Exhibit

10.2




 









 




 




MANUFACTURERS’ SERVICES

LIMITED, 




 




as the Company




 




U.S. BANCORP PIPER

JAFFRFAY,




 




as Piper Jaffray




 




RBC DAIN RAUSCHER, INC.




 




as RBC




 




and




 




BUYERS,




 




as defined herein




 




REGISTRATION RIGHTS

AGREEMENT




 




Dated as of July 1, 2003




 




4.5% Convertible Preferred

Stock




and Warrants to Purchase

Common Stock




 








 









 





























 




	

  SECTION

  1


  	

   


  	

  Definitions


  	

  1


  
	

  SECTION

  2


  	

   


  	

  Registration


  	

  2


  
	

  SECTION

  3


  	

   


  	

  Related Obligation


  	

  5


  
	

  SECTION

  4


  	

   


  	

  Obligations Of The

  Investors


  	

  10


  
	

  SECTION

  5


  	

   


  	

  Expenses Of Registration


  	

  10


  
	

  SECTION

  6


  	

   


  	

  Indemnification


  	

  11


  
	

  SECTION

  7


  	

   


  	

  Contribution


  	

  13


  
	

  SECTION

  8


  	

   


  	

  Reporting


  	

  14


  
	

  SECTION

  9


  	

   


  	

  Assignment of Registration

  Rights


  	

  14


  
	

  SECTION

  10


  	

   


  	

  Amendment

  of Registration Rights


  	

  15


  
	

  SECTION

  11


  	

   


  	

  Miscellaneous


  	

  15


  
	

   


  	

   


  	

   


  	

   


  
	

  EXHIBIT

  A


  	

   


  	

  Schedule of Buyers


  	

  A-1


  
	

  EXHIBIT

  B


  	

   


  	

  Form

  of Notice of Effectiveness of Registration Statement


  	

  B-1


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  





 




REGISTRATION RIGHTS AGREEMENT




 




THIS REGISTRATION RIGHTS AGREEMENT (this

“Agreement”), is entered into as of July 1, 2003, by and among Manufacturers’

Services Limited, a Delaware corporation (the “Company”), U.S. Bancorp Piper

Jaffray (“Piper Jaffray”), RBC Dain Rauscher, Inc. (“RBC”, and together with

Piper Jaffray, the “Placement Agents”) and the buyers listed on the Schedule of

Buyers attached hereto as Exhibit A (each, a “Buyer” and, collectively,

the “Buyers”).




 




THE PARTIES TO THIS AGREEMENT enter into

this agreement on the basis of the following facts, intentions and

understanding:




 




A.            The Company and the

Buyers entered into that certain Securities Purchase Agreement of even date

herewith among the Company, the Buyers and the Placement Agents (the

“Securities Purchase Agreement”), and, upon the terms and subject to the

conditions of the Securities Purchase Agreement, the Company has agreed to

issue and sell to the Buyers (i) an aggregate of 500,000 shares, par value

$.001 per share, of 4.5% Series B Convertible Preferred Stock of the Company

(the “Series B Preferred”), which shall be convertible into shares of common

stock, par value $.001 per share (the “Common Stock”), of the Company (as

converted, the “Conversion Shares”), and (ii) Warrants (such Warrants, as

the same may be amended, modified or supplemented from time to time in

accordance with the terms thereof, the “Buyer Warrants”) to purchase 1,059,322

shares of Common Stock (as exercised collectively, the “Buyer Warrant Shares”).




 




B.            The

Company has further agreed to issue to the Placement Agents Warrants (such

Warrants, as the same may be amended, modified or supplemented from time to

time in accordance with the terms thereof, the “Placement Agent Warrants” and,

together with the Buyer Warrants, the “Warrants”) to purchase the number of

shares of Common Stock set forth on the Schedule of Fees attached as Exhibit C

to the Securities Purchase Agreement (as exercised collectively, the “Placement

Agent Warrant Shares” and, together with the Buyer Warrant Shares, the “Warrant

Shares”).




 




C.            To induce the Buyers to

execute and deliver the Securities Purchase Agreement and to induce the

Placement Agents to act as the Company’s exclusive placement agents, the

Company has agreed to provide certain registration rights to the Buyers and the

Placement Agents under the Securities Act of 1933, as amended, and the rules

and regulations thereunder, or any similar successor statute (collectively, the

“Securities Act”), and applicable state securities laws.




 




NOW, THEREFORE, in consideration of the

promises and the mutual covenants contained herein and other good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged,

the Company, the Placement Agents and each of the Buyers hereby agree as follows:




 




SECTION 1.         Definitions.  As used in this Agreement, the following

terms shall have the following meanings:




 





























 




(a)     “Business Day” means any day other than

Saturday, Sunday or any other day on which commercial banks in The City of New

York are required by law to remain closed.




 




(b)    “Investor” means each Placement Agent and

each Buyer and any transferee or assignee thereof to whom a Placement Agent or

a Buyer assigns its rights under this Agreement and who agrees to become bound

by the provisions of this Agreement in accordance with Section 9 of this

Agreement, and any subsequent transferee or assignee thereof to whom a

transferee or assignee assigns its rights under this Agreement and who agrees

to become bound by the provisions of this Agreement in accordance with Section 9 of this Agreement.




 




(c)     “Person” means an individual, a limited

liability company, a partnership, a joint venture, a corporation, a trust, an

unincorporated organization or association and governmental or any department

or agency thereof.




 




(d)    “register,” “registered,” and “registration”

means a registration effected by preparing and filing one or more Registration

Statements (as defined below) in compliance with the Securities Act and

pursuant to Rule 415 under the Securities Act or any successor rule providing

for offering securities on a continuous or delayed basis (“Rule 415”), and the

declaration or ordering of effectiveness of such Registration Statements by the

United States Securities and Exchange Commission (the “Commission”).




 




(e)     “Registrable Securities” means (i) the

Conversion Shares issued or issuable upon conversion of the Series B Preferred,

(ii) the Warrant Shares issued or issuable upon exercise of the Warrants, (iii)

any shares of capital stock issued or issuable with respect to the Conversion

Shares, the Series B Preferred, the Warrant Shares or the Warrants as a result

of any stock split, stock dividend, recapitalization, exchange or similar event

or otherwise, or as required pursuant to the Certificate Amendment, without

regard to any limitations on conversions of the Series B Preferred or the

exercise of the Warrants, (iv) any shares of capital stock of any entity issued

in respect of the capital stock referenced in the immediately preceding clauses

(i), (ii) and (iii) as a result of a merger, consolidation, sale of assets,

sale or exchange of capital stock or other similar transaction provided, that

shares of Common Stock that are Registrable Securities shall cease to be

Registrable Securities upon (i) any sale pursuant to a Registration Statement

or Rule 144 under the Securities Act or (ii) any sale or transfer to any person

or entity which by virtue of Section 9 of this Agreement, is not entitled to

the rights provided by this Agreement.




