such amendment, modification or change, (ii) cause the
subordination provisions applicable to such Subordinated Debt to be less favorable to Agent and the Participants than those set forth on <u>Exhibit O</u>, (iii) increase the interest rate applicable thereto, or (iv) accelerate the scheduled payment thereof.&nbsp;
Lessee shall not cause or permit any of its obligations, except the obligations constituting Senior Indebtedness to constitute &ldquo;Designated Senior Indebtedness&rdquo; under the Indenture governing the Convertible Subordinated Debentures or the indenture
governing the New Convertible Subordinated Notes (it being understood that the obligations of Lessee under the Operative Documents shall at all times constitute &ldquo;Designated Senior Indebtedness&rdquo; under both such indentures).&nbsp; Notwithstanding the
foregoing, Lessee at any time:</font></p>
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<p><font size="3" face="Times New Roman">&nbsp;</font></p>
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<p align="center"><font size="3" face="Times New Roman">2.</font></p>

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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;conduct an exchange offer (whether public, private or on a 3(a)(9) basis) of all or part of the Lessee&rsquo;s Convertible
Subordinated Debentures or the New Convertible Subordinated Notes for one or more of the following:&nbsp; (a) new securities ("New Securities") that are subordinated in right of payment to the obligations of Lessee under the Operative Documents at least to the same
extent as the existing Convertible Subordinated Debentures or the New Convertible Subordinated Notes, as applicable; provided that (w) the aggregate annual interest obligation of Lessee under the New Securities shall be equal to or less than the aggregate annual
interest obligation under the existing Convertible Subordinated Debentures or the New Convertible Subordinated Notes, as applicable, (x) the maturity date of the New Securities shall not be earlier than the maturity date of the existing Convertible Subordinated
Debentures or the New Convertible Subordinated Notes, as applicable, (y) the total principal amount of the obligations represented by Lessee's Subordinated Debt shall not be increased by means of any exchange of the New Securities for all or part of the
Lessee&rsquo;s Convertible Subordinated Debentures or the New Convertible Subordinated Notes, as applicable, and (z) the New Securities shall not permit any amortization of the principal amount of the obligations represented thereby prior to the maturity of the
existing Convertible Subordinated Debentures or the New Convertible Subordinated Notes, as applicable; or (b) new securities issued by Maxtor ("<u>Maxtor Securities</u>"), in the case of the Convertible Subordinated Debentures only; or</font></p>
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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;redeem up to $287,500,000 of the existing Convertible Subordinated Debentures (plus any redemption premium owing in connection with
such redemption) on or before September 30, 2003 in accordance with the redemption notices delivered to the holders thereof by August 15, 2003 ("Redemption Notice") with the Refunding Proceeds and the Maxtor Funds but only if the Refunding Proceeds are placed in
trust with the Agent for the duration of the Refunding Period.&nbsp; For purposes of the immediately preceding sentence, if the net proceeds of any New Convertible Subordinated Notes are insufficient to redeem up to $287,500,000 of the Convertible Subordinated
Debentures (plus any redemption premium owing in connection with such redemption) in accordance with the Redemption Notice, Lessee shall be permitted to use up to but in no event more than $50,000,000 in cash in order to redeem up to $287,500,000 of the Convertible
Subordinated Debentures (plus any redemption premium owing in connection with such redemption) in accordance with this Section 10.02(j).</font></p>
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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No exchange or series of exchanges of New Securities or Maxtor Securities for all or any part of Lessee&rsquo;s Convertible Subordinated Debentures pursuant to this
Section 10.2(j) shall be deemed to permit any reduction in the amount of Maxtor's reimbursement obligations under the Maxtor Reimbursement Agreement except on a dollar-for-dollar basis to the extent that the obligations represented by Lessee's Convertible
Subordinated Debentures are reduced by means of such exchange or series of exchanges.&nbsp; Notwithstanding any provision of this Section 10.2(j) to the contrary, Lessee may (A) convert, or honor a conversion request with respect to, any such Subordinated Debt into
Equity Securities of Lessee in accordance with the terms thereof; (B) pay cash to holders of such Subordinated Debt in connection with such a conversion but solely to the extent representing the value of any fractional shares; (C) make payments of interest on such
Subordinated Debt not in violation of the Subordination provisions of such Subordinated Debt; (D) pay the redemption premium, if any, owing in connection with any redemption of all or part of the Convertible Subordinated Debentures; (E) pay additional interest in an
amount not to exceed 50 basis points per annum of the aggregate principal amount of the New Convertible Subordinated Notes to the extent due under the provisions of the New Convertible Subordinated Notes due to Borrower's failure to register such notes or shares of
common stock into which the notes are convertible within the period or to keep such notes or shares registered for or during the periods specified in the indenture for the New Convertible Subordinated Notes or the Registration Rights Agreement; and (F) make other
payments, repayments, redemptions, purchases, defeasance or other satisfaction of Subordinated Debt not to exceed $5,000,000 in the aggregate.</font></p>
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<p align="center"><font size="3" face="Times New Roman">3.</font></p>

