Document:

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                                                                    Exhibit 4.14

                    FOUR YEAR REVOLVING TERM CREDIT AGREEMENT

                CELESTICA INC. AND CELESTICA INTERNATIONAL INC.,
                                  AS BORROWERS

                                     - AND -

                            THE BANK OF NOVA SCOTIA,
                             AS ADMINISTRATIVE AGENT

                                     - AND -

                 THE FINANCIAL INSTITUTIONS NAMED IN SCHEDULE A,
                                   AS LENDERS

                                U.S. $500,000,000
                    FOUR YEAR REVOLVING TERM CREDIT FACILITY

                            MADE AS OF JULY 31, 2001

                          OSLER, HOSKIN & HARCOURT LLP

                       P.O. BOX 50, 1 FIRST CANADIAN PLACE

                                TORONTO, ONTARIO

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                                TABLE OF CONTENTS

ARTICLE 1   INTERPRETATION...................................................2

   1.1      DEFINITIONS......................................................2
   1.2      HEADINGS........................................................22
   1.3      USE OF DEFINED TERMS............................................22
   1.4      EXTENDED MEANINGS...............................................22
   1.5      CROSS REFERENCES................................................22
   1.6      REFERENCE TO AGENT OR LENDERS...................................22
   1.7      ACCOUNTING TERMS................................................23
   1.8      CONSOLIDATED FINANCIAL STATEMENTS AND CONSOLIDATED ACCOUNTS.....23
   1.9      NON-BANKING DAYS................................................23
   1.10     REFERENCES TO TIME OF DAY.......................................23
   1.11     CURRENCY........................................................24
   1.12     REFERENCES TO STATUTES..........................................24
   1.13     REFERENCES TO AGREEMENTS........................................24
   1.14     CONSENTS AND APPROVALS..........................................24
   1.15     SCHEDULES.......................................................24

ARTICLE 2   THE FACILITY....................................................26

   2.1      ESTABLISHMENT OF THE FACILITY...................................26
   2.2      PURPOSE, NATURE AND TERM OF THE FACILITY........................26
   2.3      TERM AND AVAILABILITY OF ADVANCES...............................26
   2.4      LENDERS' OBLIGATIONS............................................27
   2.5      REPAYMENT OF FACILITY...........................................27
   2.6      PAYMENTS/CANCELLATION OR REDUCTION..............................28
   2.7      EXTENSION OF MATURITY DATE......................................28
   2.8      INTEREST ON BASE RATE CANADA ADVANCES...........................31
   2.9      LIBOR ADVANCES..................................................32
   2.10     METHOD AND PLACE OF PAYMENT.....................................33
   2.11     FEES............................................................33
   2.12     CONVERSION OPTIONS..............................................34
   2.13     EXECUTION OF NOTICES............................................34
   2.14     EVIDENCE OF INDEBTEDNESS........................................34
   2.15     INTEREST ON UNPAID COSTS AND EXPENSES...........................34
   2.16     CRIMINAL RATE OF INTEREST.......................................35
   2.17     COMPLIANCE WITH THE INTEREST ACT (CANADA).......................35
   2.18     NOMINAL RATE OF INTEREST........................................35
   2.19     SWING LINE FACILITY.............................................35
   2.20     INCREASE IN AGGREGATE COMMITMENT AMOUNT TO U.S.$750,000,000.....37

ARTICLE 3   CHANGE OF CIRCUMSTANCES AND INDEMNIFICATION.....................39

   3.1      LENDER REPRESENTATION...........................................39
   3.2      INCREASED COSTS.................................................39
   3.3      ILLEGALITY......................................................40
   3.4      MITIGATION......................................................40
   3.5      TAXES...........................................................42

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                                      -ii-

   3.6      TAX REFUND......................................................44

ARTICLE 4   CONDITIONS PRECEDENT TO DRAWDOWN................................44

   4.1      CONDITIONS FOR FIRST DRAWDOWN...................................44
   4.2      CONDITIONS FOR SUBSEQUENT DRAWDOWNS.............................46

ARTICLE 5   PROVISIONS RELATING TO SUBSIDIARIES.............................47

   5.1      MATERIAL RESTRICTED SUBSIDIARIES TO PROVIDE GUARANTEES..........47
   5.2      UNRESTRICTED SUBSIDIARIES.......................................47

ARTICLE 6   REPRESENTATIONS AND WARRANTIES..................................48

   6.1      REPRESENTATIONS AND WARRANTIES..................................48
   6.2      SURVIVAL OF REPRESENTATIONS AND WARRANTIES......................52
   6.3      DEEMED REPETITION OF REPRESENTATIONS AND WARRANTIES.............53

ARTICLE 7   COVENANTS.......................................................53

   7.1      AFFIRMATIVE COVENANTS...........................................53
   7.2      NEGATIVE COVENANTS..............................................58
   7.3      FINANCIAL COVENANTS.............................................61

ARTICLE 8   DEFAULT AND ACCELERATION........................................61

   8.1      EVENTS OF DEFAULT...............................................61
   8.2      ACCELERATION....................................................64
   8.3      REMEDIES CUMULATIVE AND WAIVERS.................................65
   8.4      SUSPENSION OF LENDERS' OBLIGATIONS..............................65
   8.5      APPLICATION OF PAYMENTS AFTER AN EVENT OF DEFAULT...............65

ARTICLE 9   THE ADMINISTRATIVE AGENT AND ADMINISTRATION OF THE FACILITY.....66

   9.1      AUTHORIZATION OF ACTION.........................................66
   9.2      PROCEDURE FOR MAKING ADVANCES...................................66
   9.3      REMITTANCE OF PAYMENTS..........................................68
   9.4      REDISTRIBUTION OF PAYMENT.......................................68
   9.5      DUTIES AND OBLIGATIONS..........................................69
   9.6      PROMPT NOTICE TO THE LENDERS....................................70
   9.7      AGENT'S AUTHORITY...............................................70
   9.8      LENDER'S INDEPENDENT CREDIT DECISION............................71
   9.9      INDEMNIFICATION.................................................71
   9.10     SUCCESSOR AGENT.................................................71
   9.11     TAKING AND ENFORCEMENT OF REMEDIES..............................72
   9.12     RELIANCE UPON LENDERS...........................................73
   9.13     RELIANCE UPON AGENT.............................................73
   9.14     REPLACEMENT OF CANCELLED COMMITMENTS............................74
   9.15     DISCLOSURE OF INFORMATION.......................................74
   9.16     ADJUSTMENTS OF RATEABLE PORTIONS................................76

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ARTICLE 10  COSTS, EXPENSES AND INDEMNIFICATION.............................76

   10.1     COSTS AND EXPENSES..............................................76
   10.2     INDEMNIFICATION BY THE BORROWERS................................77
   10.3     FUNDS...........................................................77
   10.4     GENERAL INDEMNITY...............................................77
   10.5     ENVIRONMENTAL CLAIMS............................................79

ARTICLE 11  GENERAL.........................................................80

   11.1     TERM............................................................80
   11.2     SURVIVAL........................................................80
   11.3     BENEFIT OF THE AGREEMENT........................................80
   11.4     NOTICES.........................................................81
   11.5     AMENDMENT AND WAIVER............................................81
   11.6     GOVERNING LAW...................................................82
   11.7     FURTHER ASSURANCES..............................................82
   11.8     ENFORCEMENT AND WAIVER BY THE LENDERS...........................82
   11.9     EXECUTION IN COUNTERPARTS.......................................83
   11.10    ASSIGNMENT BY THE BORROWERS.....................................83
   11.11    ASSIGNMENTS AND TRANSFERS BY A LENDER...........................83
   11.12    CERTAIN REQUIREMENTS IN RESPECT OF MERGER, ETC..................85
   11.13    LOCATION OF LENDERS.............................................87
   11.14    SET-OFF.........................................................87
   11.15    TIME OF THE ESSENCE.............................................87
   11.16    ADVERTISEMENTS..................................................88
   11.17    DESIGNATION.....................................................88

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Schedules:

<TABLE>

        <S>              <C>  <C>

        Schedule A       -    Lenders

        Schedule B       -    Lenders' Commitments

        Schedule C       -    Applicable Margin and Facility Fee

        Schedule D       -    Quarterly Certificate on Covenants

        Schedule E       -    Conversion Notice

        Schedule F       -    Drawdown Notice and Notice of Swing Line Borrowing

        Schedule G       -    Guarantees

        Schedule H       -    Rollover Notice

        Schedule I       -    Transfer Notice

        Schedule J       -    Mandatory Cost Calculation

        Schedule K       -    Opinions of Counsel

        Schedule L       -    Extension Request

        Schedule M       -    Permitted Encumbrance Certificate

</TABLE>
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                    FOUR YEAR REVOLVING TERM CREDIT AGREEMENT

                                          MADE as of the 31st day of July, 2001.

B E T W E E N:

                          CELESTICA INC.,
                          a corporation incorporated under the laws of the
                          Province of Ontario,

                                                              OF THE FIRST PART,

                                     - and -

                          CELESTICA INTERNATIONAL INC.,
                          a corporation incorporated under the laws of the
                          Province of Ontario,

                                                             OF THE SECOND PART,

                                     - and -

                          THE BANK OF NOVA SCOTIA,
                          a Canadian chartered bank, as Administrative Agent

                                                              OF THE THIRD PART,

                                     - and -

                         THE FINANCIAL INSTITUTIONS NAMED IN SCHEDULE A,
                         as Lenders,

                                                             OF THE FOURTH PART.

                  WHEREAS Celestica has requested the Lenders to provide, and
the Lenders have agreed to provide, a revolving term credit facility in an
initial aggregate maximum principal amount of U.S.$500,000,000 (which may be
increased up to $750,000,000) to Celestica and Celestica International upon and
subject to the terms and conditions hereinafter set forth;

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                                      -2-

                  AND WHEREAS the Administrative Agent has agreed to act as
agent on behalf of the Lenders with regard to certain matters associated with
the Facility;

                  NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration
of the premises, the covenants herein contained and other valuable
consideration, the parties hereto agree as follows:

                                   ARTICLE 1
                                 INTERPRETATION

1.1      DEFINITIONS

                  In this Agreement:

"ACQUIRED INDEBTEDNESS" means Indebtedness of any Person (i) which is
outstanding at the time that such Person becomes a Restricted Subsidiary or is
amalgamated with, or merged with or into, a Borrower or a Restricted Subsidiary;
or (ii) which is outstanding at the time that assets of a Person are acquired by
a Borrower or a Restricted Subsidiary and the obligation for repayment of which
is assumed by such Borrower or Restricted Subsidiary in connection with the
acquisition of such assets;

"ACQUIRING LENDERS" has the meaning specified in Section 2.7(b)(iii);

"ACQUISITION DATE" has the meaning specified in Section 2.7(b)(iii);

"ADDITIONAL COMPENSATION" has the meaning specified in Section 3.2;

"ADMINISTRATIVE  AGENT"  means  Scotiabank  when acting in its  capacity as
administrative agent hereunder;

"ADVANCE" means a LIBOR Advance, a Base Rate Canada Advance made by the Lenders
or a Lender, as applicable and "Advances" means all of them;

"AFFECTED LENDER" has the meaning specified in Section 3.4(b);

"AFFILIATE" means an affiliated body corporate and, for the purposes of this
Agreement, (i) one body corporate is affiliated with another body corporate if
one such body corporate is the Subsidiary of the other or both are Subsidiaries
of the same body corporate or each of them is controlled by the same Person and
(ii) if two bodies corporate are affiliated with the same body corporate at the
same time, they are deemed to be affiliated with each other; for greater
certainty for the purposes of this definition, "body corporate" shall include a
Canadian Chartered Bank;

"AGREEMENT" means this agreement and all Schedules attached hereto as the same
may be amended, restated, replaced or superseded from time to time;

"ALTERNATE LENDERS" has the meaning specified in Section 2.7(b)(iv);

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                                      -3-

"APPLICABLE LAW" means, with respect to any Person, property, transaction or
event, all applicable laws, statutes, rules, regulations, codes, treaties,
conventions, judgements, orders, awards or determinations of courts, arbitrators
or mediators, and decrees in any applicable jurisdiction which are binding on
such Person, property, transaction or event;

"APPLICABLE MARGIN" shall have the meaning specified in Schedule C;

"APPROVED  CREDIT  RATING  AGENCY"  means any one of  Standard & Poor's  Ratings
Services (a division of The McGraw-Hill Companies,  Inc.) ("Standard & Poor's"),
Moody's Investors Service,  Inc. ("Moody's") and any other similar agency agreed
to by Celestica and the Administrative Agent;

"APPROVING LENDERS" has the meaning specified in Section 2.7(b);

"ARM'S  LENGTH"  has the  meaning  ascribed  thereto  under the  Income  Tax Act
(Canada) in effect as of the date hereof;

"ASSENTING LENDER" has the meaning specified in Section 3.4(b);

"AVAILABLE SWING LINE COMMITMENT" means the monetary amount which is the
Commitment of the Swing Line Lender as may be increased or decreased from time
to time pursuant to Section 2.19(j);

"BANKING DAY" means a day, other than a Saturday or a Sunday and, where used in
the context of a notice, delivery, payment or other communication addressed to
the Administrative Agent, which is also a day on which banks are not required or
authorized to close in Toronto, Canada;

"BASE RATE CANADA" means, on any day on which such rate is determined, the
greater of (i) the variable rate of interest per annum, expressed on the basis
of a year of 365 or 366 days, as the case may be, established or quoted from
time to time by the Administrative Agent as the reference rate of interest then
in effect for determining interest rates on United States Dollar denominated
commercial loans made by it in Canada; and (ii) the Federal Funds Effective Rate
plus 1/2 of 1% per annum;

"BASE RATE CANADA ADVANCE" means a loan made by the Lenders to a Borrower on
which interest is payable based on the Base Rate Canada;

"BORROWERS' COUNSEL" means Davies Ward Philips & Vineberg LLP, Toronto, Ontario
or such other firm of legal counsel as the Borrowers may from time to time
designate;

"BORROWERS"  means Celestica and Celestica  International  from time to time and
their respective permitted successors and assigns;

"BUSINESS" means the business of:

          (i)  conducting a broad range of electronics manufacturing services,
               including the manufacturing, assembly and testing of printed
               circuit boards, printed

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                                      -4-

                  circuit board assembly, backplanes, electro-mechanical
                  sub-assembly, memory modules, photonics, opto-electronic
                  assembly, full system assembly, product testing, quality
                  assurance, failure analysis, and other related manufacturing
                  services;

          (ii)    a full range of supply chain management, services such as
                  materials procurement, inventory management, logistics,
                  packaging, distribution, after-market support and
                  refurbishment;

          (iii)   design services including concept and product design, product
                  documentation and data management, prototype services, product
                  qualification, design for manufacturability and new product
                  introduction;

          (iv)    the design, production, distribution and sale of power
                  products; and

          (v)     any incidental businesses conducted by businesses acquired by
                  a Borrower or a Restricted Subsidiary whose principal business
                  involves one or more of the businesses described in paragraphs
                  (a) through (d) of this definition;

"CANADIAN  DOLLARS"  and  "CDN.  $"  mean  the  lawful  currency  of  Canada  in
immediately available funds;

"CAPITAL LEASE" means any leasing or similar arrangement which, in accordance
with GAAP, would be classified a capital lease;

"CAPITAL LEASE OBLIGATIONS" means all monetary obligations of Celestica or a
Subsidiary under a Capital Lease and for the purposes of this Agreement and each
other Loan Document, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP;

"CASH EQUIVALENTS" means:

     (a)  United States Dollars, Canadian Dollars or Freely Tradeable European
          Currency;

     (b)  bonds, debentures or other evidences of indebtedness issued or
          directly and fully guaranteed or insured by the United States or
          Canadian Government, any agency or instrumentality thereof or, if such
          bonds, debentures or other evidences of indebtedness are rated at
          least A-1 or P-1 by an Approved Credit Rating Agency, of the
          Government of any Province of Canada or any agency or instrumentality
          thereof;

     (c)  any evidence of indebtedness, maturing not more than one year after
          such time, issued or guaranteed by the United States or Canadian
          Government or, if such evidence of indebtedness is rated at least A-1
          or P-1 by an Approved Credit Rating Agency or R1(mid) by Dominion Bond
          Rating Service Limited ("DBRS") by the Government of any Province of
          Canada;

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                                       -5-

     (d)  commercial paper, maturing not more than twelve months from the date
          of issue, which is issued by,

          (i)     a corporation (other than an Obligor or any Affiliate of any
                  Obligor) organized under the laws of any state of the United
                  States, of the District of Columbia, of Canada or of any
                  Province of Canada and rated at least A-1 by Standard & Poor's
                  or P-1 by Moody's or any equivalent rating by another Approved
                  Credit Rating Agency or R1(mid) by DBRS; or

          (ii)    any Lender (or an Affiliate thereof);

     (e)  any certificate of deposit or bankers' acceptance, maturing not more
          than one year after such time, which is issued by either,

          (i)     a commercial banking institution that is a member of the
                  Federal Reserve System and has a combined capital and surplus
                  and undivided profits of not less than U.S. $500,000,000 or a
                  bank that is listed on Schedule I to the Bank Act (Canada); or

          (ii)    any Lender;

     (f)  any repurchase agreement entered into with any Lender (or other
          commercial banking institution of the stature referred to in clause
          (v)(A) which ,

          (i)     is secured by a fully perfected security interest in any
                  obligation of the type described in any of clauses (ii)
                  through (v); and

          (ii)    has a market value at the time such repurchase agreement is
                  entered into of not less than 100% of the repurchase
                  obligation of such Lender (or other commercial banking
                  institution) thereunder;

     (g)  marketable debt securities issued in the United Kingdom by Her
          Majesty's Government;

     (h)  amounts deposited overnight for cash management purposes with a
          commercial banking institution, which banking institution does not
          meet the debt rating criteria set out in paragraph (i) below, with
          whom Celestica or a Restricted Subsidiary has a cash management
          relationship, provided that such amounts, for the purposes of
          inclusion of such amounts in the definition of "Net Funded Debt",
          shall be limited to an aggregate amount of U.S. $30,000,000;

     (i)  amounts deposited overnight with a commercial banking institution
          provided that such institution, or the guarantor of the obligations of
          such institution with respect to such deposits, in each case, has a
          short-term debt rating of A-1 granted by Standard & Poor's or P-1
          granted by Moody's;

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                                       -6-

     (j)  the face amount of certificates of deposit issued in London by an
          authorized institution under the England Banking Act 1987 or a
          Building Society authorized under the England Building Societies Act
          1986 with a short term debt rating, in each case of A-1 granted by
          Standard & Poor's or P-1 granted by Moody's; and

     (k)  Pound Sterling bills of exchange eligible for rediscount at the Bank
          of England;

"CELESTICA" means Celestica Inc., a corporation duly incorporated, organized and
subsisting under the laws of the Province of Ontario, and any successor
corporation;

"CELESTICA CORP." means Celestica Corporation, a corporation duly incorporated,
organized and subsisting under the laws of the State of Delaware, and any
successor corporation;

"CELESTICA INTERNATIONAL" means Celestica International Inc., a corporation duly
incorporated, organized and subsisting under the laws of the Province of
Ontario, and any successor corporation;

"CERCLA" means the United States Comprehensive Environmental Response,
Compensation and Liability Act of 1980;

"CERCLIS" means the United States Comprehensive Environmental Response
Compensation Liability Information System List;

"CLAIMS" has the meaning specified in Section 10.4(a);

"CLOSING DATE" means July 31, 2001;

"CODE" means the United States Internal Revenue Code of 1986;

"COMMENCEMENT DATE" means January 1, 1999;

"COMMITMENT" means the commitment of each Lender to loan a portion of the
aggregate amount of the Facility, in the amount set opposite its name in
Schedule B, as such Schedule B may be amended pursuant to (a) Section 2.20 or
(b) under a Transfer Notice pursuant to Section 11.11;

"CONTINGENT LIABILITY" means any agreement, undertaking or arrangement by which
any Person guarantees, endorses or otherwise becomes or is contingently liable
for the Indebtedness for borrowed monies of any other Person;

"CONTROL" means, with respect to control of a body corporate by a Person, the
holding (other than by way of security only) by or for the benefit of that
Person, or Affiliates of that Person of securities of such body corporate or the
right to vote or direct the voting of securities of such body corporate to
which, in the aggregate, are attached more than 50% of the votes that may be
cast to elect directors of the body corporate, provided that the votes attached
to those securities are sufficient, if exercised, to elect a majority of the
directors of the body corporate;

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                                       -7-

"CONTROLLED GROUP" means all members of a controlled group of corporations and
all members of a controlled group of trades or business (whether or not
incorporated) under common control which, together with the Borrowers, are
treated as a single employer under Section 414(b) or Section 414(c) of the Code;

"CONVERSION" means the conversion of one type of Advance into another type of
Advance pursuant to Section 2.12;

"CONVERSION NOTICE" means a notice substantially in the form set out in
Schedule E;

"CORPORATE REORGANIZATION" has the meaning specified in Section 11.12;

"DEFAULT" means an event which, with the giving of notice or the passage of time
or the making of any determination or any combination thereof as provided for
herein, would constitute an Event of Default;

"DESIGNATED ACCOUNT" means an account of a Borrower of which the Administrative
Agent is notified by such Borrower from time to time for the purposes of
transactions under this Agreement;

"DISSENTING LENDERS" has the meaning specified in Section 2.7(b);

"DRAWDOWN" means a drawdown of an Advance;

"DRAWDOWN DATE" means, in relation to any Advance, the date, which shall be a
Banking Day, on which the Drawdown of such Advance is made by a Borrower
pursuant to a Drawdown Notice;

"DRAWDOWN NOTICE" means a notice substantially in the form set out in Exhibit 1
to Schedule F;

"EBITDA" means, for any particular period, the aggregate of:

     (a)  Net Income for such period;

     (b)  all amounts deducted in the calculation of Net Income in respect
          of Taxes, whether paid or deferred (in accordance with GAAP);

     (c)  all amounts deducted in the calculation of Net Income in respect of
          depreciation;

     (d)  all amounts deducted in the calculation of Net Income in respect
          of amortization;

     (e)  all amounts deducted in the calculation of Net Income in respect of
          Interest Expense;

     (f)  all amounts  deducted in the calculation of Net Income in connection
          with the implicit financing costs of synthetic leases and Permitted
          Securitization Transactions;

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                                       -8-

     (g)  all amounts deducted in the calculation of Net Income in determining
          all non-recurring charges; and

     (h)  non-cash charges and purchase accounting deductions,

provided that, in the event of the acquisition by Celestica or a Restricted
Subsidiary of (i) a corporation which becomes a new Restricted Subsidiary or
(ii) any other entity or a group of assets or an operation, provided that such
operation comprises a going concern which becomes a division or part of the
business of Celestica or a Restricted Subsidiary (an "operation"), EBITDA will,
subject to (x) and (y), include the EBITDA for the newly acquired Restricted
Subsidiary or operation for its immediately preceding four fiscal quarters
completed prior to such acquisition.

