EXHIBIT 10.36

 

EXECUTION VERSION

 

SANMINA-SCI CORPORATION,
HADCO CORPORATION,
HADCO SANTA CLARA, INC.,
SANMINA-SCI SYSTEMS HOLDINGS, INC.,
SCI TECHNOLOGY, INC. &
SCIMEX, INC.

 

as Borrowers,

 

SANMINA-SCI SYSTEMS (CANADA) INC. &
SCI BROCKVILLE CORP.

 

as Designated Canadian Guarantors

 

 

 

LOAN, GUARANTY AND SECURITY AGREEMENT

 

Dated as of November 19, 2008

 

$135,000,000

 

 

 

CERTAIN FINANCIAL INSTITUTIONS,

 

as Lenders,

 

BANK OF AMERICA, N.A.,

 

as Agent,

 

BANC OF AMERICA SECURITIES LLC &
DEUTSCHE BANK SECURITIES INC.

 

as Joint Lead Arrangers and Joint Book Managers

 

and

 

DEUTSCHE BANK TRUST COMPANY AMERICAS

 

as Syndication Agent

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

SECTION 1.

DEFINITIONS; RULES OF CONSTRUCTION

1

 

 

 

1.1

Definitions

1

 

 

 

1.2

Accounting Terms

34

 

 

 

1.3

Uniform Commercial Code

34

 

 

 

1.4

Certain Matters of Construction

34

 

 

 

SECTION 2.

CREDIT FACILITIES

35

 

 

 

2.1

Commitment

35

 

 

 

2.2

Letter of Credit Facility

37

 

 

 

2.3

Increase in the Aggregate Commitments

40

 

 

 

SECTION 3.

INTEREST, FEES AND CHARGES

42

 

 

 

3.1

Interest

42

 

 

 

3.2

Fees

43

 

 

 

3.3

Computation of Interest, Fees, Yield Protection

44

 

 

 

3.4

Reimbursement Obligations

44

 

 

 

3.5

Illegality

45

 

 

 

3.6

Inability to Determine Rates

45

 

 

 

3.7

Increased Costs; Capital Adequacy

45

 

 

 

3.8

Mitigation

47

 

 

 

3.9

Funding Losses

47

 

 

 

3.10

Maximum Interest

47

 

 

 

3.11

Removal or Replacement of a Lender

47

 

 

 

SECTION 4.

LOAN ADMINISTRATION

48

 

 

 

4.1

Manner of Borrowing and Funding Loans

48

 

 

 

4.2

Defaulting Lender

50

 

 

 

4.3

Number and Amount of LIBOR Loans; Determination of Rate

50

 

 

 

4.4

Borrower Agent

50

 

 

 

4.5

One Obligation

51

 

 

 

4.6

Effect of Termination

51

 

 

 

SECTION 5.

PAYMENTS

51

 

 

 

5.1

General Payment Provisions

51

 

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5.2

Repayment of Loans

51

 

 

 

5.3

Payment of Other Obligations

52

 

 

 

5.4

Marshaling; Payments Set Aside

52

 

 

 

5.5

Post-Default Allocation of Payments

52

 

 

 

5.6

Application of Payments

53

 

 

 

5.7

Loan Account; Account Stated

53

 

 

 

5.8

Taxes

54

 

 

 

5.9

Lender Tax Information

54

 

 

 

5.10

Nature and Extent of Each Borrower’s Liability

56

 

 

 

SECTION 6.

CONDITIONS PRECEDENT

58

 

 

 

6.1

Conditions Precedent to Initial Loans

58

 

 

 

6.2

Conditions Precedent to All Credit Extensions

60

 

 

 

SECTION 7.

COLLATERAL

60

 

 

 

7.1

Grant of Security Interest

60

 

 

 

7.2

Lien on Deposit Accounts; Cash Collateral

61

 

 

 

7.3

Other Collateral

62

 

 

 

7.4

No Assumption of Liability

62

 

 

 

7.5

Further Assurances

62

 

 

 

7.6

ULC Shares

62

 

 

 

SECTION 8.

COLLATERAL ADMINISTRATION

63

 

 

 

8.1

Borrowing Base Certificates

63

 

 

 

8.2

Administration of Accounts

63

 

 

 

8.3

Administration of Inventory

64

 

 

 

8.4

Administration of Deposit Accounts

65

 

 

 

8.5

General Provisions

65

 

 

 

8.6

Power of Attorney

67

 

 

 

SECTION 9.

REPRESENTATIONS AND WARRANTIES

68

 

 

 

9.1

General Representations and Warranties

68

 

 

 

9.2

Complete Disclosure

74

 

 

 

SECTION 10.

COVENANTS AND CONTINUING AGREEMENTS

75

 

 

 

10.1

Affirmative Covenants

75

 

 

 

10.2

Negative Covenants

80

 

 

 

10.3

Financial Covenant

93

 

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10.4

Post-Closing Covenants

93

 

 

 

SECTION 11.

EVENTS OF DEFAULT; REMEDIES ON DEFAULT

94

 

 

 

11.1

Events of Default

94

 

 

 

11.2

Remedies upon Default

96

 

 

 

11.3

License

97

 

 

 

11.4

Setoff

97

 

 

 

11.5

Remedies Cumulative; No Waiver

98

 

 

 

SECTION 12.

AGENT

98

 

 

 

12.1

Appointment, Authority and Duties of Agent

98

 

 

 

12.2

Agreements Regarding Collateral and Field Examination Reports

100

 

 

 

12.3

Reliance By Agent

101

 

 

 

12.4

Action Upon Default

101

 

 

 

12.5

Ratable Sharing

101

 

 

 

12.6

Indemnification of Agent Indemnitees

101

 

 

 

12.7

Limitation on Responsibilities of Agent

102

 

 

 

12.8

Successor Agent and Co-Agents

102

 

 

 

12.9

Due Diligence and Non-Reliance

103

 

 

 

12.10

Replacement of Certain Lenders

103

 

 

 

12.11

Remittance of Payments and Collections

104

 

 

 

12.12

Agent in its Individual Capacity

104

 

 

 

12.13

Agent Titles

104

 

 

 

12.14

No Third Party Beneficiaries

105

 

 

 

SECTION 13.

BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS

105

 

 

 

13.1

Successors and Assigns

105

 

 

 

13.2

Participations

105

 

 

 

13.3

Assignments

106

 

 

 

SECTION 14.

GUARANTY

106

 

 

 

14.1

Guaranty of the Obligations

106

 

 

 

14.2

Contribution by Guarantors

107

 

 

 

14.3

Payment by Guarantors

107

 

 

 

14.4

Liability of Guarantors Absolute

108

 

 

 

14.5

Waivers by Guarantors

110

 

 

 

14.6

Guarantors’ Rights of Subrogation, Contribution, Etc.

111

 

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14.7

Subordination of Other Obligations

111

 

 

 

14.8

Continuing Guaranty

112

 

 

 

14.9

Authority of Guarantors or Borrowers

112

 

 

 

14.10

Financial Condition of Borrowers

112

 

 

 

14.11

Bankruptcy, Etc.

112

 

 

 

SECTION 15.

MISCELLANEOUS

113

 

 

 

15.1

Consents, Amendments and Waivers

113

 

 

 

15.2

Indemnity

114

 

 

 

15.3

Notices and Communications

114

 

 

 

15.4

Performance of Obligors’ Obligations

115

 

 

 

15.5

Credit Inquiries

115

 

 

 

15.6

Severability

115

 

 

 

15.7

Cumulative Effect; Conflict of Terms

115

 

 

 

15.8

Counterparts

116

 

 

 

15.9

Entire Agreement

116

 

 

 

15.10

Relationship with Lenders

116

 

 

 

15.11

No Advisory or Fiduciary Responsibility

116

 

 

 

15.12

Confidentiality

116

 

 

 

15.13

Certifications Regarding Indentures

117

 

 

 

15.14

GOVERNING LAW

117

 

 

 

15.15

Consent to Forum

117

 

 

 

15.16

Waivers by Obligors

118

 

 

 

15.17

Patriot Act Notice

118

 

 

 

15.18

Judgment Currency

118

 

 

 

15.19

Language

119

 

 

 

15.20

Securitization Subsidiaries

119

 

 

 

15.21

Discharge of Obligor Upon Sale of Obligor

119

 

iv

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LIST OF EXHIBITS AND SCHEDULES

 

Exhibit A

Revolver Note

Exhibit B

Assignment and Acceptance

Exhibit C

Assignment Notice

Exhibit D

Form of Joinder Agreement

Exhibit E

Form of Lockbox Control and Intercreditor Agreement

 

Schedule 1.1(a)

Commitments of Lenders

Schedule 1.1(b)

Designated Canadian Guarantors

Schedule 2.2.4

Existing Letters of Credit

 

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LOAN, GUARANTY AND SECURITY AGREEMENT

 

THIS LOAN, GUARANTY AND SECURITY AGREEMENT (this “Agreement”) is dated as of
November 19, 2008, among SANMINA-SCI CORPORATION, a Delaware corporation
(“Sanmina”), HADCO CORPORATION, a Massachusetts corporation (“Hadco”), HADCO
SANTA CLARA, INC., a Delaware corporation (“Hadco Santa Clara”), SANMINA-SCI
SYSTEMS HOLDINGS, INC., a Delaware corporation (“SSCI Holdings”), SCI
TECHNOLOGY, INC., an Alabama corporation (“SCI Technology”), SCIMEX, INC., an
Alabama corporation (“Scimex”, and together with Sanmina, Hadco, Hadco Santa
Clara, SSCI Holdings and SCI Technology, collectively, “Borrowers”), SANMINA-SCI
SYSTEMS (CANADA) INC., a Nova Scotia limited company, and SCI BROCKVILLE CORP.,
a Nova Scotia unlimited company, each as a Designated Canadian Guarantor, the
financial institutions party to this Agreement from time to time as lenders
(collectively, “Lenders”), and BANK OF AMERICA, N.A., a national banking
association, as agent for the Lenders (“Agent”).

 

R E C I T A L S:

 

Borrowers have requested that Lenders provide a credit facility to Borrowers to
finance their mutual and collective business enterprise.  Lenders are willing to
provide the credit facility on the terms and conditions set forth in this
Agreement.

 

NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties
agree as follows:

 

A G R E E M E N T:

 

SECTION 1.                            DEFINITIONS; RULES OF CONSTRUCTION

 

1.1           Definitions.  As used herein, the following terms have the
meanings set forth below:

 

2008 Corporate Reorganization:  the corporate reorganization undertaken by
Sanmina and its Domestic Subsidiaries on or prior to the date hereof, as
described in Schedule 1.1(a) to the Disclosure Letter, and any changes or
modifications thereto with the consent of Agent (which consent will not be
unreasonably withheld or delayed).

 

2009 Corporate Reorganization:  the corporate reorganization to be undertaken by
Sanmina and its Subsidiaries, as described in Schedule 1.1(a) to the Disclosure
Letter, and any changes or modifications thereto with the consent of Agent
(which consent will not be unreasonably withheld or delayed).

 

2008/2009 Corporate Reorganizations:  the 2008 Corporate Reorganization and the
2009 Corporate Reorganization.

 

Accordion Effective Date:  as defined in Section 2.3(a).

 

Accordion Increase:  as defined in Section 2.3(a).

 

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Account:  as defined in the UCC, including all rights to payment for goods sold
or leased, or for services rendered.

 

Account Debtor:  a Person who is obligated under an Account, Chattel Paper or
General Intangible.

 

Accounts Formula Amount:  the sum of (a) 85% of the Value of Eligible Accounts
and (b) the lesser of (i) 65% of the Value of Eligible Foreign Accounts and
(ii) 7.5% of the aggregate Commitments.

 

Adjusted Availability Block:  $25,000,000.

 

Affiliate:  with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.  “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise.  “Controlling” and
“Controlled” have correlative meanings.

 

Agent Indemnitees:  Agent and its officers, directors, employees, Affiliates,
branches, agents and attorneys.

 

Agent Professionals:  attorneys, accountants, appraisers, auditors, business
valuation experts, environmental engineers or consultants, turnaround
consultants, and other professionals and experts retained by Agent.

 

Aggregate Payments:  as defined in Section 14.2.

 

Allocable Amount:  as defined in Section 5.10.3.

 

Alternate Base Rate: the greater of (i) the Base Rate and (ii) LIBOR for a 30
day Interest Period, as determined on each respective date of determination,
plus 150 basis points.

 

Anti-Terrorism Laws:  any laws relating to terrorism or money laundering,
including the Patriot Act.

 

Applicable Law:  all laws, rules, regulations and binding governmental
guidelines applicable to the Person, conduct, transaction, agreement or matter
in question, including all applicable statutory law, common law and equitable
principles, and all provisions of constitutions, treaties, statutes, rules,
regulations, orders, rulings and decrees of Governmental Authorities having
jurisdiction over such Person.

 

Applicable Margin:  with respect to any Type of Loan, as of any date, the margin
set forth below opposite the Availability Ratio for the calendar quarter
preceding such date:

 

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Level

 

Availability Ratio

 

Base Rate
Loans

 

LIBOR
Loans

 

I

 

< 25%

 

2.25

%

3.25

%

II

 

> 25% < 50%

 

2.00

%

3.00

%

III

 

> 50% < 75%

 

1.75

%

2.75

%

IV

 

>75%

 

1.50

%

2.50

%

 

Until March 31, 2009, margins shall be determined as if Level III were
applicable.  Thereafter, the margins shall be subject to increase or decrease as
of the end of each calendar quarter upon the determination by Agent of the
Availability Ratio for such calendar quarter, provided, that after receipt of a
Compliance Certificate for a particular Fiscal Quarter as provided in
Section 10.1.2, if the Fixed Charge Coverage Ratio as of the end of such Fiscal
Quarter is at least 1.00 : 1.00, each margin set forth above for the immediately
succeeding calendar quarter shall be reduced by 0.25%.

 

Approved Fund:  any Person (other than a natural person) that is engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in its ordinary course of activities, and is
administered or managed by a Lender, an entity that administers or manages a
Lender, or an Affiliate of either.

 

Asset Disposition:  a sale, lease, license, consignment, transfer or other
disposition of Property of an Obligor, including (i) a disposition of Property
in connection with a sale-leaseback transaction or synthetic lease and (ii) any
involuntary loss resulting from a casualty event or condemnation.

 

Assignment and Acceptance:  an assignment agreement between a Lender and
Eligible Assignee, in the form of Exhibit B.

 

Assuming Lender:  as defined in Section 2.3(d).

 

Assumption Agreement:  as defined in Section 2.3(d).

 

Availability:  the Borrowing Base minus the sum of the principal balance of all
Loans and LC Obligations (not to include the amount equal to LC Reserves
included in the definition of Borrowing Base).

 

Availability Block:  (i) prior to the Availability Election, $50,000,000; and
(ii) after the Availability Election, $25,000,000.

 

Availability Conditions:  as of any date and in respect of any proposed
transaction, the existence of each of the following conditions:  (a) average
Availability after giving effect to such transaction on a pro forma basis during
the preceding 30 day period is greater than or equal to $75,000,000 (provided
that up to $50,000,000 of such Availability requirement can be satisfied to the
extent of the amount of cash or Cash Equivalents held in a Cash Collateral
Account at Agent), (b) the Availability after giving effect to such transaction
on a pro forma basis is greater than or equal to $75,000,000 (provided that up
to $50,000,000 of such Availability requirement can be satisfied to the extent
of the amount of cash or Cash Equivalents held in a Cash Collateral

 

3

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Account at Agent) and (c) no Default or Event of Default exists or would result
from such transaction; provided that for the purposes of this definition, each
of the $75,000,000 Availability thresholds shall be increased to $100,000,000 if
the amount of the Commitments is increased pursuant to Section 2.3 to an
aggregate amount in excess of $250,000,000.

 

Availability Election:  the irrevocable one-time election made by written notice
from Borrower Agent to Agent stating that it elects to reduce the Availability
Block as contemplated by the definition thereof; provided, such election may be
made only within the 60-day period immediately following any two consecutive
Fiscal Quarters in respect of which the Fixed Charge Coverage Ratio is at least
1.00 : 1.00.

 

Availability Ratio: the ratio, expressed as a percentage, for any calendar
quarter, of (a) the average Availability during such quarter to (b) the average
amount of the Borrowing Base during such quarter.

 

Availability Reserve:  the sum (without duplication) of (i) the Inventory
Reserve; (ii) the Rent and Charges Reserve; (iii) the LC Reserve; (iv) the Bank
Product Reserve; (v) the aggregate amount of liabilities secured by Liens upon
Collateral that are senior to Agent’s Liens (but imposition of any such reserve
shall not waive an Event of Default arising therefrom); (vi) a reserve in
respect of Hedging Agreements with one or more Lenders or Affiliates to reflect
mark to market value risks relating thereto; (vii) Priority Payables; (viii) the
Dilution Reserve; and (ix) such additional reserves, in such amounts and with
respect to such matters, as Agent in its Credit Judgment may elect to impose
from time to time.

 

Bank of America:  Bank of America, N.A., a national banking association, and its
successors and assigns.

 

Bank of America Indemnitees:  Bank of America and its officers, directors,
employees, Affiliates, agents, branches and attorneys.

 

Bank Product:  any of the following products, services or facilities extended to
any Borrower or Subsidiary (but only to Sanmina in the case of Hedging
Agreements) by a Lender or any of its Affiliates:  (a) Cash Management Services;
(b) products under Hedging Agreements entered into by Sanmina; (c) commercial
credit card and merchant card services; and (d) other banking products or
services as may be requested by any Borrower or Subsidiary, other than Letters
of Credit; provided, however, that for any of the foregoing to be included as an
“Obligation” for purposes of a distribution under Section 5.5.1, the applicable
Secured Party and Obligor must have previously provided written notice to Agent
of (i) the existence of such Bank Product, (ii) the maximum dollar amount of
obligations arising thereunder to be included as a Bank Product Reserve (“Bank
Product Amount”), and (iii) the methodology to be used by such parties in
determining the Bank Product Debt owing from time to time.  The Bank Product
Amount may be changed from time to time upon written notice to Agent by the
Secured Party and Obligor.  No Bank Product Amount may be established or
increased at any time that a Default or Event of Default exists, or if a reserve
in such amount would cause an Overadvance.

 

Bank Product Amount:  as defined in the definition of Bank Product.

 

Bank Product Debt:  Debt and other obligations of an Obligor relating to Bank
Products.

 

4

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Bank Product Reserve:  the aggregate amount of reserves established by Agent
from time to time in its discretion in respect of Bank Product Debt, which shall
be at least equal to the sum of all Bank Product Amounts.

 

Bankruptcy Code:  Title 11 of the United States Code.

 

Base Rate:  the rate of interest announced by Bank of America from time to time
as its prime rate.  Such rate is set by Bank of America on the basis of various
factors, including its costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above or below such rate.  Any change in such rate announced
by Bank of America shall take effect at the opening of business on the day
specified in the public announcement of such change.

 

Base Rate Loan:  a Loan that bears interest based on the Alternate Base Rate.

 

Board of Governors:  the Board of Governors of the Federal Reserve System.

 

Borrowed Money:  with respect to any Person, without duplication, its (a) Debt
that (i) arises from the lending of money by any Person to such Person, (ii) is
evidenced by notes, drafts, bonds, debentures, credit documents or similar
instruments, (iii) accrues interest or is a type upon which interest charges are
customarily paid (excluding accounts payables owing in the Ordinary Course of
Business), or (iv) was issued or assumed as full or partial payment for Property
(excluding accounts payables owing in the Ordinary Course of Business);
(b) Capital Leases; (c) reimbursement obligations with respect to letters of
credit; and (d) guaranties of any Debt of the foregoing types owing by another
Person; provided that in no event shall Borrowed Money include any obligations
under or with respect to an operating lease (regardless of any change in the
treatment thereof under GAAP with respect to operating leases outstanding prior
to the effectiveness of any such change in treatment.)

 

Borrower Agent:  as defined in Section 4.4.

 

Borrowing:  a group of Loans of one Type that are made on the same day or are
converted into Loans of one Type on the same day.

 

Borrowing Base:  on any date of determination:

 

(x) prior to the Availability Election, a Dollar Equivalent amount equal to the
lesser of (a) the aggregate amount of Commitments, minus the Adjusted
Availability Block, minus the LC Reserve; or (b) the sum of the Accounts Formula
Amount, plus the Inventory Formula Amount, minus the Availability Block, minus
the Availability Reserve; and

 

(y) after the Availability Election, a Dollar Equivalent amount equal to the
lesser of (a) the aggregate amount of Commitments, minus the LC Reserve; or
(b) the sum of the Accounts Formula Amount, plus the Inventory Formula Amount,
minus the Availability Reserve, minus the Availability Block.

 

Borrowing Base Certificate:  a certificate, in form and substance satisfactory
to Agent, by which Borrower Agent certifies calculation of the Borrowing Base.

 

5

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Business Day:  any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the laws of, or are in fact
closed in, North Carolina and California, and if such day relates to a LIBOR
Loan, any such day on which dealings in Dollar deposits are conducted between
banks in the London interbank Eurodollar market.

 

Canadian Obligor:  an Obligor organized under the laws of Canada or any province
or territory thereof.

 

Canadian Plan:  any pension or other employee benefit plan and which is:  (a) a
plan maintained by any Canadian Subsidiary; (b) a plan to which any Canadian
Subsidiary contributes or is required to contribute; (c) a plan to which any
Canadian Subsidiary was required to make contributions at any time during the
five (5) calendar years preceding the date of this Agreement; or (d) any other
plan with respect to which any Canadian Subsidiary or any of its Subsidiaries or
Affiliates has incurred or may incur liability, including contingent liability
either to such plan or to any Person, administration or Governmental Authority,
including the FSCO.

 

Canadian Subsidiary:  a Subsidiary organized under the laws of Canada or any
province or territory thereof.

 

Capital Lease:  any lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.

 

Cash Collateral:  cash, and any interest or other income earned thereon, that is
delivered to Agent to Cash Collateralize any Obligations.

 

Cash Collateral Account:  a demand deposit, money market or other account
established by Agent at such financial institution as Agent may select in its
discretion, which account shall be subject to Agent’s Liens for the benefit of
Secured Parties.

 

Cash Collateralize:  the delivery of cash to Agent, as security for the payment
of Obligations, in an amount equal to (a) with respect to LC Obligations, 105%
of the aggregate LC Obligations, and (b) with respect to any inchoate,
contingent or other Obligations (including Obligations arising under Bank
Products), Agent’s good faith estimate of the amount due or to become due,
including all fees and other amounts relating to such Obligations.  “Cash
Collateralization” has a correlative meaning.

 

Cash Equivalents:  (a) securities issued or directly and fully guaranteed or
insured by (i) the United States government or any agency or instrumentality
thereof (provided that the full faith and credit of the United States of America
is pledged in support thereof), or (ii) any member of the European Economic Area
or Switzerland, or any agency or instrumentality thereof (provided that such
country, agency or instrumentality has a credit rating at least equal to that of
the United States and the full faith and credit of such country is pledged in
support thereof), in each case, with such securities having maturities of not
more than thirteen months from the date of acquisition; (b) marketable general
obligations issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof maturing
within thirteen months from the date of acquisition thereof (provided that the
full faith and credit of such state is pledged in support thereof) and, at the
time of acquisition thereof, having credit ratings of at least AA- (or the
equivalent) by S&P and at least Aa3 (or the

 

6

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equivalent) by Moody’s; (c) certificates of deposit, time deposits, eurodollar
time deposits, overnight bank deposits or bankers’ acceptances having maturities
of not more than thirteen months from the date of acquisition thereof issued by
any commercial bank organized in the United States of America, Canada, Japan or
Switzerland or any member of the European Economic Area, in each case, of
recognized standing and having combined capital and surplus in excess of
$500,000,000 (or the foreign currency equivalent thereof); (d) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clauses (a), (b) and (c) entered into with any bank
meeting the qualifications specified in clause (c) above; (e) commercial paper
having a rating at the time of acquisition thereof of at least A-1 from S&P or
at least P-1 from Moody’s or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease
publishing ratings of investments, and in any case maturing within thirteen
months after the date of acquisition thereof; (f) interests in any investment
company or money market fund substantially all of the assets of which are of the
type specified in clauses (a) through (e) above; (g) corporate obligations with
long term ratings of A or better from S&P or Moody’s, with such obligations
having maturities of not more than thirteen months from the date of acquisition;
and (h) asset backed securities rated AAA or better by S&P or Moody’s, with such
securities having maturities of not more than thirteen months from the date of
acquisition.

 

Cash Management Services:  any services provided from time to time by any Lender
or any of its Affiliates to any Borrower or Subsidiary in connection with
operating, collections, payroll, trust, or other depository or disbursement
accounts, including automated clearinghouse, e-payable, electronic funds
transfer, wire transfer, controlled disbursement, overdraft, depository,
information reporting, lockbox and stop payment services.

 

CERCLA:  the Comprehensive Environmental Response Compensation and Liability Act
(42 U.S.C. § 9601 et seq.).

 

Change in Law:  the occurrence, after the date hereof, of (a) the adoption or
taking effect of any law, rule, regulation or treaty; (b) any change in any law,
rule, regulation or treaty or in the administration, interpretation or
application thereof by any Governmental Authority; or (c) the making or issuance
of any request, guideline or directive (whether or not having the force of law)
by any Governmental Authority.

 

Change of Control:  at any time, (a) any Person or “group” (within the meaning
of Rules 13d-3 and 13d-5 under the Exchange Act) (i) shall have acquired
beneficial ownership of 35% or more on a fully diluted basis of the voting
and/or economic interest in the Equity Interests of Sanmina or (ii) shall have
obtained the power (whether or not exercised) to elect a majority of the members
of the board of directors (or similar governing body) of Sanmina; (b) during any
period of twelve (12) consecutive months, the majority of the seats (other than
vacant seats) on the board of directors (or similar governing body) of Sanmina
cease to be occupied by Persons who either (i) were members of the board of
directors of Sanmina on the Closing Date or (ii) were nominated for election by
the board of directors of Sanmina, a majority of whom were directors on the
Closing Date or whose election or nomination for election was previously
approved by a majority of such directors or directors elected in accordance with
this clause (ii); (c) any “change of control” or similar event under and as
defined in any documentation relating to any Material Indebtedness; or
(d) Sanmina ceases to own and control,

 

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beneficially and of record, directly or indirectly, all Equity Interests in all
other Borrowers (except as a result of a transaction permitted by
Section 10.2.8(i) involving the merger, amalgamation or consolidation of a
Borrower with another Borrower).

 

Claims:  all liabilities, obligations, losses, damages, penalties, judgments,
proceedings, interest, costs and expenses of any kind (including remedial
response costs, reasonable attorneys’ fees and Extraordinary Expenses) at any
time (including after Full Payment of the Obligations, resignation or
replacement of Agent, or replacement of any Lender) incurred by or asserted
against any Indemnitee in any way relating to (a) any Loans, Letters of Credit,
Loan Documents, or the use thereof or transactions relating thereto, (b) any
action taken or omitted to be taken by any Indemnitee in connection with any
Loan Documents, (c) the existence or perfection of any Liens, or realization
upon any Collateral, (d) exercise of any rights or remedies under any Loan
Documents or Applicable Law, or (e) failure by any Obligor to perform or observe
any terms of any Loan Document, in each case including all costs and expenses
relating to any investigation, litigation, arbitration or other proceeding
(including an Insolvency Proceeding or appellate proceedings), whether or not
the applicable Indemnitee is a party thereto.

 

Closing Date:  as defined in Section 6.1.

 

Code:  the Internal Revenue Code of 1986.

 

Collateral:  all Property described in Section 7.1, all Property described in
any Security Documents as security for any Obligations, and all other Property
that now or hereafter secures (or is intended to secure) any Obligations.

 

Commitment:  for any Lender, its obligation to make loans pursuant to
Section 2.1 and to participate in LC Obligations up to the maximum principal
amount shown on Schedule 1.1(a), or as hereafter determined pursuant to each
Assignment and Acceptance to which it is a party.  “Commitments” means the
aggregate amount of such commitments of all Lenders.

 

Commitment Date:  as defined in Section 2.3(b).

 

Commitment Termination Date:  the earliest to occur of (a) the Revolver
Termination Date; (b) the date on which Borrower Agent terminates the
Commitments pursuant to Section 2.1.4; or (c) the date on which the Commitments
are terminated pursuant to Section 11.2.

 

Compliance Certificate:  a certificate, in form and substance satisfactory to
Agent, by which Borrower Agent certifies compliance with Section 10.3 and
calculates the applicable Level for the Applicable Margin.

 

Consolidated Capital Expenditures:  for any period, the aggregate of all
expenditures of Sanmina 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 Sanmina and its Subsidiaries.

 

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Consolidated Tangible Foreign Assets:  as of any date of determination, the sum
of the amounts that would appear on a consolidated balance sheet of the Foreign
Subsidiaries of Sanmina as the total assets of the Foreign Subsidiaries of
Sanmina, minus the total intangible assets of the Foreign Subsidiaries of
Sanmina.

 

Contingent Obligation:  any obligation of a Person arising from a guaranty,
suretyship, indemnity or other assurance of payment or performance of any Debt,
lease, dividend or other obligation (“primary obligations”) of another obligor
(“primary obligor”) in any manner, whether directly or indirectly, including any
obligation of such Person under any (a) guaranty, endorsement (other than for
collection or deposit in the ordinary course of business), co-making or sale
with recourse of an obligation of a primary obligor; (b) obligation to make
take-or-pay or similar payments regardless of nonperformance by any other party
to an agreement; and (c) arrangement (i) to purchase any primary obligation or
security therefor, (ii) to supply funds for the purchase or payment of any
primary obligation, (iii) to maintain or assure working capital, equity capital,
net worth or solvency of the primary obligor, (iv) to purchase Property or
services for the purpose of assuring the ability of the primary obligor to
perform a primary obligation, or (v) otherwise to assure or hold harmless the
holder of any primary obligation against loss in respect thereof.  The amount of
any Contingent Obligation shall be deemed to be the stated or determinable
amount of the primary obligation (or, if less, the maximum amount for which such
Person may be liable under the instrument evidencing the Contingent Obligation)
or, if not stated or determinable, the maximum reasonably anticipated liability
with respect thereto.

 

Contributing Guarantors:  as defined in Section 14.2.

 

Convertible Indebtedness:  Debt convertible into Equity Interest of Sanmina or
any of its Subsidiaries at the option of the holder thereof.

 

Corporate Head Office Campus:  Sanmina’s head office campus located at 2700
North First Street, 2701 Zanker Road, 60 East Plumeria Drive and 30 East
Plumeria Drive, San Jose, California 95134.

 

Credit Judgment:  Agent’s reasonable credit judgment exercised in good faith,
based upon its consideration of any factor that it believes (a) could reasonably
be expected to adversely affect the quantity, quality, mix or value of
Collateral (including any Applicable Law that may inhibit collection of an
Account), the enforceability or priority of Agent’s Liens, or the amount that
Agent and Lenders could receive in liquidation of any Collateral; (b) suggests
that any collateral report or financial information delivered by any Obligor is
incomplete, inaccurate or misleading in any material respect; (c) materially
increases the likelihood of any Insolvency Proceeding involving an Obligor; or
(d) creates or could reasonably be expected to result in a Default or Event of
Default.  In exercising such judgment, Agent may consider any factors that could
reasonably be expected to increase the credit risk of lending to Borrowers on
the security of the Collateral, including any facts arising in any Collateral
review done from time to time.

 

CWA:  the Clean Water Act (33 U.S.C. §§ 1251 et seq.).

 

Debt:  as applied to any Person, without duplication, (a) all items that would
be included as liabilities on a balance sheet in accordance with GAAP, including
Capital Leases, but

 

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excluding accounts payables incurred and being paid in the Ordinary Course of
Business; (b) all Contingent Obligations where the primary obligation associated
therewith would constitute Debt under this definition; (c) all reimbursement
obligations in connection with letters of credit issued for the account of such
Person; and (d) in the case of a Borrower, the Obligations.  The Debt of a
Person shall include any recourse Debt of any partnership in which such Person
is a general partner or joint venturer.

 

Default:  an event or condition that, with the lapse of time or giving of
notice, would constitute an Event of Default.

 

Default Rate:  for any Obligation (including, to the extent permitted by law,
interest not paid when due), 2% plus the interest rate otherwise applicable
thereto.

 

Defaulting Agent: an Agent with respect to which any one or more of the
following has occurred: (a) Agent has failed to meet any of its funding or
settlement obligations pursuant to this Agreement, and such failure has
continued for at least five consecutive Business Days; or (b) Agent is under
receivership by the applicable state or federal regulatory authority.

 

Defaulting Lender:  any Lender that (a) fails to make any payment or provide
funds to Agent or any Borrower as required hereunder or fails otherwise to
perform its obligations under any Loan Document, and such failure is not cured
within one Business Day, or (b) is the subject of any Insolvency Proceeding.

 

Deposit Account Control Agreements:  the Deposit Account control agreements to
be executed by each institution maintaining a Deposit Account for a Borrower or
a Designated Canadian Guarantor, in favor of Agent, for the benefit of Secured
Parties, as security for the Obligations.

 

Designated Canadian Guarantor:  any Canadian Subsidiary of Sanmina which is a
Guarantor, whose assets are included in the Borrowing Base and which is listed
on Schedule 1.1(b) hereto as a Designated Canadian Guarantor, as such Schedule
is amended from time to time by notice from Borrower Agent to Agent.

 

Dilution Percent:  the percent, determined for Borrowers’ most recent Fiscal
Quarter, equal to (a) bad debt write-downs or write-offs, discounts, returns,
promotions, credits, credit memos and other dilutive items with respect to
Accounts of the Obligors, divided by (b) gross sales of the Obligors.

 

Dilution Reserve:  a reserve against the Accounts Formula Amount in an amount
equal to 1% for each whole percentage (or portion thereof) that the Dilution
Percent exceeds 5%.

 

Disclosure Letter:  the disclosure letter of Borrowers to Agent and the Lenders
with respect to this Agreement, dated the Closing Date.

 

Distribution:  any declaration or payment of a distribution, interest or
dividend on any Equity Interest (other than payment-in-kind, including a
dividend payable solely in shares of stock or the distribution of non-cash
rights in connection with any stockholder rights plan); or any purchase,
redemption, or other acquisition or retirement for value of any Equity Interest.

 

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Dollar Equivalent:  of any amount means, at the time of determination thereof,
(a) if such amount is expressed in Dollars, such amount, (b) if such amount is
expressed in Canadian Dollars or any other currency (other than Dollars), the
equivalent of such amount in Dollars determined by using the mid-range rate of
exchange quoted by the Wall Street Journal for Dollars or such alternative
currency, as applicable, under its “Exchange Rates” column on the Business Day
preceding the date of determination and (c) if such amount is denominated in any
other currency, the equivalent of such amount in Dollars as determined by Agent
using any method of determination it reasonably deems appropriate; provided,
however, if such amount is expressed in an alternative currency (other than
Dollars) and such amount relates to the issuance of a Letter of Credit by any
Issuing Bank, the “Dollar Equivalent” shall mean the equivalent of such amount
in Dollars as determined by such Issuing Bank using any customary method of
determination it reasonably deems appropriate.

 

Dollars:  lawful money of the United States of America.

 

Domestic Subsidiary:  any Subsidiary organized under the laws of the United
States of America, any State thereof or the District of Columbia.

 

Dominion Account:  a special account established by Borrowers and Designated
Canadian Guarantors at Bank of America, its Affiliates or branches or another
bank acceptable to Agent, over which Agent has exclusive control for withdrawal
purposes, including each Lockbox Cash Collateral Account as provided in
Section 8.2.4.

 

EBITDA:  for any period, an amount determined for Sanmina and its Subsidiaries
on a consolidated basis in accordance with GAAP equal to the amount equal to the
sum of the following:  (a) Net Income; plus (b) to the extent deducted in the
calculation of Net Income:  (i) Taxes, whether paid or deferred, (ii) Net
Interest Expense, (iii) amortization, (iv) depreciation, (v) other non-cash
charges for such period including, without limitation, goodwill, restructuring
charges, non-cash charges arising from the 2008/2009 Corporate Reorganizations,
non-cash charges arising from the accelerated recognition of pension expenses
previously deferred under FAS 87/88, cumulative translation adjustments arising
from the liquidation of Subsidiaries, financing costs and expenses, fixed asset
and other intangibles impairment; provided that any cash payments made in any
future period in respect of such charges shall be subtracted from EBITDA in the
period when such payments are made and (vi) any non-cash charges associated with
the recognition of fair value of stock options and other equity-based
compensation issued to employees which have been expensed in Sanmina’s statement
of operations for such period; minus (c) pension related payments or
contributions for such period in excess of the related charges or expenses
reflected on the income statement for such period.

 

Eligible Account:  an Account owing to a Borrower or a Designated Canadian
Guarantor that arises in the Ordinary Course of Business consistent with past
practices from the sale of goods or rendition of services, is payable in Dollars
and is deemed by Agent, in its Credit Judgment, to be an Eligible Account;
provided that Agent shall not establish any criteria for excluding Accounts from
Eligible Accounts other than those set forth below unless Agent shall have given
Borrower Agent at least three Business Days prior notice of Agent’s intention to
establish such criteria (including an explanation as to the reasons that Agent
has determined in its Credit Judgment that such criteria are appropriate). 
Without limiting the foregoing, no Account

 

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shall be an Eligible Account if (a) it is unpaid for more than 60 days after the
original due date, or more than 90 days after the original invoice date; (b) 50%
or more of the Accounts owing by the Account Debtor are not Eligible Accounts
under the foregoing clause; (c) when aggregated with other Accounts owing by the
Account Debtor, it exceeds 15% of the aggregate Eligible Accounts (or such
higher percentage as Agent may establish for the Account Debtor from time to
time); (d) it does not conform with a covenant or representation herein; (e) it
is owing by a creditor or supplier, or is otherwise subject to a potential
offset, counterclaim, dispute, deduction, discount, recoupment, reserve,
defense, chargeback, credit or allowance (but ineligibility shall be limited to
the amount thereof); (f) an Insolvency Proceeding has been commenced by or
against the Account Debtor (or, to the best of such Borrower or Designated
Canadian Guarantor’s knowledge, the Controlling Affiliate thereof); or the
Account Debtor (or, to the best of such Borrower or Designated Canadian
Guarantor’s knowledge, such Controlling Affiliate) has failed, has suspended or
ceased doing business, is liquidating, dissolving or winding up its affairs, or
is not Solvent; or the Borrower is not able to bring suit or enforce remedies
against the Account Debtor through judicial process; (g) the Account Debtor is
organized or has its principal offices or assets outside the United States of
America or Canada except to the extent such account is secured or payable by a
letter of credit in form and substance satisfactory to Agent; (h) it is owing by
a Government Authority, unless the Account Debtor is the United States or any
department, agency or instrumentality thereof and the Account has been assigned
to Agent in compliance with the Assignment of Claims Act; (i) it is not subject
to a duly perfected, first priority Lien in favor of Agent, or is subject to any
other Lien other than a Permitted Lien referred to in Section 10.2.2(a), (c),
(d), (g) and Section 10.2.1(s); (j) the goods giving rise to it have not been
delivered to and accepted by the Account Debtor, the services giving rise to it
have not been accepted by the Account Debtor, or it otherwise does not represent
a final sale; (k) it is evidenced by Chattel Paper or an Instrument of any kind,
or has been reduced to judgment; (l) its payment has been extended, the Account
Debtor has made a partial payment, or it arises from a sale on a
cash-on-delivery basis; (m) it arises from a sale to an Affiliate, from a sale
on a bill-and-hold, guaranteed sale, sale-or-return, sale-on-approval,
consignment, or other repurchase or return basis, or from a sale to a Person for
personal, family or household purposes; (n) it represents an inventory price
adjustment, a purchase price variance pass-through, a progress billing, a
prepayment, an accrual, a deposit, a refund, an invoice with terms in excess of
90 days, a residual invoice, a short payment, unearned revenue or retainage;
(o) it includes a billing for interest, fees or late charges, but ineligibility
shall be limited to the extent thereof; or (p) it arises from a sale to an
Account Debtor listed on Schedule 1.1 to the Disclosure Letter, as such Schedule
may be amended from time to time as contemplated by the definition of
“Receivables Purchase Facility”.

 

Eligible Assignee:  a Person that is (a) a Lender, U.S.-based Affiliate of a
Lender or Approved Fund; (b) any other financial institution approved by Agent
and Borrower Agent (which approval by Borrower Agent shall not be unreasonably
withheld or delayed, and shall be deemed given if no objection is made within
three Business Days after notice of the proposed assignment), that is organized
under the laws of the United States or any state or district thereof, has total
assets in excess of $5 billion, extends asset-based lending facilities in its
ordinary course of business and whose becoming an assignee would not constitute
a prohibited transaction under Section 4975 of the Code or any other Applicable
Law; and (c) during any Event of Default, any Person acceptable to Agent in its
discretion other than an Obligor, or an Affiliate or Senior Officer of an
Obligor.

 

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Eligible Foreign Account:  an Account from a Foreign Account Debtor that meets
the criteria of an “Eligible Account” (other than clause (g) thereof) and is
otherwise acceptable to Agent.

 

Eligible Inventory:  Inventory owned by a Borrower or by a Designated Canadian
Guarantor that Agent, in its Credit Judgment, deems to be Eligible Inventory;
provided that Agent shall not establish any criteria for excluding Inventory
from Eligible Inventory other than those set forth below unless Agent shall have
given Borrower Agent at least three Business Days prior notice of Agent’s
intention to establish such criteria (including an explanation as to the reasons
that Agent has determined in its Credit Judgment that such criteria are
appropriate).  Without limiting the foregoing, no Inventory shall be Eligible
Inventory unless it (a) is finished goods or raw materials, and not
work-in-process, packaging or shipping materials, labels, samples, display
items, bags, replacement parts or manufacturing supplies; (b) is not held on
consignment, nor subject to any deposit or downpayment; (c) is in new and
saleable condition and is not damaged, defective, shopworn or otherwise unfit
for sale; (d) is not slow-moving, obsolete or unmerchantable, and does not
constitute returned or repossessed goods, it being understood that:  (x) the
Borrowers and any Designated Canadian Guarantor’s general ledger “Obsolete and
Excess Reserves” shall be deemed to be ineligible; and (y) all inventory in
excess of the related customer-provided 90-day forecast that is not included in
the foregoing clause (d)(x) or any other borrowing base ineligible category
shall be deemed ineligible; (e) meets all standards imposed by any Governmental
Authority, and does not constitute hazardous materials under any applicable
Environmental Law (excluding, however, electronic products and components which
contain hazardous materials but which are still in compliance in all material
respects with Applicable Law); (f) conforms with the covenants and
representations herein; (g) is subject to Agent’s duly perfected, first priority
Lien, and no other Lien other than a Permitted Lien referred to in
Section 10.2.2(a), (c), (d), (f), (g), (m), (v) and Section 10.2.1(s); (h) is
within the continental United States or Canada, is not in transit except between
locations of Borrowers and Designated Canadian Guarantors, and is not consigned
to any Person; (i) is not subject to any warehouse receipt or negotiable
Document; (j) is not subject to any License or other arrangement that restricts
such Borrower’s, Designated Canadian Guarantor’s or Agent’s right to dispose of
such Inventory, unless Agent has received an appropriate Lien Waiver; (k) is not
located on leased premises or in the possession of a warehouseman, processor,
repairman, mechanic, shipper, freight forwarder or other Person, unless the
lessor or such Person has delivered a Lien Waiver or an appropriate Rent and
Charges Reserve has been established; and (l) is reflected in the details of a
current perpetual inventory report.

 

Enforcement Action:  any action to enforce any Obligations or Loan Documents or
to realize upon any Collateral (whether by judicial action, self-help,
notification of Account Debtors, exercise of setoff or recoupment, or
otherwise).

 

Environmental Laws:  all Applicable Laws (including all programs, permits and
guidance promulgated by regulatory agencies having the force of law), relating
to the protection or pollution of the environment or exposure of any individual
to hazardous materials, including CERCLA, RCRA and CWA.

 

Environmental Notice:  a notice (whether written or oral) from any Governmental
Authority or other Person of any possible noncompliance with, investigation of a
possible

 

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violation of, litigation relating to, or potential fine or liability under any
Environmental Law, or with respect to any Environmental Release, a notice of
environmental pollution or hazardous materials, including any complaint,
summons, citation, order, claim, demand or request for correction, remediation
or otherwise.

 

Environmental Release:  a “release” as defined in CERCLA or under any other
applicable Environmental Law.

 

Equity Interest:  the interest of any (a) shareholder in a corporation;
(b) partner in a partnership (whether general, limited, limited liability,
unlimited liability or joint venture); (c) member in a limited liability or
unlimited liability company; or (d) any other Person having any other form of
equity security or ownership, but excluding any debt security or debt instrument
convertible into or exchangeable for any equity security or ownership interest.

 

ERISA:  the Employee Retirement Income Security Act of 1974.

 

ERISA Affiliate:  any trade or business (whether or not incorporated) under
common control with an Obligor within the meaning of Section 414(b) or (c) of
the Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).

 

ERISA Event:  (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by any Obligor or ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by any Obligor or ERISA Affiliate from a Multiemployer Plan
or notification that a Multiemployer Plan is in reorganization; (d) the filing
of a notice of intent to terminate, the treatment of a Plan amendment as a
termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) any Obligor or ERISA Affiliate fails to meet any funding obligations with
respect to any Pension Plan or Multiemployer Plan, or requests a minimum funding
waiver; (f) an event or condition which constitutes grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Pension Plan or Multiemployer Plan; or (g) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon any Obligor or ERISA Affiliate.

 

Event of Default:  as defined in Section 11.

 

Excess Availability:  the positive amount by which (a) the sum of the Accounts
Formula Amount plus the Inventory Formula Amount exceeds (b) the aggregate
amount of the Commitments minus the LC Reserve.

 

Exchange Act:  the Securities Exchange Act of 1934, as amended from time to
time, and any successor statute.

 

Excluded Tax:  with respect to Agent, any Lender, Issuing Bank or any other
recipient of a payment to be made by or on account of any Obligation, (a) Taxes
imposed on or measured by

 

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its overall net income (however denominated), and franchise taxes imposed on it
(in lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the laws of which such recipient is organized or in which its
principal office is located, or in the case of any Lender, in which its
applicable Lending Office is located or with which it has a present or former
connection (other than any such connection arising from having executed,
delivered or performed its obligations or received payment under, or enforced
any Loan Document); (b) any branch profits taxes imposed by the United States or
any similar tax imposed by any other jurisdiction in which any Borrower is
located; (c) any backup withholding tax required by the Code to be withheld from
amounts payable to a Lender that has failed to comply with Section 5.9; and
(d) in the case of a Foreign Lender, any withholding tax that is (i) required
pursuant to laws in force at the time such Lender becomes a Lender (or
designates a new Lending Office) hereunder, or (ii) attributable to such
Lender’s failure or inability (other than as a result of a change in law after
the date such Lender becomes a Lender) to comply with Section 5.9, except in
either case to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new Lending Office (or assignment), to
receive additional amounts from the Obligors with respect to such withholding
tax.

 

Existing Letter of Credit:  the letters of credit referred to on Schedule 2.2.4.

 

Extraordinary Expenses:  all costs, expenses or advances that Agent or any
Lender may incur during a Default or Event of Default, or during the pendency of
an Insolvency Proceeding of an Obligor, including those relating to (a) any
audit, inspection, repossession, storage, repair, appraisal, insurance,
manufacture, preparation or advertising for sale, sale, collection, or other
preservation of or realization upon any Collateral; (b) any action, arbitration
or other proceeding (whether instituted by or against Agent, any Lender, any
Obligor, any representative of creditors of an Obligor or any other Person) in
any way relating to any Collateral (including the validity, perfection, priority
or avoidability of Agent’s Liens with respect to any Collateral), Loan
Documents, Letters of Credit or Obligations, including any lender liability or
other Claims; (c) the exercise, protection or enforcement of any rights or
remedies of Agent in, or the monitoring of, any Insolvency Proceeding;
(d) settlement or satisfaction of any taxes, charges or Liens with respect to
any Collateral; (e) any Enforcement Action; (f) negotiation and documentation of
any modification, waiver, workout, restructuring or forbearance with respect to
any Loan Documents or Obligations; and (g) Protective Advances.  Such costs,
expenses and advances include transfer fees, Other Taxes, storage fees,
insurance costs, permit fees, utility reservation and standby fees, legal fees,
appraisal fees, brokers’ fees and commissions, auctioneers’ fees and
commissions, accountants’ fees, wages and salaries paid to employees of any
Obligor or independent contractors in liquidating any Collateral, and travel
expenses.

 

Fair Share:  as defined in Section 14.2.

 

Fair Share Contribution Amount:  as defined in Section 14.2.

 

Fair Share Shortfall:  as defined in Section 14.2.

 

Fee Letter:  the fee letter agreement, dated November 19, 2008, among Agent, the
Lead Arrangers and Borrower Agent.

 

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First Tier Foreign Subsidiary:  at any date of determination, a Foreign
Subsidiary in which Sanmina or any Domestic Subsidiary (or any combination
thereof) owns directly more than 50%, in the aggregate, of the Equity Interests
of such Subsidiary.

 

Fiscal Month:  a fiscal month of any Fiscal Quarter.

 

Fiscal Quarter:  a fiscal quarter of any Fiscal Year.

 

Fiscal Year:  the fiscal year of Borrowers and Subsidiaries for accounting and
tax purposes, ending on the Saturday nearest September 30 of each year.

 

Fixed Charge Coverage Ratio:  the ratio, determined on a consolidated basis for
Sanmina and its Subsidiaries for the most recent four Fiscal Quarters then
ended, of (a) EBITDA minus Consolidated Capital Expenditures (except those
financed with Borrowed Money other than Loans), to (b) Fixed Charges.

 

Fixed Charges:  the sum of interest expense paid (other than payment-in-kind),
scheduled principal payments made on Borrowed Money, Distributions made
(excluding any Distributions made:  (i) by any Borrower to any other Borrower or
(ii) by any Subsidiary to any Borrower or to any other Subsidiary, but, for the
avoidance of doubt, including that portion of any Distribution which is not paid
to any Subsidiary or Borrower) and cash Taxes paid, net of cash refunds
received; provided, that for purposes of the calculation of the Fixed Charge
Coverage Ratio, the sum of such Taxes paid net of cash refunds received shall
not be less than zero.

 

FLSA:  the Fair Labor Standards Act of 1938.

 

Foreign Account Debtors:  an Account Debtor that is organized or has its
principal offices or assets outside the United States of America or Canada and
whose corporate credit rating is not less than BB- and Ba3 from S&P and Moody’s,
respectively, or, if applicable, the corporate credit rating of its controlling
Affiliate is not less than BB- and Ba3 from S&P and Moody’s, respectively.

 

Foreign Lender:  any Lender that is organized under the laws of a jurisdiction
other than the laws of the United States of America, or any state or district
thereof.

 

Foreign Plan:  any employee benefit plan or arrangement (a) maintained or
contributed to by any Obligor or Subsidiary that is not subject to the laws of
the United States of America; or (b) mandated by a government other than the
United States for employees of any Obligor or Subsidiary, other than a Canadian
Plan.

 

Foreign Securitization Facilities:  a non-recourse (other than limited,
customary provisions for recourse) securitization facility pursuant to which a
non-Obligor Subsidiary of Sanmina sells, assigns, conveys, contributes to
capital or otherwise transfers its receivables (including notes, chattel paper,
accounts, instruments and general intangibles consisting of rights to payment),
together with any Related Assets, to a Securitization Subsidiary.

 

Foreign Subsidiary:  a Subsidiary (excluding any Designated Canadian Guarantor)
that is a “controlled foreign corporation” under Section 957 of the Code.

 

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FSCO:  the Financial Services Commission of Ontario and any Person succeeding to
the functions thereof and includes the Superintendent under such statute and any
other Governmental Authority empowered or created by the Supplemental Pension
Plans Act (Québec) or the Pension Benefits Act (Ontario) or any Governmental
Authority of any other Canadian jurisdiction exercising similar functions in
respect of any Canadian Plan of the Borrower or any of its Subsidiaries or
Affiliates and any Governmental Authority succeeding to the functions thereof.

 

Full Payment:  with respect to any Obligations, (a) the full and indefeasible
cash payment thereof, including any interest, fees and other charges accruing
during an Insolvency Proceeding (whether or not allowed in the proceeding);
(b) if such Obligations are LC Obligations, Cash Collateralization thereof (or
delivery of a standby letter of credit acceptable to Agent in its discretion, in
the amount of required Cash Collateral); (c) a release of any Claims of Obligors
against Agent, Lenders and Issuing Bank arising on or before the payment date;
(d) adequate provision (as determined by Agent in its reasonable judgment)
having been made for the repayment of all Obligations inchoate or contingent in
nature related to the provisional application of collections to the Loan
Account, including the amount of any automated clearinghouse transfers and the
full face amount of any check or other instrument that may be dishonored or
returned or that remain unpaid for any reason, plus any bank charges and all
other reasonable costs that may be incurred by Agent or any Lender or that may
otherwise arise as a result of any such dishonor or return; and (e) adequate
provision (as determined by Agent in its reasonable judgment) having been made
for any claims against any Indemnitee that have been asserted or threatened in
writing or that can otherwise reasonably be identified by Agent based on the
then-known facts and circumstances.  No Loans shall be deemed to have been paid
in full until all Commitments related to such Loans have expired or been
terminated.

 

Funding Guarantor:  as defined in Section 14.2.

 

GAAP:  generally accepted accounting principles in effect in the United States
from time to time.

 

Governmental Approvals:  all authorizations, consents, approvals, licenses and
exemptions of, registrations and filings with, and required reports to, all
Governmental Authorities.

 

Governmental Authority:  any federal, state, provincial, territorial, municipal,
foreign or other governmental department, agency, commission, board, bureau,
court, tribunal, instrumentality, political subdivision, or other entity or
officer exercising executive, legislative, judicial, regulatory or
administrative functions for or pertaining to any government or court, in each
case whether associated with the United States, a state, district or territory
thereof, Canada, or a province or territory thereof, or any other foreign entity
or government.

 

Guaranteed Obligations:  as defined in Section 14.1.

 

Guarantor Payment:  as defined in Section 5.10.3.

 

Guarantors:  each existing and future direct and indirect wholly-owned Domestic
Subsidiary and each Designated Canadian Guarantor, except (i) Sanmina-SCI
Netherlands

 

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Holdings LLC, (ii) any Domestic Subsidiary owned by a Foreign Subsidiary and
(iii) any Securitization Subsidiary.

 

Guaranty:  each guaranty executed by a Guarantor in favor of Agent, including
the Guaranty set forth in Section 14.

 

Hedging Agreement:  an agreement relating to any swap, cap, floor, collar,
option, forward, cross right or obligation, or combination thereof or similar
transaction, with respect to interest rate, foreign exchange, currency,
commodity, credit or equity risk.

 

Increasing Lender:  as defined in Section 2.3(b).

 

Indemnified Taxes:  Taxes other than Excluded Taxes.

 

Indemnitees:  Agent Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees
and Bank of America Indemnitees.

 

Indentures:  the Senior Subordinated Indentures and the Senior Indentures.

 

Insignificant Subsidiary: (a) with respect to Section 10.1.9, a Subsidiary that
has assets with a book value not in excess of $5,000,000; and (b) with respect
to Section 11.1(j), a Foreign Subsidiary that has assets with a book value not
in excess of $10,000,000.

 

Insolvency Proceeding:  any case or proceeding commenced by or against a Person
under any state, provincial, territorial, federal or foreign law for, or any
agreement of such Person to, (a) the entry of an order for relief under the
Bankruptcy Code, or the commencement of any proceeding under the Bankruptcy and
Insolvency Act (Canada) or the Companies’ Creditors Arrangement Act (Canada) or
any other insolvency, debtor relief or debt adjustment law; (b) the appointment
of a receiver, interim receiver, receiver-manager, monitor, trustee, liquidator,
administrator, conservator or other custodian for such Person or any part of its
Property under any bankruptcy or insolvency law; or (c) an assignment or trust
mortgage for the benefit of creditors under any bankruptcy or insolvency law.

 

Intellectual Property:  all intellectual and similar Property of a Person,
including inventions, designs, patents, copyrights, trademarks, service marks,
trade names, trade secrets, confidential or proprietary information, customer
lists, know-how, software and databases; all embodiments or fixations thereof
and all related documentation, applications, registrations and franchises; all
licenses or other rights to use any of the foregoing; and all books and records
relating to the foregoing.

 

Intellectual Property Claim:  any claim or assertion (whether in writing, by
suit or otherwise) that a Borrower’s or Subsidiary’s ownership, use, marketing,
sale or distribution of any Inventory, Equipment, Intellectual Property or other
Property violates another Person’s Intellectual Property.

 

Interco Subordination Agreement:  the Interco Subordination Agreement dated as
of the date hereof among the Obligors, each Subsidiary that may from time to
time become a payee on

 

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any Intercompany Debt owed by an Obligor, Agent, and the other parties thereto,
as it may be amended, supplemented or otherwise modified from time to time.

 

Intercompany Debt:  Debt (whether or not evidenced by a writing) of Sanmina or
any of its Subsidiaries payable to, as applicable, Sanmina or any of its
Subsidiaries.

 

Interest Expense:  for any period, total interest expense (including that
portion attributable to Capital Leases in accordance with GAAP and capitalized
interest) of Sanmina and its Subsidiaries on a consolidated basis with respect
to all outstanding Debt of Sanmina and its Subsidiaries, including all
commissions, discounts and other fees, charges owed with respect to letters of
credit and net costs under Interest Rate Agreements.

 

Interest Period:  as defined in Section 3.1.3.

 

Interest Rate Agreement:  any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedging agreement or
other similar agreement or arrangement, each of which is for the purpose of
managing the interest rate exposure or interest rate risk associated with
Sanmina’s and its Subsidiaries’ operations and not for speculative purposes.

 

Inventory:  as defined in the UCC, including all goods intended for sale, lease,
display or demonstration; all work in process; and all raw materials, and other
materials and supplies of any kind that are or could be used in connection with
the manufacture, printing, packing, shipping, advertising, sale, lease or
furnishing of such goods, or otherwise used or consumed in the business of a
Borrower or Designated Canadian Guarantor, respectively (but excluding
Equipment).

 

Inventory Formula Amount:  the lesser of (I) the sum of (a) the lesser of (i) up
to 35% of the Value of raw materials Eligible Inventory of the Borrowers and the
Designated Canadian Guarantors and (ii) up to 85% of the NOLV Percentage of the
Value of such raw materials Eligible Inventory and (b) the lesser of (i) up to
35% of the Value of finished goods Eligible Inventory of the Borrowers and the
Designated Canadian Guarantors and (ii) up to 85% of the NOLV Percentage of the
Value of such finished goods Eligible Inventory and (II) 20% of the aggregate
Commitments.

 

Inventory Reserve:  reserves established by Agent to reflect factors that may
negatively impact the Value of Inventory, including change in salability,
obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or
mix, markdowns, warranty and vendor chargebacks.

 

Investment:  any acquisition of all or substantially all assets of a Person; any
acquisition of record or beneficial ownership of any Equity Interests of a
Person; or any advance or capital contribution to or other investment in a
Person.  For purposes of calculation, the amount of any Investment outstanding
at any time shall be the aggregate amount of such Investment less all cash
dividends and cash distributions received by such Person thereon (or in the case
of noncash dividends and distributions received by such Person, the amount of
cash received in respect thereof when and if converted into cash).

 

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IRS:  the United States Internal Revenue Service.

 

Issuing Bank:  Deutsche Bank Trust Company Americas, as an issuing bank of one
or more Existing Letters of Credit, and Bank of America or an Affiliate or
branch of Bank of America.

 

Issuing Bank Indemnitees:  Issuing Bank and its officers, directors, employees,
Affiliates, branches, agents and attorneys.

 

LC Application:  an application by Borrower Agent to Issuing Bank for issuance
of a Letter of Credit, in form and substance satisfactory to Issuing Bank.

 

LC Conditions:  the following conditions necessary for issuance of a Letter of
Credit:  (a) each of the conditions set forth in Section 6; (b) after giving
effect to such issuance, total LC Obligations do not exceed the Letter of Credit
Subline, no Overadvance exists and, if no Loans are outstanding, the LC
Obligations do not exceed the Borrowing Base (without giving effect to the LC
Reserve for purposes of this calculation); (c) the expiration date of such
Letter of Credit is (i) no more than 365 days from issuance, in the case of
standby Letters of Credit, (ii) no more than 120 days from issuance, in the case
of documentary Letters of Credit, and (iii) at least 20 Business Days prior to
the Fifth Anniversary of the Closing Date; (d) the Letter of Credit and payments
thereunder are denominated in Dollars; and (e) the form of the proposed Letter
of Credit is satisfactory to Agent and Issuing Bank in their discretion.