 




(f)     “Registration Statement” means a

registration statement or registration statements of the Company filed under

the Securities Act and covering all of the Registrable Securities.




 




(g)    Capitalized terms used herein and not

otherwise defined herein shall have the respective meanings set forth in the

Securities Purchase Agreement.




 




SECTION 2.         Registration.




 




(a)     Mandatory Registration.  The Company shall use its best efforts to

prepare and, as soon as practicable but in no event later than thirty (30) days

after the Closing Date (as defined in the Securities Purchase Agreement) (the

“Filing Deadline”), file with the Commission




 




2





























 




a Registration Statement on Form S-3 covering the resale of all of the

Registrable Securities.  In the event

that Form S-3 is unavailable for such a registration, the Company shall use

such other form as is available for such a registration, subject to the

provisions of Section 2(d) of this Agreement. 

The Registration Statement prepared pursuant hereto shall register for

resale at least 6,057,277 shares of Common Stock issuable upon conversion of

the Series B Preferred and exercise of the Warrants by the Investors from time

to time in accordance with the methods of distribution elected by such

Investors. The Company shall use reasonable efforts to have the Registration

Statement declared effective by the Commission as soon as practicable, but not

later than ninety (90) days after the Closing Date (the “Effectiveness

Deadline”); provided, however, that if the Commission reviews the Registration

Statement and requires the Company to make modifications thereto, then the

Effectiveness Deadline shall be extended to not later than one hundred twenty

(120) days after the Closing Date.  In

the event that, after the Closing Date and before the Registration Statement is

declared effective, the offices of the Commission are closed due to acts of

God, war or terror, the Effectiveness Deadline will be extended by a number of

days equal to the days of any such closure.




 




(b)    Allocation of Registrable Securities.

The initial number of Registrable Securities included in any Registration

Statement and each increase in the number of Registrable Securities included

therein shall be allocated pro rata among the Investors based on the number of

Registrable Securities held by each Investor at the time the Registration

Statement covering such initial number of Registrable Securities or increase

thereof is declared effective by the Commission.  In the event that an Investor sells or otherwise transfers any of

such Investor’s Registrable Securities, each transferee shall be allocated the

portion of the then remaining number of Registrable Securities included in such

Registration Statement allocable to the transferor.  In no event shall the Company include any securities other than

Registrable Securities on any Registration Statement without the prior written

consent of the Investors holding at least a majority of the Registrable

Securities.




 




(c)     Legal Counsel.  Subject to Section 5 of this Agreement, the

Investors holding at least a majority of the Registrable Securities shall have

the right to select one legal counsel to review and comment upon any

registration pursuant to this Agreement (the “Legal Counsel”), which the

Investors agree shall be Gibson, Dunn & Crutcher LLP or such other counsel

as thereafter designated in writing by the holders of at least a majority of

the Registrable Securities.  The

Investors hereby waive any conflict of interest or potential conflict of

interest that may arise as a result of the representation of such Investors by

Gibson, Dunn & Crutcher LLP in connection with the subject matter of this

Agreement.  The provision will not

prohibit any other counsel to an Investor from reviewing and commenting on any

registration filed pursuant to this Agreement at no cost to the Company.




 




(d)    Ineligibility for Form S-3.  If Form S-3 is not available for the

registration of the resale of Registrable Securities hereunder or the Company

is not permitted by the Securities Act or the Commission to use Form S-3, then

the Company shall (i) register the resale of the Registrable Securities on

another appropriate form reasonably acceptable to the holders of at least a

majority of the Registrable Securities and (ii) undertake to register the

Registrable Securities on Form S-3 as soon as such form is available; provided,

however, that the Company shall maintain the effectiveness of the Registration

Statement then in effect until such time as a




 




3





























 




Registration Statement on Form S-3 covering all of the Registrable

Securities has been declared effective by the Commission.




 




(e)     Sufficient Number of Shares Registered.  In the event the number of shares registered

under a Registration Statement filed pursuant to Section 2(a) of this Agreement

is insufficient to cover all of the Registrable Securities or all of an

Investor’s allocated portion of the Registrable Securities pursuant to Section

2(b) of this Agreement, the Company shall amend the Registration Statement, or

file a new Registration Statement (on the short form available therefor, if

applicable), or both, so as to cover at least one hundred ten percent (110%) of

the number of such Registrable Securities other than shares issuable upon exercise

of the Warrants and one hundred percent (100%) of the shares of Common Stock

issuable upon exercise of the Warrants as of the trading day immediately

preceding the date of the filing of such amendment and/or new Registration

Statement, in each case, as soon as practicable, but in no event later than

fifteen (15) days after the necessity therefor arises.  The Company shall use its reasonable efforts

to cause such amendment and/or new Registration Statement to become effective

as soon as practicable following the filing thereof.  The calculation of the number of shares sufficient to cover all

of the Registrable Securities shall be made without regard to any limitations

on the conversion of the Series B Preferred or the exercise of the Warrants,

and such calculation shall assume that all of the Series B Preferred are then

convertible into, and all of the Warrants are then exercisable for, shares of

Common Stock at the then prevailing Conversion Rate (as defined in the Series B

Preferred) or Warrant Exercise Price (as defined in the Warrants), as

applicable.




 




(f)     Effect of Failure to File and Obtain and

Maintain Effectiveness of Registration Statement.  If (i) a Registration Statement covering all the Registrable

Securities is not filed with the Commission on or before the Filing Deadline or

is not declared effective by the Commission on or before the Effectiveness

Deadline, (ii) a Registration Statement covering all of the Registrable

Securities required to be covered thereby, as described in Section 2(e) of this

Agreement, is not filed with the Commission on or before the deadline described

in Section 2(e) of this Agreement or is not declared effective by the

Commission on or before the deadline described in Section 2(e) of this

Agreement, (iii) on any day after such Registration Statement has been declared

effective by the Commission, sales of all of the Registrable Securities

required to be included on such Registration Statement cannot be made (other

than during an Allowable Grace Period (as defined in Section 3(n) of this

Agreement)) pursuant to such Registration Statement (including, without

limitation, because of a failure to keep such Registration Statement effective,

to disclose such information as is necessary for sales to be made pursuant to

such Registration Statement or to register a sufficient number of shares of

Common Stock), or (iv) a Grace Period exceeds the length of an Allowable Grace

Period (each of the items described in clauses (i), (ii), (iii) and (iv) above

shall be referred to as a “Registration Delay”), then, as partial relief for

the damages to the Investors by reason of any such delay in or reduction of its

ability to sell the Registrable Securities (which remedy shall not be exclusive

of any other remedies available at law or in equity), the Company shall pay (1)

to each holder of the Series B Preferred or Conversion Shares an amount in cash

equal to the product of (i) the initial amount paid for such Series B Preferred

or the related Conversion Shares multiplied by (ii) the product of (I) the

percentage determined by dividing (A) the Applicable Percentage (as defined

below) by (B) 30, multiplied by (II) the sum of (x) the number of days

(including any partial days) after the Filing Deadline or the deadline

described in Section 2(e) of this Agreement, as applicable, that the

Registration Statement is not filed with the Commission, plus (y) the number of

days (including 




 