     (i)  If such newly acquired Restricted Subsidiary or operation was,
          immediately prior to such acquisition, accounted for on a stand-alone
          basis, EBITDA for such newly acquired Restricted Subsidiary or
          operation shall only be included in the above calculation if EBITDA
          for such newly acquired Restricted Subsidiary or operation, as the
          case may be, can be determined by reference to historical financial
          statements satisfactory to the Administrative Agent; and

     (j)  If such newly acquired Restricted Subsidiary or operation:

          (i)     was not, immediately prior to such acquisition, accounted for
                  on a stand-alone basis; or

          (ii)    was immediately prior to such acquisition, accounted for on a
                  stand-alone basis but, in the determination of the
                  Administrative Agent acting reasonably, the business of such
                  newly acquired Restricted Subsidiary or operation will not be
                  conducted by Celestica or its Restricted Subsidiary, as the
                  case may be, in substantially the same form or the same manner
                  as conducted by the vendor immediately prior to such
                  acquisition,

then subject to the satisfaction of the Administrative Agent and the Majority
Lenders with the method of determination thereof acting reasonably, EBITDA for
such newly acquired Restricted Subsidiary or operation will be determined having
regard to historical financial results together with, and having regard to,
contractual arrangements and any other changes made or proposed to be made by
Celestica or its Restricted Subsidiary, as the case may be, to the business of
such newly acquired Restricted Subsidiary or operation;

"ENVIRONMENTAL LAWS" means applicable federal, provincial, state, municipal or
other local law, statute, regulation or by-law, code, ordinance, decree,
directive, standard, policy, guideline, rule, order, treaty, convention,
judgment, award or determination for the protection of the environment or human
health or relating to the manufacture, processing, distribution, use, treatment,
storage, Release, transport or handling of Hazardous Materials;

"ERISA" means the United States Employee Retirement Income Security Act of 1974;

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                                       -9-

"EURO" means the single currency of the European Union introduced on the
Commencement Date;

"EVENT OF DEFAULT" means any of the events described in Section 8.1;

"EXEMPTED JURISDICTION" has the meaning specified in Section 11.12;

"EXTENSION REQUEST" means a request made in writing by Celestica to the
Administrative Agent substantially in the form set out in Schedule L;

"FACILITY" means the four year revolving term credit facility in an initial
aggregate principal amount of U.S.$500,000,000 to be made available to the
Borrowers as set forth in Article 2 as same may be increased and/or extended
subject to the terms set forth herein;

"FACILITY FEE" has the meaning specified in Section 2.11(a) and calculated in
accordance with Schedule C;

"FEDERAL FUNDS EFFECTIVE RATE" means, for any particular day, the variable rate
of interest per annum, calculated on the basis of a 360-day year as determined
by the Administrative Agent for the actual number of days elapsed, equal to:

     (a)  the weighted average of the rates on overnight federal funds
          transactions with members of the Federal Reserve System arranged by
          federal funds brokers as published for such day (or, if such day is
          not a Banking Day, for the next preceding Banking Day) by the Federal
          Reserve Bank of New York, or

     (b)  for any Banking Day on which such rate is not so published by the
          Federal Reserve Bank of New York, the average of the quotations for
          such day for such transactions received by the Administrative Agent
          from three federal funds brokers of recognized standing selected by
          the Administrative Agent in consultation with Celestica;

"FINAL MATURITY DATE" means the day which is one year from the Maturity Date;

"FREELY TRADEABLE EUROPEAN CURRENCY" means Pounds Sterling and, so long as it
trades on a LIBOR equivalent basis and is freely convertible to Canadian Dollars
and to United States Dollars, the Euro;

"GAAP" has the meaning specified in Section 1.7;

"GLOBAL RATEABLE PORTION" means, with respect to any Lender, at any time, the
ratio, expressed as a decimal fraction, of:

     (a)  such Lender's Commitment at such time to

     (b)  the aggregate of the Commitments of all of the Lenders at such time;

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                                       -10-

"GUARANTEES" means the guarantees of each of the Guarantors substantially in the
form set forth in Schedule G;

"GUARANTOR" means each Person which, on the date of this Agreement, is or, after
the date of this Agreement, becomes a Material Restricted Subsidiary and
"Guarantors" means two or more of them;

"HAZARDOUS MATERIAL" has the meaning specified in Section 10.5(a);

"HEDGING OBLIGATIONS" means, with respect to any Person, all liabilities of such
Person under interest rate swap agreements, interest rate cap agreements,
interest rate collar agreements and all such other agreements or arrangements
designed to protect such Person against fluctuations in interest rates;

"INDEBTEDNESS" of any Person means, without duplication:

     (a)  all obligations of such Person for borrowed money and all obligations
          of such Person evidenced by bonds, debentures, notes or other similar
          instruments;

     (b)  all obligations, contingent or otherwise, relative to the face amount
          of all letters of credit, whether drawn or undrawn, and bankers'
          acceptances issued for the account of such Person;

     (c)  all obligations of such Person as lessee under leases which have been
          or should be, in accordance with GAAP, recorded as Capital Leases,
          including liabilities in respect of Capital Leases incurred by such
          Person in connection with sale/leaseback transactions;

     (d)  net liabilities of such Person under all Hedging Obligations or net
          liabilities of such Person under currency, swap, forward or other
          foreign exchange hedging agreements;

     (e)  whether or not so included as liabilities in accordance with GAAP, all
          obligations of such Person to pay the deferred purchase price of
          property or services, and indebtedness (excluding prepaid interest
          thereon), secured by a lien on the property owned or being purchased
          by such Person (including indebtedness arising under conditional sales
          or other title retention agreements), whether or not such indebtedness
          shall have been assumed by such Person or is limited in recourse;

     (f)  all Contingent Liabilities of such Person; and

     (g)  any Acquired Indebtedness.

For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer;

<PAGE>

                                       -11-

"INDEMNIFIED PERSON" has the meaning specified in Section 3.5(b);

"INDEMNIFYING PARTY" has the meaning specified in Section 10.4(c);

"INDEMNITEE" has the meaning specified in Section 10.4(a);

"INTEREST EXPENSE" means, for any period, the aggregate consolidated interest
expense of Celestica on a consolidated basis as determined in accordance with
GAAP including the portions of any payment made in respect of Capital Leases
allocable to interest expenses but excluding deferred financing costs and other
non-cash interest expense;

"INTEREST PAYMENT DATE" shall have the meaning set out in Section 2.8;

"INTEREST PERIOD" means relative to any LIBOR Advance, the period commencing on
(and including) the date on which such LIBOR Advance is made or continued as, or
converted into, a LIBOR Advance, and ending on (but excluding) the day which
numerically corresponds to such date one, two, three or six months thereafter
(or, if such month has no numerically corresponding date, on the last Banking
Day of such month) as the Borrower may select; provided, however, that:

     (a)  if such Interest Period would otherwise end on a day which is not a
          Banking Day, such Interest Period shall end on the next following
          Banking Day (unless, if such Interest Period applies to LIBOR
          Advances, and such next following Banking Day is the first Banking Day
          of a calendar month, in which case such Interest Period shall end on
          the Banking Day next preceding such numerically corresponding day);

     (b)  the Borrowers shall not be permitted to select, collectively or in the
          aggregate, Interest Periods to be in effect at any one time which have
          expiration dates occurring on more than ten different dates, unless
          otherwise previously consented to in writing by the Administrative
          Agent; and

     (c)  no Interest Period may end later than the Maturity Date;

"LENDERS" means, collectively, the financial institutions set out in Schedule A
and "Lender" shall mean any such financial institution;

"LENDERS" Counsel" means the firm of Osler, Hoskin & Harcourt LLP, Toronto,
Ontario, or such other firm of legal counsel as the Administrative Agent may
from time to time designate;

"LIBO RATE" means, relative to any LIBOR Advance:

     (a)  the rate of interest per annum of the offered quotations for deposits
          in the currency of the relevant Advance for a period equal or
          comparable to the Interest Period in an amount comparable to the
          Advance as such rate is reported on the display designated as "page
          3750" or "page 3740", as applicable (or any replacement pages) by
          "Telerate - The Financial Information Network" published

<PAGE>

                                       -12-

          by Telerate Systems, Inc. (or such other company or service as may be
          nominated by the British Bankers' Association as the information
          vendor for the purpose of displaying British Bankers' Association
          Interest Settlement Rates for deposits in the currency in which the
          LIBOR Advance is requested) at or about 10:00 a.m. (London, England
          time) on the applicable Rate Fixing Day; or

     (b)  if a rate cannot be determined under paragraph (a) above, the rate
          determined by the Administrative Agent to be the arithmetic average
          (rounded up if necessary, to the nearest 1/16 of 1%) of such rates as
          reported on the display page designated as the page (or any
          replacement page) for the offering of deposits in the currency in
          which the LIBOR Advance is requested (for example, the LIBO page in
          the case of United States Dollars) by Reuters Money Market Service (or
          its successor) for a period equal to or comparable to the Interest
          Period and in an amount comparable to the Advance at or about 10:00
          a.m. (London, England time) on the applicable Rate Fixing Day provided
          that at least two such rates are reported on such page; or

     (c)  if a rate cannot be determined under either of paragraphs (a) and (b)
          above, the rate determined by the Administrative Agent for a
          particular Interest Period to be the arithmetic average of the rates
          per annum at which deposits in the currency in which the LIBOR Advance
          is requested in immediately available funds are offered to the LIBOR
          Offices in the London interbank market for a period equal to or
          comparable to the Interest Period and an amount comparable to the
          Advance at or about 10:00 a.m. (London, England time) on the
          applicable Rate Fixing Day.

For the purposes of this definition, "Rate Fixing Day" means in respect of each
Interest Period, the second Banking Day before the first day of such Interest
Period.

"LIBOR ADVANCE" means a loan made by the Lenders to a Borrower on which interest
is payable at the LIBO Rate plus the Applicable Margin;

"LIBOR OFFICE" means, relative to any Lender, the office of such Lender
designated as such below its signature hereto, or designated in the Transfer
Notice by which a financial institution becomes a Lender pursuant to Section
11.11, or such other office of a Lender (or any successor, assign or Affiliate
of such Lender) as designated from time to time by notice from such Lender to
Celestica and the Administrative Agent, whether or not outside Canada, which may
be making or maintaining the LIBOR Advances of such Lender;

"LIENS" means any security interest, mortgage, pledge, hypothec, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise) or
charge against or interest in property to secure payment of a debt or
performance of an obligation (including the interest of a vendor or lessor under
any conditional sale agreement, or of a lessor under any lease including a
Capital Lease or other title retention agreement);

"LOAN DOCUMENTS" means this Agreement, the Guarantees provided for herein and
all other agreements, documents or instruments to be executed and delivered to
the Administrative Agent,

<PAGE>

                                       -13-

the Lenders or any of them by the Borrowers, the Guarantors or any of them
hereunder or thereunder or pursuant hereto or thereto;

"LOSSES" has the meaning specified in Section 10.4(a);

"MAIN FACILITY COMMITMENT" means, at any time, the amount, if any, by which the
Commitment of the Swing Line Lender exceeds the Available Swing Line Commitment
at that time;

"MAIN FACILITY RATEABLE PORTION" means, with respect to any Lender, at any time,
subject to adjustment by the Administrative Agent in accordance with Section
9.16 of this Agreement and also subject to Section 2.3 of this Agreement, the
ratio, expressed as a decimal fraction, of:

     (a)  such Lender's Commitment at such time (or, if such Lender is
          Scotiabank, or an affiliate thereof, the Main Facility Commitment) to

     (b)  the aggregate of the Commitments of all of the Lenders (other than
          Scotiabank and its affiliates) at such time and the Main Facility
          Commitment at such time;

"MAJORITY LENDERS" means the Lenders, the Commitments of which are in the
aggregate more than 51% of the aggregate amount of Commitments;

"MANDATORY COST" means, in relation to a LIBOR Advance, an amount determined in
accordance with Schedule J;

"MATERIAL ADVERSE CHANGE" means any change of circumstances or any event which
would reasonably be likely to have a Material Adverse Effect;

"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the business,
assets, operations, prospects or condition, financial or otherwise, of Celestica
and of the Restricted Subsidiaries taken as a whole, or (b) the ability of any
Borrower to perform any of its Obligations, or (c) the rights of the
Administrative Agent and the Lenders against the Obligors on a consolidated
basis pursuant to the Loan Documents;

"MATERIAL RESTRICTED SUBSIDIARY" means any Restricted Subsidiary of Celestica
whose assets total greater than U.S. $150,000,000 on an unconsolidated basis on
the date referenced in the most recently delivered set of financial statements
delivered pursuant to Section 7.1(a)(ii); provided, however, that the
unconsolidated assets of all Restricted Subsidiaries which are not Material
Restricted Subsidiaries shall not exceed on the date referenced in such
financial statements, in the aggregate, ten per cent (10%) of the consolidated
assets of the Borrowers and the Restricted Subsidiaries on such date, and in the
event that the unconsolidated assets of all Restricted Subsidiaries which are
not Material Restricted Subsidiaries exceeds, on the date referenced in such
financial statements, in the aggregate, ten percent (10%) of the consolidated
assets of the Borrowers and Restricted Subsidiaries, Celestica shall set out in
a Schedule to the Officer's Certificate to be delivered in accordance with
Section 7.1(a)(iii) the Restricted Subsidiaries which it wishes to designate as
Material Restricted Subsidiaries such that

<PAGE>

                                       -14-

unconsolidated assets of all of the Restricted Subsidiaries which are not
Material Restricted Subsidiaries shall not exceed ten percent (10%) of the
consolidated assets of the Borrowers and Restricted Subsidiaries on such date;

"MATURITY DATE" means July 30, 2005 or, if the Maturity Date has been extended
pursuant to the provisions of Section 2.7, the Final Maturity Date;

"NET FUNDED DEBT" of Celestica, on a consolidated basis, means, at any
particular time and without duplication the amount, by which the aggregate of:

     (a)  on a consolidated basis, determined in accordance with GAAP:

          (i)     the outstanding monetary Obligations at such time;

          (ii)    the Capital Lease Obligations outstanding at such time;

          (iii)   any other Indebtedness for borrowed money (including, without
                  limitation and without duplication, all Indebtedness in
                  respect of bankers' acceptances and letters of credit)
                  outstanding at such time but excluding (A) Permitted
                  Subordinated Indebtedness, and (B) any Indebtedness which, in
                  accordance with GAAP adopted as at the date of incurring such
                  Indebtedness, qualified as equity, so long as the terms
                  governing such Indebtedness are not amended after the date of
                  incurring the Indebtedness in a manner that would have
                  resulted in such Indebtedness not qualifying as equity in
                  accordance with GAAP as adopted as at the date of incurring
                  such Indebtedness;

          (iv)    the net marked-to-market value (positive or negative) of any
                  Hedging Obligations; and

          (v)     any Acquired Indebtedness outstanding at such time;

plus

     (b)  Contingent Liabilities of Celestica or any Restricted Subsidiary in
          existence at such time;

exceeds the aggregate of

     (c)  cash and Cash Equivalents on a consolidated basis;

"NET INCOME" means, for any particular period, net income of Celestica for such
period determined on a consolidated basis in accordance with GAAP;

"NOTICE OF AMOUNT" has the meaning specified in Section 3.2;

<PAGE>

                                       -15-

"NOTICE OF SWING LINE BORROWING" means a notice substantially in the form set
out in Exhibit 2 to Schedule F;

"NOTIFICATION DATE" has the meaning specified in Section 10.5(c);

"OBLIGATIONS" means all obligations (monetary and otherwise) of the Borrowers
arising under or in connection with this Agreement and each other Loan Document;

"OBLIGORS" means, collectively, the Borrowers and the Guarantors and "Obligor"
means any one of them;

"OFFICER'S CERTIFICATE" means a certificate signed by any one of the Chairman of
the Board, the President, the Chief Executive Officer, the Chief Operating
Officer, the Chief Financial Officer, any Senior Vice-President, any
Vice-President, the Treasurer, the Controller, the Assistant Treasurer, the
Secretary or the Assistant Secretary of Celestica;

"OFFICIAL BODY" means any national, federal or provincial government or any
government of any political subdivision thereof, or any agency, authority,
board, central bank, monetary authority, commission, department or
instrumentality thereof, or any court, tribunal, grand jury, mediator or
arbitrator, whether foreign or domestic, or any non-governmental regulatory
authority to the extent that the rules, regulations and orders of such body have
the force of law;

"ORGANIC DOCUMENT" means, relative to any body corporate, its articles of
incorporation, its by-laws and all shareholder agreements, voting trusts and
similar arrangements applicable to any of its Shares;

"OTHER TAXES" means any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies which arise from any
payment made hereunder or from the execution, delivery or registration of, or
otherwise with respect to, any of the Loan Documents, or any other document in
connection herewith;

"OUTSTANDING AMOUNT" has the meaning specified in Section 2.3(c);

"PBGC" means the Pension Benefit Guaranty Corporation and any entity succeeding
to any or all of its functions under ERISA;

"PENSION PLAN" means:

     (a)  any plan, program, agreement or arrangement that is a pension plan for
          the purposes of any federal or provincial pension benefit law or under
          the Income Tax Act (Canada) (whether or not registered under such law)
          which is maintained or contributed to, or to which there is or may be
          an obligation to contribute by any of the Borrowers in respect of its
          employees in Canada; and

     (b)  a "pension plan", as such term is defined in Section 3(2) of ERISA,
          which is subject to Title IV of ERISA (other than a multi-employer
          plan as defined in Section 4001(a)(3) of ERISA), and to which the
          Borrowers or any of the

<PAGE>

                                       -16-

          Subsidiaries or any corporation, trade or business that is, along with
          the Borrowers, a member of a Controlled Group, may have liability;

"PERMITTED ENCUMBRANCES" means any one or more of the following with respect to
the assets of Celestica or any Restricted Subsidiary:

     (a)  inchoate or statutory Liens for Taxes, assessments and other
          governmental charges or levies which are not delinquent (taking into
          account any relevant grace periods) or the validity of which are
          currently being contested in good faith by appropriate proceedings and
          in respect of which there shall have been set aside a provision or
          reserve (to the extent required by GAAP) in an amount which is
          adequate therefor;

     (b)  inchoate or statutory Liens of contractors, sub-contractors,
          mechanics, workers, suppliers, materialmen, carriers and others in
          respect of construction, maintenance, repair or operation of assets of
          Celestica or the relevant Restricted Subsidiary, or otherwise arising
          in the ordinary course provided that such Liens are related to
          obligations not due or delinquent (taking into account any applicable
          grace or cure periods), are not registered as encumbrances against
          title to any of the assets of Celestica or the relevant Restricted
          Subsidiary and adequate holdbacks are being maintained as required by
          applicable legislation or such Liens are being contested in good faith
          by appropriate proceedings and in respect of which there shall have
          been set aside a provision or reserve (to the extent required by GAAP)
          in an amount which is adequate with respect thereto and provided
          further that such Liens do not, in the aggregate, materially detract
          from the value of the assets of Celestica or any Material Restricted
          Subsidiary encumbered thereby or materially interfere with the use
          thereof in the operation of the business of Celestica or any Material
          Restricted Subsidiary;

     (c)  easements, rights-of-way, servitudes, restrictions and similar rights
          in real property comprised in the assets of Celestica or the relevant
          Restricted Subsidiary or interests therein granted or reserved to
          other persons, provided that such rights do not, in the aggregate,
          materially detract from the value of the assets of Celestica or any
          Material Restricted Subsidiary or materially interfere with the use
          thereof in the operation of the business of Celestica or any Material
          Restricted Subsidiary;