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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4&nbsp;&nbsp;&nbsp;&nbsp;Section 10.2(k)(iv) of the Participation Agreement is amended and restated in its entirety as follows:</font></p>

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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Minimum Consolidated EBITDA</u>.&nbsp; Permit Consolidated EBITDA, determined as of the last day of any fiscal quarter of Lessee
commencing with the fiscal quarter ending December 31, 2002, to be less than the following:&nbsp; (i) for the fiscal quarter ending December 31, 2002, $1.00; (ii) for the fiscal quarter ending March&nbsp;31, 2003, $18,000,000; (iii) for the fiscal quarter ending June
29, 2003, $9,000,000; (iv) for the fiscal quarter ending September 30, 2003, $9,000,000; (v) for the fiscal quarter ending December 31, 2003, $12,500,000; and (vi) for the fiscal quarter ending March 31, 2004, $13,000,000.&nbsp; For purposes of calculating
Lessee&rsquo;s Consolidated EBITDA as of the last day of the fiscal quarters ending September 30, 2003, December 31, 2003 and March 31, 2004 only, there shall be added to Lessee&rsquo;s Consolidated Net Income an amount equal to the actual restructuring charges
incurred by Lessee for facility and employee-related charges (to the extent such charges were deducted in calculating Borrower&rsquo;s Consolidated Net Income); provided, however, that (x) the amount of such restructuring charges to be added to Lessee&rsquo;s
Consolidated Net Income for Lessee&rsquo;s fiscal quarter ending September 30, 2003 shall not exceed $2,000,000, and (y) the aggregate amount of all such restructuring charges to be added to Lessee&rsquo;s Consolidated Net Income for the Lessee&rsquo;s fiscal
quarters ending September 30, 2003, December 31, 2003 and March 31, 2004 shall not exceed $10,000,000 in the aggregate."</font></p>
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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5&nbsp;&nbsp;&nbsp;&nbsp;The schedule appended hereto as Attachment 1 is substituted in place of and shall supersede Schedule 2 to the Compliance Certificate set
forth in Exhibit L to the Participation Agreement.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6&nbsp;&nbsp;&nbsp;&nbsp;Section 17.1 of the Lease is amended to incorporate the following as a "Lease Event of Default":</font></p>

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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Maxtor fails to pay to Lessee on or before August 1, 2004 all amounts owing pursuant to that certain Reimbursement Agreement between
Borrower and Maxtor dated as of April 2, 2001.&rdquo;</font></p>
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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
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<p align="center"><font size="3" face="Times New Roman">4.</font></p>

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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7&nbsp;&nbsp;&nbsp;&nbsp;The following definitions are added to <u>Appendix 1 to the Participation Agreement</u>:</font></p>

