MAXTOR CORP
EXHIBIT 10.3
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<FILENAME>f83240exv10w3.txt
<DESCRIPTION>EXHIBIT 10.3
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                                                                    EXHIBIT 10.3

                        [Bank of Nova Scotia Letterhead]

June 20, 2002

Maxtor Peripherals (S) Pte Ltd
No. 2 Ang Mo Kio Street 63
Ang Mo Kio Street Park 3
Singapore 569111

Attention:    Mr. Tiong Chi Sieng, Vice President-Finance/
              Ms. Ten Hui Yah, Director-Finance

Dear Sirs:

BANK GUARANTEE FACILITY OF SGD23,000,000
AMENDMENTS TO COVENANTS ON TANGIBLE NET WORTH AND
CONSOLIDATED CASH BALANCE

1. We refer to the long-term Bank Guarantee Facility of up to SGD23,000,000
(current outstanding amount) ("THE FACILITY") granted under the Guarantee
Facility Agreement dated 31 August 1999 as amended by our letter dated 13
September 1999, an Amendment Agreement dated 23 February 2001, a Supplemental
Agreement dated 2 May 2001, a Second Supplementary Agreement dated 29 January
2002 and our Amendment Letter dated 15 February 2002 (the Guarantee Facility
Agreement as amended, "THE FACILITY AGREEMENT"), and the Security Over Cash
Agreement dated 8 September 1999.

2. We are pleased to advise that at your request, The Bank of Nova Scotia,
Singapore Branch ("THE BANK") is agreeable to amending the definitions of
"CONSOLIDATED TANGIBLE NET WORTH" and "TNW HURDLE" in Clause 15.2 of the
Facility Agreement to read as follows:

                  " "CONSOLIDATED TANGIBLE NET WORTH" is defined as the networth
                  of Maxtor Corporation and its consolidated subsidiaries
                  calculated in accordance with GAAP (i.e., the generally
                  accepted accounting principles in effect in the United States
                  of America from time to time), after subtracting therefrom the
                  aggregate amount of Maxtor Corporation and its consolidated
                  subsidiaries' intangible assets (including, without
                  limitation, goodwill, franchises, licenses, patents,
                  trademarks, tradenames, copyrights and service marks), but
                  including deferred tax liabilities of up to US$338,000,000 and
                  US$90,000,000 of goodwill recorded on 29 December 2001 net of
                  any recoveries."

                  " "TNW HURDLE" means the amount of (1) US$100,000,000 plus (2)
                  50% of the quarterly consolidated positive net Income (not to
                  be reduced by losses) from 31 December 2001 to the end of the
                  most recently ended fiscal quarter, plus (3) 75% of the
                  portion of the proceeds of any new issuance of equity
                  securities in any calendar year which in aggregate exceeds
                  US$50,000,000, MINUS (4) actual
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                  restructuring charges taken after 31 December 2001 but no
                  later than 31 December 2002 up to an amount equal to
                  US$20,000,000."

Pursuant to Clause 15.1.2 of the Facility Agreement, your Company shall procure
that Maxtor Corporation maintain a Consolidated Tangible Net Worth of not less
than the TNW Hurdle at all times.

3. We are also pleased to advise that at your request, the Bank is agreeable to
amending Clause 15.1.1 of the Facility Agreement to read as follows:

                  "the Parent shall at all times maintain a CONSOLIDATED CASH
                  BALANCE of not less than the greater of (1) USD250,000,000,
                  and (2) 1.5 times of the outstanding Capital as of any Cut-Off
                  Date under the Receivable Purchase Agreement ("RPA"). The RPA
                  refers to the existing agreement dated 15 November 2001, as
                  amended from time to time, between Maxtor Corporation, The
                  Bank of Nova Scotia (New York), other financial institutions
                  and other entities related to Maxtor Corporation. The terms
                  "Capital" and "Cut-Off Date" above shall have the same meaning
                  as defined in the RPA. If The Bank of Nova Scotia (New York)
                  ceases to be part of the RPA or if the RPA is terminated prior
                  to the expiry of the Facility, the Parent shall at all times
                  maintain a Consolidated Cash Balance of not less than
                  USD250,000,000."

and amending the definition of "CONSOLIDATED CASH BALANCE" in Clause 15.2 of the
Facility Agreement to read as follows:

                  "CONSOLIDATED CASH BALANCE is defined as the aggregate amount
                  of cash, cash equivalents & marketable securities of Maxtor
                  Corporation and its consolidated subsidiaries but excluding
                  cash deposits that are charged to the Bank under banking
                  facilities granted to the Borrower."

4. With the above amendments, the Bank Guarantee Commission Rate (for the Second
Bank Guarantee and Class A Security) as defined in Clause 1.1 of the Facility
Agreement shall be increased from 0.225% per annum to 0.275% PER ANNUM with
effect from the date of this letter. In this connection, the definition for Bank
Guarantee Commission Rate under Clause 1.1 of the Facility Agreement shall be
amended to read as follows:

                  " "BANK GUARANTEE COMMISSION RATE" means, if Class A Security
                  is in effect, (i) 0.15% per annum or (ii) in respect of the
                  Second Bank Guarantee, 0.275% per annum, and, if Class B
                  Security is in effect, the rate agreed between the Bank and
                  the Borrower, in each case, calculated on the maximum
                  outstanding liability guaranteed by the Bank pursuant to the
                  Bank Guarantee which has been issued hereunder."

5. Save for the above amendments, all other terms and conditions stipulated in
the Facility Agreement and security document stated in Paragraph 1 above shall
remain unchanged.


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6. Your Company shall execute legal documents required by the Bank (if any) to
effect the above changes and bear all legal fees incurred in connection
therewith and this Amendment Letter.

7. An Amendment Fee of US$6,500 shall be payable to the Bank upon your
acceptance of this Letter.

8. If the above are acceptable, please sign and return to us the enclosed copy
of this Amendment Letter together with your Company's Board Resolution accepting
this Amendment Letter by 30 June 2002, after which this offer shall lapse unless
an extension is granted by the Bank in writing.



Yours faithfully

/s/ Wah Sun Seong Koon

Wah Sun Seong Koon
Country Head, VP & Branch Manager
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We hereby accept and further undertake to observe all the terms and conditions
set out and incorporated in this letter.

We also hereby confirm that the existing charge over cash deposits under the
Security Over Cash Agreement dated 8 September 1999 shall continue to secure the
aforesaid all monies payable in connection with the Facility notwithstanding the
amendments set out above, or in the subsequent legal documentation (if any).

MAXTOR PERIPHERALS (S) PTE LTD

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<S>                                                       <C>
/s/ Tiong Chi Sieng
TIONG CHI SIENG
Vice President, Finance
                                                          20 June 2002
----------------------------------------------------      ---------------------
Company Stamp & Authorised Signatory(ies)                 Date
for and on behalf of Maxtor Peripherals (S) Pte Ltd.
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