     (d)  title defects or irregularities which are of a minor nature and which
          do not, in the aggregate, materially detract from the value of the
          assets of Celestica or any Material Restricted Subsidiary or
          materially interfere with the use thereof in the operation of the
          business of Celestica or any Material Restricted Subsidiary;

     (e)  Liens incidental to the conduct of the business or the ownership of
          the assets of Celestica or the relevant Restricted Subsidiary (other
          than those described in Clauses (f) and (g) of this definition) which
          were not incurred in connection with the borrowing of money or the
          obtaining of advances of credit (including, without

<PAGE>

                                       -17-

          limitation, unpaid purchase price), and which do not, in the
          aggregate, materially detract from the value of the assets of
          Celestica or any Material Restricted Subsidiary or materially
          interfere with the use thereof in the operation of the business of
          Celestica or any Material Restricted Subsidiary;

     (f)  Liens securing appeal bonds or other similar Liens arising in
          connection with court proceedings (including, without limitation,
          surety bonds, security for costs of litigation where required by law
          and letters of credit) or any other instrument serving a similar
          purpose;

     (g)  attachments, judgments and other similar Liens arising in connection
          with court proceedings; provided, however, that such Liens are in
          existence for less than 30 days after the entry thereof or the
          execution or other enforcement of such Liens is effectively stayed and
          the claims secured thereby are being actively contested in good faith
          and by appropriate proceedings;

     (h)  Liens given to a public utility or any municipality or governmental or
          other public authority when required by such utility or other
          authority in connection with the operation of the business or the
          ownership of the assets of Celestica or the relevant Restricted
          Subsidiary, provided that such Liens do not have a Material Adverse
          Effect;

     (i)  Purchase Money Obligations arising in the ordinary course of business,
          provided that such Lien is limited to the property so acquired and is
          created, issued or assumed substantially concurrently with the
          acquisition of such property;

     (j)  the right reserved to or vested in any Official Body by any statutory
          provision or by the terms of any lease, licence, franchise, grant or
          permit of any of Celestica or the relevant Restricted Subsidiary, to
          terminate any such lease, licence, franchise, grant or permit, or to
          require annual or other payments as a condition to the continuance
          thereof;

     (k)  the interests of lessors (including without limitation, security
          interests granted in favour of lessors) pursuant to all leases,
          including Capital Leases and synthetic leases, under which Celestica
          or the relevant Restricted Subsidiary is the lessee;

     (l)  the extension, renewal or refinancing of any Permitted Encumbrance,
          provided that the amount so secured does not exceed the original
          amount secured immediately prior to such extension, renewal or
          refinancing;

     (m)  Liens granted over the assets securitized in connection with any
          Permitted Securitization Transaction;

     (n)  Liens granted by Celestica Corp. pursuant to and in accordance with
          the Synthetic Lease provided that neither Celestica nor any other
          Subsidiary other than

<PAGE>

                                       -18-

          Celestica, Celestica Corp. or Celestica International has any
          liability in respect of such indebtedness;

     (o)  Liens granted by Celestica and/or any Restricted Subsidiary pursuant
          to future subsidized financing by development entities on terms and
          conditions satisfactory to the Administrative Agent and the Majority
          Lenders;

     (p)  Liens granted to secure Acquired Indebtedness, to the extent that (i)
          such Liens exist at the time such person or the assets subject to such
          Lien are acquired by Celestica or a Restricted Subsidiary; (ii) such
          Liens were not created in contemplation of the transaction by which
          the subject Indebtedness became Acquired Indebtedness; and (iii) such
          Liens either (A) only extend to the assets acquired or the assets of
          the Person acquired, as applicable, in the transaction pursuant to
          which the Acquired Indebtedness became an obligation of a Borrower or
          a Restricted Subsidiary or (B) are discharged within 60 days of such
          acquisition;

     (q)  Liens granted in respect of Shares of Unrestricted Subsidiaries;

     (r)  Liens of the nature contemplated in (b), (c), (d) or (e) above, but
          exceeding the materiality thresholds specified therein, securing
          indebtedness in the aggregate not greater than U.S. $50,000,000; and

     (s)  the Lien perfected by the registration in the Ontario Personal
          Property Registration System of Financing Statement Reference File No.
          078426459, Registration No. 961017 1441 0043 8892 registered on
          October 17, 1996 for a period of 5 years, naming as Business Debtor
          Celestica, Inc. at its address located at 844 Don Mills Rd., 32/737
          North York, Ontario M3C 1V7 by 1201541 Ontario Inc. as Secured Party,
          naming as the secured party's address 161 Bay Street, 49th Floor, P.O.
          Box 700, Canada Trust Tower Toronto, Ontario M5J 2S1 and checking the
          collateral classifications accounts and other, which financing
          statement was amended on October 23, 1996 by Registration No. 961023
          1124 0043 9764 to indicate change of name of the Secured Party to
          Celestica International Inc. pursuant to articles of amendment dated
          October 22, 1996. This registration shall perfect only security
          interests granted in connection with a Loan Agreement made as of
          November 4, 1996, as amended, between Celestica, Inc. (a predecessor
          to Celestica International Inc.) and 1201541 Ontario Inc. (a
          predecessor to Celestica International Inc.), pursuant to which
          Celestica, Inc. borrowed an aggregate principal amount of U.S.
          $200,000,000 from 1201541 Ontario Inc.;

"PERMITTED ENCUMBRANCE CERTIFICATE" means a certificate in the form of Schedule
M;

"PERMITTED SECURITIZATION TRANSACTION" means any transaction providing for the
sale, securitization or other asset-backed financing of (i) trade accounts
receivable of or owing to Celestica or any Restricted Subsidiary not exceeding
30% of the book value thereof in any fiscal

<PAGE>

                                       -19-

year, (ii) inventory of Celestica or any Restricted Subsidiary not exceeding
30% of the book value thereof in any fiscal year, or (iii) contractual
rights related to (i) or (ii) provided that the terms and conditions of the
subject transaction shall be on an Arm's Length basis and on commercially
reasonable and usual terms;

"PERMITTED SUBORDINATED INDEBTEDNESS" means all unsecured Indebtedness of
Celestica, which, in respect of principal, is subordinated in right of payment
to the payment in full in cash of all monetary Obligations and, in respect of
interest, is only so subordinated upon the occurrence and during the continuance
of a Default, in each case, on terms satisfactory to the Administrative Agent
and the Majority Lenders, the terms of which permit Celestica at Celestica's
sole option in all circumstances to satisfy such indebtedness by the issue of
Shares or other securities convertible in all circumstances at the sole option
of Celestica into Shares of Celestica;

"PERSON" means an individual, company, partnership (whether or not having
separate legal personality), corporation (including a business trust and a
Canadian chartered bank), joint stock company, trust, unincorporated
association, joint venture or other entity, or a government, state or political
subdivision thereof or any agency of such government, state or political
subdivision;

"POUNDS STERLING" and "L" means the lawful currency of the United Kingdom;

"PREDECESSOR CORPORATION" has the meaning described thereto in Section 11.12;

"PREDECESSOR GUARANTEE" has the meaning described thereto in Section 11.12;

"PROPERTY" has the meaning ascribed thereto in Section 10.5(a);

"PURCHASE MONEY OBLIGATIONS" means any Lien created, issued or assumed by
Celestica or any Subsidiary to secure indebtedness assumed as part of, or issued
or incurred to pay or provide funds to pay, all or a part of the purchase price
of any property (other than the shares, stock or other securities of any
Subsidiary or of any corporation which becomes a Subsidiary upon such purchase,
except for an Unrestricted Subsidiary);

"RELEASE" has the meaning specified in Section 6.1(h)(i);

"RESTRICTED SUBSIDIARY" means each and every Subsidiary of Celestica which is
not at the time an Unrestricted Subsidiary. For greater certainty, a Subsidiary
of an Unrestricted Subsidiary shall not be a Restricted Subsidiary;

"ROLLOVER" means a rollover of a LIBOR Advance pursuant to and in accordance
with Section 2.9;

"ROLLOVER NOTICE" means a notice substantially in the form of Schedule H;

"SCOTIABANK" means The Bank of Nova Scotia, a Canadian chartered bank;

<PAGE>

                                       -20-

"SENIOR UNSECURED CREDIT AGREEMENT" means the Amended and Restated Credit
Agreement dated as of June 8, 2001 among Celestica and the Subsidiaries of
Celestica designated therein, as borrowers, Scotiabank as Administrative Agent,
Canadian Facility Agent, U.S. Facility Agent and U.K. Facility Agent and
Scotiabank and the Financial Institutions named therein as lenders as same may
be amended, restated, supplemented, extended or replaced from time to time;

"SHARES", as applied to the shares of any corporation or other entity, means the
shares or other ownership interests of every class whether now or hereafter
authorized, regardless of whether such shares or other ownership interests shall
be limited to a fixed sum or percentage with respect to the rights of the
holders thereof to participate in dividends and in the distribution of assets
upon the voluntary or involuntary liquidation, dissolution or winding-up of such
corporation or other entity;

"SPECIAL PURPOSE SUBSIDIARY" means any Subsidiary of Celestica which (a) is
formed for the purpose of effecting any Permitted Securitization Transaction and
engaging in other activities reasonably related thereto, and, where applicable,
(b) is structured as a "bankruptcy-remote subsidiary" in accordance with
customary practices in the asset-backed securitization market;

"SUBSIDIARY" means, with respect to any Person, any corporation, company or
other similar business entity (including, for greater certainty, a Canadian
chartered bank) of which more than fifty per cent (50%) of the outstanding
Shares or other equity interests (in the case of Persons other than
corporations) having ordinary voting power to elect a majority of the board of
directors or the equivalent thereof of such corporation, company or similar
business entity (irrespective of whether at the time Shares of any other class
or classes of the Shares of such corporation, company or similar business entity
shall or might have voting power upon the occurrence of any contingency) is at
the time directly or indirectly owned by such Person, by such Person and one or
more other Subsidiaries of such Person, or by one or more other Subsidiaries of
such Person;

"SUBSTITUTE LENDERS" has the meaning specified in Section 9.14;

"SUCCESSOR AGENT" has the meaning specified in Section 9.10;

"SUCCESSOR CORPORATION" has the meaning specified in Section 11.12(a);

"SWING LINE ADVANCE" means an Advance made pursuant to the provisions of
Section 2.19(a);

"SWING LINE LENDER" means Scotiabank or such other Lender as may have agreed to
act as a Swing Line Lender and to which Scotiabank and Celestica may have agreed
to acting as a Swing Line Lender from time to time;

"SYNTHETIC LEASE" means the Master Lease and Open-end Mortgage dated as of
February 12, 1998 made between Celestica Corp. (under its former name, Celestica
Colorado, Inc.) and BMO Leasing (U.S.) Inc., as same may be amended, restated,
supplemented, extended or replaced from time to time, including, without
limitation, the amendment dated December 31, 1998 pursuant to

<PAGE>

                                       -21-

which Celestica Corp. (under its former name Celestica (USA), Inc.) assumed the
liabilities of Celestica Colorado, Inc. under such Master Lease and Open-end
Mortgage;

"TAKE-OVER BID" means an offer to acquire made by Celestica or any Restricted
Subsidiary, alone or acting jointly or in concert with any other Person or
Persons (collectively, the "offeror") to any holder of Shares or securities
convertible, exchangeable or exercisable into Shares (the "Target Shares") of
the offeree issuer, which has not been solicited by or made at the request of
the board of directors of the offeree issuer or with respect to which the board
of directors of the offeree issuer has not recommended acceptance, where the
Target Shares subject to the offer to acquire, together with the Target Shares
held by or on behalf of the offeror on the date of the offer, constitute, in
aggregate, 20% (or such lesser percentage as would require compliance with the
formal requirements governing take-over bids (such as the delivery of circulars
or equivalent disclosure documents to shareholders under Applicable Law)) or
more of the outstanding Target Shares at the date of the offer to acquire, but
excluding any such offer which, under the Applicable Law of the jurisdiction in
which such offer is made, would be exempt from such formal requirements;

"TAKE-OVER BID NOTICE" has the meaning specified in Section 2.3;

"TANGIBLE NET WORTH" of Celestica, on a consolidated basis, means, at any
particular time, without duplication, the sum, determined in accordance with
GAAP, of:

     (a)  capital stock;

     (b)  preferred stock;

     (c)  paid-in capital;

     (d)  retained earnings; and

     (e)  cumulative translation adjustment (whether positive or negative);

minus the sum of any amounts shown on account of any:

     (f)  patents, patent applications, service marks, industrial designs,
          copyright and trade marks;

     (g)  goodwill and other intangibles; and

     (h)  any equity in, loan to or other investment or interest in an
          Unrestricted Subsidiary whatsoever;

"TAXES" includes all present and future income, corporation, capital gains,
capital and value-added and goods and services taxes and all stamp, franchise
and other taxes and levies, imposts, deductions, duties, charges and
withholdings whatsoever together with interest thereon and penalties with
respect thereto, if any, and charges, fees and other amounts made on or in
respect thereof;

<PAGE>

                                       -22-

"TORONTO OFFICE" means the office of the Administrative Agent located at 44 King
Street West, 14th Floor, Toronto, Ontario, Canada M5H 1H1 (facsimile:
416-866-5991) or such other address as the Administrative Agent may designate by
notice to Celestica;

"TRANSFER NOTICE" means a notice substantially in the form of Schedule I;

"TRUST INDENTURE" has the meaning specified in Section 11.17;

"UNITED STATES DOLLARS" and "U.S. $" means the lawful currency of the United
States of America in immediately available funds; and

"UNRESTRICTED SUBSIDIARY" means a Subsidiary of Celestica designated by
Celestica as such in accordance with Section 5.2 of this Agreement and any
Subsidiary of an Unrestricted Subsidiary.

1.2      HEADINGS

The division of this Agreement into Articles and Sections and the insertion of
an index and headings are for convenience of reference only and shall not affect
the construction or interpretation hereof. The terms "this Agreement", "hereof",
"hereunder" and similar expressions refer to this Agreement and not to any
particular Article, Section, paragraph or other portion hereof and include any
agreement supplemental hereto. Save as expressly provided herein, references
herein to Articles and Sections are to Articles and Sections of this Agreement.

1.3      USE OF DEFINED TERMS

Unless otherwise defined or the context otherwise requires, terms for which
meanings are provided in this Agreement shall have such meanings when used in
each Drawdown Notice, Conversion Notice, Rollover Notice, Loan Document, notice
and other communication delivered from time to time in connection with this
Agreement or any other Loan Document.

1.4      EXTENDED MEANINGS

Words importing the singular number only shall include the plural and vice
versa, and words importing any gender shall include all genders.

1.5      CROSS REFERENCES

Unless otherwise specified, references in this Agreement and in each other Loan
Document to any Article or Section are references to such Article or Section of
this Agreement or such other Loan Document, as the case may be, and unless
otherwise specified referenced in the Article, Section or definition to any
Clause are references to such Clause of such Article, Section or definition.

1.6      REFERENCE TO AGENT OR LENDERS

<PAGE>

                                       -23-

Any reference in this Agreement to the Administrative Agent or a Lender shall be
construed so as to include its permitted successors, transferees or assigns
hereunder in accordance with their respective interests.

1.7      ACCOUNTING TERMS

Unless otherwise specified, all accounting terms used herein or in any other
Loan Document shall be interpreted, all accounting determinations and
computations hereunder or thereunder shall be made, and all financial statements
required to be delivered hereunder or thereunder shall be prepared in accordance
with, those Canadian generally accepted accounting principles as now or (except
as provided in clause (a)(iii) of the definition of Net Funded Debt) hereafter
adopted by the Canadian Institute of Chartered Accountants or any successor
thereto ("GAAP") and all financial data submitted pursuant to this Agreement
shall be prepared in accordance with such principles, consistently applied;
provided that, if Celestica notifies the Administrative Agent that it wishes to
amend any covenant in Section 7.3 to eliminate the effect of any change in GAAP
or any change in the application of accounting policies on the operation of such
covenant (or the Administrative Agent notifies Celestica that the Majority
Lenders wish to amend Section 7.3 for such purpose), Celestica's compliance with
such covenant shall be determined on the basis of GAAP or accounting policies in
effect immediately before the relevant change in GAAP or change in accounting
policies became effective, until either such notices are withdrawn or such
covenant is amended in a manner satisfactory to Celestica, the Administrative
Agent and the Majority Lenders.

1.8      CONSOLIDATED FINANCIAL STATEMENTS AND CONSOLIDATED ACCOUNTS

Notwithstanding Section 1.7, wherever in this Agreement reference is made to a
consolidated financial statement of Celestica or to a determination to be made
on a consolidated basis, such reference shall be deemed to be to a consolidated
financial statement or consolidated basis, determined in accordance with GAAP,
which consolidates only the financial statements or accounts of Celestica and
its Subsidiaries, excluding all Unrestricted Subsidiaries, with investments by
Celestica or any Restricted Subsidiary in Unrestricted Subsidiaries accounted
for using equity accounting. At any time that Celestica and all Restricted
Subsidiaries have no Unrestricted Subsidiaries, all references to consolidated
financial statements herein shall be deemed to be references to the fully
consolidated financial statements of Celestica.

1.9      NON-BANKING DAYS

Except as otherwise specified herein, whenever any payment to be made hereunder
shall be stated to be due or any action to be taken hereunder shall be stated to
be required to be taken on a day other than a Banking Day, such payment shall be
made or such action shall be taken on the next succeeding Banking Day and, in
the case of the payment of any monetary amount, the extension of time shall be
included for the purposes of computation of interest or fees thereon.

1.10     REFERENCES TO TIME OF DAY

<PAGE>

                                       -24-

Except as otherwise specified herein, a time of day shall be construed as a
reference to Toronto, Canada time.

Severability

In the event that one or more of the provisions contained in this Agreement
shall be invalid, illegal or unenforceable in any respect under any Applicable
Law, the validity, legality or enforceability of the remaining provisions hereof
shall not be affected or impaired thereby.

1.11     CURRENCY

All monetary amounts in this Agreement refer to United States Dollars unless
otherwise specified.

1.12     REFERENCES TO STATUTES

Except as otherwise provided herein, any reference in this Agreement to a
statute shall be construed to be a reference to such statute as the same may
have been, or may from time to time be, amended, reformed or otherwise modified
or re-enacted from time to time.

1.13     REFERENCES TO AGREEMENTS

Except as otherwise provided herein, any reference herein to this Agreement, any
other Loan Document or any other agreement or document shall be construed to be
a reference to this Agreement, such Loan Document or such other agreement or
document, as the case may be, as the same may have been, or may from time to
time be, amended, restated, extended, supplemented or replaced.

1.14     CONSENTS AND APPROVALS

Whenever the consent in writing or approval in writing of a party hereto is
required in a particular circumstance, unless otherwise expressly provided for
therein, such consent or approval shall not be unreasonably withheld or delayed
by such party.

1.15     SCHEDULES

The following are the Schedules attached hereto and incorporated by reference
and deemed to be part hereof:

<TABLE>

        <S>              <C>  <C>
        Schedule A       -    Lenders
        Schedule B       -    Lenders' Commitments
        Schedule C       -    Applicable Margin and Facility Fee
        Schedule D       -    Quarterly Certificate on Covenants
        Schedule E       -    Conversion Notice
        Schedule F       -    Drawdown Notice and Notice of Swing Line Borrowing
        Schedule G       -    Guarantees
        Schedule H       -    Rollover Notice
</TABLE>

<PAGE>

                                       -25-

<TABLE>

        <S>              <C>  <C>
        Schedule I       -    Transfer Notice
        Schedule J       -    Mandatory Cost Calculation
        Schedule K       -    Opinions of Counsel
        Schedule L       -    Extension Request
        Schedule M       -    Permitted Encumbrance Certificate

</TABLE>

<PAGE>

                                       -26-

                                   ARTICLE 2
                                  THE FACILITY

2.1      ESTABLISHMENT OF THE FACILITY

Upon the terms and subject to the conditions hereof, each of the Lenders hereby
severally agrees to make its Global Rateable Portion of the Facility available
to the Borrowers as specified in Sections 2.2, 2.3 and 2.19.

2.2      PURPOSE, NATURE AND TERM OF THE FACILITY

     (a)  The Facility is being made available to the Borrowers by the Lenders
          for the business and operations of the Borrowers and their respective
          Restricted Subsidiaries, including, without limitation and for greater
          certainty, to finance acquisitions of companies which, after the
          acquisition thereof, will become Restricted Subsidiaries or assets
          which, after the acquisition thereof, will be owned by Celestica or a
          Restricted Subsidiary, the repayment of existing indebtedness and for
          commercial paper support.

     (b)  Advances under the Facility shall not be used by any Borrower to
          finance the acquisition of, investment in, loan to or to provide
          working capital to an Unrestricted Subsidiary.

     (c)  Subject to the terms and conditions of this Agreement (including,
          without limitation, Section 2.7) the Facility shall be a revolving
          credit facility and the Borrowers may borrow, repay and reborrow under
          the Facility as they see fit. The Facility shall terminate, subject to
          Section 2.7, on the Maturity Date.