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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;""<u>New Convertible Subordinated Notes</u>" means subordinated, convertible notes to be issued by the Lessee on or before August 15, 2003 that conform to all of the
following:&nbsp; (a) in a total principal amount of at least $150,000,000 but not to exceed $225,000,000; (b) bearing interest at a rate not in excess of 5% per annum; (c) subordinated in right of payment to the obligations of Lessee under the Participation Agreement
and other Operative Documents at least to the same extent as the existing Convertible Subordinated Debentures and containing subordination provisions no less favorable to Agent and Participants than those set forth in <u>Exhibit&nbsp;O</u> or as otherwise approved by
the Required Participants; (d) having a maturity date that is no earlier than seven (7) years after issuance; and (e) permitting no amortization of the principal amount of the obligations represented thereby prior to such maturity date.&rdquo;</font></p>
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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;""<u>Refunding Period</u>" means a period of sixty (60) days commencing with the first day the New Convertible Subordinated Notes are offered for sale."</font></p>
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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;""<u>Refunding Proceeds</u>" means all of the proceeds of the issuance and sale of the New Convertible Subordinated Notes net of the costs and fees paid to or
deducted by or on behalf of third parties in connection with issuance and sale of the New Convertible Subordinated Notes.</font></p>
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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8&nbsp;&nbsp;&nbsp;&nbsp;The definitions of "Investment" and "Subordinated Debt" contained in <u>Appendix 1 to the Participation Agreement</u> are amended and
restated in their entirety as follows:</font></p>

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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;""<u>Investment</u>" means, as to any Person, any investment by such Person, whether by means of the purchase or other acquisition of stock or other securities of any
other Person or by means of a loan, creating a debt, capital contribution, guaranty or other debt or equity participation or interest in any other Person.&nbsp; For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such Investment.&nbsp; Notwithstanding the foregoing, the term "Investment" shall not include purchases of Convertible Subordinated Debentures or New Convertible Subordinated Notes made in
compliance with Section 10.2(j) of the Participation Agreement."</font></p>
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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;""<u>Subordinated Debt</u>" means the Convertible Subordinated Debentures, the New Convertible Subordinated Notes and any other subordinated debt permitted by
<u>clause&nbsp;(x) of Section 10.2(a) of the Participation Agreement</u>."</font></p>
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<p align="center"><font size="3" face="Times New Roman">5.</font></p>

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<p align="center"><font size="3" face="Times New Roman">ARTICLE 2<br>
CONDITIONS TO EFFECTIVENESS OF AMENDMENT</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1&nbsp;&nbsp;&nbsp;&nbsp;The effectiveness of this Amendment is subject to the fulfillment to the satisfaction of the following conditions precedent:</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;This Amendment duly executed by the Lessee, the Lessor, the Required Participants and the
Agent;</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;A Second Amendment to the Lease in the form of Attachment 2, duly executed by Lessor and
Lessee and notarized for recording,</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;A Second Amendment to the Deed of Trust in the form of Attachment 3, duly executed by
Lessor and Agent and notarized for recording;</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Agent shall have received appropriate authorization documents, including borrowing
resolutions and certificates of incumbency, confirming to its satisfaction that all necessary corporate and organizational actions have been taken to authorize Lessee to enter into this Amendment; and</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;Agent shall have received such other documents, instruments or agreements as Agent may
require to effectuate the intents and purposes of this Amendment.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;&nbsp;&nbsp;&nbsp;In addition, within a reasonable time period not to exceed thirty (30) days after recordation of the amendments described in 2.1(b) and
2.2(c), Lessee shall deliver to the Agent, the Lessor and the Participants (a) such endorsements as the Lessor and the Agent may reasonably request to each of the (i) ALTA owner's title insurance policy issued in connection with the closing of the Participation
Agreement, and (ii) ALTA lender's title insurance policy issued in connection with the closing of the Participation Agreement.</font></p>