4





























 




any partial days) after the Effectiveness Deadline or the deadline

described in Section 2(e) of this Agreement that the Registration Statement is

not declared effective by the Commission, plus (z) after the Registration

Statement has been declared effective by the Commission, the number of days

(including any partial days) that such Registration Statement is not available

(other than during an Allowable Grace Period) for the sale of all the

Registrable Securities and (2) to each holder of the Warrants or Warrant Shares

an amount in cash equal to the product of (i) the aggregate Exercise Price for

such Warrant or any related Warrant Shares, multiplied by (ii) the product of

(I) the percentage determined by dividing (A) the Applicable Percentage by (B)

30, multiplied by (II) the sum of (x) the number of days (including any partial

days) after the Filing Deadline or the deadline described in Section 2(e) of

this Agreement, as applicable, that the Registration Statement is not filed

with the Commission, plus (y) the number of days (including any partial days)

after the Effectiveness Deadline or the deadline described in Section 2(e) of

this Agreement, as applicable, that the Registration Statement is not declared

effective by the Commission, plus (z) after the Registration Statement has been

declared effective by the Commission, the number of days (including any partial

days) that such Registration Statement is not available (other than during an

Allowable Grace Period) for the sale of all Registrable Securities.  The “Applicable Percentage” shall mean (A)

for periods that only include days on or before the date that is 60 days after

the commencement of a Registration Delay, eight-tenths percent (0.8%), (B) for

periods that only include days after date that is 60 days after the

commencement of a Registration Delay, one and two-tenths percent (1.2%) and (C)

for periods that include days both before and after the date that is that is 60

days after the commencement of a Registration Delay, a percentage equal to a

fraction, the numerator of which shall be the sum of (i) the number of days in

such period that are on or before the date that is 60 days after the

commencement of such Registration Delay multiplied by eight-tenths percent

(0.8%) and (ii) the number of days in such period that are after the date that

is 60 days after the commencement of such Registration Delay multiplied by one

and two-tenths percent (1.2%) and the denominator of which shall be the total

number of days comprising such period. 

The payments to which a holder shall be entitled pursuant to this

Section 2(f) are referred to herein as “Registration Delay Payments.”  The Registration Delay Payments shall be

paid in cash on the earlier of (A) the last day of the calendar month during

which such Registration Delay Payments are incurred and (B) the third Business

Day after the event or failure giving rise to the Registration Delay Payments

is cured.  In the event the Company

fails to make Registration Delay Payments in a timely manner, such Registration

Delay Payments shall bear interest at the rate of one and six-tenths percent

(1.6%) per month (prorated for partial months)

until paid in full.




 




SECTION 3.         Related Obligations.  At such time as the Company is obligated to

file a Registration Statement with the Commission pursuant to Sections 2(a),

2(d) or 2(e) of this Agreement, the Company will use reasonable efforts to

effect the registration of all of the Registrable Securities in accordance with

the intended method of disposition thereof and, pursuant thereto, the Company

shall have the following obligations:




 




(a)     The Company shall promptly prepare and file

with the Commission a Registration Statement with respect to all of the

Registrable Securities (but in no event later than the applicable Filing

Deadline) and use its reasonable efforts to cause such Registration Statement

relating to all of the Registrable Securities required to be covered thereby to

become effective as soon as practicable after such filing (but in no event

later than the applicable Effectiveness Deadline).  The Company shall, subject to the terms of this Agreement, keep

each




 




5





























 




Registration Statement effective pursuant to Rule 415 at all times

until the earlier of (i) the date as of which all of the Investors (other than

any Investors who are “affiliates” of the Company as such term is used in Rule

144(k) promulgated under the Securities Act) may sell all of the Registrable

Securities without restriction pursuant to Rule 144(k) (or the successor rule

thereto) promulgated under the Securities Act (assuming a Cashless Exercise of

any Warrants) or (ii) the date on which all of the Investors shall have sold

all of the Registrable Securities (the “Registration Period”), which

Registration Statement, as of its filing and effective dates and each day

thereafter (including all amendments or supplements thereto, as of their

respective filing and effective dates and each day thereafter), shall not

contain any untrue statement of a material fact or omit to state a material

fact required to be stated therein, or necessary to make the statements

therein, not misleading, and the prospectus contained in such Registration

Statement, as of its filing date and each day thereafter (including all

amendments and supplements thereto, as of their respective filing dates and each

day thereafter), shall not contain any untrue statement of a material fact or

omit to state a material fact required to be stated thereon, or necessary to

make the statements therein, in light of the circumstances in which they were

made, not misleading.




 




(b)    Subject to Section 3(n) of this Agreement,

the Company shall prepare and file with the Commission such amendments

(including post-effective amendments) and supplements to the Registration

Statement and the prospectus used in connection with such Registration

Statement, which prospectus is to be filed pursuant to Rule 424 (or any

successor rule thereto) promulgated under the Securities Act, as may be

necessary to keep such Registration Statement effective at all times during the

Registration Period, and, during such period, comply with the provisions of the

Securities Act.  In the case of

amendments and supplements to a Registration Statement and the prospectus used

in connection with such Registration Statement which are required to be filed

pursuant to this Agreement (including pursuant to this Section 3(b)) by reason

of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any

analogous report under the Securities Exchange Act of 1934, as amended, and the

rules and regulations thereunder, or any similar successor statute (the

“Exchange Act”), the Company shall have incorporated such report by reference

into such Registration Statement, if applicable, or shall file such amendments

or supplements with the Commission on the same day on which the Exchange Act

report is filed which created the requirement for the Company to amend or

supplement such Registration Statement and prospectus.




 




(c)     The Company shall permit Legal Counsel to

review and comment upon each Registration Statement, prospectus and all

amendments and supplements thereto at least one (1) Business Day prior to their

filing with the Commission.  The Company

shall furnish to the Investors and Legal Counsel, without charge, (i) promptly

after receipt of such correspondence, copies of all correspondence from the

Commission or the staff of the Commission to the Company or its representatives

relating to each Registration Statement, prospectus and all amendments and

supplements thereto, (ii) promptly after the same is prepared and filed with

the Commission, one (1) copy of each Registration Statement, prospectus and all

amendments and supplements thereto, including all exhibits and financial

statements related thereto, and (iii) promptly upon the effectiveness of each

Registration Statement and each amendment and supplement thereto, one (1) copy

of the prospectus included in each such Registration Statement and all

amendments and supplements thereto.  The

Company agrees that it will, and it will cause its counsel to, consider in good

faith any comments or objections from Legal Counsel as to the form or content

of each Registration Statement, prospectus and all amendments or supplements




 




6





























 




thereto or any request for acceleration of the effectiveness of each

Registration Statement, prospectus and all amendments or supplements thereto.