2.3      TERM AND AVAILABILITY OF ADVANCES

     (a)  The Facility shall be available for Drawdowns by the Borrowers, at the
          option of the Borrowers, as follows:

          (i)     to Celestica or Celestica International, Drawdowns from
                  Lenders, each in a minimum amount of U.S. $5,000,000 and
                  integral multiples of U.S. $100,000 in excess thereof, in
                  United States Dollars by way of Base Rate Canada Advances; and

          (ii)    to Celestica or Celestica International, Drawdowns from
                  Lenders, each in a minimum amount of U.S. $5,000,000 and
                  integral multiples of U.S. $100,000 in excess thereof, in
                  United States Dollars by way of LIBOR Advances.

     (b)  Each Drawdown of an Advance pursuant to Section 2.3(a)(i) or (ii)
          shall be made by irrevocable Drawdown Notice, which Drawdown Notice
          shall be given by Celestica or Celestica International to the
          Administrative Agent, not later than (y)

<PAGE>

                                       -27-

          10:00 a.m. Toronto, Canada time on the Banking Day prior to the
          relevant Drawdown Date in the case of Base Rate Canada Advances, and
          (z) 10:00 a.m. London, England time and 10:00 a.m. New York, New York
          time on the third Banking Day prior to the relevant Drawdown Date in
          the case of a LIBOR Advance in United States Dollars.

     (c)  A Borrower may not make a Drawdown under the Facility if, as a result
          of such Drawdown, the sum of (i) the aggregate principal amount of all
          LIBOR Advances in United States Dollars outstanding under the
          Facility, plus (ii) the aggregate principal amount of all Base Rate
          Canada Advances outstanding under the Facility (collectively, the
          "Outstanding Amount") would exceed the aggregate of all Commitments of
          the Lenders at such time (or such lesser amount as may be available
          following a cancellation in part of the Facility pursuant to Section
          2.6).

     (d)  If a Borrower wishes to make a Drawdown under the Facility for the
          purpose of financing a Take-over Bid, such Borrower shall deliver to
          the Administrative Agent a written notice (a "Take-over Bid Notice")
          thereof at least ten (10) Banking Days prior to the day on which it
          gives to the Administrative Agent a Drawdown Notice requesting such
          Drawdown. Such Take-over Bid Notice shall include the details of such
          Take-over Bid. As soon as possible, but in any event within five (5)
          Banking Days of the giving of the Take-over Bid Notice, each Lender
          shall, acting reasonably and in good faith, determine whether or not
          it wishes to fund its Main Facility Rateable Portion of such Drawdown.
          Notwithstanding any other provisions hereof, if any Lender determines
          that it does not wish to fund its Main Facility Rateable Portion of
          such Drawdown, such Lender shall not be required to fund its Main
          Facility Rateable Portion of such Drawdown and the Drawdown shall be
          reduced accordingly.

     (e)  This Section 2.3 shall not apply to Swing Line Advances.

2.4      LENDERS' OBLIGATIONS

     (a)  The obligations of the Lenders hereunder are several and not joint.

     (b)  Save as otherwise specifically provided herein, each Lender shall
          participate in each Advance (other than, for certainty, any Swing Line
          Advance) referred to in the applicable provisions of Section 2.3 in
          accordance with its Main Facility Rateable Portion.

The failure of any Lender to make available its share of any Advance required to
be made by it under this Agreement shall not relieve any other Lender of its
obligation to make available its share of any Advance required to be made under
this Agreement.

2.5      REPAYMENT OF FACILITY

<PAGE>

                                       -28-

     (a)  Provided that the Facility is not prepaid or accelerated in accordance
          with Article 8, each Borrower shall repay the principal amount of all
          Advances made to it outstanding under the Facility, together with
          accrued and unpaid interest thereon, subject to Section 2.6 and
          Section 2.7, on the Maturity Date to the Administrative Agent.

     (b)  All repayments of the Facility by the Borrowers shall be in a minimum
          amount equal to the minimum amount of a Drawdown of each type of
          Advance set out in Section 2.3 and amounts in excess thereof in
          integral multiples of U.S. $100,000, except in the event of a Rollover
          of an Advance into a lesser amount than the Advance then outstanding
          or a repayment pursuant to paragraph (a) of this Section 2.5 which may
          be in any amount.

2.6      PAYMENTS/CANCELLATION OR REDUCTION

Celestica may at any time, upon giving at least three (3) Banking Days' prior
notice to the Administrative Agent, repay, or cause another Borrower to repay
and, in each case, cancel, any drawn portion of the Facility or cancel in full
or, from time to time, in part, any undrawn portion of the Facility; provided,
however, that:

     (a)  in the event that any such repayment relates to a LIBOR Advance other
          than on the scheduled last day of the applicable Interest Period, the
          Borrower to which such Advance was made shall contemporaneously pay to
          the Administrative Agent all applicable breakage costs, being any loss
          or expense incurred by the Lenders by reason of the resulting
          liquidation or re-employment of deposits of funds;

     (b)  any such reduction shall be in a minimum amount of U.S. $5,000,000 and
          cancellations in excess thereof shall be in increments of U.S.
          $100,000;

     (c)  any cancellation shall reduce the Commitment of each Lender on a pro
          rata basis having regard to the Commitment of each Lender; and

     (d)  any such cancellation shall permanently reduce the Facility and may
          not be reinstated.

2.7      EXTENSION OF MATURITY DATE

     (a)  MATURITY DATE. Subject to Section 2.6, this Section 2.7, Section 8.2
          and Section 8.5, the Facility shall be available until the Maturity
          Date. Notwithstanding the termination of availability of the Facility,
          until all of the Obligations (other than contingent indemnity
          obligations) of the Borrowers shall have been fully and indefeasibly
          paid and satisfied and all financing arrangements among the Borrowers
          and the Lenders with respect to the Obligations shall have been
          cancelled or terminated, all of the rights and remedies under this
          Agreement and the other Loan Documents shall survive.

<PAGE>

                                       -29-

     (b)  EXTENSION OF MATURITY DATE. Not more than 90 days nor less than 60
          days before the Maturity Date, Celestica may request, by delivery of
          an Extension Request (which shall include the consent of all
          Guarantors) to the Administrative Agent, that the Maturity Date be
          extended for an additional period of one year. Within 5 days after
          receipt of such Extension Request, the Administrative Agent shall
          notify each Lender of the Extension Request by Celestica and provide
          each Lender with a copy of such Extension Request. Within 25 days
          after Celestica has delivered such Extension Request, each Lender
          shall give the Administrative Agent notice in writing of its decision
          to agree to so extend or to deny the requested extension (and the
          failure to provide such notice shall be deemed to be a decision to
          deny the requested extension). Within 5 days following the aforesaid
          25 day period, the Administrative Agent shall give written notice to
          Celestica and the Lenders advising as to those Lenders who have agreed
          to the requested extension (for purposes of this Section 2.7, the
          "APPROVING LENDERS") and those Lenders who have not agreed to or who
          have been deemed to have not agreed to the requested extension (for
          purposes of this Section 2.7, the "DISSENTING LENDERS").

          (i)     If all Lenders approve the requested extension, the Facility
                  shall be extended for a further one year and the Facility
                  shall be available until and each Borrower shall repay all
                  Advances and other amounts in accordance with Section 2.5 on
                  the Final Maturity Date.

          (ii)    If Lenders having Commitments equal to at least 66% but less
                  than 100% of the Commitments approve the requested extension
                  then an Approving Lender, at its option, may acquire all or
                  any portion of the rights and obligations of the Dissenting
                  Lenders under the Facility by giving written notice to the
                  Administrative Agent of the portion of the rights and
                  obligations of the Dissenting Lenders which such Approving
                  Lender is prepared to acquire. Such notice shall be given
                  within 10 days following receipt of the notice from the
                  Administrative Agent advising as to the Approving Lenders and
                  the Dissenting Lenders pursuant to Section 2.7(b). If more
                  than one Approving Lender gives notice to the Administrative
                  Agent that it wishes to acquire all or a portion of the rights
                  and obligations of the Dissenting Lenders under the Facility,
                  then each Approving Lender shall, subject to Section
                  2.7(b)((iii) be entitled to acquire its pro rata share of the
                  rights and obligations of the Dissenting Lenders under the
                  Facility. For the purpose of this Section 2.7(b)(ii), the
                  Approving Lenders' pro rata shares shall be determined based
                  on the Commitments (before acquisition under this Section
                  2.7(b)(ii)) of each of the Approving Lenders wishing to
                  acquire a portion of the rights and obligations of the
                  Dissenting Lenders under the Facility. The Administrative
                  Agent shall give written notice to Celestica within five days
                  following the expiry of the time for Approving Lenders to give
                  notice

<PAGE>

                                       -30-

                  of acquisition pursuant to this Section 2.7(b)(ii), of the
                  Commitments of the Dissenting Lenders so acquired.

          (iii)   If one or more of the Approving Lenders (for purposes of this
                  Section 2.7(b)(iii), the "Acquiring Lenders") has given notice
                  to the Administrative Agent that it wishes to acquire all or a
                  portion of the rights and obligations of the Dissenting
                  Lenders under the Facility pursuant to Section 2.7(b)(ii),
                  then, concurrently with the notice given to Celestica pursuant
                  to Section 2.7(b)(ii), the Administrative Agent shall give
                  notice to each of the Acquiring Lenders setting out the
                  Commitments of and the amount of the outstanding Advances made
                  by the Dissenting Lenders to be acquired by each of the
                  Acquiring Lenders in accordance with Section 2.7(b)(ii) and of
                  the date (for purposes of this Section 2.7(b)(iii), the
                  "Acquisition Date") on which the acquisition shall be
                  effective. The Acquisition Date shall be the tenth day
                  following the date of the notice given pursuant to this
                  Section 2.7(b)(iii). At or before 11:00 a.m. (Toronto, Canada
                  time) on the Acquisition Date, each Acquiring Lender shall
                  deposit with or transfer to the Administrative Agent for the
                  account of the Dissenting Lenders an amount equal to the
                  amount of the outstanding credit to be acquired by it pursuant
                  to this Section 2.7(b)(iii). Upon receipt of such amounts, the
                  Administrative Agent shall (i) disburse such amounts to each
                  of the Dissenting Lenders in accordance with their respective
                  entitlement thereto against delivery of forms of Transfer
                  Notice executed by each of the Dissenting Lenders; and (ii)
                  make appropriate entries in the books of account regarding the
                  Facility. The provisions of Section 11.11(b), (c) and (d)
                  shall apply mutatis mutandis to any acquisition pursuant to
                  this Section 2.7(b)(iii). Each acquisition of the outstanding
                  Advances of a Dissenting Lender by an Acquiring Lender shall
                  be subject to the prior consent of Celestica, which consent
                  shall not be unreasonably withheld or delayed, provided that
                  it shall not be unreasonable for Celestica to withhold its
                  consent if such acquisition gives rise to a claim for
                  increased costs pursuant to Article 3 or any obligation on the
                  part of an Obligor to deduct or withhold any Taxes from or in
                  respect of any sum payable under this Agreement, in excess of
                  what would have been the case without such acquisition, but it
                  shall be unreasonable for Celestica to withhold its consent if
                  such Acquiring Lender waives the rights to any benefits under
                  Section 3.5 in respect of the Advances purchased by it
                  pursuant to this clause (iii).

          (iv)    If Lenders having Commitments equal to at least 66% but less
                  than 100% of the Commitments approve the requested extension
                  and if the Acquiring Lenders have not acquired all of the
                  rights and obligations of the Dissenting Lenders pursuant to
                  Section 2.7(b)(iii), then Celestica may, at its option, either
                  (A) locate one or more other financial institutions (for
                  purposes of this Section 2.7(b)(iv), "Alternate Lenders"),
                  satisfactory to
<PAGE>

                                       -31-

                  the Administrative Agent acting reasonably, to become Lenders
                  and to acquire all or a pro rata share of the rights and
                  obligations of the Dissenting Lenders under the Facility which
                  have not been acquired by the Acquiring Lenders or (B) repay
                  to the Administrative Agent on behalf of such Dissenting
                  Lenders all of the outstanding Advances which have been
                  advanced by such Dissenting Lenders and all accrued and unpaid
                  interest and fees thereon without any repayment to any other
                  Lenders. For the purpose of this Section 2.7(b)(iv), the
                  Alternate Lenders' pro rata shares shall be determined based
                  on the Commitments of each of the Alternate Lenders wishing to
                  acquire a portion of the rights and obligations of the
                  Dissenting Lenders under the Facility. If all of the rights
                  and obligations of the Dissenting Lenders have not been
                  acquired by Acquiring Lenders or Alternate Lenders or both or
                  if all of the credit outstanding hereunder which has been
                  extended by such Dissenting Lenders and all accrued and unpaid
                  interest and fees thereon have not been repaid as aforesaid on
                  or before the Maturity Date, there shall be no extension of
                  the Maturity Date and Section 2.7(b)(v) shall apply. If (A)
                  all of the rights and obligations of the Dissenting Lenders
                  have been acquired by Acquiring Lenders and/or Alternate
                  Lenders and/or (B) if all of the Advances outstanding
                  hereunder which have been advanced by such Dissenting Lenders
                  and all accrued and unpaid interest and fees thereon have been
                  repaid as aforesaid on or before the Maturity Date, the
                  Facility shall be extended for a further one year and this
                  Facility shall be available until and each Borrower shall
                  repay all Advances and other amounts in accordance with
                  Section 2.5(b) on the Final Maturity Date.

          (v)     If Lenders having Commitments of less than 66% of the
                  Commitments under the Facility approve the requested extension
                  then the Facility shall be available until, and each Borrower
                  shall repay all Advances and other amounts in accordance with
                  Section 2.5 on the Maturity Date.

A Dissenting Lender shall remain committed to make Advances under the Facility
until the earlier of the date on which the Obligations owing to it are assigned
or repaid as aforesaid and the Maturity Date.

2.8      INTEREST ON BASE RATE CANADA ADVANCES

Interest on each Base Rate Canada Advance shall accrue at a rate per annum equal
to the Base Rate Canada in effect from time to time during the period of time
that the Base Rate Canada Advance is outstanding. Such interest shall be payable
to the Administrative Agent at its Toronto Office in United States Dollars
quarterly in arrears on the last Banking Day of each of March, June, September
and December (each hereinafter referred to as an "Interest Payment Date") in
each year for the period from and including the Drawdown Date for such Advance
(or, if applicable, the date on which such Advance was converted into a Base
Rate Canada Advance) or the preceding Interest Payment Date for such Base Rate
Canada Advance, as the case may be, to and including the day preceding such
Interest Payment Date and shall be calculated on the

<PAGE>

                                       -32-

principal amount of the Base Rate Canada Advance from time to time outstanding
during such period and on the basis of the actual number of days elapsed and the
number of days deemed to be included in a year by the definition of the rate
used to set Base Rate Canada. Changes in the Base Rate Canada shall cause an
automatic and immediate adjustment of the interest rate payable on Base Rate
Canada Advances without the necessity of any notice to the Borrowers.

2.9      LIBOR ADVANCES

     (a)  LIBOR Advances shall be available for Drawdown, Conversion or Rollover
          in United States Dollars in minimum principal amounts of U.S.
          $5,000,000 and integral multiples of U.S. $100,000 in excess thereof.
          Each Drawdown Notice shall specify the applicable Interest Period for
          the LIBOR Advance. The duration of each such Interest Period shall be
          for a period of approximately one, two, three or six months (or such
          other period as may be agreed to by the Administrative Agent with the
          consent of the Majority Lenders), as the Borrower requesting such
          Drawdown, Conversion or Rollover may select in the applicable Drawdown
          Notice, Conversion Notice or Rollover Notice. No LIBOR Advance may
          have an Interest Period ending after the Maturity Date. If any
          Interest Period would end on a day which is not a Banking Day, such
          Interest Period shall be extended to the next succeeding Banking Day
          unless such next succeeding Banking Day falls in the next calendar
          month, in which case such Interest Period shall be shortened to end on
          the immediately preceding Banking Day.

     (b)  If a Lender determines that deposits of the necessary amount for the
          applicable Interest Period are not available in the London interbank
          market or if for any other reason the Administrative Agent, acting
          reasonably, is unable to determine the applicable LIBO Rate, then the
          relevant LIBOR Advance will not be made, and the Administrative Agent
          will discuss with such Borrower the particular circumstances and
          implications of such event. In the event that such determination is
          made by the Administrative Agent in the case of a proposed Rollover of
          an existing LIBOR Advance or a proposed Conversion of a Base Rate
          Canada Advance into a LIBOR Advance, the proposed LIBOR Advance will
          automatically be deemed to be a Base Rate Canada Advance.

     (c)  Interest on any LIBOR Advance shall be calculated at a rate per annum
          equal to the LIBO Rate plus the Applicable Margin, plus any applicable
          Mandatory Cost then in effect, shall accrue from day to day and shall
          be calculated on the basis of the actual number of days elapsed
          (including the first day of each Interest Period but excluding the
          last day thereof) and divided by 360. Interest on any LIBOR Advance
          shall be payable to the Administrative Agent in United States Dollars
          in arrears on the last day of the Interest Period relating thereto;
          provided, however, that if the Interest Period is for a term of more
          than three months, interest shall be payable on the last Banking Day
          of the first three-month period and on the last Banking Day of each
          three-month period thereafter, as well as on the last day of the
          Interest Period.

<PAGE>

                                       -33-

     (d)  If a LIBOR Advance to a Borrower is neither repaid on the last day of
          an Interest Period nor converted into another type of Advance on such
          date pursuant to Section 2.12, and if the Administrative Agent has not
          received a Rollover Notice or a Conversion Notice specifying the term
          of the next Interest Period for such LIBOR Advance at or before 10:00
          a.m. on the third Banking Day prior to the last day of the then
          current Interest Period, then the outstanding LIBOR Advance shall be
          deemed to be converted, by way of Conversion on the last day of the
          then current Interest Period, into a Base Rate Canada Advance.

     (e)  Except as otherwise provided herein, LIBOR Advances shall not be
          repaid, prepaid or converted into another type of Advance except on
          the last day of any Interest Period relating thereto.

2.10     METHOD AND PLACE OF PAYMENT

     (a)  Each payment to be made by a Borrower under this Agreement shall be
          made without deduction, set-off or counterclaim.

     (b)  All payments of principal, interest and fees hereunder shall be made
          for value at or before 12:00 noon (Toronto, Canada time) on the day
          such amount is due by deposit or transfer thereof to the account of
          the Administrative Agent maintained at its Toronto Office. Payments
          received after such time shall be deemed to have been made on the next
          following Banking Day.

     (c)  Subject to Section 9.16, each Lender shall be entitled to its Main
          Facility Rateable Portion of each repayment or prepayment of principal
          of a Base Rate Canada Advance (other than a Swing Line Advance) or a
          LIBOR Advance.

     (d)  Notwithstanding Section 2.9(c), in the event that a Borrower is
          required to pay Additional Compensation to a Lender, such Borrower may
          prepay all or any portion of the Advances made by such Lender to such
          Borrower, without any obligation to prepay any portion of the Advances
          made by other Lenders to whom the Borrower is not required to pay
          Additional Compensation; provided, however, that any prepayment of a
          LIBOR Advance shall be subject to the provisions of Section 10.2.

2.11     FEES

     (a)  During the period commencing on the date hereof and ending on the
          Maturity Date (the "relevant period"), Celestica on behalf of itself
          and Celestica International shall pay to the Administrative Agent for
          the account of the Lenders a fee (the "Facility Fee") calculated at
          the rate per annum set forth in Schedule C on the aggregate
          Commitments (after giving effect to any cancellation and reduction
          pursuant to Sections 2.6 and 2.7) hereunder during the relevant period
          from day to day which fee shall be payable quarterly in arrears.

<PAGE>

                                       -34-

     (b)  Celestica shall pay to the Administrative Agent for its own account
          the fees specified in the letter dated June 26, 2001 addressed by the
          Administrative Agent to Celestica.

2.12     CONVERSION OPTIONS

Subject to the provisions of this Agreement, a Borrower may convert any type of
Advance outstanding under the Facility as follows:

     (a)  provided that no Event of Default has occurred and is continuing, a
          Base Rate Canada Advance or a portion thereof into a LIBOR Advance by
          giving the Administrative Agent a Conversion Notice no later than
          10:00 a.m. three (3) Banking Days prior to the date of the proposed
          Conversion;

     (b)  provided that no Event of Default has occurred and is continuing, a
          LIBOR Advance or a portion thereof into a Base Rate Canada Advance on
          the last day of the Interest Period of the relevant LIBOR Advance by
          giving the Administrative Agent a Conversion Notice no later than
          10:00 a.m. one (1) Banking Day prior to the date of the proposed
          Conversion.

2.13     EXECUTION OF NOTICES

All Drawdown Notices, Conversion Notices, Rollover Notices and notices of
repayment or cancellation and, unless otherwise provided herein, all other
notices, requests, demands or other communications to be given to the
Administrative Agent by a Borrower hereunder shall be executed by any one
officer or director of the Borrower making each such Drawdown Notice, Conversion
Notice, Rollover Notice or notice of repayment or cancellation.