<p align="center"><font size="3" face="Times New Roman"><br>
ARTICLE 3<br>
REPRESENTATIONS AND WARRANTIES</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lessee hereby represents and warrants to Lessor, Agent and the Participants that:</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1&nbsp;&nbsp;&nbsp;&nbsp;After giving effect to the amendment of the Participation Agreement pursuant to this Amendment and the consummation of the transactions
contemplated hereby (i) each of the representations and warranties set forth in Section 8.3 of the Participation Agreement and in the other Operative Documents are true and correct in all material respects as if made on the date hereof except to the extent such
representations and warranties specifically refer to an earlier date in which case they shall be true and correct in all material respects as of such earlier date (with references to the Participation Agreement being deemed to include this Amendment), and (ii) there
exists no Lease Event of Default or Potential Lease Default under the Operative Documents after giving effect to this Amendment.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2&nbsp;&nbsp;&nbsp;&nbsp;Lessee has the corporate power and authority and legal right to make, deliver the amendments described herein, and to perform the
obligations of its part to be performed under the Participation Agreement as amended hereby and the amendments described herein.&nbsp; Lessee has taken all necessary action to authorize the execution, delivery and performance of this Amendment and the amendments
described herein.&nbsp; No consent or authorization of, filing with, or other act by or in respect of any Governmental Authority is required in connection with the execution, delivery, performance, validity or enforceability of this Amendment or the amendments
described herein or the performance by Lessee of the Participation Agreement as amended hereby.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3&nbsp;&nbsp;&nbsp;&nbsp;This Amendment and the Participation Agreement as amended hereby are, or upon delivery thereof to Agent will be, the legal, valid and
binding obligations of Lessee, enforceable against Lessee in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally.</font></p>

<p align="center"><font size="3" face="Times New Roman">6.</font></p>

<div align="center">

<hr size="2" width="100%" align="center">
</div>

<p align="center"><font size="3" face="Times New Roman"><br>
ARTICLE 4<br>
MISCELLANEOUS</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1&nbsp;&nbsp;&nbsp;&nbsp;The Participation Agreement, the other Operative Documents and all agreements, instruments and documents executed and delivered in
connection with any of the foregoing shall each be deemed to be amended hereby to the extent necessary, if any, to give effect to the provisions of this Amendment.&nbsp; Except as so amended hereby, the Participation Agreement and the other Operative Documents shall
remain in full force and effect in accordance with their respective terms.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2&nbsp;&nbsp;&nbsp;&nbsp;Lessee agrees to pay Agent on demand for all reasonable expenses, including reasonable fees and costs of attorneys and costs of recordation
and title insurance, incurred by Agent in connection with the preparation, negotiation and execution of this Amendment and any document required to be furnished hereunder.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3&nbsp;&nbsp;&nbsp;&nbsp;This Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which shall together
constitute one and the same instrument.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date set forth in the preamble hereto.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td valign="top">
<p><font size="3" face="Times New&#13;&#13;&#13;&#13;&#13;&#13;
Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">QUANTUM CORPORATION, a Delaware corporation, as Lessee</font></p>

<p><font size="3" face="Times New Roman">By:<u>&nbsp;&nbsp;/s/&nbsp;Mary
Springer&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u> Name: Mary Springer<u><br>
</u> Title: &nbsp;Treasurer</font></p>

<p><font size="3" face="Times New Roman">&nbsp;</font></p>

<p><font size="3" face="Times New Roman">KEYBANK NATIONAL ASSOCIATION, as Agent</font></p>

<p><font size="3" face="Times New Roman">By:<u>&nbsp;&nbsp;/s/&nbsp;Robert W. Boswell&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u> Name: Robert W. Boswell<u><br>
</u> Title: &nbsp;Vice President</font></p>

<p><font size="3" face="Times New Roman">&nbsp;</font></p>

<p><font size="3" face="Times New Roman">KEYBANK NATIONAL ASSOCIATION, as Participant</font></p>

<p><font size="3" face="Times New Roman">By:<u>&nbsp;&nbsp;/s/&nbsp;Robert W. Boswell&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u> Name: Robert W. Boswell<u><br>
</u> Title: &nbsp;Vice President</font></p>

<p><font size="3" face="Times New Roman">&nbsp;</font></p>

<p><font size="3" face="Times New Roman">FLEET NATIONAL BANK, as Participant</font></p>

<p><font size="3" face="Times New Roman">By:<u>&nbsp;&nbsp;/s/&nbsp;Greg
Roux&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u> Name: Greg Roux<u><br>
</u> Title: &nbsp;Managing Director</font></p>

<p><font size="3" face="Times New Roman">&nbsp;</font></p>

<p><font size="3" face="Times New Roman">SELCO SERVICE CORPORATION, as Lessor</font></p>

<p><font size="3" face="Times New Roman">By:<u>&nbsp;&nbsp;/s/&nbsp;Donald C. Davis&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u> Name: Donald C. Davis<u><br>
</u> Title: &nbsp;Vice President</font></p>