 




(d)    The Company shall furnish to each Investor

whose Registrable Securities are included in any Registration Statement,

without charge to such Investor, (i) promptly after the same is prepared

and filed with the Commission, at least one copy of such Registration Statement

and all amendments and supplements thereto, including all exhibits and

financial statements and each preliminary prospectus, (ii) upon the effectiveness

of each Registration Statement, such number of copies of the prospectus

included in such Registration Statement and all amendments and supplements

thereto as such Investor may reasonably request, and (iii) such other

documents, including copies of any preliminary or final prospectus, as such

Investor may reasonably request from time to time in order to facilitate the

disposition of the Registrable Securities.




 




(e)     Subject to Section 3(n) of this Agreement,

the Company shall use reasonable efforts to (i) promptly register and qualify,

unless an exemption from registration and qualification applies, the resale of

the Registrable Securities under such other securities or “blue sky” laws of

all applicable jurisdictions in the United States as any holder of Registrable

Shares reasonably requests in writing, (ii) promptly prepare and file in those

jurisdictions, such amendments (including post-effective amendments) and

supplements to such registrations and qualifications as may be necessary to

maintain the effectiveness thereof during the Registration Period, (iii)

promptly take such other actions as may be reasonably necessary to maintain

such registrations and qualifications in effect at all times during the

Registration Period, and (iv) promptly take all other actions reasonably

necessary or advisable to qualify the Registrable Securities for sale in such

jurisdictions; provided, however, that the Company shall not be required in

connection therewith or as a condition thereto to file a general consent to service

of process in any such jurisdiction, except in such jurisdictions where the

Company is subject to service of process. 

The Company shall promptly notify each Investor who holds Registrable

Securities and Legal Counsel of the receipt by the Company of any notification

with respect to the suspension of the registration or qualification of any of

the Registrable Securities for sale under the securities or “blue sky” laws of

any jurisdiction in the United States or its receipt of notice of the initiation

or threatening of any proceeding for such purpose.




 




(f)     Notwithstanding anything to the contrary

set forth herein, as promptly as practicable after becoming aware of such

event, the Company shall notify each Investor and Legal Counsel in writing of

the happening of any event as a result of which (i) the Registration Statement

or any amendment or supplement thereto, as then in effect, includes an untrue

statement of a material fact or omission to state a material fact required to

be stated therein or necessary to make the statements therein not misleading or

(ii) the prospectus related to such Registration Statement or any amendment or

supplement thereto includes an untrue statement of a material fact or omission

to state a material fact required to be stated therein or necessary to make the

statements therein, in light of the circumstances under which they were made,

not misleading, and, subject to Section 3(n) of this Agreement, promptly

prepare a supplement or amendment to such Registration Statement and prospectus

to correct such untrue statement or omission, and deliver such number of copies

of such supplement or amendment to each Investor and Legal Counsel as such

Investor or Legal Counsel may reasonably request.  The Company shall also promptly notify each Investor and Legal

Counsel in writing (i) when a prospectus and




 




7





























 




each prospectus supplement or amendment thereto has been filed, and

when a Registration Statement and each amendment (including post-effective

amendments) and supplement thereto has been declared effective by the

Commission (notification of such effectiveness shall be delivered to each

Investor and Legal Counsel by facsimile on the same day of such effectiveness

and by overnight mail), (ii) of any request by the Commission for amendments or

supplements to a Registration Statement or related prospectus or related

information, and (iii) of the Company’s reasonable determination that an

amendment (including any post-effective amendment) or supplement to a

Registration Statement or prospectus would be appropriate (subject to Section

3(n) hereof).




 




(g)    Subject to Section 3(n) of this Agreement,

the Company shall use reasonable efforts to (i) prevent the issuance of any

stop order or other suspension of effectiveness of a Registration Statement, or

the suspension of the qualification of any of the Registrable Securities for

sale in any jurisdiction, (ii) if such an order or suspension is issued, obtain

the withdrawal of such order or suspension at the earliest practicable moment

and notify each holder of Registrable Securities and Legal Counsel of the

issuance of such order and the resolution thereof or its receipt of notice of

the initiation or threat of any proceeding for such purpose.




 




(h)    The Company shall hold in confidence and not

make any disclosure of information concerning an Investor provided to the

Company unless (i) disclosure of such information is necessary to comply with

United States federal or state securities laws, (ii) the disclosure of such

information is necessary to avoid or correct a misstatement or omission in any

Registration Statement, prospectus or any amendment or supplement thereto,

(iii) the release of such information is ordered pursuant to a subpoena or

other final, non-appealable order from a court or governmental body of

competent jurisdiction, or (iv) such information has been made generally

available to the public other than by disclosure in violation of this Agreement

or any other agreement.  The Company

agrees that it shall, upon learning that disclosure of such information

concerning an Investor is sought in or by a court or governmental body of

competent jurisdiction or through other means, unless ordered or requested by

the Commission or other governmental authority not to do so, give prompt

written notice to such Investor and allow such Investor, at the Investor’s

expense, to undertake appropriate action to prevent disclosure of, or to obtain

a protective order for, such information.




 




(i)      The Company shall use its best efforts to

(i) cause all the Registrable Securities to be listed on each securities

exchange on which securities of the same class or series issued by the Company

are then listed, if any, if the listing of such Registrable Securities is then

permitted under the rules of such exchange, or (ii) secure designation and

quotation of all the Registrable Securities on The Nasdaq National Market, or

(iii) if the Company is unsuccessful in satisfying the preceding clause (i) or

(ii), to secure the inclusion for quotation on The Nasdaq SmallCap Market for

such Registrable Securities and, without limiting the generality of the

foregoing, to arrange for at least two market makers to register with the

National Association of Securities Dealers, Inc. (“NASD”) as such with respect

to such Registrable Securities.  The

Company shall pay all fees and expenses in connection with satisfying its

obligation under this Section 3(i).




 




(j)      In connection with any sale or transfer of

Registrable Securities pursuant to a Registration Statement, the Company shall

cooperate with the Investors who hold Registrable




 




8





























 




Securities being offered and, to the extent applicable, facilitate the

timely preparation and delivery of certificates (not bearing any restrictive

legend) representing the Registrable Securities to be offered pursuant to a

Registration Statement and enable such certificates to be in such denominations

or amounts, as the case may be, as the Investors may reasonably request and,

registered in such names as the Investors may request.




 




(k)     If requested by an Investor, the Company

shall (i) as soon as practicable, incorporate in each prospectus supplement or

post-effective amendment to the Registration Statement such information as an

Investor reasonably requests to be included therein relating to the sale and

distribution of Registrable Securities, (ii) as soon as practicable, make all

required filings of such prospectus supplement or post-effective amendment

after being notified of the matters to be incorporated in such prospectus

supplement or post-effective amendment, and (iii) as soon as practicable,

supplement or make amendments to any Registration Statement and prospectus if

reasonably requested by an Investor holding any Registrable Securities.




 




(l)      The Company shall comply with all

applicable rules and regulations of the Commission in connection with any

registration hereunder.