2.14     EVIDENCE OF INDEBTEDNESS

The Administrative Agent shall open and maintain in accordance with its usual
practice books of account evidencing all Advances and all other amounts owing by
the Borrowers to the Administrative Agent and the Lenders hereunder, details of
every Drawdown Date in respect of each Advance and all amounts from time to time
owing or paid by a Borrower to the Administrative Agent for its own account or
for the account of the Lenders hereunder, the amounts of principal, interest and
fees payable from time to time hereunder and the unused portion of each Lenders'
Commitment available to be drawn down by the Borrowers. The information entered
in the foregoing accounts shall constitute, in the absence of manifest error,
prima facie evidence of the obligations of the Borrowers to the Administrative
Agent and the Lenders hereunder, the date the Lenders made each Advance
available to the Borrowers and the amounts the Borrowers have paid from time to
time on account of the principal of and interest on the Advances.

2.15     INTEREST ON UNPAID COSTS AND EXPENSES

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                                       -35-

Unless the payment of interest is otherwise specifically provided for herein,
where a Borrower fails to pay any amount required to be paid by a Borrower
hereunder when due, having received notice that such amount is due, such
Borrower shall pay interest to the Administrative Agent on such unpaid amount,
including overdue interest from the time such amount is due until paid at an
annual rate equal to the sum of (i) 2%, plus (ii) the Base Rate Canada. Such
interest shall be determined daily, compounded quarterly in arrears on each
Interest Payment Date in each year and payable on demand.

2.16     CRIMINAL RATE OF INTEREST

Notwithstanding the foregoing provisions of this Article 2, the Borrowers shall
in no event be obliged to make any payments of interest or other amounts payable
to the Lenders hereunder in excess of an amount or rate which would be
prohibited by law or would result in the receipt by the Lenders of interest at a
criminal rate (as such terms are construed under the Criminal Code (Canada)).

2.17     COMPLIANCE WITH THE INTEREST ACT (CANADA)

For the purposes of this Agreement, whenever any interest is calculated on the
basis of a period of time other than a calendar year, the annual rate of
interest to which each rate of interest determined pursuant to such calculation
is equivalent for the purposes of the Interest Act (Canada) is such rate as so
determined multiplied by the actual number of days in the calendar year in which
the same is to be ascertained and divided by the number of days used in the
basis of such determination.

2.18     NOMINAL RATE OF INTEREST

The parties acknowledge and agree that all calculations of interest under the
Loan Documents are to be made on the basis of the nominal interest rate
described herein and not on the basis of effective yearly rates or on any other
basis which gives effect to the principle of deemed reinvestment of interest.
The parties acknowledge that there is a material difference between the stated
nominal interest rates and the effective yearly rates of interest and that they
are capable of making the calculations required to determine such effective
yearly rates of interest.

2.19     SWING LINE FACILITY

     (a)  SWING LINE ADVANCES. Subject to subsection (b), the Swing Line Lender
          hereby agrees, on the terms and conditions set forth in this
          Agreement, to make Swing Line Advances in United States Dollars to
          Celestica or Celestica International from time to time from the date
          hereof to the Maturity Date.

     (b)  LIMITATION ON SWING LINE ADVANCES. No Swing Line Advance shall be made
          by the Swing Line Lender if:

<PAGE>

                                       -36-

          (i)     the sum of (A) the amount of such Swing Line Advance and (B)
                  the aggregate principal amount of all Swing Line Advances
                  outstanding on such day exceeds the Available Swing Line
                  Commitment; or

          (ii)    immediately after such Swing Line Advance is made, the
                  aggregate outstanding principal amount of all Advances exceeds
                  the aggregate Commitments.

     (c)  AMOUNT OF EACH SWING LINE ADVANCE. Each Swing Line Advance shall be in
          an aggregate principal amount of U.S. $1,000,000 or any integral
          multiple thereof.

     (d)  INTEREST RATES. Each Swing Line Advance shall bear interest on the
          outstanding principal amount thereof, for each day from the date such
          Swing Line Advance is made until it becomes due, at a rate per annum
          equal to, the Base Rate Canada plus the Applicable Margin.

     (e)  PROCEDURE FOR REQUESTING SWING LINE ADVANCES. The relevant Borrower
          shall give to the Administrative Agent telephonic notice no later than
          10:00 a.m. (local time) on the date of each Swing Line Advance
          specifying (i) the date of such Swing Line Advance, which shall be a
          Banking Day in Toronto, Canada; and (ii) the amount of such Swing Line
          Advance. Such telephonic notice shall be followed by delivery by the
          relevant Borrower by no later than 3:00 p.m. local time on the same
          day of a Notice of Swing Line Borrowing. Promptly after receiving such
          Notice of Swing Line Borrowing, the Administrative Agent shall notify
          the relevant Swing Line Lender of the contents thereof and such Notice
          of Swing Line Borrowing shall not thereafter be revocable by such
          Borrower.

     (f)  FUNDING OF SWING LINE ADVANCES. On the date of each Swing Line
          Advance, the Swing Line Lender shall make available such Swing Line
          Advance no later than 12:00 noon, Toronto, Canada time.

     (g)  OPTIONAL PREPAYMENT OF SWING LINE ADVANCES. Any Borrower may prepay
          its Swing Line Advance in whole at any time or from time to time in
          part in a minimum principal amount of U.S. $1,000,000, as the case may
          be, or any integral multiple thereof, by giving notice of such
          prepayment to the Administrative Agent not later than 10:00 a.m.
          Toronto, Canada time on the date of prepayment and paying the
          principal amount to be prepaid (together with interest accrued thereon
          to the date of prepayment) to the Administrative Agent for the account
          of the relevant Swing Line Lender.

     (h)  MATURITY OF SWING LINE ADVANCES. Any Swing Line Advance outstanding on
          the seventh day after such Swing Line Advance, if not repaid by such
          Borrower on such seventh day, shall convert to a Base Rate Canada
          Advance. If, prior to the seventh day after such Swing Line Advance
          was made, the Administrative Agent declares the Advances to be
          immediately due and payable or the Commitments automatically
          terminate, each as set out in Section 8.2, such Swing

<PAGE>

                                       -37-

          Line Advance shall be due and payable on the date of such declaration
          by the Administrative Agent or automatic termination.

     (i)  REFUNDING UNPAID SWING LINE ADVANCES. If any Swing Line Advance is
          converted, pursuant to subsection (j), to another form of Advance, the
          Swing Line Lender shall forthwith notify the Administrative Agent and
          the Administrative Agent shall, by notice to the Lenders (including
          the Swing Line Lender in its capacity as Lender), require the Lenders
          to pay to the Administrative Agent, for the account of the Swing Line
          Lender, their Main Facility Rateable Portion of the aggregate amount
          of such other form of Advance. Such other form of Advance shall
          constitute, a Base Rate Canada Advance, provided that if the Lenders
          are prevented from making such Advances by provisions of applicable
          bankruptcy laws or otherwise, the amount so paid by each Lender shall
          constitute a purchase by it of a participation in the unpaid principal
          amount of such converted Swing Line Advances. Any such notice to the
          Lenders shall specify the date on which such payments are to be made
          by them. No later than 12:00 noon Toronto, Canada time on the date so
          specified each Lender shall pay the amount so notified to it in
          immediately available funds to the Administrative Agent for the
          account of the Swing Line Lender. Each Lender's obligations to make
          payments for the account of the Swing Line Lender under this
          subsection shall be absolute and unconditional and shall not be
          affected by any circumstance provided that no Lender shall be
          obligated to make any payment to the Administrative Agent under this
          Section with respect to a Swing Line Advance made by the Swing Line
          Lender at a time when the Swing Line Lender had received written
          notice from Celestica or the Administrative Agent that a Default had
          occurred and was continuing.

     (j)  INCREASING OR DECREASING AVAILABLE SWING LINE COMMITMENT. At any time
          and from time to time, Celestica may, by written notice to the
          Administrative Agent, increase or decrease the Available Swing Line
          Commitment, provided that the Available Swing Line Commitment shall at
          no time exceed U.S. $75,000,000 less the amount, if any, that the
          Commitment of the Swing Line Lender has been reduced pursuant to
          Section 2.6 or be less than zero.

2.20     INCREASE IN AGGREGATE COMMITMENT AMOUNT TO U.S.$750,000,000

     (a)  Notwithstanding any other provision of this Agreement, each of the
          parties hereto agree that Celestica may, from time to time and at any
          time, give notice to the Administrative Agent that one or more
          financial institutions (each an "Additional Lender") have agreed to
          make commitments (each an "Additional Commitment") hereunder
          (provided, however, that Celestica shall not be entitled to give such
          notice at any time at which the aggregate Commitments is equal to U.S.
          $750,000,000 (or such lesser amount as may be available following a
          cancellation in part of the Facility pursuant to Section 2.6)). Upon
          receipt of such written notice, each party hereto hereby irrevocably
          authorizes the Administrative Agent to:

<PAGE>

                                       -38-

          (i)     insert the name of the Additional Lender or Affiliate of the
                  Additional Lender (collectively, the "Additional Parties")
                  that will become a Lender on Schedule A;

          (ii)    amend Schedule B to reflect the Additional Commitment of the
                  Additional Lender;

          (iii)   affix signature pages of the Additional Parties to this
                  Agreement; and

          (iv)    if Advances (other than Swing Line Advances) are outstanding
                  at the time such notice is given, then the Additional Parties
                  shall make available to the Administrative Agent an amount
                  equal to their respective Main Facility Rateable Portion
                  (calculated as if the Additional Commitment were a Commitment)
                  of such Advances and the Administrative Agent shall make
                  available to each Lender that Lender's Main Facility Rateable
                  Portion (calculated without reference to the Additional
                  Commitment) of such amount,

          whereupon each of the Borrowers, the Administrative Agent, each
          Lender and the Additional Parties shall acquire the same rights and
          assume the same obligations between themselves as they would have
          acquired and assumed had such Additional Parties been original
          parties hereto as Lenders.

     (b)  Each of the parties hereto agrees that it will promptly execute and
          deliver all such documents, including, without limitation, all such
          additional conveyances, transfers and consents and other assurances,
          and do all such other acts and things as may from time to time be
          desirable in order to better evidence or give effect to this Section
          2.20.

<PAGE>

                                       -39-

                                   ARTICLE 3
                             CHANGE OF CIRCUMSTANCES
                               AND INDEMNIFICATION

3.1      LENDER REPRESENTATION

Each Lender represents to each of Celestica and Celestica International and the
Administrative Agent that it is resident in Canada for the purposes of the
Income Tax Act (Canada) and that it is beneficially entitled to the principal,
interest and fees payable to it under the Loan Documents. The foregoing
representation shall be true and correct and shall be deemed to be given by each
Lender on each day that a payment of interest, principal or fees is to be made
to it pursuant to a Loan Document.

3.2      INCREASED COSTS

In the event of (i) any Applicable Law coming into force after the date hereof,
(ii) any change in any Applicable Law, or in the interpretation or application
thereof by any court or by any governmental, regulatory, other authority or
central bank charged with the administration thereof, or (iii) compliance by any
Lender with any direction, request or requirement (whether or not having the
force of law but, if not having the force of law, one with which a responsible
bank acting reasonably would comply) of any government, monetary authority,
central bank or comparable agency (each such event being hereinafter referred to
as a "change in law") which now or hereafter:

     (a)  subjects a Lender to any Tax or changes the basis of taxation, or
          increases any existing Tax (in each case, except for the coming into
          force of any Tax or change in the basis of taxation in respect of or
          the change in the rate of Tax charged on net income as a whole, on
          franchises or capital applicable to the relevant jurisdictions of the
          Lender), on payments of principal, interest or other amounts payable
          by the Borrowers to such Lender under any Loan Document or on or by
          reference to the amount of any Advances made or to be made by any
          Lender hereunder or on or by reference to the Commitment of any
          Lender, or

     (b)  imposes, modifies or deems applicable any reserve, deposit, ratio or
          similar requirements or otherwise imposes any cost on any Lender in
          funding or maintaining all or any of the Advances or its Commitment;
          or

     (c)  has the effect of increasing the amount of overall capital required to
          be maintained by a Lender, taking into account the existence of such
          Lender's participation in any Advance or any of its obligations under
          any Loan Document (including, without limitation, all or any part of
          its Commitment),

          and the result of any of the foregoing is to increase the cost to a
          Lender, reduce the income receivable by it or reduce the effective
          return on the capital of such Lender in respect of any Advances and/or
          its Commitment to an extent which such Lender believes to be material
          (after consultation with Celestica), the Lender

<PAGE>

                                       -40-

          shall give notice thereof to the Administrative Agent and the
          Administrative Agent shall give notice thereof to the Borrowers
          (herein called a "Notice of Amount") stating the event by reason of
          which it believes it is entitled to Additional Compensation, such cost
          and/or such reduction in such return (or such proportion of such
          reduction as is, in the reasonable and bona fide opinion of such
          Lender, attributable to its obligations hereunder), the amount of such
          Additional Compensation (as hereinafter defined) incurred by such
          Lender and supplying reasonable supporting evidence (including, in the
          event of change of Applicable Law, a photocopy of the Applicable Law
          evidencing such change together with a certificate of a duly
          authorized officer of the Lender setting forth the Additional
          Compensation and the basis for calculation of such Additional
          Compensation and an opinion in writing of such Lender's counsel
          confirming such change); provided that the Lender shall not be
          required to disclose any information required to be kept confidential
          by Applicable Law (in which case the requirement of such
          confidentiality shall be supported by an opinion of such Lender's
          Counsel) within ten (10) Banking Days of the date of receipt of any
          Notice of Amount, the amount set out therein (in this Article 3
          referred to as "ADDITIONAL COMPENSATION") shall be paid to the Lender
          by Celestica and Celestica International. In the event such Lender
          subsequently recovers all or part of the Additional Compensation paid
          by the Borrowers, it shall repay an equal amount to such Borrowers.

3.3       ILLEGALITY

If, with respect to any Lender, the implementation of any existing provision of
Applicable Law or the adoption of any Applicable Law, or any change therein or
in the interpretation or application thereof by any court or by any statutory
board or commission now or hereafter makes it unlawful for such Lender to make,
fund or maintain all or any portion of an outstanding Advance, to maintain all
or any part of its Commitment hereunder or to give effect to its obligations in
respect of all or any portion of an outstanding Advance, such Lender may, by
written notice thereof to the Borrowers and the other Lenders through the
Administrative Agent (supported, at the request and expense of the Borrowers, by
an opinion of such Lender's counsel), declare the obligations of such Lender
under this Agreement to be terminated whereupon the same shall forthwith
terminate, and the Borrowers to whom such Lender has made Advances shall repay
within the time required by such law (or as promptly as practicable if already
unlawful or at the end of such longer period, if any, as such Lender in its bona
fide opinion may agree) the principal of the Advances made by such Lender. If
any such change shall affect only that portion of such Lender's obligations
under this Agreement that is, in the bona fide opinion of such Lender, severable
from the remainder of this Agreement so that the remainder of this Agreement may
be continued in full force and effect without otherwise affecting any of the
obligations of such Lender or the Borrowers hereunder, such Lender shall declare
its obligations under only that portion so terminated.

3.4      MITIGATION

        (a)  If, in respect of any Lender, circumstances arise which would
             result, upon the giving of notice, in:

<PAGE>

                                       -41-

          (i)     Additional Compensation being paid by a Borrower to a Lender
                  under Section 3.2; or

          (ii)    a reduction of all or any of an Advance by such Lender or the
                  Lender's Commitment pursuant to Section 3.3; or

          (iii)   the prepayment of the portion of the Advances outstanding to
                  it pursuant to Section 3.3; or

          (iv)    the payment of any amount by an Obligor under Section 3.5;

          then such Lender, promptly upon becoming aware of the same and the
          possible results thereof, shall notify the Administrative Agent
          thereof and the Administrative Agent shall notify the Borrowers
          thereof and, in consultation with the Borrowers shall take such steps,
          if any, as such Lender in its bona fide opinion considers appropriate
          to mitigate the effects of such circumstances. Without limiting the
          generality of the foregoing, if it is commercially reasonable, such
          Lender shall make reasonable efforts to limit the incidence of any
          such Additional Compensation and seek recovery for the account of the
          Borrowers upon the Borrower's request and at the Borrower's expense;
          provided that such Lender in its reasonable determination suffers no
          appreciable economic, legal, regulatory or other disadvantage. In all
          events, the Lenders shall promptly co-operate with the Borrowers to
          the extent possible, to rearrange the affected availment to one that
          may not be affected by such change, but failure to effect a change in
          availment shall not relieve the relevant Borrower of its obligation to
          pay the Additional Compensation. Notwithstanding the foregoing
          provisions, a Lender shall only be entitled to rely upon the
          provisions of Section 3.2 if and for so long as it is not treating the
          Borrowers in any materially different or in any less favourable manner
          than is applicable to any other customers of any Lender, where such
          other customers are bound by similar provisions to the foregoing
          provisions of Section 3.2.

     (b)  If any Lender seeks Additional Compensation pursuant to Section 3.2
          hereof (the "Affected Lender"), then the relevant Borrowers may
          indicate to the Administrative Agent in writing that they desire to
          (i) replace the Affected Lender with one or more of the other Lenders,
          and/or (ii) amend a Drawdown Notice or Notice of Swing Line Borrowing
          to reduce the amount sought to be borrowed to reflect the reduced
          amount hereunder, and the Administrative Agent shall then forthwith
          give notice to the other Lenders that any Lender or Lenders may, in
          the aggregate, advance all or part of the Affected Lender's Main
          Facility Rateable Portion of such Advance and, in the aggregate,
          assume all or part of the Affected Lender's Commitment and obligations
          hereunder and acquire all or part of the rights of the Affected Lender
          and assume all or part of the obligations of the Affected Lender under
          each of the other Loan Documents (but in no event shall any other
          Lender or the Administrative Agent be obliged to do so). If a Lender
          shall so agree in writing (herein collectively called the "Assenting
          Lenders" and individually called an "Assenting Lender") with respect
          to such advance,

<PAGE>

                                       -42-

          acquisition and assumption, the Main Facility Rateable Portion of such
          Advance of each Assenting Lender (other than a Swing Line Advance) and
          the Commitment and the obligations of such Assenting Lender under this
          Agreement and the rights and obligations of such Assenting Lender
          under each of the other Loan Documents shall be increased accordingly
          on a date mutually acceptable to such Assenting Lender and the
          Borrowers. On such date, the Assenting Lender shall advance to the
          relevant Borrowers the relevant portion of the Affected Lender's Main
          Facility Rateable Portion of the outstanding Advances (other than
          Swing Line Advances) and the relevant Borrowers shall prepay to the
          Affected Lender the Advances of the Affected Lender then outstanding,
          together with all interest accrued thereon and all other amounts owing
          to the Affected Lender hereunder, and, upon such advance and
          prepayment, the Affected Lender shall cease to be a "Lender" for
          purposes of this Agreement and shall no longer have any obligations
          hereunder. Upon the assumption of the Affected Lender's Commitment as
          aforesaid by an Assenting Lender, Schedule B hereto shall be deemed to
          be amended to increase the Commitment of such Assenting Lender by the
          amount of such assumption and to reduce the Commitment of the Affected
          Lender by a like amount. If no Assenting Lender is found, then in such
          event, the relevant Borrower is entitled to repay the Affected Lender
          and reduce its obligations hereunder by such amount so repaid.

3.5      TAXES

     (a)  All payments by any Obligor under this Agreement or the Guarantees
          shall be made free and clear of and without deduction or withholding
          for any and all Taxes, unless required by law. If an Obligor shall be
          required by law, rule, regulation or the interpretation thereof by the
          relevant governmental authority to deduct or withhold any such Taxes
          from or in respect of any sum payable under this Agreement,

          (i)     the sum payable shall be increased by such additional amount
                  as may be necessary so that after making all required
                  deductions or withholdings (including deductions or
                  withholdings applicable to additional amounts paid under this
                  Section 3.5), the Lenders or Agent, as applicable, receive a
                  net amount equal to the full amount they would have received
                  if no deduction or withholding had been made;

          (ii)    the Obligor shall make such required deductions or
                  withholdings;

          (iii)   the Obligor shall pay the full amount deducted or withheld to
                  the relevant taxation or other authority in accordance with
                  Applicable Law; and

          (iv)    such Obligor shall deliver to the relevant Lender or
                  Administrative Agent, as applicable, as soon as practicable
                  after it has made such payment to the applicable authority (x)
                  a copy of such receipt as is issued by such authority
                  evidencing the deduction or withholding of all amounts
                  required

<PAGE>

                                       -43-

                  to be deducted or withheld from the sum payable hereunder or
                  (y) if such a receipt is not available from such authority,
                  notice of the payment of such amount deducted or withheld;

                  provided that the obligations of an Obligor to pay additional
                  amounts pursuant to hereto shall not apply with respect to
                  Taxes ("Excluded Taxes") arising by virtue of a Lender or the
                  Administrative Agent, as applicable, having a connection with
                  the jurisdiction that imposes the Taxes other than merely by
                  the execution of this Agreement, receipt of payments under
                  this Agreement, the holding and disposition of Advances, the
                  performance of its obligations or the enforcement of its
                  rights under this Agreement.