 

LC Documents:  all documents, instruments and agreements (including LC Requests
and LC Applications) delivered by Borrowers or any other Person to Issuing Bank
or Agent in connection with issuance, amendment or renewal of, or payment under,
any Letter of Credit.

 

LC Obligations:  the sum (without duplication) of (a) all amounts owing by
Borrowers for any drawings under Letters of Credit; (b) the stated amount of all
outstanding Letters of Credit; and (c) all fees and other amounts owing with
respect to Letters of Credit.

 

LC Request:  a request for issuance of a Letter of Credit, to be provided by
Borrower Agent to Issuing Bank, in form satisfactory to Agent and Issuing Bank.

 

LC Reserve:  the aggregate of all LC Obligations, other than (a) those that have
been Cash Collateralized; and (b) if no Default or Event of Default exists,
those constituting charges owing to the Issuing Bank.

 

Lead Arrangers:  Banc of America Securities LLC and Deutsche Bank Securities
Inc.

 

Lender Counterparty:  each Lender or any Affiliate of a Lender counterparty to a
Hedging Agreement (including any Person who is a Lender as of the Closing Date
but subsequently, whether before or after entering into a Hedging Agreement,
ceases to be a Lender).

 

Lender Indemnitees:  Lenders and their officers, directors, employees,
Affiliates, branches, agents and attorneys.

 

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Lenders:  as defined in the preamble to this Agreement, including Agent in its
capacity as a provider of Swingline Loans and any other Person who hereafter
becomes a “Lender” pursuant to an Assignment and Acceptance or an Assumption
Agreement.

 

Lending Office:  the office designated as such by the applicable Lender at the
time it becomes party to this Agreement or thereafter by notice to Agent and
Borrower Agent.

 

Letter of Credit:  any standby or documentary letter of credit issued by Issuing
Bank for the account of a Borrower, or any indemnity, guarantee, exposure
transmittal memorandum or similar form of credit support issued by Agent or
Issuing Bank for the benefit of a Borrower and shall include the existing
Letters of Credit.

 

Letter of Credit Subline:  $50,000,000; provided, that if the aggregate amount
of the Commitments is greater than $250,000,000, “Letter of Credit Subline”
shall mean $100,000,000.

 

LIBOR:  for any Interest Period with respect to a LIBOR Loan, the per annum rate
of interest (rounded upward, if necessary, to the nearest 1/100th of 1%),
determined by Agent at approximately 11:00 a.m. (London time) two Business Days
prior to commencement of such Interest Period, for a term comparable to such
Interest Period, equal to (a) the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source
designated by Agent); or (b) if BBA LIBOR is not available for any reason, the
interest rate at which Dollar deposits in the approximate amount of the LIBOR
Loan would be offered by Bank of America’s London branch to major banks in the
London interbank Eurodollar market.  If the Board of Governors imposes a Reserve
Percentage with respect to LIBOR deposits, then LIBOR shall be the foregoing
rate, divided by 1 minus the Reserve Percentage.

 

LIBOR Loan:  a Loan that bears interest based on LIBOR.

 

License:  any license or agreement under which an Obligor is authorized to use
Intellectual Property in connection with any manufacture, marketing,
distribution or disposition of Collateral, any use of Property or any other
conduct of its business.

 

Licensor:  any Person from whom an Obligor obtains the right to use any
Intellectual Property.

 

Lien:  any Person’s interest in Property securing an obligation owed to, or a
claim by, such Person, whether such interest is based on common law, statute or
contract, including liens, security interests, pledges, hypothecations,
statutory trusts, reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, conditional sales, restrictions, leases,
leasings, and other title exceptions and encumbrances affecting Property.

 

Lien Waiver:  an agreement, in form and substance reasonably satisfactory to
Agent, by which (a) for any material Collateral located on leased premises, the
lessor waives or subordinates any Lien it may have on the Collateral, and agrees
to permit Agent to enter upon the premises and remove the Collateral or to use
the premises to store or dispose of the Collateral; (b) for any Collateral held
by a warehouseman, processor, shipper, customs broker or freight forwarder, such
Person waives or subordinates any Lien it may have on the Collateral, agrees to
hold any Documents in its possession relating to the Collateral as agent for
Agent, and agrees to

 

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deliver the Collateral to Agent upon request; (c) for any Collateral held by a
repairman, mechanic or bailee, such Person acknowledges Agent’s Lien, waives or
subordinates any Lien it may have on the Collateral, and agrees to deliver the
Collateral to Agent upon request; and (d) for any Collateral subject to a
Licensor’s Intellectual Property rights, the Licensor grants to Agent the right,
vis-à-vis such Licensor, to enforce Agent’s Liens with respect to the
Collateral, including the right to dispose of it with the benefit of the
Intellectual Property, whether or not a default exists under any applicable
License.

 

Loan:  a loan made pursuant to Section 2.1, and any Swingline Loan, Overadvance
Loan or Protective Advance.

 

Loan Account:  the loan account established by each Lender on its books pursuant
to Section 5.7.

 

Loan Documents:  this Agreement, Other Agreements and Security Documents.

 

Loan Year:  each 12 month period commencing on the Closing Date and on each
anniversary of the Closing Date.

 

Lockbox Cash Collateral Account: a Cash Collateral Account that has been
designated a “lockbox account” by the Borrower Agent.

 

Margin Stock:  as defined in Regulation U of the Board of Governors.

 

Material Adverse Effect:  the effect of any event or circumstance that, taken
alone or in conjunction with other events or circumstances, (a) has or could be
reasonably expected to have a material adverse effect on the business,
operations, Properties, liabilities (actual or contingent) or condition
(financial or otherwise) of Borrowers and their Subsidiaries, taken as a whole,
on the value of any material portion of Collateral, on the enforceability of any
Loan Documents, or on the validity or priority of Agent’s Liens on any
Collateral; (b) materially impairs the ability of any Obligor to perform any of
its obligations under the Loan Documents, including repayment of any
Obligations; or (c) otherwise materially impairs the ability of Agent or any
Lender to enforce or collect any Obligations or to realize upon any Collateral;
provided that the effect on Sanmina’s consolidated financial position or results
of operations of the sale by Sanmina and its Subsidiaries of their personal
computing and associated logistics services business shall not constitute a
Material Adverse Effect.

 

Material Contract:  any agreement or arrangement to which a Borrower or
Subsidiary is party (other than the Loan Documents) (a) that is deemed to be a
material contract under any securities law applicable to such Person, including
the Securities Act of 1933; (b) for which breach, termination, nonperformance or
failure to renew could reasonably be expected to have a Material Adverse Effect;
or (c) that relates to Subordinated Debt or Borrowed Money having an outstanding
principal amount of $25,000,000 or more.

 

Material Indebtedness:  any Borrowed Money (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of any Obligor
evidencing an outstanding principal amount exceeding $25,000,000.  For purposes
of determining Material Indebtedness, the “principal amount” of the obligations
of such Obligor in respect of any Hedging Agreement at

 

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any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that such Obligor would be required to pay if such Hedging Agreement
were terminated at such time.

 

Moody’s:  Moody’s Investors Service, Inc., and its successors.

 

Multiemployer Plan: any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which any Obligor or ERISA Affiliate makes or is
obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions.

 

Net Income: for any period, (i) the net income (or loss) of Sanmina and its
Subsidiaries on a consolidated basis for such period taken as a single
accounting period determined in conformity with GAAP, excluding (ii) (a) the
income (or loss) of any Person (other than a Subsidiary of Sanmina) in which any
other Person (other than Sanmina or any of its Subsidiaries) has a joint
interest, except to the extent of the amount of dividends or other distributions
actually paid to Sanmina or any of its Subsidiaries by such Person during such
period, (b) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary of Sanmina or is merged into or consolidated with Sanmina
or any of its Subsidiaries or that Person’s assets are acquired by Sanmina or
any of its Subsidiaries, (c) the income of any Subsidiary of Sanmina to the
extent that the declaration or payment of dividends or similar distributions by
that Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary, (d) any
after-tax gains or losses attributable to Asset Dispositions or returned surplus
assets of any Pension Plan, and (e) (to the extent not included in clauses (a)
through (d) above) any net extraordinary gains or net extraordinary losses, to
the extent included in determining net income (or loss) for such period.

 

Net Interest Expense:  for any period, Interest Expense for such period minus
interest income included in Net Income for such period.

 

Net Proceeds:  with respect to an Asset Disposition, proceeds (including, when
received, any deferred or escrowed payments) received by a Borrower or
Subsidiary in cash from such disposition, net of (a) reasonable and customary
costs and expenses actually incurred in connection therewith, including legal
fees and sales commissions; (b) amounts applied to repayment of Debt secured by
a Permitted Lien senior to Agent’s Liens on Collateral sold, including, without
limitation, any premium, penalty, or make-whole amounts related thereto required
to be paid as a result of such Asset Disposition; (c) Taxes paid or a good faith
estimate of Taxes payable with respect to such proceeds, including, without
limitation, any premium, penalty, or make-whole amounts related thereto required
to be paid as a result of such Asset Disposition; and (d) reserves for
indemnities or other reserves in accordance with GAAP against any liabilities
associated with the assets sold, transferred, leased, licensed, consigned or
disposed of in such Asset Disposition, including pension and other
post-retirement benefit liabilities and liabilities related to environmental
matters, until such reserves are no longer needed.

 

NOLV Percentage:  the net orderly liquidation value of Inventory, expressed as a
percentage, expected to be realized at an orderly, negotiated sale held within a
reasonable period of time, net of all liquidation expenses, as determined from
the most recent appraisal of the

 

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Inventory of the Borrowers and the Designated Canadian Guarantors performed by
an appraiser and on terms reasonably satisfactory to Agent.

 

Notes:  each Revolver Note or other promissory note executed by a Borrower to
evidence any Obligations.

 

Notice of Borrowing:  a Notice of Borrowing to be provided by Borrower Agent to
request a Borrowing of Loans, in form reasonably satisfactory to Agent.

 

Notice of Conversion/Continuation:  a Notice of Conversion/Continuation to be
provided by Borrower Agent to request a conversion or continuation of any Loans
as LIBOR Loans, in form reasonably satisfactory to Agent.

 

Obligations:  all (a) principal of and premium, if any, on the Loans, (b) LC
Obligations and other obligations of Obligors with respect to Letters of Credit,
(c) interest, expenses, fees and other sums payable by Obligors under Loan
Documents, (d) obligations of Obligors under any indemnity for Claims,
(e) Extraordinary Expenses, (f) Bank Product Debt, and (g) other Debts,
obligations and liabilities of any kind owing by Obligors pursuant to the Loan
Documents, whether now existing or hereafter arising, whether evidenced by a
note or other writing, whether allowed in any Insolvency Proceeding, whether
arising from an extension of credit, issuance of a letter of credit, acceptance,
loan, guaranty, indemnification or otherwise, and whether direct or indirect,
absolute or contingent, due or to become due, primary or secondary, or joint or
several.

 

Obligee Guarantor:  as defined in Section 14.7.

 

Obligor:  each Borrower or Guarantor.

 

Ordinary Course of Business:  the ordinary course of business of any Borrower or
Subsidiary, in the exercise of its reasonable business judgment and undertaken
in good faith.

 

Organic Documents:  with respect to any Person, its charter, certificate or
articles of incorporation, bylaws, articles of organization, limited liability
agreement, operating agreement, members agreement, shareholders agreement,
partnership agreement, certificate of partnership, certificate of formation,
voting trust agreement, or similar agreement or instrument governing the
formation or operation of such Person.

 

OSHA:  the Occupational Safety and Hazard Act of 1970.

 

Other Agreement:  each Note; LC Document; Fee Letter; Lien Waiver; Borrowing
Base Certificate, Compliance Certificate, Perfection Certificate, financial
statement or report delivered hereunder; the Disclosure Letter; or other
document, instrument or agreement (other than this Agreement, a Security
Document, any Hedging Agreement or any agreement related to Bank Products) now
or hereafter entered into by an Obligor with Agent or a Lender in connection
with any transactions relating hereto.

 

Other Taxes:  all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment
made under any Loan

 

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Document or from the execution, delivery or enforcement of, or otherwise with
respect to, any Loan Document.

 

Overadvance:  as defined in Section 2.1.5.

 

Overadvance Loan:  a Base Rate Loan made when an Overadvance exists or is caused
by the funding thereof.

 

Participant:  as defined in Section 13.2.

 

Patriot Act:  the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L.
No. 107-56, 115 Stat. 272 (2001).

 

Payment Item:  each check, draft or other item of payment payable to a Borrower,
including those constituting proceeds of any Collateral.

 

PBGC:  the Pension Benefit Guaranty Corporation.

 

Pension Plan:  any employee pension benefit plan (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to
Title IV of ERISA and is sponsored or maintained by any Obligor or ERISA
Affiliate or to which the Obligor or ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time during
the preceding five plan years.

 

Perfection Certificate:  the perfection certificate of Obligors with respect to
this Agreement in form and substance satisfactory to Agent, dated the Closing
Date, as the same shall be supplemented from time to time.

 

Permitted Acquisition:  any acquisition by Sanmina or any of its wholly-owned
Subsidiaries, whether by purchase, merger, amalgamation, or otherwise, of all or
substantially all of the assets of, all of the Equity Interests of, or a
business line or unit or a division of, any Person; provided,

 

A.             IMMEDIATELY PRIOR TO, AND AFTER GIVING EFFECT THERETO, NO DEFAULT
OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING OR WOULD RESULT
THEREFROM;

 

B.             ALL TRANSACTIONS IN CONNECTION THEREWITH SHALL BE CONSUMMATED, IN
ALL MATERIAL RESPECTS, IN ACCORDANCE WITH ALL APPLICABLE LAWS AND IN CONFORMITY
WITH ALL APPLICABLE GOVERNMENTAL AUTHORIZATIONS;

 

C.             IN THE CASE OF THE ACQUISITION OF EQUITY INTERESTS IN WHICH ALL
OF THE EQUITY INTERESTS (EXCEPT FOR ANY SUCH EQUITY INTERESTS IN THE NATURE OF
DIRECTORS’ QUALIFYING SHARES REQUIRED PURSUANT TO APPLICABLE LAW) ACQUIRED OR
OTHERWISE ISSUED BY SUCH PERSON OR ANY NEWLY FORMED SUBSIDIARY OF SANMINA IN
CONNECTION WITH SUCH ACQUISITION SHALL BE OWNED 100% BY SANMINA OR A GUARANTOR,
SANMINA SHALL TAKE, OR CAUSE TO BE TAKEN, PROMPTLY

 

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AFTER THE DATE SUCH PERSON BECOMES A SUBSIDIARY OF SANMINA, TO THE EXTENT
APPLICABLE, EACH OF THE ACTIONS SET FORTH IN SECTION 10.1.9;

 

D.             IN THE CASE OF AN ACQUISITION WHERE THE CONSIDERATION PAYABLE IS
$25,000,000 OR MORE, SANMINA SHALL HAVE DELIVERED TO AGENT AT LEAST TEN
(10) BUSINESS DAYS (OR SUCH SHORTER PERIOD OF TIME AS MAY BE AGREED TO BY AGENT)
PRIOR TO SUCH PROPOSED ACQUISITION, ALL RELEVANT FINANCIAL INFORMATION WITH
RESPECT TO SUCH ACQUIRED ASSETS OR EQUITY INTERESTS, INCLUDING, WITHOUT
LIMITATION, THE AGGREGATE CONSIDERATION FOR SUCH ACQUISITION;

 

E.             ANY PERSON OR ASSETS OR DIVISION AS ACQUIRED IN ACCORDANCE
HEREWITH SHALL CONSTITUTE A PERMITTED BUSINESS; AND

 

F.              SUCH ACQUISITION SHALL NOT HAVE BEEN PRECEDED BY A TENDER OFFER
THAT HAS NOT BEEN APPROVED BY THE BOARD OF DIRECTORS OF SUCH PERSON.

 

Permitted Asset Disposition:  as long as (i) no Default or Event of Default
exists and (ii) during a Trigger Period, all Net Proceeds with respect to
Collateral received by an Obligor are remitted to Agent, an Asset Disposition
that is (a) a sale of Inventory in the Ordinary Course of Business consistent
with past practices (including, without limitation, the sale of Inventory from
Sanmina or any Subsidiary to Sanmina or any Subsidiary; (b) a disposition of
Equipment; (c) a disposition of Inventory that is obsolete, unmerchantable or
otherwise unsalable in the Ordinary Course of Business consistent with past
practices; (d) termination of a lease of real or personal Property that is not
necessary for the Ordinary Course of Business consistent with past practices,
could not reasonably be expected to have a Material Adverse Effect and does not
result from an Obligor’s default; (e) approved in writing by Agent and Required
Lenders; or (f) replacement of Equipment that is worn, damaged or obsolete with
Equipment of like function and value, if the replacement Equipment is acquired
substantially contemporaneously with such disposition and is free of Liens;
provided that in all cases any involuntary loss resulting from a casualty event
or condemnation shall constitute a Permitted Asset Disposition.

 

Permitted Business:  any business that is related, ancillary or complementary to
the businesses of Sanmina and its Subsidiaries on the Closing Date or any
reasonable extension thereof.

 

Permitted Contingent Obligations:  Contingent Obligations (a) arising from
endorsements of Payment Items for collection or deposit in the Ordinary Course
of Business consistent with past practices; (b) arising from Hedging Agreements
permitted hereunder; (c) existing on the Closing Date, and any extension or
renewal thereof that does not increase the amount of such Contingent Obligation
when extended or renewed; (d) incurred in the Ordinary Course of Business
consistent with past practices with respect to surety, appeal or performance
bonds, or other similar obligations; (e) arising from customary indemnification
obligations in favor of purchasers in connection with dispositions of Equipment
permitted hereunder; (f) arising under the Loan Documents; or (g) in an
aggregate amount of $50,000,000 or less at any time.

 

Permitted Lien:  as defined in Section 10.2.2.

 

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Permitted Pool Transaction:  the transfer of cash, whether directly or
indirectly, through the repayment of or making of any Intercompany Debt, the
making of any Upstream Payment or the making of Investments, from a Foreign
Subsidiary to another Foreign Subsidiary in order to have the cash balances of
such Foreign Subsidiaries repay or refund their obligations under the Citibank
cash management pool, provided that in connection with any such transfer, (i) if
any cash is proposed to be transferred from an Obligor to a Foreign Subsidiary,
prior to, or simultaneously with, such proposed transfer, an equivalent amount
of cash shall be transferred to such Obligor from a Foreign Subsidiary and
(ii) if any cash is proposed to be transferred to an Obligor from a Foreign
Subsidiary, prior to, or simultaneously with, such proposed transfer, an
equivalent amount of cash shall be transferred from such Obligor to a Foreign
Subsidiary.

 

Permitted Purchase Money Debt:  Purchase Money Debt of Borrowers and
Subsidiaries that is unsecured or secured only by a Purchase Money Lien, as long
as the aggregate principal amount does not exceed $75,000,000 at any time plus
any amount permitted by and not utilized pursuant to Section 10.2.1(l), but in
no event shall the aggregate outstanding principal amount of Purchase Money Debt
and Debt permitted under Section 10.2.1(l) exceed at any time $150,000,000.

 

Person:  any individual, corporation, limited liability company, unlimited
liability company, partnership, joint venture, joint stock company, land trust,
business trust, unincorporated organization, Governmental Authority or other
entity.

 

Plan:  any employee benefit plan (as such term is defined in Section 3(3) of
ERISA) established by an Obligor or, with respect to any such plan that is
subject to Section 412 of the Code or Title IV of ERISA, an ERISA Affiliate.

 

Pledged Securities:  the Equity Interests in each of the Borrowers (other than
Sanmina) and the Guarantors and other Equity Interests owned directly by the
Borrowers and the Guarantors, provided in the case of any First Tier Foreign
Subsidiary (other than any Designated Canadian Guarantor) and in the case of
Sanmina-SCI Netherlands Holdings LLC not more than 65% of the voting Equity
Interests thereof shall be “Pledged Securities” and provided, further, that
Pledged Securities shall exclude (i) any Equity Interests in any Securitization
Subsidiary, (ii) any Equity Interests in Sanmina-SCI Australia Holding Pty Ltd.,
and (iii) any other Equity Interests to the extent Agent determines in its
reasonable discretion after consultation with Borrower Agent that such pledge is
not commercially feasible.

 

PPSA:  the Personal Property Security Act (Ontario) (or any successor statute)
or similar legislation of any other Canadian jurisdiction (including, without
limitation, the Civil Code of Québec), the laws of which are required by such
legislation to be applied in connection with the issue, perfection, effect of
perfection, enforcement, enforceability, opposability, validity or effect of
security interests, hypothecs or other applicable Liens.

 

Priority Payables:  at any time, with respect to each Designated Canadian
Guarantor:

 

(a)           the amount past due and owing by each such Designated Canadian
Guarantor, or the accrued amount for which such Designated Canadian Guarantor
has an obligation to remit to a Governmental Authority or other Person pursuant
to any

 

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applicable law, rule or regulation, in respect of (i) goods and services taxes,
sales taxes, employee income taxes, municipal taxes and other taxes payable or
to be remitted or withheld; (ii) workers’ compensation; (iii) vacation or
holiday pay; and (iv) other like charges and demands  to the extent any
Governmental Authority or other Person may claim a security interest, Lien,
trust or other claim ranking or capable of ranking in priority to or pari passu
with one or more of the first priority Liens granted in the Security Documents;
and

 

(b)           the aggregate amount of any other liabilities of each such
Designated Canadian Guarantor in respect of which a trust has been imposed on
any Collateral to provide for payment;

 

in each case net of the aggregate amount of all restricted cash held or set
aside for the payment of such obligations.

 

Pro Rata:  with respect to any Lender, a percentage (carried out to the ninth
decimal place) determined (a) while Commitments are outstanding, by dividing the
amount of such Lender’s Commitment by the aggregate amount of all Commitments;
and (b) at any other time, by dividing the amount of such Lender’s Loans and LC
Obligations by the aggregate amount of all outstanding Loans and LC Obligations.

 

Proceeds Cash Collateral Account:  any Cash Collateral Account into which the
proceeds of Collateral or payments on Accounts constituting Collateral are
deposited.

 

Properly Contested:  with respect to any obligation of any Person, (a) the
obligation is subject to a bona fide dispute regarding amount or the Person’s
liability to pay; (b) the obligation is being properly contested in good faith
by appropriate proceedings promptly instituted and diligently pursued;
(c) appropriate reserves have been established to the extent required in
accordance with GAAP; (d) non-payment could not reasonably be expected to have a
Material Adverse Effect, nor result in forfeiture or sale of any material
portion of the assets of the Person; (e) no Lien is imposed on any material
portion of the assets of the Person, unless bonded and stayed to the extent
reasonably requested by and to the satisfaction of Agent; and (f) if the
obligation results from entry of a judgment or other order, such judgment or
order is stayed pending appeal or other judicial review.

 

Property:  any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible.

 

Protective Advances:  as defined in Section 2.1.6.

 

Purchase Money Debt:  (a) Debt (other than the Obligations) for payment of any
of the purchase price of fixed assets; (b) Debt (other than the Obligations)
incurred within 10 days before or after acquisition of any fixed assets, for the
purpose of financing any of the purchase price thereof; and (c) any renewals,
extensions or refinancings (but not increases) thereof.

 

Purchase Money Lien:  a Lien that secures Purchase Money Debt, encumbering only
the fixed assets acquired with such Debt, and any accession, addition or
improvement thereto, any

 

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replacement thereof and the proceeds thereof, together with customary cash
deposits, and constituting a Capital Lease or a purchase money security interest
under the UCC.

 

RCRA:  the Resource Conservation and Recovery Act (42 U.S.C. §§ 6991-6991i).

 

Real Estate:  all right, title and interest (whether as owner, lessor or lessee)
in any real Property or any buildings, structures, parking areas or other
improvements thereon.

 

Receivables Purchase Facility:  that certain non-recourse (other than customary
recourse provisions included therein) receivables purchase facility contemplated
by (i) the Receivables Transfer and Contribution Agreement between Sanmina and
Sanmina SPV LLC and (ii) the Credit and Security Agreement among Sanmina SPV
LLC, the lenders from time to time party thereto and Deutsche Bank AG, New York
Branch, pursuant to which Sanmina will contribute to such Subsidiary receivables
and Related Assets from one or more of the obligors listed on Schedule 1.1 to
the Disclosure Letter and such Subsidiary will obtain loans secured by such
receivables and Related Assets; provided that upon notice to Agent and the
delivery to Agent of a current Borrowing Base Certificate (giving pro forma
effect to any permitted addition or deletion of obligors from such Schedule) and
so long as no Default, Event of Default or Trigger Period exists at the time
thereof or would result therefrom, Borrower Agent may at any time during the
last month of a Fiscal Quarter delete obligors from such Schedule or add
additional obligors to such Schedule so long as (1) the total number of
additional obligors added in any Fiscal Year does not exceed five and (2) the
aggregate Value of the Accounts of such additional obligors during any Fiscal
Year does not exceed 10% of the aggregate Commitments then in effect (as
determined by reference to the most recent Borrowing Base Certificate delivered
pursuant to Section 8.1); and provided, further, notwithstanding the limitations
in clauses (1) and (2) above, up to five additional obligors that are not
obligors in respect of any Accounts constituting Collateral on the Closing Date
may be added to such Schedule so long as the aggregate Value of the Accounts of
such additional obligors does not exceed $75,000,000 (determined with respect to
each such obligor at the respective date of addition to such Schedule).

 

Refinancing Conditions:  the following conditions for Refinancing Debt:  (a) it
is in an aggregate principal amount that does not exceed the principal amount of
the Debt being extended, renewed or refinanced plus an amount necessary to pay
any fees and expenses, including premiums and defeasances costs, related
thereto; (b) it has a final maturity no sooner than, and a weighted average life
no less than, the Debt being extended, renewed or refinanced; (c) it is
subordinated to the Obligations at least to the same extent as the Debt being
extended, renewed or refinanced; (d) taken as a whole in each case, (i) the
representations, (ii) the covenants and (iii) the defaults applicable to it are
not materially less favorable to Borrowers than those applicable to the Debt
being extended, renewed or refinanced (it being understood and agreed that, in
determining whether any of the foregoing provisions of Refinancing Debt are
materially less favorable to Borrowers, Borrower Agent shall be permitted (but
shall not be required) to consult with Agent prior to incurring such Refinancing
Debt and request that Agent make a determination as to whether such provisions
are materially less favorable to Borrowers, and the good faith determination of
Agent in that regard shall be definitive and it being further

 

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understood that Agent shall have no obligation to make any such determination);
(e) no additional Lien is granted to secure it; (f) no additional Person is
obligated on such Debt unless such Person would otherwise be permitted under
this Agreement to be obligated on the Debt being extended, renewed or
refinanced; and (g) upon giving effect to it, no Default or Event of Default
exists.

 

Refinancing Debt:  Borrowed Money that is the result of an extension, renewal or
refinancing of Debt permitted under Section 10.2.1(b), (d) or (f).

 

Related Assets:  with respect to any receivables, any assets related thereto
(but, for the avoidance of doubt, not including any such assets relating to the
Eligible Accounts), including all collateral securing such receivables, all
contracts and contract rights, purchase orders, leases, security interests,
financing statements or other documentation in respect of such receivables, and
all guarantees indemnities, warranties or other documentation or other
obligations in respect of any such receivable, any other assets which are
customarily transferred, or in respect of which security interests are
customarily granted in connection with transactions involving receivables
similar to the receivables, interest in goods represented by the receivables and
all goods returned by or reclaimed, repossessed or recovered from, the account
debtor, and any collections or proceeds of the foregoing.

 

Reimbursement Date:  as defined in Section 2.2.2.

 

Rent and Charges Reserve:  the aggregate of (a) all past due rent and other
amounts owing by an Obligor to any landlord, warehouseman, processor, repairman,
mechanic, shipper, freight forwarder, broker or other Person who possesses any
Collateral or could assert a Lien on any Collateral; and (b) a reserve at least
equal to three months rent and other charges that could reasonably be expected
to be payable to any such Person, unless it has executed a Lien Waiver.

 

Report:  as defined in Section 12.2.3.

 

Reportable Event:  any of the events set forth in Section 4043(c) of ERISA,
other than events for which the 30 day notice period has been waived.

 

Required Lenders:  Lenders (subject to Section 4.2) having (a) Commitments in
excess of 50% of the aggregate Commitments; and (b) if the Commitments have
terminated, Loans in excess of 50% of all outstanding Loans; provided that in
the event there are five or fewer non-affiliated Lenders, “Required Lenders”
shall mean three or more non-affiliated Lenders (subject to Section 4.2) having
(y) Commitments in excess of 50% of the aggregate Commitments; and (z) if the
Commitments have terminated, Loans in excess of 50% of all outstanding Loans.

 

Reserve Percentage:  the reserve percentage (expressed as a decimal, rounded
upward to the nearest 1/16th of 1%) applicable to member banks under regulations
issued from time to time by the Board of Governors for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently referred to
as “Eurocurrency liabilities”).

 

Restricted Investment:  any Investment by a Borrower or Subsidiary, other than
(a) Investments in Subsidiaries to the extent existing on the Closing Date;
(b) Cash Equivalents;

 

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provided that if such Cash Equivalents are owned by an Obligor, the Cash
Equivalents are subject to Agent’s Lien and control, pursuant to documentation
in form and substance reasonably satisfactory to Agent; and (c) loans and
advances permitted under Section 10.2.4.

 

Restrictive Agreement:  an agreement (other than a Loan Document) that
conditions or restricts the right of any Borrower, Subsidiary or other Obligor
to incur or repay Borrowed Money, to grant Liens on any assets, to declare or
make Distributions, to modify, extend or renew any agreement evidencing Borrowed
Money, or to repay any Intercompany Debt.

 

Revolver Note:  a promissory note to be executed by Borrowers in favor of a
Lender in the form of Exhibit A, which shall be in the amount of such Lender’s
Commitment and shall evidence the Loans made by such Lender.

 

Revolver Termination Date:  the earlier of (a) the date that occurs 90 days
prior to the maturity date of (i) the 2010 Senior Notes or (ii) the 2013 Senior
Subordinated Notes, in each case if such Notes are not repaid, redeemed,
defeased, refinanced or reserved under the Borrowing Base prior to such date,
and (b) the fifth anniversary of the Closing Date.

 

Royalties:  all royalties, fees, expense reimbursement and other amounts payable
by a Borrower under a License.

 

S&P:  Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and its successors.

 

Secured Parties:  Agent, Issuing Bank, Lenders and providers of Bank Products.

 

Securitization Subsidiary:  a Subsidiary of Sanmina created solely for the
purposes of effecting a securitization facility, the activities and assets of
which are limited solely to such purpose and assets, and the charter documents
of which contain customary bankruptcy-remote provisions, or a non-Obligor
Subsidiary of Sanmina, as the case may be.

 

Security Documents:  this Agreement, the Guaranties, Deposit Account Control
Agreements, security agreements, deeds of hypothec and all other documents,
instruments and agreements now or hereafter securing (or given with the intent
to secure) any Obligations.

 

Senior Indentures:  those certain indentures, by and among Sanmina, certain
Subsidiaries thereof and the trustee party thereto and each governing one of
either series of the Senior Notes, as each such indenture may be amended,
supplemented, or otherwise modified from time to time.

 

Senior Notes:  (a) the Senior Floating Rate Notes due 2010 issued by Sanmina
pursuant to an indenture, dated as of June 12, 2007, in the aggregate original
principal amount of $300,000,000 (the “2010 Notes”), (b) the Senior Floating
Rate Notes due 2014 issued by Sanmina pursuant to an indenture, dated as of
June 12, 2007, in the aggregate original principal amount of $300,000,000, and
(c) any registered notes issued by Sanmina in exchange for, and as contemplated
by, any of the Senior Notes with substantially identical terms as the Senior
Notes.

 

Senior Officer:  the chairman of the board, president, chief executive officer,
chief financial officer or treasurer of a Borrower or, if the context requires,
an Obligor.

 

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Senior Subordinated Indentures:  those certain indentures, by and among Sanmina,
certain Subsidiaries thereof and the trustee party thereto and each governing
one of either series of the Senior Subordinated Notes, as each such indenture
may be amended, supplemented, or otherwise modified from time to time.

 

Senior Subordinated Notes:  (a) the 8.125% Senior Subordinated Notes due 2016
issued by Sanmina pursuant to an indenture, dated as of February 15, 2006,
(b) the 63/4% Senior Subordinated Notes due 2013 issued by Sanmina pursuant to
an indenture, dated as of February 24, 2005 (the “2013 Notes”), and (c) any
registered notes issued by Sanmina in exchange for, and as contemplated by, any
of the Senior Subordinated Notes with substantially identical terms as the
Senior Subordinated Notes.

 

Settlement Report:  a report delivered by Agent to Lenders summarizing the Loans
and participations in LC Obligations outstanding as of a given settlement date,
allocated to Lenders on a Pro Rata basis in accordance with their Commitments.

 

Solvent:  as to any Person as of the date of determination, such Person (a) owns
Property whose fair salable value is greater than the amount required to pay all
of its debts (including contingent, subordinated, unmatured and unliquidated
liabilities); (b) owns Property whose present fair salable value (as defined
below) is greater than the probable total liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities) of such Person as they
become absolute and matured; (c) is able to pay all of its debts as they mature;
(d) has capital that is not unreasonably small for its business and is
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage; (e) is not “insolvent” within the
meaning of Section 101(32) of the Bankruptcy Code or, as regards a Canadian
Subsidiary, is not an “insolvent person” within the meaning of the Bankruptcy
and Insolvency Act (Canada); and (f) has not incurred (by way of assumption or
otherwise) any obligations or liabilities (contingent or otherwise) under any
Loan Documents, or made any conveyance in connection therewith, with actual
intent to hinder, delay or defraud either present or future creditors of such
Person or any of its Affiliates.  “Fair salable value” means the amount that
could be obtained for assets within a reasonable time, either through collection
or through sale under ordinary selling conditions by a capable and diligent
seller to an interested buyer who is willing (but under no compulsion) to
purchase.  For purposes of this definition, the amount of any contingent
liability at any time shall be computed as the amount that, in light of all of
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability
(irrespective of whether such contingent liabilities meet the criteria for
accrual under Statement of Financial Accounting Standard No. 5).

 

Subordinated Debt:  Debt incurred by a Borrower that is expressly subordinate
and junior in right of payment to Full Payment of all Obligations, has no
scheduled amortization payments or mandatory prepayments or redemptions (other
than as a result of an event of default thereunder or as a result of customary
change of control provisions) prior to 91 days after the Revolver Termination
Date, and the covenants and subordination provisions thereof are reasonably
satisfactory to Agent.  Subordinated Debt includes the Debt evidenced by the
Senior Subordinated Notes and Senior Subordinated Note Indentures; provided that
such Debt may have a maturity date prior to the Revolver Termination Date so
long as at least 90 days prior to such

 

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maturity date, such Debt is repaid, redeemed, defeased or refinanced or, on such
90th day, reserved for under the Borrowing Base.

 

Subsidiary:  any entity at least 50% of whose voting securities or Equity
Interests is owned by a Borrower or any combination of Borrowers (including
indirect ownership by a Borrower through other entities in which the Borrower
directly or indirectly owns at least 50% of the voting securities or Equity
Interests); provided that, in determining the percentage of ownership interests
of any Person controlled by another Person, no ownership interest in the nature
of a “qualifying share” of the first Person shall be deemed to be outstanding.

 

Swingline Loan:  any Borrowing of Base Rate Loans funded with Agent’s funds,
until such Borrowing is settled among Lenders or repaid by Borrowers.

 

Syndication Agent:  Deutsche Bank Trust Company Americas.

 

Taxes:  all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

 

Transferee:  any actual or potential Eligible Assignee, Participant or other
Person acquiring an interest in any Obligations.

 

Trigger Period:  the period (a) commencing on the day that an Event of Default
occurs, or Availability is less than $50,000,000 at any time; and (b) continuing
until the date on which, during the preceding 60 consecutive days, no Event of
Default has existed and Availability has been greater than $50,000,000 at all
times, provided that after there are three Trigger Periods in any Fiscal Year,
in the event that on any date in such Fiscal Year an Event of Default occurs or
Availability is less than $50,000,000, then a Trigger Period shall be deemed to
commence on either such date and shall continue until the date on which, during
the preceding 180 consecutive days, no Event of Default has existed and
Availability has been greater than $50,000,000 at all times; and provided,
further, that prior to the Availability Election each of the $50,000,000
Availability thresholds in this definition shall be reduced by the amount (to
the extent not in excess of $25,000,000) of Excess Availability on the
respective date of determination.

 

Type:  any type of a Loan (i.e., Base Rate Loan or LIBOR Loan) that has the same
interest option and, in the case of LIBOR Loans, the same Interest Period.

 

UCC:  the Uniform Commercial Code as in effect in the State of New York or, when
the laws of any other jurisdiction govern the perfection or enforcement of any
Lien, the Uniform Commercial Code of such jurisdiction or the PPSA.

 

Unfunded Pension Liability:  the excess of a Pension Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension
Plan’s assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.

 

Upstream Payment:  a Distribution by a Subsidiary of a Borrower to such Borrower
or a wholly-owned Subsidiary.

 

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Value:  (a) for Inventory, its value determined on the basis of the lower of
cost or market, calculated on a first-in, first-out basis, and excluding any
portion of cost attributable to intercompany profit among Borrowers and their
Affiliates; and (b) for an Account, its face amount, net of any returns,
rebates, discounts (calculated on the shortest terms), credits, allowances or
Taxes (including sales, excise or other taxes) that have been or could be
claimed by the Account Debtor or any other Person.

 

1.2           Accounting Terms.  Under the Loan Documents (except as otherwise
specified herein), all accounting terms shall be interpreted, all accounting
determinations shall be made, and all financial statements shall be prepared, in
accordance with GAAP applied on a basis consistent with the most recent audited
financial statements of Borrowers delivered to Agent before the Closing Date and
using the same inventory valuation method as used in such financial statements,
except for any change required or permitted by GAAP if Borrowers’ certified
public accountants concur in such change, the change is disclosed to Agent, and
Section 10.3 is amended in a manner satisfactory to Required Lenders to take
into account the effects of the change.  If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either Borrower Agent or the Required Lenders shall so
request, Agent, the Lenders and Borrower Agent shall negotiate in good faith to
amend such ratio or requirement to preserve the original intent thereof in light
of such change in GAAP (subject to the approval of the Required Lenders);
provided that, until so amended, (a) such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein and
(b) Borrower Agent shall provide to Agent and the Lenders financial statements
and other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

 

1.3           Uniform Commercial Code.  As used herein, the following terms are
defined in accordance with the UCC in effect in the State of New York from time
to time:  “Chattel Paper,” “Deposit Account,” “Document,” “Equipment,” “General
Intangibles,” “Instrument”, “Proceeds” and “Supporting Obligation.”

 

1.4           Certain Matters of Construction.  The terms “herein,” “hereof,”
“hereunder” and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision.  Any pronoun used
shall be deemed to cover all genders.  In the computation of periods of time
from a specified date to a later specified date, “from” means “from and
including,” and “to” and “until” each mean “to but excluding.”  The terms
“including” and “include” shall mean “including, without limitation” and, for
purposes of each Loan Document, the parties agree that the rule of ejusdem
generis shall not be applicable to limit any provision.  Section titles appear
as a matter of convenience only and shall not affect the interpretation of any
Loan Document.  All references to (a) laws or statutes include all related
rules, regulations, interpretations, amendments and successor provisions;
(b) any document, instrument or agreement (including any Loan Document) include
any amendments, waivers and other modifications, extensions or renewals (to the
extent permitted by the Loan Documents); (c) any section mean, unless the
context otherwise requires, a section of this Agreement; (d) any exhibits or
schedules mean, unless the context otherwise requires, exhibits and schedules
attached hereto, which are hereby incorporated by reference; (e) any Person
include successors and assigns; (f) time of day mean time of day at Agent’s
notice address under Section 15.3.1; or

 

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(g) discretion of Agent, Issuing Bank or any Lender mean the sole and absolute
discretion of such Person.  All calculations of Value, fundings of Loans,
issuances of Letters of Credit and payments of Obligations shall be in Dollars
and, unless the context otherwise requires, all determinations (including
calculations of Borrowing Base and financial covenants) made from time to time
under the Loan Documents shall be made in light of the circumstances existing at
such time.  Borrowing Base calculations shall be consistent with historical
methods of valuation and calculation, and otherwise satisfactory to Agent (and
not necessarily calculated in accordance with GAAP).  Borrowers shall have the
burden of establishing any alleged negligence, misconduct or lack of good faith
by Agent, Issuing Bank or any Lender under any Loan Documents.  No provision of
any Loan Documents shall be construed against any party by reason of such party
having, or being deemed to have, drafted the provision.  Whenever the phrase “to
the best of Borrowers’ knowledge” or words of similar import are used in any
Loan Documents, it means actual knowledge of a Senior Officer, or knowledge that
a Senior Officer would have obtained if he or she had engaged in good faith and
diligent performance of his or her duties, including reasonably specific
inquiries of employees or agents and a good faith attempt to ascertain the
matter to which such phrase relates.  For purposes of any Collateral located in
the Province of Québec or charged by any deed of hypothec (or any other Loan
Document) and for all other purposes pursuant to which the interpretation or
construction of a Loan Document may be subject to the laws of the Province of
Québec or a court or tribunal exercising jurisdiction in the Province of Québec,
(i) “personal property” shall be deemed to include “movable property”,
(ii) “real property” shall be deemed to include “immovable property” and an
“easement” shall be deemed to include a “servitude”, (iii) “tangible property”
shall be deemed to include “corporeal property”, (iv) “intangible property”
shall be deemed to include “incorporeal property”, (v) “security interest” and
“mortgage” shall be deemed to include a “hypothec”, (vi) all references to
filing, registering or recording under the PPSA or UCC shall be deemed to
include publication under the Civil Code of Québec, and all references to
releasing any Lien shall be deemed to include a release, discharge and mainlevee
of a hypothec, (vii) all references to “perfection” of or “perfected” Liens
shall be deemed to include a reference to the “opposability” of such Liens to
third parties, (viii) any “right of offset”, “right of setoff” or similar
expression shall be deemed to include a “right of compensation”, (ix) “goods”
shall be deemed to include “corporeal movable property” other than chattel
paper, documents of title, instruments, money and securities, and (x) an “agent”
shall be deemed to include a “mandatary”.

 

SECTION 2.         CREDIT FACILITIES

 

2.1           Commitment.

 

2.1.1        LOANS.  EACH LENDER AGREES, SEVERALLY, ON THE TERMS SET FORTH
HEREIN, TO MAKE LOANS TO BORROWERS FROM TIME TO TIME FOR THE PERIOD FROM AND
INCLUDING THE CLOSING DATE TO THE COMMITMENT TERMINATION DATE IN AN AGGREGATE
PRINCIPAL AMOUNT AT ANY ONE TIME OUTSTANDING WHICH, WHEN ADDED TO SUCH LENDER’S
PRO RATA SHARE OF THE SUM OF THE LC OBLIGATIONS THEN OUTSTANDING AND THE
AGGREGATE PRINCIPAL AMOUNT OF THE SWINGLINE LOANS THEN OUTSTANDING, DOES NOT
EXCEED THE AMOUNT OF SUCH LENDER’S COMMITMENT.  THE LOANS MAY BE REPAID AND
REBORROWED AS PROVIDED HEREIN.  IN NO EVENT SHALL LENDERS HAVE ANY OBLIGATION TO
HONOR A REQUEST FOR A LOAN IF THE UNPAID BALANCE OF LOANS OUTSTANDING AT SUCH
TIME (INCLUDING THE REQUESTED LOAN) WOULD EXCEED THE BORROWING BASE.

 

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2.1.2        REVOLVER NOTES.  THE LOANS MADE BY EACH LENDER AND INTEREST
ACCRUING THEREON SHALL BE EVIDENCED BY THE RECORDS OF AGENT AND SUCH LENDER.  AT
THE REQUEST OF ANY LENDER, BORROWERS SHALL DELIVER A REVOLVER NOTE TO SUCH
LENDER.

 

2.1.3        USE OF PROCEEDS.  THE PROCEEDS OF LOANS SHALL BE USED BY BORROWERS
SOLELY (A) TO SATISFY EXISTING DEBT; (B) TO PAY FEES AND TRANSACTION EXPENSES
ASSOCIATED WITH THE CLOSING OF THIS CREDIT FACILITY; (C) TO PAY OBLIGATIONS IN
ACCORDANCE WITH THIS AGREEMENT; AND (D) FOR WORKING CAPITAL AND OTHER LAWFUL
CORPORATE PURPOSES OF BORROWERS (INCLUDING ANY TRANSACTION PERMITTED BY THIS
AGREEMENT).

 

2.1.4        VOLUNTARY REDUCTION OR TERMINATION OF COMMITMENTS.  THE COMMITMENTS
SHALL TERMINATE ON THE REVOLVER TERMINATION DATE, UNLESS SOONER TERMINATED IN
ACCORDANCE WITH THIS AGREEMENT.  UPON AT LEAST 10 DAYS (OR SUCH SHORTER PERIOD
AS MAY BE AGREED TO IN WRITING BY AGENT IN ITS DISCRETION) PRIOR WRITTEN NOTICE
TO AGENT AT ANY TIME, BORROWER AGENT MAY, AT ITS OPTION, TERMINATE THE
COMMITMENTS AND THIS CREDIT FACILITY OR PERMANENTLY REDUCE THE COMMITMENTS, ON A
PRO RATA BASIS FOR EACH LENDER IN A MINIMUM AMOUNT OF $25,000,000, OR AN
INCREMENT OF $1,000,000 IN EXCESS THEREOF; PROVIDED THAT NO SUCH REDUCTION IN
COMMITMENTS SHALL REDUCE THE AGGREGATE AMOUNT OF THE COMMITMENTS TO LESS THAN
$100,000,000.  ANY NOTICE OF TERMINATION OR REDUCTION GIVEN BY BORROWER AGENT
SHALL BE IRREVOCABLE; PROVIDED THAT A NOTICE OF TERMINATION OF THE COMMITMENTS
DELIVERED BY BORROWER AGENT MAY STATE THAT SUCH NOTICE IS CONDITIONED UPON THE
EFFECTIVENESS OF OTHER CREDIT FACILITIES OR OTHER FINANCING TRANSACTION, IN
WHICH CASE SUCH NOTICE MAY BE REVOKED BY BORROWER AGENT (BY NOTICE TO AGENT ON
OR PRIOR TO THE SPECIFIED TERMINATION DATE) IF SUCH CONDITION IS NOT SATISFIED. 
ON THE REVOLVER TERMINATION DATE, BORROWERS SHALL MAKE FULL PAYMENT OF ALL
OBLIGATIONS.

 

2.1.5        OVERADVANCES.  IF THE AGGREGATE LOANS AND LC OBLIGATIONS EXCEED THE
BORROWING BASE (“OVERADVANCE”) OR THE AGGREGATE COMMITMENTS AT ANY TIME, THE
EXCESS AMOUNT SHALL BE PAYABLE BY BORROWERS ON DEMAND BY AGENT, BUT ALL SUCH
LOANS SHALL NEVERTHELESS CONSTITUTE OBLIGATIONS SECURED BY THE COLLATERAL AND
ENTITLED TO ALL BENEFITS OF THE LOAN DOCUMENTS.  UNLESS ITS AUTHORITY HAS BEEN
REVOKED IN WRITING BY REQUIRED LENDERS, AGENT MAY REQUIRE LENDERS TO HONOR
REQUESTS FOR OVERADVANCE LOANS AND TO FORBEAR FROM REQUIRING BORROWERS TO CURE
AN OVERADVANCE, (A) WHEN NO OTHER EVENT OF DEFAULT IS KNOWN TO AGENT, AS LONG AS
(I) THE OVERADVANCE DOES NOT CONTINUE FOR MORE THAN 30 CONSECUTIVE DAYS (AND NO
OVERADVANCE MAY EXIST FOR AT LEAST FIVE CONSECUTIVE DAYS THEREAFTER BEFORE
FURTHER OVERADVANCE LOANS ARE REQUIRED), AND (II) THE OVERADVANCE IS NOT KNOWN
BY AGENT TO EXCEED 10% OF THE AGGREGATE COMMITMENTS THEN IN EFFECT (LESS THE
THEN OUTSTANDING AMOUNT OF PROTECTIVE ADVANCES); AND (B) REGARDLESS OF WHETHER
AN EVENT OF DEFAULT EXISTS, IF AGENT DISCOVERS AN OVERADVANCE NOT PREVIOUSLY
KNOWN BY IT TO EXIST, AS LONG AS FROM THE DATE OF SUCH DISCOVERY THE
OVERADVANCE, (I) IS NOT INCREASED BY MORE THAN $5,000,000 (LESS THE THEN
OUTSTANDING AMOUNT OF PROTECTIVE ADVANCES), AND (II) DOES NOT CONTINUE FOR MORE
THAN 30 CONSECUTIVE DAYS.  IN NO EVENT SHALL OVERADVANCE LOANS BE REQUIRED THAT
WOULD CAUSE THE OUTSTANDING LOANS AND LC OBLIGATIONS TO EXCEED THE AGGREGATE
COMMITMENTS AND IN NO EVENT SHALL AN OVERADVANCE CAUSE THE SUM OF ANY LENDER’S
LOANS AND PRO RATA SHARE OF THE LC OBLIGATIONS THEN OUTSTANDING TO EXCEED ITS
COMMITMENT.  ANY FUNDING OF AN OVERADVANCE LOAN OR SUFFERANCE OF AN OVERADVANCE
SHALL NOT CONSTITUTE A WAIVER BY AGENT OR LENDERS OF THE EVENT OF DEFAULT CAUSED
THEREBY.  IN NO EVENT SHALL ANY BORROWER OR OTHER OBLIGOR BE DEEMED A
BENEFICIARY OF THIS SECTION NOR AUTHORIZED TO ENFORCE ANY OF ITS TERMS.

 

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2.1.6        PROTECTIVE ADVANCES.  AGENT SHALL BE AUTHORIZED, IN ITS DISCRETION,
AT ANY TIME THAT ANY CONDITIONS IN SECTION 6 ARE NOT SATISFIED, TO MAKE BASE
RATE LOANS (“PROTECTIVE ADVANCES”) (A) UP TO AN AGGREGATE AMOUNT OUTSTANDING AT
ANY TIME NOT IN EXCESS OF 10% OF THE AGGREGATE COMMITMENTS THEN IN EFFECT (LESS
THE THEN OUTSTANDING AMOUNT OF OVERADVANCES), IF AGENT DEEMS SUCH LOANS
NECESSARY OR DESIRABLE TO PRESERVE OR PROTECT COLLATERAL, OR TO ENHANCE THE
COLLECTIBILITY OR REPAYMENT OF OBLIGATIONS; OR (B) TO PAY ANY OTHER AMOUNTS
CHARGEABLE TO OBLIGORS UNDER ANY LOAN DOCUMENTS, INCLUDING COSTS, FEES AND
EXPENSES.  EACH LENDER SHALL PARTICIPATE IN EACH PROTECTIVE ADVANCE ON A PRO
RATA BASIS; PROVIDED, THAT IN NO EVENT SHALL THE AGGREGATE AMOUNT OF OUTSTANDING
PROTECTIVE ADVANCES PLUS THE AGGREGATE AMOUNT OF OUTSTANDING LOANS AND LC
OBLIGATIONS EXCEED THE AGGREGATE COMMITMENTS.  REQUIRED LENDERS MAY AT ANY TIME
REVOKE AGENT’S AUTHORITY TO MAKE FURTHER PROTECTIVE ADVANCES BY WRITTEN NOTICE
TO AGENT.  ABSENT SUCH REVOCATION, AGENT’S DETERMINATION THAT FUNDING OF A
PROTECTIVE ADVANCE IS APPROPRIATE SHALL BE CONCLUSIVE.

 

2.2           Letter of Credit Facility.

 

2.2.1        ISSUANCE OF LETTERS OF CREDIT.  ISSUING BANK AGREES TO ISSUE
LETTERS OF CREDIT FROM TIME TO TIME UNTIL 30 DAYS PRIOR TO THE REVOLVER
TERMINATION DATE (OR UNTIL THE COMMITMENT TERMINATION DATE, IF EARLIER), ON THE
TERMS SET FORTH HEREIN, INCLUDING THE FOLLOWING:

 

A.             EACH BORROWER ACKNOWLEDGES THAT ISSUING BANK’S WILLINGNESS TO
ISSUE ANY LETTER OF CREDIT IS CONDITIONED UPON ISSUING BANK’S RECEIPT OF A LC
APPLICATION WITH RESPECT TO THE REQUESTED LETTER OF CREDIT, AS WELL AS SUCH
OTHER INSTRUMENTS AND AGREEMENTS AS ISSUING BANK MAY CUSTOMARILY REQUIRE FOR
ISSUANCE OF A LETTER OF CREDIT OF SIMILAR TYPE AND AMOUNT.  ISSUING BANK SHALL
HAVE NO OBLIGATION TO ISSUE ANY LETTER OF CREDIT UNLESS (I) ISSUING BANK
RECEIVES A LC REQUEST AND LC APPLICATION AT LEAST THREE BUSINESS DAYS PRIOR TO
THE REQUESTED DATE OF ISSUANCE; (II) EACH LC CONDITION IS SATISFIED AND (III) IF
A DEFAULTING LENDER EXISTS, SUCH LENDER OR BORROWERS HAVE ENTERED INTO
ARRANGEMENTS SATISFACTORY TO AGENT AND ISSUING BANK TO ELIMINATE ANY FUNDING
RISK ASSOCIATED WITH THE DEFAULTING LENDER.  IF ISSUING BANK RECEIVES WRITTEN
NOTICE FROM A LENDER AT LEAST FIVE BUSINESS DAYS BEFORE ISSUANCE OF A LETTER OF
CREDIT THAT ANY LC CONDITION HAS NOT BEEN SATISFIED, ISSUING BANK SHALL HAVE NO
OBLIGATION TO ISSUE THE REQUESTED LETTER OF CREDIT (OR ANY OTHER) UNTIL SUCH
NOTICE IS WITHDRAWN IN WRITING BY THAT LENDER OR UNTIL REQUIRED LENDERS HAVE
WAIVED SUCH CONDITION IN ACCORDANCE WITH THIS AGREEMENT.  PRIOR TO RECEIPT OF
ANY SUCH NOTICE, ISSUING BANK SHALL NOT BE DEEMED TO HAVE KNOWLEDGE OF ANY
FAILURE OF LC CONDITIONS.

 

B.             LETTERS OF CREDIT MAY BE REQUESTED BY A BORROWER ONLY (I) TO
SUPPORT OBLIGATIONS OF SUCH BORROWER INCURRED IN THE ORDINARY COURSE OF
BUSINESS; OR (II) FOR OTHER PURPOSES AS AGENT AND LENDERS MAY APPROVE FROM TIME
TO TIME IN WRITING.  THE RENEWAL OR EXTENSION OF ANY LETTER OF CREDIT SHALL BE
TREATED AS THE ISSUANCE OF A NEW LETTER OF CREDIT, EXCEPT THAT DELIVERY OF A NEW
LC APPLICATION SHALL BE REQUIRED AT THE DISCRETION OF ISSUING BANK.

 

C.             BORROWERS ASSUME (SOLELY AS BETWEEN BORROWERS AND SECURED
PARTIES) ALL RISKS OF THE ACTS, OMISSIONS OR MISUSES OF ANY LETTER OF CREDIT BY
THE BENEFICIARY THEREOF.  IN CONNECTION WITH ISSUANCE OF ANY LETTER OF CREDIT,
NONE OF AGENT, ISSUING BANK OR ANY LENDER SHALL BE RESPONSIBLE FOR THE
EXISTENCE, CHARACTER, QUALITY, QUANTITY, CONDITION, PACKING, VALUE OR DELIVERY
OF ANY GOODS PURPORTED TO BE REPRESENTED BY ANY DOCUMENTS; ANY DIFFERENCES OR

 

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VARIATION IN THE CHARACTER, QUALITY, QUANTITY, CONDITION, PACKING, VALUE OR
DELIVERY OF ANY GOODS FROM THAT EXPRESSED IN ANY DOCUMENTS; THE FORM, VALIDITY,
SUFFICIENCY, ACCURACY, GENUINENESS OR LEGAL EFFECT OF ANY DOCUMENTS OR OF ANY
ENDORSEMENTS THEREON; THE TIME, PLACE, MANNER OR ORDER IN WHICH SHIPMENT OF
GOODS IS MADE; PARTIAL OR INCOMPLETE SHIPMENT OF, OR FAILURE TO SHIP, ANY GOODS
REFERRED TO IN A LETTER OF CREDIT OR DOCUMENTS; ANY DEVIATION FROM INSTRUCTIONS,
DELAY, DEFAULT OR FRAUD BY ANY SHIPPER OR OTHER PERSON IN CONNECTION WITH ANY
GOODS, SHIPMENT OR DELIVERY; ANY BREACH OF CONTRACT BETWEEN A SHIPPER OR VENDOR
AND A BORROWER; ERRORS, OMISSIONS, INTERRUPTIONS OR DELAYS IN TRANSMISSION OR
DELIVERY OF ANY MESSAGES, BY MAIL, CABLE, TELEGRAPH, TELEX, TELECOPY, E-MAIL,
TELEPHONE OR OTHERWISE; ERRORS IN INTERPRETATION OF TECHNICAL TERMS; THE
MISAPPLICATION BY A BENEFICIARY OF ANY LETTER OF CREDIT OR THE PROCEEDS THEREOF;
OR ANY CONSEQUENCES ARISING FROM CAUSES BEYOND THE CONTROL OF ISSUING BANK,
AGENT OR ANY LENDER, INCLUDING ANY ACT OR OMISSION OF A GOVERNMENTAL AUTHORITY. 
THE RIGHTS AND REMEDIES OF ISSUING BANK UNDER THE LOAN DOCUMENTS SHALL BE
CUMULATIVE.  ISSUING BANK SHALL BE FULLY SUBROGATED TO THE RIGHTS AND REMEDIES
OF EACH BENEFICIARY WHOSE CLAIMS AGAINST BORROWERS ARE DISCHARGED WITH PROCEEDS
OF ANY LETTER OF CREDIT.

 

D.             IN CONNECTION WITH ITS ADMINISTRATION OF AND ENFORCEMENT OF
RIGHTS OR REMEDIES UNDER ANY LETTERS OF CREDIT OR LC DOCUMENTS, ISSUING BANK
SHALL BE ENTITLED TO ACT, AND SHALL BE FULLY PROTECTED IN ACTING, UPON ANY
CERTIFICATION, DOCUMENTATION OR COMMUNICATION IN WHATEVER FORM BELIEVED BY
ISSUING BANK, IN GOOD FAITH, TO BE GENUINE AND CORRECT AND TO HAVE BEEN SIGNED,
SENT OR MADE BY A PROPER PERSON.  ISSUING BANK MAY CONSULT WITH AND EMPLOY LEGAL
COUNSEL, ACCOUNTANTS AND OTHER EXPERTS TO ADVISE IT CONCERNING ITS OBLIGATIONS,
RIGHTS AND REMEDIES, AND SHALL BE ENTITLED TO ACT UPON, AND SHALL BE FULLY
PROTECTED IN ANY ACTION TAKEN IN GOOD FAITH RELIANCE UPON, ANY ADVICE GIVEN BY
SUCH EXPERTS.  ISSUING BANK MAY EMPLOY AGENTS AND ATTORNEYS-IN-FACT IN
CONNECTION WITH ANY MATTER RELATING TO LETTERS OF CREDIT OR LC DOCUMENTS, AND
SHALL NOT BE LIABLE FOR THE NEGLIGENCE OR MISCONDUCT OF AGENTS AND
ATTORNEYS-IN-FACT SELECTED WITH REASONABLE CARE.