<p><font size="3" face="Times New Roman">&nbsp;</font></p>

<p><font size="3" face="Times New Roman">SELCO SERVICE CORPORATION, as Participant</font></p>

<p><font size="3" face="Times New Roman">By:<u>&nbsp;&nbsp;/s/&nbsp;Donald C. Davis&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u> Name: Donald C. Davis<u><br>
</u> Title: &nbsp;Vice President</font></p>

<p><font size="3" face="Times New Roman">&nbsp;</font></p>

<p><font size="3" face="Times New Roman">COMERICA BANK-CALIFORNIA, as Participant</font></p>

<p><a name="OLE_LINK1"><font size="3" face="Times New Roman">By:<u>&nbsp;&nbsp;/s/&nbsp;Rob
Ways&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u> Name: Rob Ways<u><br>
</u> Title: &nbsp;Vice President</font></a></p>
</td>
</tr>
</table>

<p align="center"><font size="3" face="Times New Roman">7.</font></p>

<div align="center">

<hr size="2" width="100%" align="center">
</div>

<p align="center"><b><font size="3" face="Times New Roman">&nbsp;</font></b></p>

<p align="center"><b><font size="3" face="Times New Roman">ATTACHMENT 1</font></b></p>

<p align="center"><b><font size="3" face="Times New Roman">FORM OF SECOND AMENDMENT TO LEASE AGREEMENT</font></b></p>

<p><font size="3" face="Times New Roman">Prepared by and upon recording return to:</font></p>

<p><font size="3" face="Times New Roman">Timothy N. Brown, Esq.<br>
Reed Smith Crosby Heafey LLP<br>
Two Embarcadero Center, Suite 2000<br>
San Francisco, California 94111</font></p>

<p align="center"><b><font size="3" face="Times New Roman">SECOND AMENDMENT TO MASTER LEASE, DEED OF TRUST WITH ABSOLUTE ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING</font></b></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS SECOND AMENDMENT TO MASTER LEASE, DEED OF TRUST WITH ABSOLUTE ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Amendment") dated as
of July&nbsp;___, 2003, is entered into by and between SELCO SERVICE CORPORATION, an Ohio Corporation (the "Lessor") and QUANTUM CORPORATION, a Delaware corporation (the "Lessee").</font></p>

<p align="center"><font size="3" face="Times New Roman">RECITALS</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;The Lessor, Lessee, Keybank National Association, as Agent (in such capacity, the "Agent"), and the financial institutions from time to time
parties thereto (the "Participants") are parties to the Participation Agreement, dated as of December 17, 2002 (as amended, supplemented or otherwise modified from time to time, the "Participation Agreement").</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the Participation Agreement, the Lessor and the Lessee executed a Master Lease, Deed of Trust with Absolute Assignment of Leases
and Rents, Security Agreement and Fixture Filing ("Lease"), dated December 17, 2002, affecting certain real property located in El Paso County, Colorado, described in Schedule 1 to the Lease.&nbsp; The Lease was recorded on December 23, 2002, in the Official Records
of El Paso County, Colorado, as Document Number 202228819.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;The Lessee now has requested the Lessor, the Participants and the Agent to amend the Participation Agreement in certain respects.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the Second Amendment to Participation Agreement dated as of the date hereof ("Second Amendment to Participation Agreement")
among the Lessor, Lessee, the Required Participants and Agent, the parties thereto have agreed to amend the Participation Agreement upon the terms and subject to the conditions set forth therein, including without limitation, the execution, delivery and recordation
of this Amendment.</font></p>