 




(m)    Within two (2) Business Days after a

Registration Statement is ordered effective by the Commission, the Company

shall deliver, and shall cause legal counsel for the Company to deliver, to the

transfer agent for the Registrable Securities (with copies to the Investors

whose Registrable Securities are included in such Registration Statement) confirmation

that such Registration Statement has been declared effective by the Commission

in the form attached hereto as Exhibit B.




 




(n)    Notwithstanding anything to the contrary

herein, at any time after a Registration Statement has been declared effective by

the Commission, the Company may delay the disclosure of material non-public

information concerning the Company if the disclosure of such information at the

time is not, in the good faith judgment of the Board of Directors of the

Company, in the best interests of the Company (a “Grace Period”); provided,

however, that the Company shall promptly (i) notify the Investors in writing of

the existence of material non-public information giving rise to a Grace Period

(provided that the Company shall not disclose the content of such material

non-public information to the Investors) and the date on which the Grace Period

will begin, and (ii) notify the Investors in writing of the date on which

the Grace Period ends; provided further, that no single Grace Period shall

exceed thirty (30) consecutive days, during any three hundred sixty-five (365)

day period, the aggregate of all of the Grace Periods shall not exceed an

aggregate of sixty (60) days and the first day of any Grace Period must be at

least two (2) trading days after the last day of any prior Grace Period (an

“Allowable Grace Period”).  For purposes

of determining the length of a Grace Period, the Grace Period shall be deemed

to begin on and include the date the Investors receive the notice referred to

in clause (i) and shall end on and include the later of the date the Investors

receive the notice referred to in clause (ii) and the date referred to in such

notice; provided, however, that no Grace Period shall be longer than an

Allowable Grace Period.  The provisions

of Section 3(g) of this

Agreement shall not be applicable during the period of any Allowable Grace

Period.  Upon expiration of the Grace

Period, the Company shall again be bound by the first sentence of Section 3(f)

of this Agreement.




 




9





























 




SECTION 4.         Obligations Of The Investors.




 




(a)     At least seven (7) Business Days prior to

the first anticipated filing date of a Registration Statement, the Company

shall notify each Investor in writing of the information the Company requires

from each such Investor if such Investor elects to have any of such Investor’s

Registrable Securities included in such Registration Statement.  It shall be a condition precedent to the

obligations of the Company to complete the registration pursuant to this

Agreement with respect to the Registrable Securities of a particular Investor

that such Investor shall furnish to the Company such information regarding

itself, the Registrable Securities held by it and the intended method of disposition

of the Registrable Securities held by it as shall be reasonably required to

effect the effectiveness of the registration of such Registrable Securities and

shall execute such documents in connection with such registration as the

Company may reasonably request.  Each

Investor shall promptly notify the Company of any material change with respect

to such information previously provided to the Company by such Investor.




 




(b)    Each Investor agrees to cooperate with the

Company as reasonably requested by the Company in connection with the

preparation and filing of any Registration Statement hereunder, unless such

Investor has notified the Company in writing of such Investor’s election to

exclude all of such Investor’s Registrable Securities from such Registration

Statement, in which case, such Investor does not need to cooperate with the

Company until it notifies the Company of its desire to include one or more

share of the Registrable Securities in such Registration Statement.




 




(c)     Each Investor agrees that, upon receipt of

any notice from the Company of the happening of any event of the kind described

in Sections 3(g) or 3(n) of this Agreement or the first sentence of Section

3(f) of this Agreement, such Investor will immediately discontinue disposition of

Registrable Securities pursuant to any Registration Statements covering such

Registrable Securities until such Investor’s receipt of the copies of the

amended or supplemented prospectus contemplated by Section 3(g) of this

Agreement or the first sentence of Section 3(f) of this Agreement or receipt of

notice that no amendment or supplement is required and, if so directed by the

Company, such Investor shall deliver to the Company (at the expense of the

Company) or destroy (and deliver to the Company a certificate of destruction)

all copies of the prospectus covering such Registrable Securities current at

the time of receipt of such notice (other than a single file copy, which such

Investor may keep) in such Investor’s possession.  Notwithstanding anything to the contrary in this Agreement, the

Company shall cause its transfer agent to deliver unlegended shares of Common

Stock to a transferee of an Investor in accordance with the terms of the

Securities Purchase Agreement, the Series B Preferred, and/or the Warrants, as

applicable, in connection with any sale of Registrable Securities with respect

to which an Investor has entered into a contract for sale prior to the

Investor’s receipt of a notice from the Company of the happening of any event

of the kind described in Section 3(g) of this Agreement or the first sentence

of Section 3(f) of this Agreement and for which the Investor has not yet

settled.




 




SECTION 5.         Expenses Of Registration.  All

expenses, other than underwriting discounts and commissions, incurred in

connection with registrations, filings or qualifications pursuant to Sections 2

and 3 of this Agreement, including, without limitation, all registration,

listing and qualifications fees, printers and accounting fees, and fees and

disbursements of




 




10





























 




counsel for the Company shall be paid by the Company.  The Company shall also reimburse the

Investors for the fees and disbursements of Legal Counsel in connection with

registration, filing or qualification pursuant to Sections 2 and 3 of this

Agreement which amount shall be limited to Ten Thousand Dollars ($10,000) for

each Registration Statement.  In

addition, the Company shall pay all of the Investors’ reasonable costs

(including fees and disbursements of Legal Counsel) incurred in connection with

the successful enforcement of the Investors rights under this Agreement.




 




SECTION 6.         Indemnification.  In the event any Registrable Securities

are included in a Registration Statement under this Agreement:




 




(a)     To the fullest extent permitted by law, the

Company will, and hereby does, indemnify, hold harmless and defend each

Investor, the directors, officers, members, partners, employees, agents,

representatives of, and each Person, if any, who controls any Investor within

the meaning of the Securities Act or the Exchange Act (each, an “Indemnified

Person”), against any losses, claims, damages, liabilities, judgments, fines,

penalties, charges, costs, reasonable attorneys’ fees, amounts paid in

settlement or expenses, joint or several, (collectively, “Claims”) incurred in

investigating, preparing or defending any action, claim, suit, inquiry,

proceeding, investigation or appeal taken from the foregoing by or before any

court or governmental, administrative or other regulatory agency, body or the

Commission, whether pending or threatened, whether or not an indemnified party

is or may be a party thereto (“Indemnified Damages”), to which any of them may

become subject insofar as such Claims (or actions or proceedings, whether

commenced or threatened, in respect thereof) arise out of or are based upon (i)

any untrue statement or alleged untrue statement of a material fact in a

Registration Statement or any amendment (including post-effective amendments)

or supplement thereto or in any filing made in connection with the

qualification of the offering under the securities or other “blue sky” laws of

any jurisdiction in which Registrable Securities are offered (“Blue Sky

Filing”), or the omission or alleged omission to state a material fact required

to be stated therein or necessary to make the statements therein not

misleading, or (ii) any untrue statement or alleged untrue statement of a

material fact contained in any preliminary prospectus if used prior to the

effective date of such Registration Statement, or contained in the final

prospectus (as amended or supplemented, if any) or the omission or alleged

omission to state therein any material fact necessary to make the statements

made therein, in light of the circumstances under which the statements therein

were made, not misleading, or (iii) any violation or alleged violation caused

by the Company, or its directors, officers, employees, agents or

representatives acting on its behalf, of the Securities Act, the Exchange Act, any