 

2.2.2        REIMBURSEMENT; PARTICIPATIONS.

 

A.             IF ISSUING BANK HONORS ANY REQUEST FOR PAYMENT UNDER A LETTER OF
CREDIT, BORROWERS SHALL PAY TO ISSUING BANK, ON THE SAME DAY (“REIMBURSEMENT
DATE”), THE AMOUNT PAID BY ISSUING BANK UNDER SUCH LETTER OF CREDIT, TOGETHER
WITH INTEREST AT THE INTEREST RATE FOR BASE RATE LOANS FROM THE REIMBURSEMENT
DATE UNTIL PAYMENT BY BORROWERS.  THE OBLIGATION OF BORROWERS TO REIMBURSE
ISSUING BANK FOR ANY PAYMENT MADE UNDER A LETTER OF CREDIT SHALL BE ABSOLUTE,
UNCONDITIONAL, IRREVOCABLE, AND JOINT AND SEVERAL, AND SHALL BE PAID WITHOUT
REGARD TO ANY LACK OF VALIDITY OR ENFORCEABILITY OF ANY LETTER OF CREDIT OR THE
EXISTENCE OF ANY CLAIM, SETOFF, DEFENSE OR OTHER RIGHT THAT BORROWERS MAY HAVE
AT ANY TIME AGAINST THE BENEFICIARY.  WHETHER OR NOT BORROWER AGENT SUBMITS A
NOTICE OF BORROWING, BORROWERS SHALL BE DEEMED TO HAVE REQUESTED A BORROWING OF
BASE RATE LOANS IN AN AMOUNT NECESSARY TO PAY ALL AMOUNTS DUE ISSUING BANK ON
ANY REIMBURSEMENT DATE AND EACH LENDER AGREES TO FUND ITS PRO RATA SHARE OF SUCH
BORROWING WHETHER OR NOT THE COMMITMENTS HAVE TERMINATED, AN OVERADVANCE EXISTS
OR IS CREATED THEREBY, OR THE CONDITIONS IN SECTION 6 ARE SATISFIED.

 

B.             UPON ISSUANCE OF A LETTER OF CREDIT, EACH LENDER SHALL BE DEEMED
TO HAVE IRREVOCABLY AND UNCONDITIONALLY PURCHASED FROM ISSUING BANK, WITHOUT
RECOURSE OR WARRANTY, AN UNDIVIDED PRO RATA INTEREST AND PARTICIPATION IN ALL LC
OBLIGATIONS RELATING TO THE LETTER OF

 

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CREDIT.  IF ISSUING BANK MAKES ANY PAYMENT UNDER A LETTER OF CREDIT AND
BORROWERS DO NOT REIMBURSE SUCH PAYMENT ON THE REIMBURSEMENT DATE, AGENT SHALL
PROMPTLY NOTIFY LENDERS AND EACH LENDER SHALL PROMPTLY (WITHIN ONE BUSINESS DAY)
AND UNCONDITIONALLY PAY TO AGENT, FOR THE BENEFIT OF ISSUING BANK, THE LENDER’S
PRO RATA SHARE OF SUCH PAYMENT.  UPON REQUEST BY A LENDER, ISSUING BANK SHALL
FURNISH COPIES OF ANY LETTERS OF CREDIT AND LC DOCUMENTS IN ITS POSSESSION AT
SUCH TIME.

 

C.             THE OBLIGATION OF EACH LENDER TO MAKE PAYMENTS TO AGENT FOR THE
ACCOUNT OF ISSUING BANK IN CONNECTION WITH ISSUING BANK’S PAYMENT UNDER A LETTER
OF CREDIT SHALL BE ABSOLUTE, UNCONDITIONAL AND IRREVOCABLE, NOT SUBJECT TO ANY
COUNTERCLAIM, SETOFF, QUALIFICATION OR EXCEPTION WHATSOEVER, AND SHALL BE MADE
IN ACCORDANCE WITH THIS AGREEMENT UNDER ALL CIRCUMSTANCES, IRRESPECTIVE OF ANY
LACK OF VALIDITY OR UNENFORCEABILITY OF ANY LOAN DOCUMENTS; ANY DRAFT,
CERTIFICATE OR OTHER DOCUMENT PRESENTED UNDER A LETTER OF CREDIT HAVING BEEN
DETERMINED TO BE FORGED, FRAUDULENT, INVALID OR INSUFFICIENT IN ANY RESPECT OR
ANY STATEMENT THEREIN BEING UNTRUE OR INACCURATE IN ANY RESPECT; OR THE
EXISTENCE OF ANY SETOFF OR DEFENSE THAT ANY OBLIGOR MAY HAVE WITH RESPECT TO ANY
OBLIGATIONS.  ISSUING BANK DOES NOT ASSUME ANY RESPONSIBILITY FOR ANY FAILURE OR
DELAY IN PERFORMANCE OR ANY BREACH BY ANY BORROWER OR OTHER PERSON OF ANY
OBLIGATIONS UNDER ANY LC DOCUMENTS.  ISSUING BANK DOES NOT MAKE TO LENDERS ANY
EXPRESS OR IMPLIED WARRANTY, REPRESENTATION OR GUARANTY WITH RESPECT TO THE
COLLATERAL, LC DOCUMENTS OR ANY OBLIGOR.  ISSUING BANK SHALL NOT BE RESPONSIBLE
TO ANY LENDER FOR ANY RECITALS, STATEMENTS, INFORMATION, REPRESENTATIONS OR
WARRANTIES CONTAINED IN, OR FOR THE EXECUTION, VALIDITY, GENUINENESS,
EFFECTIVENESS OR ENFORCEABILITY OF ANY LC DOCUMENTS; THE VALIDITY, GENUINENESS,
ENFORCEABILITY, COLLECTIBILITY, VALUE OR SUFFICIENCY OF ANY COLLATERAL OR THE
PERFECTION OF ANY LIEN THEREIN; OR THE ASSETS, LIABILITIES, FINANCIAL CONDITION,
RESULTS OF OPERATIONS, BUSINESS, CREDITWORTHINESS OR LEGAL STATUS OF ANY
OBLIGOR.

 

D.             NO ISSUING BANK INDEMNITEE SHALL BE LIABLE TO ANY LENDER OR OTHER
PERSON FOR ANY ACTION TAKEN OR OMITTED TO BE TAKEN IN CONNECTION WITH ANY LC
DOCUMENTS EXCEPT AS A RESULT OF ITS ACTUAL GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.  ISSUING BANK SHALL NOT HAVE ANY LIABILITY TO ANY LENDER IF ISSUING
BANK REFRAINS FROM ANY ACTION UNDER ANY LETTER OF CREDIT OR LC DOCUMENTS UNTIL
IT RECEIVES WRITTEN INSTRUCTIONS FROM REQUIRED LENDERS.

 

2.2.3        CASH COLLATERAL.  IF ANY LC OBLIGATIONS, WHETHER OR NOT THEN DUE OR
PAYABLE, SHALL FOR ANY REASON BE OUTSTANDING AT ANY TIME (A) THAT AN EVENT OF
DEFAULT EXISTS, (B) THAT AVAILABILITY IS LESS THAN ZERO, (C) AFTER THE
COMMITMENT TERMINATION DATE, OR (D) WITHIN 20 BUSINESS DAYS PRIOR TO THE
REVOLVER TERMINATION DATE, THEN BORROWERS SHALL, AT ISSUING BANK’S OR AGENT’S
REQUEST, CASH COLLATERALIZE THE STATED AMOUNT OF ALL OUTSTANDING LETTERS OF
CREDIT AND PAY TO ISSUING BANK THE AMOUNT OF ALL OTHER LC OBLIGATIONS. 
BORROWERS SHALL, ON DEMAND BY ISSUING BANK OR AGENT FROM TIME TO TIME, CASH
COLLATERALIZE THE LC OBLIGATIONS OF ANY DEFAULTING LENDER.  IF BORROWERS FAIL TO
PROVIDE ANY CASH COLLATERAL AS REQUIRED HEREUNDER, LENDERS MAY (AND SHALL UPON
DIRECTION OF AGENT) ADVANCE, AS LOANS, THE AMOUNT OF THE CASH COLLATERAL
REQUIRED (WHETHER OR NOT THE COMMITMENTS HAVE TERMINATED, AN OVERADVANCE EXISTS
OR THE CONDITIONS IN SECTION 6 ARE SATISFIED).

 

2.2.4        EXISTING LETTERS OF CREDIT.  ON THE CLOSING DATE, (I) EACH EXISTING
LETTER OF CREDIT, TO THE EXTENT OUTSTANDING, SHALL BE AUTOMATICALLY AND WITHOUT
FURTHER ACTION BY THE PARTIES THERETO DEEMED CONVERTED INTO LETTERS OF CREDIT
ISSUED PURSUANT TO SECTION 2.2 FOR THE ACCOUNT OF

 

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THE OBLIGORS SET FORTH ON SCHEDULE 2.2.4 AND SUBJECT TO THE PROVISIONS HEREOF,
AND FOR THIS PURPOSE FEES IN RESPECT THEREOF PURSUANT TO SECTION 2.2.2(A) SHALL
BE PAYABLE (IN SUBSTITUTION FOR ANY FEES SET FORTH IN THE APPLICABLE LETTER OF
CREDIT REIMBURSEMENT AGREEMENTS OR APPLICATIONS RELATING TO SUCH EXISTING
LETTERS OF CREDIT, EXCEPT TO THE EXTENT THAT SUCH FEES ARE ALSO PAYABLE PURSUANT
TO SECTION 2.2.2(A)) AS IF SUCH EXISTING LETTERS OF CREDIT HAD BEEN ISSUED ON
THE CLOSING DATE, (II) THE LENDERS SET FORTH ON SCHEDULE 2.2.4, OR THEIR
DESIGNATED AFFILIATES WHO ARE ISSUING BANKS, WITH RESPECT TO EACH SUCH EXISTING
LETTER OF CREDIT SHALL BE DEEMED TO BE THE ISSUING BANK WITH RESPECT TO SUCH
EXISTING LETTERS OF CREDIT, (III) SUCH LETTERS OF CREDIT SHALL EACH BE INCLUDED
IN THE CALCULATION OF LC OBLIGATIONS, AND (IV) ALL LIABILITIES OF THE OBLIGORS
WITH RESPECT TO SUCH EXISTING LETTERS OF CREDIT SHALL CONSTITUTE OBLIGATIONS. 
NO EXISTING LETTER OF CREDIT CONVERTED IN ACCORDANCE WITH THIS SECTION 2.2.4
SHALL BE AMENDED, EXTENDED OR RENEWED EXCEPT IN ACCORDANCE WITH THE TERMS
HEREOF.  NOTWITHSTANDING THE FOREGOING, THE OBLIGORS SHALL NOT BE REQUIRED TO
PAY ANY ADDITIONAL ISSUANCE FEES WITH RESPECT TO THE ISSUANCE OF SUCH EXISTING
LETTER OF CREDIT SOLELY AS A RESULT OF SUCH LETTER OF CREDIT BEING CONVERTED TO
A LETTER OF CREDIT HEREUNDER, IT BEING UNDERSTOOD THAT THE FRONTING,
PARTICIPATION AND OTHER FEES SET FORTH IN SECTION 2.2.2(A) SHALL OTHERWISE APPLY
TO SUCH EXISTING LETTERS OF CREDIT.

 

2.3           Increase in the Aggregate Commitments.

 

A.             THE BORROWER AGENT MAY, AT ANY TIME, BY NOTICE TO AGENT, REQUEST
THAT THE AGGREGATE AMOUNT OF THE COMMITMENTS BE INCREASED IN AN AGGREGATE AMOUNT
DURING THE TERM OF THIS AGREEMENT OF UP TO $200,000,000 (IN A MINIMUM AMOUNT OF
$25,000,000 AND IN INCREMENTS OF $5,000,000) (AN “ACCORDION INCREASE”) TO BE
EFFECTIVE AS OF THE DATE UPON WHICH THE CONDITIONS SET FORTH IN
SECTION 2.3(D) BELOW ARE FULFILLED TO THE SATISFACTION OF AGENT (AN “ACCORDION
EFFECTIVE DATE”); PROVIDED, HOWEVER, THAT (I) IN NO EVENT SHALL MORE THAN FOUR
ACCORDION INCREASES OCCUR DURING THE TERM OF THIS AGREEMENT AND (II) NO DEFAULT
OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING AS OF THE DATE OF SUCH
REQUEST OR AS OF THE APPLICABLE ACCORDION EFFECTIVE DATE, OR SHALL OCCUR AS A
RESULT THEREOF.

 

B.             AGENT WILL PROMPTLY NOTIFY THE LENDERS OF A REQUEST BY THE
BORROWER AGENT FOR AN ACCORDION INCREASE, WHICH NOTICE SHALL INCLUDE THE DATE BY
WHICH LENDERS WISHING TO PARTICIPATE IN SUCH ACCORDION INCREASE MUST COMMIT TO
AN INCREASE IN THE AMOUNT OF THEIR RESPECTIVE COMMITMENTS (EACH, A “COMMITMENT
DATE”) AND SHALL PROVIDE THAT SUCH REQUEST IS MADE RATABLY TO ALL THE LENDERS. 
EACH LENDER THAT IS WILLING TO PARTICIPATE IN SUCH ACCORDION INCREASE (EACH, AN
“INCREASING LENDER”) SHALL GIVE WRITTEN NOTICE TO AGENT ON OR PRIOR TO THE
APPLICABLE COMMITMENT DATE OF THE AMOUNT BY WHICH IT IS WILLING TO INCREASE ITS
COMMITMENT.  IF THE LENDERS NOTIFY AGENT THAT THEY ARE WILLING TO INCREASE THE
AMOUNT OF THEIR RESPECTIVE COMMITMENTS BY AN AGGREGATE AMOUNT THAT EXCEEDS THE
AMOUNT OF SUCH ACCORDION INCREASE, SUCH ACCORDION INCREASE SHALL BE ALLOCATED
RATABLY AMONG THE LENDERS WILLING TO PARTICIPATE THEREIN.

 

C.             PROMPTLY FOLLOWING THE APPLICABLE COMMITMENT DATE, AGENT SHALL
NOTIFY THE BORROWER AGENT AS TO THE AMOUNT, IF ANY, BY WHICH THE LENDERS ARE
WILLING TO PARTICIPATE IN THE APPLICABLE ACCORDION INCREASE.  IF THE AGGREGATE
AMOUNT BY WHICH THE LENDERS ARE WILLING TO PARTICIPATE IN SUCH ACCORDION
INCREASE ON THE APPLICABLE COMMITMENT DATE IS LESS THAN SUCH ACCORDION INCREASE,
THEN THE BORROWER AGENT MAY EXTEND OFFERS TO ONE OR MORE ELIGIBLE ASSIGNEES TO
PARTICIPATE IN ANY PORTION OF SUCH ACCORDION INCREASE THAT HAS NOT BEEN
COMMITTED TO BY THE LENDERS AS OF THE APPLICABLE COMMITMENT DATE; PROVIDED,
HOWEVER, THAT THE

 

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COMMITMENT OF EACH SUCH ELIGIBLE ASSIGNEE SHALL BE IN AN AMOUNT OF $5,000,000 OR
AN INTEGRAL MULTIPLE OF $1,000,000 IN EXCESS THEREOF (OR SUCH LESSER AMOUNTS AS
MAY BE NECESSARY TO CAUSE THE AGGREGATE INCREASE TO EQUAL SUCH ACCORDION
INCREASE).

 

D.             ON THE APPLICABLE ACCORDION EFFECTIVE DATE, EACH ELIGIBLE
ASSIGNEE THAT ACCEPTS AN OFFER TO PARTICIPATE IN THE APPLICABLE ACCORDION
INCREASE IN ACCORDANCE WITH SECTION 2.3(C) (EACH SUCH ELIGIBLE ASSIGNEE BEING AN
“ASSUMING LENDER”) SHALL BECOME A LENDER PARTY TO THIS AGREEMENT AS OF THE
APPLICABLE ACCORDION EFFECTIVE DATE AND THE COMMITMENT OF EACH INCREASING LENDER
FOR SUCH ACCORDION INCREASE SHALL BE SO INCREASED BY SUCH AMOUNT (OR BY THE
AMOUNT ALLOCATED TO SUCH LENDER PURSUANT TO THE LAST SENTENCE OF SECTION 2.3(B))
AS OF SUCH ACCORDION EFFECTIVE DATE AND THE COMMITMENT OF EACH LENDER AS SET
FORTH ON SCHEDULE 1.1(B) SHALL BE ADJUSTED ACCORDINGLY; PROVIDED, THAT ON OR
BEFORE THE APPLICABLE ACCORDION EFFECTIVE DATE:

 

(1)           the full amount of the Accordion Increase has been committed to by
Increasing Lenders or Assuming Lenders;

 

(2)           all amendments to this Agreement deemed reasonably necessary by
Agent to accomplish the applicable Accordion Increase shall have been agreed by
the parties hereto and any Assuming Lenders;

 

(3)           all necessary approvals shall have been obtained by each of the
Increasing Lenders, the Assuming Lenders and Agent; and

 

(4)           Agent shall have received the following, each dated such date:

 

(A)          (i)  certified copies of resolutions of the Borrower Agent
approving such Accordion Increase and the corresponding modifications to this
Agreement and (ii) an opinion of counsel for the Borrower Agent (which may be
in-house counsel), in form and substance reasonably satisfactory to Agent;

 

(B)           an assumption agreement from each Assuming Lender, if any, in form
and substance satisfactory to the Borrower Agent and Agent (each an “Assumption
Agreement”), duly executed by such Eligible Assignee, Agent and the Borrower
Agent; and

 

(C)           confirmation from each Increasing Lender of the increase in the
amount of its Commitment in a writing satisfactory to the Borrower Agent and
Agent.

 

On the applicable Accordion Effective Date, upon fulfillment of the conditions
set forth in the immediately preceding sentence of this Section 2.3(d), Agent
shall notify the Lenders (including, without limitation, each Assuming Lender)
and the Borrower Agent, on or before 2:00 pm (New York time), by facsimile,
email or other electronic communication, of the occurrence of such Accordion
Increase and shall record in the Loan Account the relevant information with
respect to each Increasing Lender and each Assuming Lender on such date.  The
Borrower Agent shall prepay Loans on such Accordion Effective Date to the extent

 

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necessary to cause the outstanding Loans to be ratable with the Commitment of
each Lender.  This Section shall supersede the provisions of Section 15.1 as
applicable.

 

SECTION 3.         INTEREST, FEES AND CHARGES

 

3.1           Interest.

 

3.1.1        RATES AND PAYMENT OF INTEREST.

 

A.             THE OBLIGATIONS SHALL BEAR INTEREST (I) IF A BASE RATE LOAN, AT
THE ALTERNATE BASE RATE IN EFFECT FROM TIME TO TIME, PLUS THE APPLICABLE MARGIN;
(II) IF A LIBOR LOAN, AT LIBOR FOR THE APPLICABLE INTEREST PERIOD, PLUS THE
APPLICABLE MARGIN; AND (III) IF ANY OTHER OBLIGATION (INCLUDING, TO THE EXTENT
PERMITTED BY LAW, INTEREST NOT PAID WHEN DUE), AT THE ALTERNATE BASE RATE IN
EFFECT FROM TIME TO TIME, PLUS THE APPLICABLE MARGIN FOR BASE RATE LOANS.
 INTEREST SHALL ACCRUE FROM THE DATE THE LOAN IS ADVANCED OR THE OBLIGATION IS
INCURRED OR PAYABLE, UNTIL PAID BY BORROWERS.  IF A LOAN IS REPAID ON THE SAME
DAY MADE, ONE DAY’S INTEREST SHALL ACCRUE.

 

B.             DURING AN INSOLVENCY PROCEEDING WITH RESPECT TO ANY BORROWER, OR
DURING ANY OTHER EVENT OF DEFAULT IF AGENT OR REQUIRED LENDERS IN THEIR
DISCRETION SO ELECT, OBLIGATIONS SHALL BEAR INTEREST AT THE DEFAULT RATE
(WHETHER BEFORE OR AFTER ANY JUDGMENT).  EACH BORROWER ACKNOWLEDGES THAT THE
COST AND EXPENSE TO AGENT AND LENDERS DUE TO AN EVENT OF DEFAULT ARE DIFFICULT
TO ASCERTAIN AND THAT THE DEFAULT RATE IS A FAIR AND REASONABLE ESTIMATE TO
COMPENSATE AGENT AND LENDERS FOR THIS.

 

C.             INTEREST ACCRUED ON THE LOANS SHALL BE DUE AND PAYABLE IN
ARREARS, (I) ON THE FIRST DAY OF EACH QUARTER WITH RESPECT TO BASE RATE LOANS;
(II) ON THE LAST DAY OF ANY INTEREST PERIOD WITH RESPECT TO LIBOR LOANS,
PROVIDED THAT ACCRUED INTEREST ON LIBOR LOANS HAVING AN INTEREST PERIOD OF 180
DAYS SHALL ALSO BE PAID ON THE 90TH DAY OF EACH SUCH INTEREST PERIOD; (III) ON
ANY DATE OF PREPAYMENT, WITH RESPECT TO THE PRINCIPAL AMOUNT OF LOANS BEING
PREPAID; AND (IV) ON THE COMMITMENT TERMINATION DATE.  INTEREST ACCRUED ON ANY
OTHER OBLIGATIONS SHALL BE DUE AND PAYABLE AS PROVIDED IN THE LOAN DOCUMENTS
AND, IF NO PAYMENT DATE IS SPECIFIED, SHALL BE DUE AND PAYABLE ON DEMAND. 
NOTWITHSTANDING THE FOREGOING, INTEREST ACCRUED AT THE DEFAULT RATE SHALL BE DUE
AND PAYABLE ON DEMAND.

 

3.1.2        APPLICATION OF LIBOR TO OUTSTANDING LOANS.

 

A.             BORROWER AGENT MAY ON ANY BUSINESS DAY, SUBJECT TO DELIVERY OF A
NOTICE OF CONVERSION/CONTINUATION, ELECT TO CONVERT ANY PORTION OF THE BASE RATE
LOANS TO, OR TO CONTINUE ANY LIBOR LOAN AT THE END OF ITS INTEREST PERIOD AS, A
LIBOR LOAN.  DURING ANY DEFAULT OR EVENT OF DEFAULT, AGENT MAY (AND SHALL AT THE
DIRECTION OF REQUIRED LENDERS) DECLARE THAT NO LOAN MAY BE MADE, CONVERTED OR
CONTINUED AS A LIBOR LOAN.

 

B.             WHENEVER BORROWERS DESIRE TO CONVERT OR CONTINUE LOANS AS LIBOR
LOANS, BORROWER AGENT SHALL GIVE AGENT A NOTICE OF CONVERSION/CONTINUATION, NO
LATER THAN 11:00 A.M. AT LEAST THREE BUSINESS DAYS BEFORE THE REQUESTED
CONVERSION OR CONTINUATION DATE.  PROMPTLY AFTER RECEIVING ANY SUCH NOTICE,
AGENT SHALL NOTIFY EACH LENDER THEREOF.  EACH NOTICE OF

 

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CONVERSION/CONTINUATION SHALL BE IRREVOCABLE, AND SHALL SPECIFY THE AMOUNT OF
LOANS TO BE CONVERTED OR CONTINUED, THE CONVERSION OR CONTINUATION DATE (WHICH
SHALL BE A BUSINESS DAY), AND THE DURATION OF THE INTEREST PERIOD (WHICH SHALL
BE DEEMED TO BE 30 DAYS IF NOT SPECIFIED).  IF, UPON THE EXPIRATION OF ANY
INTEREST PERIOD IN RESPECT OF ANY LIBOR LOANS, BORROWERS SHALL HAVE FAILED TO
DELIVER A NOTICE OF CONVERSION/CONTINUATION, THEY SHALL BE DEEMED TO HAVE
ELECTED TO CONVERT SUCH LOANS INTO BASE RATE LOANS.

 

3.1.3        INTEREST PERIODS.  IN CONNECTION WITH THE MAKING, CONVERSION OR
CONTINUATION OF ANY LIBOR LOANS, BORROWERS SHALL SELECT AN INTEREST PERIOD
(“INTEREST PERIOD”) TO APPLY, WHICH INTEREST PERIOD SHALL BE 30, 60, 90 OR 180
DAYS; PROVIDED, HOWEVER, THAT:

 

A.             THE INTEREST PERIOD SHALL COMMENCE ON THE DATE THE LOAN IS MADE
OR CONTINUED AS, OR CONVERTED INTO, A LIBOR LOAN, AND SHALL EXPIRE ON THE
NUMERICALLY CORRESPONDING DAY IN THE CALENDAR MONTH AT ITS END;

 

B.             IF ANY INTEREST PERIOD COMMENCES ON A DAY FOR WHICH THERE IS NO
CORRESPONDING DAY IN THE CALENDAR MONTH AT ITS END OR IF SUCH CORRESPONDING DAY
FALLS AFTER THE LAST BUSINESS DAY OF SUCH MONTH, THEN THE INTEREST PERIOD SHALL
EXPIRE ON THE LAST BUSINESS DAY OF SUCH MONTH; AND IF ANY INTEREST PERIOD WOULD
EXPIRE ON A DAY THAT IS NOT A BUSINESS DAY, THE PERIOD SHALL EXPIRE ON THE NEXT
BUSINESS DAY; AND

 

C.             NO INTEREST PERIOD SHALL EXTEND BEYOND THE REVOLVER TERMINATION
DATE.

 

3.1.4        INTEREST RATE NOT ASCERTAINABLE.  IF AGENT SHALL DETERMINE THAT ON
ANY DATE FOR DETERMINING LIBOR, DUE TO ANY CIRCUMSTANCE AFFECTING THE LONDON
INTERBANK MARKET, ADEQUATE AND FAIR MEANS DO NOT EXIST FOR ASCERTAINING SUCH
RATE ON THE BASIS PROVIDED HEREIN, THEN AGENT SHALL IMMEDIATELY NOTIFY BORROWER
AGENT OF SUCH DETERMINATION.  UNTIL AGENT NOTIFIES BORROWER AGENT THAT SUCH
CIRCUMSTANCE NO LONGER EXISTS, THE OBLIGATION OF LENDERS TO MAKE LIBOR LOANS
SHALL BE SUSPENDED, AND NO FURTHER LOANS MAY BE CONVERTED INTO OR CONTINUED AS
LIBOR LOANS.

 

3.2           Fees.

 

3.2.1        UNUSED LINE FEE.  BORROWERS SHALL PAY TO AGENT, FOR THE PRO RATA
BENEFIT OF LENDERS, A FEE ACCRUING DURING EACH CALENDAR QUARTER WHEN THE AVERAGE
DAILY AGGREGATE AMOUNT OF LOANS AND LC OBLIGATIONS DURING THE PRECEDING CALENDAR
QUARTER OR ANY PORTION THEREOF (A) IS LESS THAN 50% OF THE COMMITMENTS IN SUCH
PRIOR CALENDAR QUARTER, AT THE RATE OF 0.625% PER ANNUM AND (B) IS EQUAL TO OR
IN EXCESS OF 50% OF THE COMMITMENTS IN SUCH PRIOR CALENDAR QUARTER, AT A RATE OF
0.50% PER ANNUM, IN EACH CASE TIMES THE DAILY AMOUNT BY WHICH THE COMMITMENTS IN
SUCH CALENDAR QUARTER EXCEED THE AGGREGATE AMOUNT OF LOANS, AMOUNTS OWING FOR
ANY DRAWINGS UNDER LETTERS OF CREDIT AND STATED AMOUNT OF LETTERS OF CREDIT
DURING SUCH CALENDAR QUARTER.   SUCH FEE SHALL BE DETERMINED BY AGENT AND BE
PAYABLE QUARTERLY IN ARREARS, ON THE FIRST DAY OF EACH CALENDAR QUARTER
COMMENCING ON THE FIRST QUARTER TO OCCUR AFTER THE CLOSING DATE AND ON THE
COMMITMENT TERMINATION DATE.

 

3.2.2        LC FACILITY FEES.  BORROWERS SHALL PAY (A) TO AGENT, FOR THE PRO
RATA BENEFIT OF LENDERS, A FEE EQUAL TO THE APPLICABLE MARGIN IN EFFECT FOR
LIBOR LOANS TIMES THE AVERAGE DAILY STATED AMOUNT OF LETTERS OF CREDIT, WHICH
FEE SHALL BE PAYABLE MONTHLY IN ARREARS,

 

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ON THE FIRST DAY OF EACH MONTH; (B) TO AGENT, FOR ITS OWN ACCOUNT, A FRONTING
FEE EQUAL TO 0.125% PER ANNUM ON THE STATED AMOUNT OF EACH LETTER OF CREDIT,
WHICH FEE SHALL BE PAYABLE QUARTERLY IN ARREARS, ON THE FIRST DAY OF EACH
CALENDAR QUARTER COMMENCING ON THE FIRST QUARTER TO OCCUR AFTER THE CLOSING
DATE; AND (C) TO ISSUING BANK, FOR ITS OWN ACCOUNT, ALL CUSTOMARY CHARGES
ASSOCIATED WITH THE ISSUANCE, AMENDING, NEGOTIATING, PAYMENT, PROCESSING,
TRANSFER AND ADMINISTRATION OF LETTERS OF CREDIT, WHICH CHARGES SHALL BE PAID AS
AND WHEN INCURRED.  DURING AN EVENT OF DEFAULT, THE FEE PAYABLE UNDER
CLAUSE (A) SHALL BE INCREASED BY 2% PER ANNUM.

 

3.2.3        AGENT FEES.  IN CONSIDERATION OF AGENT’S AND LEAD ARRANGERS’
SYNDICATION OF THE COMMITMENTS AND AGENT’S SERVICE HEREUNDER, BORROWERS SHALL
PAY TO AGENT AND LEAD ARRANGERS, RESPECTIVELY, FOR THEIR OWN ACCOUNT, THE FEES
DESCRIBED IN THE FEE LETTER.

 

3.3           Computation of Interest, Fees, Yield Protection.  All interest on
LIBOR Loans shall be computed for the actual days elapsed, based on a year of
360 days, and all interest on Base Rate Loans, as well as fees and other charges
calculated on a per annum basis, shall be computed for the actual days elapsed,
based on a year of 365 or 366 days, as applicable.  Each determination by Agent
of any interest, fees or interest rate hereunder shall be final, conclusive and
binding for all purposes, absent manifest error.  All fees shall be fully earned
when due and shall not be subject to rebate, refund or proration.  All fees
payable under Section 3.2 are compensation for services and are not, and shall
not be deemed to be, interest or any other charge for the use, forbearance or
detention of money.  A certificate as to amounts payable by Borrowers under
Section 3.4, 3.6, 3.7, 3.9 or 5.8, submitted to Borrower Agent by Agent or the
affected Lender, as applicable, shall be final, conclusive and binding for all
purposes, absent manifest error, and Borrowers shall pay such amounts to the
appropriate party within 10 days following receipt of the certificate.  For the
purposes of the Interest Act (Canada), (i) whenever any interest or fees under
this Agreement or any other Loan Document is calculated using a rate based on a
year of 360 days, the rate determined pursuant to such calculation, when
expressed as an annual rate, is equivalent to (x) the applicable rate,
(y) multiplied by the actual number of days in the calendar year in which the
period for which such interest is payable (or compounded) ends, and (z) divided
by 360, (ii) the principle of deemed reinvestment of interest does not apply to
any interest calculation under this Agreement, and (iii) the rates of interest
stipulated in this Agreement are intended to be nominal rates and not effective
rates or yields.

 

3.4           Reimbursement Obligations.  Borrowers shall reimburse Agent and
any Lender for all Extraordinary Expenses.  Borrowers shall also reimburse
Agent, Syndication Agent and the Lead Arrangers for all reasonable legal,
accounting, appraisal, consulting, and other fees, costs and expenses incurred
by it in connection with (a) negotiation and preparation of any Loan Documents,
including any amendment or other modification thereof; (b) administration of and
actions relating to any Collateral, Loan Documents and transactions contemplated
thereby, including any actions taken to perfect or maintain priority of Agent’s
Liens on any Collateral, to maintain any insurance required hereunder or to
verify Collateral; and (c) subject to the limits of Section 10.1.1(b), each
inspection, audit or appraisal with respect to any Obligor or Collateral,
whether prepared by Agent’s personnel or a third party.  All legal, accounting
and consulting fees shall be charged to Borrowers by Agent’s, Syndication
Agent’s and the Lead Arrangers’ professionals, as applicable, at their full
hourly rates, regardless of any reduced or alternative fee billing arrangements
that Agent, Syndication Agent, the Lead Arrangers, any Lender or any of their
Affiliates may have with such professionals with respect to this or any other
transaction.  If,

 

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for any reason (including inaccurate reporting on financial statements or a
Compliance Certificate), it is determined that a higher Applicable Margin should
have applied to a period than was actually applied, then the proper margin shall
be applied retroactively and Borrowers shall immediately pay to Agent, for the
Pro Rata benefit of Lenders, an amount equal to the difference between the
amount of interest and fees that would have accrued using the proper margin and
the amount actually paid.  All amounts payable by Borrowers under this Section
shall be due on demand.  For the avoidance of doubt, the provisions of this
Section 3.4 shall apply regardless of whether the Closing Date occurs.

 

3.5           Illegality.  If any Lender determines that any Applicable Law has
made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund LIBOR Loans, or to determine or charge interest rates based upon LIBOR, or
any Governmental Authority has imposed material restrictions on the authority of
such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to Agent, any
obligation of such Lender to make or continue LIBOR Loans or to convert Base
Rate Loans to LIBOR Loans shall be suspended until such Lender notifies Agent
that the circumstances giving rise to such determination no longer exist.  Upon
delivery of such notice, Borrowers shall prepay or, if applicable, convert all
LIBOR Loans of such Lender to Base Rate Loans, either on the last day of the
Interest Period therefor, if such Lender may lawfully continue to maintain such
LIBOR Loans to such day, or immediately, if such Lender may not lawfully
continue to maintain such LIBOR Loans.  Upon any such prepayment or conversion,
Borrowers shall also pay accrued interest on the amount so prepaid or converted.

 

3.6           Inability to Determine Rates.  If Required Lenders notify Agent
for any reason in connection with a request for a Borrowing of, or conversion to
or continuation of, a LIBOR Loan that (a) Dollar deposits are not being offered
to banks in the London interbank Eurodollar market for the applicable amount and
Interest Period of such Loan, (b) adequate and reasonable means do not exist for
determining LIBOR for the requested Interest Period, or (c) LIBOR for the
requested Interest Period does not adequately and fairly reflect the cost to
such Lenders of funding such Loan, then Agent will promptly so notify Borrower
Agent and each Lender.  Thereafter, the obligation of Lenders to make or
maintain LIBOR Loans shall be suspended until Agent (upon instruction by
Required Lenders) revokes such notice.  Upon receipt of such notice, Borrower
Agent may revoke any pending request for a Borrowing of, conversion to or
continuation of a LIBOR Loan or, failing that, will be deemed to have submitted
a request for a Base Rate Loan.

 

3.7           Increased Costs; Capital Adequacy.

 

3.7.1                       CHANGE IN LAW.  IF ANY CHANGE IN LAW SHALL:

 

A.                                       IMPOSE MODIFY OR DEEM APPLICABLE ANY
RESERVE, SPECIAL DEPOSIT, COMPULSORY LOAN, INSURANCE CHARGE OR SIMILAR
REQUIREMENT AGAINST ASSETS OF, DEPOSITS WITH OR FOR THE ACCOUNT OF, OR CREDIT
EXTENDED OR PARTICIPATED IN BY, ANY LENDER (EXCEPT ANY RESERVE REQUIREMENT
REFLECTED IN LIBOR) OR ISSUING BANK;

 

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B.             SUBJECT ANY LENDER OR ISSUING BANK TO ANY TAX WITH RESPECT TO ANY
LOAN, LOAN DOCUMENT, LETTER OF CREDIT OR PARTICIPATION IN LC OBLIGATIONS, OR
CHANGE THE BASIS OF TAXATION OF PAYMENTS TO SUCH LENDER OR ISSUING BANK IN
RESPECT THEREOF (EXCEPT IN EACH CASE FOR INDEMNIFIED TAXES OR OTHER TAXES
COVERED BY SECTION 5.8 AND THE IMPOSITION OF, OR ANY CHANGE IN THE RATE OF, ANY
EXCLUDED TAX PAYABLE BY SUCH LENDER OR ISSUING BANK); OR

 

C.             IMPOSE ON ANY LENDER OR ISSUING BANK OR THE LONDON INTERBANK
MARKET ANY OTHER CONDITION, COST OR EXPENSE AFFECTING ANY LOAN, LOAN DOCUMENT,
LETTER OF CREDIT OR PARTICIPATION IN LC OBLIGATIONS;

 

and the result thereof shall be to increase the cost to such Lender of making or
maintaining any LIBOR Loan (or of maintaining its obligation to make any such
Loan), or to increase the cost to such Lender or Issuing Bank of participating
in, issuing or maintaining any Letter of Credit (or of maintaining its
obligation to participate in or to issue any Letter of Credit), or to reduce the
amount of any sum received or receivable by such Lender or Issuing Bank
hereunder (whether of principal, interest or any other amount) then, upon
request of such Lender or Issuing Bank (which request shall be accompanied by a
certificate of such Lender or Issuing Bank setting forth in reasonable detail
the amount or amounts necessary to compensate such Lender or Issuing Bank and
the basis therefor), Borrowers will pay to such Lender or Issuing Bank, as
applicable, such additional amount or amounts as will compensate such Lender or
Issuing Bank, as applicable, for such additional costs incurred or reduction
suffered.

 

3.7.2        CAPITAL ADEQUACY.  IF ANY LENDER OR ISSUING BANK DETERMINES THAT
ANY CHANGE IN LAW AFFECTING SUCH LENDER OR ISSUING BANK OR ANY LENDING OFFICE OF
SUCH LENDER OR SUCH LENDER’S OR ISSUING BANK’S HOLDING COMPANY, IF ANY,
REGARDING CAPITAL REQUIREMENTS HAS OR WOULD HAVE THE EFFECT OF REDUCING THE RATE
OF RETURN ON SUCH LENDER’S, ISSUING BANK’S OR HOLDING COMPANY’S CAPITAL AS A
CONSEQUENCE OF THIS AGREEMENT, OR SUCH LENDER’S OR ISSUING BANK’S COMMITMENTS,
LOANS, LETTERS OF CREDIT OR PARTICIPATIONS IN LC OBLIGATIONS, TO A LEVEL BELOW
THAT WHICH SUCH LENDER, ISSUING BANK OR HOLDING COMPANY COULD HAVE ACHIEVED BUT
FOR SUCH CHANGE IN LAW (TAKING INTO CONSIDERATION SUCH LENDER’S, ISSUING BANK’S
AND HOLDING COMPANY’S POLICIES WITH RESPECT TO CAPITAL ADEQUACY), THEN FROM TIME
TO TIME UPON THE REQUEST OF SUCH LENDER OR ISSUING BANK (WHICH REQUEST SHALL BE
ACCOMPANIED BY A CERTIFICATE OF SUCH LENDER OR ISSUING BANK SETTING FORTH IN
REASONABLE DETAIL THE AMOUNT OR AMOUNTS NECESSARY TO COMPENSATE SUCH LENDER OR
ISSUING BANK AND THE BASIS THEREFOR), BORROWERS WILL PAY TO SUCH LENDER OR
ISSUING BANK, AS THE CASE MAY BE, SUCH ADDITIONAL AMOUNT OR AMOUNTS AS WILL
COMPENSATE IT OR ITS HOLDING COMPANY FOR ANY SUCH REDUCTION SUFFERED.

 

3.7.3        COMPENSATION.  FAILURE OR DELAY ON THE PART OF ANY LENDER OR
ISSUING BANK TO DEMAND COMPENSATION PURSUANT TO THIS SECTION SHALL NOT
CONSTITUTE A WAIVER OF ITS RIGHT TO DEMAND SUCH COMPENSATION, BUT BORROWERS
SHALL NOT BE REQUIRED TO COMPENSATE A LENDER OR ISSUING BANK FOR ANY INCREASED
COSTS INCURRED OR REDUCTIONS SUFFERED MORE THAN NINE MONTHS PRIOR TO THE DATE
THAT THE LENDER OR ISSUING BANK NOTIFIES BORROWER AGENT OF THE CHANGE IN LAW
GIVING RISE TO SUCH INCREASED COSTS OR REDUCTIONS AND OF SUCH LENDER’S OR
ISSUING BANK’S INTENTION TO CLAIM COMPENSATION THEREFOR (EXCEPT THAT, IF THE
CHANGE IN LAW GIVING RISE TO SUCH INCREASED COSTS OR REDUCTIONS IS RETROACTIVE,
THEN THE NINE-MONTH PERIOD REFERRED TO ABOVE SHALL BE EXTENDED TO INCLUDE THE
PERIOD OF RETROACTIVE EFFECT THEREOF).

 

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3.8           Mitigation.  If any Lender gives a notice under Section 3.5 or
requests compensation under Section 3.7, or if Borrowers are required to pay
additional amounts with respect to a Lender under Section 5.8, then such Lender
shall use reasonable efforts to designate a different Lending Office or to
assign its rights and obligations hereunder to another of its offices, branches
or Affiliates, if, in the judgment of such Lender, such designation or
assignment (a) would eliminate the need for such notice or reduce amounts
payable or to be withheld in the future, as applicable; and (b) would not
subject the Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to it.  Borrowers shall pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.

 

3.9           Funding Losses.  If for any reason (other than default by a
Lender) (a) any Borrowing of, or conversion to or continuation of, a LIBOR Loan
does not occur on the date specified therefor in a Notice of Borrowing or Notice
of Conversion/Continuation (whether or not withdrawn), (b) any repayment or
conversion of a LIBOR Loan occurs on a day other than the end of its Interest
Period, or (c) Borrowers fail to repay a LIBOR Loan when required hereunder,
then Borrowers shall pay to Agent its customary administrative charge and to
each Lender all losses and expenses that it sustains as a consequence thereof,
including loss of anticipated profits and any loss or expense arising from
liquidation or redeployment of funds or from fees payable to terminate deposits
of matching funds.  Lenders shall not be required to purchase Dollar deposits in
the London interbank market or any other offshore Dollar market to fund any
LIBOR Loan, but the provisions hereof shall be deemed to apply as if each Lender
had purchased such deposits to fund its LIBOR Loans.

 

3.10         Maximum Interest.  Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by Applicable Law (“maximum rate”).  If Agent or any Lender shall
receive interest in an amount that exceeds the maximum rate, the excess interest
shall be applied to the principal of the Obligations or, if it exceeds such
unpaid principal, refunded to Borrowers.  In determining whether the interest
contracted for, charged or received by Agent or a Lender exceeds the maximum
rate, such Person may, to the extent permitted by Applicable Law,
(a) characterize any payment that is not principal as an expense, fee or premium
rather than interest; (b) exclude voluntary prepayments and the effects thereof;
and (c) amortize, prorate, allocate and spread in equal or unequal parts the
total amount of interest throughout the contemplated term of the Obligations
hereunder.

 

3.11         Removal or Replacement of a Lender.  Anything contained herein to
the contrary notwithstanding, and except during the occurrence and continuance
of a Default or Event of Default, in the event that:  (a) any Lender (an
“Increased-Cost Lender”) shall give notice to Borrower Agent that such Lender is
entitled to receive payments under Section 3.7 or Section 5.8, or pursuant to
Section 3.5 is unable to make LIBOR Loans, the circumstances which have caused
such Lender to be unable to make LIBOR Loans or which entitle such Lender to
receive such payments shall remain in effect, and such Lender shall fail to
withdraw such notice within five (5) Business Days after Borrower Agent’s
request for such withdrawal; (b) any Lender is a Defaulting Lender; or (c) in
connection with any proposed amendment, modification, termination, waiver or
consent with respect to any of the provisions hereof as contemplated by
Section 15.1.1, the consent of Required Lenders shall have been obtained but the
consent of one

 

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or more of such other Lenders (each a “Non-Consenting Lender”) whose consent is
required shall not have been obtained; then, with respect to each such
Increased-Cost Lender, Defaulting Lender or Non-Consenting Lender (the
“Terminated Lender”), Borrower Agent may, by giving written notice to Agent and
any Terminated Lender of its election to do so, elect to cause such Terminated
Lender (and such Terminated Lender hereby irrevocably agrees) to assign its
outstanding Loans in full to one or more Eligible Assignees (each a “Replacement
Lender”) in accordance with the provisions of Section 13.3 and Terminated Lender
shall pay any fees payable thereunder in connection with such assignment;
provided, (1) on the date of such assignment, the Replacement Lender shall pay
to Terminated Lender an amount equal to the principal of, and all accrued
interest on, all outstanding Loans of the Terminated Lender (and, other than as
specified in clause (2) below, no premium shall be payable in connection
therewith); (2) on the date of such assignment, Borrower Agent shall pay any
amounts payable to such Terminated Lender pursuant to Section 3.5 or otherwise
and Borrower Agent shall reimburse the Terminated Lender for any fees paid by
such Terminated Lender pursuant to Section 13.3 and in connection with the
assignment; and (3) in the event such Terminated Lender is a Non-Consenting
Lender, each Replacement Lender shall consent, at the time of such assignment,
to each matter in respect of which such Terminated Lender was a Non-Consenting
Lender.  Upon the prepayment of all amounts owing to any Terminated Lender, such
Terminated Lender shall no longer constitute a “Lender” for purposes hereof;
provided, any rights of such Terminated Lender to indemnification hereunder
shall survive as to such Terminated Lender.

 

SECTION 4.         LOAN ADMINISTRATION

 

4.1           Manner of Borrowing and Funding Loans.

 

4.1.1        NOTICE OF BORROWING.

 

A.             WHENEVER BORROWERS DESIRE FUNDING OF A BORROWING OF LOANS,
BORROWER AGENT SHALL GIVE AGENT A NOTICE OF BORROWING.  SUCH NOTICE MUST BE
RECEIVED BY AGENT NO LATER THAN 11:00 A.M. (I) ON THE BUSINESS DAY OF THE
REQUESTED FUNDING DATE, IN THE CASE OF BASE RATE LOANS, AND (II) AT LEAST THREE
BUSINESS DAYS PRIOR TO THE REQUESTED FUNDING DATE, IN THE CASE OF LIBOR LOANS. 
NOTICES RECEIVED AFTER 11:00 A.M. SHALL BE DEEMED RECEIVED ON THE NEXT BUSINESS
DAY.  EACH NOTICE OF BORROWING SHALL BE IRREVOCABLE AND SHALL SPECIFY (A) THE
AMOUNT OF THE BORROWING, (B) THE REQUESTED FUNDING DATE (WHICH MUST BE A
BUSINESS DAY), (C) WHETHER THE BORROWING IS TO BE MADE AS BASE RATE LOANS OR
LIBOR LOANS, AND (D) IN THE CASE OF LIBOR LOANS, THE DURATION OF THE APPLICABLE
INTEREST PERIOD (WHICH SHALL BE DEEMED TO BE 30 DAYS IF NOT SPECIFIED).  IN
ADDITION, IN THE CASE OF A BORROWING AFTER THE AVAILABILITY ELECTION WHICH WOULD
RESULT IN AVAILABILITY BEING LESS THAN $50,000,000, THE NOTICE OF BORROWING
SHALL DEMONSTRATE THAT THE FIXED CHARGE COVERAGE RATIO WOULD BE NOT LESS THAN
1.00 : 1.00 AFTER GIVING EFFECT TO SUCH BORROWING AS OF THE END OF THE FISCAL
QUARTER IMMEDIATELY PRECEDING SUCH FUNDING FOR WHICH FINANCIAL INFORMATION
PURSUANT TO SECTION 10.1.2(A) OR (B) HAS BEEN DELIVERED TO AGENT.

 

B.             UNLESS PAYMENT IS OTHERWISE TIMELY MADE BY BORROWERS, THE
BECOMING DUE OF ANY OBLIGATIONS (WHETHER PRINCIPAL, INTEREST, FEES OR OTHER
CHARGES, INCLUDING EXTRAORDINARY EXPENSES, LC OBLIGATIONS, CASH COLLATERAL AND
BANK PRODUCT DEBT) SHALL BE DEEMED TO BE A REQUEST FOR BASE RATE LOANS ON THE
DUE DATE, IN THE AMOUNT OF SUCH OBLIGATIONS.  THE PROCEEDS OF SUCH LOANS SHALL
BE DISBURSED AS DIRECT PAYMENT OF THE RELEVANT OBLIGATION.  IN

 

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ADDITION, AGENT MAY, AT ITS OPTION, CHARGE SUCH OBLIGATIONS AGAINST ANY
OPERATING, INVESTMENT OR OTHER ACCOUNT OF A BORROWER MAINTAINED WITH AGENT OR
ANY OF ITS AFFILIATES.

 

C.             IF BORROWERS ESTABLISH A CONTROLLED DISBURSEMENT ACCOUNT WITH
AGENT OR ANY AFFILIATE OF AGENT, THEN THE PRESENTATION FOR PAYMENT OF ANY CHECK
OR OTHER ITEM OF PAYMENT DRAWN ON SUCH ACCOUNT AT A TIME WHEN THERE ARE
INSUFFICIENT FUNDS TO COVER IT SHALL BE DEEMED TO BE A REQUEST FOR BASE RATE
LOANS ON THE DATE OF SUCH PRESENTATION, IN THE AMOUNT OF THE CHECK AND ITEMS
PRESENTED FOR PAYMENT.  THE PROCEEDS OF SUCH LOANS MAY BE DISBURSED DIRECTLY TO
THE CONTROLLED DISBURSEMENT ACCOUNT OR OTHER APPROPRIATE ACCOUNT.

 

4.1.2        FUNDINGS BY LENDERS.  EACH LENDER SHALL TIMELY HONOR ITS COMMITMENT
BY FUNDING ITS PRO RATA SHARE OF EACH BORROWING OF LOANS THAT IS PROPERLY
REQUESTED HEREUNDER.  EXCEPT FOR BORROWINGS TO BE MADE AS SWINGLINE LOANS, AGENT
SHALL ENDEAVOR TO NOTIFY LENDERS OF EACH NOTICE OF BORROWING (OR DEEMED REQUEST
FOR A BORROWING) BY 12:00 NOON ON THE PROPOSED FUNDING DATE FOR BASE RATE LOANS
OR BY 3:00 P.M. AT LEAST TWO BUSINESS DAYS BEFORE ANY PROPOSED FUNDING OF LIBOR
LOANS.  EACH LENDER SHALL FUND TO AGENT SUCH LENDER’S PRO RATA SHARE OF THE
BORROWING TO THE ACCOUNT SPECIFIED BY AGENT IN IMMEDIATELY AVAILABLE FUNDS NOT
LATER THAN 2:00 P.M. ON THE REQUESTED FUNDING DATE, UNLESS AGENT’S NOTICE IS
RECEIVED AFTER THE TIMES PROVIDED ABOVE, IN WHICH EVENT LENDER SHALL FUND ITS
PRO RATA SHARE BY 11:00 A.M. ON THE NEXT BUSINESS DAY.  SUBJECT TO ITS RECEIPT
OF SUCH AMOUNTS FROM LENDERS, AGENT SHALL DISBURSE THE PROCEEDS OF THE LOANS AS
DIRECTED BY BORROWER AGENT.  UNLESS AGENT SHALL HAVE RECEIVED (IN SUFFICIENT
TIME TO ACT) WRITTEN NOTICE FROM A LENDER THAT IT DOES NOT INTEND TO FUND ITS
PRO RATA SHARE OF A BORROWING, AGENT MAY, BUT SHALL NOT BE OBLIGATED TO, ASSUME
THAT SUCH LENDER HAS DEPOSITED OR PROMPTLY WILL DEPOSIT ITS SHARE WITH AGENT,
AND AGENT MAY, BUT SHALL NOT BE OBLIGATED TO, DISBURSE A CORRESPONDING AMOUNT TO
BORROWERS.  IF A LENDER’S SHARE OF ANY BORROWING OR OF ANY SETTLEMENT PURSUANT
TO SECTION 4.1.3(B) IS NOT RECEIVED BY AGENT, THEN BORROWERS AGREE TO REPAY TO
AGENT ON DEMAND THE AMOUNT OF SUCH SHARE, TOGETHER WITH INTEREST THEREON FROM
THE DATE DISBURSED UNTIL REPAID, AT THE RATE APPLICABLE TO THE BORROWING.

 

4.1.3        SWINGLINE LOANS; SETTLEMENT.

 

A.             AGENT MAY, BUT SHALL NOT BE OBLIGATED TO, ADVANCE SWINGLINE LOANS
TO BORROWERS, UP TO AN AGGREGATE OUTSTANDING PRINCIPAL AMOUNT EQUAL TO THE
GREATER OF (I) $15,000,000 AND (II) 10% OF THE AGGREGATE AMOUNT OF THE
COMMITMENTS.  EACH SWINGLINE LOAN SHALL CONSTITUTE A LOAN FOR ALL PURPOSES,
EXCEPT THAT PAYMENTS THEREON SHALL BE MADE TO AGENT FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF LENDERS, AS APPLICABLE.  THE OBLIGATION OF BORROWERS TO REPAY
SWINGLINE LOANS SHALL BE EVIDENCED BY THE RECORDS OF AGENT AND NEED NOT BE
EVIDENCED BY ANY PROMISSORY NOTE.

 

B.             TO FACILITATE ADMINISTRATION OF THE LOANS, LENDERS AND AGENT
AGREE (WHICH AGREEMENT IS SOLELY AMONG THEM, AND NOT FOR THE BENEFIT OF OR
ENFORCEABLE BY ANY BORROWER) THAT SETTLEMENT AMONG THEM WITH RESPECT TO
SWINGLINE LOANS AND OTHER LOANS MAY TAKE PLACE ON A DATE DETERMINED FROM TIME TO
TIME BY AGENT, WHICH SHALL OCCUR AT LEAST ONCE EACH WEEK.  ON EACH SETTLEMENT
DATE, SETTLEMENT SHALL BE MADE WITH EACH LENDER IN ACCORDANCE WITH THE
SETTLEMENT REPORT DELIVERED BY AGENT TO LENDERS.  BETWEEN SETTLEMENT DATES,
AGENT MAY IN ITS DISCRETION APPLY PAYMENTS ON LOANS TO SWINGLINE LOANS,
REGARDLESS OF ANY DESIGNATION BY BORROWER OR ANY PROVISION HEREIN TO THE
CONTRARY.  EACH LENDER’S OBLIGATION TO MAKE SETTLEMENTS WITH AGENT IS

 

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ABSOLUTE AND UNCONDITIONAL, WITHOUT OFFSET, COUNTERCLAIM OR OTHER DEFENSE, AND
WHETHER OR NOT THE COMMITMENTS HAVE TERMINATED, AN OVERADVANCE EXISTS OR THE
CONDITIONS IN SECTION 6 ARE SATISFIED.  IF, DUE TO AN INSOLVENCY PROCEEDING WITH
RESPECT TO A BORROWER OR OTHERWISE, ANY SWINGLINE LOAN MAY NOT BE SETTLED AMONG
LENDERS HEREUNDER, THEN EACH LENDER SHALL BE DEEMED TO HAVE PURCHASED FROM AGENT
A PRO RATA PARTICIPATION IN EACH UNPAID SWINGLINE LOAN AND SHALL TRANSFER THE
AMOUNT OF SUCH PARTICIPATION TO AGENT, IN IMMEDIATELY AVAILABLE FUNDS, WITHIN
ONE BUSINESS DAY AFTER AGENT’S REQUEST THEREFOR.  AGENT ACKNOWLEDGES THAT IT
RECEIVES ALL LOAN PROCEEDS, AND INTEREST AND FEES OWING TO LENDERS HEREUNDER, IN
ITS CAPACITY AS AGENT UNDER THIS AGREEMENT.

 

4.1.4        NOTICES.  EACH BORROWER AUTHORIZES AGENT AND LENDERS TO EXTEND,
CONVERT OR CONTINUE LOANS, EFFECT SELECTIONS OF INTEREST RATES, AND TRANSFER
FUNDS TO OR ON BEHALF OF BORROWERS BASED ON TELEPHONIC OR E-MAILED
INSTRUCTIONS.  BORROWERS SHALL CONFIRM EACH SUCH REQUEST BY PROMPT DELIVERY TO
AGENT OF A NOTICE OF BORROWING OR NOTICE OF CONVERSION/CONTINUATION, IF
APPLICABLE, BUT IF IT DIFFERS IN ANY MATERIAL RESPECT FROM THE ACTION TAKEN BY
AGENT OR LENDERS, THE RECORDS OF AGENT AND LENDERS SHALL GOVERN.  NEITHER AGENT
NOR ANY LENDER SHALL HAVE ANY LIABILITY FOR ANY LOSS SUFFERED BY A BORROWER AS A
RESULT OF AGENT OR ANY LENDER ACTING UPON ITS UNDERSTANDING OF TELEPHONIC OR
E-MAILED INSTRUCTIONS FROM A PERSON BELIEVED IN GOOD FAITH BY AGENT OR ANY
LENDER TO BE A PERSON AUTHORIZED TO GIVE SUCH INSTRUCTIONS ON A BORROWER’S
BEHALF.

 

4.2           Defaulting Lender.  Agent may (but shall not be required to), in
its discretion, retain any payments or other funds received by Agent that are to
be provided to a Defaulting Lender hereunder, and may apply such funds to such
Lender’s defaulted obligations or readvance the funds to Borrowers in accordance
with this Agreement.  The failure of any Lender to fund a Loan, to make a
payment in respect of LC Obligations or to otherwise perform its obligations
hereunder shall not relieve any other Lender of its obligations, and no Lender
shall be responsible for default by another Lender.  Lenders and Agent agree
(which agreement is solely among them, and not for the benefit of or enforceable
by any Borrower) that, solely for purposes of determining a Defaulting Lender’s
right to vote (except as provided in Section 15.1.1(c)) on matters relating to
the Loan Documents and to share in payments, fees and Collateral proceeds
thereunder, a Defaulting Lender shall not be deemed to be a “Lender” until all
its defaulted obligations have been cured.

 

4.3           Number and Amount of LIBOR Loans; Determination of Rate  Each
Borrowing of LIBOR Loans shall be in a minimum amount of $5,000,000, plus any
increment of $1,000,000 in excess thereof.  No more than seven Borrowings of
LIBOR Loans may be outstanding at any time, and all LIBOR Loans having the same
length and beginning date of their Interest Periods shall be aggregated together
and considered one Borrowing for this purpose.  Upon determining LIBOR for any
Interest Period requested by Borrowers, Agent shall promptly notify Borrowers
thereof by telephone or electronically and, if requested by Borrowers, shall
confirm any telephonic notice in writing.

 

4.4           Borrower Agent.  Each Borrower hereby designates Sanmina (in such
capacity, “Borrower Agent”) as its representative and agent for all purposes
under the Loan Documents, including requests for Loans and Letters of Credit,
designation of interest rates, delivery or receipt of communications,
preparation and delivery of Borrowing Base and financial reports,

 

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receipt and payment of Obligations, requests for waivers, amendments or other
accommodations, actions under the Loan Documents (including in respect of
compliance with covenants), and all other dealings with Agent, Issuing Bank or
any Lender.  Borrower Agent hereby accepts such appointment.  Agent and Lenders
shall be entitled to rely upon, and shall be fully protected in relying upon,
any notice or communication (including any notice of borrowing) delivered by
Borrower Agent on behalf of any Borrower.  Agent and Lenders may give any notice
or communication with a Borrower hereunder to Borrower Agent on behalf of such
Borrower.  Each of Agent, Issuing Bank and Lenders shall have the right, in its
discretion, to deal exclusively with Borrower Agent for any or all purposes
under the Loan Documents.  Each Borrower agrees that any notice, election,
communication, representation, agreement or undertaking made on its behalf by
Borrower Agent shall be binding upon and enforceable against it.

 

4.5           One Obligation.  The Loans, LC Obligations and other Obligations
shall constitute one general obligation of Borrowers and (unless otherwise
expressly provided in any Loan Document) shall be secured by Agent’s Lien upon
all Collateral.

 

4.6           Effect of Termination.  On the effective date of any termination
of the Commitments, all Obligations shall be immediately due and payable.  All
undertakings of Borrowers contained in the Loan Documents shall survive any
termination, and Agent shall retain its Liens in the Collateral and all of its
rights and remedies under the Loan Documents until Full Payment of the
Obligations.  Notwithstanding Full Payment of the Obligations, Agent shall not
be required to terminate its Liens in any Collateral unless, with respect to any
damages Agent may incur as a result of the dishonor or return of Payment Items
applied to Obligations, Agent receives (a) a written agreement, executed by
Borrowers and any Person whose advances are used in whole or in part to satisfy
the Obligations, indemnifying Agent and Lenders from any such damages; or
(b) such Cash Collateral as Agent, in its discretion, deems necessary to protect
against any such damages.  Sections 2.2, 3.4, 3.7, 3.9, 5.4, 5.8, 5.9, 12, 15.2,
15.12 and this Section, and the obligation of each Obligor and Lender with
respect to each indemnity given by it in any Loan Document, shall survive Full
Payment of the Obligations and any release relating to this credit facility.