     (b)  Without prejudice to the foregoing provisions of this Section 3.5, if
          the Administrative Agent or any Lender (in this Section 3.5, an
          "Indemnified Person") is required at any time (whether before or after
          any Obligor has discharged all of its other obligations hereunder) to
          make any payment on account of any Tax which an Obligor is required to
          withhold in accordance with Section 3.5(a) hereof or for which an
          Obligor is otherwise required to indemnify a Lender or the
          Administrative Agent pursuant to Sections 3.5(a), (c) or (d) hereof,
          or if any liability in respect of any such payment is asserted,
          imposed, levied or assessed against such Indemnified Person, the
          Obligor in respect of which such sum was received or receivable shall,
          within 30 days of written demand of the Administrative Agent or
          Lender, promptly indemnify such Indemnified Person against such
          payment or liability, together with interest, penalties and expenses
          payable or incurred in connection therewith including, without
          limitation, any Tax imposed by any jurisdiction on or in relation to
          any amounts paid to or for the account of such Indemnified Person
          pursuant to this Section 3.5. An Indemnified Person intending to make
          a claim pursuant to this Section 3.5 shall notify the Obligor of the
          event in respect of which it believes it is entitled to make such
          claim and supply reasonable supporting evidence including a copy of
          the relevant portion of any written assessment, provided that any such
          Indemnified Person shall not be required to disclose any information
          required to be kept confidential by regulation or contract (in which
          case the basis of such confidentiality, at the request and expense of
          the Borrowers, shall be supported by an opinion of counsel of
          reputable standing).

     (c)  If an Obligor fails to pay any Taxes required to be paid by it
          pursuant to this Section 3.5 when due to the appropriate taxing
          authority or fails to remit to the Administrative Agent, for the
          account of the respective Lenders, for the account of any other Agent
          or for the Administrative Agent's own account, as applicable, the
          required receipts or other documentary evidence required by Section
          3.5(a)(ii), the Obligor shall indemnify the Lenders or Agent, as
          applicable, for any incremental Taxes, interest or penalties that may
          become payable by any Lender or the Administrative Agent as a result
          of any such failure. For purposes of this

<PAGE>

                                       -44-

          Section 3.5, a distribution by the Administrative Agent or any Lender
          to or for the account of any Lender shall be deemed a payment by the
          Obligor.

     (d)  Each Obligor will indemnify the Lenders and Agents for the full amount
          of Taxes imposed by any jurisdiction and paid by such Lender or Agent,
          as applicable with respect to any amounts payable pursuant to this
          Section 3.5, and any liability arising therefrom or with respect
          thereto, whether or not such Taxes were correctly or legally asserted.
          This indemnification shall be made within 30 days from the date such
          Lender or Agent, as applicable makes written demand therefor which
          demand shall identify the nature and amount of Taxes for which
          indemnification is being sought and shall include a copy of the
          relevant portion of any written assessment from the relevant taxing
          authority demanding payment of such Taxes.

     (e)  Without prejudice to the survival of any other agreement contained
          herein, the agreements and obligations contained in this Section 3.5
          shall survive the payment in full of principal, interest, fees and any
          other amounts payable hereunder and the termination of this Agreement
          and the Guarantees.

3.6      TAX REFUND

     (a)  If, following the imposition of any Tax on any payment by any Obligor
          in consequence of which such Obligor pays an additional amount under
          Section 3.5(a), any Lender receives or is granted a refund of any Tax
          actually paid by it which in such Lender's sole opinion (acting in
          good faith) is attributable to such additional amount paid by such
          Obligor and is both identifiable and quantifiable by it without
          requiring such Lender or its professional advisers to expend a
          material amount of time or incur a material cost in so identifying or
          quantifying (any of the foregoing, to the extent so identifiable and
          quantifiable, being referred to as a "refund"), such Lender shall, to
          the extent that it can do so without prejudice to the retention of the
          relevant refund and subject to such Obligor's obligation to repay
          promptly on demand by the Lender the amount to such Lender if the
          relevant refund is subsequently disallowed or cancelled, reimburse
          such Obligor promptly after receipt of such refund by such Lender with
          such amount as such Lender shall in its sole opinion but in good faith
          have concluded to be the amount or value of the relevant refund.

     (b)  Nothing contained in this Agreement shall interfere with the right of
          any Lender to arrange its Tax and other affairs in whatever manner it
          thinks fit. No Lender shall be required to disclose any confidential
          information relating to the organization of its affairs.

                                   ARTICLE 4
                        CONDITIONS PRECEDENT TO DRAWDOWN

4.1      CONDITIONS FOR FIRST DRAWDOWN

<PAGE>

                                       -45-

The following conditions shall be satisfied by the Borrowers on or prior to the
first Drawdown Date after the date hereof:

     (a)  each Obligor shall have duly authorized, executed and delivered to the
          Administrative Agent each of the Loan Documents to which it is a party
          and each such Loan Document shall constitute a legal, valid and
          binding obligation of such Obligor, enforceable against such Obligor
          in accordance with its terms;

     (b)  each Obligor shall have delivered to the Administrative Agent:

          (i)     a certified copy of its Organic Documents,

          (ii)    a certified copy of the resolutions authorizing it to enter
                  into, execute and deliver the Loan Documents to which it is a
                  party and to perform its obligations thereunder;

          (iii)   a certificate as to the incumbency of its officers signing the
                  Loan Documents to which it is a party; and

          (iv)    a certificate of status, good standing or like certificate
                  with respect to such Obligor issued by the appropriate
                  government officials of the jurisdiction of its incorporation;

     (c)  the representations and warranties set forth in Section 6.1 shall be
          true and correct in all material respects on and as of the Drawdown
          Date, both before and after giving effect to the Drawdown of such
          Advance and to the application of proceeds therefrom, by reference to
          the facts and circumstances then existing;

     (d)  no Default or Event of Default shall have occurred and be continuing,
          nor shall any such event occur as a result of making the Advances or
          the application of proceeds therefrom on the Drawdown Date;

     (e)  there shall have been no Material Adverse Change since December 31,
          2000;

     (f)  each Material Restricted Subsidiary shall have executed and delivered
          to the Administrative Agent a Guarantee;

     (g)  Celestica shall have executed and delivered to the Administrative
          Agent a Guarantee of the monetary Obligations of Celestica
          International;

     (h)  any Borrower which intends to make a Drawdown shall have given the
          appropriate Drawdown Notice to the Administrative Agent in accordance
          with the provisions of Section 2.3;

     (i)  opinions of Borrowers' Counsel, and local counsel to each Guarantor,
          substantially in form of Schedule K, shall have been delivered to the
          Administrative Agent;

<PAGE>

                                       -46-

     (j)  none of the undertaking, property or assets of the Borrowers or any of
          the Restricted Subsidiaries shall be subject to any Liens other than
          (i) Permitted Encumbrances or (ii) Liens with respect to which the
          Administrative Agent shall have received satisfactory evidence of the
          repayment of the underlying obligation and fully executed discharges
          and releases thereof and Celestica and each of the Restricted
          Subsidiaries shall have delivered to the Administrative Agent a
          Permitted Encumbrance Certificate; and

     (k)  the Borrowers shall have paid all fees and expenses relating to the
          Facility provided for in this Agreement which are payable on or prior
          to the first Drawdown Date.

The conditions set forth in this Section 4.1 are inserted for the sole benefit
of the Lenders and may be waived by the Administrative Agent on behalf of the
Lenders in whole or in part, with or without terms or conditions.

4.2      CONDITIONS FOR SUBSEQUENT DRAWDOWNS

The following conditions shall be satisfied by the Borrower requesting an
Advance at or prior to the time of each Drawdown of an Advance under the
Facility subsequent to the first Drawdown after the date hereof:

     (a)  a Borrower shall have given to the Administrative Agent a Drawdown
          Notice in accordance with the provisions of Section 2.3;

     (b)  the representations and warranties set forth in Section 6.1 shall be,
          mutatis mutandis, true and correct in all material respects on and as
          of the Drawdown Date, both before and after giving effect to the
          Drawdown of such Advance and to the application of proceeds therefrom,
          by reference to the facts and circumstances then existing; and

     (c)  no Default or Event of Default shall have occurred and be continuing,
          nor shall any such event occur as a result of making the Advances or
          the application of proceeds therefrom on the Drawdown Date.

<PAGE>

                                       -47-

                                   ARTICLE 5
                       PROVISIONS RELATING TO SUBSIDIARIES

5.1      MATERIAL RESTRICTED SUBSIDIARIES TO PROVIDE GUARANTEES

     (a)  Each Subsidiary of Celestica which is or becomes a Material Restricted
          Subsidiary shall comply with the requirements of Subsection 7.1(m).

     (b)  In the event that a Material Restricted Subsidiary ceases to be a
          Material Restricted Subsidiary as a result of the diminution of the
          value of its assets such that the aggregate value thereof does not
          meet the applicable threshold set out in the definition of Material
          Restricted Subsidiary under this Agreement, Celestica may request and
          the Administrative Agent shall, in its reasonable discretion, release
          the Guarantee executed by such Material Restricted Subsidiary.

5.2      UNRESTRICTED SUBSIDIARIES

Celestica may, from time to time and at any time hereafter, designate any
Subsidiary as an Unrestricted Subsidiary so long as:

     (a)  (i) such Subsidiary shall not be a Subsidiary existing as at the date
          of this Agreement; and (ii) such Subsidiary shall never have been a
          Restricted Subsidiary;

     (b)  neither Celestica nor any of its Subsidiaries (other than Unrestricted
          Subsidiaries) shall be liable, contingently or otherwise, for any
          indebtedness or other liability or obligation of the Unrestricted
          Subsidiary, except for guarantees provided by the immediate parent of
          such Unrestricted Subsidiary in respect of indebtedness of such
          Unrestricted Subsidiary, where such guarantees are:

          (i)     made solely for the purpose of facilitating a pledge by the
                  guarantor of Shares of such Unrestricted Subsidiary; and

          (ii)    the recourse under such guarantees are limited to such pledged
                  Shares; and

     (c)  neither Celestica nor any of its Restricted Subsidiaries shall have
          applied the proceeds of any Advance under the Facility to fund the
          equity of, or otherwise capitalize the Unrestricted Subsidiary;

Provided that an Event of Default has not occurred and is not continuing,
Celestica may from time to time and at any time hereafter, designate an
Unrestricted Subsidiary as a Restricted Subsidiary provided that:

          (i)     immediately upon giving effect to such designation, Celestica
                  shall remain in compliance with all covenants set out in
                  Section 7.3 on a pro-forma (four quarter) basis; and

<PAGE>

                                       -48-

          (ii)    the designation of such Unrestricted Subsidiary as a
                  Restricted Subsidiary would not otherwise result in the
                  occurrence of a Default or an Event of Default.

                                  ARTICLE 6
                         REPRESENTATIONS AND WARRANTIES

6.1      REPRESENTATIONS AND WARRANTIES

Each Borrower represents and warrants as follows to the Administrative Agent and
the Lenders and acknowledges and confirms that the Administrative Agent and the
Lenders are relying upon such representations and warranties:

     (a)  ORGANIZATION, ETC. Each Obligor is validly organized and existing and
          in good standing under the laws of the jurisdiction of its
          incorporation or creation, is duly qualified to do business and is
          qualified as a foreign corporation, company or other entity in each
          jurisdiction where the nature of its business requires such
          qualification, except where the failure to be so qualified would not
          reasonably be likely to have Material Adverse Effect, and has full
          power and authority and holds all requisite governmental licences,
          permits and other approvals to enter into and perform its obligations
          under the Loan Documents to which it is a party and except where
          failure to hold such licenses, permits or approvals would not
          reasonably be likely to have a Material Adverse Effect to own or hold
          under lease its property and to conduct its business substantially as
          currently conducted by it.

     (b)  VALIDITY, ETC. Each Obligor has duly executed and delivered each Loan
          Document to which it is a party and each such Loan Document
          constitutes a legal, valid and binding obligation of such Obligor
          enforceable against it in accordance with its terms.

     (c)  DUE AUTHORIZATION, NON-CONTRAVENTION ETC. The execution, delivery and
          performance by each Obligor of each Loan Document to which it is a
          party are within its corporate powers, have been duly authorized by
          all necessary corporate action by it, and do not

          (i)     contravene its Organic Documents;

          (ii)    contravene any Applicable Law or contractual restriction;

          (iii)   result in, or require the creation or imposition of, any Lien
                  on any of its properties.

     (d)  GOVERNMENT APPROVAL, REGULATION, ETC. No authorization or approval or
          other action by, and no consent from, notice to or filing with, any
          Official Body or other Person is required for the due execution,
          delivery or performance by any Obligor

<PAGE>

                                       -49-

          of any Loan Document to which it is a party or in order to render any
          such Loan Document legal, valid, binding or enforceable against such
          Obligor.

     (e)  FINANCIAL STATEMENTS. The consolidated financial statements of
          Celestica and its Subsidiaries as at December 31, 2000 fairly present
          the financial condition of Celestica and its Subsidiaries as at such
          date and the results of their operations for the fiscal year then
          ended, in accordance with GAAP consistently applied. Since December
          31, 2000 there has been no Material Adverse Change;

     (f)  LITIGATION, LABOUR CONTROVERSIES, ETC. There is no pending or, to the
          knowledge of Celestica and the Restricted Subsidiaries, threatened
          litigation, action, proceeding, or labour controversy affecting
          Celestica or any of the Restricted Subsidiaries, or any of their
          respective properties, businesses, assets or revenues, which would
          reasonably be likely to have a Material Adverse Effect or purports to
          affect the legality, validity or enforceability of any Loan Document.

     (g)  LICENCES, ETC. AND COMPLIANCE WITH LAWS. All material licences,
          franchises, certificates, consents, rights, approvals, authorizations,
          registrations, orders and permits required under Applicable Law (other
          than Environmental Laws) to enable each of the Borrowers and each
          Restricted Subsidiary to carry on their respective businesses as now
          conducted by them and to own or lease their respective properties have
          been duly obtained and are currently subsisting. Each of the Borrowers
          and each Restricted Subsidiary have complied in all material respects
          with the terms and provisions presently required to be complied with
          by them in all such material licences, franchises, certificates,
          consents, rights, approvals, authorizations, registrations, orders and
          permits and with Applicable Law (other than Environmental Laws) and
          are not in violation of any of the respective provisions thereof if
          such non-compliance or violation would reasonably be likely to have a
          Material Adverse Effect.

     (h)  COMPLIANCE WITH ENVIRONMENTAL LAWS. Each of the Borrowers and the
          Subsidiaries and all facilities and property now or formerly owned,
          operated or leased by them:

          (i)     are and have been in compliance with all Environmental Laws,
                  including, without limitation, with respect to the release,
                  spill, leak, pumping, pouring, emptying, injection, escape,
                  leaching, dumping, spraying, burial, abandonment,
                  incineration, seepage, placement, emission, deposit, issuance,
                  discharge, transportation or disposal ("Release") of any
                  Hazardous Material in or over the water, atmosphere or soil
                  other than for non-compliance with Environmental Laws which
                  would not reasonably be likely to have a Material Adverse
                  Effect;

          (ii)    have no contingent liabilities in connection with any Release
                  or likely Release of Hazardous Materials and have not Released
                  or caused or permitted the Release of Hazardous Materials, and
                  have no knowledge of

<PAGE>

                                       -50-

                  Releases by others, at, on or under any property now or
                  previously owned, operated or leased by the Celestica and its
                  Material Restricted Subsidiaries that, with respect to any of
                  the foregoing, singly or in the aggregate, would reasonably be
                  likely to have a Material Adverse Effect;

          (iii)   have not received notice of and are not aware of any pending
                  or threatened claims, complaints, notices, orders, directions,
                  instructions or requests for information with respect to any
                  alleged violation of or potential liability under any
                  Environmental Law which would reasonably be likely to have a
                  Material Adverse Effect;

          (iv)    have been issued and are in compliance with all permits,
                  certificates, approvals, licences and other authorizations
                  relating to environmental matters and necessary or desirable
                  for the Business other than for any such non-issuances and
                  non-compliances which would not reasonably be likely to have a
                  Material Adverse Effect and each such permit, certificate,
                  approval, licence or other authorization the absence of which
                  would reasonably be likely to have a Material Adverse Effect
                  is in good standing and there are no proceedings pending or,
                  to the knowledge of the Borrowers, threatened to revoke, amend
                  or limit in any material respect any such permit, certificate,
                  approval, licence or other authorization;

          (v)     have no underground storage tanks, active or, to the knowledge
                  of the Borrowers, abandoned, including petroleum storage
                  tanks, on or under any such property that, singly or in the
                  aggregate, would reasonably be likely to have a Material
                  Adverse Effect;

          (vi)    have not directly transported or directly arranged for the
                  transportation of any Hazardous Substances in violation of
                  Environmental Laws or to any location which would reasonably
                  be likely to lead to claims against them for any remedial
                  work, damage to the environment or natural resources or
                  personal injury, including claims under CERCLA, which in any
                  such case would reasonably be likely to have a Material
                  Adverse Effect;

          (vii)   have no polychlorinated biphenyls or friable asbestos present
                  at any such property that, singly or in the aggregate, would
                  reasonably be likely to have a Material Adverse Effect;

          (viii)  have no conditions which exist at, on or under any such
                  property which, with or without the passage of time, or the
                  giving of notice or both, would give rise to liability under
                  any Environmental Laws which would reasonably be likely to
                  have a Material Adverse Effect; and

          (ix)    is not listed or proposed for listing on the National
                  Priorities List pursuant to CERCLA, on the CERCLIS or on any
                  similar state list of sites or Persons requiring investigation
                  or clean up where the liability imposition

<PAGE>

                                       -51-

                  and allocation regime provided for in the applicable state
                  Environmental Law is similar to CERCLA, including, without
                  limitation, the ability of governments and other parties to
                  recover costs from other responsible or potentially
                  responsible persons, except for any such listing or proposed
                  listing which would not reasonably be likely to have a
                  Material Adverse Effect.

     (i)  ENCUMBRANCES. There are no Liens on any of the assets or undertaking
          of the Borrowers or any Restricted Subsidiary other than Permitted
          Encumbrances.

     (j)  NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of Default has
          occurred and is continuing.

     (k)  ACCURACY OF INFORMATION. All factual information heretofore or
          contemporaneously furnished by or on behalf of Celestica in writing to
          the Administrative Agent for the purposes of or in connection with
          this Agreement, including, without limitation, the final prospectus of
          Celestica dated May 23, 2001, is true and accurate in every material
          respect on the date as of which such information is dated or certified
          and as of the date of execution and delivery of this Agreement, and
          such information is not incomplete by omitting to state any material
          fact necessary to make such information not misleading.

     (l)  NO ACTION FOR WINDING-UP OR BANKRUPTCY. There has been no involuntary
          action taken against any of the Borrowers or any Restricted Subsidiary
          for any such corporation's winding-up, dissolution, liquidation,
          bankruptcy, receivership, administration or similar or analogous
          events in respect of such corporation or all or any material part of
          its assets or revenues.

     (m)  TAXES. Each Borrower and each of its Subsidiaries have duly filed on a
          timely basis all tax returns required to be filed by them except where
          such failure to file would not reasonably be likely to have a Material
          Adverse Effect and have paid all Taxes which are due and payable by
          them, and all assessments and re-assessments, and all other Taxes,
          governmental charges, governmental royalties, penalties, interest and
          fines claimed against them, other than those for which liability is
          being contested by them in good faith by appropriate proceedings and
          for which adequate provision has been made where required in
          accordance with GAAP or in respect of which such failure to pay would
          not reasonably be likely to have a Material Adverse Effect, and all
          required instalment payments have been made in respect of Taxes
          payable for the current period for which returns are not yet required
          to be filed except where such failure to pay would not reasonably be
          likely to have a Material Adverse Effect; there are no agreements,
          waivers or other arrangements providing for an extension of time with
          respect of the filing of any tax returns by them or the payment of any
          Taxes except where such agreements, waivers or other arrangements
          would not reasonably be likely to have a Material Adverse Effect;
          there are no actions or proceedings to be taken by any taxation
          authority of any jurisdiction to enforce the payment of any Taxes by

<PAGE>

                                       -52-

          them other than those which are being contested by them in good faith
          by appropriate proceedings and which proceedings have been stayed for
          the duration of such contestation.

     (n)  PENSION PLANS. Except as would not be reasonably likely to have a
          Material Adverse Effect, (i) all Pension Plans are duly established,
          registered, qualified, administered and invested in compliance with
          the terms thereof, any applicable collective agreements and Applicable
          Law; (ii) no events have occurred and no action has been taken by any
          Person which would reasonably be likely to result in the termination
          or partial termination of any Pension Plan, whether by declaration of
          any Superintendent of Pensions or otherwise; (iii) none of the
          Borrowers have withdrawn any assets held in respect of any Pension
          Plan except as permitted under the terms thereof and Applicable Laws;
          (iv) no Pension Plan has a "SOLVENCY DEFICIENCY" or "GOING CONCERN
          UNFUNDED LIABILITY" as defined in the Pension Benefits Act (Ontario)
          and the regulations enacted thereunder, as amended; (v) all
          contributions, premiums and other payments required to be paid to or
          in respect of each Pension Plan have been paid in a timely fashion in
          accordance with the terms thereof and Applicable Law and no taxes,
          penalties or fees are owing or exigible in respect of any Pension
          Plan; and (vi) no actions, suits, claims, or proceedings are pending
          or, to the knowledge of the Borrower, threatened in respect of any
          Pension Plan or its assets, other than routine claims for benefits.
          For the purposes of this section, "APPLICABLE LAW" shall include any
          federal or provincial pension benefits legislation and the Income Tax
          Act (Canada).