<p align="center"><font size="3" face="Times New Roman">1.</font></p>

<div align="center">

<hr size="2" width="100%" align="center">
</div>

<p align="center"><font size="3" face="Times New Roman">AGREEMENT</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Definitions</u>.&nbsp; All capitalized terms not otherwise defined in this Amendment shall have the respective meanings given to
those terms in <u>Appendix 1 to the Lease</u>, as amended by this Amendment.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Amendments to the Lease</u>.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1&nbsp;&nbsp;&nbsp;&nbsp; The following definitions are added to <u>Appendix 1 to the Participation</u>
Agreement:</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;""<u>New Convertible Subordinated Notes</u>" means subordinated, convertible notes to be issued by the Lessee on or
before August 15, 2003, that conform to all of the following:&nbsp; (a) in a total principal amount of at least $150,000,000 but not to exceed $225,000,000; (b) bearing interest at a rate note in excess of 5% per annum; (c) subordinated in right of payment to the
obligations of Lessee under the Participation Agreement and other Operative Documents at least to the same extent as the existing Convertible Subordinated Debentures and containing subordination provisions no less favorable to Agent and Participants than those set
forth in <u>Exhibit&nbsp;O</u> or as otherwise approved by Required Participants; (d) having a Maturity Date that is no earlier than the Business Day next following the maturity date of Lessee's existing Convertible Subordinated Debentures after the date of issuance;
and (e) permitting no amortization of the principal amount of the obligations represented thereby prior to the maturity of Lessee's existing Convertible Subordinated Debentures."</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;""<u>Refunding Period</u>" means a period of sixty (60) days commencing with the first day the New Convertible
Subordinated Notes are offered for sale."</font></p>

<p><font size="3" face="Times New Roman">""<u>Refunding Proceeds</u>" means all of the proceeds of the issuance of the New Convertible Subordinated Debentures net of the costs and fees paid to third parties in connection with issuance of the New Convertible
Subordinated Notes."</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;&nbsp;&nbsp;&nbsp; The definitions of "Investments" and "Subordinated Debt" contained in <u>Appendix 1 to the
Participation Agreement</u> are amended and restated in their entirety as follows:</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;""<u>Investment</u>" means, as to any Person, any investment by such Person, whether by means of the purchase or other
acquisition of stock or other securities of any other Person or by means of a loan, creating a debt, capital contribution, guaranty or other debt or equity participation or interest in any other Person.&nbsp; For purposes of covenant compliance, the amount of any
Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.&nbsp; Notwithstanding the foregoing, the term "Investment" shall not include purchases of Convertible Subordinated Debentures
or New Convertible Subordinated Notes made in compliance with Section 10.2(j) of the Participation Agreement."</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;""<u>Subordinated Debt</u>" means the Convertible Subordinated Debentures, the New Convertible Subordinated Notes and
any other subordinated debt permitted by <u>clause&nbsp;(x) of Section 10.2(a) of the Participation Agreement</u>."</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3&nbsp;&nbsp;&nbsp;&nbsp; Section 17.1 of the Lease is amended to incorporate the following as a "Lease Event of
Default":</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"(q)&nbsp; Maxtor fails to pay to Lessee on or before August 1, 2004 all amounts owing pursuant to that certain
Reimbursement Agreement between Borrower and Maxtor dated as of April 2, 2001.&rdquo;</font></p>

<p align="center"><font size="3" face="Times New Roman">2.</font></p>

<div align="center">

<hr size="2" width="100%" align="center">
</div>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Effective Date</u>.&nbsp; This Amendment shall become effective on the date of
satisfaction of the conditions set forth in Section 2.1 of the Second Amendment to Participation Agreement (the "Effective Date").</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Effect of this Amendment</u>.&nbsp; On and after the Effective Date, each
reference in the Lease and the other Operative Documents to the Lease shall mean the Lease as amended hereby.&nbsp; Except as specifically amended above, (a) the Lease shall remain in full force and effect, and (ii) the execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, alter or affect any provision, condition, or covenant contained in the Lease or the other Operative Documents or affect or impair any rights, powers, or remedies of the Lessor, Agent or the
Participants.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Counterparts</u>.&nbsp; This Amendment may be executed in any number of
counterparts, each of which shall be an original, but all of which shall together constitute one and the same instrument.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be duly executed by an officer thereunto
duly authorized as of the date and year first above written.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td valign="top">
<p><font size="3" face="Times New&#13;&#13;&#13;&#13;&#13;&#13;
Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><b><font size="3" face="Times New Roman">LESSOR:</font></b></p>

<p><b><font size="3" face="Times New Roman">SELCO SERVICE CORPORATION</font></b>, as Lessor</p>