 

SECTION 5.                            PAYMENTS

 

5.1           General Payment Provisions.  All payments of Obligations shall be
made in Dollars, without offset, counterclaim or defense of any kind, and in
immediately available funds, not later than 12:00 noon on the due date.  Any
payment after such time shall be deemed made on the next Business Day.  Any
payment of a LIBOR Loan prior to the end of its Interest Period shall be
accompanied by all amounts due under Section 3.9.  Any prepayment of Loans shall
be applied first to Base Rate Loans and then to LIBOR Loans.

 

5.2           Repayment of Loans.  Loans shall be due and payable in full on the
Revolver Termination Date, unless payment is sooner required hereunder.  Loans
may be prepaid from time to time, without penalty or premium and without prior
notice.  All repayments and prepayments of Loans shall be applied on a Pro Rata
basis.  If any Asset Disposition includes the disposition of Collateral
(i) outside the Ordinary Course of Business consistent with past practices or
(ii) in connection with factoring or similar arrangements permitted under

 

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Section 10.2.5(e) or Section 10.2.5(f) hereof, then, in each case, prior thereto
(except in the case of any involuntary loss resulting from a casualty event or
condemnation and in the case of transactions contemplated by the 2009 Corporate
Reorganization) the Borrower Agent shall deliver to Agent a Borrowing Base
Certificate giving effect to such Asset Disposition and if a Trigger Period
exists at the time of such Disposition or as a result thereof the Net Proceeds
of such Asset Disposition shall be applied to the Loans.  Notwithstanding
anything herein to the contrary, if an Overadvance exists, Borrowers shall, on
the sooner of Agent’s demand or the first Business Day after any Borrower has
knowledge thereof, repay the outstanding Loans and, if necessary, Cash
Collateralize any Letters of Credit, in an aggregate amount sufficient to reduce
the principal balance of Loans to the lesser of the Borrowing Base or the
Commitments.

 

5.3           Payment of Other Obligations.  Obligations other than Loans,
including LC Obligations and Extraordinary Expenses, shall be paid by Borrowers
as provided in the Loan Documents or, if no payment date is specified, on
demand.

 

5.4           Marshaling; Payments Set Aside.  None of Agent or Lenders shall be
under any obligation to marshal any assets in favor of any Obligor or against
any Obligations.  If any payment by or on behalf of Borrowers is made to Agent,
Issuing Bank or any Lender, or Agent, Issuing Bank or any Lender exercises a
right of setoff, and such payment or the proceeds of such setoff or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by
Agent, Issuing Bank or such Lender in its discretion) to be repaid to a trustee,
receiver or any other Person, then to the extent of such recovery, the
Obligation originally intended to be satisfied, and all Liens, rights and
remedies relating thereto, shall be revived and continued in full force and
effect as if such payment had not been made or such setoff had not occurred.

 

5.5           Post-Default Allocation of Payments.

 

5.5.1                        ALLOCATION.  NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, DURING AN EVENT OF DEFAULT, MONIES TO BE APPLIED TO THE OBLIGATIONS,
WHETHER ARISING FROM PAYMENTS BY OBLIGORS, REALIZATION ON COLLATERAL, SETOFF OR
OTHERWISE, SHALL BE ALLOCATED AS FOLLOWS:

 

A.             FIRST, TO ALL COSTS AND EXPENSES, INCLUDING EXTRAORDINARY
EXPENSES, OWING TO AGENT;

 

B.             SECOND, TO ALL AMOUNTS OWING TO AGENT ON SWINGLINE LOANS;

 

C.             THIRD, TO ALL AMOUNTS OWING TO ISSUING BANK ON LC OBLIGATIONS;

 

D.             FOURTH, TO ALL OBLIGATIONS CONSTITUTING FEES (EXCLUDING AMOUNTS
RELATING TO BANK PRODUCTS);

 

E.             FIFTH, TO ALL OBLIGATIONS CONSTITUTING INTEREST (EXCLUDING
AMOUNTS RELATING TO BANK PRODUCTS);

 

F.              SIXTH, TO PROVIDE CASH COLLATERAL FOR OUTSTANDING LETTERS OF
CREDIT;

 

G.             SEVENTH, TO ALL OTHER OBLIGATIONS, OTHER THAN BANK PRODUCT DEBT;

 

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H.             EIGHTH, TO ANY BANK PRODUCT DEBT THAT IS SUBJECT IN FULL TO ANY
RESERVE HEREUNDER; AND

 

I.              LAST, TO ANY OTHER BANK PRODUCT DEBT.

 

Amounts shall be applied to each category of Obligations set forth above until
Full Payment thereof and then to the next category.  If amounts are insufficient
to satisfy a category, they shall be applied on a pro rata basis among the
Obligations in the category.  Amounts distributed with respect to any Bank
Product Debt shall be the lesser of the applicable Bank Product Amount last
reported to Agent or the actual Bank Product Debt as calculated by the
methodology reported to Agent for determining the amount due.  Agent shall have
no obligation to calculate the amount to be distributed with respect to any Bank
Product Debt, but may rely upon written notice of the amount (setting forth a
reasonably detailed calculation) from the Secured Party.  In the absence of such
notice, Agent may assume the amount to be distributed is the Bank Product Amount
last reported to it.  The allocations set forth in this Section are solely to
determine the rights and priorities of Agent and Lenders as among themselves,
and may be changed by agreement among them without the consent of any Obligor. 
This Section is not for the benefit of or enforceable by any Borrower.

 

5.5.2                        ERRONEOUS APPLICATION.  AGENT SHALL NOT BE LIABLE
FOR ANY APPLICATION OF AMOUNTS MADE BY IT IN GOOD FAITH AND, IF ANY SUCH
APPLICATION IS SUBSEQUENTLY DETERMINED TO HAVE BEEN MADE IN ERROR, THE SOLE
RECOURSE OF ANY LENDER OR OTHER PERSON TO WHICH SUCH AMOUNT SHOULD HAVE BEEN
MADE SHALL BE TO RECOVER THE AMOUNT FROM THE PERSON THAT ACTUALLY RECEIVED IT
(AND, IF SUCH AMOUNT WAS RECEIVED BY ANY LENDER, SUCH LENDER HEREBY AGREES TO
RETURN IT).

 

5.6           Application of Payments.  The ledger balance in all Dominion
Accounts as of the end of a Business Day shall be applied to the Obligations
constituting principal, interest, fees and expenses at the beginning of the next
Business Day or as soon thereafter as designated by Agent.  If, as a result of
such application, a credit balance exists, the balance shall not accrue interest
in favor of Borrowers and shall be made available to Borrowers as long as no
Default or Event of Default exists.  Each Borrower irrevocably waives the right
to direct the application of any payments or Collateral proceeds, and agrees
that Agent shall have the continuing, exclusive right to apply and reapply same
against the Obligations, in such manner as Agent deems advisable,
notwithstanding any entry by Agent in its records.

 

5.7           Loan Account; Account Stated.

 

5.7.1                        LOAN ACCOUNT.  AGENT SHALL MAINTAIN IN ACCORDANCE
WITH ITS USUAL AND CUSTOMARY PRACTICES AN ACCOUNT OR ACCOUNTS (“LOAN ACCOUNT”)
EVIDENCING THE DEBT OF BORROWERS RESULTING FROM EACH LOAN OR ISSUANCE OF A
LETTER OF CREDIT FROM TIME TO TIME.  ANY FAILURE OF AGENT TO RECORD ANYTHING IN
THE LOAN ACCOUNT, OR ANY ERROR IN DOING SO, SHALL NOT LIMIT OR OTHERWISE AFFECT
THE OBLIGATION OF BORROWERS TO PAY ANY AMOUNT OWING HEREUNDER.  AGENT MAY
MAINTAIN A SINGLE LOAN ACCOUNT IN THE NAME OF BORROWER AGENT, AND EACH BORROWER
CONFIRMS THAT SUCH ARRANGEMENT SHALL HAVE NO EFFECT ON THE JOINT AND SEVERAL
CHARACTER OF ITS LIABILITY FOR THE OBLIGATIONS.

 

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5.7.2        ENTRIES BINDING.  ENTRIES MADE IN THE LOAN ACCOUNT SHALL CONSTITUTE
PRESUMPTIVE EVIDENCE OF THE INFORMATION CONTAINED THEREIN.  IF ANY INFORMATION
CONTAINED IN THE LOAN ACCOUNT IS PROVIDED TO OR INSPECTED BY ANY PERSON, THEN
SUCH INFORMATION SHALL BE CONCLUSIVE AND BINDING ON SUCH PERSON FOR ALL PURPOSES
ABSENT MANIFEST ERROR, EXCEPT TO THE EXTENT SUCH PERSON NOTIFIES AGENT IN
WRITING WITHIN 30 DAYS AFTER RECEIPT OR INSPECTION THAT SPECIFIC INFORMATION IS
SUBJECT TO DISPUTE.

 

5.7.3        REGISTER.  AGENT, ACTING SOLELY FOR THIS PURPOSE AS AN AGENT OF THE
BORROWERS, ALSO SHALL MAINTAIN A REGISTER FOR THE RECORDATION OF THE NAMES AND
ADDRESSES OF THE LENDERS AND THE PRINCIPAL AMOUNTS OF THE LOANS OWING TO EACH
LENDER PURSUANT TO THE TERMS HEREOF FROM TIME TO TIME (THE “REGISTER”).  THE
ENTRIES IN THE REGISTER SHALL BE CONCLUSIVE, AND THE BORROWER, AGENT AND THE
LENDERS MAY TREAT EACH PERSON WHOSE NAME IS RECORDED IN THE REGISTER AS A LENDER
FOR ALL PURPOSES OF THIS AGREEMENT, NOTWITHSTANDING NOTICE TO THE CONTRARY.  THE
REGISTER SHALL BE AVAILABLE FOR INSPECTION BY THE BORROWER AND ANY LENDER, AT
ANY REASONABLE TIME AND FROM TIME TO TIME UPON REASONABLE PRIOR NOTICE.

 

5.8           Taxes.

 

5.8.1        PAYMENTS FREE OF TAXES.  ALL PAYMENTS BY OBLIGORS OF OBLIGATIONS
SHALL BE FREE AND CLEAR OF AND WITHOUT REDUCTION FOR ANY TAXES.  IF APPLICABLE
LAW REQUIRES ANY OBLIGOR OR AGENT TO WITHHOLD OR DEDUCT ANY TAX (INCLUDING
BACKUP WITHHOLDING OR WITHHOLDING TAX), THE WITHHOLDING OR DEDUCTION SHALL BE
BASED ON INFORMATION PROVIDED PURSUANT TO SECTION 5.9 AND AGENT SHALL PAY THE
AMOUNT WITHHELD OR DEDUCTED TO THE RELEVANT GOVERNMENT AUTHORITY.  IF THE
WITHHOLDING OR DEDUCTION IS MADE ON ACCOUNT OF INDEMNIFIED TAXES OR OTHER TAXES,
THE SUM PAYABLE BY OBLIGORS SHALL BE INCREASED SO THAT AGENT, LENDER OR ISSUING
BANK, AS APPLICABLE, RECEIVES AN AMOUNT EQUAL TO THE SUM IT WOULD HAVE RECEIVED
IF NO SUCH WITHHOLDING OR DEDUCTION (INCLUDING DEDUCTIONS APPLICABLE TO
ADDITIONAL SUMS PAYABLE UNDER THIS SECTION) HAD BEEN MADE.  WITHOUT LIMITING THE
FOREGOING, OBLIGORS SHALL TIMELY PAY ALL OTHER TAXES TO THE RELEVANT
GOVERNMENTAL AUTHORITIES.

 

5.8.2        PAYMENT.  OBLIGORS SHALL INDEMNIFY, HOLD HARMLESS AND REIMBURSE
(WITHIN 10 DAYS AFTER DEMAND THEREFOR) AGENT, LENDERS AND ISSUING BANK FOR ANY
INDEMNIFIED TAXES OR OTHER TAXES (INCLUDING INDEMNIFIED TAXES AND OTHER TAXES
ATTRIBUTABLE TO AMOUNTS PAYABLE UNDER THIS SECTION) WITHHELD OR DEDUCTED BY ANY
OBLIGOR OR AGENT, OR PAID BY AGENT, ANY LENDER OR ISSUING BANK, WITH RESPECT TO
ANY OBLIGATIONS, LETTERS OF CREDIT OR LOAN DOCUMENTS, WHETHER OR NOT SUCH TAXES
WERE PROPERLY ASSERTED BY THE RELEVANT GOVERNMENTAL AUTHORITY, AND INCLUDING ALL
PENALTIES, INTEREST AND REASONABLE EXPENSES RELATING THERETO.  A CERTIFICATE AS
TO THE AMOUNT OF ANY SUCH PAYMENT OR LIABILITY DELIVERED TO BORROWER AGENT BY
AGENT, OR BY A LENDER OR ISSUING BANK (WITH A COPY TO AGENT), SHALL BE
CONCLUSIVE ABSENT MANIFEST ERROR.  AS SOON AS PRACTICABLE AFTER ANY PAYMENT OF
TAXES BY AN OBLIGOR, BORROWER AGENT SHALL DELIVER TO AGENT A RECEIPT FROM THE
GOVERNMENTAL AUTHORITY OR OTHER EVIDENCE OF PAYMENT SATISFACTORY TO AGENT.

 

5.9           Lender Tax Information.

 

5.9.1        STATUS OF LENDERS.  EACH LENDER SHALL DELIVER DOCUMENTATION AND
INFORMATION TO AGENT AND BORROWER AGENT, AT THE TIMES REASONABLY REQUESTED BY
AGENT OR BORROWER AGENT, SUFFICIENT TO PERMIT AGENT OR OBLIGORS TO DETERMINE
(A) WHETHER OR NOT

 

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PAYMENTS MADE WITH RESPECT TO OBLIGATIONS ARE SUBJECT TO TAXES, (B) IF
APPLICABLE, THE REQUIRED RATE OF WITHHOLDING OR DEDUCTION, AND (C) SUCH LENDER’S
ENTITLEMENT TO ANY AVAILABLE EXEMPTION FROM, OR REDUCTION OF, APPLICABLE TAXES
FOR SUCH PAYMENTS OR OTHERWISE TO ESTABLISH SUCH LENDER’S STATUS FOR WITHHOLDING
TAX PURPOSES IN THE APPLICABLE JURISDICTION.

 

5.9.2        DOCUMENTATION.  IF A BORROWER IS RESIDENT FOR TAX PURPOSES IN THE
UNITED STATES, ANY LENDER THAT IS A “UNITED STATES PERSON” WITHIN THE MEANING OF
SECTION 7701(A)(30) OF THE CODE SHALL DELIVER TO AGENT AND BORROWER AGENT IRS
FORM W-9 OR SUCH OTHER DOCUMENTATION OR INFORMATION PRESCRIBED BY APPLICABLE LAW
OR REASONABLY REQUESTED BY AGENT OR BORROWER AGENT TO DETERMINE WHETHER SUCH
LENDER IS SUBJECT TO BACKUP WITHHOLDING OR INFORMATION REPORTING REQUIREMENTS. 
IF ANY FOREIGN LENDER IS ENTITLED TO ANY EXEMPTION FROM OR REDUCTION OF UNITED
STATES WITHHOLDING TAX FOR PAYMENTS WITH RESPECT TO THE OBLIGATIONS, IT SHALL
DELIVER TO AGENT AND BORROWER AGENT ON OR PRIOR TO THE DATE ON WHICH IT BECOMES
A LENDER HEREUNDER (AND FROM TIME TO TIME THEREAFTER UPON THE REQUEST OF AGENT
OR BORROWER AGENT, BUT ONLY IF SUCH FOREIGN LENDER IS LEGALLY ENTITLED TO DO
SO), (A) IRS FORM W-8BEN CLAIMING ELIGIBILITY FOR BENEFITS OF AN INCOME TAX
TREATY TO WHICH THE UNITED STATES IS A PARTY; (B) IRS FORM W-8ECI; (C) IRS
FORM W-8IMY AND ALL REQUIRED SUPPORTING DOCUMENTATION; (D) IN THE CASE OF A
FOREIGN LENDER CLAIMING THE BENEFITS OF THE EXEMPTION FOR PORTFOLIO INTEREST
UNDER SECTION 881(C) OF THE CODE, IRS FORM W-8BEN AND A CERTIFICATE SHOWING SUCH
FOREIGN LENDER IS NOT (I) A “BANK” WITHIN THE MEANING OF SECTION 881(C)(3)(A) OF
THE CODE, (II) A “10 PERCENT SHAREHOLDER” OF ANY OBLIGOR WITHIN THE MEANING OF
SECTION 881(C)(3)(B) OF THE CODE, OR (III) A “CONTROLLED FOREIGN CORPORATION”
DESCRIBED IN SECTION 881(C)(3)(C) OF THE CODE; OR (E) ANY OTHER FORM PRESCRIBED
BY APPLICABLE LAW AS A BASIS FOR CLAIMING EXEMPTION FROM OR A REDUCTION IN
WITHHOLDING TAX, TOGETHER WITH SUCH SUPPLEMENTARY DOCUMENTATION NECESSARY TO
ALLOW AGENT AND BORROWERS TO DETERMINE THE WITHHOLDING OR DEDUCTION REQUIRED TO
BE MADE.

 

5.9.3        LENDER OBLIGATIONS.  EACH LENDER AND ISSUING BANK SHALL PROMPTLY
NOTIFY BORROWERS AND AGENT OF ANY CHANGE IN CIRCUMSTANCES THAT WOULD CHANGE ANY
CLAIMED EXEMPTION OR REDUCTION.  EACH LENDER AND ISSUING BANK SHALL INDEMNIFY,
HOLD HARMLESS AND REIMBURSE (WITHIN 10 DAYS AFTER DEMAND THEREFOR) BORROWERS AND
AGENT FOR ANY TAXES, LOSSES, CLAIMS, LIABILITIES, PENALTIES, INTEREST AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES) INCURRED BY OR ASSERTED AGAINST
A BORROWER OR AGENT BY ANY GOVERNMENTAL AUTHORITY DUE TO SUCH LENDER’S OR
ISSUING BANK’S FAILURE TO DELIVER, OR INACCURACY OR DEFICIENCY IN, ANY
DOCUMENTATION REQUIRED TO BE DELIVERED BY IT PURSUANT TO THIS SECTION.  EACH
LENDER AND ISSUING BANK AUTHORIZES AGENT TO SET OFF ANY AMOUNTS DUE TO AGENT
UNDER THIS SECTION AGAINST ANY AMOUNTS PAYABLE TO SUCH LENDER OR ISSUING BANK
UNDER ANY LOAN DOCUMENT.

 

5.9.4        IF A LENDER DETERMINES, IN ITS SOLE DISCRETION, THAT IT HAS
RECEIVED A REFUND OF ANY INDEMNIFIED 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 SECTION 5.8, SUCH LENDER SHALL PAY OVER SUCH
REFUND TO THE BORROWER (BUT ONLY TO THE EXTENT OF INDEMNITY PAYMENTS MADE, OR
ADDITIONAL AMOUNTS PAID, BY THE BORROWER UNDER THIS SECTION 5.8 WITH RESPECT TO
THE TAXES OR OTHER TAXES GIVING RISE TO SUCH REFUND), NET OF ALL OUT-OF-POCKET
EXPENSES OF 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 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 SUCH LENDER IN THE EVENT SUCH LENDER IS

 

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REQUIRED TO REPAY SUCH REFUND TO SUCH GOVERNMENTAL AUTHORITY.  THIS
SECTION 5.9.4 SHALL NOT BE CONSTRUED TO REQUIRE 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.

 

5.10         Nature and Extent of Each Borrower’s Liability.

 

5.10.1                  JOINT AND SEVERAL LIABILITY.  EACH BORROWER AGREES THAT
IT IS JOINTLY AND SEVERALLY LIABLE FOR, AND ABSOLUTELY AND UNCONDITIONALLY
GUARANTEES TO AGENT AND LENDERS THE PROMPT PAYMENT AND PERFORMANCE OF, ALL
OBLIGATIONS AND ALL AGREEMENTS UNDER THE LOAN DOCUMENTS.  EACH BORROWER AGREES
THAT ITS GUARANTY OBLIGATIONS HEREUNDER CONSTITUTE A CONTINUING GUARANTY OF
PAYMENT AND NOT OF COLLECTION, THAT SUCH OBLIGATIONS SHALL NOT BE DISCHARGED
UNTIL FULL PAYMENT OF THE OBLIGATIONS, AND THAT SUCH OBLIGATIONS ARE ABSOLUTE
AND UNCONDITIONAL, IRRESPECTIVE OF (A) THE GENUINENESS, VALIDITY, REGULARITY,
ENFORCEABILITY, SUBORDINATION OR ANY FUTURE MODIFICATION OF, OR CHANGE IN, ANY
OBLIGATIONS OR LOAN DOCUMENT, OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT TO
WHICH ANY OBLIGOR IS OR MAY BECOME A PARTY OR BE BOUND; (B) THE ABSENCE OF ANY
ACTION TO ENFORCE THIS AGREEMENT (INCLUDING THIS SECTION) OR ANY OTHER LOAN
DOCUMENT, OR ANY WAIVER, CONSENT OR INDULGENCE OF ANY KIND BY AGENT OR ANY
LENDER WITH RESPECT THERETO; (C) THE EXISTENCE, VALUE OR CONDITION OF, OR
FAILURE TO PERFECT A LIEN OR TO PRESERVE RIGHTS AGAINST, ANY SECURITY OR
GUARANTY FOR THE OBLIGATIONS OR ANY ACTION, OR THE ABSENCE OF ANY ACTION, BY
AGENT OR ANY LENDER IN RESPECT THEREOF (INCLUDING THE RELEASE OF ANY SECURITY OR
GUARANTY); (D) THE INSOLVENCY OF ANY OBLIGOR; (E) ANY ELECTION BY AGENT OR ANY
LENDER IN AN INSOLVENCY PROCEEDING FOR THE APPLICATION OF SECTION 1111(B)(2) OF
THE BANKRUPTCY CODE; (F) ANY BORROWING OR GRANT OF A LIEN BY ANY OTHER BORROWER,
AS DEBTOR-IN-POSSESSION UNDER SECTION 364 OF THE BANKRUPTCY CODE OR OTHERWISE;
(G) THE DISALLOWANCE OF ANY CLAIMS OF AGENT OR ANY LENDER AGAINST ANY OBLIGOR
FOR THE REPAYMENT OF ANY OBLIGATIONS UNDER SECTION 502 OF THE BANKRUPTCY CODE OR
OTHERWISE; OR (H) ANY OTHER ACTION OR CIRCUMSTANCES THAT MIGHT OTHERWISE
CONSTITUTE A LEGAL OR EQUITABLE DISCHARGE OR DEFENSE OF A SURETY OR GUARANTOR,
EXCEPT FULL PAYMENT OF ALL OBLIGATIONS.

 

5.10.2                  WAIVERS.

 

A.               EACH BORROWER EXPRESSLY WAIVES, TO THE EXTENT PERMITTED BY LAW,
ALL RIGHTS THAT IT MAY HAVE NOW OR IN THE FUTURE UNDER ANY STATUTE, AT COMMON
LAW, IN EQUITY OR OTHERWISE, TO COMPEL AGENT OR LENDERS TO MARSHAL ASSETS OR TO
PROCEED AGAINST ANY OBLIGOR, OTHER PERSON OR SECURITY FOR THE PAYMENT OR
PERFORMANCE OF ANY OBLIGATIONS BEFORE, OR AS A CONDITION TO, PROCEEDING AGAINST
SUCH BORROWER.  EACH BORROWER WAIVES, TO THE EXTENT PERMITTED BY LAW, ALL
DEFENSES AVAILABLE TO A SURETY, GUARANTOR OR ACCOMMODATION CO-OBLIGOR OTHER THAN
FULL PAYMENT OF ALL OBLIGATIONS.  IT IS AGREED AMONG EACH BORROWER, AGENT AND
LENDERS THAT THE PROVISIONS OF THIS SECTION 5.10 ARE OF THE ESSENCE OF THE
TRANSACTION CONTEMPLATED BY THE LOAN DOCUMENTS AND THAT, BUT FOR SUCH
PROVISIONS, AGENT AND LENDERS WOULD DECLINE TO MAKE LOANS AND ISSUE LETTERS OF
CREDIT.  EACH BORROWER ACKNOWLEDGES THAT ITS GUARANTY PURSUANT TO THIS
SECTION IS NECESSARY TO THE CONDUCT AND PROMOTION OF ITS BUSINESS, AND CAN BE
EXPECTED TO BENEFIT SUCH BUSINESS.

 

B.               AGENT AND LENDERS MAY, IN THEIR DISCRETION, PURSUE SUCH RIGHTS
AND REMEDIES AS THEY DEEM APPROPRIATE, INCLUDING REALIZATION UPON COLLATERAL,
WITHOUT AFFECTING ANY RIGHTS AND REMEDIES UNDER THIS SECTION 5.10.  IF, IN
TAKING ANY ACTION IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS OR REMEDIES,
AGENT OR ANY LENDER SHALL FORFEIT ANY OTHER RIGHTS OR REMEDIES,

 

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INCLUDING THE RIGHT TO ENTER A DEFICIENCY JUDGMENT AGAINST ANY BORROWER OR OTHER
PERSON, WHETHER BECAUSE OF ANY APPLICABLE LAWS PERTAINING TO “ELECTION OF
REMEDIES” OR OTHERWISE, EACH BORROWER CONSENTS TO SUCH ACTION AND WAIVES, TO THE
EXTENT PERMITTED BY LAW, ANY CLAIM BASED UPON IT, EVEN IF THE ACTION MAY RESULT
IN LOSS OF ANY RIGHTS OF SUBROGATION THAT ANY BORROWER MIGHT OTHERWISE HAVE
HAD.  ANY ELECTION OF REMEDIES THAT RESULTS IN DENIAL OR IMPAIRMENT OF THE RIGHT
OF AGENT OR ANY LENDER TO SEEK A DEFICIENCY JUDGMENT AGAINST ANY BORROWER SHALL
NOT IMPAIR ANY OTHER BORROWER’S OBLIGATION TO PAY THE FULL AMOUNT OF THE
OBLIGATIONS.  EACH BORROWER WAIVES, TO THE EXTENT PERMITTED BY LAW, ALL RIGHTS
AND DEFENSES ARISING OUT OF AN ELECTION OF REMEDIES, SUCH AS NONJUDICIAL
FORECLOSURE WITH RESPECT TO ANY SECURITY FOR THE OBLIGATIONS, EVEN THOUGH THAT
ELECTION OF REMEDIES DESTROYS SUCH BORROWER’S RIGHTS OF SUBROGATION AGAINST ANY
OTHER PERSON.  AGENT MAY BID ALL OR A PORTION OF THE OBLIGATIONS AT ANY
FORECLOSURE OR TRUSTEE’S SALE OR AT ANY PRIVATE SALE, AND THE AMOUNT OF SUCH BID
NEED NOT BE PAID BY AGENT BUT SHALL BE CREDITED AGAINST THE OBLIGATIONS.  THE
AMOUNT OF THE SUCCESSFUL BID AT ANY SUCH SALE, WHETHER AGENT OR ANY OTHER PERSON
IS THE SUCCESSFUL BIDDER, SHALL BE CONCLUSIVELY DEEMED TO BE THE FAIR MARKET
VALUE OF THE COLLATERAL, AND THE DIFFERENCE BETWEEN SUCH BID AMOUNT AND THE
REMAINING BALANCE OF THE OBLIGATIONS SHALL BE CONCLUSIVELY DEEMED TO BE THE
AMOUNT OF THE OBLIGATIONS GUARANTEED UNDER THIS SECTION 5.10, NOTWITHSTANDING
THAT ANY PRESENT OR FUTURE LAW OR COURT DECISION MAY HAVE THE EFFECT OF REDUCING
THE AMOUNT OF ANY DEFICIENCY CLAIM TO WHICH AGENT OR ANY LENDER MIGHT OTHERWISE
BE ENTITLED BUT FOR SUCH BIDDING AT ANY SUCH SALE.

 

5.10.3                  EXTENT OF LIABILITY; CONTRIBUTION.

 

A.               NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, EACH
BORROWER’S LIABILITY UNDER THIS SECTION 5.10 SHALL BE LIMITED TO THE GREATER OF
(I) ALL AMOUNTS FOR WHICH SUCH BORROWER IS PRIMARILY LIABLE, AS DESCRIBED BELOW,
AND (II) SUCH BORROWER’S ALLOCABLE AMOUNT.

 

B.               IF ANY BORROWER MAKES A PAYMENT UNDER THIS SECTION 5.10 OF ANY
OBLIGATIONS (OTHER THAN AMOUNTS FOR WHICH SUCH BORROWER IS PRIMARILY LIABLE) (A
“GUARANTOR PAYMENT”) THAT, TAKING INTO ACCOUNT ALL OTHER GUARANTOR PAYMENTS
PREVIOUSLY OR CONCURRENTLY MADE BY ANY OTHER BORROWER, EXCEEDS THE AMOUNT THAT
SUCH BORROWER WOULD OTHERWISE HAVE PAID IF EACH BORROWER HAD PAID THE AGGREGATE
OBLIGATIONS SATISFIED BY SUCH GUARANTOR PAYMENTS IN THE SAME PROPORTION THAT
SUCH BORROWER’S ALLOCABLE AMOUNT BORE TO THE TOTAL ALLOCABLE AMOUNTS OF ALL
BORROWERS, THEN SUCH BORROWER SHALL BE ENTITLED TO RECEIVE CONTRIBUTION AND
INDEMNIFICATION PAYMENTS FROM, AND TO BE REIMBURSED BY, EACH OTHER BORROWER FOR
THE AMOUNT OF SUCH EXCESS, PRO RATA BASED UPON THEIR RESPECTIVE ALLOCABLE
AMOUNTS IN EFFECT IMMEDIATELY PRIOR TO SUCH GUARANTOR PAYMENT.  THE “ALLOCABLE
AMOUNT” FOR ANY BORROWER SHALL BE THE MAXIMUM AMOUNT THAT COULD THEN BE
RECOVERED FROM SUCH BORROWER UNDER THIS SECTION 5.10 WITHOUT RENDERING SUCH
PAYMENT VOIDABLE UNDER SECTION 548 OF THE BANKRUPTCY CODE OR UNDER ANY
APPLICABLE STATE FRAUDULENT TRANSFER OR CONVEYANCE ACT, OR SIMILAR STATUTE OR
COMMON LAW.

 

C.               NOTHING CONTAINED IN THIS SECTION 5.10 SHALL LIMIT THE
LIABILITY OF ANY BORROWER TO PAY LOANS MADE DIRECTLY OR INDIRECTLY TO THAT
BORROWER (INCLUDING LOANS ADVANCED TO ANY OTHER BORROWER AND THEN RE-LOANED OR
OTHERWISE TRANSFERRED TO, OR FOR THE BENEFIT OF, SUCH BORROWER), LC OBLIGATIONS
RELATING TO LETTERS OF CREDIT ISSUED TO SUPPORT SUCH BORROWER’S BUSINESS, AND
ALL ACCRUED INTEREST, FEES, EXPENSES AND OTHER RELATED OBLIGATIONS WITH RESPECT
THERETO, FOR WHICH SUCH BORROWER SHALL BE PRIMARILY LIABLE FOR ALL PURPOSES
HEREUNDER.  AGENT AND LENDERS SHALL HAVE THE RIGHT, AT ANY TIME IN THEIR
DISCRETION, TO CONDITION LOANS AND LETTERS OF

 

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CREDIT UPON A SEPARATE CALCULATION OF BORROWING AVAILABILITY FOR EACH BORROWER
AND TO RESTRICT THE DISBURSEMENT AND USE OF SUCH LOANS AND LETTERS OF CREDIT TO
SUCH BORROWER.

 

5.10.4                  JOINT ENTERPRISE.  EACH BORROWER HAS REQUESTED THAT
AGENT AND LENDERS MAKE THIS CREDIT FACILITY AVAILABLE TO BORROWERS ON A COMBINED
BASIS, IN ORDER TO FINANCE BORROWERS’ BUSINESS MOST EFFICIENTLY AND
ECONOMICALLY.  BORROWERS’ BUSINESS IS A MUTUAL AND COLLECTIVE ENTERPRISE, AND
BORROWERS BELIEVE THAT CONSOLIDATION OF THEIR CREDIT FACILITY WILL ENHANCE THE
BORROWING POWER OF EACH BORROWER AND EASE THE ADMINISTRATION OF THEIR
RELATIONSHIP WITH LENDERS, ALL TO THE MUTUAL ADVANTAGE OF BORROWERS.  BORROWERS
ACKNOWLEDGE AND AGREE THAT AGENT’S AND LENDERS’ WILLINGNESS TO EXTEND CREDIT TO
BORROWERS AND TO ADMINISTER THE COLLATERAL ON A COMBINED BASIS, AS SET FORTH
HEREIN, IS DONE SOLELY AS AN ACCOMMODATION TO BORROWERS AND AT BORROWERS’
REQUEST.

 

SECTION 6.                            CONDITIONS PRECEDENT

 

6.1           Conditions Precedent to Initial Loans.  In addition to the
conditions set forth in Section 6.2, Lenders shall not be required to fund any
requested Loan, issue any Letter of Credit, or otherwise extend credit to
Borrowers hereunder, until the date (“Closing Date”) that each of the following
conditions has been satisfied:

 

A.              NOTES SHALL HAVE BEEN EXECUTED BY BORROWERS AND DELIVERED TO
EACH LENDER THAT REQUESTS ISSUANCE OF A NOTE.  EACH OTHER LOAN DOCUMENT TO BE
ENTERED INTO AS OF THE CLOSING DATE SHALL HAVE BEEN DULY EXECUTED AND DELIVERED
TO AGENT BY EACH OF THE SIGNATORIES THERETO, AND EACH OBLIGOR SHALL BE IN
COMPLIANCE WITH ALL TERMS THEREOF.

 

B.              AGENT SHALL HAVE RECEIVED, EXCEPT AS OTHERWISE PROVIDED IN THIS
AGREEMENT, (I) ACKNOWLEDGMENTS OF ALL FILINGS OR RECORDATIONS NECESSARY TO
PERFECT ITS LIENS IN THE COLLATERAL, AS WELL AS UCC AND LIEN SEARCHES AND OTHER
EVIDENCE SATISFACTORY TO AGENT THAT SUCH LIENS ARE THE ONLY LIENS UPON THE
COLLATERAL, EXCEPT PERMITTED LIENS AND (II) ALL LIEN WAIVERS REQUESTED BY AGENT.

 

C.              RESERVED.

 

D.              AGENT SHALL HAVE RECEIVED CERTIFICATES, IN FORM AND SUBSTANCE
SATISFACTORY TO IT, FROM A KNOWLEDGEABLE SENIOR OFFICER OF EACH OBLIGOR
CERTIFYING THAT, AFTER GIVING EFFECT TO THE INITIAL LOANS AND TRANSACTIONS
HEREUNDER, AS OF THE CLOSING DATE (I) SUCH OBLIGOR IS SOLVENT; (II) NO DEFAULT
OR EVENT OF DEFAULT EXISTS; (III) THE REPRESENTATIONS AND WARRANTIES SET FORTH
IN SECTION 9 ARE TRUE AND CORRECT; AND (IV) SUCH OBLIGOR HAS COMPLIED WITH ALL
AGREEMENTS AND CONDITIONS TO BE SATISFIED BY IT UNDER THE LOAN DOCUMENTS AS OF
THE CLOSING DATE (UNLESS WAIVED BY AGENT).

 

E.              AGENT SHALL HAVE RECEIVED A CERTIFICATE OF A DULY AUTHORIZED
OFFICER OF EACH OBLIGOR, CERTIFYING (I) THAT ATTACHED COPIES OF SUCH OBLIGOR’S
ORGANIC DOCUMENTS ARE TRUE AND COMPLETE, AND IN FULL FORCE AND EFFECT, WITHOUT
AMENDMENT EXCEPT AS SHOWN; (II) THAT AN ATTACHED COPY OF RESOLUTIONS AUTHORIZING
EXECUTION AND DELIVERY OF THE LOAN DOCUMENTS IS TRUE AND COMPLETE, AND THAT SUCH
RESOLUTIONS ARE IN FULL FORCE AND EFFECT, WERE DULY ADOPTED, HAVE NOT BEEN
AMENDED, MODIFIED OR REVOKED, AND CONSTITUTE ALL RESOLUTIONS ADOPTED WITH
RESPECT TO THIS CREDIT FACILITY; AND (III) TO THE TITLE, NAME AND SIGNATURE OF
EACH PERSON AUTHORIZED TO SIGN THE LOAN

 

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DOCUMENTS.  AGENT MAY CONCLUSIVELY RELY ON THIS CERTIFICATE UNTIL IT IS
OTHERWISE NOTIFIED BY THE APPLICABLE OBLIGOR IN WRITING.

 

F.              AGENT SHALL HAVE RECEIVED A WRITTEN OPINION OF WILSON SONSINI
GOODRICH & ROSATI, P.C., AS WELL AS ANY LOCAL COUNSEL TO OBLIGORS OR AGENT, IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO AGENT.

 

G.             AGENT SHALL HAVE RECEIVED COPIES OF THE CHARTER DOCUMENTS OF EACH
OBLIGOR, CERTIFIED BY THE SECRETARY OF STATE OR OTHER APPROPRIATE OFFICIAL OF
SUCH OBLIGOR’S JURISDICTION OF ORGANIZATION.  AGENT SHALL HAVE RECEIVED GOOD
STANDING CERTIFICATES FOR EACH OBLIGOR, ISSUED BY THE SECRETARY OF STATE OR
OTHER APPROPRIATE OFFICIAL OF SUCH OBLIGOR’S JURISDICTION OF ORGANIZATION.

 

H.             AGENT SHALL HAVE RECEIVED COPIES OF POLICIES OR CERTIFICATES OF
INSURANCE FOR THE INSURANCE POLICIES CARRIED BY OBLIGORS, ALL IN COMPLIANCE WITH
THE LOAN DOCUMENTS.

 

I.              AGENT SHALL HAVE COMPLETED ITS BUSINESS, FINANCIAL AND LEGAL DUE
DILIGENCE OF OBLIGORS, INCLUDING (I) COMPLETION AND A ROLL-FORWARD OF ITS
PREVIOUS FIELD EXAMINATION, WITH RESULTS SATISFACTORY TO AGENT; (II) COMPLETION
OF THE INVENTORY APPRAISAL CONDUCTED BY EMERALD TECHNOLOGY VALUATIONS WITH
RESULTS SATISFACTORY TO AGENT; (III) A SATISFACTORY REVIEW OF SANMINA’S
CONTRACTS WITH ITS CUSTOMERS; AND (IV) A SATISFACTORY REVIEW OF THE TERMS OF
SANMINA’S ONGOING LEGAL ENTITY RATIONALIZATION PROGRAM.  SINCE SEPTEMBER 29,
2007 THERE SHALL NOT HAVE OCCURRED ANY EVENT OR CIRCUMSTANCE THAT HAD OR COULD
BE REASONABLY EXPECTED, EITHER INDIVIDUALLY OR IN THE AGGREGATE, TO HAVE A
MATERIAL ADVERSE EFFECT.

 

J.              OBLIGORS SHALL HAVE PAID ALL FEES AND EXPENSES (INCLUDING THE
REASONABLE FEES AND EXPENSES OF COUNSEL (INCLUDING ANY LOCAL COUNSEL) FOR AGENT)
TO BE PAID TO AGENT, THE LEAD ARRANGERS AND LENDERS ON THE CLOSING DATE.

 

K.             AGENT AND THE LENDERS SHALL HAVE RECEIVED ALL DOCUMENTATION AND
OTHER INFORMATION REQUIRED BY REGULATORY AUTHORITIES UNDER APPLICABLE
ANTI-TERRORISM LAWS AND “KNOW YOUR CUSTOMER” RULES AND REGULATIONS.

 

L.              RESERVED.

 

M.            THERE SHALL BE NO ACTION, SUIT, INVESTIGATION OR PROCEEDING
PENDING OR, TO THE KNOWLEDGE OF THE BORROWERS, THREATENED IN WRITING IN ANY
COURT OR BEFORE ANY ARBITRATOR OR GOVERNMENTAL AUTHORITY THAT, EITHER
INDIVIDUALLY OR IN THE AGGREGATE, COULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.

 

N.             AGENT, SYNDICATION AGENT AND THE LEAD ARRANGERS SHALL HAVE
RECEIVED, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THEM, (A) FINANCIAL
PROJECTIONS OF THE BORROWERS AND THEIR SUBSIDIARIES EVIDENCING THE ABILITY OF
SANMINA AND ITS SUBSIDIARIES TO COMPLY WITH THE FINANCIAL COVENANT SET FORTH IN
SECTION 10.3 AND (B) A SUMMARY OF PRELIMINARY YEAR-END RESULTS FOR THE FISCAL
YEAR ENDED SEPTEMBER 27, 2008.

 

O.             AGENT SHALL HAVE RECEIVED A “PAY-OFF” LETTER IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO AGENT WITH RESPECT TO THE REPAYMENT IN FULL
AND THE TERMINATION OF ANY

 

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COMMITMENT TO MAKE EXTENSIONS OF CREDIT UNDER THAT CERTAIN AMENDED AND RESTATED
CREDIT AND GUARANTY AGREEMENT DATED DECEMBER 16, 2005 AMONG SANMINA, CERTAIN
GUARANTORS PARTY THERETO, CERTAIN LENDERS AND FINANCIAL INSTITUTIONS PARTY
THERETO AND AGENT, AS ADMINISTRATIVE AGENT (AS AMENDED, RESTATED, SUPPLEMENTED
OR OTHERWISE MODIFIED).

 

P.             AGENT SHALL HAVE RECEIVED A BORROWING BASE CERTIFICATE PREPARED
AS OF OCTOBER 25, 2008.  UPON GIVING EFFECT TO THE INITIAL FUNDING OF LOANS AND
ISSUANCE OF LETTERS OF CREDIT, AND THE PAYMENT BY BORROWERS OF ALL FEES AND
EXPENSES INCURRED IN CONNECTION HEREWITH, AVAILABILITY SHALL BE AT LEAST
$75,000,000.

 

6.2           Conditions Precedent to All Credit Extensions.  Agent, Issuing
Bank and Lenders shall not be required to fund any Loans, arrange for issuance
of any Letters of Credit or grant any other accommodation to or for the benefit
of Borrowers (in each case, subject to the last sentence of Section 3.1.2(a),
excluding the conversion or continuation of any Loan), unless the following
conditions are satisfied:

 

A.             NO DEFAULT OR EVENT OF DEFAULT SHALL EXIST AT THE TIME OF, OR
RESULT FROM, SUCH FUNDING, ISSUANCE OR GRANT;

 

B.             THE REPRESENTATIONS AND WARRANTIES OF EACH OBLIGOR IN THE LOAN
DOCUMENTS (I) THAT ARE NOT QUALIFIED BY “MATERIALITY” SHALL BE TRUE AND CORRECT
IN ALL MATERIAL RESPECTS ON THE DATE OF, AND UPON GIVING EFFECT TO, SUCH
FUNDING, ISSUANCE OR GRANT AND (II) THAT ARE QUALIFIED BY “MATERIALITY” SHALL BE
TRUE AND CORRECT ON AND AS OF SUCH DATE, EXCEPT, IN EACH CASE, TO THE EXTENT
THAT SUCH REPRESENTATIONS AND WARRANTIES SPECIFICALLY REFER TO AN EARLIER DATE,
IN WHICH CASE THEY SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS (EXCEPT IF
QUALIFIED BY “MATERIALITY”, SHALL BE TRUE AND CORRECT) AS OF SUCH EARLIER DATE;

 

C.             ALL CONDITIONS PRECEDENT IN ANY OTHER LOAN DOCUMENT SHALL BE
SATISFIED;

 

D.             THE AGGREGATE PRINCIPAL AMOUNT OF ALL LOANS AND THE AGGREGATE
UNDRAWN AMOUNT OF ALL LETTERS OF CREDIT OUTSTANDING, AFTER GIVING EFFECT TO THE
APPLICABLE BORROWING OR ISSUANCE OR RENEWAL OF A LETTER OF CREDIT, SHALL NOT
EXCEED THE BORROWING BASE ON SUCH DATE; AND

 

E.             WITH RESPECT TO ISSUANCE OF A LETTER OF CREDIT, THE LC CONDITIONS
SHALL BE SATISFIED.

 

Each request (or deemed request) by Borrowers for funding of a Loan, issuance of
a Letter of Credit or grant of an accommodation (in each case, subject to the
last sentence of Section 3.1.2(a), excluding the conversion or continuation of
any Loan) shall constitute a representation by Borrowers that the foregoing
conditions are satisfied on the date of such request and on the date of such
funding, issuance or grant.

 

SECTION 7.                            COLLATERAL

 

7.1           Grant of Security Interest.  To secure the prompt payment and
performance of all Obligations, each Obligor hereby grants to Agent, for the
benefit of Secured Parties, a continuing security interest in and Lien upon the
following Property, whether now owned or hereafter acquired, and wherever
located:

 

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A.             ALL ACCOUNTS AND ALL SUPPORTING OBLIGATIONS, CHATTEL PAPER,
DOCUMENTS AND INSTRUMENTS IN RESPECT THEREOF OR RELATING THERETO;

 

B.              ALL DEPOSIT ACCOUNTS (EXCEPT ACCOUNTS USED FOR COLLECTIONS FOR
TRANSACTIONS PERMITTED BY SECTION 10.2.5(E) OR SECTION 10.2.5(F));

 

C.              ALL INVENTORY;

 

D.              THE PLEDGED SECURITIES;

 

E.              ALL NOTES FROM A CANADIAN OBLIGOR REFERRED TO IN
SECTION 10.2.1(I);

 

F.               ALL MONIES, WHETHER OR NOT IN THE POSSESSION OR UNDER THE
CONTROL OF AGENT, A LENDER, OR A BAILEE OR AFFILIATE OF AGENT OR A LENDER,
INCLUDING ANY CASH COLLATERAL;

 

G.              ALL ACCESSIONS TO, SUBSTITUTIONS FOR, AND ALL REPLACEMENTS,
PRODUCTS, AND CASH AND NON-CASH PROCEEDS OF THE FOREGOING, INCLUDING PROCEEDS OF
AND UNEARNED PREMIUMS WITH RESPECT TO INSURANCE POLICIES, AND CLAIMS AGAINST ANY
PERSON FOR LOSS, DAMAGE OR DESTRUCTION OF ANY COLLATERAL; AND

 

H.              ALL BOOKS AND RECORDS (INCLUDING CUSTOMER LISTS, FILES,
CORRESPONDENCE, TAPES, COMPUTER PROGRAMS, PRINT-OUTS AND COMPUTER RECORDS)
PERTAINING TO THE FOREGOING.

 

7.2           Lien on Deposit Accounts; Cash Collateral.

 

7.2.1                        DEPOSIT ACCOUNTS.  TO FURTHER SECURE THE PROMPT
PAYMENT AND PERFORMANCE OF ALL OBLIGATIONS, EACH OBLIGOR HEREBY GRANTS TO AGENT,
FOR THE BENEFIT OF SECURED PARTIES, A CONTINUING SECURITY INTEREST IN AND LIEN
UPON ALL AMOUNTS CREDITED TO ANY DEPOSIT ACCOUNT OF SUCH OBLIGOR, INCLUDING ANY
SUMS IN ANY BLOCKED OR LOCKBOX ACCOUNTS OR IN ANY ACCOUNTS INTO WHICH SUCH SUMS
ARE SWEPT.  EACH OBLIGOR HEREBY AUTHORIZES AND DIRECTS EACH BANK OR OTHER
DEPOSITORY TO DELIVER TO AGENT, UPON REQUEST, ALL BALANCES IN ANY DEPOSIT
ACCOUNT MAINTAINED BY SUCH OBLIGOR, WITHOUT INQUIRY INTO THE AUTHORITY OR RIGHT
OF AGENT TO MAKE SUCH REQUEST.  AGENT MAY MAKE ANY SUCH REQUEST DURING A TRIGGER
PERIOD.

 

7.2.2                        CASH COLLATERAL.  ANY CASH COLLATERAL MAY BE
INVESTED, AT AGENT’S DISCRETION, IN CASH EQUIVALENTS, BUT AGENT SHALL HAVE NO
DUTY TO DO SO, REGARDLESS OF ANY AGREEMENT OR COURSE OF DEALING WITH ANY
OBLIGOR, AND SHALL HAVE NO RESPONSIBILITY FOR ANY INVESTMENT OR LOSS OTHER THAN
FOR A LOSS FROM AN INVESTMENT IN OTHER THAN CASH EQUIVALENTS.  EACH OBLIGOR
HEREBY GRANTS TO AGENT, FOR THE BENEFIT OF SECURED PARTIES, A SECURITY INTEREST
IN ALL CASH COLLATERAL HELD FROM TIME TO TIME AND ALL PROCEEDS THEREOF, AS
SECURITY FOR THE OBLIGATIONS, WHETHER SUCH CASH COLLATERAL IS HELD IN A CASH
COLLATERAL ACCOUNT OR ELSEWHERE.  AGENT MAY APPLY CASH COLLATERAL TO THE PAYMENT
OF ANY OBLIGATIONS, IN SUCH ORDER AS AGENT MAY ELECT, AS THEY BECOME DUE AND
PAYABLE.  EACH CASH COLLATERAL ACCOUNT AND ALL CASH COLLATERAL SHALL BE UNDER
THE SOLE DOMINION AND CONTROL OF AGENT.  NO OBLIGOR OR OTHER PERSON CLAIMING
THROUGH OR ON BEHALF OF ANY OBLIGOR SHALL HAVE ANY RIGHT TO ANY CASH COLLATERAL,
UNTIL FULL PAYMENT OF ALL OBLIGATIONS OR UNTIL SUCH TIME AS SUCH OBLIGATIONS ARE
NO LONGER REQUIRED TO BE CASH-COLLATERALIZED, AS DETERMINED BY AGENT IN
ACCORDANCE WITH THE TERMS HEREOF.

 

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7.3           Other Collateral.

 

7.3.1        CERTAIN AFTER-ACQUIRED COLLATERAL.  SUBJECT TO SECTION 10.4.1,
BORROWERS SHALL PROMPTLY NOTIFY AGENT IN WRITING IF, AFTER THE CLOSING DATE, ANY
OBLIGOR OBTAINS ANY INTEREST IN ANY COLLATERAL CONSISTING OF DEPOSIT ACCOUNTS OR
THE TREASURER OR ASSISTANT TREASURER OF BORROWER AGENT BECOMES AWARE OF
COLLATERAL WITH A VALUE IN EXCESS OF $5,000,000 CONSISTING OF CHATTEL PAPER,
DOCUMENTS OR INSTRUMENTS, AND, UPON AGENT’S REQUEST, SHALL PROMPTLY TAKE SUCH
ACTIONS AS AGENT DEEMS APPROPRIATE TO EFFECT AGENT’S DULY PERFECTED, FIRST
PRIORITY LIEN (SUBJECT TO PERMITTED LIENS REFERRED TO IN SECTION 10.2.2(A), (C),
(D), (F), (G), (I), (U), (V)) UPON SUCH COLLATERAL, INCLUDING OBTAINING ANY
APPROPRIATE POSSESSION, CONTROL AGREEMENT OR LIEN WAIVER.  IF ANY COLLATERAL IS
IN THE POSSESSION OF A THIRD PARTY (OTHER THAN INVENTORY IN-TRANSIT), AT AGENT’S
REQUEST, OBLIGORS SHALL OBTAIN AN ACKNOWLEDGMENT THAT SUCH THIRD PARTY HOLDS THE
COLLATERAL FOR THE BENEFIT OF AGENT.

 

7.3.2        PLEDGED SECURITIES.  EACH OBLIGOR HEREBY CONSENTS TO THE GRANT BY
EACH OTHER OBLIGOR OF A SECURITY INTEREST IN AND LIEN UPON ALL PLEDGED
SECURITIES OF SUCH OBLIGOR TO AGENT AND, WITHOUT LIMITING THE FOREGOING,
CONSENTS TO THE TRANSFER OF ANY PLEDGED SECURITIES TO AGENT OR ITS NOMINEE WHILE
AN EVENT OF DEFAULT EXISTS AND TO THE SUBSTITUTION OF AGENT OR ITS NOMINEE AS A
PARTNER IN ANY PARTNERSHIP OR MEMBER IN ANY LIMITED LIABILITY COMPANY WITH ALL
THE RIGHTS AND POWERS RELATED THERETO

 

7.4           No Assumption of Liability.  The Lien on Collateral granted
hereunder is given as security only and shall not subject Agent or any Lender
to, or in any way modify, any obligation or liability of Obligors relating to
any Collateral.

 

7.5           Further Assurances.  Promptly upon request and except as otherwise
provided herein, Obligors shall deliver such instruments, assignments, title
certificates, or other documents or agreements, and shall take such actions, as
Agent deems appropriate under Applicable Law to evidence or perfect its Lien on
any Collateral, or otherwise to give effect to the intent of this Agreement;
provided that unless reasonably requested by Agent, no Obligor shall be required
to take any action to perfect the security interest in Pledged Securities under
the laws of any jurisdiction outside of the United States of America.  Each
Obligor authorizes Agent to file any financing statement or similar Lien
registration document that describes the Collateral in substantial conformance
with the description in Section 7.1, and ratifies any action taken by Agent
before the Closing Date to effect or perfect its Lien on any Collateral.

 

7.6           ULC Shares.  Notwithstanding any provisions to the contrary
contained in this Agreement or any other document or agreement among all or some
of the parties hereto, each Obligor who has granted a security interest
hereunder in shares or other equity interests (“ULC Shares”) of any unlimited
company incorporated under the laws of the Province of Nova Scotia, Canada,
unlimited liability company incorporated under the laws of the Province of
British Columbia, Canada, unlimited liability corporation incorporated under the
laws of the Province of Alberta, Canada or any other entity whose members or
shareholders have liability comparable to that of members or shareholders of
those entities (each a “ULC”) or is the sole registered and beneficial owner of
all Pledged Securities which are ULC Shares and will remain so until such time
as such ULC Shares are effectively transferred into the name of Agent, any other
Lender or any other person on the books and records of the issuer of such
pledged ULC Shares.

 

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Accordingly, such Obligor shall be entitled to receive and retain for its own
account any dividends, property or other distributions, if any, in respect of
such ULC Shares (except insofar as the Obligor has granted a security interest
in such dividends, property or other distributions, and any shares which are
Pledged Securities shall be delivered to Agent to hold as Collateral hereunder)
and shall have the right to vote such ULC Shares and to control the direction,
management and policies of the issuer of such ULC Shares to the same extent as
the Obligor would if such ULC Shares were not pledged to Agent pursuant hereto.
Nothing in this Agreement or any other document or agreement among all or some
of the parties hereto is intended to, and nothing in this Agreement, or any
other document or agreement among all or some of the parties hereto shall
constitute Agent, any other Lender or any person other than the Obligor a
shareholder or member of a ULC for the purposes of the Companies Act (Nova
Scotia) until such time as notice is given to the Obligor and further steps are
taken thereunder so as to register Agent, or any other person as holder of
Collateral which is ULC Shares.  To the extent any provision hereof or of any
other document or agreement would have the effect of constituting Agent, any
other Lender, or any other person as a shareholder or member of a ULC for the
purposes of the Companies Act  (Nova Scotia) prior to such time, such provision
shall be severed herefrom or therefrom and ineffective with respect to the
Collateral which is ULC Shares without otherwise invalidating or rendering
unenforceable this Agreement or such other agreement or invalidating or
rendering unenforceable such provision insofar as it relates to Collateral which
is not ULC Shares.  Except upon the exercise of rights to sell or otherwise
dispose of Pledged Collateral which is ULC Shares following the occurrence and
during the continuance of an Event of Default, the Obligor shall not cause or
permit, or enable any ULC in which it holds ULC Shares to cause or permit, Agent
or any other Lender to: (a) be registered as a shareholder or member of such
ULC; (b) have any notation entered in its favour in the share register of such
ULC; (c) be held out as a shareholder or member of such ULC; (d) receive,
directly or indirectly, any dividends, property or other distributions from such
ULC by reason of Agent or any other Lender holding a security interest in such
ULC; or (e) act as a shareholder or member of such ULC, or exercise any rights
of a shareholder or member including the right to attend a meeting of, or to
vote the shares of, such ULC.

 

SECTION 8.                            COLLATERAL ADMINISTRATION

 

8.1           Borrowing Base Certificates.  By the 18th day of each Fiscal
Month, Borrower Agent shall deliver to Agent (and Agent shall promptly deliver
same to Lenders) a Borrowing Base Certificate prepared as of the close of
business of the previous month, and at such other times as Agent may reasonably
request.  All calculations of Availability in any Borrowing Base Certificate
shall originally be made by Borrowers and certified by a Senior Officer,
provided that Agent may from time to time review and adjust any such calculation
(a) to reflect its reasonable estimate of declines in value of any Collateral,
due to collections received in the Dominion Account or otherwise; and (b) to the
extent the calculation is not made in accordance with this Agreement or does not
accurately reflect the Availability Reserve.

 

8.2           Administration of Accounts.

 

8.2.1        RECORDS AND SCHEDULES OF ACCOUNTS.  EACH OBLIGOR SHALL KEEP
ACCURATE AND COMPLETE RECORDS OF ITS ACCOUNTS, INCLUDING ALL PAYMENTS AND
COLLECTIONS THEREON, AND SHALL

 

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SUBMIT TO AGENT SALES, COLLECTION, RECONCILIATION AND OTHER REPORTS IN FORM
REASONABLY SATISFACTORY TO AGENT, ON SUCH PERIODIC BASIS AS AGENT MAY REASONABLY
REQUEST (BUT IN NO MORE THAN MONTHLY UNLESS AN EVENT OF DEFAULT EXISTS).  EACH
OBLIGOR SHALL ALSO PROVIDE TO AGENT, ON OR BEFORE THE 18TH DAY OF EACH MONTH, A
DETAILED AGED TRIAL BALANCE OF ALL OF ITS ACCOUNTS AS OF THE END OF THE
PRECEDING MONTH, SPECIFYING EACH ACCOUNT’S ACCOUNT DEBTOR NAME, ADDRESS AND
AMOUNT.  IF BORROWER AGENT BECOMES AWARE THAT ANY OF THE FORTY LARGEST ACCOUNT
DEBTORS (OR ANY CONTROLLING AFFILIATE OF SUCH ACCOUNT DEBTOR) OBLIGATED UNDER
ANY ELIGIBLE ACCOUNT (AS DETERMINED BY REFERENCE TO THE MOST RECENT BORROWING
BASE CERTIFICATE DELIVERED PURSUANT TO SECTION 8.1) COMMENCES AN INSOLVENCY
PROCEEDING (OR THE CONTROLLING AFFILIATE THEREOF IN THE CASE OF AN ACCOUNT
DEBTOR THAT IS A SUBSIDIARY), BORROWER AGENT SHALL NOTIFY AGENT OF SUCH
OCCURRENCE PROMPTLY (AND IN ANY EVENT WITHIN TWO BUSINESS DAYS) AFTER BORROWER
AGENT HAS KNOWLEDGE THEREOF.

 

8.2.2        TAXES.  IF AN ACCOUNT OF ANY OBLIGOR INCLUDES A CHARGE FOR ANY
TAXES, AGENT IS AUTHORIZED, IN ITS DISCRETION, TO PAY THE AMOUNT THEREOF TO THE
PROPER TAXING AUTHORITY FOR THE ACCOUNT OF SUCH OBLIGOR AND TO CHARGE OBLIGORS
THEREFOR; PROVIDED, HOWEVER, THAT NEITHER AGENT NOR LENDERS SHALL BE LIABLE FOR
ANY TAXES THAT MAY BE DUE FROM OBLIGORS OR WITH RESPECT TO ANY COLLATERAL.

 

8.2.3        ACCOUNT VERIFICATION.  DURING ANY TRIGGER PERIOD, AGENT SHALL HAVE
THE RIGHT AT ANY TIME, IN THE NAME OF AGENT, ANY DESIGNEE OF AGENT OR ANY
OBLIGOR, TO VERIFY THE VALIDITY, AMOUNT OR ANY OTHER MATTER RELATING TO ANY
ACCOUNTS OF OBLIGORS BY MAIL, TELEPHONE OR OTHERWISE.  OBLIGORS SHALL COOPERATE
FULLY WITH AGENT IN AN EFFORT TO FACILITATE AND PROMPTLY CONCLUDE ANY SUCH
VERIFICATION PROCESS.  AGENT SHALL ENDEAVOR TO GIVE BORROWER AGENT PRIOR NOTICE
OF AGENT’S INTENTION TO CONDUCT SUCH VERIFICATIONS BY TELEPHONE; PROVIDED THAT
THE FAILURE BY AGENT TO GIVE SUCH NOTICE SHALL NOT LIMIT THE RIGHT OF AGENT TO
CONDUCT SUCH VERIFICATIONS.