other law, including, without limitation, any state securities law, or any rule

or regulation thereunder relating to the offer or sale of the Registrable

Securities pursuant to a Registration Statement (the matters in the foregoing

clauses (i) through (ii) being, collectively, “Violations”).  Subject to Section 6(c) of this Agreement,

the Company shall reimburse the Indemnified Persons, promptly as such expenses

are incurred and are due and payable, for any legal fees or other reasonable

expenses incurred by them in connection with investigating or defending any

such Claim.  Notwithstanding anything to

the contrary contained herein, the indemnification agreement contained in this

Section 6(a):  (i) shall not apply to a

Claim by an Indemnified Person arising out of or based upon a Violation which

occurs in reliance upon and in conformity with information furnished in writing

to the Company by such Indemnified Person for such Indemnified Person expressly

for use in connection with the preparation of the Registration Statement or any

such amendment thereof or supplement thereto;




 




11





























 




(ii) shall not be available to the extent such Claim is based on a

failure of the Investor to deliver or to cause to be delivered the prospectus

made available by the Company, including a corrected prospectus, if such

prospectus or corrected prospectus was timely made available by the Company

pursuant to Section 3(d) of this Agreement; and (iii) shall not apply to

amounts paid in settlement of any Claim if such settlement is effected without

the prior written consent of the Company, which consent shall not be

unreasonably withheld or delayed.  Such

indemnity shall remain in full force and effect regardless of any investigation

made by or on behalf of the Indemnified Person and shall survive the transfer

of the Registrable Securities by the Investors pursuant to Section 9 of this

Agreement.




 




(b)    In connection with any Registration

Statement in which an Investor is participating, each such Investor agrees to

severally and not jointly indemnify, hold harmless and defend, to the same

extent and in the same manner as is set forth in Section 6(a) of this

Agreement, the Company, each of its directors, each of its officers who signs

the Registration Statement and each Person, if any, who controls the Company

within the meaning of the Securities Act or the Exchange Act (each, an

“Indemnified Party”), against any Claims or Indemnified Damages to which any of

them may become subject, under the Securities Act, the Exchange Act or

otherwise, insofar as such Claims or Indemnified Damages arise out of or are

based upon any Violation, in each case to the extent, and only to the extent,

that such Violation occurs in reliance upon and in conformity with written

information furnished to the Company by such Investor expressly for use in

connection with such Registration Statement and, subject to Section 6(c) of

this Agreement, such Investor will reimburse any legal or other expenses

reasonably incurred by an Indemnified Party in connection with investigating or

defending any such Claim; provided, however, that the indemnity agreement

contained in this Section 6(b) and the agreement with respect to contribution

contained in Section 7 of this Agreement shall not apply to amounts paid in

settlement of any Claim if such settlement is effected without the prior

written consent of such Investor, which consent shall not be unreasonably

withheld or delayed; provided, further, that the Investor shall be liable under

this Section 6(b) for only that amount of the Claims and Indemnified Damages as

does not exceed the net proceeds to such Investors as a result of the sale of

Registrable Securities pursuant to such Registration Statement. Such

indemnification agreement shall remain in full force and effect regardless of

any investigation made by or on behalf of such Indemnified Party and shall

survive the transfer of the Registrable Securities by the Investors pursuant to

Section 9

of this Agreement.  Notwithstanding

anything to the contrary contained herein, the indemnification agreement

contained in this Section 6(b) shall not inure to the benefit of any

Indemnified Party if the untrue statement or omission of material fact

contained in the preliminary prospectus was corrected on a timely basis in the

prospectus, as then amended or supplemented.




 




(c)     Promptly after an Indemnified Person or

Indemnified Party under this Section 6 has knowledge of any Claim as to which

such Indemnified Person reasonably believes indemnity may be sought or promptly

after such Indemnified Person or Indemnified Party receives notice of the

commencement of any action or proceeding (including any governmental action or

proceeding) involving a Claim, such Indemnified Person or Indemnified Party

shall, if a Claim in respect thereof is to be made against any indemnifying

party under this Section 6, deliver to the indemnifying party a written notice

of such Claim, and the indemnifying party shall have the right to participate

in, and, to the extent the indemnifying party so desires, jointly with any

other indemnifying party similarly noticed, to assume control of the defense

thereof




 




12





























 




with counsel mutually satisfactory to the indemnifying party and the

Indemnified Person or the Indemnified Party, as the case may be; provided,

however, that an Indemnified Person or Indemnified Party shall have the right

to retain its own counsel if, in the reasonable opinion of counsel retained by

the indemnifying party, the representation by such counsel of the Indemnified

Person or Indemnified Party and the indemnifying party would be inappropriate

due to actual or potential differing interests between such Indemnified Person

or Indemnified Party and any other party represented by such counsel in such

proceeding; provided, further, that the indemnifying party shall not be

responsible for the reasonable fees and expense of more than one (1) separate

legal counsel for such Indemnified Person or Indemnified Party.  In the case of an Indemnified Person, the

legal counsel referred to in the immediately preceding sentence shall be

selected by the Investors holding at least a majority in interest of the

Registrable Securities included in the Registration Statement to which the

Claim relates.  The Indemnified Party or

Indemnified Person shall cooperate fully with the indemnifying party in

connection with any negotiation or defense of any such action or Claim by the

indemnifying party and shall furnish to the indemnifying party all information

reasonably available to the Indemnified Party or Indemnified Person which

relates to such action or Claim.  The

indemnifying party shall keep the Indemnified Party or Indemnified Person fully

apprised at all times as to the status of the defense or any settlement

negotiations with respect thereto.  No

indemnifying party shall be liable for any settlement of any action, claim or

proceeding effected without its prior written consent; provided, however, that

the indemnifying party shall not unreasonably withhold, delay or condition its

consent.  No indemnifying party shall,

without the prior written consent of the Indemnified Party or Indemnified

Person, consent to entry of any judgment or enter into any settlement or other

compromise which does not include as an unconditional term thereof the giving

by the claimant or plaintiff to such Indemnified Party or Indemnified Person of

a full release from all liability in respect to such Claim and action and

proceeding.  After indemnification as

provided for under this Agreement, the rights of the indemnifying party shall

be subrogated to all rights of the Indemnified Party or Indemnified Person with

respect to all third parties, firms or corporations relating to the matter for

which indemnification has been made. 

The failure to deliver written notice to the indemnifying party as

provided in this Agreement shall not relieve such indemnifying party of any

liability to the Indemnified Person or Indemnified Party under this Section 6,

except to the extent that the indemnifying party is prejudiced in its ability

to defend such action.