<p><font size="3" face="Times New Roman">By:<u>&nbsp;&nbsp;/s/&nbsp;Paula
Oswald&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u> Name: Paula Oswald<u><br>
</u> Title: &nbsp;Vice President</font></p>

<p><b><font size="3" face="Times New Roman">&nbsp;</font></b></p>

<p><b><font size="3" face="Times New Roman">LESSEE:</font></b></p>

<p><b><font size="3" face="Times New Roman">SELCO SERVICE CORPORATION</font></b>, as Lessee</p>

<p><font size="3" face="Times New Roman">By:<u>&nbsp;&nbsp;/s/&nbsp;Paula
Oswald&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u> Name: Paula Oswald<u><br>
</u> Title: &nbsp;Vice President</font></p>
</td>
</tr>
</table>

<p align="center"><font size="3" face="Times New Roman">3.</font></p>

<div align="center">

<hr size="2" width="100%" align="center">
</div>

<p align="center"><b><font size="3" face="Times New Roman">ATTACHMENT 2</font></b></p>

<p align="center"><b><font size="3" face="Times New Roman">FORM OF SECOND AMENDMENT TO DEED OF TRUST</font></b></p>

<p><font size="3" face="Times New Roman">Prepared by and upon recording return to:</font></p>

<p><font size="3" face="Times New Roman">Timothy N. Brown, Esq.<br>
Reed Smith Crosby Heafey LLP<br>
Two Embarcadero Center, Suite 2000<br>
San Francisco, California 94111</font></p>

<p align="center"><b><font size="3" face="Times New Roman">SECOND AMENDMENT TO DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING</font></b></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS SECOND AMENDMENT TO DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING (this "Amendment") dated as of July _____, 2003, is entered into by and between SELCO
SERVICE CORPORATION, an Ohio Corporation (the "Grantor") and KEYBANK NATIONAL ASSOCIATION, as Agent (in such capacity, the "Beneficiary").</font></p>

<p align="center"><font size="3" face="Times New Roman">RECITALS</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Grantor, Quantum Corporation (the "Lessee"), Keybank National Association, as Agent (in such capacity, the "Agent"), and the
financial institutions from time to time parties thereto (the "Participants") are parties to the Participation Agreement, dated as of December 17, 2002 (as amended, supplemented or otherwise modified from time to time, the "Participation Agreement").</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pursuant to the Participation Agreement, the Grantor executed a Deed of Trust, Security Agreement and Fixture Filing ("Deed of
Trust") in favor of Agent as Beneficiary, dated December 17, 2002, affecting the fee interest of Grantor in certain real property located in El Paso County, Colorado, described in Exhibit A to the Deed of Trust.&nbsp; The Deed of Trust was recorded on December 23,
2002, in the Official Records of El Paso County, Colorado, as Document Number 202228823.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Lessee now has requested the Grantor, the Participants and the Agent to amend the Participation Agreement in certain
respects.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pursuant to the Second Amendment to Participation Agreement dated as of the date hereof ("Second Amendment to Participation
Agreement") among the Grantor, Lessee, the Required Participants and Agent, the parties thereto have agreed to amend the Participation Agreement upon the terms and subject to the conditions set forth therein, including without limitation, the execution, delivery and
recordation of this Amendment.</font></p>

<p align="center"><font size="3" face="Times New Roman">AGREEMENT</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Definitions</u>.&nbsp; All capitalized terms not otherwise defined in this Amendment shall have the respective meanings given to
those terms in <u>Appendix 1 to the Deed of Trust</u>, as amended by this Amendment.</font></p>