 

8.2.4        MAINTENANCE OF DOMINION ACCOUNT.  EACH BORROWER HEREBY AGREES THAT
DURING ANY TRIGGER PERIOD EACH LOCKBOX CASH COLLATERAL ACCOUNT AND EACH PROCEEDS
CASH COLLATERAL ACCOUNT SHALL AUTOMATICALLY BE DEEMED A DOMINION ACCOUNT. 
NEITHER AGENT NOR LENDERS ASSUME ANY RESPONSIBILITY TO OBLIGORS FOR ANY LOCKBOX
ARRANGEMENT OR DOMINION ACCOUNT, INCLUDING ANY CLAIM OF ACCORD AND SATISFACTION
OR RELEASE WITH RESPECT TO ANY PAYMENT ITEMS ACCEPTED BY ANY BANK.

 

8.2.5        PROCEEDS OF COLLATERAL.  OBLIGORS SHALL REQUEST IN WRITING AND
OTHERWISE TAKE ALL NECESSARY STEPS TO ENSURE THAT ALL PAYMENTS ON ACCOUNTS
CONSTITUTING COLLATERAL OR OTHERWISE RELATING TO COLLATERAL ARE MADE DIRECTLY TO
A LOCKBOX CASH COLLATERAL ACCOUNT OR A PROCEEDS CASH COLLATERAL ACCOUNT.  IF ANY
OBLIGOR OR SUBSIDIARY RECEIVES CASH OR PAYMENT ITEMS WITH RESPECT TO ANY
COLLATERAL, IT SHALL HOLD SAME IN TRUST FOR AGENT AND PROMPTLY (NOT LATER THAN
THE NEXT BUSINESS DAY) DEPOSIT SAME INTO A CASH COLLATERAL ACCOUNT (EXCEPT THAT
DURING A TRIGGER PERIOD ALL SUCH CASH AND PAYMENT ITEMS SHALL BE HELD IN TRUST
AND PROMPTLY DEPOSITED IN A DOMINION ACCOUNT).

 

8.3           Administration of Inventory.

 

8.3.1        RECORDS AND REPORTS OF INVENTORY.  EACH OBLIGOR SHALL KEEP ACCURATE
AND COMPLETE RECORDS OF ITS INVENTORY AND SHALL SUBMIT TO AGENT INVENTORY AND
RECONCILIATION REPORTS

 

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IN FORM REASONABLY SATISFACTORY TO AGENT, ON SUCH PERIODIC BASIS AS AGENT MAY
REASONABLY REQUEST (BUT NO MORE THAN MONTHLY UNLESS AN EVENT OF DEFAULT
EXISTS).  EACH OBLIGOR SHALL CONDUCT A PHYSICAL INVENTORY AT LEAST ONCE PER
CALENDAR YEAR (AND ON A MORE FREQUENT BASIS IF REQUESTED BY AGENT WHEN AN EVENT
OF DEFAULT EXISTS) AND PERIODIC CYCLE COUNTS CONSISTENT WITH HISTORICAL
PRACTICES, AND SHALL PROVIDE TO AGENT UPON REQUEST A REPORT BASED ON EACH SUCH
INVENTORY AND COUNT PROMPTLY UPON COMPLETION THEREOF, TOGETHER WITH SUCH
SUPPORTING INFORMATION AS AGENT MAY REASONABLY REQUEST.  UPON REASONABLE PRIOR
NOTICE, AGENT MAY OBSERVE EACH PHYSICAL COUNT.

 

8.3.2        RETURNS OF INVENTORY.  NO OBLIGOR SHALL RETURN ANY INVENTORY TO A
SUPPLIER, VENDOR OR OTHER PERSON, WHETHER FOR CASH, CREDIT OR OTHERWISE, UNLESS
(A) SUCH RETURN IS IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST
PRACTICES; (B) NO DEFAULT, EVENT OF DEFAULT OR OVERADVANCE EXISTS OR WOULD
RESULT THEREFROM; AND (C) ANY PAYMENT RECEIVED BY AN OBLIGOR FOR A RETURN IS
(I) PROMPTLY REMITTED TO AGENT FOR APPLICATION TO THE LOANS, IF ANY ARE
OUTSTANDING, OR (II) IF NO LOANS ARE OUTSTANDING, PROMPTLY IN A CASH COLLATERAL
ACCOUNT (SUBJECT TO SECTION 8.2.5).

 

8.3.3        ACQUISITION, SALE AND MAINTENANCE.  NO OBLIGOR SHALL ACQUIRE OR
ACCEPT ANY INVENTORY ON CONSIGNMENT OR APPROVAL, AND SHALL TAKE ALL STEPS TO
ASSURE THAT ALL INVENTORY IS PRODUCED IN ACCORDANCE WITH THE FLSA.  NO OBLIGOR
SHALL SELL ANY INVENTORY ON CONSIGNMENT OR APPROVAL OR ANY OTHER BASIS UNDER
WHICH THE CUSTOMER MAY RETURN OR REQUIRE AN OBLIGOR TO REPURCHASE SUCH
INVENTORY.  OBLIGORS SHALL USE, STORE AND MAINTAIN ALL INVENTORY WITH REASONABLE
CARE AND CAUTION, IN ACCORDANCE IN ALL MATERIAL RESPECTS WITH APPLICABLE
STANDARDS OF ANY INSURANCE AND IN CONFORMITY IN ALL MATERIAL RESPECTS WITH ALL
APPLICABLE LAW, AND SHALL MAKE CURRENT RENT PAYMENTS (WITHIN APPLICABLE GRACE
PERIODS PROVIDED FOR IN LEASES AND UNLESS SUCH RENT PAYMENT IS BEING PROPERLY
CONTESTED) AT ALL LOCATIONS WHERE ANY COLLATERAL IS LOCATED.

 

8.4           Administration of Deposit Accounts.  Schedule 8.4 to the
Disclosure Letter sets forth all Deposit Accounts maintained by Obligors,
including all Dominion Accounts.  Subject to Section 10.4.1, each Obligor shall
take all actions necessary to establish Agent’s control of each such Deposit
Account (other than an account exclusively used for payroll, payroll or
employment taxes or employee benefits, or an account containing not more than
the Dollar Equivalent of $10,000 at any time, cash collateral accounts permitted
hereunder and accounts used for collections for transactions permitted by
Section 10.2.5(e) or Section 10.2.5(f)), including the execution of a Deposit
Account Control Agreement with respect to such Account.  Each Obligor shall be
the sole account holder of each such Deposit Account and shall not allow any
other Person (other than Agent or such financial institution where such Deposit
Account is located) to have control over such Deposit Account or any Property
deposited therein.  Each Obligor shall promptly notify Agent of any opening or
closing of a Deposit Account and, with the consent of Agent, will amend
Schedule 8.4 to the Disclosure Letter to reflect same.

 

8.5           General Provisions.

 

8.5.1        LOCATION OF COLLATERAL.  ALL TANGIBLE ITEMS OF COLLATERAL, OTHER
THAN INVENTORY IN TRANSIT, SHALL AT ALL TIMES BE KEPT BY OBLIGORS AT THE
BUSINESS LOCATIONS SET FORTH IN SCHEDULE 8.5.1 TO THE DISCLOSURE LETTER, EXCEPT
THAT OBLIGORS MAY (A) MAKE SALES OR OTHER DISPOSITIONS OF COLLATERAL IN
ACCORDANCE WITH SECTION 10.2.5; AND (B) MOVE COLLATERAL TO ANOTHER LOCATION IN
THE UNITED STATES OR CANADA.  BORROWER AGENT SHALL PROVIDE TO AGENT AT THE END
OF

 

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EACH FISCAL MONTH OR AT SUCH OTHER TIME AS REQUESTED BY AGENT A LIST OF ANY
LOCATIONS TO WHICH TANGIBLE ITEMS OF COLLATERAL HAVING A BOOK VALUE IN EXCESS OF
$5,000,000, WITH RESPECT TO COLLATERAL LOCATED IN THE UNITED STATES, OR
$100,000, WITH RESPECT TO COLLATERAL LOCATED IN CANADA,  HAVE BEEN MOVED TO THE
EXTENT SUCH LOCATIONS ARE NOT LISTED ON SCHEDULE 8.5.1 TO THE DISCLOSURE LETTER
OR HAVE NOT BEEN PREVIOUSLY NOTIFIED TO AGENT PURSUANT TO THIS SECTION 8.5.1.

 

8.5.2                        INSURANCE OF COLLATERAL; CONDEMNATION PROCEEDS.

 

A.              EACH OBLIGOR SHALL MAINTAIN INSURANCE WITH RESPECT TO THE
COLLATERAL, COVERING CASUALTY, HAZARD, THEFT, MALICIOUS MISCHIEF, FLOOD AND
OTHER RISKS, IN AMOUNTS, WITH ENDORSEMENTS AND WITH INSURERS (WITH A BEST RATING
OF AT LEAST A7, UNLESS OTHERWISE APPROVED BY AGENT) REASONABLY SATISFACTORY TO
AGENT (AND AGENT AGREES THAT INSURANCE IN EFFECT ON THE CLOSING DATE IS
SATISFACTORY).  ALL PROCEEDS WITH RESPECT TO THE COLLATERAL UNDER EACH POLICY
SHALL BE PAYABLE TO AGENT TO BE APPLIED AS SET FORTH IN CLAUSE (B) BELOW.  FROM
TIME TO TIME UPON REQUEST, OBLIGORS SHALL DELIVER TO AGENT THE ORIGINALS OR
CERTIFIED COPIES OF ITS INSURANCE POLICIES.  UNLESS AGENT SHALL AGREE OTHERWISE,
EACH POLICY SHALL INCLUDE SATISFACTORY ENDORSEMENTS (I) SHOWING AGENT AS
ADDITIONAL INSURED OR LOSS PAYEE, AS APPLICABLE; (II) REQUIRING 30 DAYS PRIOR
WRITTEN NOTICE TO AGENT IN THE EVENT OF CANCELLATION OF THE POLICY FOR ANY
REASON WHATSOEVER; AND (III) SPECIFYING THAT THE INTEREST OF AGENT SHALL NOT BE
IMPAIRED OR INVALIDATED BY ANY ACT OR NEGLECT OF ANY OBLIGOR OR THE OWNER OF THE
PROPERTY, NOR BY THE OCCUPATION OF THE PREMISES FOR PURPOSES MORE HAZARDOUS THAN
ARE PERMITTED BY THE POLICY.  IF ANY OBLIGOR FAILS TO PROVIDE AND PAY FOR ANY
INSURANCE, AGENT MAY, AT ITS OPTION, BUT SHALL NOT BE REQUIRED TO, PROCURE THE
INSURANCE AND CHARGE OBLIGORS THEREFOR.  EACH OBLIGOR AGREES TO DELIVER TO
AGENT, PROMPTLY AS RENDERED, COPIES OF ALL REPORTS MADE TO INSURANCE COMPANIES
FOR CLAIMS IN EXCESS OF $1,000,000.  WHILE NO EVENT OF DEFAULT EXISTS, OBLIGORS
MAY SETTLE, ADJUST OR COMPROMISE ANY INSURANCE CLAIM, AS LONG AS THE PROCEEDS
ARE DELIVERED TO AGENT AS REQUIRED HEREUNDER.  IF AN EVENT OF DEFAULT EXISTS,
ONLY AGENT SHALL BE AUTHORIZED TO SETTLE, ADJUST AND COMPROMISE SUCH CLAIMS.

 

B.              ANY PROCEEDS OF INSURANCE COVERING THE COLLATERAL AND ANY AWARDS
ARISING FROM CONDEMNATION OR EXPROPRIATION OF ANY COLLATERAL IN EACH CASE
EXCEEDING $1,000,000 SHALL BE PAID TO AGENT TO BE APPLIED IN ACCORDANCE WITH THE
TERMS OF SECTION 5.2.  ANY SUCH PROCEEDS OR AWARDS THAT RELATE TO INVENTORY
SHALL BE APPLIED TO PAYMENT OF THE LOANS, AND THEN TO ANY OTHER OBLIGATIONS
OUTSTANDING, AND THEN ANY REMAINING BALANCE DEPOSITED IN A CASH COLLATERAL
ACCOUNT (SUBJECT TO SECTION 8.2.5).

 

C.              BORROWER AGENT SHALL PROMPTLY PROVIDE WRITTEN NOTICE TO AGENT IN
THE EVENT A LOSS, THEFT, DAMAGE OR DESTRUCTION OCCURS WITH RESPECT TO ANY
COLLATERAL IF THE AMOUNT NOT COVERED BY INSURANCE EXCEEDS THE DOLLAR EQUIVALENT
OF $5,000,000.

 

8.5.3                        PROTECTION OF COLLATERAL.  ALL EXPENSES OF
PROTECTING, STORING, WAREHOUSING, INSURING, HANDLING, MAINTAINING AND SHIPPING
ANY COLLATERAL, ALL TAXES PAYABLE WITH RESPECT TO ANY COLLATERAL (INCLUDING ANY
SALE THEREOF), AND ALL OTHER PAYMENTS REQUIRED TO BE MADE BY AGENT TO ANY PERSON
TO REALIZE UPON ANY COLLATERAL, SHALL BE BORNE AND PAID BY BORROWERS.  AGENT
SHALL NOT BE LIABLE OR RESPONSIBLE IN ANY WAY FOR THE SAFEKEEPING OF ANY
COLLATERAL (EXCEPT FOR REASONABLE CARE OF COLLATERAL IN AGENT’S ACTUAL
POSSESSION), FOR ANY LOSS OR DAMAGE THERETO (EXCEPT FOR REASONABLE CARE IN ITS
CUSTODY WHILE COLLATERAL IS IN AGENT’S ACTUAL POSSESSION), FOR

 

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ANY DIMINUTION IN THE VALUE THEREOF, OR FOR ANY ACT OR DEFAULT OF ANY
WAREHOUSEMAN, CARRIER, FORWARDING AGENCY OR OTHER PERSON WHATSOEVER, BUT THE
SAME SHALL BE AT OBLIGORS’ SOLE RISK.

 

8.5.4                        DEFENSE OF TITLE TO COLLATERAL.  EACH OBLIGOR SHALL
AT ALL TIMES DEFEND ITS TITLE TO COLLATERAL AND AGENT’S LIENS THEREIN AGAINST
ALL PERSONS, CLAIMS AND DEMANDS WHATSOEVER, EXCEPT PERMITTED LIENS.

 

8.5.5                        PROCEEDS OF COLLATERAL.  EACH OBLIGOR SHALL AT ALL
TIMES MAINTAIN IN CASH COLLATERAL ACCOUNTS ALL PROCEEDS OF COLLATERAL AND NOT
COMMINGLE SUCH PROCEEDS WITH PROCEEDS OF ACCOUNTS COLLECTED UNDER THE
RECEIVABLES PURCHASE FACILITY OR ANY OTHER FACTORING OR SECURITIZATION
ARRANGEMENT EXCEPT DURING ANY “RAMP-UP” PERIOD WITH RESPECT TO THE RECEIVABLES
PURCHASE FACILITY OR ANY OTHER FACTORING OR SECURITIZATION ARRANGEMENT IF AND
ONLY IF AGENT, THE RELEVANT BORROWERS AND THE AGENT UNDER SUCH FACILITY OR
ARRANGEMENT HAVE ENTERED INTO AN AGREEMENT IN RESPECT OF ANY COMMINGLED PROCEEDS
SUBSTANTIALLY IN THE FORM OF EXHIBIT E.

 

8.6           Power of Attorney.  Each Obligor hereby irrevocably constitutes
and appoints Agent (and all Persons designated by Agent) as such Obligor’s true
and lawful attorney (and agent-in-fact) for the purposes provided in this
Section.  Agent, or Agent’s designee, may, without notice and in either its or
an Obligor’s name, but at the cost and expense of Borrowers:

 

A.              ENDORSE AN OBLIGOR’S NAME ON ANY PAYMENT ITEM OR OTHER PROCEEDS
OF COLLATERAL (INCLUDING PROCEEDS OF INSURANCE) THAT COME INTO AGENT’S
POSSESSION OR CONTROL; AND

 

B.              DURING AN EVENT OF DEFAULT, (I) NOTIFY ANY ACCOUNT DEBTORS OF
THE ASSIGNMENT OF THEIR ACCOUNTS, DEMAND AND ENFORCE PAYMENT OF ACCOUNTS BY
LEGAL PROCEEDINGS OR OTHERWISE, AND GENERALLY EXERCISE ANY RIGHTS AND REMEDIES
WITH RESPECT TO ACCOUNTS; (II) SETTLE, ADJUST, MODIFY, COMPROMISE, DISCHARGE OR
RELEASE ANY ACCOUNTS OR OTHER COLLATERAL, OR ANY LEGAL PROCEEDINGS BROUGHT TO
COLLECT ACCOUNTS OR COLLATERAL; (III) SELL OR ASSIGN ANY ACCOUNTS AND OTHER
COLLATERAL UPON SUCH TERMS, FOR SUCH AMOUNTS AND AT SUCH TIMES AS AGENT DEEMS
ADVISABLE; (IV) COLLECT, LIQUIDATE AND RECEIVE BALANCES IN DEPOSIT ACCOUNTS OR
INVESTMENT ACCOUNTS, AND TAKE CONTROL, IN ANY MANNER, OF PROCEEDS OF COLLATERAL;
(V) PREPARE, FILE AND SIGN AN OBLIGOR’S NAME TO A PROOF OF CLAIM OR OTHER
DOCUMENT IN A BANKRUPTCY OF AN ACCOUNT DEBTOR, OR TO ANY NOTICE, ASSIGNMENT OR
SATISFACTION OF LIEN OR SIMILAR DOCUMENT; (VI) RECEIVE, OPEN AND DISPOSE OF MAIL
ADDRESSED TO AN OBLIGOR, AND NOTIFY POSTAL AUTHORITIES TO DELIVER ANY SUCH MAIL
TO AN ADDRESS DESIGNATED BY AGENT; (VII) ENDORSE ANY CHATTEL PAPER, DOCUMENT,
INSTRUMENT, BILL OF LADING, OR OTHER DOCUMENT OR AGREEMENT RELATING TO ANY
ACCOUNTS, INVENTORY OR OTHER COLLATERAL; (VIII) USE AN OBLIGOR’S STATIONERY AND
SIGN ITS NAME TO VERIFICATIONS OF ACCOUNTS AND NOTICES TO ACCOUNT DEBTORS;
(IX) USE INFORMATION CONTAINED IN ANY DATA PROCESSING, ELECTRONIC OR INFORMATION
SYSTEMS RELATING TO COLLATERAL; (X) MAKE AND ADJUST CLAIMS UNDER INSURANCE
POLICIES; (XI) TAKE ANY ACTION AS MAY BE NECESSARY OR APPROPRIATE TO OBTAIN
PAYMENT UNDER ANY LETTER OF CREDIT, BANKER’S ACCEPTANCE OR OTHER INSTRUMENT FOR
WHICH AN OBLIGOR IS A BENEFICIARY; AND (XII) TAKE ALL OTHER ACTIONS AS AGENT
DEEMS APPROPRIATE TO FULFILL ANY OBLIGOR’S OBLIGATIONS UNDER THE LOAN DOCUMENTS.

 

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SECTION 9.                            REPRESENTATIONS AND WARRANTIES

 

9.1           General Representations and Warranties.  To induce Agent and
Lenders to enter into this Agreement and to make available the Commitments,
Loans and Letters of Credit, each Obligor represents and warrants that:

 

9.1.1        ORGANIZATION AND QUALIFICATION.  EACH BORROWER AND SUBSIDIARY IS
DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE
JURISDICTION OF ITS ORGANIZATION.  EACH BORROWER AND SUBSIDIARY IS DULY
QUALIFIED, AUTHORIZED TO DO BUSINESS AND IN GOOD STANDING AS A FOREIGN
CORPORATION, COMPANY OR OTHER ENTITY, AS APPLICABLE, IN EACH JURISDICTION WHERE
FAILURE TO BE SO QUALIFIED COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT.

 

9.1.2        POWER AND AUTHORITY.  EACH OBLIGOR IS DULY AUTHORIZED TO EXECUTE,
DELIVER AND PERFORM THE LOAN DOCUMENTS TO WHICH IT IS A PARTY.  THE EXECUTION,
DELIVERY AND PERFORMANCE OF THE LOAN DOCUMENTS TO WHICH IT IS A PARTY HAVE BEEN
DULY AUTHORIZED BY ALL NECESSARY ACTION ON THE PART OF EACH OBLIGOR, AND DO NOT
(A) REQUIRE ANY CONSENT OR APPROVAL OF ANY HOLDERS OF EQUITY INTERESTS OF ANY
OBLIGOR, OTHER THAN THOSE ALREADY OBTAINED; (B) CONTRAVENE THE ORGANIC DOCUMENTS
OF ANY OBLIGOR; (C) VIOLATE OR CAUSE A DEFAULT UNDER ANY APPLICABLE LAW OR
MATERIAL CONTRACT; OR (D) RESULT IN OR REQUIRE THE IMPOSITION OF ANY LIEN (OTHER
THAN PERMITTED LIENS) ON ANY PROPERTY OF ANY OBLIGOR.

 

9.1.3        ENFORCEABILITY.  EACH LOAN DOCUMENT IS A LEGAL, VALID AND BINDING
OBLIGATION OF EACH OBLIGOR PARTY THERETO, ENFORCEABLE IN ACCORDANCE WITH ITS
TERMS, EXCEPT AS ENFORCEABILITY MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY OR
SIMILAR LAWS AFFECTING THE ENFORCEMENT OF CREDITORS’ RIGHTS GENERALLY AND BY
EQUITABLE PRINCIPLES (REGARDLESS OF WHETHER ENFORCEMENT IS SOUGHT IN EQUITY OR
AT LAW).

 

9.1.4        CAPITAL STRUCTURE.  SCHEDULE 9.1.4 TO THE DISCLOSURE LETTER SHOWS
AS OF THE CLOSING DATE, FOR EACH BORROWER AND SUBSIDIARY, ITS NAME, ITS
JURISDICTION OF ORGANIZATION, ITS ISSUED EQUITY INTERESTS, THE HOLDERS OF ITS
EQUITY INTERESTS (EXCLUDING SANMINA), AND ALL AGREEMENTS BINDING ON SUCH HOLDERS
WITH RESPECT TO THEIR EQUITY INTERESTS.  EACH BORROWER HAS GOOD TITLE TO ITS
EQUITY INTERESTS IN ITS DIRECT SUBSIDIARIES, SUBJECT ONLY TO AGENT’S LIEN, AND
ALL SUCH EQUITY INTERESTS ARE DULY ISSUED, FULLY PAID AND NON-ASSESSABLE (TO THE
EXTENT APPLICABLE).  THERE ARE NO OUTSTANDING PURCHASE OPTIONS, WARRANTS,
SUBSCRIPTION RIGHTS, AGREEMENTS TO ISSUE OR SELL, CONVERTIBLE INTERESTS, PHANTOM
RIGHTS OR POWERS OF ATTORNEY (OTHER THAN THOSE GRANTED UNDER ANY LOAN DOCUMENT
OR PURSUANT TO ANY AGREEMENT, DOCUMENT OR INSTRUMENT RELATED TO DEBT PERMITTED
UNDER SECTION 10.2.1) RELATING TO EQUITY INTERESTS OF ANY BORROWER (OTHER THAN
SANMINA) OR SUBSIDIARY.

 

9.1.5        TITLE TO PROPERTIES; PRIORITY OF LIENS.  EACH BORROWER AND
SUBSIDIARY HAS GOOD AND MARKETABLE TITLE TO (OR VALID LEASEHOLD INTERESTS IN)
ALL OF ITS REAL ESTATE, AND GOOD TITLE TO ALL OF ITS PERSONAL PROPERTY,
INCLUDING ALL PROPERTY REFLECTED IN ANY FINANCIAL STATEMENTS DELIVERED TO AGENT
OR LENDERS, IN EACH CASE FREE OF LIENS EXCEPT PERMITTED LIENS.  EACH BORROWER
AND SUBSIDIARY HAS PAID AND DISCHARGED ALL LAWFUL CLAIMS THAT, IF UNPAID, COULD
BECOME A LIEN ON ITS PROPERTIES, OTHER THAN PERMITTED LIENS.  ALL LIENS OF AGENT
IN THE COLLATERAL ARE DULY PERFECTED (EXCEPT TO THE EXTENT THAT PERFECTION WITH
RESPECT TO SUCH COLLATERAL IS NOT REQUIRED UNDER ANY

 

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LOAN DOCUMENT), FIRST PRIORITY LIENS, SUBJECT ONLY TO PERMITTED LIENS THAT ARE
EXPRESSLY ALLOWED TO HAVE PRIORITY OVER AGENT’S LIENS.

 

9.1.6                        ACCOUNTS.  AGENT MAY RELY, IN DETERMINING WHICH
ACCOUNTS ARE ELIGIBLE ACCOUNTS, ON ALL STATEMENTS AND REPRESENTATIONS MADE BY
OBLIGORS WITH RESPECT THERETO.  OBLIGORS WARRANT, WITH RESPECT TO EACH ACCOUNT
AT THE TIME IT IS SHOWN AS AN ELIGIBLE ACCOUNT IN A BORROWING BASE CERTIFICATE,
THAT:

 

A.              IT IS GENUINE AND IN ALL RESPECTS WHAT IT PURPORTS TO BE, AND IS
NOT EVIDENCED BY A JUDGMENT;

 

B.              IT ARISES OUT OF A COMPLETED, BONA FIDE SALE AND DELIVERY OF
GOODS IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICES, AND
SUBSTANTIALLY IN ACCORDANCE WITH ANY PURCHASE ORDER, CONTRACT OR OTHER DOCUMENT
RELATING THERETO;

 

C.              IT IS FOR A SUM CERTAIN, MATURING AS STATED IN THE INVOICE
COVERING SUCH SALE, A COPY OF WHICH HAS BEEN FURNISHED OR IS AVAILABLE TO AGENT
ON REQUEST;

 

D.              IT IS NOT SUBJECT TO ANY OFFSET, LIEN (OTHER THAN AGENT’S LIEN
OR PERMITTED LIENS REFERRED TO IN SECTION 10.2.2(A), (C), (D), (G) AND
SECTION 10.2.1(S)), DEDUCTION, DEFENSE, DISPUTE, COUNTERCLAIM OR OTHER ADVERSE
CONDITION EXCEPT AS ARISING IN THE ORDINARY COURSE OF BUSINESS AND DISCLOSED TO
AGENT OR AS CONTEMPLATED BY CLAUSE (F) BELOW; AND IT IS ABSOLUTELY OWING BY THE
ACCOUNT DEBTOR, WITHOUT CONTINGENCY IN ANY RESPECT;

 

E.              NO PURCHASE ORDER, AGREEMENT, DOCUMENT OR APPLICABLE LAW
RESTRICTS GRANTS OF SECURITY INTERESTS IN SUCH ACCOUNT TO AGENT (UNLESS UNDER
APPLICABLE LAW THE RESTRICTION IS INEFFECTIVE), AND THE APPLICABLE BORROWER IS
THE SOLE PAYEE OR REMITTANCE PARTY SHOWN ON THE INVOICE;

 

F.               NO EXTENSION, COMPROMISE, SETTLEMENT, MODIFICATION, CREDIT,
DEDUCTION OR RETURN HAS BEEN AUTHORIZED WITH RESPECT TO THE ACCOUNT, EXCEPT
DISCOUNTS OR ALLOWANCES GRANTED IN THE ORDINARY COURSE OF BUSINESS CONSISTENT
WITH PAST PRACTICES FOR PROMPT PAYMENT THAT ARE REFLECTED ON THE FACE OF THE
INVOICE RELATED THERETO AND IN THE REPORTS SUBMITTED TO AGENT HEREUNDER; AND

 

G.              TO THE BEST OF OBLIGORS’ KNOWLEDGE, (I) THERE ARE NO FACTS OR
CIRCUMSTANCES THAT ARE REASONABLY LIKELY TO IMPAIR THE ENFORCEABILITY OR
COLLECTIBILITY OF SUCH ACCOUNT; (II) THE ACCOUNT DEBTOR HAD THE CAPACITY TO
CONTRACT WHEN THE ACCOUNT AROSE, CONTINUES TO MEET THE APPLICABLE OBLIGOR’S
CUSTOMARY CREDIT STANDARDS, IS SOLVENT, IS NOT CONTEMPLATING OR SUBJECT TO AN
INSOLVENCY PROCEEDING, AND HAS NOT FAILED, OR SUSPENDED OR CEASED DOING
BUSINESS; AND (III) THERE ARE NO PROCEEDINGS OR ACTIONS THREATENED IN WRITING OR
PENDING AGAINST ANY ACCOUNT DEBTOR THAT COULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT ON THE ACCOUNT DEBTOR’S FINANCIAL CONDITION.

 

9.1.7                        FINANCIAL STATEMENTS.  THE CONSOLIDATED BALANCE
SHEETS, AND RELATED STATEMENTS OF INCOME, CASH FLOW AND SHAREHOLDER’S EQUITY, OF
SANMINA AND ITS SUBSIDIARIES THAT HAVE BEEN AND ARE HEREAFTER DELIVERED TO AGENT
AND LENDERS, ARE PREPARED IN ACCORDANCE WITH GAAP (SUBJECT TO CHANGES FROM AUDIT
AND YEAR END ADJUSTMENTS AND THE ABSENCE OF FOOTNOTES IN

 

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THE CASE OF UNAUDITED FINANCIAL STATEMENTS AND THE ABSENCE OF AMORTIZATION
CHARGES IN THE CASE OF MONTHLY FINANCIAL STATEMENTS DELIVERED PURSUANT TO
SECTION 6.1), AND FAIRLY PRESENT IN ALL MATERIAL RESPECTS THE FINANCIAL
POSITIONS AND RESULTS OF OPERATIONS OF SANMINA AND ITS SUBSIDIARIES AT THE DATES
AND FOR THE PERIODS INDICATED.  ALL PROJECTIONS DELIVERED FROM TIME TO TIME BY
BORROWERS TO AGENT AND LENDERS HAVE BEEN PREPARED IN GOOD FAITH, BASED ON
REASONABLE ASSUMPTIONS IN LIGHT OF THE CIRCUMSTANCES AT SUCH TIME (IT BEING
UNDERSTOOD THAT PROJECTIONS ARE NOT TO BE VIEWED AS FACTS AND THAT ACTUAL
RESULTS DURING THE PERIOD OR PERIODS COVERED BY THE PROJECTIONS MAY DIFFER FROM
THE PROJECTIONS AND THAT SUCH DIFFERENCES MAY BE MATERIAL).  SINCE SEPTEMBER 29,
2007, THERE HAS BEEN NO CHANGE IN THE CONDITION, FINANCIAL OR OTHERWISE, OF
SANMINA AND ITS SUBSIDIARIES, TAKEN AS A WHOLE, THAT COULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.  EACH OBLIGOR IS SOLVENT.

 

9.1.8        SURETY OBLIGATIONS.  NO BORROWER OR SUBSIDIARY IS OBLIGATED AS
SURETY OR INDEMNITOR UNDER ANY BOND OR OTHER CONTRACT THAT ASSURES PAYMENT OR
PERFORMANCE OF ANY OBLIGATION OF ANY PERSON, EXCEPT AS PERMITTED HEREUNDER.

 

9.1.9        TAXES.  EACH BORROWER AND SUBSIDIARY HAS FILED ALL MATERIAL
FEDERAL, STATE, PROVINCIAL, TERRITORIAL, MUNICIPAL, LOCAL AND FOREIGN TAX
RETURNS AND OTHER REPORTS THAT IT IS REQUIRED BY LAW TO FILE, AND HAS PAID AND
REMITTED, OR MADE PROVISION FOR THE PAYMENT AND REMITTANCE OF, ALL ITS MATERIAL
TAXES THAT ARE DUE AND PAYABLE, EXCEPT TO THE EXTENT BEING PROPERLY CONTESTED;
PROVIDED THAT FOR THE PURPOSES OF THIS SECTION 9.1.9, ANY SUCH TAXES, TAX
RETURNS OR OTHER REPORTS REQUIRED TO BE FILED, PAID OR REMITTED UNDER APPLICABLE
LAW IN CANADA SHALL BE DEEMED MATERIAL.  THE PROVISION FOR TAXES ON THE BOOKS OF
EACH BORROWER AND SUBSIDIARY HAS BEEN ESTABLISHED IN ACCORDANCE WITH GAAP FOR
ALL YEARS NOT CLOSED BY APPLICABLE STATUTES, AND FOR ITS CURRENT FISCAL YEAR.

 

9.1.10      BROKERS.  THERE ARE NO BROKERAGE COMMISSIONS, FINDER’S FEES OR
INVESTMENT BANKING FEES PAYABLE IN CONNECTION WITH ANY TRANSACTIONS CONTEMPLATED
BY THE LOAN DOCUMENTS.

 

9.1.11      INTELLECTUAL PROPERTY.  EACH BORROWER AND SUBSIDIARY OWNS OR HAS THE
LAWFUL RIGHT TO USE ALL MATERIAL INTELLECTUAL PROPERTY NECESSARY FOR THE CONDUCT
OF ITS BUSINESS, WITHOUT CONFLICT IN ANY MATERIAL RESPECT WITH ANY INTELLECTUAL
PROPERTY RIGHTS OF OTHERS.  THERE IS NO PENDING OR, TO ANY BORROWER’S KNOWLEDGE,
THREATENED (IN WRITING) INTELLECTUAL PROPERTY CLAIM WITH RESPECT TO ANY
BORROWER, ANY SUBSIDIARY OR ANY OF THEIR PROPERTY (INCLUDING ANY INTELLECTUAL
PROPERTY) WHICH COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT. 
EXCEPT AS DISCLOSED ON SCHEDULE 9.1.11 TO THE DISCLOSURE LETTER, NO BORROWER OR
SUBSIDIARY PAYS OR OWES ANY ROYALTY OR OTHER COMPENSATION TO ANY PERSON IN
EXCESS OF $1,500,000 ANNUALLY WITH RESPECT TO ANY LICENSE OF INTELLECTUAL
PROPERTY.

 

9.1.12      GOVERNMENTAL APPROVALS.  EACH BORROWER AND SUBSIDIARY HAS, IS IN
COMPLIANCE WITH, AND IS IN GOOD STANDING WITH RESPECT TO, ALL MATERIAL
GOVERNMENTAL APPROVALS NECESSARY TO CONDUCT ITS BUSINESS AND TO OWN, LEASE AND
OPERATE ITS PROPERTIES.  ALL NECESSARY IMPORT, EXPORT OR OTHER LICENSES, PERMITS
OR CERTIFICATES FOR THE IMPORT OR HANDLING OF ANY GOODS OR OTHER COLLATERAL HAVE
BEEN PROCURED AND ARE IN EFFECT, AND BORROWERS AND SUBSIDIARIES HAVE COMPLIED
WITH ALL FOREIGN AND DOMESTIC LAWS WITH RESPECT TO THE SHIPMENT AND IMPORTATION
OF ANY GOODS OR COLLATERAL, EXCEPT WHERE NONCOMPLIANCE COULD NOT REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

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9.1.13      COMPLIANCE WITH LAWS.  EACH BORROWER AND SUBSIDIARY HAS DULY
COMPLIED, AND ITS PROPERTIES AND BUSINESS OPERATIONS ARE IN COMPLIANCE, IN ALL
RESPECTS WITH ALL APPLICABLE LAW, EXCEPT WHERE NONCOMPLIANCE COULD NOT
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.  THERE HAVE BEEN NO
CITATIONS, NOTICES OR ORDERS OF MATERIAL NONCOMPLIANCE ISSUED TO ANY BORROWER OR
SUBSIDIARY UNDER ANY APPLICABLE LAW.  NO INVENTORY HAS BEEN PRODUCED IN
VIOLATION OF THE FLSA.

 

9.1.14      COMPLIANCE WITH ENVIRONMENTAL LAWS.  EXCEPT AS DISCLOSED ON
SCHEDULE 9.1.14 TO THE DISCLOSURE LETTER, TO THE BEST OF THEIR KNOWLEDGE NO
BORROWER’S OR SUBSIDIARY’S PAST OR PRESENT OPERATIONS, REAL ESTATE OR OTHER
PROPERTIES ARE SUBJECT TO ANY FEDERAL, STATE, PROVINCIAL, TERRITORIAL, LOCAL OR
FOREIGN INVESTIGATION TO DETERMINE WHETHER ANY MATERIAL REMEDIAL ACTION IS
NEEDED TO ADDRESS ANY ENVIRONMENTAL POLLUTION, HAZARDOUS MATERIAL OR
ENVIRONMENTAL CLEAN-UP.  NO BORROWER OR SUBSIDIARY HAS RECEIVED ANY
ENVIRONMENTAL NOTICE IN RESPECT OF ANY MATERIAL PROPERTIES OF SUCH PERSON.  NO
BORROWER OR SUBSIDIARY HAS ANY MATERIAL CONTINGENT LIABILITY WITH RESPECT TO ANY
ENVIRONMENTAL RELEASE, ENVIRONMENTAL POLLUTION OR HAZARDOUS MATERIAL ON ANY REAL
ESTATE NOW OR PREVIOUSLY OWNED, LEASED OR OPERATED BY IT.

 

9.1.15      BURDENSOME CONTRACTS.  NO BORROWER OR SUBSIDIARY IS A PARTY OR
SUBJECT TO ANY CONTRACT, AGREEMENT OR CHARTER RESTRICTION THAT COULD REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.  NO BORROWER OR SUBSIDIARY IS
PARTY OR SUBJECT TO ANY RESTRICTIVE AGREEMENT, EXCEPT AS SHOWN ON
SCHEDULE 9.1.15 TO THE DISCLOSURE LETTER OR AS PERMITTED BY SECTION 10.2.13.  NO
SUCH RESTRICTIVE AGREEMENT PROHIBITS THE EXECUTION, DELIVERY OR PERFORMANCE OF
ANY LOAN DOCUMENT BY AN OBLIGOR.

 

9.1.16      LITIGATION.  EXCEPT AS SHOWN ON SCHEDULE 9.1.16 TO THE DISCLOSURE
LETTER, THERE ARE NO PROCEEDINGS OR INVESTIGATIONS PENDING OR, TO ANY BORROWER’S
KNOWLEDGE, THREATENED IN WRITING AGAINST ANY BORROWER OR SUBSIDIARY, OR ANY OF
THEIR BUSINESSES, OPERATIONS OR PROPERTIES, THAT (A) RELATE TO ANY LOAN
DOCUMENTS OR TRANSACTIONS CONTEMPLATED THEREBY; OR (B) COULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.  NO BORROWER OR SUBSIDIARY IS IN
DEFAULT WITH RESPECT TO ANY ORDER, INJUNCTION OR JUDGMENT OF ANY GOVERNMENTAL
AUTHORITY BINDING ON IT.

 

9.1.17      NO DEFAULTS.  NO EVENT OR CIRCUMSTANCE HAS OCCURRED OR EXISTS THAT
CONSTITUTES A DEFAULT OR EVENT OF DEFAULT.  NO BORROWER OR SUBSIDIARY IS IN
MATERIAL DEFAULT, AND NO EVENT OR CIRCUMSTANCE HAS OCCURRED OR EXISTS THAT WITH
THE PASSAGE OF TIME OR GIVING OF NOTICE WOULD CONSTITUTE A MATERIAL DEFAULT,
UNDER ANY MATERIAL CONTRACT.  TO THE BEST OF THEIR KNOWLEDGE, THERE IS NO BASIS
UPON WHICH ANY PARTY (OTHER THAN A BORROWER OR SUBSIDIARY) COULD TERMINATE A
MATERIAL CONTRACT PRIOR TO ITS SCHEDULED TERMINATION DATE.

 

9.1.18      ERISA.  EXCEPT AS DISCLOSED ON SCHEDULE 9.1.18 TO THE DISCLOSURE
LETTER:

 

A.             EACH PLAN IS IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH THE
APPLICABLE PROVISIONS OF ERISA, THE CODE, AND OTHER FEDERAL AND STATE LAWS. 
EACH PLAN THAT IS INTENDED TO QUALIFY UNDER SECTION 401(A) OF THE CODE HAS
RECEIVED A FAVORABLE DETERMINATION LETTER FROM THE IRS OR AN APPLICATION FOR
SUCH A LETTER IS CURRENTLY BEING PROCESSED BY THE IRS WITH RESPECT THERETO AND,
TO THE KNOWLEDGE OF BORROWERS, NOTHING HAS OCCURRED WHICH WOULD PREVENT, OR
CAUSE THE LOSS OF, SUCH QUALIFICATION.  EACH OBLIGOR AND ERISA AFFILIATE HAS
MADE ALL REQUIRED

 

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CONTRIBUTIONS TO EACH PLAN SUBJECT TO SECTION 412 OF THE CODE, AND NO
APPLICATION FOR A FUNDING WAIVER OR AN EXTENSION OF ANY AMORTIZATION PERIOD
PURSUANT TO SECTION 412 OF THE CODE HAS BEEN MADE WITH RESPECT TO ANY PLAN.

 

B.             THERE ARE NO PENDING OR, TO THE KNOWLEDGE OF BORROWERS,
THREATENED (IN WRITING) CLAIMS, ACTIONS OR LAWSUITS, OR ACTION BY ANY
GOVERNMENTAL AUTHORITY, WITH RESPECT TO ANY PLAN THAT COULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.  THERE HAS BEEN NO PROHIBITED
TRANSACTION OR VIOLATION OF THE FIDUCIARY RESPONSIBILITY RULES WITH RESPECT TO
ANY PLAN THAT HAS RESULTED IN OR COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT.

 

C.             (I) NO ERISA EVENT HAS OCCURRED OR IS REASONABLY EXPECTED TO
OCCUR; (II) NO PENSION PLAN HAS ANY UNFUNDED PENSION LIABILITY; (III) NO OBLIGOR
OR ERISA AFFILIATE HAS INCURRED, OR REASONABLY EXPECTS TO INCUR, ANY LIABILITY
UNDER TITLE IV OF ERISA WITH RESPECT TO ANY PENSION PLAN (OTHER THAN PREMIUMS
DUE AND NOT DELINQUENT UNDER SECTION 4007 OF ERISA); (IV) NO OBLIGOR OR ERISA
AFFILIATE HAS INCURRED, OR REASONABLY EXPECTS TO INCUR, ANY LIABILITY (AND NO
EVENT HAS OCCURRED WHICH, WITH THE GIVING OF NOTICE UNDER SECTION 4219 OF ERISA,
WOULD RESULT IN SUCH LIABILITY) UNDER SECTION 4201 OR 4243 OF ERISA WITH RESPECT
TO A MULTIEMPLOYER PLAN; AND (V) NO OBLIGOR OR ERISA AFFILIATE HAS ENGAGED IN A
TRANSACTION THAT COULD BE SUBJECT TO SECTION 4069 OR 4212(C) OF ERISA.

 

D.             WITH RESPECT TO ANY FOREIGN PLAN, (I) ALL EMPLOYER AND EMPLOYEE
CONTRIBUTIONS REQUIRED BY LAW OR BY THE TERMS OF THE FOREIGN PLAN HAVE BEEN
MADE, OR, IF APPLICABLE, ACCRUED, IN ACCORDANCE WITH NORMAL ACCOUNTING
PRACTICES; (II) THE FAIR MARKET VALUE OF THE ASSETS OF EACH FUNDED FOREIGN PLAN,
THE LIABILITY OF EACH INSURER FOR ANY FOREIGN PLAN FUNDED THROUGH INSURANCE, OR
THE BOOK RESERVE ESTABLISHED FOR ANY FOREIGN PLAN, TOGETHER WITH ANY ACCRUED
CONTRIBUTIONS, IS SUFFICIENT TO PROCURE OR PROVIDE FOR THE ACCRUED BENEFIT
OBLIGATIONS WITH RESPECT TO ALL CURRENT AND FORMER PARTICIPANTS IN SUCH FOREIGN
PLAN ACCORDING TO THE ACTUARIAL ASSUMPTIONS AND VALUATIONS MOST RECENTLY USED TO
ACCOUNT FOR SUCH OBLIGATIONS IN ACCORDANCE WITH APPLICABLE GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES; AND (III) IT HAS BEEN REGISTERED AS REQUIRED AND HAS BEEN
MAINTAINED IN GOOD STANDING WITH APPLICABLE REGULATORY AUTHORITIES.

 

E.             (I) THE CANADIAN SUBSIDIARIES HAVE NO CANADIAN PLAN OTHER THAN
THOSE LISTED ON SCHEDULE 9.1.18 TO THE DISCLOSURE LETTER, AND ALL MONTHLY AND
OTHER PAYMENTS IN RESPECT OF SUCH CANADIAN PLANS WHICH ARE PENSION PLANS (ON
ACCOUNT OF CONTRIBUTIONS, SPECIAL CONTRIBUTIONS OR UNFUNDED LIABILITY OR
SOLVENCY DEFICIENCIES) OR OTHERWISE ARE ACCURATELY SET FORTH IN SCHEDULE 9.1.18
TO THE DISCLOSURE LETTER.  NO CANADIAN PLAN HAS BEEN TERMINATED OR PARTIALLY
TERMINATED OR IS INSOLVENT OR IN REORGANIZATION, NOR HAVE ANY PROCEEDINGS BEEN
INSTITUTED TO TERMINATE, IN WHOLE OR IN PART, OR REORGANIZE ANY CANADIAN PLAN.

 

(II)           NO CANADIAN SUBSIDIARY HAS CEASED TO PARTICIPATE (IN WHOLE OR IN
PART) AS A PARTICIPATING EMPLOYER IN ANY CANADIAN PLAN WHICH IS A PENSION PLAN
OR HAS WITHDRAWN FROM ANY CANADIAN PLAN WHICH IS A PENSION PLAN IN A COMPLETE OR
PARTIAL WITHDRAWAL, NOR HAS A CONDITION OCCURRED WHICH IF CONTINUED WOULD RESULT
IN A COMPLETE OR PARTIAL WITHDRAWAL.

 

(III)          NO CANADIAN SUBSIDIARY HAS ANY UNFUNDED LIABILITY ON WINDUP OR
WITHDRAWAL LIABILITY, INCLUDING CONTINGENT WITHDRAWAL OR WINDUP LIABILITY, TO
ANY CANADIAN PLAN OR ANY SOLVENCY DEFICIENCY IN RESPECT OF ANY CANADIAN PLAN.

 

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(IV)          NO CANADIAN SUBSIDIARY HAS ANY UNFUNDED LIABILITY ON WINDUP OR ANY
LIABILITY IN RESPECT OF ANY CANADIAN PLAN (INCLUDING TO THE FSCO) OTHER THAN FOR
REQUIRED INSURANCE PREMIUMS OR CONTRIBUTIONS OR REMITTANCES WHICH HAVE BEEN
PAID, CONTRIBUTED AND REMITTED WHEN DUE.

 

(V)           THE CANADIAN SUBSIDIARIES HAVE MADE ALL CONTRIBUTIONS TO THEIR
CANADIAN PLANS REQUIRED BY LAW OR THE TERMS THEREOF TO BE MADE BY THEM WHEN DUE,
AND THEY ARE NOT IN ARREARS IN THE PAYMENT OF ANY CONTRIBUTION, PAYMENT,
REMITTANCE OR ASSESSMENT OR IN DEFAULT IN FILING ANY REPORTS, RETURNS,
STATEMENTS, AND SIMILAR DOCUMENTS IN RESPECT OF THE CANADIAN PLANS REQUIRED TO
BE MADE OR PAID BY THEM PURSUANT TO ANY CANADIAN PLAN, ANY LAW, ACT, REGULATION,
DIRECTIVE OR ORDER OR ANY EMPLOYMENT, UNION, PENSION, DEFERRED PROFIT SHARING,
BENEFIT, BONUS OR OTHER SIMILAR AGREEMENT OR ARRANGEMENT.

 

(VI)          NO CANADIAN SUBSIDIARY IS LIABLE OR, TO THE BEST OF THE BORROWERS’
KNOWLEDGE, ALLEGED TO BE LIABLE, TO ANY EMPLOYEE OR FORMER EMPLOYEE, DIRECTOR OR
FORMER DIRECTOR, OFFICER OR FORMER OFFICER OR OTHER PERSON RESULTING FROM ANY
VIOLATION OR ALLEGED VIOLATION OF ANY CANADIAN PLAN, ANY FIDUCIARY DUTY, ANY LAW
OR AGREEMENT IN RELATION TO ANY CANADIAN PLAN OR HAS ANY UNFUNDED PENSION OR
LIKE OBLIGATIONS OR SOLVENCY DEFICIENCY (INCLUDING ANY PAST SERVICE OR
EXPERIENCE DEFICIENCY FUNDING LIABILITIES), OTHER THAN ACCRUED OBLIGATIONS NOT
YET DUE, FOR WHICH IT HAS MADE FULL PROVISION IN ITS BOOKS AND RECORDS.

 

(VII)         ALL VACATION PAY, BONUSES, SALARIES AND WAGES, TO THE EXTENT
ACCRUING DUE, ARE PROPERLY REFLECTED IN THE CANADIAN SUBSIDIARIES’ BOOKS AND
RECORDS.

 

(VIII)        WITHOUT LIMITING THE FOREGOING, ALL OF THE CANADIAN SUBSIDIARIES’
CANADIAN PLANS ARE DULY REGISTERED WHERE REQUIRED BY, AND ARE IN COMPLIANCE AND
GOOD STANDING IN ALL MATERIAL RESPECTS UNDER, ALL APPLICABLE LAWS, ACTS,
STATUTES, REGULATIONS, ORDERS, DIRECTIVES AND AGREEMENTS, INCLUDING, WITHOUT
LIMITATION, THE INCOME TAX ACT (CANADA), THE SUPPLEMENTAL PENSION PLANS ACT
(QUÉBEC) AND THE PENSION BENEFITS ACT (ONTARIO), ANY SUCCESSOR LEGISLATION
THERETO, AND OTHER APPLICABLE LAWS OF ANY JURISDICTION.

 

(IX)           NO CANADIAN SUBSIDIARY HAS MADE ANY APPLICATION FOR A FUNDING
WAIVER OR EXTENSION OF ANY AMORTIZATION PERIOD IN RESPECT OF ANY CANADIAN PLAN.

 

(X)            THERE HAS BEEN NO PROHIBITED TRANSACTION OR VIOLATION OF ANY
FIDUCIARY RESPONSIBILITIES WITH RESPECT TO ANY CANADIAN PLAN.

 

(XI)           THERE ARE NO OUTSTANDING OR PENDING OR THREATENED (IN WRITING)
INVESTIGATIONS, CLAIMS, SUITS OR PROCEEDINGS IN RESPECT OF ANY CANADIAN PLANS
(INCLUDING TO ASSERT RIGHTS OR CLAIMS TO BENEFITS) THAT COULD GIVE RISE TO A
MATERIAL ADVERSE EFFECT.

 

9.1.19      TRADE RELATIONS.  THERE EXISTS NO ACTUAL OR THREATENED (IN WRITING)
TERMINATION, LIMITATION OR MODIFICATION OF ANY BUSINESS RELATIONSHIP BETWEEN ANY
BORROWER OR SUBSIDIARY AND ANY CUSTOMER OR SUPPLIER, OR ANY GROUP OF CUSTOMERS
OR SUPPLIERS, WHO INDIVIDUALLY OR IN THE AGGREGATE ARE MATERIAL TO THE BUSINESS
OF SUCH BORROWER OR SUBSIDIARY.  THERE EXISTS NO CONDITION OR CIRCUMSTANCE THAT
COULD REASONABLY BE EXPECTED TO IMPAIR THE ABILITY OF ANY BORROWER OR SUBSIDIARY
TO CONDUCT ITS BUSINESS AT ANY TIME HEREAFTER IN SUBSTANTIALLY THE SAME MANNER
AS CONDUCTED ON THE CLOSING DATE.

 

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9.1.20      LABOR RELATIONS.  EXCEPT AS DESCRIBED ON SCHEDULE 9.1.20 TO THE
DISCLOSURE LETTER, AS OF THE CLOSING DATE NO BORROWER OR SUBSIDIARY IS PARTY TO
OR BOUND BY ANY COLLECTIVE BARGAINING AGREEMENT, MANAGEMENT AGREEMENT OR
CONSULTING AGREEMENT.  EXCEPT AS DESCRIBED ON SCHEDULE 9.1.20 TO THE DISCLOSURE
LETTER, THERE ARE NO MATERIAL GRIEVANCES, DISPUTES OR CONTROVERSIES WITH ANY
UNION OR OTHER ORGANIZATION OF ANY BORROWER’S OR SUBSIDIARY’S EMPLOYEES, OR, TO
ANY BORROWER’S KNOWLEDGE, ANY ASSERTED OR THREATENED (IN WRITING) STRIKES, WORK
STOPPAGES OR DEMANDS FOR COLLECTIVE BARGAINING.

 

9.1.21      PAYABLE PRACTICES.  NO BORROWER OR SUBSIDIARY HAS MADE ANY MATERIAL
CHANGE IN ITS HISTORICAL ACCOUNTS PAYABLE PRACTICES FROM THOSE IN EFFECT ON THE
CLOSING DATE.

 

9.1.22      NOT A REGULATED ENTITY.  NO OBLIGOR IS (A) AN “INVESTMENT COMPANY”
OR A “PERSON DIRECTLY OR INDIRECTLY CONTROLLED BY OR ACTING ON BEHALF OF AN
INVESTMENT COMPANY” WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF 1940; OR
(B) SUBJECT TO REGULATION UNDER THE FEDERAL POWER ACT, THE INTERSTATE COMMERCE
ACT, ANY PUBLIC UTILITIES CODE OR ANY OTHER APPLICABLE LAW REGARDING ITS
AUTHORITY TO INCUR BORROWED MONEY.

 

9.1.23      MARGIN STOCK.  NO BORROWER OR SUBSIDIARY IS ENGAGED, PRINCIPALLY OR
AS ONE OF ITS IMPORTANT ACTIVITIES, IN THE BUSINESS OF EXTENDING CREDIT FOR THE
PURPOSE OF PURCHASING OR CARRYING ANY MARGIN STOCK.  NO LOAN PROCEEDS OR LETTERS
OF CREDIT WILL BE USED BY BORROWERS TO PURCHASE OR CARRY, OR TO REDUCE OR
REFINANCE ANY DEBT INCURRED TO PURCHASE OR CARRY, ANY MARGIN STOCK OR FOR ANY
RELATED PURPOSE GOVERNED BY REGULATIONS T, U OR X OF THE BOARD OF GOVERNORS.

 

9.1.24      INSURANCE.  THE INSURANCE COVERAGE OF THE OBLIGORS AS IN EFFECT ON
THE CLOSING DATE COMPLIES WITH THE REQUIREMENTS OF SECTION 8.5.2 AND IS OUTLINED
AS TO CARRIER, POLICY NUMBER, EXPIRATION DATE, TYPE, AMOUNT AND DEDUCTIBLES ON
SCHEDULE 9.1.24 TO THE DISCLOSURE LETTER.

 

9.1.25      SENIOR INDEBTEDNESS.  THE OBLIGATIONS (TO THE EXTENT THEY FALL
WITHIN THE DEFINITION OF “SENIOR DEBT” IN THE APPLICABLE SENIOR SUBORDINATED
INDENTURE) ARE HEREBY DESIGNATED AS “DESIGNATED SENIOR DEBT” FOR PURPOSES OF AND
AS DEFINED IN EACH SENIOR SUBORDINATED INDENTURE.  SANMINA HAS TAKEN ALL ACTIONS
NECESSARY FOR THE OBLIGATIONS (TO THE EXTENT THEY FALL WITHIN THE DEFINITION OF
“SENIOR DEBT” IN THE APPLICABLE SENIOR SUBORDINATED INDENTURE) TO CONSTITUTE
“SENIOR DEBT” AND “DESIGNATED SENIOR DEBT” FOR THE PURPOSES OF AND AS DEFINED IN
EACH SENIOR SUBORDINATED INDENTURE.

 

9.2           Complete Disclosure.  No Loan Document, when taken as a whole with
the other Loan Documents and together with Sanmina’s filings with the Securities
and Exchange Commission,  contains any untrue statement of a material fact, nor
fails to disclose any material fact necessary to make the statements contained
therein not materially misleading.  There is no fact or circumstance that any
Obligor has failed to disclose to Agent in writing or that is not disclosed in
Sanmina’s filings with the Securities and Exchange Commission that could
reasonably be expected to have a Material Adverse Effect.

 

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SECTION 10.                     COVENANTS AND CONTINUING AGREEMENTS

 

10.1         Affirmative Covenants.  As long as any Commitments are outstanding
and until Full Payment of the Obligations, each Borrower shall, and shall cause
each Subsidiary to:

 

10.1.1      INSPECTIONS; APPRAISALS.

 

A.             PERMIT AGENT FROM TIME TO TIME, SUBJECT (EXCEPT WHEN A DEFAULT OR
EVENT OF DEFAULT EXISTS) TO REASONABLE NOTICE AND NORMAL BUSINESS HOURS, TO
VISIT AND INSPECT THE PROPERTIES OF ANY BORROWER OR SUBSIDIARY FOR THE PURPOSE
OF CONDUCTING AN ANNUAL (OR MORE FREQUENTLY AT AGENT’S DISCRETION) FIELD AUDIT
(WHICH FIELD AUDIT SHALL INCLUDE THE RIGHT TO INSPECT, AUDIT AND MAKE EXTRACTS
FROM ANY BORROWER’S OR SUBSIDIARY’S BOOKS AND RECORDS, AND DISCUSS WITH ITS
OFFICERS, EMPLOYEES, AGENTS, ADVISORS AND INDEPENDENT ACCOUNTANTS SUCH
BORROWER’S OR SUBSIDIARY’S BUSINESS, FINANCIAL CONDITION, ASSETS, PROSPECTS AND
RESULTS OF OPERATIONS).  LENDERS MAY PARTICIPATE IN ANY SUCH VISIT OR
INSPECTION, AT THEIR OWN EXPENSE.  NEITHER AGENT NOR ANY LENDER SHALL HAVE ANY
DUTY TO ANY BORROWER TO MAKE ANY INSPECTION, NOR TO SHARE ANY RESULTS OF ANY
INSPECTION, APPRAISAL OR REPORT WITH ANY BORROWER.  BORROWERS ACKNOWLEDGE THAT
ALL INSPECTIONS, APPRAISALS AND REPORTS ARE PREPARED BY AGENT AND LENDERS FOR
THEIR PURPOSES, AND BORROWERS SHALL NOT BE ENTITLED TO RELY UPON THEM. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NO BORROWER OR SUBSIDIARY WILL
BE REQUIRED TO DISCLOSE, PERMIT THE INSPECTION, EXAMINATION OR MAKING OF
EXTRACTS, OR DISCUSSION OF, ANY DOCUMENT, INFORMATION OR OTHER MATTER THAT
(I) CONSTITUTES NON-FINANCIAL TRADE SECRETS OR NON-FINANCIAL PROPRIETARY
INFORMATION, (II) IN RESPECT OF WHICH DISCLOSURE TO AGENT (OR ITS DESIGNATED
REPRESENTATIVE) IS THEN PROHIBITED BY APPLICABLE LAW OR ANY AGREEMENT BINDING ON
SUCH BORROWER OR ANY SUBSIDIARY WHICH AGREEMENT WAS NOT ENTERED INTO IN
CONTEMPLATION OF THIS AGREEMENT AND DOES NOT APPLY TO THE COLLATERAL OR (III) IS
SUBJECT TO ATTORNEY-CLIENT OR SIMILAR PRIVILEGE OR CONSTITUTES ATTORNEY WORK
PRODUCT.

 

B.             REIMBURSE AGENT FOR ALL REASONABLE CHARGES, COSTS AND EXPENSES OF
AGENT IN CONNECTION WITH (I) EXAMINATIONS OF ANY OBLIGOR’S BOOKS AND RECORDS OR
ANY OTHER FINANCIAL OR COLLATERAL MATTERS AS AGENT DEEMS APPROPRIATE, UP TO
THREE TIMES PER LOAN YEAR; AND (II) APPRAISALS OF INVENTORY UP TO THREE TIMES
PER LOAN YEAR; PROVIDED, HOWEVER, THAT IF AN EXAMINATION OR APPRAISAL IS
INITIATED DURING THE EXISTENCE OF A DEFAULT OR EVENT OF DEFAULT, ALL REASONABLE
CHARGES, COSTS AND EXPENSES THEREFOR SHALL BE REIMBURSED BY BORROWERS WITHOUT
REGARD TO SUCH LIMITS.  SUBJECT TO AND WITHOUT LIMITING THE FOREGOING, BORROWERS
SPECIFICALLY AGREE TO PAY AGENT’S THEN STANDARD CHARGES FOR EACH DAY THAT AN
EMPLOYEE OF AGENT OR ITS AFFILIATES IS ENGAGED IN ANY EXAMINATION ACTIVITIES,
AND SHALL PAY THE STANDARD CHARGES OF AGENT’S INTERNAL APPRAISAL GROUP.  THIS
SECTION SHALL NOT BE CONSTRUED TO LIMIT AGENT’S RIGHT TO CONDUCT EXAMINATIONS OR
TO OBTAIN APPRAISALS AT ANY TIME IN ITS DISCRETION, NOR TO USE THIRD PARTIES FOR
SUCH PURPOSES.