 




(d)    The indemnification required by this Section

6 shall be made by periodic payments of the amount thereof during the course of

the investigation or defense, as and when bills are received or Indemnified

Damages are incurred.




 




(e)     The indemnity agreements contained herein

shall be in addition to (i) any cause of action or similar right of the

Indemnified Party or Indemnified Person against the indemnifying party or

others, and (ii) any liabilities the indemnifying party may be subject to

pursuant to the law.




 




SECTION 7.         Contribution.  To the extent

any indemnification by an indemnifying party is prohibited or limited by law,

the indemnifying party agrees to make the maximum contribution with respect to

any amounts for which it would otherwise be liable under Section 6 of this

Agreement to the fullest extent permitted by law; provided, however, that:  (i) no

contribution shall be made under circumstances where the maker would not

have been




 




13





























 




liable for indemnification under the fault standards set forth in

Section 6 of this Agreement,  (ii) no

Person involved in the sale of Registrable Securities which Person is guilty of

fraudulent misrepresentation (within the meaning of Section 11(f) of the

Securities Act) in connection with such sale shall be entitled to contribution

from any Person involved in such sale of Registrable Securities who was not

guilty of fraudulent misrepresentation, and (iii) contribution by any seller of

Registrable Securities shall be limited in amount to the net amount of proceeds

received by such seller from the sale of such Registrable Securities pursuant

to such Registration Statement.  The

provisions of this Section 7 shall remain in full force and effect, regardless

of the investigation made by or on behalf of the beneficiaries of this Section

7 and shall survive the transfer of Registrable Securities by the Investors

pursuant to Section 9 of this Agreement.




 




SECTION 8.         Reporting.




 




(a)     Reports Under The Exchange Act.  With a view to making available to the

Investors the benefits of Rule 144 promulgated under the Securities Act or any

other similar rule or regulation of the Commission that may at any time permit

the Investors to sell securities of the Company to the public without

registration (“Rule 144”), the Company shall use its best efforts to:




 




(1)           make and keep public information

available, as those terms are understood and defined in Rule 144;




 




(2)           file with the Commission in a timely

manner all reports and other documents required of the Company under the

Securities Act and the Exchange Act; and




 




(3)           furnish to each Investor, so long as

such Investor owns Registrable Securities, promptly upon request, (A) a written

statement by the Company, if true, that it has complied with the applicable

reporting requirements of Rule 144, the Securities Act and the Exchange Act,

(B) a copy of the most recent annual or quarterly report of the Company and

copies of such other reports and documents so filed by the Company, and (C)

such other information as may be reasonably requested to permit the Investors

to sell such securities pursuant to Rule 144 without registration.




 




(b)    Rule 144A Information. The Company

shall, upon request of any Investor, make available to such Investor the

information required by Rule 144A(d)(4) (or any successor rule) under the

Securities Act.




 




SECTION 9.         Assignment of Registration Rights.  The rights under this Agreement shall be automatically

assignable by the Investors to any transferee of at least $250,000 of

Registrable Securities if:  (i) the

Investor agrees in writing with the transferee or assignee to assign such

rights, and a copy of such agreement is furnished to the Company within a

reasonable time after such assignment; (ii) the Company is, within a

reasonable time after such transfer or assignment, furnished with written

notice of (a) the name and address of such transferee or assignee, and (b) the

securities with respect to which such rights are being transferred or assigned;

(iii) immediately following such transfer or assignment, the further




 




14





























 




disposition of such securities by the transferee or assignee is

restricted under the Securities Act and applicable state securities laws; (iv)

at or before the time the Company receives the written notice contemplated by

clause (ii) of this sentence, the transferee or assignee agrees in writing with

the Company to be bound by all of the obligations of an Investor under this

Agreement; (v) such transfer shall have been made in accordance with the

applicable requirements of the Securities Purchase Agreement, the Series B

Preferred and the Warrants; and (vi) such transfer shall have been conducted in

accordance with all applicable federal and state securities laws.




 




SECTION 10.       Amendment of Registration Rights.  Any provision of this Agreement may be amended and the

observance of any provision of this Agreement may be waived (either generally

or in a particular instance and either retroactively or prospectively), only

with the written consent of the Company and Investors who then hold at least a

majority of the Registrable Securities. 

Any amendment or waiver effected in accordance with this Section 10 shall

be binding upon each Investor and the Company. 

No such amendment shall be effective to the extent that it applies to

less than all of the holders of the Registrable Securities.  No consideration shall be offered or paid to

any Person to amend or consent to a waiver or modification of any provision of

any of this Agreement unless the same consideration also is offered to all of

the parties to this Agreement.




 




SECTION 11.       Miscellaneous.




 




(a)     A Person is deemed to be a holder of

Registrable Securities whenever such Person owns or is deemed to own of record

such Registrable Securities.  If the

Company receives conflicting instructions, notices or elections from two or

more Persons with respect to the same Registrable Securities, the Company shall

act upon the basis of instructions, notice or election received from such

record owner of such Registrable Securities.




 




(b)    Any notices, consents, waivers or other

communications required or permitted to be given under the terms of this

Agreement must be in writing and will be deemed to have been delivered:  (i) upon receipt, when delivered personally;

(ii) upon receipt, when sent by facsimile; or (iii) one (1) Business Day after

deposit with a nationally recognized overnight delivery service, in each case

properly addressed to the party to receive the same.  The addresses and facsimile numbers for such communications shall

be:




 




	

  If to the Company:


  
	

   


  	 

	

  Manufacturers’ Services

  Limited


  	 

	

  300 Baker Avenue, Suite

  106


  	 

	

  Concord,

  Massachusetts  10742


  	 

	

  Telephone:


  	

  (978) 287-5630


  	 

	

  Facsimile:


  	

  (978) 287-5635


  	 

	

  Attention:


  	

  Chief Executive Officer


  and General Counsel


  	 

	

   


  	 

	

  with a copy to:


  	 

	

   


  
	

  Hale and Dorr LLP


  





 




15





























 




	

  60 State Street


  
	

  Boston, Massachusetts,

  02109


  
	

  Telephone:


  	

  (617) 526-6000


  
	

  Facsimile:


  	

  (617) 526-5000


  
	

  Attention:


  	

  John A. Burgess, Esq.


  
	

   


  
	

  If to the Placement

  Agents:


  
	

   


  
	

  U.S. Bancorp Piper

  Jaffray


  
	

  345 California Street,

  Suite 2100


  
	

  San Francisco,

  California  94104


  
	

  Telephone: 


  	

  (415) 984-5127


  
	

  Facsimile:


  	

  (415) 984-5121


  
	

  Attention:


  	

  Mr. David Fullerton


  
	

   


  
	

  with a copy to:


  
	

   


  
	

  Gibson, Dunn &

  Crutcher LLP


  
	

  1050 Connecticut

  Avenue, NW


  
	

  Washington, DC  20036


  
	

  Telephone:


  	

  (202) 955-8500


  
	

  Facsimile:


  	

  (202) 467-0539


  
	

  Attention:


  	

  Brian J. Lane, Esq.