     (o)  REGULATIONS U AND X. No Borrower is engaged in the business of
          extending credit for the purpose of purchasing or carrying margin
          stock. None of the proceeds from the Facility will be used for the
          purpose of purchasing or carrying directly or indirectly margin stock
          or for any other purpose that would constitute this transaction a
          "Purpose Credit" within the meaning of Regulations U and X of the
          Board of Governors of the Federal Reserves System, as any of them may
          be amended from time to time.

     (p)  INVESTMENT COMPANY ACT. No Obligor is an investment company within the
          meaning of the United States Investment Company Act of 1940.

     (q)  PUBLIC UTILITY HOLDING COMPANY ACT. No Obligor is an "affiliate" or a
          "subsidiary company" of a "public utility company" for a "holding
          company" or an "affiliate" or a "subsidiary company" of a "public
          utility company" as such terms are defined in the United States Public
          Utility Holding Company Act of 1935.

6.2      SURVIVAL OF REPRESENTATIONS AND WARRANTIES

The representations and warranties set out in this Article 6 and in any Loan
Document shall survive the execution and delivery of this Agreement and the
making of any Advances to the

<PAGE>

                                       -53-

Borrowers, notwithstanding any investigations or examinations which may be made
by the Administrative Agent or any Lender or any counsel to any of them.

6.3      DEEMED REPETITION OF REPRESENTATIONS AND WARRANTIES

Each of the representations set out in Section 6.1 shall be true and correct in
all material respects and shall be deemed to be given on the occurrence of the
Drawdown, Conversion or Rollover of an Advance, in each case by reference to the
facts and circumstances existing on the date of such Drawdown, Conversion or
Rollover.

                                    ARTICLE 7
                                    COVENANTS

7.1      AFFIRMATIVE COVENANTS

Celestica covenants and agrees with each of the Lenders that, unless the
Majority Lenders otherwise consent in writing, so long as any amount payable
hereunder or under the Loan Documents is outstanding or any of the Lenders has
any Commitment hereunder:

     (a)  FINANCIAL REPORTING. Celestica shall deliver to the Administrative
          Agent, with sufficient copies for distribution to each of the
          Administrative Agent and each of the Lenders:

          (i)     within 60 days after the end of each of its fiscal quarters in
                  each fiscal year, commencing with the fiscal quarter ending
                  September 30, 2001, the unaudited financial statements of
                  Celestica on a consolidated basis, each consisting of a
                  balance sheet, statement of income and statement (in the form
                  customarily prepared by Celestica for internal reporting
                  purposes) of changes in financial position as at the end of
                  such fiscal quarter and for the period commencing with the end
                  of the previous fiscal quarter and ending with the end of such
                  fiscal quarter, together with the figures for the year-to-date
                  and setting forth, in each case, in comparative form to the
                  figures for the corresponding fiscal quarter of the previous
                  fiscal year;

          (ii)    within 120 days after the end of each fiscal year of
                  Celestica, the audited consolidated financial statements of
                  Celestica for such year setting forth the corresponding
                  figures for the previous fiscal year in comparative form,
                  together with the report thereon of an independent auditor of
                  recognized national standing, each consisting of a balance
                  sheet, statement of income and statement of changes in
                  financial position;

          (iii)   within 60 days after the end of each fiscal quarter of
                  Celestica in each fiscal year, commencing with the fiscal
                  quarter ending September 30, 2001, an Officer's Certificate of
                  Celestica substantially in the form of Schedule D stating
                  that:

<PAGE>

                                       -54-

                  (A)    Celestica is in compliance with the covenants set forth
                         in this Article 7 and that no Default or Event of
                         Default has occurred and is continuing (or specifying
                         such non-compliance or Default or Event of Default and
                         stating what action, if any, Celestica is taking or is
                         causing to be taken in connection therewith) and
                         providing a calculation of the ratios referred to in
                         Sections 7.3(a) and (b), and a statement as to the
                         amount and calculation of Tangible Net Worth, Net
                         Funded Debt and EBITDA, in each case as at the last day
                         of the relevant period; and

                  (B)    Celestica has determined that the unconsolidated assets
                         of all Restricted Subsidiaries which are not Material
                         Restricted Subsidiaries do not, or will not, after
                         giving effect to the Guarantees delivered by the
                         Restricted Subsidiaries listed in a schedule thereto,
                         exceed ten per cent (10%) of the consolidated assets of
                         the Borrowers and the Restricted Subsidiaries on the
                         date referenced in the most recently delivered set of
                         financial statements delivered pursuant to Section
                         7.1(a)(ii);

          (iv)    in the event that Celestica delivers filings other than the
                  financial statements referred to in clauses (i) to (iii) above
                  to any securities commission, stock exchange or similar
                  regulatory authority, such filings concurrently with the
                  delivery of such filings to the securities commission, stock
                  exchange or similar regulatory authority; and

          (v)     such other information respecting the condition or operations,
                  financial or otherwise, of Celestica or any Subsidiary (other
                  than an Unrestricted Subsidiary) as any Lender through the
                  Administrative Agent may from time to time reasonably request,
                  including without limitation, particulars of Advances advanced
                  or applied by either of the Borrowers to or for the benefit of
                  Celestica Italia S.r.l. or by any of Celestica's Restricted
                  Subsidiaries to or for the benefit of Celestica Italia S.r.l.

     (b)  CORPORATE STATUS. Subject to transactions undertaken in compliance
          with Section 11.12, Celestica shall remain a corporation duly
          incorporated and validly subsisting under the laws of the Province of
          Ontario and each of the Restricted Subsidiaries shall remain validly
          organized and existing and in good standing under the laws of its
          jurisdiction of formation.

     (c)  MAINTENANCE OF BUSINESS AND PROPERTIES. Each of Celestica and each
          Restricted Subsidiary shall, and shall cause each of its Subsidiaries
          (except for Unrestricted Subsidiaries) to, continue its business,
          maintain, preserve, protect and keep its properties in good repair,
          working order and condition, reasonable wear and tear excepted, and
          make necessary and proper repairs, renewals and replacements so that
          its business carried on in connection therewith may be properly
          conducted at

<PAGE>

                                       -55-

          all times unless Celestica or such Restricted Subsidiary determines
          in good faith that the continued maintenance of any of its properties
          is no longer desirable.

     (d)  NOTICE OF EVENT OF DEFAULT. Celestica shall deliver to the
          Administrative Agent, forthwith upon becoming aware of any Default or
          Event of Default, a certificate of an officer of Celestica specifying
          such Default or Event of Default together with a statement of an
          officer of Celestica setting forth details of such Default or Event of
          Default and the action which has been, or is proposed to be, taken
          with respect thereto.

     (e)  OTHER NOTIFICATIONS. Celestica shall at any time upon request of the
          Administrative Agent, acting reasonably, provide to the Administrative
          Agent an up to date corporate chart showing Celestica and all of its
          Subsidiaries and shall promptly notify the Administrative Agent of:

          (i)     any change in the name or organization of any of the Borrowers
                  or any Material Restricted Subsidiary and of any change in the
                  location of the registered office or executive office of any
                  of them;

          (ii)    the non-compliance with any Environmental Law or any
                  environmental claim, complaint, notice or order issued to any
                  of the Borrowers, or any of the Subsidiaries, or any other
                  environmental condition or event where such non-compliance,
                  condition or event would reasonably be likely to have a
                  Material Adverse Effect. As soon as practicable thereafter,
                  Celestica shall advise the Administrative Agent as to the
                  actions which the Borrowers or any such Subsidiary intends to
                  take in connection with any such claim, complaint, notice or
                  order; and

          (iii)   the institution of any steps by the Borrower or any other
                  Person to terminate any Pension Plan which would reasonably be
                  likely to have a Material Adverse Effect, failure to make a
                  required contribution to any Pension Plan if such failure is
                  sufficient to give rise to a Lien under Section 3.02(f) of
                  ERISA, the taking of any action with respect to a Pension Plan
                  which could reasonably be expected to result in the
                  requirement that a Borrower furnish a bond or other security
                  to the PBGC or such Pension Plan, the occurrence of any event
                  with respect any Pension Plan which would reasonably be likely
                  to have a Material Adverse Effect and copies of all
                  documentation relating thereto.

     (f)  COMPLIANCE WITH LAWS, ETC. Each of Celestica and the Restricted
          Subsidiaries will, and will cause each of its Subsidiaries to, comply
          in all material respects with Applicable Laws, such compliance to
          include (without limitation) its qualification as a foreign
          corporation in all jurisdictions in which such qualification is
          legally required for the conduct of its business.

<PAGE>

                                       -56-

     (g)  PAYMENT OF TAXES. The Borrowers shall, and the Borrowers shall cause
          each of the Subsidiaries to, pay or cause to be paid, when due, all
          Taxes including, property taxes, business taxes, social security
          premiums, assessments and governmental charges or levies imposed upon
          it or upon its income, sales, capital or profit or any property
          belonging to it unless any such Tax, social security premiums,
          assessment, charge or levy is contested by it in good faith with
          adequate provision or reserve, where required by GAAP, and to withhold
          and remit when due all payroll and withholding taxes.

     (h)  INSURANCE. Each of Celestica and the Restricted Subsidiaries will, and
          will cause each of its Subsidiaries (except for Unrestricted
          Subsidiaries) to, maintain or cause to be maintained insurance with
          responsible insurance companies with respect to its properties and
          business against such casualties and contingencies, of such types, and
          in such amounts as is customary in the case for similar businesses
          operating in similar geographic locations. Notwithstanding the
          foregoing, Celestica and each of the Restricted Subsidiaries shall be
          permitted to self-insure only where self-insurance is usual and
          customary for the type of risk, and for companies in substantially the
          same line of business and operating in the same geographic location as
          Celestica or the Restricted Subsidiary, as applicable, and where
          customary and usual reserves or provisions are taken in respect of
          such self-insurance by Celestica or the Restricted Subsidiary, as
          applicable. Upon request of the Administrative Agent, Celestica will
          furnish to the Administrative Agent for distribution to the Lenders at
          reasonable intervals a certificate of an Authorized Officer of
          Celestica setting forth the nature and extent of all insurance
          maintained by Celestica and the Restricted Subsidiaries in accordance
          with this Section which certificate shall specify the risks for which
          Celestica or any Restricted Subsidiary have self-insured and the
          amount of the provisions or reserves, if any, held or made in respect
          of such self-insurance.

     (i)  BOOKS AND RECORDS. Celestica and each Restricted Subsidiary will, and
          will cause each of its Subsidiaries to, keep books and records which
          accurately reflect all of its business affairs and transactions.
          Celestica will permit the Administrative Agent and each Lender or any
          of their respective representatives, at reasonable times and customary
          intervals during normal business hours, to visit Celestica's offices
          and to discuss its financial matters with Celestica's financial
          officers. Upon the occurrence of and during the continuation of a
          Default, Celestica and each Restricted Subsidiary shall permit the
          Administrative Agent and each Lender or any of their respective
          representatives at any time to visit all of its offices, to discuss
          its financial matters with its officers and its independent chartered
          accountant (and each of Celestica and each Restricted Subsidiary
          hereby authorizes such independent chartered accountant to discuss
          their financial matters with the Administrative Agent and each Lender
          or its representatives whether or not any representative of Celestica
          or the Restricted Subsidiary is present) and to examine (and, at the
          expense of the Borrowers, photocopy extracts from) any of its books or
          corporate records. The Borrowers shall pay any fees of

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                                       -57-

          such independent chartered accountant incurred in connection with the
          Administrative Agent's or any Lender's exercise of its rights pursuant
          to this Section.

     (j)  CELESTICA INTERNATIONAL TO REMAIN SUBSIDIARY. Celestica International
          (or its Successor Corporation within the meaning of Section 11.12)
          shall remain a directly or indirectly wholly-owned Subsidiary of
          Celestica.

     (k)  PUNCTUAL PAYMENT. Celestica will, and will cause each Obligor to duly
          and punctually pay or cause to be paid all amounts due under this
          Agreement and the other Loan Documents at the dates and places, in the
          currencies and in the manner provided in this Agreement and any other
          Loan Documents.

     (l)  RATINGS MAINTENANCE. Celestica shall maintain a credit rating with the
          Approved Credit Rating Agencies and shall forthwith notify the
          Administrative Agent in the event that any rating by an Approved
          Credit Rating Agency is downgraded or in the event that the rating of
          Celestica shall have been placed under review by an Approved Credit
          Rating Agency.

     (m)  MATERIAL RESTRICTED SUBSIDIARY GUARANTEES.

          (i)     Subject to clauses (ii) and (iii), Celestica shall:

                  (A)    within 45 days of the acquisition or incorporation of a
                         Subsidiary which is a Restricted Subsidiary, whose
                         assets total greater than U.S. $150,000,000 on the date
                         of such acquisition or incorporation; and

                  (B)    upon the designation of a Restricted Subsidiary as a
                         Material Restricted Subsidiary on the Schedule to the
                         Officer's Certificate delivered pursuant to Section
                         7.1(a)(iii) within 45 days of such delivery of the
                         Officer's Certificate making such designation,

                  cause such Material Restricted Subsidiary to (I) authorize,
                  execute and deliver a Guarantee to the Administrative Agent
                  substantially in the form of Schedule G with such changes as
                  the Administrative Agent and the Material Restricted
                  Subsidiary may necessarily require on the advice of their
                  respective counsel to reflect local legal requirements; (II)
                  deliver to the Administrative Agent certified copies of its
                  Organic Documents and a resolution authorizing the Guarantee,
                  a certificate of its officers signing the Guarantee and a
                  certificate of status, good standing or like certificate with
                  respect to it issued by appropriate government officials of
                  its jurisdiction of incorporation; and (III) cause to be
                  delivered an opinion of counsel to the newly acquired or
                  incorporated Material Restricted Subsidiary substantially in
                  the form of Schedule K, with only those changes which are
                  satisfactory to the Lender's Counsel.

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                                       -58-

          (ii)    In the event that any Material Restricted Subsidiary is not a
                  wholly-owned Subsidiary of Celestica, on the later of (i) the
                  date of execution of a Guarantee or (ii) the date of
                  acquisition by any Person which is not Celestica or a
                  Subsidiary of Celestica of any Share of such Material
                  Restricted Subsidiary, Celestica shall deliver an
                  acknowledgement addressed by such Person to the Administrative
                  Agent acknowledging the Guarantee executed by such Material
                  Restricted Subsidiary and the enforceability thereof against
                  the Material Restricted Subsidiary to the full extent set out
                  in the Guarantee (subject to the same qualifications as set
                  out in the opinion of legal counsel to such Material
                  Restricted Subsidiary with respect to such Guarantee)
                  notwithstanding the ownership of Shares of the Material
                  Restricted Subsidiary by such Person and any agreement between
                  such Person and Celestica or any Subsidiary of Celestica.

          (iii)   The Borrowers and Guarantors shall, and the Borrowers shall
                  cause each of its Subsidiaries to, take all such steps and do
                  such things as may be necessary, in the opinion of the
                  Administrative Agent, to ensure the continuous enforceability
                  of each Guarantee granted by each Borrower and each Material
                  Restricted Subsidiary.

     (n)  ACCURACY OF INFORMATION. All factual information hereafter furnished
          by or on behalf of Celestica in writing to the Administrative Agent
          for the purposes of or in connection with this Agreement shall be true
          and accurate in every material respect on the date as of which such
          information is dated or certified and shall not be incomplete by the
          omission to state any material fact necessary to make such information
          not misleading.

7.2      NEGATIVE COVENANTS

Celestica covenants and agrees with each of the Lenders that, unless the
Majority Lenders otherwise consent in writing, so long as any amount payable
hereunder is outstanding or the Lenders shall have any Commitment hereunder:

     (a)  NO MERGER, AMALGAMATION, ETC. None of the Borrowers or any Restricted
          Subsidiary shall, directly or indirectly, merge, amalgamate or enter
          into any similar or other business combination pursuant to statutory
          authority or otherwise with any other Person except upon compliance
          with Section 11.12.

     (b)  RESTRICTION ON DISPOSITION OF ASSETS. None of the Borrowers or any
          Restricted Subsidiary shall sell, assign, transfer, lease, convey or
          otherwise dispose of any property, assets or investments, (in each
          case a "sale") other than:

          (i)     sales made in compliance with Section 11.12; or

          (ii)    sales of obsolete equipment in the ordinary course of
                  business; or

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                                       -59-

          (iii)   sales, assignments and transfers pursuant to a Permitted
                  Securitization Transaction; or

          (iv)    sale/leaseback transactions of:

                  (A)    any real property owned by a Borrower or Restricted
                         Subsidiary; and

                  (B)    any property or assets acquired by a Borrower or
                         Restricted Subsidiary, as the case may be, which is
                         completed within six months of the date on which such
                         property or assets were acquired, provided that any
                         Borrowing made to finance such acquisition shall be
                         repaid within two Banking Days of the completion of
                         such sale/leaseback transaction; or

          (v)     sales of Shares of any Unrestricted Subsidiary; or

          (vi)    sales of assets and property, including inventory, in the
                  ordinary course of business; or

          (vii)   sales of any fixed assets together with associated
                  intellectual property not otherwise permitted in clauses (i)
                  to (vi) above, subject to an aggregate limit of sales under
                  this clause (vii) in any fiscal year by the Borrowers and
                  Restricted Subsidiaries in an amount equal to 10% of the
                  aggregate net book value of the fixed assets plus 10% of the
                  aggregate net book value of intellectual property of Celestica
                  on a consolidated basis (the "disposition allowance") and
                  provided that, in any fiscal year in which the Borrowers and
                  Restricted Subsidiaries do not sell fixed assets and
                  associated intellectual property under this clause (vii)
                  having aggregate net book values totalling the disposition
                  allowance, the Borrowers and Restricted Subsidiaries may carry
                  forward into the following fiscal years the unused disposition
                  allowance, and further provided that none of the Borrowers or
                  Restricted Subsidiaries shall sell any intellectual property
                  under this clause (vii) unless such sale is incidental to a
                  sale of fixed assets; or

          (viii)  sales of assets, property or investments from a Borrower or
                  Restricted Subsidiary to another Borrower or Restricted
                  Subsidiary provided that no Borrower or Restricted Subsidiary
                  shall so sell assets, property or investments during the
                  occurrence and continuance of a Default or where such sale,
                  alone or as part of a series of previously or concurrently
                  occurring sales, would reasonably be likely to have a Material
                  Adverse Effect.

     (c)  RESTRICTION ON CERTAIN INTER-COMPANY TRANSACTIONS. Except as otherwise
          permitted by this Section 7.2, none of the Borrowers or any Restricted
          Subsidiary

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                                       -60-

          shall enter into any agreement or complete any transaction
          with any other Borrower or any Restricted Subsidiary during the
          occurrence and continuance of a Default or where such agreement or
          transaction, alone or as part of a series of previously or
          concurrently occurring agreements or transactions, would reasonably be
          likely to have a Material Adverse Effect.

     (d)  NEGATIVE PLEDGE/PARI PASSU RANKING. None of the Borrowers or any of
          the Restricted Subsidiaries shall create, incur, assume or permit to
          exist any Lien, other than Permitted Encumbrances, on any of its
          property, undertaking or assets now owned or hereafter acquired. Each
          Obligor's monetary Obligations shall rank at least pari passu with all
          other unsecured Indebtedness of such Obligor and no Obligor shall, or
          shall agree with any other Person to, pay any other Indebtedness in
          priority to payment of all monetary Obligations as and when due.

     (e)  RESTRICTION ON NON-ARM'S LENGTH TRANSACTIONS. The Borrowers shall not,
          and shall not permit any Restricted Subsidiary to, enter into any
          transaction or agreement with any Person which is not at Arm's Length
          with the Borrowers or such Restricted Subsidiary (other than other
          Borrowers, Restricted Subsidiaries or Unrestricted Subsidiaries)
          unless,

          (i)     such transaction or agreement is in the ordinary course of
                  business and is on terms no less favourable to the Borrowers
                  or such Restricted Subsidiary as would be obtainable in a
                  comparable transaction with a Person which is at Arm's Length
                  with the Borrower or such Restricted Subsidiary, and

          (ii)    such transaction or agreement complies with the terms of
                  Section 7.2(c).

     (f)  RESTRICTION ON CHANGE OF BUSINESS. None of the Borrowers or the
          Restricted Subsidiaries shall, either directly or indirectly, enter
          into any business other than the Business without the prior written
          consent of the Majority Lenders.

     (g)  NO CHANGE IN ACCOUNTING TREATMENT OR REPORTING PRACTICES. Subject to
          the provisions of Section 1.7, none of the Borrowers nor any
          Restricted Subsidiary shall make any material change in its accounting
          or reporting or financial reporting practices, except as consistent
          with GAAP or Applicable Law, which changes shall be disclosed to the
          Lenders.

     (h)  RESTRICTIONS ON TRANSACTIONS WITH UNRESTRICTED SUBSIDIARIES. No
          Borrower shall, or shall permit any Restricted Subsidiary to,

          (i)     sell assets or lend monies to any Unrestricted Subsidiary
                  unless such sale is permitted pursuant to Section 7.2(b)(vi)
                  and such sale or loan is in the ordinary course of business
                  and is on terms no less favourable to such Borrower or such
                  Restricted Subsidiary as would be obtainable in a comparable
                  transaction with a Person which is at Arm's Length with the
                  Borrower or such Restricted Subsidiary; or

<PAGE>

                                       -61-

          (ii)    provide financial assistance by means of a guarantee to an
                  Unrestricted Subsidiary unless the financial assistance is in
                  the form of a guarantee granted by the immediate parent of
                  such Unrestricted Subsidiary, where such guarantee is (A) made
                  solely for the purpose of facilitating a pledge by the
                  guarantor of Shares of such Unrestricted Subsidiary; and (B)
                  the recourse thereunder is limited to the Shares of the
                  Unrestricted Subsidiary; and (C) a pledge of the Shares of the
                  Unrestricted Subsidiary.