 

10.1.2      FINANCIAL AND OTHER INFORMATION.  KEEP ADEQUATE RECORDS AND BOOKS OF
ACCOUNT WITH RESPECT TO ITS BUSINESS ACTIVITIES, IN WHICH PROPER ENTRIES ARE
MADE THAT ARE SUFFICIENT TO PREPARE FINANCIAL STATEMENTS IN ACCORDANCE WITH
GAAP; AND FURNISH TO AGENT AND LENDERS:

 

A.             AS SOON AS AVAILABLE, AND IN ANY EVENT WITHIN 90 DAYS AFTER THE
END OF EACH FISCAL YEAR, BALANCE SHEETS AS OF THE END OF SUCH FISCAL YEAR AND
THE RELATED STATEMENTS OF INCOME, CASH FLOW AND STOCKHOLDERS’ EQUITY FOR SUCH
FISCAL YEAR, ON CONSOLIDATED BASIS FOR SANMINA AND ITS SUBSIDIARIES, WHICH
CONSOLIDATED STATEMENTS SHALL BE AUDITED AND CERTIFIED

 

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(WITHOUT QUALIFICATION AS TO GOING CONCERN OR SCOPE OF AUDIT AND SHALL STATE
THAT SUCH CONSOLIDATED FINANCIAL STATEMENTS FAIRLY PRESENT, IN ALL MATERIAL
RESPECTS, THE CONSOLIDATED FINANCIAL POSITION OF SANMINA AND ITS SUBSIDIARIES AS
AT THE DATES INDICATED AND THE RESULTS OF THEIR OPERATIONS AND THEIR CASH FLOWS
FOR THE PERIODS INDICATED IN CONFORMITY WITH GAAP AND THAT THE AUDIT BY SUCH
ACCOUNTANTS IN CONNECTION WITH SUCH CONSOLIDATED FINANCIAL STATEMENTS HAS BEEN
MADE IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS IN THE UNITED
STATES) BY A FIRM OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF RECOGNIZED
STANDING SELECTED BY SANMINA AND REASONABLY ACCEPTABLE TO AGENT (IT BEING
UNDERSTOOD THAT KPMG LLP IS ACCEPTABLE TO AGENT), AND SHALL SET FORTH IN
COMPARATIVE FORM CORRESPONDING FIGURES FOR THE PRECEDING FISCAL YEAR;

 

B.             (I) AS SOON AS AVAILABLE, AND IN ANY EVENT WITHIN 45 DAYS AFTER
THE END OF EACH OF THE FIRST THREE FISCAL QUARTERS IN ANY FISCAL YEAR, UNAUDITED
BALANCE SHEETS AS OF THE END OF SUCH FISCAL QUARTER AND THE RELATED STATEMENTS
OF INCOME, CASH FLOW AND STOCKHOLDER’S EQUITY FOR SUCH FISCAL QUARTER AND FOR
THE PORTION OF THE FISCAL YEAR THEN ELAPSED, ON CONSOLIDATED BASIS FOR SANMINA
AND ITS SUBSIDIARIES, SETTING FORTH IN COMPARATIVE FORM CORRESPONDING FIGURES
FOR THE PRECEDING FISCAL YEAR AND CERTIFIED BY THE CHIEF FINANCIAL OFFICER OF
BORROWER AGENT AS PREPARED IN ACCORDANCE WITH GAAP AND FAIRLY PRESENTING IN ALL
MATERIAL RESPECTS THE FINANCIAL POSITION AND RESULTS OF OPERATIONS FOR SANMINA
AND ITS SUBSIDIARIES FOR SUCH FISCAL QUARTER AND PERIOD, SUBJECT TO NORMAL
YEAR-END ADJUSTMENTS AND THE ABSENCE OF FOOTNOTES AND (II) AS SOON AS AVAILABLE,
AND IN ANY EVENT WITHIN 45 DAYS AFTER THE END OF EACH FISCAL QUARTER IN ANY
FISCAL YEAR, A WRITTEN SUMMARY (BY ACCOUNT DEBTOR) OF THE ACCOUNTS SOLD IN SUCH
FISCAL QUARTER IN CONNECTION WITH THE RECEIVABLES PURCHASE FACILITY;

 

C.             CONCURRENTLY WITH DELIVERY OF FINANCIAL STATEMENTS UNDER
CLAUSES (A) AND (B) ABOVE, OR MORE FREQUENTLY IF REQUESTED BY AGENT WHILE A
DEFAULT OR EVENT OF DEFAULT EXISTS, A COMPLIANCE CERTIFICATE EXECUTED BY THE
CHIEF FINANCIAL OFFICER OR TREASURER OF BORROWER AGENT;

 

D.             CONCURRENTLY WITH DELIVERY OF FINANCIAL STATEMENTS UNDER
CLAUSE (A) ABOVE, COPIES OF ALL MANAGEMENT LETTERS AND OTHER MATERIAL REPORTS
SUBMITTED TO BORROWERS BY THEIR ACCOUNTANTS IN CONNECTION WITH SUCH FINANCIAL
STATEMENTS;

 

E.             NOT LATER THAN 30 DAYS AFTER THE END OF EACH FISCAL YEAR,
PROJECTIONS OF SANMINA’S CONSOLIDATED BALANCE SHEETS, RESULTS OF OPERATIONS,
CASH FLOW AND AVAILABILITY FOR THE NEXT FISCAL YEAR, QUARTER BY QUARTER;

 

F.              AT AGENT’S REQUEST, A LISTING OF EACH OBLIGOR’S TRADE PAYABLES,
SPECIFYING THE TRADE CREDITOR AND BALANCE DUE, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO AGENT;

 

G.             PROMPTLY AFTER THE SENDING OR FILING THEREOF, COPIES OF ANY PROXY
STATEMENTS, FINANCIAL STATEMENTS OR REPORTS THAT ANY OBLIGOR HAS MADE GENERALLY
AVAILABLE TO ITS SHAREHOLDERS; AND COPIES OF ANY REGULAR, PERIODIC AND SPECIAL
REPORTS OR REGISTRATION STATEMENTS OR PROSPECTUSES THAT ANY OBLIGOR FILES WITH
THE SECURITIES AND EXCHANGE COMMISSION (IT BEING UNDERSTOOD THAT ANY CURRENT
REPORT ON 8-K REPORT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION SHALL BE
FURNISHED TO AGENT ONLY) OR ANY OTHER GOVERNMENTAL AUTHORITY, OR ANY SECURITIES
EXCHANGE (EXCLUDING LISTING APPLICATIONS AND OTHER ROUTINE REPORTS FILED WITH
ANY SECURITIES EXCHANGE);

 

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H.             SUCH OTHER REPORTS AND INFORMATION (FINANCIAL OR OTHERWISE) AS
AGENT MAY REQUEST FROM TIME TO TIME IN CONNECTION WITH ANY COLLATERAL OR ANY
BORROWER’S, SUBSIDIARY’S OR OTHER OBLIGOR’S FINANCIAL CONDITION OR BUSINESS.

 

Documents required to be delivered pursuant to Section 10.1.2(a), Section 10.1.2
(b) or Section 10.1.2(g) (to the extent such documents are included in materials
otherwise filed with the Securities and Exchange Commission) may be delivered
electronically, shall be deemed to have been delivered on the date on which such
documents are posted on Borrower Agent’s behalf on an Internet or intranet
website, if any, to which each Lender and Agent have access (whether a
commercial, third-party website or whether sponsored by Agent); provided that
Borrower Agent shall notify Agent (by telecopier or electronic mail) of the
posting of any such documents and shall deliver paper copies of such documents
to (i) Agent and (ii) any Lender that requests such paper copies.

 

10.1.3      NOTICES.  NOTIFY AGENT (FOR DISTRIBUTION TO THE LENDERS) IN WRITING,
PROMPTLY AFTER A BORROWER’S OBTAINING KNOWLEDGE THEREOF, OF ANY OF THE FOLLOWING
THAT AFFECTS AN OBLIGOR:  (A) THE NON-FRIVOLOUS THREAT IN WRITING OR
COMMENCEMENT OF ANY PROCEEDING OR INVESTIGATION, WHETHER OR NOT COVERED BY
INSURANCE, THAT IF ADVERSELY DETERMINED COULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT; (B) ANY PENDING OR THREATENED LABOR DISPUTE, STRIKE OR
WALKOUT, OR THE EXPIRATION OF ANY MATERIAL LABOR CONTRACT, IN EACH CASE
INVOLVING EMPLOYEES OF AN OBLIGOR OR ANY OF ITS SUBSIDIARIES; (C) ANY DEFAULT
UNDER OR TERMINATION (OTHER THAN AT THE END OF ITS TERM IN ACCORDANCE WITH SUCH
MATERIAL CONTRACT) OF A MATERIAL CONTRACT; (D) THE EXISTENCE OF ANY DEFAULT OR
EVENT OF DEFAULT; (E) ANY JUDGMENT IN AN AMOUNT EXCEEDING $10,000,000; (F) THE
ASSERTION OF ANY INTELLECTUAL PROPERTY CLAIM, IF AN ADVERSE RESOLUTION COULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT; (G) ANY VIOLATION OR
ASSERTED VIOLATION OF ANY APPLICABLE LAW (INCLUDING ERISA, OSHA, FLSA, OR ANY
ENVIRONMENTAL LAWS), IF AN ADVERSE RESOLUTION COULD REASONABLY BE EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT; (H) THE OCCURRENCE OF ANY ERISA EVENT IN AN
AMOUNT EXCEEDING $10,000,000 OR SIMILAR OCCURRENCE IN RESPECT OF A CANADIAN
PLAN; OR (I) THE DISCHARGE OF OR ANY WITHDRAWAL OR RESIGNATION BY BORROWERS’
INDEPENDENT ACCOUNTANTS.

 

10.1.4      LANDLORD AND STORAGE AGREEMENTS.  UPON REQUEST, PROVIDE AGENT WITH
COPIES OF ALL AGREEMENTS FROM TIME TO TIME IN EFFECT BETWEEN AN OBLIGOR AND ANY
LANDLORD, WAREHOUSEMAN, PROCESSOR, SHIPPER, BAILEE OR OTHER PERSON THAT OWNS ANY
PREMISES AT WHICH ANY COLLATERAL MAY BE KEPT OR THAT OTHERWISE MAY POSSESS OR
HANDLE ANY COLLATERAL.

 

10.1.5      COMPLIANCE WITH LAWS.  COMPLY WITH ALL APPLICABLE LAWS, INCLUDING
ERISA, ENVIRONMENTAL LAWS, FLSA, OSHA, ANTI-TERRORISM LAWS, AND LAWS REGARDING
COLLECTION, PAYMENT AND REMITTANCE OF TAXES, AND MAINTAIN ALL GOVERNMENTAL
APPROVALS NECESSARY TO THE OWNERSHIP OF ITS PROPERTIES OR CONDUCT OF ITS
BUSINESS, UNLESS FAILURE TO COMPLY (OTHER THAN FAILURE TO COMPLY WITH APPLICABLE
ANTI-TERRORISM LAWS) OR MAINTAIN COULD NOT REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.

 

10.1.6      TAXES.  PAY, REMIT AND DISCHARGE ALL MATERIAL TAXES PRIOR TO THE
DATE ON WHICH THEY BECOME DELINQUENT OR PENALTIES ATTACH, UNLESS SUCH TAXES ARE
BEING PROPERLY CONTESTED; PROVIDED THAT TAXES THAT ARE DETERMINED TO HAVE BEEN
DUE AS A RESULT OF A SUBSEQUENT AUDIT NOTWITHSTANDING A GOOD FAITH DETERMINATION
BY THE OBLIGORS THAT SUCH TAXES WERE NOT

 

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PAYABLE AT THE TIME SUCH TAXES ARE DETERMINED TO HAVE BEEN DUE SHALL NOT BE
DEEMED TO BE DELINQUENT FOR PURPOSES OF THIS SECTION 10.1.6 SO LONG AS SUCH
TAXES ARE PAID AND DISCHARGED PROMPTLY FOLLOWING THE AUDITOR’S DETERMINATION
THAT THE TAXES WERE DUE, UNLESS SUCH DETERMINATION IS BEING PROPERLY CONTESTED
AND, PROVIDED, FURTHER, THAT FOR THE PURPOSES OF THIS SECTION 10.1.6, ALL TAXES
REQUIRED TO BE PAID, REMITTED OR DISCHARGED UNDER APPLICABLE LAW IN CANADA SHALL
BE DEEMED MATERIAL.

 

10.1.7      INSURANCE.  IN ADDITION TO THE INSURANCE REQUIRED HEREUNDER WITH
RESPECT TO COLLATERAL, MAINTAIN INSURANCE WITH INSURERS (WITH A BEST RATING OF
AT LEAST A7, UNLESS OTHERWISE APPROVED BY AGENT, WHICH APPROVAL SHALL NOT BE
UNREASONABLY WITHHELD, DELAYED OR CONDITIONED) REASONABLY SATISFACTORY TO AGENT,
(A) WITH RESPECT TO THE PROPERTIES AND BUSINESS OF BORROWERS AND SUBSIDIARIES OF
SUCH TYPE (INCLUDING PRODUCT LIABILITY, WORKERS’ COMPENSATION, LARCENY,
EMBEZZLEMENT, OR OTHER CRIMINAL MISAPPROPRIATION INSURANCE), IN SUCH AMOUNTS,
AND WITH SUCH COVERAGES AND DEDUCTIBLES AS ARE CUSTOMARY FOR COMPANIES SIMILARLY
SITUATED; AND (B) BUSINESS INTERRUPTION INSURANCE IN SUCH AMOUNTS, AND WITH SUCH
COVERAGES AND DEDUCTIBLES AS ARE CUSTOMARY FOR COMPANIES SIMILARLY SITUATED.

 

10.1.8      LICENSES.  KEEP EACH MATERIAL LICENSE AFFECTING ANY COLLATERAL
(INCLUDING THE MANUFACTURE, DISTRIBUTION OR DISPOSITION OF INVENTORY) OR ANY
OTHER MATERIAL PROPERTY OF BORROWERS AND SUBSIDIARIES IN FULL FORCE AND EFFECT;
PROMPTLY NOTIFY AGENT OF ANY MATERIAL MODIFICATION TO ANY SUCH LICENSE, OR ENTRY
INTO ANY NEW MATERIAL LICENSE; PAY ALL ROYALTIES WHEN DUE EXCEPT FOR ROYALTIES
BEING PROPERLY CONTESTED; AND NOTIFY AGENT OF ANY DEFAULT OR BREACH ASSERTED BY
ANY PERSON TO HAVE OCCURRED UNDER ANY MATERIAL LICENSE.

 

10.1.9      FUTURE SUBSIDIARIES.

 

A.             PROMPTLY NOTIFY AGENT UPON ANY PERSON BECOMING A SUBSIDIARY AND,
IF SUCH PERSON IS A DOMESTIC SUBSIDIARY (OTHER THAN AN INSIGNIFICANT SUBSIDIARY
OR A PERSON OTHERWISE EXCLUDED FROM THE DEFINITION OF GUARANTOR), CAUSE IT TO
GUARANTY THE OBLIGATIONS IN A MANNER SATISFACTORY TO AGENT BY EXECUTING AND
DELIVERING THE JOINDER AGREEMENT ATTACHED HERETO AS EXHIBIT D AND SUCH OTHER
DOCUMENTS, INSTRUMENTS AND AGREEMENTS REASONABLY REQUESTED BY AGENT AND TO TAKE
SUCH OTHER ACTIONS AS AGENT SHALL REQUIRE TO EVIDENCE AND PERFECT A LIEN IN
FAVOR OF AGENT (FOR THE BENEFIT OF SECURED PARTIES) ON ALL COLLATERAL OF SUCH
PERSON, INCLUDING DELIVERY OF SUCH LEGAL OPINIONS, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO AGENT, AS IT SHALL DEEM APPROPRIATE.  AT THE BORROWER
AGENT’S REQUEST, ANY SUBSIDIARY REFERRED TO HEREIN CAN BE DESIGNATED A BORROWER
RATHER THAN A GUARANTOR AS PROVIDED IN THE JOINDER AGREEMENT.  NO PROPERTY OF
ANY SUBSIDIARY REFERRED TO HEREIN SHALL BE PERMITTED TO BE INCLUDED IN THE
BORROWING BASE UNTIL AGENT HAS RECEIVED AND APPROVED, IN ITS CREDIT JUDGMENT,
(A) A COLLATERAL EXAMINATION OR AUDIT WITH RESPECT TO SUCH PROPERTY, INCLUDING
AN APPRAISAL BY AN INDEPENDENT APPRAISAL FIRM REASONABLY ACCEPTABLE TO AGENT,
(B) ALL UCC, PPSA OR OTHER SEARCH RESULTS NECESSARY TO CONFIRM AGENT’S FIRST
PRIORITY LIEN (SUBJECT TO LIENS PERMITTED WITH RESPECT TO ELIGIBLE ACCOUNTS AND
ELIGIBLE INVENTORY BY THE RESPECTIVE DEFINITION THEREOF) ON ALL OF SUCH
PROPERTY, AND (C) SUCH CUSTOMARY CERTIFICATES (INCLUDING A SOLVENCY
CERTIFICATE), RESOLUTIONS, FINANCIAL STATEMENTS, LEGAL OPINIONS, AND OTHER
DOCUMENTATION AS AGENT MAY REASONABLY REQUEST (INCLUDING AS REQUIRED BY
SECTIONS 10.1.1 AND 10.1.11).

 

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B.             IF, AT ANY TIME AND FROM TIME TO TIME AFTER THE CLOSING DATE, ANY
SUBSIDIARY THAT IS NOT AN OBLIGOR BECAUSE IT IS AN INSIGNIFICANT SUBSIDIARY
(I) CEASES TO BE AN INSIGNIFICANT SUBSIDIARY AS OF THE END OF THE MOST RECENTLY
ENDED FISCAL QUARTER OR (II) IS REQUESTED IN WRITING BY THE BORROWER AGENT TO BE
AN OBLIGOR UNDER THE LOAN DOCUMENTS, SUCH SUBSIDIARY SHALL BECOME AN OBLIGOR
PURSUANT TO THE TERMS HEREOF, AND THE BORROWER AGENT AND THE OTHER OBLIGORS
SHALL, NOT LATER THAN FORTY-FIVE (45) DAYS AFTER THE END OF SUCH FISCAL QUARTER,
CAUSE SUCH SUBSIDIARY TO BECOME AN OBLIGOR AND TO EXECUTE ALL APPLICABLE
DOCUMENTS IN RESPECT THEREOF AS REQUIRED BY CLAUSE (A) ABOVE.

 

10.1.10    EXISTENCE.  EXCEPT AS OTHERWISE PERMITTED HEREUNDER, EACH OBLIGOR
WILL, AND WILL CAUSE EACH OF ITS SUBSIDIARIES TO, AT ALL TIMES PRESERVE AND KEEP
IN FULL FORCE AND EFFECT ITS EXISTENCE AND ALL RIGHTS AND FRANCHISES, LICENSES
AND PERMITS MATERIAL TO ITS BUSINESS; PROVIDED, NO OBLIGOR OR ANY OF ITS
SUBSIDIARIES SHALL BE REQUIRED TO PRESERVE ANY SUCH EXISTENCE, RIGHT OR
FRANCHISE, LICENSES AND PERMITS IF THE PRESERVATION THEREOF IS NO LONGER
DESIRABLE IN THE CONDUCT OF THE BUSINESS OF SUCH PERSON AND THAT THE LOSS
THEREOF IS NOT DISADVANTAGEOUS IN ANY MATERIAL RESPECT TO SUCH PERSON OR TO
LENDERS.

 

10.1.11    FURTHER ASSURANCES.  AT ANY TIME OR FROM TIME TO TIME UPON THE
REQUEST OF AGENT, EACH OBLIGOR WILL, AT ITS EXPENSE, PROMPTLY EXECUTE,
ACKNOWLEDGE AND DELIVER SUCH FURTHER DOCUMENTS AND DO SUCH OTHER ACTS AND THINGS
AS AGENT MAY REASONABLY REQUEST IN ORDER TO EFFECT FULLY THE PURPOSES OF THE
LOAN DOCUMENTS.  IN FURTHERANCE AND NOT IN LIMITATION OF THE FOREGOING, EACH
OBLIGOR SHALL TAKE SUCH ACTIONS AS AGENT MAY REASONABLY REQUEST FROM TIME TO
TIME TO ENSURE THAT THE OBLIGATIONS ARE GUARANTIED BY THE GUARANTORS AND ARE
SECURED BY THE COLLATERAL OF THE BORROWERS AND THE GUARANTORS.  NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN, IF AN EVENT OF DEFAULT HAS OCCURRED
AND IS CONTINUING, AGENT SHALL HAVE THE RIGHT TO REQUIRE ANY OBLIGOR TO EXECUTE
AND DELIVER DOCUMENTATION, CONSENTS, AUTHORIZATIONS, APPROVALS AND ORDERS IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO AGENT AND AS AGENT SHALL DEEM
NECESSARY TO GRANT TO AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, A VALID AND
PERFECTED FIRST PRIORITY LIEN ON ANY COLLATERAL NOT OTHERWISE REQUIRED
HEREUNDER, EXCEPT TO THE EXTENT SUCH REQUIREMENTS ARE PROHIBITED BY OTHER
AGREEMENTS BINDING ON SUCH OBLIGOR OR ILLEGAL UNDER APPLICABLE LAW, AND NO
REASONABLE ALTERNATIVE STRUCTURE CAN BE DEVISED HAVING SUBSTANTIALLY THE SAME
EFFECT AS SUCH ACTIONS THAT WOULD NOT BE PROHIBITED OR ILLEGAL UNDER APPLICABLE
LAW.

 

10.1.12    PAYMENT OF OBLIGATIONS.  PAY AND DISCHARGE AS THE SAME SHALL BECOME
DUE AND PAYABLE, ALL ITS MATERIAL OBLIGATIONS AND LIABILITIES, INCLUDING ALL
LAWFUL MATERIAL CLAIMS WHICH, IF UNPAID, WOULD BY LAW BECOME A LIEN UPON ITS
PROPERTY UNLESS THE SAME ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE
PROCEEDINGS DILIGENTLY CONDUCTED AND ADEQUATE RESERVES TO THE EXTENT REQUIRED IN
ACCORDANCE WITH GAAP ARE BEING MAINTAINED BY SUCH BORROWER OR SUCH SUBSIDIARY.

 

10.1.13    MAINTENANCE OF PROPERTIES.  BORROWER AGENT SHALL AND SHALL CAUSE EACH
OF ITS SUBSIDIARIES TO:  (A) MAINTAIN, PRESERVE AND PROTECT ALL OF THEIR
RESPECTIVE MATERIAL PROPERTIES AND EQUIPMENT NECESSARY TO THE OPERATION OF THEIR
RESPECTIVE BUSINESSES IN GOOD WORKING ORDER AND CONDITION, ORDINARY WEAR AND
TEAR EXCEPTED; AND (B) MAKE ALL NECESSARY REPAIRS THERETO AND RENEWALS AND
REPLACEMENTS THEREOF; IN EACH OF THE FOREGOING CLAUSES (A) AND (B), EXCEPT WHERE
THE FAILURE TO DO SO COULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

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10.1.14    CANADIAN PLANS.  THE BORROWERS SHALL CAUSE EACH OF ITS AND THEIR
SUBSIDIARIES’ CANADIAN PLANS TO BE DULY QUALIFIED AND ADMINISTERED IN ALL
RESPECTS IN COMPLIANCE WITH, AS APPLICABLE, THE SUPPLEMENTAL PENSION PLANS ACT
(QUÉBEC) AND THE PENSION BENEFITS ACT (ONTARIO) AND ALL OTHER APPLICABLE LAWS
(INCLUDING REGULATIONS, ORDERS AND DIRECTIVES), AND THE TERMS OF THE CANADIAN
PLANS AND ANY AGREEMENTS RELATING THERETO.  THE BORROWERS SHALL ENSURE THAT IT
AND ITS CANADIAN SUBSIDIARIES:

 

A.                                       HAVE NO UNFUNDED, SOLVENCY, OR
DEFICIENCY ON WINDUP LIABILITY AND NO ACCUMULATED FUNDING DEFICIENCY (WHETHER OR
NOT WAIVED), OR ANY AMOUNT OF UNFUNDED BENEFIT LIABILITIES IN RESPECT OF ANY
CANADIAN PLAN, INCLUDING ANY CANADIAN PLAN TO BE ESTABLISHED AND ADMINISTERED BY
IT OR THEM;

 

B.                                      ALL AMOUNTS REQUIRED TO BE PAID BY IT OR
THEM ARE PAID WHEN DUE;

 

C.                                       NO LIABILITY UPON IT OR THEM OR LIEN ON
ANY OF ITS OR THEIR PROPERTY ARISES OR EXISTS IN RESPECT OF ANY CANADIAN PLAN;

 

D.                                      MAKE ALL REQUIRED CONTRIBUTIONS TO ANY
CANADIAN PLAN WHEN DUE;

 

E.                                       NOT ENGAGE IN A PROHIBITED TRANSACTION
OR VIOLATION OF THE FIDUCIARY RESPONSIBILITY RULES WITH RESPECT TO ANY CANADIAN
PLAN THAT COULD REASONABLY BE EXPECTED TO RESULT IN LIABILITY; AND

 

F.                                         HAS NO LIEN ON ANY OF ITS OR THEIR
PROPERTY THAT ARISES OR EXISTS IN RESPECT OF ANY CANADIAN PLAN.

 

10.2                          Negative Covenants.  As long as any Commitments
are outstanding and until Payment in Full of the Obligations, each Borrower
shall not, and shall cause each Subsidiary not to:

 

10.2.1                  PERMITTED DEBT.  CREATE, INCUR, GUARANTEE OR SUFFER TO
EXIST ANY BORROWED MONEY, EXCEPT:

 

A.                                       THE OBLIGATIONS;

 

B.                                      SUBORDINATED DEBT;

 

C.                                       PERMITTED PURCHASE MONEY DEBT;

 

D.                                      BORROWED MONEY (OTHER THAN THE
OBLIGATIONS AND PERMITTED PURCHASE MONEY DEBT), BUT ONLY TO THE EXTENT
OUTSTANDING ON THE CLOSING DATE, LISTED ON SCHEDULE 10.2.1 TO THE DISCLOSURE
LETTER (AND OTHER NON-MATERIAL DEBT OF BORROWERS OR ANY SUBSIDIARY EXISTING ON
THE CLOSING DATE IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $5,000,000) AND
NOT SATISFIED WITH PROCEEDS OF THE INITIAL LOANS;

 

E.                                       HEDGING AGREEMENTS ENTERED INTO BY AN
OBLIGOR OR SUBSIDIARY;

 

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f.              Debt that is in existence when a Person becomes a Subsidiary or
that is secured by an asset when acquired by a Borrower or Subsidiary, as long
as such Debt was not incurred in contemplation of such Person becoming a
Subsidiary or such acquisition, and does not exceed $50,000,000 in the aggregate
principal amount at any time outstanding;

 

g.             Permitted Contingent Obligations;

 

h.             Refinancing Debt as long as each Refinancing Condition is
satisfied;

 

i.              (i) Intercompany Debt of any Obligor payable to another Obligor
or a Foreign Subsidiary, provided that, simultaneously with the incurrence of
such Debt, Sanmina shall cause (A) all such Intercompany Debt to be unsecured,
and in the case of Intercompany Debt owed to a Borrower from a Canadian Obligor,
subject to a perfected first priority Lien pursuant to the terms hereof, and
(B) all such Intercompany Debt of any Obligor to be subordinated in right of
payment to the payment in full of the Obligations pursuant to the terms of the
Interco Subordination Agreement; provided further, that such Intercompany Debt
owed by a Canadian Obligor to any other Obligor shall be evidenced by a note in
form and substance reasonably satisfactory to Agent and the payee thereunder
shall promptly endorse and deliver the same to Agent; (ii) Intercompany Debt of
any Foreign Subsidiary payable to any Obligor, provided, that (a) the aggregate
outstanding principal amount of such Debt made or extended at a time when the
Availability Conditions are not met shall not exceed the Dollar Equivalent of
$50,000,000 (it being understood that there shall be no limit on the aggregate
principal amount of any such Debt made or extended at a time when the
Availability Conditions are met), and (b) simultaneously with the incurrence of
such Debt Sanmina shall cause all such Intercompany Debt to be unsecured, and
subject to a perfected first priority Lien pursuant to the terms hereof;
provided further, that such Intercompany Debt (excluding any such Intercompany
Debt that is outstanding on the Closing Date) shall be evidenced by a loan
agreement or a note, and if evidenced by a note, the payee thereunder shall
promptly endorse and deliver the same to Agent; (iii) Intercompany Debt of any
Foreign Subsidiary payable to any other Foreign Subsidiary; and
(iv) Intercompany Debt outstanding on the date hereof provided that all such
Intercompany Debt of any Obligor shall be subordinated in right of payment to
the payment in full of the Obligations pursuant to the terms of the Interco
Subordination Agreement;

 

j.              guaranties in the Ordinary Course of Business of the obligations
owed to or of suppliers, customers, franchisees and licensees of Sanmina and its
Subsidiaries;

 

k.             (i) unsecured guaranties by an Obligor of Debt of an Obligor or
guaranties by a Subsidiary of Debt of Sanmina or an Obligor with respect, in
each case, to Debt otherwise permitted to be incurred pursuant to this Section
10.2.1, (ii) unsecured guaranties by an Obligor of Debt of Foreign Subsidiaries
(A) which Debt of Foreign Subsidiaries exists on the Closing Date and is listed
on Schedule 10.2.1 to the Disclosure Letter and (B) Debt in an aggregate
principal amount not to exceed at any time outstanding the Dollar Equivalent of
$50,000,000 in the case of Debt incurred after the Closing Date, and
(iii) guaranties by any Foreign Subsidiary of Debt of any other Foreign
Subsidiary permitted to be incurred pursuant to this Section 10.2.1;

 

l.              Debt with respect to Capital Leases entered into after the
Closing Date in an aggregate principal amount not to exceed at any time
outstanding the Dollar Equivalent of

 

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$75,000,000 plus any amount permitted by and not utilized pursuant to Section
10.2.1(c), but in no event shall the aggregate outstanding principal amount of
Debt under this Section 10.2.1(l) and Section 10.2.1(c) exceed at any time the
Dollar Equivalent of $150,000,000 provided that the sum of the amount of Debt of
Foreign Subsidiaries under either such Section guaranteed by an Obligor and the
amount of Debt under Section 10.2.1(i)(ii) shall not exceed the Dollar
Equivalent of $150,000,000;

 

m.            non-recourse (other than certain limited, customary provisions for
recourse) Debt secured by the Corporate Head Office Campus in a principal amount
not to exceed the greater of (a) the Dollar Equivalent of $75,000,000 and
(b) the fair market value of the Corporate Head Office Campus;

 

n.             Debt of Foreign Subsidiaries in an aggregate principal amount not
to exceed at any time 20% of Consolidated Tangible Foreign Assets;

 

o.             reimbursement obligations in respect of letters of credit, bank
guaranties and banker’s acceptances in an aggregate face amount not to exceed
the Dollar Equivalent of $50,000,000 at any time;

 

p.             customary indemnification obligations pursuant to factoring or
similar arrangements permitted under Section 10.2.5(e) or
Section 10.2.5(f) hereof;

 

q.             Debt (including guaranties) incurred pursuant to Foreign
Securitization Facilities, the Receivables Purchase Facility or any other
factoring or similar arrangement permitted under Section 10.2.5(e) or
Section 10.2.5(f);

 

r.              Debt incurred by Sanmina or any Subsidiary arising from
agreements providing for indemnification, adjustment of purchase price or
similar obligations, or from guaranties or letters of credit, surety bonds or
performance bonds securing the performance of Sanmina or any such Subsidiary
pursuant to such agreements, in connection with Permitted Acquisitions or
permitted dispositions of any business, assets or Subsidiary of Sanmina or any
of its Subsidiaries; and

 

s.             Debt of Obligors or any Subsidiary to any person other than an
Obligor or a Subsidiary that is not included in any of the preceding clauses of
this Section, provided that such Debt is on terms otherwise satisfactory to
Agent, has no scheduled amortization payments or mandatory prepayments or
redemptions (other than as a result of an event of default thereunder or a
change of control) prior to 91 days after the Revolver Termination Date and, if
the Fixed Charge Coverage Ratio as of the end of the Fiscal Quarter immediately
preceding the incurrence of such Debt and after giving pro forma effect thereto
is less than or equal to 1.50 : 1.00, the outstanding principal amount incurred
under this subclause (s) does not exceed the Dollar Equivalent of $250,000,000
in the aggregate at any time (it being understood that such $250,000,000
aggregate limit shall not apply to Debt incurred under this subclause (s) at a
time when such Fixed Charge Coverage Ratio on a pro forma basis after giving
effect thereto is greater than 1.50 : 1.00); provided further any such Debt
secured by a Lien on the Collateral is subordinated to the Liens granted
hereunder on terms satisfactory to Agent and is subject to an intercreditor
agreement in form and substance satisfactory to Agent (including (i) provisions

 

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providing that any Lien on the Collateral in respect of such Debt be on a
“silent second” basis as is customary in asset-based lending transactions and
(ii) customary intercreditor standstill and payment blockage provisions); and
provided, further, that such Debt may have a maturity date prior to the Revolver
Termination Date so long as at least 90 days prior to such maturity date, such
Debt is repaid, redeemed, defeased or refinanced or on such 90th day, reserved
for under the Borrowing Base.

 

10.2.2     Permitted Liens.  Create or suffer to exist any Lien upon any of its
Property, except the following (collectively, “Permitted Liens”):

 

a.             Liens in favor of Agent;

 

b.             Purchase Money Liens securing Permitted Purchase Money Debt and
Liens securing Debt permitted under Section 10.2.1(l);

 

c.             Liens for Taxes not yet due or being Properly Contested;

 

d.             statutory, common law or contractual Liens of landlords, creditor
depository institutions or institutions holding securities accounts (including
rights of set-off or similar rights and remedies), carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed by law
(other than Liens for Taxes or imposed under ERISA or under Applicable Law
governing Canadian Plans) arising in the Ordinary Course of Business, but only
if (i) payment of the obligations secured thereby is not yet due or is being
Properly Contested, and (ii) such Liens do not materially impair the value or
use of the Property or materially impair operation of the business of any
Borrower or Subsidiary;

 

e.             Liens incurred or deposits made in the Ordinary Course of
Business (consistent with past practices) to secure the performance of tenders,
bids, leases, contracts (except those relating to Borrowed Money), statutory
obligations and other similar obligations, or arising as a result of progress
payments under government contracts or arising in connection with grants from
any Governmental Authority;

 

f.              Liens arising in the Ordinary Course of Business that are
subject to Lien Waivers;

 

g.             Liens arising by virtue of a judgment or judicial order against
any Borrower or Subsidiary, or any Property of a Borrower not constituting an
Event of Default under Section 11.1(g), provided that such Liens are (i) in
existence for less than 20 days or being Properly Contested, and (ii) at all
times junior to Agent’s Liens;

 

h.             easements, rights-of-way, servitudes, restrictions, covenants or
other agreements of record, and other similar charges or encumbrances on Real
Estate, that do not secure any monetary obligation and do not interfere in any
material respect with the Ordinary Course of Business consistent with past
practices;

 

i.              Liens of a collecting bank on Payment Items in the course of
collection;

 

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j.              any interest or title of a lessor or sublessor under any lease
of real estate not prohibited hereby;

 

k.             Liens solely on any cash earnest money deposits made by Sanmina
or any of its Subsidiaries in connection with any letter of intent or purchase
agreement permitted hereunder;

 

l.              purported Liens evidenced by the filing of precautionary UCC or
PPSA financing statements relating solely to operating leases of personal
property entered into in the Ordinary Course of Business consistent with past
practices;

 

m.            Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;

 

n.             any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;

 

o.             licenses or sublicenses of patents, trademarks, copyrights and
other Intellectual Property rights granted by Sanmina or any of its Subsidiaries
in the Ordinary Course of Business consistent with past practices and not
interfering in any material respect with the ordinary conduct of the business of
Sanmina or such Subsidiary;

 

p.             Liens described in Schedule 10.2.2 to the Disclosure Letter (or
other non-material Liens of Sanmina and its Subsidiaries existing on the Closing
Date and not described in such Schedule securing obligations in an aggregate
principal amount not to exceed at any time the Dollar Equivalent of $2,000,000)
and any renewals or extensions thereof, provided that the property covered
thereby is not increased and any renewal or extension of the obligations secured
or benefited thereby constitutes Refinancing Debt that satisfies each
Refinancing Condition;

 

q.             Liens securing Debt permitted pursuant to Section 10.2.1(m) and
10.2.1(s); provided, any such Lien securing Debt permitted pursuant to
Section 10.2.1(m) shall encumber only the Corporate Head Office Campus and such
other property relating thereto as is normally described in a mortgage or deed
of trust;

 

r.              Liens encumbering assets of Foreign Subsidiaries securing Debt
permitted pursuant to Section 10.2.1(n) or other obligations not prohibited
hereby in an aggregate amount not to exceed at any time 20% of Consolidated
Tangible Foreign Assets;

 

s.             Liens consisting of pledges of cash collateral to secure letters
of credit, bank guarantees and banker’s acceptances in an aggregate amount
permitted under Section 10.2.1(o);

 

t.              Liens on Property at the time Sanmina or any Subsidiary acquired
such Property in a transaction permitted by Section 10.2.4, including any
acquisition by means of a merger, amalgamation or consolidation with or into
Sanmina or any Subsidiary; provided, however, that such Lien may not extend to
any other Property of Sanmina or any Subsidiary; provided further that such
Liens shall not have been created in anticipation of or in connection

 

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with the transaction or series of transactions pursuant to which such Property
was acquired by Sanmina or any Subsidiary;

 

u.             Liens on the Property of a Person existing at the time such
Person becomes a Subsidiary of Sanmina in a transaction permitted by
Section 10.2.4; provided, however that any such Lien may not extend to any other
Property of Sanmina or any other Subsidiary that is not a direct Subsidiary of
such Person; provided further that any such Lien was not created in anticipation
of or in connection with the transaction or series of transactions pursuant to
which such Person became a Subsidiary of Sanmina;

 

v.             Liens on specific items of inventory or other goods and the
proceeds thereof securing such Person’s obligations in respect of bankers’
acceptances issued or credited for the account of such Person to facilitate the
purchase, shipment or storage of such inventory or goods;

 

w.            Liens arising under consignment or similar arrangements for the
sale of goods in the Ordinary Course of Business consistent with past practices;

 

x.             Liens on insurance proceeds securing the payment of financed
insurance premiums;

 

y.             leases or subleases granted to others in the Ordinary Course of
Business  consistent with past practices which do not interfere in any material
respect with the business operations of Sanmina and its Subsidiaries taken as a
whole;

 

z.             customary Liens granted in favor of a trustee to secure fees and
other amounts owing to such trustee under an indenture or other agreement
pursuant to which Debt permitted by Section 10.2.1 is issued;

 

aa.           other Liens on assets, other than the Collateral, securing Debt or
other obligations in an aggregate amount not to exceed the Dollar Equivalent of
$100,000,000 at any time outstanding;

 

bb.          the interest of the lenders in the receivables and Related Assets
of the Securitization Subsidiary under the Receivables Purchase Facility, the
Lien of the Securitization Subsidiary on the receivables and Related Assets
contributed to it and the interest of a purchaser (or an agent for such
purchaser) of receivables and Related Assets sold pursuant to any securitization
or other factoring or similar arrangement referred to in Section 10.2.5(e) or
Section 10.2.5(f) acquired pursuant to, or any Lien on the assets of a
Securitization Subsidiary granted in connection with, such other factoring or
similar arrangement, and Liens granted pursuant to Foreign Securitization
Facilities or other factoring or similar arrangement referred to in
Section 10.2.5(e) or Section 10.2.5(f);

 

cc.           Liens in respect of deposit accounts for the collection of
receivables (and Related Assets) sold pursuant to Section 10.2.5(e) or
Section 10.2.5(f);

 

dd.          existing Liens shown on Schedule 10.2.2 (and any renewals or
extensions thereof, which if such renewal or extension is in connection with
Debt constituting Refinancing

 

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Debt, such Debt incurred in accordance with the Refinancing Conditions, provided
that the property covered thereby is not increased); and

 

ee.           deposits made (and the Liens thereon) in the Ordinary Course of
Business in connection with workers’ compensation, unemployment insurance and
other types of social security.

 

10.2.3     Distributions; Upstream Payments.

 

a.             Declare or make any Distributions, other than:

 

i.              Distributions, if at the time thereof the Availability
Conditions are satisfied;

 

ii.             Upstream Payments;

 

iii.            Acquisitions of Equity Interests of Sanmina in connection with
the exercise of stock options, restricted stock units or stock appreciation
rights by way of cashless exercise or in connection with the satisfaction of
withholding tax obligations;

 

iv.            Purchases of fractional shares of the Equity Interests of Sanmina
arising out of stock dividends, splits or combinations or business combinations;

 

v.             So long as no Default or Event of Default has occurred and is
continuing or would result therefrom, purchase, repurchase, redeem, defease,
acquire or retire for value (i) Equity Interests of Sanmina or any of its
Subsidiaries from any officer, director, employee or consultant of Sanmina or
its Subsidiaries in an aggregate amount not to exceed the Dollar Equivalent of
$5,000,000 during any year and (ii) any non-cash rights distributed in
connection with any stockholder rights plan;

 

vi.            So long as no Default or Event of Default has occurred and is
continuing or would result therefrom, repurchases of common stock of Sanmina in
an amount not to exceed $25,000,000 over the term of this Agreement; and

 

vii.           In connection with any acquisition permitted pursuant to
Section 10.2.4, (i) receive or accept the return to Sanmina or any of its
Subsidiaries of Equity Interests of Sanmina or any of its Subsidiaries
constituting a portion of the purchase price consideration in settlement of
indemnification claims or (ii) make payments or distributions to dissenting
stockholders pursuant to applicable law.

 

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b.             Create or suffer to exist any encumbrance or restriction on the
ability of a Subsidiary to make any Upstream Payment, except for restrictions
(i) under the Loan Documents, (ii) permitted under Section 10.2.13, (iii) under
Applicable Law or (iv) in effect on the Closing Date as shown on Schedule 9.1.15
to the Disclosure Letter.

 

10.2.4     Restricted Investments.  Make any Restricted Investment, except:

 

a.             (i) equity investments in Foreign Subsidiaries to the minimum
extent required to comply with the local minimum capitalization requirements of
foreign jurisdictions, (ii) conversions of Intercompany Debt existing on the
Closing Date into equity, and (iii) and conversions of Intercompany Debt
incurred after the Closing Date between any Obligor and Foreign Subsidiary into
equity not to exceed the Dollar Equivalent of $50,000,000 in the aggregate;

 

b.             (i) equity Investments owned as of the Closing Date in any
Subsidiary, (ii) Investments made after the Closing Date by an Obligor in any
other Obligor, (iii) Investments made after the Closing Date (but exclusive of
any conversions of Debt into equity) by any Obligor in any Foreign Subsidiary in
an amount in excess of the Dollar Equivalent of $50,000,000 and (iv) Investments
from a Foreign Subsidiary into another Foreign Subsidiary;

 

c.             Investments (i) in any Equity Interests or other securities
received in satisfaction or partial satisfaction thereof from financially
troubled account debtors (whether in connection with a foreclosure, bankruptcy,
workout or otherwise) and (ii) deposits, prepayments and other credits to
suppliers made in the Ordinary Course of Business;

 

d.             Consolidated Capital Expenditures;

 

e.             loans and advances to employees of Sanmina and its Subsidiaries
made in the Ordinary Course of Business and to the extent permitted by the
Sarbanes-Oxley Act of 2002, in an aggregate principal amount at any time
outstanding not to exceed the Dollar Equivalent of $10,000,000 in the aggregate;

 

f.              Intercompany Debt permitted by Section 10.2.1;

 

g.             Investments described in Schedule 10.2.4 to the Disclosure
Letter;

 

h.             Sanmina and its Subsidiaries may enter into and perform their
respective obligations under Hedging Agreements entered into in the Ordinary
Course of Business consistent with past practices;

 

i.              Investments consisting of extensions of credit in the nature of
accounts receivable, prepaid royalties or expenses or notes receivable arising
from the sale or lease of goods or services in the Ordinary Course of Business
consistent with past practices, or performance or similar deposits arising in
the Ordinary Course of Business consistent with past practices, and Investments
received in satisfaction or partial satisfaction thereof from financially
troubled account debtors to the extent reasonably necessary to prevent or limit
loss;

 

j.              guaranty and similar obligations permitted by Section 10.2.1;

 

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k.             commission, entertainment, relocation, payroll, travel, indemnity
and similar advances to cover matters that are expected at the time of such
advances ultimately to be treated as expenses for accounting purposes and that
are made in the ordinary course of business;

 

l.              Investments acquired by Sanmina or any of its Subsidiaries
(i) in exchange for any other Investments held by Sanmina or such Subsidiary in
connection with or as a result of bankruptcy, workout, reorganization or
recapitalization of the issuer of such Investment or (ii) as result of a
foreclosure by Sanmina or any of its Subsidiaries with respect to any secured
Investment or other transfer of title with respect to any secured Investment in
default;

 

m.            Investments representing the non-cash portion of the consideration
received in connection with any issuance of Equity Interests by a Subsidiary of
Sanmina to Sanmina or to another Subsidiary of Sanmina not prohibited hereunder;

 

n.             equity Investments in Subsidiaries solely to the extent made to
effect transactions permitted pursuant to Section 10.2.5(d) hereof;

 

o.             Investments in connection with Foreign Securitization Facilities,
the Receivables Purchase Facility and any other securitization or factoring or
similar arrangement referred to in Section 10.2.5(e) or Section 10.2.5(f);

 

p.             Investments constituting or made in connection with Permitted
Acquisitions; provided that either (A)(i) the Availability Conditions are
satisfied at the time thereof and (ii) the Fixed Charge Coverage Ratio as of the
end of the Fiscal Quarter immediately preceding such Investment and after giving
pro forma effect thereto is not less than 1.00 : 1.00, or (B) in respect of any
such Investment in an aggregate amount not exceeding the Dollar Equivalent of
$125,000,000 and provided that no Default or Event of Default exists or would
result from such Investment, average Availability both on the date thereof and
after giving effect to such Investment on a pro forma basis during the preceding
30 day period is greater than or equal to $125,000,000 (provided that up to
$75,000,000 of such Availability requirement can be satisfied to the extent of
the amount of cash or Cash Equivalents held in a Cash Collateral Account at
Agent); and  provided, further, that for the purposes of this Section 10.2.4(p),
the $125,000,000 Availability threshold shall be increased to $175,000,000 if
the amount of the Commitments is increased pursuant to Section 2.3 to an
aggregate amount in excess of $250,000,000;

 

q.             Permitted Pool Transactions;

 

r.              Investments in connection with the 2009 Corporate
Reorganization; and

 

s.             (i) so long as the Availability Conditions are satisfied, any
Investments and (ii) if the Availability Conditions are not satisfied,
Investments, other than Investments by any Borrower or Designated Canadian
Guarantor in any non-Obligor Subsidiary of Sanmina, in an aggregate amount not
to exceed at any time the Dollar Equivalent of $25,000,000.

 

Provided, in no event shall any Obligor make any Investment which results in or
facilitates in any manner any Distribution not otherwise permitted under the
terms of Section 10.2.3.  For purposes of determining compliance with the
provisions of this Section 10.2.4, equity

 

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Investments made by Sanmina or any of its Subsidiaries (the “contributor”) in
any Subsidiary that are effected pursuant to one or more equity contributions
made contemporaneously or in prompt succession by the contributor and/or any of
its Subsidiaries shall be deemed one Investment by the contributor; and
provided, further, no Property acquired by any Borrower or Guarantor in
connection with any Investment permitted under this Section 10.2.4 shall be
permitted to be included in the Borrowing Base until Agent has received and
approved, in its Credit Judgment, (A) a collateral examination or audit with
respect to such Property, including an appraisal by an independent appraisal
firm reasonably acceptable to Agent, (B) all UCC, PPSA or other search results
necessary to confirm Agent’s first priority Lien on all of such Property, and
(C) such customary certificates (including a solvency certificate), resolutions,
financial statements, legal opinions, and other documentation as Agent may
reasonably request (including as required by Sections 10.1.1 and 10.1.11).

 

10.2.5     Disposition of Assets.  Make any Asset Disposition, except:

 

a.             a Permitted Asset Disposition;

 

b.             Investments made in accordance with Section 10.2.4;

 

c.             a sale, conveyance, lease, transfer or other disposition of
Property by a Subsidiary to an Obligor or a sale, conveyance, lease, transfer or
other disposition of Property by an Obligor to another Obligor;

 

d.             all or any part of the business, property or assets of any
Foreign Subsidiary of Sanmina may be conveyed, sold, leased, transferred or
otherwise disposed of in one transaction or a series of transactions, (i) in the
case of a Foreign Subsidiary that is a First Tier Foreign Subsidiary, (A) to any
other First Tier Foreign Subsidiary or any Obligor and (B) to any non-First Tier
Foreign Subsidiary to the extent only that the gross fair market value of all
such property and assets conveyed, sold, leased, transferred or otherwise
disposed of during the term hereof pursuant to this clause (B) to all other such
Foreign Subsidiaries shall not exceed an amount equal to the Dollar Equivalent
of $100,000,000  in the aggregate, and (ii) in the case of any non-First Tier
Foreign Subsidiary, to any other Foreign Subsidiary or any Obligor (either
directly or indirectly, including through any First Tier Foreign Subsidiary,
pursuant to transactions occurring contemporaneously or in prompt succession
involving another Subsidiary or Sanmina);

 

e.             (i) sales or transfers of receivables and Related Assets from one
or more of the obligors listed on Schedule 1.1 to the Disclosure Letter (as such
Schedule may be amended from time to time as contemplated by the definition of
“Receivables Purchase Facility”) pursuant to the Receivables Purchase Facility
(and repurchases of receivables and Related Assets pursuant to the terms of the
Receivables Purchase Facility) and (ii) sales of receivables and Related Assets
by any Obligor (A) to a Securitization Subsidiary on a non-recourse (other than
limited, customary provisions for recourse) basis and the sale thereof by the
Securitization Subsidiary to purchasers or (B) pursuant to a non-recourse (other
than limited, customary provisions for recourse) factoring or similar
arrangement; provided, that in the case of (i) or (ii), the cash consideration
for any such sale shall be for an amount equal to at least 90% of the face
amount of such receivables, and provided, further, the face amount of all
receivables sold and outstanding

 

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at any time pursuant to clauses (i) and (ii) of this Section 10.2.5(e) shall not
exceed the Dollar Equivalent of $400,000,000 in the aggregate, and provided,
further, in the case of (ii), no Default or Event of Default exists or would
result therefrom at the time of any such sale and Borrower Agent from time to
time shall provide Agent upon Agent’s request, with a current list of the
receivables that are sold pursuant to such arrangement;

 

f.              sales of receivables and Related Assets pursuant to Foreign
Securitization Facilities or pursuant to a non-recourse (other than limited,
customary provisions for recourse) factoring or similar arrangement in which a
non-Obligor Subsidiary of Sanmina sells Receivables and Related Assets;
provided, that (1) the face amount of all such receivables sold and outstanding
at any time shall not exceed the Dollar Equivalent of $250,000,000 and (2) at
the time of any such sale, no Default or Event of Default exists or would result
therefrom;

 

g.             the sale, assignment or transfer of Intellectual Property assets
by any Obligor to any First Tier Foreign Subsidiary with an aggregate value of
up to the Dollar Equivalent of $125,000,000; provided that any prior to any such
transaction involving intellectual property assets relating to the Inventory
Collateral, the transferee of such intellectual property assets shall enter into
a license reasonably satisfactory to Agent substantially similar to that set
forth in Section 11.3 to the extent such assets are Collateral;

 

h.             sales of assets not constituting Collateral for fair market value
and for aggregate consideration of less than $50,000,000 during the term hereof;

 

i.              the granting of Permitted Liens;

 

j.              the licensing of Intellectual Property on commercially
reasonable terms in the Ordinary Course of Business;

 

k.             the sublease of facilities of Sanmina or any Subsidiary or the
lease by Sanmina or any Subsidiary of facilities under any operating lease, in
each case in the Ordinary Course of Business;

 

l.              the sale of real property (including all buildings, fixtures or
other improvements located thereon) comprising the Corporate Head Office Campus
in connection with a sale and leaseback transaction;

 

m.            sales of Real Estate owned by any Obligor or any Subsidiary;
provided that the aggregate consideration for all such sales does not exceed
$250,000,000;

 

n.             Permitted Pool Transactions;

 

o.             Asset Dispositions of the Property listed on Schedule 10.2.5 to
the Disclosure Letter;

 

p.             Asset Dispositions in connection with transactions permitted by
Section 10.2.8; and

 

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q.             Asset Dispositions in connection with the 2009 Corporate
Reorganization; provided to the extent any such Disposition involves
intellectual property assets relating to the Inventory Collateral, prior to such
Disposition the transferee of any such intellectual property assets (if not an
Obligor) shall enter into a license, reasonably satisfactory to Agent,
substantially similar to that set forth in Section 11.3.

 

10.2.6      RESERVED.

 

10.2.7      RESTRICTIONS ON PAYMENT OF CERTAIN DEBT.  IF THE AVAILABILITY
CONDITIONS ARE NOT SATISFIED AT THE TIME THEREOF, MAKE ANY PAYMENTS (WHETHER
VOLUNTARY OR MANDATORY, OR A PREPAYMENT, REDEMPTION, RETIREMENT, DEFEASANCE OR
ACQUISITION) WITH RESPECT TO ANY (A) SUBORDINATED DEBT, EXCEPT REGULARLY
SCHEDULED PAYMENTS OF PRINCIPAL, INTEREST AND FEES AND PAYMENTS UPON MANDATORY
REDEMPTION OR PREPAYMENT, BUT ONLY TO THE EXTENT PERMITTED UNDER ANY
SUBORDINATION AGREEMENT RELATING TO SUCH DEBT (AND A SENIOR OFFICER OF BORROWER
AGENT SHALL CERTIFY TO AGENT, NOT LESS THAN FIVE BUSINESS DAYS PRIOR TO THE DATE
OF PAYMENT, THAT ALL CONDITIONS UNDER SUCH AGREEMENT HAVE BEEN SATISFIED); OR
(B) BORROWED MONEY (OTHER THAN THE OBLIGATIONS) PRIOR TO ITS DUE DATE (EXCEPT
SCHEDULED PAYMENTS OF PRINCIPAL, INTEREST AND FEES AND PAYMENTS UPON MANDATORY
REDEMPTION OR PREPAYMENT) UNDER THE AGREEMENTS EVIDENCING SUCH DEBT AS IN EFFECT
ON THE CLOSING DATE (OR AS AMENDED THEREAFTER WITH THE CONSENT OF AGENT);
PROVIDED THAT, BORROWERS AND THEIR SUBSIDIARIES MAY HONOR ANY CONVERSION REQUEST
BY A HOLDER OF ANY CONVERTIBLE INDEBTEDNESS OF SANMINA OR ANY OF ITS
SUBSIDIARIES AND MAKE CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES IN CONNECTION
WITH THE CONVERSION OF ANY CONVERTIBLE INDEBTEDNESS.

 

10.2.8      FUNDAMENTAL CHANGES.  CHANGE ITS NAME OR CONDUCT BUSINESS UNDER ANY
FICTITIOUS NAME; CHANGE ITS TAX OR OTHER ORGANIZATIONAL IDENTIFICATION NUMBER;
CHANGE ITS FORM OR JURISDICTION OF ORGANIZATION OR MERGE, AMALGAMATE, COMBINE OR
CONSOLIDATE WITH ANY PERSON, OR LIQUIDATE, WIND UP ITS AFFAIRS OR DISSOLVE
ITSELF, IN EACH CASE WHETHER IN A SINGLE TRANSACTION OR IN A SERIES OF RELATED
TRANSACTIONS, EXCEPT (I) FOR MERGERS, AMALGAMATIONS OR CONSOLIDATIONS OF A
WHOLLY-OWNED SUBSIDIARY WITH ANOTHER WHOLLY-OWNED SUBSIDIARY OR INTO A BORROWER,
(II) ANY FOREIGN SUBSIDIARY OF SANMINA MAY BE MERGED, CONSOLIDATED OR
AMALGAMATED WITH OR INTO ANY OTHER FOREIGN SUBSIDIARY OR BE LIQUIDATED, WOUND UP
OR DISSOLVED; (III) IN CONNECTION WITH A PERMITTED ACQUISITION (INCLUDING A
“SQUEEZE OUT” MERGER); (IV) IN CONNECTION WITH THE 2009 CORPORATE
REORGANIZATION; AND (V) CHANGES IN ITS NAME, TAX OR OTHER ORGANIZATIONAL
IDENTIFICATION NUMBER OR FORM OF JURISDICTION OF ORGANIZATION UPON 30 DAYS PRIOR
WRITTEN NOTICE TO AGENT AND PROVIDED THAT AS A RESULT OF ANY SUCH CHANGE NO LIEN
GRANTED TO AGENT HEREUNDER CEASES TO BE A VALID, PERFECTED LIEN WITH THE
PRIORITY REQUIRED HEREUNDER.

 

10.2.9      RESERVED.

 

10.2.10    PLANS.  BECOME PARTY TO ANY MULTIEMPLOYER PLAN, CANADIAN PLAN OR
FOREIGN PLAN, OTHER THAN ANY IN EXISTENCE ON THE CLOSING DATE.

 

10.2.11    TAX CONSOLIDATION.  FILE OR CONSENT TO THE FILING OF ANY CONSOLIDATED
INCOME TAX RETURN WITH ANY PERSON OTHER THAN BORROWERS AND SUBSIDIARIES.

 

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10.2.12    ACCOUNTING CHANGES.  MAKE ANY MATERIAL CHANGE IN ACCOUNTING TREATMENT
OR REPORTING PRACTICES, EXCEPT AS REQUIRED BY GAAP OR APPLICABLE LAW AND IN
ACCORDANCE WITH SECTION 1.2; OR CHANGE ITS FISCAL YEAR.