  
	

   


  
	

  If to Legal Counsel:


  
	

   


  
	

  Gibson, Dunn &

  Crutcher LLP


  
	

  1050 Connecticut

  Avenue, NW


  
	

  Washington, DC  20036


  
	

  Telephone:


  	

  (202) 955-8500


  
	

  Facsimile:


  	

  (202) 467-0539


  
	

  Attention:


  	

  Brian J. Lane, Esq.


  





 




If to a Buyer, to its address and facsimile number set

forth on the Schedule of Buyers attached hereto as Exhibit A, with

copies to such Buyer’s representatives as set forth on the Schedule of Buyers,

or to such other address and/or facsimile number and/or to the attention of

such other Person as the recipient party has specified by written notice given

to each other party five (5) days prior to the effectiveness of such

change.  Written confirmation of receipt

(A) given by the recipient of such notice, consent, waiver or other

communication, (B) mechanically or electronically generated by the sender’s

facsimile machine containing the time, date, recipient facsimile number and an

image of the first page of such transmission, or (C) provided by a courier or

overnight courier service shall be rebuttable evidence of personal service,

receipt by facsimile or receipt from a nationally recognized overnight delivery

service in accordance with clause (i), (ii) or (iii) above, respectively.




 




16





























 




(c)     Failure of any party to exercise any right

or remedy under this Agreement or otherwise, or delay by a party in exercising

such right or remedy, shall not operate as a waiver thereof.




 




(d)    All questions concerning the construction,

validity, enforcement and interpretation of this Agreement shall be governed by

the internal laws of the State of New York, without giving effect to any choice

of law or conflict of law provision or rule (whether of the State of New York

or any other jurisdictions) that would cause the application of the laws of any

jurisdictions other than the State of New York.  Each party hereby irrevocably submits to the non-exclusive

jurisdiction of the state and federal courts sitting the City of New York,

borough of Manhattan, for the adjudication of any dispute hereunder or in connection

herewith or with any transaction contemplated hereby or discussed herein, and

hereby irrevocably waives, and agrees not to assert in any suit, action or

proceeding, any claim that it is not personally subject to the jurisdiction of

any such court, that such suit, action or proceeding is brought in an

inconvenient forum or that the venue of such suit, action or proceeding is

improper.  Each party hereby irrevocably

waives personal service of process and consents to process being served in any

such suit, action or proceeding by mailing a copy thereof to such party at the

address for such notices to it under this Agreement and agrees that such

service shall constitute good and sufficient service of process and notice

thereof.  Nothing contained herein shall

be deemed to limit in any way any right to serve process in any manner

permitted by law.  If any provision of

this Agreement shall be invalid or unenforceable in any jurisdiction, such

invalidity or unenforceability shall not affect the validity or enforceability

of the remainder of this Agreement in that jurisdiction or the validity or

enforceability of any provision of this Agreement in any other

jurisdiction.  EACH PARTY HEREBY

IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY

TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH

OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.




 




(e)     This Agreement, the Securities Purchase

Agreement, the Warrants and the documents referenced herein and therein

constitute the entire agreement among the parties hereto with respect to the

subject matter hereof and thereof. 

There are no restrictions, promises, warranties or undertakings, other

than those set forth or referred to herein and therein.  This Agreement, the Securities Purchase Agreement,

the Warrants and the documents referenced herein and therein supersede all

prior agreements and understandings among the parties hereto with respect to

the subject matter hereof and thereof.




 




(f)     Subject to the requirements of Section 9 of

this Agreement, this Agreement shall inure to the benefit of and be binding

upon the permitted successors and assigns of each of the parties hereto.




 




(g)    The headings in this Agreement are for

convenience of reference only and shall not limit or otherwise affect the

meaning hereof.




 




(h)    This Agreement may be executed in identical

counterparts, each of which shall be deemed an original but all of which shall

constitute one and the same agreement. 

This Agreement, once executed by a party, may be delivered to the other

parties hereto by facsimile




 




17





























 




transmission of a copy of this Agreement bearing the signature of the

party so delivering this Agreement.




 




(i)      Each party shall do and perform, or cause

to be done and performed, all such further acts and things, and shall execute

and deliver all such other agreements, certificates, instruments and documents,

as the other party may reasonably request in order to carry out the intent and

accomplish the purposes of this Agreement and the consummation of the

transactions contemplated hereby.




 




(j)      All consents and other determinations

required to be made by the Investors pursuant to this Agreement shall be made,

unless otherwise specified in this Agreement, by Investors holding at least a

majority of the Registrable Securities, determined as if all of the Series B

Preferred held by Investors then outstanding have been converted into

Registrable Securities and all Warrants then outstanding have been exercised

for Registrable Securities without regard to any limitations on conversion of

the Series B Preferred or on exercise of the Warrants.




 




(k)     The language used in this Agreement will be

deemed to be the language chosen by the parties to express their mutual intent

and no rules of strict construction will be applied against any party.




 




(l)      This Agreement is intended for

the benefit of the parties hereto and their respective permitted successors and

assigns, and is not for the benefit of, nor may any provision hereof be enforced

by, any other Person.




 




(m)    The obligations of each Investor under this

Agreement are several and not joint with the obligations of any other Investor,

and no Investor shall be responsible in any way for the performance of the

obligations of any other Investor under this Agreement.  Nothing contained in this Agreement, and no

action taken by any Investor pursuant hereto, shall be deemed to constitute the

Investors as a partnership, an association, a joint venture or any other kind

of entity, or create a presumption that the Investors are in any way acting in

concert or as a group with respect to such obligations or the transactions

contemplated by this Agreement.  Subject

to the provisions of Section 10 of this Agreement, each Investor shall be

entitled to independently protect and enforce its rights, including without

limitation the rights arising out of this Agreement, and it shall not be

necessary for any other Investor to be joined as an additional party in any

proceeding for such purpose.




 




18





























 




IN WITNESS WHEREOF, the parties have caused

this Registration Rights Agreement to be duly executed as of day and year first

above written.




 




	

   


  	

  “COMPANY”


  
	

   


  	

   


  
	

   


  	

  MANUFACTURERS’

  SERVICES LIMITED


  
	

   


  	

   


  
	

   


  	

  By:


  	

   /s/ Albert

  N. Notini


  
	

   


  	

   


  	

  Its:


  	

  Executive Vice President and Chief Financial Officer


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  “PIPER

  JAFFRAY”


  
	

   


  	

   


  
	

   


  	

  U.S.

  BANCORP PIPER JAFFRAY


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

   /s/ David J.

  Fullerton


  	

   


  
	

   


  	

   


  	

  Its:


  	

   Managing

  Director


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  “RBC”


  
	

   


  	

   


  
	

   


  	

  RBC

  DAIN RAUSCHER, INC.


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

   /s/ John S.

  Kirks


  	

   


  
	

   


  	

   


  	

  Its


  	

   Managing

  Director


  
					





 




 




[Signatures of Buyers on

Following Page]




 




S-1