<p align="center"><font size="3" face="Times New Roman">1.</font></p>

<div align="center">

<hr size="2" width="100%" align="center">
</div>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Amendments to the Mortgage.</u>&nbsp;</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1&nbsp;&nbsp;&nbsp;&nbsp; The following definitions are added to <u>Appendix 1 to the Participation</u>
Agreement:</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;""<u>New Convertible Subordinated Notes</u>" means subordinated, convertible notes to be issued by the Lessee on or
before August 15, 2003, that conform to all of the following:&nbsp; (a) in a total principal amount of at least $150,000,000 but not to exceed $225,000,000; (b) bearing interest at a rate note in excess of 5% per annum; (c) subordinated in right of payment to the
obligations of Lessee under the Participation Agreement and other Operative Documents at least to the same extent as the existing Convertible Subordinated Debentures and containing subordination provisions no less favorable to Agent and Participants than those set
forth in <u>Exhibit&nbsp;O</u> or as otherwise approved by Required Participants; (d) having a Maturity Date that is no earlier than the Business Day next following the maturity date of Lessee's existing Convertible Subordinated Debentures after the date of issuance;
and (e) permitting no amortization of the principal amount of the obligations represented thereby prior to the maturity of Lessee's existing Convertible Subordinated Debentures."</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;""<u>Refunding Period</u>" means a period of sixty (60) days commencing with the first day the New Convertible
Subordinated Notes are offered for sale."</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;""<u>Refunding Proceeds</u>" means all of the proceeds of the issuance of the New Convertible Subordinated Notes net
of the costs and fees paid to third parties in connection with issuance of the New Convertible Subordinated Notes."</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;&nbsp;&nbsp;&nbsp; The definitions of "Investment" and "Subordinated Debt" contained in <u>Appendix 1 to the
Participation Agreement</u> are amended and restated in their entirety as follows:</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;""<u>Investment</u>" means, as to any Person, any investment by such Person, whether by means of the purchase or other
acquisition of stock or other securities of any other Person or by means of a loan, creating a debt, capital contribution, guaranty or other debt or equity participation or interest in any other Person.&nbsp; For purposes of covenant compliance, the amount of any
Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.&nbsp; Notwithstanding the foregoing, the term "Investment" shall not include purchases of Convertible Subordinated Debentures
or New Convertible Subordinated Notes made in compliance with Section 10.2(j) of the Participation Agreement."</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;""<u>Subordinated Debt</u>" means the Convertible Subordinated Debentures, the New Convertible Subordinated Notes and
any other subordinated debt permitted by <u>clause&nbsp;(x) of Section 10.2(a) of the Participation Agreement</u>."</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Effective Date</u>.&nbsp; This Amendment shall become effective on the date of
satisfaction of the conditions set forth in Section 2.1 of the Second Amendment to Participation Agreement ("Effective Date").</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Effect of this Amendment</u>.&nbsp; On and after the Effective Date, each
reference in the Deed of Trust and the other Operative Documents to the Deed of Trust or Mortgage shall mean the Deed of Trust as amended hereby.&nbsp; Except as specifically amended above, (a) the Deed of Trust shall remain in full force and effect, and (ii) the
execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, alter or affect any provision, condition, or covenant contained in the Deed of Trust or the other Operative Documents or affect or impair any rights, powers, or
remedies of the Lessor, Agent or the Participants.</font></p>

<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Counterparts</u>.&nbsp; This Amendment may be executed in any number of
counterparts, each of which shall be an original, but all of which shall together constitute one and the same instrument.</font></p>

<p align="center"><font size="3" face="Times New Roman">2.</font></p>

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<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the undersigned has caused this Amendment to be duly executed and delivered as of the date first
above written.</font></p>

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Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
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<p><b><font size="3" face="Times New Roman">GRANTOR:</font></b></p>

<p><b><font size="3" face="Times New Roman">SELCO SERVICE CORPORATION</font></b>, as Grantor</p>

<p><font size="3" face="Times New Roman">By:<u>&nbsp;&nbsp;/s/&nbsp;Paula
Oswald&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u> Name: Paula Oswald<u><br>
</u> Title: &nbsp;Vice President</font></p>

<p><b><font size="3" face="Times New Roman">&nbsp;</font></b></p>

<p><b><font size="3" face="Times New Roman">BENEFICIARY:</font></b></p>

<p><b><font size="3" face="Times New Roman">KEYBANK NATIONAL ASSOCIATION</font></b>, as Agent</p>

<p><font size="3" face="Times New Roman">By:<u>&nbsp;&nbsp;/s/&nbsp;Paula
Oswald&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u> Name: Paula Oswald<u><br>
</u> Title: &nbsp;Vice President</font></p>
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<p><font size="3" face="Times New Roman">3.</font></p>

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