 

10.2.13    RESTRICTIVE AGREEMENTS.  BECOME A PARTY TO ANY RESTRICTIVE AGREEMENT,
OTHER THAN RESTRICTIONS (I) IN AGREEMENTS EVIDENCING DEBT PERMITTED BY
SECTION 10.2.1(C) OR SECTION 10.2.1(L) THAT IMPOSE RESTRICTIONS ON THE PROPERTY
SO ACQUIRED; (II) BY REASON OF CUSTOMARY PROVISIONS RESTRICTING ASSIGNMENTS,
SUBLETTING OR OTHER TRANSFERS CONTAINED IN LEASES, LICENSES, JOINT VENTURE
AGREEMENTS AND OTHER AGREEMENTS ENTERED INTO IN THE ORDINARY COURSE OF BUSINESS;
(III) THAT ARE OR WERE CREATED BY VIRTUE OF ANY TRANSFER OF, AGREEMENT TO
TRANSFER OR OPTION OR RIGHT WITH RESPECT TO ANY PROPERTY, ASSETS OR EQUITY
INTERESTS NOT OTHERWISE PROHIBITED UNDER THIS AGREEMENT; (IV) IN THE INDENTURES,
THE SENIOR NOTES OR THE SENIOR SUBORDINATED NOTES OR IN OTHER DOCUMENTS RELATED
TO SUCH DEBT; (V) CONTAINED IN AGREEMENTS OR DOCUMENTS EVIDENCING DEBT OR OTHER
OBLIGATIONS PERMITTED BY SECTION 10.2.1(N) SO LONG AS ANY SUCH ENCUMBRANCE OR
RESTRICTION APPLIES ONLY TO THE FOREIGN SUBSIDIARY ISSUING SUCH DEBT OR OTHER
OBLIGATION AND ITS SUBSIDIARIES; (VI) IMPOSED ON A SUBSIDIARY AND EXISTING AT
THE TIME IT BECAME A SUBSIDIARY IF SUCH RESTRICTIONS WERE NOT CREATED IN
CONNECTION WITH OR IN ANTICIPATION OF THE TRANSACTION OR SERIES OF TRANSACTIONS
PURSUANT TO WHICH SUCH SUBSIDIARY BECAME A SUBSIDIARY OR WAS ACQUIRED BY SANMINA
AND ONLY TO THE EXTENT APPLYING TO SUCH SUBSIDIARY; (VII) UNDER OR IN CONNECTION
WITH ANY JOINT VENTURE AGREEMENTS, PARTNERSHIP AGREEMENT, STOCK SALE AGREEMENTS
AND OTHER SIMILAR AGREEMENTS; PROVIDED THAT (A) ANY SUCH AGREEMENTS ARE ENTERED
INTO IN THE ORDINARY COURSE OF BUSINESS AND IN GOOD FAITH, AND (B) SUCH
RESTRICTIONS ARE REASONABLY CUSTOMARY FOR SUCH AGREEMENTS; (VIII) UNDER ANY
AGREEMENT, INSTRUMENT OR CONTRACT AFFECTING PROPERTY OR A PERSON AT THE TIME
SUCH PROPERTY OR PERSON WAS ACQUIRED BY SANMINA OR ANY OF ITS SUBSIDIARIES, SO
LONG AS SUCH RESTRICTION RELATES SOLELY TO THE PROPERTY OR PERSON SO ACQUIRED
AND WAS NOT CREATED IN CONNECTION WITH OR IN ANTICIPATION OF SUCH ACQUISITION;
(IX) EXISTING BY VIRTUE OF, OR ARISING UNDER, APPLICABLE LAW, REGULATION, ORDER,
APPROVAL, LICENSE, PERMIT, GRANT OR SIMILAR RESTRICTION, IN EACH CASE ISSUED OR
IMPOSED BY A GOVERNMENTAL AUTHORITY; (X) THAT RESULT FROM ANY REFINANCING DEBT
OF DEBT REFERRED TO IN CLAUSE (IV), (V), (VI), (VII) OR (VIII) OF THIS
SECTION 10.2.13; PROVIDED THAT THE RESTRICTIONS EXISTING UNDER OR BY REASON OF
ANY SUCH AGREEMENT, INSTRUMENT OR CONTRACT ARE NOT MATERIALLY LESS FAVORABLE,
TAKEN AS A WHOLE, TO THE LENDERS THAT THOSE UNDER THE AGREEMENT EVIDENCING THE
DEBT BEING REFINANCED; (XI) CUSTOMARY SUBROGATION WAIVERS IN GUARANTIES
PERMITTED UNDER THIS AGREEMENT, AND (XII) CONTAINED IN AGREEMENTS OR DOCUMENTS
ENTERED INTO IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THE RECEIVABLES
PURCHASE FACILITY OR SALES OR SECURITIZATIONS OF RECEIVABLES AND RELATED ASSETS
PERMITTED BY SECTION 10.2.5(E) OR (F); (XIII) SPECIFIC PROPERTY ENCUMBERED TO
SECURE PAYMENT OF PARTICULAR DEBT OR TO BE SOLD PURSUANT TO AN EXECUTED
AGREEMENT WITH RESPECT TO A DISPOSITION PERMITTED UNDER SECTION 10.2.5;
(XIV) RESTRICTIONS IN AGREEMENTS ENTERED INTO IN CONNECTION WITH THE INCURRENCE
OF PERMITTED LIENS, TO THE EXTENT THEY CONDITION, PROHIBIT OR LIMIT THE ABILITY
OF AGENT OR LENDERS FROM OBTAINING A LIEN ONLY ON THE PROPERTY, RIGHTS AND
ASSETS SUBJECT TO SUCH PERMITTED LIEN (BUT EXCLUDING ANY OF THE COLLATERAL);
(XV) ARISING IN CONNECTION WITH GRANTS FROM ANY GOVERNMENTAL AUTHORITY; AND
(XVI) EXISTING ON THE CLOSING DATE AND SET FORTH IN SECTION 10.2.13 TO THE
DISCLOSURE LETTER.

 

10.2.14    HEDGING AGREEMENTS.  ENTER INTO ANY HEDGING AGREEMENT, EXCEPT TO
HEDGE RISKS ARISING IN THE ORDINARY COURSE OF BUSINESS (CONSISTENT WITH PAST
PRACTICES) AND NOT FOR SPECULATIVE PURPOSES.

 

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10.2.15    CONDUCT OF BUSINESS.  ENGAGE IN ANY BUSINESS, OTHER THAN ITS BUSINESS
AS CONDUCTED ON THE CLOSING DATE OR ANY PERMITTED BUSINESS, AND IN EACH CASE ANY
ACTIVITIES INCIDENTAL THERETO.

 

10.2.16    AFFILIATE TRANSACTIONS.  ENTER INTO OR BE PARTY TO ANY TRANSACTION
WITH AN AFFILIATE, EXCEPT (A) TRANSACTIONS CONTEMPLATED OR PERMITTED BY THE LOAN
DOCUMENTS; (B) PAYMENT OF REASONABLE COMPENSATION TO OFFICERS AND EMPLOYEES FOR
SERVICES ACTUALLY RENDERED, BENEFIT PLANS FOR OFFICERS AND EMPLOYEES ENTERED
INTO OR MAINTAINED AND ESTABLISHED IN THE ORDINARY COURSE OF BUSINESS, AND LOANS
AND ADVANCES PERMITTED BY SECTION 10.2.4; (C) PAYMENT OF CUSTOMARY DIRECTORS’
FEES AND INDEMNITIES; (D) TRANSACTIONS BETWEEN SANMINA AND ANY OF ITS
SUBSIDIARIES OR BETWEEN ANY SUBSIDIARIES; (E) TRANSACTIONS WITH AFFILIATES THAT
WERE CONSUMMATED PRIOR TO THE CLOSING DATE, AS SHOWN ON SCHEDULE 10.2.16 TO THE
DISCLOSURE LETTER; AND (F) TRANSACTIONS WITH AFFILIATES UPON FAIR AND REASONABLE
TERMS FULLY DISCLOSED TO AGENT AND NO LESS FAVORABLE THAN WOULD BE OBTAINED IN A
COMPARABLE ARM’S-LENGTH TRANSACTION WITH A NON-AFFILIATE.

 

10.2.17    USE OF PROCEEDS.  USE THE PROCEEDS OF ANY LOAN, WHETHER DIRECTLY OR
INDIRECTLY, AND WHETHER IMMEDIATELY, INCIDENTALLY OR ULTIMATELY, TO PURCHASE OR
CARRY MARGIN STOCK OR TO EXTEND CREDIT TO OTHERS FOR THE PURPOSE OF PURCHASING
OR CARRYING MARGIN STOCK OR TO REFUND INDEBTEDNESS ORIGINALLY INCURRED FOR SUCH
PURPOSE.

 

10.2.18    AMENDMENTS TO SUBORDINATED DEBT OR INDENTURES.  AMEND, SUPPLEMENT OR
OTHERWISE MODIFY THE INDENTURES, ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT
RELATING TO THE SENIOR NOTES OR ANY SUBORDINATED DEBT, IF SUCH MODIFICATION
(A) INCREASES THE PRINCIPAL BALANCE OF SUCH DEBT, OR INCREASES ANY REQUIRED
PAYMENT OF PRINCIPAL OR INTEREST; (B) ACCELERATES THE DATE ON WHICH ANY
INSTALLMENT OF PRINCIPAL OR ANY INTEREST IS DUE, OR ADDS ANY ADDITIONAL
REDEMPTION, PUT OR PREPAYMENT PROVISIONS; (C) SHORTENS THE FINAL MATURITY DATE
OR OTHERWISE ACCELERATES AMORTIZATION; (D) INCREASES THE INTEREST RATE;
(E) INCREASES OR ADDS ANY FEES OR CHARGES (EXCLUDING ANY FEES OR CHARGES FOR
AMENDMENTS, CONSENTS OR WAIVERS); (F) MODIFIES ANY COVENANT IN A MANNER OR ADDS
ANY REPRESENTATION, COVENANT OR DEFAULT THAT IS, MORE ONEROUS OR RESTRICTIVE IN
ANY MATERIAL RESPECT FOR ANY BORROWER OR SUBSIDIARY, OR THAT IS OTHERWISE
MATERIALLY ADVERSE TO ANY BORROWER, ANY SUBSIDIARY OR LENDERS; OR (G) RESULTS IN
THE OBLIGATIONS NOT CONSTITUTING “SENIOR DEBT” UNDER THE SENIOR SUBORDINATED
INDENTURES OR OTHERWISE NOT BEING FULLY BENEFITED BY THE SUBORDINATION
PROVISIONS THEREOF.

 

10.3         Financial Covenant.  As long as any Commitments are outstanding and
until Full Payment of the Obligations, Borrowers shall:

 

10.3.1      FIXED CHARGE COVERAGE RATIO.  AFTER THE AVAILABILITY ELECTION,
MAINTAIN A FIXED CHARGE COVERAGE RATIO OF AT LEAST 1.0 TO 1.0 FOR EACH PERIOD OF
FOUR FISCAL QUARTERS ENDING DURING OR IMMEDIATELY BEFORE ANY TRIGGER PERIOD.

 

10.4         Post-Closing Covenants.

 

10.4.1      NOTWITHSTANDING ANYTHING HEREIN OR IN ANY OTHER LOAN DOCUMENT TO THE
CONTRARY, NOT LATER THAN 30 DAYS FOLLOWING THE CLOSING DATE OR SUCH LATER DATE
AS AGENT MAY DETERMINE IN ITS SOLE DISCRETION, THE AGENT SHALL RECEIVE COPIES OF
ONE OR MORE EXECUTED DEPOSIT

 

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ACCOUNT CONTROL AGREEMENTS IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO IT
AS REQUIRED UNDER SECTION 8.4.

 

10.4.2      NOT LATER THAN 15 DAYS FOLLOWING THE CLOSING DATE OR SUCH LATER DATE
AS AGENT MAY DETERMINE IN ITS SOLE DISCRETION, AGENT SHALL HAVE BEEN PROVIDED
WITH AN EXECUTED COPY OF THE CREDIT AGREEMENT ENTERED INTO IN CONNECTION WITH
THE RECEIVABLES PURCHASE FACILITY, WHICH AGREEMENT SHALL BE (I) REASONABLY
SATISFACTORY TO AGENT AND (II) IN SUBSTANTIALLY THE SAME FORM AS THE DRAFT OF
SUCH AGREEMENT PRESENTED TO AGENT ON OR IMMEDIATELY PRIOR TO THE CLOSING DATE.

 

SECTION 11.                     EVENTS OF DEFAULT; REMEDIES ON DEFAULT

 

11.1         Events of Default.  Each of the following shall be an “Event of
Default” hereunder, if the same shall occur for any reason whatsoever, whether
voluntary or involuntary, by operation of law or otherwise:

 

a.             An Obligor fails to pay (i) the principal of, or premium on, any
Loan when due (whether at stated maturity, on demand, upon acceleration or
otherwise); or (ii) any interest on any Loan or any fee or other amount due
hereunder within two (2) Business Days after the date due;

 

b.             Any representation, warranty or other written statement of an
Obligor made in connection with any Loan Document or transactions contemplated
thereby is incorrect or misleading in any material respect when given;

 

c.             An Obligor breaches or fail to perform any covenant contained in
Section 7.3, 8.1, 8.2.4, 8.2.5, 8.5.2, 10.1.1, 10.1.2 (other than
clauses (a) and (b) thereof), 10.1.7, 10.2 or 10.3;

 

d.             An (i) Obligor breaches of fails to perform any covenant
contained in Section 7.5, Section 10.1.2(a) or Section 10.1.2(b) and such breach
or failure is not cured within 15 days after a Senior Officer of such Obligor
has knowledge thereof or receives notice thereof from Agent, whichever is
sooner, or (ii) Obligor breaches or fails to perform any other covenant
contained in any Loan Documents (not covered by clause (a), (b), (c) or
(d)(i) of this Section),  and such breach or failure is not cured within 30 days
after a Senior Officer of such Obligor has knowledge thereof or receives notice
thereof from Agent, whichever is sooner; provided, however, that such notice and
opportunity to cure shall not apply if the breach or failure to perform is not
capable of being cured within such period or is a willful breach by an Obligor;

 

e.             A Guarantor repudiates, revokes or attempts to revoke its
Guaranty; an Obligor denies or contests the validity or enforceability of any
Loan Documents or Obligations, or the perfection or priority of any Lien granted
to Agent; or any Loan Document or Guaranty ceases to be in full force or effect
for any reason or any Lien ceases to be a valid, perfected Lien with the
priority required hereunder (in each case other than as expressly permitted
hereby or pursuant to a waiver or release by Agent and Lenders);

 

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f.              Any breach or default of an Obligor or any Subsidiary occurs
under any document, instrument or agreement to which it is a party or by which
it or any of its Properties is bound, relating to any Borrowed Money (other than
the Obligations), Debt in respect of Hedging Agreements or Debt arising from any
obligation owed for all or any part of the deferred purchase price of property
or services, which purchase price is (a) due more than six months from the date
of incurrence of the obligation in respect thereof or (b) evidenced by a note or
similar written instrument, in each case in excess of the Dollar Equivalent of
$50,000,000, if the maturity of or any payment with respect to such Debt may be
accelerated or demanded due to such breach (it being understood that the amount
of Debt in respect of any Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that would be
required to be paid if such Hedging Agreement were terminated at such time);

 

g.             Any (i) material non-monetary judgment or order is entered
against an Obligor or any Subsidiary or (ii) judgment or order for the payment
of money is entered against an Obligor or any Subsidiary in an amount that
exceeds, individually or cumulatively with all unsatisfied judgments or orders
against all Obligors and Subsidiaries, the Dollar Equivalent of $50,000,000 (net
of any insurance coverage therefor acknowledged in writing by the insurer),
unless, in each case, no later than 60 days after the entry thereof, a stay of
enforcement of such judgment or order is in effect, by reason of a pending
appeal or otherwise, or such judgment is satisfied, discharged, vacated or
bonded;

 

h.             Reserved.

 

i.              An Obligor or any Subsidiary is enjoined, restrained or in any
way prevented by any Governmental Authority from conducting any material part of
its business for any material period of time; an Obligor or any Subsidiary
suffers the loss, revocation or termination of any material license, permit,
lease or agreement necessary to its business; there is a cessation of any
material part of an Obligor or any Subsidiary’s business for a material period
of time; any material Collateral or Property of an Obligor or any Subsidiary is
taken or impaired through condemnation; except as expressly permitted under any
Loan Document, any Subsidiary agrees to or commences any liquidation,
dissolution or winding up of its affairs; or an Obligor or any Subsidiary is not
Solvent;

 

j.              An Insolvency Proceeding is commenced by an Obligor or any
Subsidiary (except an Insignificant Subsidiary); an Obligor or any Subsidiary
(except an Insignificant Subsidiary) makes an offer of settlement, extension,
arrangement, proposal (or notice of intention to make a proposal) or composition
to its unsecured creditors generally; a trustee, receiver, interim receiver,
receiver-manager, monitor or similar official or custodian is appointed to take
possession of any substantial Property of or to operate any of the business of
an Obligor or any Subsidiary (except an Insignificant Subsidiary); or an
Insolvency Proceeding is commenced against an Obligor or any Subsidiary (except
an Insignificant Subsidiary) and such Obligor or Subsidiary consents to
institution of the proceeding, the petition commencing the proceeding is not
timely contested by such Obligor or such Subsidiary, the proceeding is not
dismissed within 60 days after filing or institution, or an order for relief is
entered in the proceeding;

 

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k.             An ERISA Event (excluding a “standard termination” of a Pension
Plan, within the meaning of Title IV of ERISA, or any contributions to a Pension
Plan required to complete a standard termination of the Pension Plan) occurs
with respect to a Pension Plan or Multiemployer Plan that has resulted or could
reasonably be expected to result in liability of an Obligor to a Pension Plan,
Multiemployer Plan or PBGC in excess of $40.0 million, or that constitutes
grounds for appointment of a trustee for or termination by the PBGC of any
Pension Plan or Multiemployer Plan; an Obligor or ERISA Affiliate fails to pay
when due any installment payment in excess of $5,000,000 with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan; or
any event similar to the foregoing occurs or exists with respect to a Foreign
Plan; or any event or condition shall occur or exist with respect to a Canadian
Plan that could, in Agent’s good faith judgment, subject Borrowers or their
Subsidiaries to any Tax, penalty or other liabilities under the Supplemental
Pension Plans Act (Québec) and the Pension Benefits Act (Ontario) or any other
Applicable Laws and which could reasonably be expected to give rise to a
Material Adverse Effect, or if Borrowers or any of their Subsidiaries are in
default with respect to required payments to a Canadian Plan or any Lien arises
(save for contribution amounts not yet due) in connection with any Canadian
Plan;

 

l.              An Obligor or any of its Senior Officers is convicted for (i) a
felony committed in the conduct of the Obligor’s business, or (ii) violating any
state or federal law (including the Controlled Substances Act, Money Laundering
Control Act of 1986 and Illegal Exportation of War Materials Act) that could
lead to forfeiture of any material Property or any Collateral; or

 

m.            A Change of Control occurs.

 

11.2         Remedies upon Default.  If an Event of Default described in
Section 11.1(j) occurs with respect to any Obligor, all Obligations shall become
automatically due and payable and all Commitments shall terminate, without any
action by Agent or notice of any kind.  In addition, or if any other Event of
Default exists, Agent may in its discretion (and shall upon written direction of
Required Lenders) do any one or more of the following from time to time:

 

a.             declare any Obligations immediately due and payable, whereupon
they shall be due and payable without diligence, presentment, demand, protest or
notice of any kind, all of which are hereby waived by Obligors to the fullest
extent permitted by law;

 

b.             terminate, reduce or condition any Commitment, or make any
adjustment to the Borrowing Base;

 

c.             require Obligors to Cash Collateralize LC Obligations, Bank
Product Debt and other Obligations that are contingent or not yet due and
payable, and, if Obligors fail promptly to deposit such Cash Collateral, Agent
may (and shall upon the direction of Required Lenders) advance the required Cash
Collateral as Loans (whether or not an Overadvance exists or is created thereby,
or the conditions in Section 6 are satisfied); and

 

d.             exercise any other rights or remedies afforded under any
agreement, by law, at equity or otherwise, including the rights and remedies of
a secured party under the UCC or the PPSA, as applicable.  Such rights and
remedies include the rights to (i) take possession of

 

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any Collateral; (ii) require Obligors to assemble Collateral, at Borrowers’
expense, and make it available to Agent at a place designated by Agent;
(iii) enter any premises where Collateral is located and store Collateral on
such premises until sold (and if the premises are owned or leased by an Obligor,
Obligors agree not to charge for such storage); and (iv) sell or otherwise
dispose of any Collateral in its then condition, or after any further
manufacturing or processing thereof, at public or private sale, with such notice
as may be required by Applicable Law, in lots or in bulk, at such locations, all
as Agent, in its discretion, deems advisable.  Each Obligor agrees that 10 days
notice of any proposed sale or other disposition of Collateral by Agent shall be
reasonable.  Agent shall have the right to conduct such sales on any Obligor’s
premises, without charge, and such sales may be adjourned from time to time in
accordance with Applicable Law.  Agent shall have the right to sell, lease or
otherwise dispose of any Collateral for cash, credit or any combination thereof,
and Agent may purchase any Collateral at public or, if permitted by law, private
sale and, in lieu of actual payment of the purchase price, may set off the
amount of such price against the Obligations.

 

11.3         License.  For purposes of enabling Agent, during the continuance of
an Event of Default, to exercise the rights and remedies under Section 11.2 at
such time as Agent shall be lawfully entitled to exercise such rights and
remedies, and for no other purpose, Agent is hereby granted (to the extent
grantable by such Obligor without breaching or violating any agreement) an
irrevocable, non-exclusive license (subject, in the case of trademarks, to
sufficient rights to quality control and inspection in favor of such Obligor to
avoid the risk of invalidation of such trademarks and, in the case of trade
secrets, to an obligation of Agent to take reasonable steps under the
circumstances to keep the trade secrets confidential to avoid the risk of
invalidation of such trade secrets) or other right to use, license or
sub-license (without payment of royalty or other compensation to any Person) any
or all Intellectual Property of Obligors, computer hardware and software, trade
secrets, brochures, customer lists, promotional and advertising materials,
labels, packaging materials and other Property, in advertising for sale,
marketing, selling, collecting, completing manufacture of, or otherwise
exercising any rights or remedies with respect to, any Collateral.  The license
granted under this Section 11.3 shall continue in effect until Full Payment of
the Obligations and termination of this Agreement in accordance with its terms,
at which time such license shall immediately terminate.

 

11.4         Setoff.  At any time during the existence of an Event of Default,
Agent, Issuing Bank, Lenders, and any of their Affiliates are authorized, to the
fullest extent permitted by Applicable Law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by Agent, Issuing Bank, such Lender or such Affiliate to or for the
credit or the account of an Obligor against any Obligations, irrespective of
whether or not Agent, Issuing Bank, such Lender or such Affiliate shall have
made any demand under this Agreement or any other Loan Document and although
such Obligations may be contingent or unmatured or are owed to a branch or
office of Agent, Issuing Bank, such Lender or such Affiliate different from the
branch or office holding such deposit or obligated on such indebtedness.  The
rights of Agent, Issuing Bank, each Lender and each such Affiliate under this
Section are in addition to other rights and remedies (including other rights of
setoff) that such Person may have.

 

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11.5         Remedies Cumulative; No Waiver.

 

11.5.1      CUMULATIVE RIGHTS.  ALL COVENANTS, CONDITIONS, PROVISIONS,
WARRANTIES, GUARANTIES, INDEMNITIES AND OTHER UNDERTAKINGS OF OBLIGORS CONTAINED
IN THE LOAN DOCUMENTS ARE CUMULATIVE AND NOT IN DEROGATION OR SUBSTITUTION OF
EACH OTHER.  IN PARTICULAR, THE RIGHTS AND REMEDIES OF AGENT AND LENDERS ARE
CUMULATIVE, MAY BE EXERCISED AT ANY TIME AND FROM TIME TO TIME, CONCURRENTLY OR
IN ANY ORDER, AND SHALL NOT BE EXCLUSIVE OF ANY OTHER RIGHTS OR REMEDIES THAT
AGENT AND LENDERS MAY HAVE, WHETHER UNDER ANY AGREEMENT, BY LAW, AT EQUITY OR
OTHERWISE.  ALL RIGHTS AND REMEDIES SHALL CONTINUE IN FULL FORCE AND EFFECT
UNTIL FULL PAYMENT OF ALL OBLIGATIONS.

 

11.5.2      WAIVERS.  NO WAIVER OR COURSE OF DEALING SHALL BE ESTABLISHED BY
(A) THE FAILURE OR DELAY OF AGENT OR ANY LENDER TO REQUIRE STRICT PERFORMANCE BY
BORROWERS WITH ANY TERMS OF THE LOAN DOCUMENTS, OR TO EXERCISE ANY RIGHTS OR
REMEDIES WITH RESPECT TO COLLATERAL OR OTHERWISE; (B) THE MAKING OF ANY LOAN OR
ISSUANCE OF ANY LETTER OF CREDIT DURING A DEFAULT, EVENT OF DEFAULT OR OTHER
FAILURE TO SATISFY ANY CONDITIONS PRECEDENT; OR (C) ACCEPTANCE BY AGENT OR ANY
LENDER OF PERFORMANCE BY ANY OBLIGOR UNDER ANY LOAN DOCUMENTS IN A MANNER OTHER
THAN THAT SPECIFIED THEREIN.  IT IS EXPRESSLY ACKNOWLEDGED BY BORROWERS THAT ANY
FAILURE TO SATISFY A FINANCIAL COVENANT ON A MEASUREMENT DATE SHALL NOT BE CURED
OR REMEDIED BY SATISFACTION OF SUCH COVENANT ON A SUBSEQUENT DATE.

 

SECTION 12.                     AGENT

 

12.1         Appointment, Authority and Duties of Agent.

 

12.1.1      APPOINTMENT AND AUTHORITY.  EACH LENDER APPOINTS AND DESIGNATES BANK
OF AMERICA AS AGENT HEREUNDER.  AGENT MAY, AND EACH LENDER AUTHORIZES AGENT TO,
ENTER INTO ALL LOAN DOCUMENTS TO WHICH AGENT IS INTENDED TO BE A PARTY AND
ACCEPT ALL SECURITY DOCUMENTS, FOR AGENT’S BENEFIT AND THE PRO RATA BENEFIT OF
LENDERS.  EACH LENDER AGREES THAT ANY ACTION TAKEN BY AGENT OR REQUIRED LENDERS
IN ACCORDANCE WITH THE PROVISIONS OF THE LOAN DOCUMENTS, AND THE EXERCISE BY
AGENT OR REQUIRED LENDERS OF ANY RIGHTS OR REMEDIES SET FORTH THEREIN, TOGETHER
WITH ALL OTHER POWERS REASONABLY INCIDENTAL THERETO, SHALL BE AUTHORIZED BY AND
BINDING UPON ALL LENDERS.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
AGENT SHALL HAVE THE SOLE AND EXCLUSIVE AUTHORITY TO (A) ACT AS THE DISBURSING
AND COLLECTING AGENT FOR LENDERS WITH RESPECT TO ALL PAYMENTS AND COLLECTIONS
ARISING IN CONNECTION WITH THE LOAN DOCUMENTS; (B) EXECUTE AND DELIVER AS AGENT
EACH LOAN DOCUMENT, INCLUDING ANY INTERCREDITOR OR SUBORDINATION AGREEMENT, AND
ACCEPT DELIVERY OF EACH LOAN DOCUMENT FROM ANY OBLIGOR OR OTHER PERSON; (C) ACT
AS COLLATERAL AGENT FOR SECURED PARTIES FOR PURPOSES OF PERFECTING AND
ADMINISTERING LIENS UNDER THE LOAN DOCUMENTS, AND FOR ALL OTHER PURPOSES STATED
THEREIN; (D) MANAGE, SUPERVISE OR OTHERWISE DEAL WITH COLLATERAL; (E) CONSENT TO
THE ADDITION OF OBLIGORS ON SCHEDULE 1.1(B) TO THE DISCLOSURE LETTER AS
CONTEMPLATED IN THE DEFINITION OF RECEIVABLES PURCHASE FACILITY AND (F) TAKE ANY
ENFORCEMENT ACTION OR OTHERWISE EXERCISE ANY RIGHTS OR REMEDIES WITH RESPECT TO
ANY COLLATERAL UNDER THE LOAN DOCUMENTS, APPLICABLE LAW OR OTHERWISE.  THE
DUTIES OF AGENT SHALL BE MINISTERIAL AND ADMINISTRATIVE IN NATURE, AND AGENT
SHALL NOT HAVE A FIDUCIARY RELATIONSHIP WITH ANY LENDER, SECURED PARTY,
PARTICIPANT OR OTHER PERSON, BY REASON OF ANY LOAN DOCUMENT OR ANY TRANSACTION
RELATING THERETO.  AGENT ALONE SHALL BE AUTHORIZED TO DETERMINE WHETHER ANY
ACCOUNTS OR INVENTORY CONSTITUTE ELIGIBLE ACCOUNTS OR ELIGIBLE INVENTORY, OR
WHETHER TO IMPOSE OR RELEASE ANY RESERVE, AND TO EXERCISE ITS CREDIT JUDGMENT IN
CONNECTION THEREWITH, WHICH DETERMINATIONS AND JUDGMENTS, IF EXERCISED IN GOOD
FAITH, SHALL EXONERATE AGENT FROM LIABILITY TO ANY LENDER OR OTHER PERSON FOR
ANY ERROR IN JUDGMENT.  FOR THE PURPOSES OF CREATING A SOLIDARITÉ ACTIVE IN

 

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ACCORDANCE WITH ARTICLE 1541 OF THE CIVIL CODE OF QUÉBEC BETWEEN AGENT, ON THE
ONE HAND, AND EACH OTHER SECURED PARTY, TAKEN INDIVIDUALLY ON THE OTHER HAND,
EACH OBLIGOR AND EACH SUCH SECURED PARTY ACKNOWLEDGE AND AGREE WITH AGENT THAT
SUCH SECURED PARTY AND AGENT ARE HEREBY CONFERRED THE LEGAL STATUS OF SOLIDARY
CREDITORS OF EACH SUCH OBLIGOR IN RESPECT OF ALL OBLIGATIONS OWED BY EACH SUCH
OBLIGOR TO AGENT AND SUCH SECURED PARTY HEREUNDER AND UNDER THE OTHER LOAN
DOCUMENTS (COLLECTIVELY, THE “SOLIDARY CLAIM”) AND THAT, ACCORDINGLY, BUT
SUBJECT (FOR THE AVOIDANCE OF DOUBT) TO ARTICLE 1542 OF THE CIVIL CODE OF
QUÉBEC, EACH SUCH OBLIGOR IS IRREVOCABLY BOUND TOWARDS AGENT AND EACH OTHER
SECURED PARTY IN RESPECT OF THE ENTIRE SOLIDARY CLAIM OF AGENT AND SUCH.  AS A
RESULT OF THE FOREGOING, THE PARTIES HERETO ACKNOWLEDGE THAT AGENT AND EACH
OTHER SECURED PARTY SHALL AT ALL TIMES HAVE A VALID AND EFFECTIVE RIGHT OF
ACTION FOR THE ENTIRE SOLIDARY CLAIM OF AGENT AND SUCH SECURED PARTY AND THE
RIGHT TO GIVE FULL ACQUITTANCE FOR IT.  ACCORDINGLY, AND WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, AGENT, AS SOLIDARY CREDITOR WITH EACH OTHER SECURED
PARTY, SHALL AT ALL TIMES HAVE A VALID AND EFFECTIVE RIGHT OF ACTION IN RESPECT
OF THE SOLIDARY CLAIM AND THE RIGHT TO GIVE A FULL ACQUITTANCE FOR SAME.  BY ITS
EXECUTION OF THE LOAN DOCUMENTS TO WHICH IT IS A PARTY, EACH SUCH OBLIGOR AND
SECURED PARTY NOT A PARTY HERETO SHALL ALSO BE DEEMED TO HAVE ACCEPTED THE
STIPULATIONS HEREINABOVE PROVIDED.  THE PARTIES FURTHER AGREE AND ACKNOWLEDGE
THAT SUCH LIENS (HYPOTHECS) UNDER THE SECURITY DOCUMENTS AND THE OTHER LOAN
DOCUMENTS SHALL BE GRANTED TO AGENT, FOR ITS OWN BENEFIT AND FOR THE BENEFIT OF
THE OTHER SECURED PARTY, AS SOLIDARY CREDITOR AS HEREINABOVE SET FORTH.

 

12.1.2      DUTIES.  AGENT SHALL NOT HAVE ANY DUTIES EXCEPT THOSE EXPRESSLY SET
FORTH IN THE LOAN DOCUMENTS.  THE CONFERRAL UPON AGENT OF ANY RIGHT SHALL NOT
IMPLY A DUTY ON AGENT’S PART TO EXERCISE SUCH RIGHT, UNLESS INSTRUCTED TO DO SO
BY REQUIRED LENDERS IN ACCORDANCE WITH THIS AGREEMENT.

 

12.1.3      AGENT PROFESSIONALS.  AGENT MAY PERFORM ITS DUTIES THROUGH AGENTS
AND EMPLOYEES.  AGENT MAY CONSULT WITH AND EMPLOY AGENT PROFESSIONALS, AND SHALL
BE ENTITLED TO ACT UPON, AND SHALL BE FULLY PROTECTED IN ANY ACTION TAKEN IN
GOOD FAITH RELIANCE UPON, ANY ADVICE GIVEN BY AN AGENT PROFESSIONAL.  AGENT
SHALL NOT BE RESPONSIBLE FOR THE NEGLIGENCE OR MISCONDUCT OF ANY AGENTS,
EMPLOYEES OR AGENT PROFESSIONALS SELECTED BY IT WITH REASONABLE CARE.

 

12.1.4      INSTRUCTIONS OF REQUIRED LENDERS.  THE RIGHTS AND REMEDIES CONFERRED
UPON AGENT UNDER THE LOAN DOCUMENTS MAY BE EXERCISED WITHOUT THE NECESSITY OF
JOINDER OF ANY OTHER PARTY, UNLESS REQUIRED BY APPLICABLE LAW.  AGENT MAY
REQUEST INSTRUCTIONS FROM REQUIRED LENDERS WITH RESPECT TO ANY ACT (INCLUDING
THE FAILURE TO ACT) IN CONNECTION WITH ANY LOAN DOCUMENTS, AND MAY SEEK
ASSURANCES TO ITS SATISFACTION FROM LENDERS OF THEIR INDEMNIFICATION OBLIGATIONS
UNDER SECTION 12.6 AGAINST ALL CLAIMS THAT COULD BE INCURRED BY AGENT IN
CONNECTION WITH ANY ACT.  AGENT SHALL BE ENTITLED TO REFRAIN FROM ANY ACT UNTIL
IT HAS RECEIVED SUCH INSTRUCTIONS OR ASSURANCES, AND AGENT SHALL NOT INCUR
LIABILITY TO ANY PERSON BY REASON OF SO REFRAINING.  INSTRUCTIONS OF REQUIRED
LENDERS SHALL BE BINDING UPON ALL LENDERS, AND NO LENDER SHALL HAVE ANY RIGHT OF
ACTION WHATSOEVER AGAINST AGENT AS A RESULT OF AGENT ACTING OR REFRAINING FROM
ACTING IN ACCORDANCE WITH THE INSTRUCTIONS OF REQUIRED LENDERS.  NOTWITHSTANDING
THE FOREGOING, INSTRUCTIONS BY AND CONSENT OF ALL LENDERS SHALL BE REQUIRED IN
THE CIRCUMSTANCES DESCRIBED IN SECTION 15.1.1, AND IN NO EVENT

 

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SHALL REQUIRED LENDERS, WITHOUT THE PRIOR WRITTEN CONSENT OF EACH LENDER, DIRECT
AGENT TO ACCELERATE AND DEMAND PAYMENT OF LOANS HELD BY ONE LENDER WITHOUT
ACCELERATING AND DEMANDING PAYMENT OF ALL OTHER LOANS, NOR TO TERMINATE THE
COMMITMENTS OF ONE LENDER WITHOUT TERMINATING THE COMMITMENTS OF ALL LENDERS. 
IN NO EVENT SHALL AGENT BE REQUIRED TO TAKE ANY ACTION THAT, IN ITS OPINION, IS
CONTRARY TO APPLICABLE LAW OR ANY LOAN DOCUMENTS OR COULD SUBJECT ANY AGENT
INDEMNITEE TO PERSONAL LIABILITY.

 

12.2                           Agreements Regarding Collateral and Field
Examination Reports.

 

12.2.1      LIEN RELEASES; CARE OF COLLATERAL.  LENDERS AUTHORIZE AGENT TO
RELEASE ANY LIEN WITH RESPECT TO ANY COLLATERAL (A) UPON FULL PAYMENT OF THE
OBLIGATIONS; (B) THAT IS THE SUBJECT OF AN ASSET DISPOSITION WHICH BORROWERS
CERTIFY IN WRITING TO AGENT IS A PERMITTED ASSET DISPOSITION OR AN ASSET
DISPOSITION PERMITTED UNDER SECTION 10.2.5 OR A LIEN WHICH OBLIGORS CERTIFY IS A
PERMITTED LIEN ENTITLED TO PRIORITY OVER AGENT’S LIENS (AND AGENT MAY RELY
CONCLUSIVELY ON ANY SUCH CERTIFICATE WITHOUT FURTHER INQUIRY); (C) THAT DOES NOT
CONSTITUTE A MATERIAL PART OF THE COLLATERAL; OR (D) WITH THE WRITTEN CONSENT OF
ALL LENDERS; PROVIDED, HOWEVER, THAT ANY LIEN WITH RESPECT TO RECEIVABLES (TO
THE EXTENT SUCH RECEIVABLES ARE OWING FROM AN ACCOUNT DEBTOR LISTED ON SCHEDULE
1.1 TO THE DISCLOSURE LETTER, AS SUCH SCHEDULE MAY BE AMENDED FROM TIME TO TIME
AS CONTEMPLATED BY THE DEFINITION OF “RECEIVABLES PURCHASE FACILITY”) AND
RELATED ASSETS TRANSFERRED PURSUANT TO THE RECEIVABLES PURCHASE FACILITY SHALL
BE AUTOMATICALLY RELEASED WITHOUT FURTHER ACTION BY AGENT.  AGENT SHALL HAVE NO
OBLIGATION WHATSOEVER TO ANY LENDERS TO ASSURE THAT ANY COLLATERAL EXISTS OR IS
OWNED BY AN OBLIGOR, OR IS CARED FOR, PROTECTED, INSURED OR ENCUMBERED, NOR TO
ASSURE THAT AGENT’S LIENS HAVE BEEN PROPERLY CREATED, PERFECTED OR ENFORCED, OR
ARE ENTITLED TO ANY PARTICULAR PRIORITY, NOR TO EXERCISE ANY DUTY OF CARE WITH
RESPECT TO ANY COLLATERAL.

 

12.2.2      POSSESSION OF COLLATERAL.  AGENT AND LENDERS APPOINT EACH LENDER AS
AGENT (FOR THE BENEFIT OF SECURED PARTIES) FOR THE PURPOSE OF PERFECTING LIENS
IN ANY COLLATERAL HELD OR CONTROLLED BY SUCH LENDER, TO THE EXTENT SUCH LIENS
ARE PERFECTED BY POSSESSION OR CONTROL.  IF ANY LENDER OBTAINS POSSESSION OR
CONTROL OF ANY COLLATERAL, IT SHALL NOTIFY AGENT THEREOF AND, PROMPTLY UPON
AGENT’S REQUEST, DELIVER SUCH COLLATERAL TO AGENT OR OTHERWISE DEAL WITH IT IN
ACCORDANCE WITH AGENT’S INSTRUCTIONS.

 

12.2.3      REPORTS.  AGENT SHALL PROMPTLY FORWARD TO EACH LENDER, WHEN
COMPLETE, COPIES OF ANY FIELD AUDIT, EXAMINATION OR APPRAISAL REPORT PREPARED BY
OR FOR AGENT WITH RESPECT TO ANY OBLIGOR OR COLLATERAL (“REPORT”).  EACH LENDER
AGREES (A) THAT NEITHER BANK OF AMERICA NOR AGENT MAKES ANY REPRESENTATION OR
WARRANTY AS TO THE ACCURACY OR COMPLETENESS OF ANY REPORT, AND SHALL NOT BE
LIABLE FOR ANY INFORMATION CONTAINED IN OR OMITTED FROM ANY REPORT; (B) THAT THE
REPORTS ARE NOT INTENDED TO BE COMPREHENSIVE AUDITS OR EXAMINATIONS, AND THAT
AGENT OR ANY OTHER PERSON PERFORMING ANY AUDIT OR EXAMINATION WILL INSPECT ONLY
SPECIFIC INFORMATION REGARDING OBLIGATIONS OR THE COLLATERAL AND WILL RELY
SIGNIFICANTLY UPON OBLIGORS’ BOOKS AND RECORDS AS WELL AS UPON REPRESENTATIONS
OF OBLIGORS’ OFFICERS AND EMPLOYEES; AND (C) TO KEEP ALL REPORTS CONFIDENTIAL
AND STRICTLY FOR SUCH LENDER’S INTERNAL USE, AND NOT TO DISTRIBUTE ANY REPORT
(OR THE CONTENTS THEREOF) TO ANY PERSON (EXCEPT TO SUCH LENDER’S PARTICIPANTS,
ATTORNEYS AND ACCOUNTANTS) OR USE ANY REPORT IN ANY MANNER OTHER THAN
ADMINISTRATION OF THE LOANS AND OTHER OBLIGATIONS.  EACH LENDER AGREES TO
INDEMNIFY AND HOLD HARMLESS AGENT AND ANY OTHER PERSON PREPARING A REPORT FROM
ANY ACTION SUCH LENDER MAY TAKE AS A RESULT OF OR ANY CONCLUSION IT MAY DRAW
FROM ANY REPORT, AS WELL AS FROM ANY CLAIMS ARISING IN CONNECTION WITH ANY THIRD
PARTIES THAT OBTAIN ANY INFORMATION CONTAINED IN A REPORT THROUGH SUCH LENDER.

 

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12.3         Reliance By Agent.  Agent shall be entitled to rely, and shall be
fully protected in relying, upon any certification, notice or other
communication (including those by telephone, telex, telegram, telecopy or
e-mail) believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person, and upon the advice and statements of Agent
Professionals.

 

12.4         Action Upon Default.  Agent shall not be deemed to have knowledge
of any Default or Event of Default unless it has received written notice from a
Lender or Borrower specifying the occurrence and nature thereof.  If any Lender
acquires knowledge of a Default or Event of Default, it shall promptly notify
Agent and the other Lenders thereof in writing.  Each Lender agrees that, except
as otherwise provided in any Loan Documents or with the written consent of Agent
and Required Lenders, it will not take any Enforcement Action, accelerate
Obligations under any Loan Documents, or exercise any right that it might
otherwise have under Applicable Law to credit bid at foreclosure sales, UCC or
similar sales or other similar dispositions of Collateral.  Notwithstanding the
foregoing, however, a Lender may take action to preserve or enforce its rights
against an Obligor where a deadline or limitation period is applicable that
would, absent such action, bar enforcement of Obligations held by such Lender,
including the filing of proofs of claim in an Insolvency Proceeding.

 

12.5         Ratable Sharing.  If any Lender shall obtain any payment or
reduction of any Obligation, whether through set-off or otherwise, in excess of
its share of such Obligation, determined on a Pro Rata basis or in accordance
with Section 5.5.1, as applicable, such Lender shall forthwith purchase from
Agent, Issuing Bank and the other Lenders such participations in the affected
Obligation as are necessary to cause the purchasing Lender to share the excess
payment or reduction on a Pro Rata basis or in accordance with Section 5.5.1, as
applicable.  If any of such payment or reduction is thereafter recovered from
the purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.  No Lender shall
set off against any Dominion Account without the prior consent of Agent.

 

12.6         Indemnification of Agent Indemnitees.  EACH LENDER SHALL INDEMNIFY
AND HOLD HARMLESS AGENT INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY OBLIGORS
(BUT WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF OBLIGORS UNDER ANY LOAN
DOCUMENTS), ON A PRO RATA BASIS, AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR
ASSERTED AGAINST ANY AGENT INDEMNITEE, PROVIDED THE CLAIM RELATES TO OR ARISES
FROM AN AGENT INDEMNITEE ACTING AS OR FOR AGENT (IN ITS CAPACITY AS AGENT).  In
Agent’s discretion, it may reserve for any such Claims made against an Agent
Indemnitee, and may satisfy any judgment, order or settlement relating thereto,
from proceeds of Collateral prior to making any distribution of Collateral
proceeds to Lenders.  If Agent is sued by any receiver, bankruptcy trustee,
debtor-in-possession or other Person for any alleged preference or fraudulent
transfer, then any monies paid by Agent in settlement or satisfaction of such
proceeding, together with all interest, costs and expenses (including reasonable
attorneys’ fees) incurred in the defense of same, shall be promptly reimbursed
to Agent by each Lender to the extent of its Pro Rata share.

 

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12.7         Limitation on Responsibilities of Agent.  Agent shall not be liable
to Lenders for any action taken or omitted to be taken under the Loan Documents,
except for losses directly and solely caused by Agent’s gross negligence or
willful misconduct.  Agent does not assume any responsibility for any failure or
delay in performance or any breach by any Obligor or Lender of any obligations
under the Loan Documents.  Agent does not make to Lenders any express or implied
warranty, representation or guarantee with respect to any Obligations,
Collateral, Loan Documents or Obligor.  No Agent Indemnitee shall be responsible
to Lenders for any recitals, statements, information, representations or
warranties contained in any Loan Documents; the execution, validity,
genuineness, effectiveness or enforceability of any Loan Documents; the
genuineness, enforceability, collectibility, value, sufficiency, location or
existence of any Collateral, or the validity, extent, perfection or priority of
any Lien therein; the validity, enforceability or collectibility of any
Obligations; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any Obligor or Account
Debtor.  No Agent Indemnitee shall have any obligation to any Lender to
ascertain or inquire into the existence of any Default or Event of Default, the
observance or performance by any Obligor of any terms of the Loan Documents, or
the satisfaction of any conditions precedent contained in any Loan Documents.

 

12.8         Successor Agent and Co-Agents.

 

12.8.1      RESIGNATION; SUCCESSOR AGENT; DEFAULTING AGENT.

 

A.                                       SUBJECT TO THE APPOINTMENT AND
ACCEPTANCE OF A SUCCESSOR AGENT AS PROVIDED BELOW, AGENT MAY RESIGN AT ANY TIME
BY GIVING AT LEAST 30 DAYS WRITTEN NOTICE THEREOF TO LENDERS AND BORROWERS. 
UPON RECEIPT OF SUCH NOTICE, REQUIRED LENDERS SHALL HAVE THE RIGHT TO APPOINT A
SUCCESSOR AGENT WHICH SHALL BE (A) A LENDER OR AN AFFILIATE OF A LENDER; OR
(B) A COMMERCIAL BANK THAT IS ORGANIZED UNDER THE LAWS OF THE UNITED STATES OR
ANY STATE OR DISTRICT THEREOF, HAS A COMBINED CAPITAL SURPLUS OF AT LEAST
$200,000,000 AND (PROVIDED NO DEFAULT OR EVENT OF DEFAULT EXISTS) IS REASONABLY
ACCEPTABLE TO BORROWERS.  IF NO SUCCESSOR AGENT IS APPOINTED PRIOR TO THE
EFFECTIVE DATE OF THE RESIGNATION OF AGENT, THEN AGENT MAY APPOINT A SUCCESSOR
AGENT FROM AMONG LENDERS.  UPON ACCEPTANCE BY A SUCCESSOR AGENT OF AN
APPOINTMENT TO SERVE AS AGENT HEREUNDER, SUCH SUCCESSOR AGENT SHALL THEREUPON
SUCCEED TO AND BECOME VESTED WITH ALL THE POWERS AND DUTIES OF THE RETIRING
AGENT WITHOUT FURTHER ACT, AND THE RETIRING AGENT SHALL BE DISCHARGED FROM ITS
DUTIES AND OBLIGATIONS HEREUNDER BUT SHALL CONTINUE TO HAVE THE BENEFITS OF THE
INDEMNIFICATION SET FORTH IN SECTIONS 12.6 AND 15.2.  NOTWITHSTANDING ANY
AGENT’S RESIGNATION, THE PROVISIONS OF THIS SECTION 12 SHALL CONTINUE IN EFFECT
FOR ITS BENEFIT WITH RESPECT TO ANY ACTIONS TAKEN OR OMITTED TO BE TAKEN BY IT
WHILE AGENT.  ANY SUCCESSOR TO BANK OF AMERICA BY MERGER OR ACQUISITION OF STOCK
OR THIS LOAN SHALL CONTINUE TO BE AGENT HEREUNDER WITHOUT FURTHER ACT ON THE
PART OF THE PARTIES HERETO, UNLESS SUCH SUCCESSOR RESIGNS AS PROVIDED ABOVE.

 

B.                                      IN THE EVENT THAT AGENT BECOMES A
DEFAULTING AGENT, REQUIRED LENDERS, IN THEIR SOLE AND ABSOLUTE DISCRETION, SHALL
HAVE THE RIGHT AT ANY TIME THEREAFTER TO REMOVE SUCH DEFAULTING AGENT AND TO
SELECT AND APPOINT A SUCCESSOR AGENT.  UPON ACCEPTANCE BY A SUCCESSOR AGENT OF
AN APPOINTMENT TO SERVE AS AGENT HEREUNDER, SUCH SUCCESSOR AGENT SHALL THEREUPON
SUCCEED TO AND BECOME VESTED WITH ALL OF THE POWERS AND DUTIES OF THE REPLACED
AGENT WITHOUT FURTHER ACT; PROVIDED, HOWEVER, THAT SUBJECT TO THE PROVISIONS OF
SECTION 12.7, THE REMOVAL OF A

 

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DEFAULTING AGENT SHALL NOT IMPAIR OR IMPEDE ANY RIGHTS AND REMEDIES AT LAW OR IN
EQUITY OTHERWISE AVAILABLE TO LENDERS WITH RESPECT TO THE ACTS OR OMISSIONS OF
SUCH DEFAULTING AGENT.

 

12.8.2      SEPARATE COLLATERAL AGENT.  IT IS THE INTENT OF THE PARTIES THAT
THERE SHALL BE NO VIOLATION OF ANY APPLICABLE LAW DENYING OR RESTRICTING THE
RIGHT OF FINANCIAL INSTITUTIONS TO TRANSACT BUSINESS IN ANY JURISDICTION.  IF
AGENT BELIEVES THAT IT MAY BE LIMITED IN THE EXERCISE OF ANY RIGHTS OR REMEDIES
UNDER THE LOAN DOCUMENTS DUE TO ANY APPLICABLE LAW, AGENT MAY APPOINT AN
ADDITIONAL PERSON WHO IS NOT SO LIMITED, AS A SEPARATE COLLATERAL AGENT OR
CO-COLLATERAL AGENT.  IF AGENT SO APPOINTS A COLLATERAL AGENT OR CO-COLLATERAL
AGENT, EACH RIGHT AND REMEDY INTENDED TO BE AVAILABLE TO AGENT UNDER THE LOAN
DOCUMENTS SHALL ALSO BE VESTED IN SUCH SEPARATE AGENT.  EVERY COVENANT AND
OBLIGATION NECESSARY TO THE EXERCISE THEREOF BY SUCH AGENT SHALL RUN TO AND BE
ENFORCEABLE BY IT AS WELL AS AGENT.  LENDERS SHALL EXECUTE AND DELIVER SUCH
DOCUMENTS AS AGENT DEEMS APPROPRIATE TO VEST ANY RIGHTS OR REMEDIES IN SUCH
AGENT.  IF ANY COLLATERAL AGENT OR CO-COLLATERAL AGENT SHALL DIE OR DISSOLVE,
BECOME INCAPABLE OF ACTING, RESIGN OR BE REMOVED, THEN ALL THE RIGHTS AND
REMEDIES OF SUCH AGENT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, SHALL VEST IN
AND BE EXERCISED BY AGENT UNTIL APPOINTMENT OF A NEW AGENT.

 

12.9         Due Diligence and Non-Reliance.  Each Lender acknowledges and
agrees that it has, independently and without reliance upon Agent or any other
Lenders, and based upon such documents, information and analyses as it has
deemed appropriate, made its own credit analysis of each Obligor and its own
decision to enter into this Agreement and to fund Loans and participate in LC
Obligations hereunder.  Each Lender has made such inquiries concerning the Loan
Documents, the Collateral and each Obligor as such Lender feels necessary.  Each
Lender further acknowledges and agrees that the other Lenders and Agent have
made no representations or warranties concerning any Obligor, any Collateral or
the legality, validity, sufficiency or enforceability of any Loan Documents or
Obligations.  Each Lender will, independently and without reliance upon the
other Lenders or Agent, and based upon such financial statements, documents and
information as it deems appropriate at the time, continue to make and rely upon
its own credit decisions in making Loans and participating in LC Obligations,
and in taking or refraining from any action under any Loan Documents.  Except
for notices, reports and other information expressly requested by a Lender,
Agent shall have no duty or responsibility to provide any Lender with any
notices, reports or certificates furnished to Agent by any Obligor or any credit
or other information concerning the affairs, financial condition, business or
Properties of any Obligor (or any of its Affiliates) which may come into
possession of Agent or any of Agent’s Affiliates.

 

12.10       Replacement of Certain Lenders.  If a Lender (a) is a Defaulting
Lender, or (b) fails to give its consent to any amendment, waiver or action for
which consent of all Lenders was required and Required Lenders consented, then,
in addition to any other rights and remedies that any Person may have, Agent
may, by notice to such Lender within 120 days after such event, require such
Lender to assign all of its rights and obligations under the Loan Documents to
Eligible Assignee(s) specified by Agent, pursuant to appropriate Assignment and
Acceptance(s) and within 20 days after Agent’s notice.  Agent is irrevocably
appointed as attorney-in-fact to execute any such Assignment and Acceptance if
the Lender fails to execute same.  Such Lender shall be entitled to receive, in
cash, concurrently with such assignment, all amounts owed to it under the Loan
Documents, including all principal, interest and fees through the date of
assignment (but excluding any prepayment charge).

 

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12.11       Remittance of Payments and Collections.

 

12.11.1            REMITTANCES GENERALLY.  ALL PAYMENTS BY ANY LENDER TO AGENT
SHALL BE MADE BY THE TIME AND ON THE DAY SET FORTH IN THIS AGREEMENT, IN
IMMEDIATELY AVAILABLE FUNDS.  IF NO TIME FOR PAYMENT IS SPECIFIED OR IF PAYMENT
IS DUE ON DEMAND BY AGENT AND REQUEST FOR PAYMENT IS MADE BY AGENT BY 11:00 A.M.
ON A BUSINESS DAY, PAYMENT SHALL BE MADE BY LENDER NOT LATER THAN 2:00 P.M. ON
SUCH DAY, AND IF REQUEST IS MADE AFTER 11:00 A.M., THEN PAYMENT SHALL BE MADE BY
11:00 A.M. ON THE NEXT BUSINESS DAY.  PAYMENT BY AGENT TO ANY LENDER SHALL BE
MADE BY WIRE TRANSFER, IN THE TYPE OF FUNDS RECEIVED BY AGENT.  ANY SUCH PAYMENT
SHALL BE SUBJECT TO AGENT’S RIGHT OF OFFSET FOR ANY AMOUNTS DUE FROM SUCH LENDER
UNDER THE LOAN DOCUMENTS.

 

12.11.2            FAILURE TO PAY.  IF ANY LENDER FAILS TO PAY ANY AMOUNT WHEN
DUE BY IT TO AGENT PURSUANT TO THE TERMS HEREOF, SUCH AMOUNT SHALL BEAR INTEREST
FROM THE DUE DATE UNTIL PAID AT THE RATE DETERMINED BY AGENT AS CUSTOMARY IN THE
BANKING INDUSTRY FOR INTERBANK COMPENSATION.  IN NO EVENT SHALL BORROWERS BE
ENTITLED TO RECEIVE CREDIT FOR ANY INTEREST PAID BY A LENDER TO AGENT, NOR SHALL
ANY DEFAULTING LENDER BE ENTITLED TO INTEREST ON ANY AMOUNTS HELD BY AGENT
PURSUANT TO SECTION 4.2.

 

12.11.3            RECOVERY OF PAYMENTS.  IF AGENT PAYS ANY AMOUNT TO A LENDER
IN THE EXPECTATION THAT A RELATED PAYMENT WILL BE RECEIVED BY AGENT FROM AN
OBLIGOR AND SUCH RELATED PAYMENT IS NOT RECEIVED, THEN AGENT MAY RECOVER SUCH
AMOUNT FROM EACH LENDER THAT RECEIVED IT.  IF AGENT DETERMINES AT ANY TIME THAT
AN AMOUNT RECEIVED UNDER ANY LOAN DOCUMENT MUST BE RETURNED TO AN OBLIGOR OR
PAID TO ANY OTHER PERSON PURSUANT TO APPLICABLE LAW OR OTHERWISE, THEN,
NOTWITHSTANDING ANY OTHER TERM OF ANY LOAN DOCUMENT, AGENT SHALL NOT BE REQUIRED
TO DISTRIBUTE SUCH AMOUNT TO ANY LENDER.  IF ANY AMOUNTS RECEIVED AND APPLIED BY
AGENT TO ANY OBLIGATIONS ARE LATER REQUIRED TO BE RETURNED BY AGENT PURSUANT TO
APPLICABLE LAW, EACH LENDER SHALL PAY TO AGENT, ON DEMAND, SUCH LENDER’S PRO
RATA SHARE OF THE AMOUNTS REQUIRED TO BE RETURNED.

 

12.12       Agent in its Individual Capacity.  As a Lender, Bank of America
shall have the same rights and remedies under the other Loan Documents as any
other Lender, and the terms “Lenders,” “Required Lenders” or any similar term
shall include Bank of America in its capacity as a Lender.  Each of Bank of
America and its Affiliates may accept deposits from, maintain deposits or credit
balances for, invest in, lend money to, provide Bank Products to, act as trustee
under indentures of, serve as financial or other advisor to, and generally
engage in any kind of business with, Obligors and their Affiliates, as if Bank
of America were any other bank, without any duty to account therefor (including
any fees or other consideration received in connection therewith) to the other
Lenders.  In their individual capacity, Bank of America and its Affiliates may
receive information regarding Obligors, their Affiliates and their Account
Debtors (including information subject to confidentiality obligations), and each
Lender agrees that Bank of America and its Affiliates shall be under no
obligation to provide such information to Lenders, if acquired in such
individual capacity and not as Agent hereunder.

 

12.13       Agent Titles.  Each Lender or other financial institution, other
than Bank of America, that is designated (on the cover page of this Agreement or
otherwise) by Bank of America as an “Agent” or “Arranger” of any type shall not
have any right, power, responsibility

 

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or duty under any Loan Documents other than those applicable to all Lenders (to
the extent that it is a Lender), and shall in no event be deemed to have any
fiduciary relationship with any other Lender.

 

12.14       No Third Party Beneficiaries.  This Section 12 is an agreement
solely among Lenders and Agent, and shall survive Full Payment of the
Obligations.  This Section 12 does not confer any rights or benefits upon
Borrowers or any other Person.  As between Borrowers and Agent, any action that
Agent may take under any Loan Documents or with respect to any Obligations shall
be conclusively presumed to have been authorized and directed by Lenders.

 

SECTION 13.       BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS

 

13.1         Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of Borrowers, Agent, Lenders, and their respective
successors and assigns, except that (a) no Borrower shall have the right to
assign its rights or delegate its obligations under any Loan Documents except as
permitted under Section 10; and (b) any assignment by a Lender must be made in
compliance with Section 13.3.  Agent may treat the Person which made any Loan as
the owner thereof for all purposes until such Person makes an assignment in
accordance with Section 13.3.  Any authorization or consent of a Lender shall be
conclusive and binding on any subsequent transferee or assignee of such Lender.

 

13.2         Participations.

 

13.2.1      PERMITTED PARTICIPANTS; EFFECT.  ANY LENDER MAY, IN THE ORDINARY
COURSE OF ITS BUSINESS AND IN ACCORDANCE WITH APPLICABLE LAW, AT ANY TIME SELL
TO A FINANCIAL INSTITUTION (“PARTICIPANT”) A PARTICIPATING INTEREST IN THE
RIGHTS AND OBLIGATIONS OF SUCH LENDER UNDER ANY LOAN DOCUMENTS.  DESPITE ANY
SALE BY A LENDER OF PARTICIPATING INTERESTS TO A PARTICIPANT, SUCH LENDER’S
OBLIGATIONS UNDER THE LOAN DOCUMENTS SHALL REMAIN UNCHANGED, SUCH LENDER SHALL
REMAIN SOLELY RESPONSIBLE TO THE OTHER PARTIES HERETO FOR PERFORMANCE OF SUCH
OBLIGATIONS, SUCH LENDER SHALL REMAIN THE HOLDER OF ITS LOANS AND COMMITMENTS
FOR ALL PURPOSES, ALL AMOUNTS PAYABLE BY BORROWERS SHALL BE DETERMINED AS IF
SUCH LENDER HAD NOT SOLD SUCH PARTICIPATING INTERESTS, AND BORROWERS AND AGENT
SHALL CONTINUE TO DEAL SOLELY AND DIRECTLY WITH SUCH LENDER IN CONNECTION WITH
THE LOAN DOCUMENTS.  EACH LENDER SHALL BE SOLELY RESPONSIBLE FOR NOTIFYING ITS
PARTICIPANTS OF ANY MATTERS UNDER THE LOAN DOCUMENTS, AND AGENT AND THE OTHER
LENDERS SHALL NOT HAVE ANY OBLIGATION OR LIABILITY TO ANY SUCH PARTICIPANT.  A
PARTICIPANT THAT WOULD BE A FOREIGN LENDER IF IT WERE A LENDER SHALL NOT BE
ENTITLED TO THE BENEFITS OF SECTION 5.8 UNLESS BORROWERS AGREE OTHERWISE IN
WRITING.

 

13.2.2      VOTING RIGHTS.  EACH LENDER SHALL RETAIN THE SOLE RIGHT TO APPROVE,
WITHOUT THE CONSENT OF ANY PARTICIPANT, ANY AMENDMENT, WAIVER OR OTHER
MODIFICATION OF ANY LOAN DOCUMENTS OTHER THAN THAT WHICH FORGIVES PRINCIPAL,
INTEREST OR FEES, REDUCES THE STATED INTEREST RATE OR FEES PAYABLE WITH RESPECT
TO ANY LOAN OR COMMITMENT IN WHICH SUCH PARTICIPANT HAS AN INTEREST, POSTPONES
THE COMMITMENT TERMINATION DATE OR ANY DATE FIXED FOR ANY REGULARLY SCHEDULED
PAYMENT OF PRINCIPAL, INTEREST OR FEES ON SUCH LOAN OR COMMITMENT, OR RELEASES
ANY BORROWER, ALL OR SUBSTANTIALLY ALL OF THE VALUE OF THE GUARANTIES OF THE
OBLIGATIONS MADE BY THE GUARANTORS OR SUBSTANTIAL PORTION OF THE COLLATERAL.

 

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13.2.3      BENEFIT OF SET-OFF.  BORROWERS AGREE THAT EACH PARTICIPANT SHALL
HAVE A RIGHT OF SET-OFF IN RESPECT OF ITS PARTICIPATING INTEREST TO THE SAME
EXTENT AS IF SUCH INTEREST WERE OWING DIRECTLY TO A LENDER, AND EACH LENDER
SHALL ALSO RETAIN THE RIGHT OF SET-OFF WITH RESPECT TO ANY PARTICIPATING
INTERESTS SOLD BY IT.  BY EXERCISING ANY RIGHT OF SET-OFF, A PARTICIPANT AGREES
TO SHARE WITH LENDERS ALL AMOUNTS RECEIVED THROUGH ITS SET-OFF, IN ACCORDANCE
WITH SECTION 12.5 AS IF SUCH PARTICIPANT WERE A LENDER.

 

13.3         Assignments.

 

13.3.1      PERMITTED ASSIGNMENTS.  A LENDER MAY ASSIGN TO AN ELIGIBLE ASSIGNEE
ANY OF ITS RIGHTS AND OBLIGATIONS UNDER THE LOAN DOCUMENTS, AS LONG AS (A) EACH
ASSIGNMENT IS OF A CONSTANT, AND NOT A VARYING, PERCENTAGE OF THE TRANSFEROR
LENDER’S RIGHTS AND OBLIGATIONS UNDER THE LOAN DOCUMENTS AND, IN THE CASE OF A
PARTIAL ASSIGNMENT, IS IN A MINIMUM PRINCIPAL AMOUNT OF $5,000,000 (UNLESS
OTHERWISE AGREED BY AGENT IN ITS DISCRETION AND, EXCEPT DURING THE OCCURRENCE
AND CONTINUANCE OF A DEFAULT OR AN EVENT OF DEFAULT, SANMINA) AND INTEGRAL
MULTIPLES OF $1,000,000 IN EXCESS OF THAT AMOUNT; (B) EXCEPT IN THE CASE OF AN
ASSIGNMENT IN WHOLE OF A LENDER’S RIGHTS AND OBLIGATIONS, THE AGGREGATE AMOUNT
OF THE COMMITMENTS RETAINED BY THE TRANSFEROR LENDER IS AT LEAST $5,000,000
(UNLESS OTHERWISE AGREED BY AGENT IN ITS DISCRETION); AND (C) THE PARTIES TO
EACH SUCH ASSIGNMENT SHALL EXECUTE AND DELIVER TO AGENT, FOR ITS ACCEPTANCE AND
RECORDING, AN ASSIGNMENT AND ACCEPTANCE.  NOTHING HEREIN SHALL LIMIT THE RIGHT
OF A LENDER TO PLEDGE OR ASSIGN ANY RIGHTS UNDER THE LOAN DOCUMENTS TO (I) ANY
FEDERAL RESERVE BANK OR THE UNITED STATES TREASURY AS COLLATERAL SECURITY
PURSUANT TO REGULATION A OF THE BOARD OF GOVERNORS AND ANY OPERATING CIRCULAR
ISSUED BY SUCH FEDERAL RESERVE BANK, OR (II) COUNTERPARTIES TO SWAP AGREEMENTS
RELATING TO ANY LOANS; PROVIDED, HOWEVER, THAT ANY PAYMENT BY BORROWERS TO THE
ASSIGNING LENDER IN RESPECT OF ANY OBLIGATIONS ASSIGNED AS DESCRIBED IN THIS
SENTENCE SHALL SATISFY BORROWERS’ OBLIGATIONS HEREUNDER TO THE EXTENT OF SUCH
PAYMENT, AND NO SUCH ASSIGNMENT SHALL RELEASE THE ASSIGNING LENDER FROM ITS
OBLIGATIONS HEREUNDER.

 

13.3.2      EFFECT; EFFECTIVE DATE.  UPON DELIVERY TO AGENT OF AN ASSIGNMENT
NOTICE IN THE FORM OF EXHIBIT C AND A PROCESSING FEE OF $3,500 (UNLESS OTHERWISE
AGREED BY AGENT IN ITS DISCRETION), THE ASSIGNMENT SHALL BECOME EFFECTIVE AS
SPECIFIED IN THE NOTICE, IF IT COMPLIES WITH THIS SECTION 13.3.  FROM SUCH
EFFECTIVE DATE, THE ELIGIBLE ASSIGNEE SHALL FOR ALL PURPOSES BE A LENDER UNDER
THE LOAN DOCUMENTS, AND SHALL HAVE ALL RIGHTS AND OBLIGATIONS OF A LENDER
THEREUNDER.  UPON CONSUMMATION OF AN ASSIGNMENT, THE TRANSFEROR LENDER, AGENT
AND BORROWERS SHALL MAKE APPROPRIATE ARRANGEMENTS FOR ISSUANCE OF REPLACEMENT
AND/OR NEW NOTES, AS APPLICABLE.  THE TRANSFEREE LENDER SHALL COMPLY WITH
SECTION 5.9 AND DELIVER, UPON REQUEST, AN ADMINISTRATIVE QUESTIONNAIRE
SATISFACTORY TO AGENT.

 

SECTION 14.       GUARANTY

 

14.1         Guaranty of the Obligations.  Guarantors jointly and severally
hereby irrevocably and unconditionally guaranty to Agent for the ratable benefit
of the Secured Parties the due and punctual payment in full of all Obligations
when the same shall become due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including amounts
that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)) (collectively, the
“Guaranteed Obligations”).

 

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14.2         Contribution by Guarantors.  All Guarantors desire to allocate
among themselves (collectively, the “Contributing Guarantors”), in a fair and
equitable manner, their obligations arising under this Guaranty.  Accordingly,
in the event any payment or distribution is made on any date by a Guarantor (a
“Funding Guarantor”) under this Guaranty that exceeds its Fair Share as of such
date, to the extent permitted by applicable law, such Funding Guarantor shall be
entitled to a contribution from each of the other Contributing Guarantors in the
amount of such other Contributing Guarantor’s Fair Share Shortfall as of such
date, with the result that all such contributions will cause each Contributing
Guarantor’s Aggregate Payments to equal its Fair Share as of such date.  “Fair
Share” means, with respect to a Contributing Guarantor as of any date of
determination, an amount equal to (a) the ratio of (i) the Fair Share
Contribution Amount with respect to such Contributing Guarantor to (ii) the
aggregate of the Fair Share Contribution Amounts with respect to all
Contributing Guarantors multiplied by (b) the aggregate amount paid or
distributed on or before such date by all Funding Guarantors under this Guaranty
in respect of the obligations Guaranteed.  “Fair Share Shortfall” means, with
respect to a Contributing Guarantor as of any date of determination, the excess,
if any, of the Fair Share of such Contributing Guarantor over the Aggregate
Payments of such Contributing Guarantor.  “Fair Share Contribution Amount”
means, with respect to a Contributing Guarantor as of any date of determination,
the maximum aggregate amount of the obligations of such Contributing Guarantor
under this Guaranty that would not render its obligations hereunder or
thereunder subject to avoidance as a fraudulent transfer or conveyance under
Section 548 of Title 11 of the United States Code or any comparable applicable
provisions of state law; provided, solely for purposes of calculating the “Fair
Share Contribution Amount” with respect to any Contributing Guarantor for
purposes of this Section 14.2, any assets or liabilities of such Contributing
Guarantor arising by virtue of any rights to subrogation, reimbursement or
indemnification or any rights to or obligations of contribution hereunder shall
not be considered as assets or liabilities of such Contributing Guarantor. 
“Aggregate Payments” means, with respect to a Contributing Guarantor as of any
date of determination, an amount equal to (1) the aggregate amount of all
payments and distributions made on or before such date by such Contributing
Guarantor in respect of this Guaranty (including, without limitation, in respect
of this Section 14.2), minus (2) the aggregate amount of all payments received
on or before such date by such Contributing Guarantor from the other
Contributing Guarantors as contributions under this Section 14.2.  The amounts
payable as contributions hereunder shall be determined as of the date on which
the related payment or distribution is made by the applicable Funding
Guarantor.  The allocation among Contributing Guarantors of their obligations as
set forth in this Section 14.2 shall not be construed in any way to limit the
liability of any Contributing Guarantor hereunder.  Each Guarantor is a third
party beneficiary to the contribution agreement set forth in this Section 14.2.

 

14.3         Payment by Guarantors.  Guarantors hereby jointly and severally
agree, in furtherance of the foregoing and not in limitation of any other right
which any Secured Party may have at law or in equity against any Guarantor by
virtue hereof, that upon the failure of any Borrower to pay any of the
Guaranteed Obligations when and as the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)),
Guarantors will upon demand pay, or cause to be paid, in cash, to Agent for the
ratable benefit of Secured Parties, an amount equal to the sum of the unpaid
principal amount of all Guaranteed Obligations then due

 

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as aforesaid, accrued and unpaid interest on such Guaranteed Obligations
(including interest which, but for any Borrower’s becoming the subject of a case
under the Bankruptcy Code, would have accrued on such Guaranteed Obligations,
whether or not a claim is allowed against such Borrower for such interest in the
related bankruptcy case) and all other Guaranteed Obligations then owed to
Secured Parties as aforesaid.

 

14.4         Liability of Guarantors Absolute.  Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guaranteed Obligations.  In furtherance of the foregoing and without limiting
the generality thereof, each Guarantor agrees as follows:

 

14.4.1      THIS GUARANTY IS A GUARANTY OF PAYMENT WHEN DUE AND NOT OF
COLLECTABILITY.  THIS GUARANTY IS A PRIMARY OBLIGATION OF EACH GUARANTOR AND NOT
MERELY A CONTRACT OF SURETY;

 

14.4.2      AGENT MAY ENFORCE THIS GUARANTY UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT NOTWITHSTANDING THE EXISTENCE OF ANY DISPUTE
BETWEEN ANY BORROWER AND ANY SECURED PARTY WITH RESPECT TO THE EXISTENCE OF SUCH
EVENT OF DEFAULT;

 

14.4.3      THE OBLIGATIONS OF EACH GUARANTOR HEREUNDER ARE INDEPENDENT OF THE
OBLIGATIONS OF ANY BORROWER AND THE OBLIGATIONS OF ANY OTHER GUARANTOR
(INCLUDING ANY OTHER GUARANTOR) OF THE OBLIGATIONS OF ANY BORROWER, AND A
SEPARATE ACTION OR ACTIONS MAY BE BROUGHT AND PROSECUTED AGAINST SUCH GUARANTOR
WHETHER OR NOT ANY ACTION IS BROUGHT AGAINST SUCH BORROWER OR ANY OF SUCH OTHER
GUARANTORS AND WHETHER OR NOT ANY BORROWER OR SUCH OTHER GUARANTORS ARE JOINED
IN ANY SUCH ACTION OR ACTIONS;

 

14.4.4      PAYMENT BY ANY GUARANTOR OF A PORTION, BUT NOT ALL, OF THE
GUARANTEED OBLIGATIONS SHALL IN NO WAY LIMIT, AFFECT, MODIFY OR ABRIDGE ANY
GUARANTOR’S LIABILITY FOR ANY PORTION OF THE GUARANTEED OBLIGATIONS WHICH HAS
NOT BEEN PAID.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, IF AGENT IS
AWARDED A JUDGMENT IN ANY SUIT BROUGHT TO ENFORCE ANY GUARANTOR’S COVENANT TO
PAY A PORTION OF THE GUARANTEED OBLIGATIONS, SUCH JUDGMENT SHALL NOT BE DEEMED
TO RELEASE SUCH GUARANTOR FROM ITS COVENANT TO PAY THE PORTION OF THE GUARANTEED
OBLIGATIONS THAT IS NOT THE SUBJECT OF SUCH SUIT, AND SUCH JUDGMENT SHALL NOT,
EXCEPT TO THE EXTENT SATISFIED BY SUCH GUARANTOR, LIMIT, AFFECT, MODIFY OR
ABRIDGE ANY OTHER GUARANTOR’S LIABILITY HEREUNDER IN RESPECT OF THE GUARANTEED
OBLIGATIONS;

 

14.4.5      ANY SECURED PARTY, UPON SUCH TERMS AS IT DEEMS APPROPRIATE, WITHOUT
NOTICE OR DEMAND AND WITHOUT AFFECTING THE VALIDITY OR ENFORCEABILITY HEREOF OR
GIVING RISE TO ANY REDUCTION, LIMITATION, IMPAIRMENT, DISCHARGE OR TERMINATION
OF ANY GUARANTOR’S LIABILITY HEREUNDER, FROM TIME TO TIME MAY (I) RENEW, EXTEND,
ACCELERATE, INCREASE THE RATE OF INTEREST ON, OR OTHERWISE CHANGE THE TIME,
PLACE, MANNER OR TERMS OF PAYMENT OF THE GUARANTEED OBLIGATIONS; (II) SETTLE,
COMPROMISE, RELEASE OR DISCHARGE, OR ACCEPT OR REFUSE ANY OFFER OF PERFORMANCE
WITH RESPECT TO, OR SUBSTITUTIONS FOR, THE GUARANTEED OBLIGATIONS OR ANY
AGREEMENT RELATING THERETO AND/OR SUBORDINATE THE PAYMENT OF THE SAME TO THE
PAYMENT OF ANY OTHER OBLIGATIONS; (III) REQUEST AND ACCEPT OTHER GUARANTIES OF
THE GUARANTEED OBLIGATIONS AND TAKE AND HOLD SECURITY FOR THE PAYMENT HEREOF OR
THE GUARANTEED OBLIGATIONS; (IV) RELEASE, SURRENDER, EXCHANGE, SUBSTITUTE,

 

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COMPROMISE, SETTLE, RESCIND, WAIVE, ALTER, SUBORDINATE OR MODIFY, WITH OR
WITHOUT CONSIDERATION, ANY SECURITY FOR PAYMENT OF THE GUARANTEED OBLIGATIONS,
ANY OTHER GUARANTIES OF THE GUARANTEED OBLIGATIONS, OR ANY OTHER OBLIGATION OF
ANY PERSON (INCLUDING ANY OTHER GUARANTOR) WITH RESPECT TO THE GUARANTEED
OBLIGATIONS; (V) ENFORCE AND APPLY ANY SECURITY NOW OR HEREAFTER HELD BY OR FOR
THE BENEFIT OF SUCH SECURED PARTY IN RESPECT HEREOF OR THE GUARANTEED
OBLIGATIONS AND DIRECT THE ORDER OR MANNER OF SALE THEREOF, OR EXERCISE ANY
OTHER RIGHT OR REMEDY THAT SUCH SECURED PARTY MAY HAVE AGAINST ANY SUCH
SECURITY, IN EACH CASE AS SUCH SECURED PARTY IN ITS DISCRETION MAY DETERMINE
CONSISTENT HEREWITH OR THE APPLICABLE HEDGING AGREEMENT AND ANY APPLICABLE
SECURITY AGREEMENT, INCLUDING FORECLOSURE ON ANY SUCH SECURITY PURSUANT TO ONE
OR MORE JUDICIAL OR NONJUDICIAL SALES, WHETHER OR NOT EVERY ASPECT OF ANY SUCH
SALE IS COMMERCIALLY REASONABLE, AND EVEN THOUGH SUCH ACTION OPERATES TO IMPAIR
OR EXTINGUISH ANY RIGHT OF REIMBURSEMENT OR SUBROGATION OR OTHER RIGHT OR REMEDY
OF ANY GUARANTOR AGAINST ANY BORROWER OR ANY SECURITY FOR THE GUARANTEED
OBLIGATIONS; AND (VI) EXERCISE ANY OTHER RIGHTS AVAILABLE TO IT UNDER THE LOAN
DOCUMENTS OR THE HEDGING AGREEMENTS; AND

 

14.4.6      THIS GUARANTY AND THE OBLIGATIONS OF GUARANTORS HEREUNDER SHALL BE
VALID AND ENFORCEABLE AND SHALL NOT BE SUBJECT TO ANY REDUCTION, LIMITATION,
IMPAIRMENT, DISCHARGE OR TERMINATION FOR ANY REASON (OTHER THAN PAYMENT IN FULL
OF THE GUARANTEED OBLIGATIONS), INCLUDING THE OCCURRENCE OF ANY OF THE
FOLLOWING, WHETHER OR NOT ANY GUARANTOR SHALL HAVE HAD NOTICE OR KNOWLEDGE OF
ANY OF THEM:  (I) ANY FAILURE OR OMISSION TO ASSERT OR ENFORCE OR AGREEMENT OR
ELECTION NOT TO ASSERT OR ENFORCE, OR THE STAY OR ENJOINING, BY ORDER OF COURT,
BY OPERATION OF LAW OR OTHERWISE, OF THE EXERCISE OR ENFORCEMENT OF, ANY CLAIM
OR DEMAND OR ANY RIGHT, POWER OR REMEDY (WHETHER ARISING UNDER THE LOAN
DOCUMENTS OR THE HEDGING AGREEMENTS, AT LAW, IN EQUITY OR OTHERWISE) WITH
RESPECT TO THE GUARANTEED OBLIGATIONS OR ANY AGREEMENT RELATING THERETO, OR WITH
RESPECT TO ANY OTHER GUARANTY OF OR SECURITY FOR THE PAYMENT OF THE GUARANTEED
OBLIGATIONS; (II) ANY RESCISSION, WAIVER, AMENDMENT OR MODIFICATION OF, OR ANY
CONSENT TO DEPARTURE FROM, ANY OF THE TERMS OR PROVISIONS (INCLUDING PROVISIONS
RELATING TO EVENTS OF DEFAULT) HEREOF, ANY OF THE OTHER LOAN DOCUMENTS, ANY OF
THE HEDGING AGREEMENTS OR ANY AGREEMENT OR INSTRUMENT EXECUTED PURSUANT THERETO,
OR OF ANY OTHER GUARANTY OR SECURITY FOR THE GUARANTEED OBLIGATIONS, IN EACH
CASE WHETHER OR NOT IN ACCORDANCE WITH THE TERMS HEREOF OR SUCH LOAN DOCUMENT,
SUCH HEDGING AGREEMENT OR ANY AGREEMENT RELATING TO SUCH OTHER GUARANTY OR
SECURITY; (III) THE GUARANTEED OBLIGATIONS, OR ANY AGREEMENT RELATING THERETO,
AT ANY TIME BEING FOUND TO BE ILLEGAL, INVALID OR UNENFORCEABLE IN ANY RESPECT;
(IV) THE APPLICATION OF PAYMENTS RECEIVED FROM ANY SOURCE (OTHER THAN PAYMENTS
RECEIVED PURSUANT TO THE OTHER LOAN DOCUMENTS OR ANY OF THE HEDGING AGREEMENTS
OR FROM THE PROCEEDS OF ANY SECURITY FOR THE GUARANTEED OBLIGATIONS, EXCEPT TO
THE EXTENT SUCH SECURITY ALSO SERVES AS COLLATERAL FOR INDEBTEDNESS OTHER THAN
THE GUARANTEED OBLIGATIONS) TO THE PAYMENT OF INDEBTEDNESS OTHER THAN THE
GUARANTEED OBLIGATIONS, EVEN THOUGH ANY SECURED PARTY MIGHT HAVE ELECTED TO
APPLY SUCH PAYMENT TO ANY PART OR ALL OF THE GUARANTEED OBLIGATIONS; (V) ANY
SECURED PARTY’S CONSENT TO THE CHANGE, REORGANIZATION OR TERMINATION OF THE
CORPORATE STRUCTURE OR EXISTENCE OF SANMINA OR ANY OF ITS SUBSIDIARIES AND TO
ANY CORRESPONDING RESTRUCTURING OF THE GUARANTEED OBLIGATIONS; (VI) ANY FAILURE
TO PERFECT OR CONTINUE PERFECTION OF A SECURITY INTEREST IN ANY COLLATERAL WHICH
SECURES ANY OF THE GUARANTEED OBLIGATIONS; (VII) ANY DEFENSES, SET-OFFS OR
COUNTERCLAIMS WHICH ANY BORROWER MAY ALLEGE OR ASSERT AGAINST ANY SECURED PARTY
IN RESPECT OF THE GUARANTEED OBLIGATIONS, INCLUDING FAILURE OF CONSIDERATION,
BREACH OF WARRANTY, PAYMENT, STATUTE OF FRAUDS, STATUTE OF LIMITATIONS, ACCORD
AND SATISFACTION AND USURY; AND (VIII) ANY OTHER ACT

 

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OR THING OR OMISSION, OR DELAY TO DO ANY OTHER ACT OR THING, WHICH MAY OR MIGHT
IN ANY MANNER OR TO ANY EXTENT VARY THE RISK OF ANY GUARANTOR AS AN OBLIGOR IN
RESPECT OF THE GUARANTEED OBLIGATIONS.

 

14.5         Waivers by Guarantors.  Each Guarantor hereby waives, to the
fullest extent permitted by law, for the benefit of Secured Parties:  (a) any
right to require any Secured Party, as a condition of payment or performance by
such Guarantor, to (i) proceed against any Borrower, any other guarantor
(including any other Guarantor) of the Guaranteed Obligations or any other
Person, (ii) proceed against or exhaust any security held from any Borrower, any
such other guarantor or any other Person, (iii) proceed against or have resort
to any balance of any Deposit Account or credit on the books of any Secured
Party in favor of any Borrower or any other Person, or (iv) pursue any other
remedy in the power of any Secured Party whatsoever; (b) any defense arising by
reason of the incapacity, lack of authority or any disability or other defense
of any Borrower or any other Guarantor including any defense based on or arising
out of the lack of validity or the unenforceability of the Guaranteed
Obligations or any agreement or instrument relating thereto or by reason of the
cessation of the liability of any Borrower or any other Guarantor from any cause
other than payment in full of the Guaranteed Obligations; (c) any defense based
upon any statute or rule of law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more burdensome than that
of the principal; (d) any defense based upon any Secured Party’s errors or
omissions in the administration of the Guaranteed Obligations, except behavior
which amounts to gross negligence or bad faith; (e) (i) any principles or
provisions of law, statutory or otherwise, which are or might be in conflict
with the terms hereof and any legal or equitable discharge of such Guarantor’s
obligations hereunder, (ii) the benefit of any statute of limitations affecting
such Guarantor’s liability hereunder or the enforcement hereof, (iii) any rights
to set-offs, recoupments and counterclaims, and (iv) promptness, diligence and
any requirement that any Secured Party protect, secure, perfect or insure any
security interest or lien or any property subject thereto; (f) notices, demands,
presentments, protests, notices of protest, notices of dishonor and notices of
any action or inaction, including acceptance hereof, notices of default
hereunder, the Hedging Agreements or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the Guaranteed
Obligations or any agreement related thereto, notices of any extension of credit
to any Borrower and notices of any of the matters referred to in Section 14.4
and any right to consent to any thereof; and (g) any defenses or benefits that
may be derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms hereof.

 

As used in this paragraph, any reference to “the principal” includes any
Borrower, and any reference to “the creditor” includes Agent and each other
Secured Party.  In accordance with Section 2856 of the California Civil Code
(a) each Guarantor waives any and all rights and defenses available to it by
reason of Sections 2787 to 2855, inclusive, 2899 and 3433 of the California
Civil Code, including without limitation any and all rights or defenses such
Guarantor may have by reason of protection afforded to the principal with
respect to any of the Guaranteed Obligations, or to any other guarantor of any
of the Guaranteed Obligations with respect to any of such guarantor’s
obligations under its guaranty, in either case pursuant to the antideficiency or
other laws of the State of California limiting or discharging the principal’s
indebtedness or such guarantor’s obligations, including without limitation
Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure; and
(b) each Guarantor waives all rights and defenses arising out of an election of
remedies by the creditor, even though that election of remedies, such as a

 

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nonjudicial foreclosure with respect to security for a Guaranteed Obligation,
has destroyed such Guarantor’s rights of subrogation and reimbursement against
the principal by the operation of Section 580d of the Code of Civil Procedure or
otherwise; and even though that election of remedies by the creditor, such as
nonjudicial foreclosure with respect to security for an obligation of any other
guarantor of any of the Guaranteed Obligations, has destroyed such Guarantor’s
rights of contribution against such other guarantor.  No other provision of this
Guaranty shall be construed as limiting the generality of any of the covenants
and waivers set forth in this paragraph.  As provided below, this Guaranty shall
be governed by, and shall be construed and enforced in accordance with, the
internal laws of the State of New York.  This paragraph is included solely out
of an abundance of caution, and shall not be construed to mean that any of the
above-referenced provisions of California law are in any way applicable to this
Guaranty or to any of the Guaranteed Obligations.

 

14.6         Guarantors’ Rights of Subrogation, Contribution, Etc.  Until the
Guaranteed Obligations shall have been indefeasibly paid in full, each Guarantor
hereby waives any claim, right or remedy, direct or indirect, that such
Guarantor now has or may hereafter have against any Borrower or any other
Guarantor or any of its assets in connection with this Guaranty or the
performance by such Guarantor of its obligations hereunder, in each case whether
such claim, right or remedy arises in equity, under contract, by statute, under
common law or otherwise and including without limitation (a) any right of
subrogation, reimbursement or indemnification that such Guarantor now has or may
hereafter have against any Borrower with respect to the Guaranteed Obligations,
(b) any right to enforce, or to participate in, any claim, right or remedy that
any Secured Party now has or may hereafter have against any Borrower, and
(c) any benefit of, and any right to participate in, any collateral or security
now or hereafter held by any Secured Party.  In addition, until the Guaranteed
Obligations shall have been indefeasibly paid in full, each Guarantor shall
withhold exercise of any right of contribution such Guarantor may have against
any other guarantor (including any other Guarantor) of the Guaranteed
Obligations, including, without limitation, any such right of contribution as
contemplated by Section 14.2.  Each Guarantor further agrees that, to the extent
the waiver or agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification such Guarantor may have
against any Borrower or against any collateral or security, and any rights of
contribution such Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights any Secured Party may have against such
Borrower, to all right, title and interest any Secured Party may have in any
such collateral or security, and to any right any Secured Party may have against
such other guarantor.  If any amount shall be paid to any Guarantor on account
of any such subrogation, reimbursement, indemnification or contribution rights
at any time when all Guaranteed Obligations shall not have been finally and
indefeasibly paid in full, such amount shall be held in trust for Agent on
behalf of Secured Parties and shall forthwith be paid over to Agent for the
benefit of Secured Parties to be credited and applied against the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms hereof.

 

14.7         Subordination of Other Obligations.  Any Indebtedness of any
Borrower or any Guarantor now or hereafter held by any Guarantor (the “Obligee
Guarantor”) is hereby subordinated in right of payment to the Guaranteed
Obligations, and any such indebtedness collected or received by the Obligee
Guarantor after an Event of Default has occurred and is

 

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continuing shall be held in trust for Agent on behalf of Secured Parties and
shall forthwith be paid over to Agent for the benefit of Secured Parties to be
credited and applied against the Guaranteed Obligations but without affecting,
impairing or limiting in any manner the liability of the Obligee Guarantor under
any other provision hereof.

 

14.8         Continuing Guaranty.  This Guaranty is a continuing guaranty and
shall remain in effect until all of the Guaranteed Obligations shall have been
paid in full.  Each Guarantor hereby irrevocably waives any right to revoke this
Guaranty as to future transactions giving rise to any Guaranteed Obligations.

 

14.9         Authority of Guarantors or Borrowers.  It is not necessary for any
Secured Party to inquire into the capacity or powers of any Guarantor or any
Borrower or the officers, directors or any agents acting or purporting to act on
behalf of any of them.

 

14.10       Financial Condition of Borrowers.  Any Loan may be made to any
Borrower or continued from time to time, and any Hedging Agreements may be
entered into from time to time, in each case without notice to or authorization
from any Guarantor regardless of the financial or other condition of any
Borrower at the time of any such grant or continuation or at the time such
Hedging Agreement is entered into, as the case may be.  No Secured Party shall
have any obligation to disclose or discuss with any Guarantor its assessment, or
any Guarantor’s assessment, of the financial condition of any Borrower.  Each
Guarantor has adequate means to obtain information from any Borrower on a
continuing basis concerning the financial condition of such Borrower and its
ability to perform its obligations under the Loan Documents and the Hedging
Agreements, and each Guarantor assumes the responsibility for being and keeping
informed of the financial condition of Borrowers and of all circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations.  Each
Guarantor hereby waives and relinquishes any duty on the part of any Secured
Party to disclose any matter, fact or thing relating to the business, operations
or conditions of any Borrower now known or hereafter known by any Secured Party.

 

14.11                     Bankruptcy, Etc.

 

14.11.1            SO LONG AS ANY GUARANTEED OBLIGATIONS REMAIN OUTSTANDING, NO
GUARANTOR SHALL, WITHOUT THE PRIOR WRITTEN CONSENT OF AGENT ACTING PURSUANT TO
THE INSTRUCTIONS OF REQUIRED LENDERS, COMMENCE OR JOIN WITH ANY OTHER PERSON IN
COMMENCING ANY BANKRUPTCY, REORGANIZATION OR INSOLVENCY CASE OR PROCEEDING OF OR
AGAINST ANY BORROWER OR ANY OTHER GUARANTOR.  THE OBLIGATIONS OF GUARANTORS
HEREUNDER SHALL NOT BE REDUCED, LIMITED, IMPAIRED, DISCHARGED, DEFERRED,
SUSPENDED OR TERMINATED BY ANY CASE OR PROCEEDING, VOLUNTARY OR INVOLUNTARY,
INVOLVING THE BANKRUPTCY, INSOLVENCY, RECEIVERSHIP, REORGANIZATION, LIQUIDATION
OR ARRANGEMENT OF ANY BORROWER OR ANY GUARANTOR OR BY ANY DEFENSE WHICH ANY
BORROWER OR ANY OTHER GUARANTOR MAY HAVE BY REASON OF THE ORDER, DECREE OR
DECISION OF ANY COURT OR ADMINISTRATIVE BODY RESULTING FROM ANY SUCH PROCEEDING.

 

14.11.2            EACH GUARANTOR ACKNOWLEDGES AND AGREES THAT ANY INTEREST ON
ANY PORTION OF THE GUARANTEED OBLIGATIONS WHICH ACCRUES AFTER THE COMMENCEMENT
OF ANY CASE OR PROCEEDING REFERRED TO IN SECTION 14.11.1 ABOVE (OR, IF INTEREST
ON ANY PORTION OF THE GUARANTEED OBLIGATIONS CEASES TO ACCRUE BY OPERATION OF
LAW BY REASON OF THE COMMENCEMENT OF SUCH CASE OR

 

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PROCEEDING, SUCH INTEREST AS WOULD HAVE ACCRUED ON SUCH PORTION OF THE
GUARANTEED OBLIGATIONS IF SUCH CASE OR PROCEEDING HAD NOT BEEN COMMENCED) SHALL
BE INCLUDED IN THE GUARANTEED OBLIGATIONS BECAUSE IT IS THE INTENTION OF
GUARANTORS AND SECURED PARTIES THAT THE GUARANTEED OBLIGATIONS WHICH ARE
GUARANTEED BY GUARANTORS PURSUANT HERETO SHOULD BE DETERMINED WITHOUT REGARD TO
ANY RULE OF LAW OR ORDER WHICH MAY RELIEVE ANY BORROWER OF ANY PORTION OF SUCH
GUARANTEED OBLIGATIONS.  GUARANTORS WILL PERMIT ANY TRUSTEE IN BANKRUPTCY,
RECEIVER, DEBTOR IN POSSESSION, ASSIGNEE FOR THE BENEFIT OF CREDITORS OR SIMILAR
PERSON TO PAY AGENT, OR ALLOW THE CLAIM OF AGENT IN RESPECT OF, ANY SUCH
INTEREST ACCRUING AFTER THE DATE ON WHICH SUCH CASE OR PROCEEDING IS COMMENCED.

 

14.11.3            IN THE EVENT THAT ALL OR ANY PORTION OF THE GUARANTEED
OBLIGATIONS ARE PAID BY BORROWERS, THE OBLIGATIONS OF GUARANTORS HEREUNDER SHALL
CONTINUE AND REMAIN IN FULL FORCE AND EFFECT OR BE REINSTATED, AS THE CASE MAY
BE, IN THE EVENT THAT ALL OR ANY PART OF SUCH PAYMENT(S) ARE RESCINDED OR
RECOVERED DIRECTLY OR INDIRECTLY FROM ANY SECURED PARTY AS A PREFERENCE,
FRAUDULENT TRANSFER OR OTHERWISE, AND ANY SUCH PAYMENTS WHICH ARE SO RESCINDED
OR RECOVERED SHALL CONSTITUTE GUARANTEED OBLIGATIONS FOR ALL PURPOSES HEREUNDER.

 

SECTION 15.                     MISCELLANEOUS

 

15.1         Consents, Amendments and Waivers.

 

15.1.1      AMENDMENT.  NO MODIFICATION OF ANY LOAN DOCUMENT, INCLUDING ANY
EXTENSION OR AMENDMENT OF A LOAN DOCUMENT OR ANY WAIVER OF A DEFAULT OR EVENT OF
DEFAULT, SHALL BE EFFECTIVE WITHOUT THE PRIOR WRITTEN AGREEMENT OF AGENT (WITH
THE CONSENT OF REQUIRED LENDERS) AND EACH OBLIGOR PARTY TO SUCH LOAN DOCUMENT;
PROVIDED, HOWEVER, THAT

 

A.                                       WITHOUT THE PRIOR WRITTEN CONSENT OF
AGENT, NO MODIFICATION SHALL BE EFFECTIVE WITH RESPECT TO ANY PROVISION IN A
LOAN DOCUMENT THAT RELATES TO ANY RIGHTS, DUTIES OR DISCRETION OF AGENT;

 

B.                                      WITHOUT THE PRIOR WRITTEN CONSENT OF
ISSUING BANK, NO MODIFICATION SHALL BE EFFECTIVE WITH RESPECT TO ANY LC
OBLIGATIONS OR SECTION 2.2;

 

C.                                       WITHOUT THE PRIOR WRITTEN CONSENT OF
EACH AFFECTED LENDER, NO MODIFICATION SHALL BE EFFECTIVE THAT WOULD (I) INCREASE
THE COMMITMENT OF SUCH LENDER; OR (II) REDUCE THE AMOUNT OF, OR WAIVE OR DELAY
PAYMENT OF, ANY PRINCIPAL, INTEREST OR FEES PAYABLE TO SUCH LENDER; AND

 

D.                                      WITHOUT THE PRIOR WRITTEN CONSENT OF ALL
LENDERS (EXCEPT A DEFAULTING LENDER AS PROVIDED IN SECTION 4.2), NO MODIFICATION
SHALL BE EFFECTIVE THAT WOULD (I) EXTEND THE REVOLVER TERMINATION DATE;
(II) ALTER SECTION 5.5, 7.1 (EXCEPT TO ADD COLLATERAL), 12.5 OR 15.1;
(III) AMEND THE DEFINITIONS OF BORROWING BASE (AND THE DEFINED TERMS USED IN
SUCH DEFINITION), PRO RATA OR REQUIRED LENDERS; (IV) INCREASE ANY ADVANCE RATE,
DECREASE THE AVAILABILITY BLOCK OR INCREASE TOTAL COMMITMENTS EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 2.3; (VI) RELEASE ALL OR SUBSTANTIALLY
ALL OF THE COLLATERAL, EXCEPT AS CURRENTLY CONTEMPLATED BY THE LOAN DOCUMENTS;
(VII) RELEASE ANY OBLIGOR FROM LIABILITY FOR ANY OBLIGATIONS, IF SUCH OBLIGOR IS
SOLVENT AT THE TIME OF THE RELEASE (OTHER THAN THE RELEASE OF LESS THAN ALL OR
SUBSTANTIALLY ALL OF THE

 

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VALUE OF THE GUARANTIES OF THE OBLIGATIONS MADE BY THE GUARANTOR) OR
(VIII) WAIVE ANY OF THE CONDITIONS OF SECTION 6.1.

 

15.1.2      LIMITATIONS.  THE AGREEMENT OF BORROWERS SHALL NOT BE NECESSARY TO
THE EFFECTIVENESS OF ANY MODIFICATION OF A LOAN DOCUMENT THAT DEALS SOLELY WITH
THE RIGHTS AND DUTIES OF LENDERS, AGENT AND/OR ISSUING BANK AS AMONG
THEMSELVES.  ONLY THE CONSENT OF THE PARTIES TO THE FEE LETTER OR ANY AGREEMENT
RELATING TO A BANK PRODUCT SHALL BE REQUIRED FOR ANY MODIFICATION OF SUCH
AGREEMENT, AND ANY NON-LENDER THAT IS PARTY TO A BANK PRODUCT AGREEMENT SHALL
HAVE NO RIGHT TO PARTICIPATE IN ANY MANNER IN MODIFICATION OF ANY OTHER LOAN
DOCUMENT.  ANY WAIVER OR CONSENT GRANTED BY LENDERS HEREUNDER SHALL BE EFFECTIVE
ONLY IF IN WRITING AND ONLY FOR THE MATTER SPECIFIED.  NO CONSENT OF ANY PARTY
SHALL BE REQUIRED TO ADD AN OBLIGOR IN ACCORDANCE WITH SECTION 10.1.9 AND NO
CONSENT OF THE LENDERS SHALL BE REQUIRED FOR AN AMENDMENT OR MODIFICATION TO THE
EXTENT EXPRESSLY PROVIDED HEREIN THAT SUCH AMENDMENT OR MODIFICATION CAN BE MADE
BY AN OBLIGOR AND/OR AGENT.

 

15.1.3      PAYMENT FOR CONSENTS.  NO BORROWER WILL, DIRECTLY OR INDIRECTLY, PAY
ANY REMUNERATION OR OTHER THING OF VALUE, WHETHER BY WAY OF ADDITIONAL INTEREST,
FEE OR OTHERWISE, TO ANY LENDER (IN ITS CAPACITY AS A LENDER HEREUNDER) AS
CONSIDERATION FOR AGREEMENT BY SUCH LENDER WITH ANY MODIFICATION OF ANY LOAN
DOCUMENTS, UNLESS SUCH REMUNERATION OR VALUE IS CONCURRENTLY PAID, ON THE SAME
TERMS, ON A PRO RATA BASIS TO ALL LENDERS PROVIDING THEIR CONSENT.

 

15.2         Indemnity.  SUBJECT TO SECTION 5.8, EACH BORROWER SHALL INDEMNIFY
AND HOLD HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR
ASSERTED AGAINST ANY INDEMNITEE, INCLUDING CLAIMS ARISING FROM THE NEGLIGENCE OF
AN INDEMNITEE.  In no event shall any party to a Loan Document have any
obligation thereunder to indemnify or hold harmless an Indemnitee with respect
to a Claim that is determined in a final, non-appealable judgment by a court of
competent jurisdiction to result from the gross negligence or willful misconduct
of such Indemnitee.  The provisions of this Section 15.2 shall survive payment
in full of the Obligations.

 

15.3         Notices and Communications.

 

15.3.1      NOTICE ADDRESS.  SUBJECT TO SECTION 4.1.4, ALL NOTICES AND OTHER
COMMUNICATIONS BY OR TO A PARTY HERETO SHALL BE IN WRITING AND SHALL BE GIVEN TO
ANY BORROWER, AT BORROWER AGENT’S ADDRESS SHOWN ON THE SIGNATURE PAGES HEREOF,
AND TO ANY OTHER PERSON AT ITS ADDRESS SHOWN ON THE SIGNATURE PAGES HEREOF (OR,
IN THE CASE OF A PERSON WHO BECOMES A LENDER AFTER THE CLOSING DATE, AT THE
ADDRESS SHOWN ON ITS ASSIGNMENT AND ACCEPTANCE), OR AT SUCH OTHER ADDRESS AS A
PARTY MAY HEREAFTER SPECIFY BY NOTICE IN ACCORDANCE WITH THIS SECTION 15.3. 
EACH SUCH NOTICE OR OTHER COMMUNICATION SHALL BE EFFECTIVE ONLY (A) IF GIVEN BY
FACSIMILE TRANSMISSION, WHEN TRANSMITTED TO THE APPLICABLE FACSIMILE NUMBER, IF
CONFIRMATION OF RECEIPT IS RECEIVED; (B) IF GIVEN BY MAIL, THREE BUSINESS DAYS
AFTER DEPOSIT IN THE MAIL, WITH FIRST-CLASS POSTAGE PRE-PAID, ADDRESSED TO THE
APPLICABLE ADDRESS; OR (C) IF GIVEN BY PERSONAL DELIVERY, WHEN DULY DELIVERED TO
THE NOTICE ADDRESS WITH RECEIPT ACKNOWLEDGED.  NOTWITHSTANDING THE FOREGOING, NO
NOTICE TO AGENT PURSUANT TO SECTION 2.1.4, 2.2, 3.1.2, OR 4.1.1 SHALL BE
EFFECTIVE UNTIL ACTUALLY RECEIVED BY THE INDIVIDUAL TO WHOSE ATTENTION AT AGENT
SUCH NOTICE IS REQUIRED TO BE SENT.  ANY WRITTEN NOTICE OR OTHER COMMUNICATION
THAT IS NOT SENT IN CONFORMITY WITH THE FOREGOING PROVISIONS SHALL

 

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NEVERTHELESS BE EFFECTIVE ON THE DATE ACTUALLY RECEIVED BY THE NOTICED PARTY. 
ANY NOTICE RECEIVED BY BORROWER AGENT SHALL BE DEEMED RECEIVED BY ALL BORROWERS.

 

15.3.2      ELECTRONIC COMMUNICATIONS; VOICE MAIL.  ELECTRONIC MAIL AND INTERNET
WEBSITES MAY BE USED ONLY FOR ROUTINE COMMUNICATIONS, SUCH AS FINANCIAL
STATEMENTS, BORROWING BASE CERTIFICATES AND OTHER INFORMATION REQUIRED BY
SECTION 10.1.2, ADMINISTRATIVE MATTERS, DISTRIBUTION OF LOAN DOCUMENTS FOR
EXECUTION, AND MATTERS PERMITTED UNDER SECTION 4.1.4.  AGENT AND LENDERS MAKE NO
ASSURANCES AS TO THE PRIVACY AND SECURITY OF ELECTRONIC COMMUNICATIONS.  EXCEPT
AS EXPRESSLY PROVIDED THEREIN, ELECTRONIC AND VOICE MAIL MAY NOT BE USED AS
EFFECTIVE NOTICE UNDER THE LOAN DOCUMENTS.

 

15.3.3      NON-CONFORMING COMMUNICATIONS.  AGENT AND LENDERS MAY RELY UPON ANY
NOTICES PURPORTEDLY GIVEN BY OR ON BEHALF OF ANY OBLIGOR EVEN IF SUCH NOTICES
WERE NOT MADE IN A MANNER SPECIFIED HEREIN, WERE INCOMPLETE OR WERE NOT
CONFIRMED, OR IF THE TERMS THEREOF, AS UNDERSTOOD BY THE RECIPIENT, VARIED FROM
A LATER CONFIRMATION.  EACH OBLIGOR SHALL INDEMNIFY AND HOLD HARMLESS EACH
INDEMNITEE FROM ANY LIABILITIES, LOSSES, COSTS AND EXPENSES ARISING FROM ANY
TELEPHONIC COMMUNICATION PURPORTEDLY GIVEN BY OR ON BEHALF OF AN OBLIGOR.

 

15.4         Performance of Obligors’ Obligations.  Agent may, in its discretion
at any time and from time to time, at Borrowers’ expense, pay any amount or do
any act required of an Obligor under any Loan Documents or otherwise lawfully
requested by Agent to (a) enforce any Loan Documents or collect any Obligations;
(b) protect, insure, maintain or realize upon any Collateral; or (c) defend or
maintain the validity or priority of Agent’s Liens in any Collateral, including
any payment of a judgment, insurance premium, warehouse charge, finishing or
processing charge, or landlord claim, or any discharge of a Lien.  All payments,
costs and expenses (including Extraordinary Expenses) of Agent under this
Section shall be reimbursed to Agent by Borrowers, on demand, with interest from
the date incurred to the date of payment thereof at the Default Rate applicable
to Base Rate Loans.  Any payment made or action taken by Agent under this
Section shall be without prejudice to any right to assert an Event of Default or
to exercise any other rights or remedies under the Loan Documents.

 

15.5         Credit Inquiries.  Each Borrower hereby authorizes Agent and
Lenders (but they shall have no obligation) to respond to usual and customary
credit inquiries from third parties concerning any Borrower or Subsidiary.

 

15.6         Severability.  Wherever possible, each provision of the Loan
Documents shall be interpreted in such manner as to be valid under Applicable
Law.  If any provision is found to be invalid under Applicable Law, it shall be
ineffective only to the extent of such invalidity and the remaining provisions
of the Loan Documents shall remain in full force and effect.

 

15.7         Cumulative Effect; Conflict of Terms.  The provisions of the Loan
Documents are cumulative.  The parties acknowledge that the Loan Documents may
use several limitations, tests or measurements to regulate similar matters, and
they agree that these are cumulative and that each must be performed as
provided.  Except as otherwise provided in another Loan Document (by specific
reference to the applicable provision of this Agreement), if any provision
contained herein is in direct conflict with any provision in another Loan
Document, the provision herein shall govern and control.

 

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15.8         Counterparts.  Any Loan Document may be executed in counterparts,
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This Agreement shall become effective when
Agent has received counterparts bearing the signatures of all parties hereto. 
Delivery of a signature page of any Loan Document by telecopy or other
electronic means shall be effective as delivery of a manually executed
counterpart of such agreement.

 

15.9         Entire Agreement.  Time is of the essence of the Loan Documents. 
The Loan Documents constitute the entire contract among the parties relating to
the subject matter hereof, and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.

 

15.10       Relationship with Lenders.  The obligations of each Lender hereunder
are several, and no Lender shall be responsible for the obligations or
Commitments of any other Lender.  Amounts payable hereunder to each Lender shall
be a separate and independent debt.  It shall not be necessary for Agent or any
other Lender to be joined as an additional party in any proceeding for such
purposes.  Nothing in this Agreement and no action of Agent or Lenders pursuant
to the Loan Documents shall be deemed to constitute Agent and Lenders to be a
partnership, association, joint venture or any other kind of entity, nor to
constitute control of any Obligor.

 

15.11       No Advisory or Fiduciary Responsibility.  In connection with all
aspects of each transaction contemplated by any Loan Document, Obligors
acknowledge and agree that (a)(i) this credit facility and any related arranging
or other services by Agent, any Lender, any of their Affiliates or any arranger
are arm’s-length commercial transactions between Obligors and such Person;
(ii) Obligors have consulted their own legal, accounting, regulatory and tax
advisors to the extent they have deemed appropriate; and (iii) Obligors are
capable of evaluating and understanding, and do understand and accept, the
terms, risks and conditions of the transactions contemplated by the Loan
Documents; (b) each of Agent, Lenders, their Affiliates and any arranger is and
has been acting solely as a principal in connection with this credit facility,
is not the financial advisor, agent or fiduciary for Obligors, any of their
Affiliates or any other Person, and has no obligation with respect to the
transactions contemplated by the Loan Documents except as expressly set forth
therein; and (c) Agent, Lenders, their Affiliates and any arranger may be
engaged in a broad range of transactions that involve interests that differ from
Obligors and their Affiliates, and have no obligation to disclose any of such
interests to Obligors or their Affiliates.  To the fullest extent permitted by
Applicable Law, each Obligor hereby waives and releases any claims that it may
have against Agent, Lenders, their Affiliates and any arranger with respect to
any breach or alleged breach of agency or fiduciary duty in connection with any
aspect of any transaction contemplated by a Loan Document.

 

15.12       Confidentiality.  Each of Agent, Lenders and Issuing Bank agrees to
maintain the confidentiality of all Information (as defined below) with the same
degree of care that it uses to protect its own confidential information (but in
no event less than a reasonable degree of care), except that Information may be
disclosed (a) on a need to know basis to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents,
advisors and representatives (provided such Persons are informed of the
confidential nature of the Information and instructed to keep the Information
confidential); (b) to the extent requested by any governmental or regulatory
authority purporting to have jurisdiction over it (including any self-regulatory

 

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authority); (c) to the extent required by Applicable Law or by any subpoena or
similar legal process; (d) to any other party hereto; (e) to the extent
necessary in connection with the exercise of any remedies, the enforcement of
any rights, or any action or proceeding relating to any Loan Documents;
(f) subject to an agreement containing provisions substantially the same as this
Section, to any Transferee or any actual or prospective party (or its advisors)
to any Bank Product; (g) with the consent of Borrower Agent; or (h) to the
extent such Information (i) becomes publicly available other than as a result of
a breach of this Section or (ii) is available to Agent, any Lender, Issuing Bank
or any of their Affiliates on a nonconfidential basis from a source other than
Borrowers; provided that prior to any disclosure pursuant to clause (c), to the
extent practicable the party disclosing such Information shall use reasonable
efforts to notify (to the extent not prohibited by Applicable Law) Borrower
Agent.  Notwithstanding the foregoing, Agent and Lenders may publish or
disseminate general information describing this credit facility, including the
names and addresses of Obligors and a general description of Obligors’
businesses, and, subject to the review and approval of Borrower Agent may use
Obligors’ logos, trademarks or product photographs in advertising materials.  As
used herein, “Information” means all information received from an Obligor or
Subsidiary relating to it or its business that is identified as confidential
when delivered.  Any Person required to maintain the confidentiality of
Information pursuant to this Section shall be deemed to have complied if it
exercises the same degree of care that it accords its own confidential
information, but in no event less than a reasonable degree of care.  Each of
Agent, Lenders and Issuing Bank acknowledges that (i) Information may include
material non-public information concerning an Obligor or Subsidiary; (ii) it has
developed compliance procedures regarding the use of material non-public
information; and (iii) it will handle such material non-public information in
accordance with Applicable Law, including federal, state, provincial,
territorial and foreign securities laws.

 

15.13       Certifications Regarding Indentures.  Obligors certify to Agent and
Lenders that neither the execution nor performance by Obligors of the Loan
Documents nor the incurrence of any Obligations by Borrowers violates any of the
Indentures.  Obligors further certify that the Commitments and Obligations
constitute “Senior Debt” under the Senior Subordinated Indentures.  Agent may
condition Borrowings, Letters of Credit and other credit accommodations under
the Loan Documents from time to time upon Agent’s receipt of evidence that the
Commitments and Obligations continue to constitute “Senior Debt” at such time.

 

15.14       GOVERNING LAW.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, UNLESS
OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO
FEDERAL LAWS RELATING TO NATIONAL BANKS).

 

15.15       Consent to Forum.  EACH OBLIGOR HEREBY CONSENTS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH JURISDICTION OVER
NEW YORK, NEW YORK, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO ANY LOAN
DOCUMENTS, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN
ANY SUCH COURT.  EACH OBLIGOR IRREVOCABLY WAIVES ALL CLAIMS, OBJECTIONS AND
DEFENSES THAT IT MAY HAVE REGARDING SUCH COURT’S PERSONAL OR SUBJECT MATTER
JURISDICTION, VENUE OR INCONVENIENT FORUM.  EACH

 

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PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED
FOR NOTICES IN SECTION 15.3.1.  Nothing herein shall limit the right of Agent or
any Lender to bring proceedings against any Obligor in any other court, nor
limit the right of any party to serve process in any other manner permitted by
Applicable Law.  Nothing in this Agreement shall be deemed to preclude
enforcement by Agent of any judgment or order obtained in any forum or
jurisdiction.

 

15.16       Waivers by Obligors.  To the fullest extent permitted by Applicable
Law, each Obligor waives (a) the right to trial by jury (which Agent and each
Lender hereby also waives) in any proceeding or dispute of any kind relating in
any way to any Loan Documents, Obligations or Collateral; (b) presentment,
demand, protest, notice of presentment, default, non-payment, maturity, release,
compromise, settlement, extension or renewal of any commercial paper, accounts,
documents, instruments, chattel paper and guaranties at any time held by Agent
on which an Obligor may in any way be liable, and hereby ratifies anything Agent
may do in this regard; (c) notice prior to taking possession or control of any
Collateral; (d) any bond or security that might be required by a court prior to
allowing Agent to exercise any rights or remedies; (e) the benefit of all
valuation, appraisement and exemption laws; (f) any claim against Agent or any
Lender, on any theory of liability, for special, indirect, consequential,
exemplary or punitive damages (as opposed to direct or actual damages) in any
way relating to any Enforcement Action, Obligations, Loan Documents or
transactions relating thereto; and (g) notice of acceptance hereof.  Each
Obligor acknowledges that the foregoing waivers are a material inducement to
Agent and Lenders entering into this Agreement and that Agent and Lenders are
relying upon the foregoing in their dealings with Obligors.  Each Obligor has
reviewed the foregoing waivers with its legal counsel and has knowingly and
voluntarily waived its jury trial and other rights following consultation with
legal counsel.  In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.

 

15.17       Patriot Act Notice.  Agent and Lenders hereby notify Borrowers that
pursuant to the requirements of the Patriot Act, Agent and Lenders are required
to obtain, verify and record information that identifies each Borrower,
including its legal name, address, tax ID number and other information that will
allow Agent and Lenders to identify it in accordance with the Patriot Act. 
Agent and Lenders will also require information regarding each personal
guarantor, if any, and may require information regarding Borrowers’ management
and owners, such as legal name, address, social security number and date of
birth.

 

15.18       Judgment Currency.  If for the purpose of obtaining judgment in any
court it is necessary to convert an amount due hereunder in the currency in
which it is due (the “Original Currency”) into another currency (the “Second
Currency”), the rate of exchange applied shall be that at which, in accordance
with normal banking procedures, Agent could purchase in the New York foreign
exchange market, the Original Currency with the Second Currency on the date
two (2) Business Days preceding that on which judgment is given.  Each Obligor
agrees that its obligation in respect of any Original Currency due from it
hereunder shall, notwithstanding any judgment or payment in such other currency,
be discharged only to the extent that, on the Business Day following the date
Agent receives payment of any sum so adjudged to be due hereunder in the Second
Currency, Agent may, in accordance with normal banking procedures, purchase, in
the New York foreign exchange market, the Original Currency with the amount of
the Second Currency so paid; and if the amount of the Original Currency so
purchased or could

 

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have been so purchased is less than the amount originally due in the Original
Currency, each Obligor agrees as a separate obligation and notwithstanding any
such payment or judgment to indemnify Agent and Lenders against such loss. The
term “rate of exchange” in this Section  15.18 means the spot rate at which
Agent, in accordance with normal practices, is able on the relevant date to
purchase the Original Currency with the Second Currency, and includes any
premium and costs of exchange payable in connection with such purchase.

 

15.19       Language. The parties have requested that this Agreement and the
other documents contemplated hereby or relating hereto be drawn up in the
English language.  Les parties ont requis que cette convention ainsi que tous
les documents qui y sont envisagés ou qui s’y rapportent soient rédigés en
langue anglaise.

 

15.20       Securitization Subsidiaries.  Notwithstanding anything to the
contrary herein, in no event shall any Securitization Subsidiary have any
liability under any Loan Document for the performance by any Obligor of its
obligations thereunder or any liability for the payment or performance of any
Obligation.

 

15.21       Discharge of Obligor Upon Sale of Obligor.  If all of the Equity
Interests of any Obligor or any of its successors in interest hereunder shall be
sold or otherwise disposed of (including by merger, amalgamation or
consolidation) in accordance with the terms and conditions hereof, such Obligor
or such successor in interest, as the case may be, hereunder shall automatically
be discharged and released from its obligations hereunder without any further
action by any Secured Party or any other Person effective immediately prior to
the time of such sale or disposition.

 

[Remainder of page intentionally left blank; signatures begin on following page]

 

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IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the
date set forth above.

 

 

BORROWERS:

 

 

 

Sanmina-SCI Corporation

 

 

 

By:

 

/s/ Walter Boileau

 

Name:

Walter Boileau

 

Title:

Treasurer

 

Address:

 

 

2700 North First Street

 

 

San Jose, California 95134

 

 

Attn: Treasurer

 

 

Telecopy: (408) 964-3644

 

 

 

 

 

 

 

Hadco Corporation

 

Hadco Santa Clara, Inc.

 

Sanmina-SCI Systems Holdings, Inc.

 

SCI Technology, Inc.

 

Scimex, Inc.

 

 

 

 

By:

 

/s/ Walter Boileau

 

Name:

Walter Boileau

 

Title:

Vice President and Treasurer

 

Address:

 

 

c/o Sanmina-SCI Corporation

 

 

2700 North First Street

 

 

San Jose, California 95134

 

 

Attn: Treasurer

 

 

Telecopy: (408) 964-3644

 

[Signature Page to Loan, Guaranty and Security Agreement]

 

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GUARANTORS:

 

 

 

SCI Brockville Corp.

 

 

 

By:

 

/s/ Shelly L. Byers

 

Name:

Shelly L. Byers

 

Title:

Vice President

 

Address:

 

 

c/o Sanmina-SCI Corporation

 

 

2700 North First Street

 

 

San Jose, California 95134

 

 

Attn: Treasurer

 

 

Telecopy: (408) 964-3644

 

 

 

 

 

 

 

Sanmina-SCI Systems (Canada) Inc.

 

 

 

 

By:

 

/s/ Walter Boileau

 

Name:

Walter Boileau

 

Title:

Treasurer

 

Address:

 

 

c/o Sanmina-SCI Corporation

 

 

2700 North First Street

 

 

San Jose, California 95134

 

 

Attn: Treasurer

 

 

Telecopy: (408) 964-3644

 

[Signature Page to Loan, Guaranty and Security Agreement]

 

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AGENT AND LENDERS:

 

 

 

BANK OF AMERICA, N.A.,

 

as Agent and Lender

 

 

 

 

By:

 

/s/ Stephen King

 

Name:

Stephen King

 

Title: Senior Vice President

 

Address:

 

 

55 South Lake Avenue

 

 

Pasadena, California 91101

 

 

Attn: Client Manager

 

 

Telecopy: (626) 584-4602

 

[Signature Page to Loan, Guaranty and Security Agreement]

 

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DEUTSCHE BANK TRUST COMPANY

AMERICAS, as Lender

 

 

 

 

By:

 

/s/ Paul O’Leary

 

Name:

Paul O’Leary

 

Title:

Director

 

 

 

 

By:

 

/s/ Erin Morrissey

 

Name:

Erin Morrissey

 

Title:

Vice President

 

 

 

 

 

 

 

Address:

 

 

60 Wall Street, 2nd Floor

 

 

New York, New York 10005

 

 

Attn: Paul J. O’Leary

 

 

Telecopy: (212) 250-6133

 

[Signature Page to Loan, Guaranty and Security Agreement]

 

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SIEMENS FINANCIAL SERVICES, INC.,

 

as Lender

 

 

 

 

By:

 

/s/ Jim Fuller

 

Name:

Jim Fuller

 

Title:

VP and Co-Head

 

 

 

 

By:

 

/s/ Mark Picillo

 

Name:

Mark Picillo

 

Title:

Vice President

 

 

 

 

Address:

 

 

170 Wood Ave. South

 

 

Iselin, New Jersey 08830

 

 

Attn:

 

 

 

Telecopy: (732) 590-6648

 

[Signature Page to Loan, Guaranty and Security Agreement]

 

--------------------------------------------------------------------------------

 

 

MERRILL LYNCH COMMERCIAL FINANCE
CORP, as Lender

 

 

 

 

By:

 

/s/ Matt Christensen

 

Name:

Matt Christensen

 

Title:

Director

 

 

 

 

Address:

 

 

4 World Financial Center

 

 

250 Vesey Street

 

 

New York, New York 10080

 

 

Attn: Dan Spencer

 

 

Telecopy: (312) 269-1348

 

[Signature Page to Loan, Guaranty and Security Agreement]

 

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