     (i)  RESTRICTIONS ON TRANSACTIONS WITH CELESTICA ITALIA S.R.L. No Borrower
          shall, or shall permit any Restricted Subsidiary to,

          (i)     invest Advances in, contribute equity to, or otherwise apply
                  Advances for the benefit of Celestica Italia S.r.l. except,
                  subject to Section 7.2(i)(ii), by loaning such Advances to
                  Celestica Italia S.r.l.; and

          (ii)    lend Advances to Celestica Italia S.r.l. where the amount of
                  Advances that has been advanced to or for the benefit of
                  Celestica Italia S.r.l. outstanding at such time would exceed
                  U.S.$200,000,000.

7.3      FINANCIAL COVENANTS

     (a)  MINIMUM TANGIBLE NET WORTH. Celestica shall maintain, at all times, a
          minimum Tangible Net Worth in an amount that shall not be less than an
          amount equal to the sum of U.S. $1,750,000,000, plus 50% of cumulative
          annual positive Net Income commencing with the fiscal year ending
          December 31, 2000 and in each subsequent fiscal year.

     (b)  MAXIMUM NET FUNDED DEBT: EBITDA RATIO. Celestica shall maintain a Net
          Funded Debt: EBITDA ratio, calculated on a rolling four quarter basis
          of not more than 3.25:1.0.

     (c)  CALCULATION OF FINANCIAL RATIOS. For the purposes of Sections 7.3(a)
          and (b), all of the calculations shall be made on a consolidated basis
          for Celestica and its Subsidiaries (but for greater certainty,
          excluding Unrestricted Subsidiaries) in accordance with the provisions
          of Sections 1.7 and 1.8.

                                   ARTICLE 8
                            DEFAULT AND ACCELERATION

8.1      EVENTS OF DEFAULT

The occurrence of any one or more of the following events (each such event and
the expiry of the cure period, if any, provided in connection therewith, being
herein referred to as an "EVENT OF DEFAULT") shall constitute a default under
this Agreement:

     (a)  if a Borrower shall default in (i) the payment when due of any
          principal of any Advance; (ii) the payment when due of any interest on
          any Advance (and such

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                                       -62-

          default shall continue unremedied, in the case of interest, for a
          period of three (3) days); or (iii) the payment when due of any fee or
          any other Obligation (and any of such defaults described in item (iii)
          shall continue unremedied for a period of five (5) days);

     (b)  any representation or warranty made or deemed to be made hereunder or
          in any other Loan Document or any other writing or certificate
          furnished by on behalf of an Obligor to the Administrative Agent for
          the purposes of or in connection with this Agreement or any such other
          Loan Document is or shall be incorrect when made in any material
          respect;

     (c)  any Obligor shall default in the service or performance of any
          agreement, covenant or condition contained herein or in any other Loan
          Document (other than as set forth above) and such failure shall remain
          unremedied for a period of thirty (30) days after notice in writing
          has been given by the Administrative Agent to Celestica;

     (d)  a default shall occur in the payment when due, whether by acceleration
          or otherwise, of any Indebtedness (other than as set forth in (a)
          above) of any Borrower or any Restricted Subsidiary having a principal
          amount, individually or in the aggregate, in excess of $50,000,000, or
          a default shall occur in the performance or observance of any
          obligation or condition with respect to any such Indebtedness if the
          effect of such default is to accelerate the maturity of any such
          Indebtedness or such default shall continue unremedied and unwaived
          for any applicable grace period of time sufficient to permit the
          holder or holders of such Indebtedness, or any trustee or agent for
          such holders, to have the right to cause such Indebtedness to become
          due and payable prior to its expressed maturity;

     (e)  any judgment or order for the payment of money in excess of
          $25,000,000, which is not covered by insurance, shall be rendered
          against any Borrower or any Restricted Subsidiary and either:

          (i)     enforcement proceedings shall have been commenced by any
                  creditor upon such judgment or order; or

          (ii)    there shall be any period of 30 consecutive days during which
                  a stay of enforcement of such judgment or order, by reason of
                  a pending appeal or otherwise, shall not be in effect and such
                  judgment shall not have been paid or otherwise satisfied;

     (f)  any Borrower or any Restricted Subsidiary shall:

          (i)     become (or be deemed by any Applicable Law to be) insolvent or
                  generally fail to pay, or admit in writing its inability or
                  unwillingness to pay its debts as they generally become due;

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                                       -63-

          (ii)    apply for, consent to, or acquiesce in, the appointment of a
                  trustee, receiver, receiver and manager, liquidator,
                  sequestrator, administrator or other custodian in connection
                  with the insolvency of a Borrower or a Restricted Subsidiary
                  or any property of any thereof except as permitted under
                  Section 11.12, or make a general assignment for the benefit of
                  creditors;

          (iii)   in the absence of an application referred to in Section
                  8.1(f)(ii), consent or acquiescence, permit or suffer to exist
                  the appointment of a trustee, receiver, receiver and manager,
                  liquidator, sequestrator, administrator or other custodian for
                  a Borrower or a Restricted Subsidiary or for a substantial
                  part of the property of any of them except as permitted under
                  Section 11.12, and such trustee, receiver, receiver and
                  manager, liquidator, sequestrator, administrator or other
                  custodian shall not be discharged within 60 days, provided
                  that the Borrowers hereby expressly authorize the
                  Administrative Agent and each Lender to appear in any court
                  conducting any relevant proceeding relating to any of them or
                  any Restricted Subsidiary during such 60-day period to
                  preserve, protect and defend their rights under the Loan
                  Documents;

          (iv)    permit or suffer to exist the commencement of any bankruptcy,
                  reorganization, debt arrangement, administration or other case
                  or proceeding under any bankruptcy, insolvency or similar law,
                  or any dissolution, winding up, administration or liquidation
                  proceeding, in respect of any Borrower or any Restricted
                  Subsidiary (except as permitted under Section 11.12), and, if
                  any such case or proceeding is not commenced by such Borrower
                  or such Restricted Subsidiary, such case or proceeding shall
                  be consented to or acquiesced in by such Borrower or such
                  Restricted Subsidiary or shall result in the entry of an order
                  for relief or shall remain for 60 days undismissed, provided
                  that each Borrower and each Restricted Subsidiary is hereby
                  deemed to expressly authorize the Administrative Agent and
                  each Lender to appear in any court conducting any such case or
                  proceeding relating to any of them or any Restricted
                  Subsidiary during such 60-day period to preserve, protect and
                  defend their rights under the Loan Documents; or

          (v)     take any corporate action authorizing, or in furtherance of,
                  any of the matters referred to in clauses (ii), (iii) or (iv)
                  above;

     (g)  Onex Corporation shall cease to control Celestica unless the shares of
          Celestica become widely held such that no one Person or group of
          Persons acting jointly or in concert (within the meaning of Part XX of
          the Securities Act (Ontario)) controls Celestica, provided that any
          Person or group of Persons acting jointly or in concert which owns or
          controls securities of Celestica to which are attached more than 20%
          of the votes that may be cast to elect the directors of Celestica

<PAGE>

                                       -64-

          shall, in the absence of evidence satisfactory to the Administrative
          Agent, acting reasonably, be deemed to control Celestica;

     (h)  any Loan Document shall (except in accordance with its terms), in
          whole or in part, terminate, cease to be effective or cease to be the
          legally valid, binding and enforceable obligation of any Obligor that
          is a party thereto; or any Obligor shall, directly or indirectly,
          contest in any manner such effectiveness, validity, binding nature or
          enforceability of any Loan Document;

     (i)  any Borrower or any governmental authority declares, orders or
          proposes to order a full or partial wind up of any Pension Plan which,
          in either case, would reasonably be likely to have a Material Adverse
          Effect or if any of the following events shall occur with respect to a
          Pension Plan:

          (i)     the institution of any step by a Borrower, any member of its
                  Controlled Group or any other Person to terminate a Pension
                  Plan if, as a result of such termination, the Borrowers or any
                  such member of its Controlled Group would reasonably be likely
                  to be required to make a contribution to such Pension Plan or
                  could reasonably expect to incur a liability or obligation to
                  such Pension Plan which, in either case, would reasonably be
                  likely to have a Material Adverse Effect; or

          (ii)    a contribution failure occurs with respect to any Pension Plan
                  sufficient to give rise to a Lien under Section 302(f) of
                  ERISA.

8.2      ACCELERATION

Upon the occurrence of an Event of Default (other than as set forth in Section
8.1(f) or (g)) and at any time thereafter while an Event of Default is
continuing, the Administrative Agent may, in consultation with the Lenders (and,
if so instructed by the Majority Lenders, shall) by written notice to the
Borrowers:

     (a)  declare the Advances made to the Borrowers to be immediately due and
          payable (whereupon the same shall become so payable together with
          accrued interest thereon and any other sums then owed by the Borrowers
          hereunder or under any other Loan Document) or declare such Advances
          to be due and payable on demand of the Administrative Agent; and/or

     (b)  if not theretofore terminated, declare that all of the Commitments
          shall be cancelled, whereupon the same shall be cancelled and the
          Commitment of each Lender shall be reduced to zero.

If, pursuant to this Section 8.2, the Administrative Agent declares any Advances
made to the Borrowers to be due and payable on demand, then, and at any time
thereafter, the Administrative Agent may (and, if so instructed by the Majority
Lenders, shall) by written notice to the Borrowers call for repayment of such
Advances on such date or dates as it may specify in such

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                                       -65-

notice (whereupon the same shall become due and payable on such date together
with accrued interest thereon and any other sums then owed by the Borrowers
hereunder or under any other Loan Document and the provisions of Section 8.4
shall apply) or withdraw its declaration with effect from such date as it may
specify in such notice.

Upon the occurrence of an Event of Default set forth in Section 8.1(f) or (g),
the Commitments shall automatically terminate and the outstanding principal
amount of all outstanding Advances (together with accrued interest thereon and
any other sums then owed by the Borrowers hereunder or under any other Loan
Document and the provisions of Section 8.4 shall apply) shall automatically be
and become immediately due and payable, without notice or demand.

8.3      REMEDIES CUMULATIVE AND WAIVERS

It is expressly understood and agreed that the rights and remedies of the
Lenders, the Administrative Agent and each of them hereunder or under any other
Loan Document or other instrument executed pursuant to this Agreement are
cumulative and are in addition to and not in substitution for any rights or
remedies provided by law or by equity; and any single or partial exercise by the
Lenders, the Administrative Agent or any of them of any right or remedy for a
default or breach of any term, covenant, condition or agreement contained in
this Agreement or any other Loan Document shall not be deemed to be a waiver of
or to alter, affect or prejudice any other right or remedy or other rights or
remedies to which the Lenders, the Administrative Agent or any of them may be
lawfully entitled for such default or breach. Any waiver by the Lenders, the
Administrative Agent or any of them of the strict observance, performance or
compliance with any term, covenant, condition or other matter contained herein
or in any other Loan Document and any indulgence granted, either expressly or by
course of conduct, by the Lenders, the Administrative Agent or any of them shall
be effective only in the specific instance and for the purpose for which it was
given and shall be deemed not to be a waiver of any rights and remedies of the
Lenders, the Administrative Agent or any of them under this Agreement or any
other Loan Document as a result of any other default or breach hereunder or
thereunder.

8.4      SUSPENSION OF LENDERS' OBLIGATIONS

Without prejudice to the rights which arise out of this Agreement or by law, the
occurrence of an Event of Default shall, while such Event of Default shall be
continuing, relieve the Lenders of all obligations to make any Advances
hereunder (whether or not any Drawdown Notice in respect of any such Advance
shall have been received by the Administrative Agent prior to the occurrence of
an Event of Default) or to accept or comply with any Drawdown Notice, Conversion
Notice or Rollover Notice.

8.5      APPLICATION OF PAYMENTS AFTER AN EVENT OF DEFAULT

If any Event of Default shall occur and be continuing, all payments made by the
Borrowers hereunder or payments made pursuant to any of the provisions of any of
the Guarantees shall be applied in the following order:

     (a)  to amounts due hereunder as costs and expenses of the Administrative
          Agent;

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                                       -66-

     (b)  to amounts due hereunder as costs and expenses of the Lenders;

     (c)  to amounts due hereunder as fees;

     (d)  to any other amounts (other than amounts in respect of interest or
          principal) due hereunder;

     (e)  to amounts due hereunder as interest; and

     (f)  to amounts due hereunder as principal.

                                   ARTICLE 9
                          THE ADMINISTRATIVE AGENT AND
                         ADMINISTRATION OF THE FACILITY

9.1      AUTHORIZATION OF ACTION

Each Lender hereby irrevocably appoints and authorizes the Administrative Agent
to be its Agent in its name and on its behalf and to exercise such rights or
powers granted to the Administrative Agent under this Agreement and the Loan
Documents to the extent specifically provided herein and therein and on the
terms hereof and thereof, together with such rights, powers and discretions as
are reasonably incidental thereto. As to any matters not expressly provided for
by this Agreement or the Loan Documents, the Administrative Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority Lenders, and such
instructions shall be binding upon all Lenders; provided, however, that no Agent
shall be required to take any action which exposes Agent to liability in such
capacity, which could result in the Administrative Agent incurring any costs and
expenses or which is contrary to this Agreement or Applicable Law.

9.2      PROCEDURE FOR MAKING ADVANCES

     (a)  The Administrative Agent shall make Advances available to the relevant
          Borrowers as required hereunder by debiting the account of the
          Administrative Agent to which the Lenders' Main Facility Rateable
          Portions of such Advances have been credited in accordance with
          Section 9.2(b) (or causing such account to be debited) and, in the
          absence of other arrangements agreed to by the Administrative Agent
          and Celestica in writing, by transferring (or causing to be
          transferred) like funds in accordance with the instructions of the
          Borrower as set forth in the Drawdown Notice in respect of each
          Advance; provided that the obligation of the Administrative Agent
          hereunder shall be limited to taking such steps as are commercially
          reasonable to implement such instructions, which steps once taken
          shall constitute conclusive and binding evidence that such funds were
          advanced hereunder in accordance with the provisions relating thereto
          and the Administrative Agent shall not be liable for any damages,
          claims or costs which may be suffered by the Borrower and occasioned
          by the failure of such Advance

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                                       -67-

          to reach the designated destination, except to the extent such
          damages, claims or costs are the result of the gross negligence or
          wilful misconduct of the Administrative Agent.

     (b)  Unless the Administrative Agent has been notified by a Lender on the
          Banking Day prior to the Drawdown Date requested by a Borrower that
          such Lender will not make available to the Administrative Agent its
          Main Facility Rateable Portion of such Advance, the Administrative
          Agent may assume that such Lender has made such portion of the Advance
          available to the Administrative Agent on the Drawdown Date in
          accordance with the provisions hereof and the Administrative Agent
          may, in reliance upon such assumption, make available to the Borrower
          on such date a corresponding amount. If and to the extent such Lender
          shall not have so made its Main Facility Rateable Portion of the
          Advance available to the Administrative Agent, then such Lender shall
          pay to the Administrative Agent forthwith on demand such Lender's Main
          Facility Rateable Portion of the Advance and all reasonable costs and
          expenses incurred by the Administrative Agent in connection therewith
          together with interest thereon (at the rate payable thereunder by the
          Borrower in respect of such Advance) for each day from the date such
          amount is made available to the Borrower until the date such amount is
          paid to the Administrative Agent; provided, however, that
          notwithstanding such obligation, if such Lender fails to so pay, the
          Borrower covenants and agrees that without prejudice to any rights
          such Borrower may have against such Lender, it shall reimburse such
          amount to the Administrative Agent forthwith after demand therefor by
          the Administrative Agent. The amount payable to the Administrative
          Agent pursuant hereto shall be as set forth in a certificate delivered
          by the Administrative Agent to such Lender and such Borrower (which
          certificate shall contain reasonable details of how the amount payable
          is calculated) and shall be conclusive and binding, for all purposes,
          in the absence of manifest error. If such Lender makes the payment to
          the Administrative Agent required herein, such Lender shall be
          considered to have made its Main Facility Rateable Portion of the
          Advance for purposes of this Agreement and the Administrative Agent
          shall make appropriate entries in the books of account maintained by
          the Administrative Agent.

     (c)  The failure of any Lender to make its Main Facility Rateable Portion
          of any Advance shall not relieve any other Lender of its obligation,
          if any, hereunder to make its Main Facility Rateable Portion of such
          Advance on the Drawdown Date, but no Lender shall be responsible for
          the failure of any other Lender to make the Main Facility Rateable
          Portion of the Advance to be made by such other Lender on the date of
          any Advance.

     (d)  Where a Drawdown under the Facility and a repayment of an Advance
          under the Facility are to occur on the same day, the Administrative
          Agent shall not make available to the relevant Borrower the amount of
          the Advance to be drawn down until the Administrative Agent is
          satisfied that it has received irrevocable and irreversible payment of
          the amount to be prepaid or repaid. Notwithstanding the

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                                       -68-

          foregoing, in the absence of gross negligence or wilful misconduct on
          the part of the Administrative Agent, the risk of non-receipt of the
          amount to be repaid is that of the Lenders and not of the
          Administrative Agent.

     (e)  This Section 9.2 shall not apply to Swing Line Advances.

9.3      REMITTANCE OF PAYMENTS

Forthwith after receipt of any repayment of principal or payment of interest or
fees pursuant to any provision of this Agreement, the Administrative Agent which
has received such repayment or payment shall remit to each Lender its Main
Facility Rateable Portion thereof; provided, however, that the Administrative
Agent shall be entitled to set off against and deduct from any amount payable to
a Lender any outstanding amounts payable by such Lender to the Administrative
Agent pursuant to Section 9.2(b). Forthwith after receipt of any payment of
Facility Fees pursuant to Section 2.11, the Administrative Agent shall remit to
each Lender its Main Facility Rateable Portion of such payment. If the
Administrative Agent, on the assumption that it will receive on any particular
date a payment of principal, interest or fees hereunder, remits such payment to
the Lenders and the Borrowers fail to make such payment, each of the Lenders
agrees to repay to the Administrative Agent forthwith on demand the amount
received by it together with all reasonable costs and expenses incurred by the
Administrative Agent in connection therewith to the extent not reimbursed by the
Borrower and interest thereon at the rate and calculated in the manner
applicable to the Advance in respect of which such payment was made for each day
from the date such amount is remitted to the Lenders, the exact amount of the
repayment required to be made by the Lenders pursuant hereto to be as set forth
in a certificate delivered by the Administrative Agent to each Lender, which
certificate shall be conclusive and binding for all purposes in the absence of
manifest error. The Administrative Agent shall make appropriate entries in the
register maintained by it to reflect the foregoing.

9.4      REDISTRIBUTION OF PAYMENT

     (a)  If any Lender receives or recovers (whether by payment or combination
          of accounts or otherwise) an amount owed to it by a Borrower under
          this Agreement otherwise than through the Administrative Agent, then
          such Lender shall, within two Banking Days following such receipt or
          recovery, notify the Administrative Agent (who shall in turn notify
          the other Lenders) of such fact.

     (b)  Subject to the other terms and conditions of this Agreement, if at any
          time the proportion which any Lender (a "Recovering Lender") has
          received or recovered (whether by payment or combination of accounts
          or otherwise) in respect of its portion of any payment to be made
          under this Agreement by a Borrower for the account of such Recovering
          Lender and one or more other Lenders is greater (the amount of the
          excess being herein called the "excess amount") than the proportion
          thereof received or recovered by the Lender or Lenders receiving or
          recovering the smallest proportion thereof, then:

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                                       -69-

          (i)     the Recovering Lender shall, within two Banking Days following
                  such receipt or recovery, pay to the Administrative Agent an
                  amount equal to the excess amount; and

          (ii)    the Administrative Agent shall treat the amount received by it
                  from the Recovering Lender pursuant to paragraph (i) above as
                  if such amount had been received by it from such Borrower
                  pursuant to its obligations under this Agreement and shall pay
                  the same to the Persons entitled thereto (including such
                  Recovering Lender) pro rata to their respective entitlements
                  thereto in which event, for all purposes in connection
                  herewith, the Recovering Lender shall be deemed only to have
                  received or recovered from such Borrower that portion of the
                  excess amount which is actually paid to the Recovering Lender
                  by the Administrative Agent pursuant to this Section
                  9.4(b)(ii).

     (c)  If a Lender that has paid an excess amount to the Administrative Agent
          in accordance with Section 9.4(b)(i) is required to refund the whole
          (or a portion) of such excess amount to the Borrower, then each of the
          other Lenders shall pay to the Administrative Agent for the account of
          that Lender the whole (or that proportion) of the amount received by
          it as a result of the distribution in respect of that excess amount
          made by the Administrative Agent pursuant to Section 9.4(b)(ii).

9.5      DUTIES AND OBLIGATIONS

     (a)  Neither the Administrative Agent nor any of its directors, officers,
          agents or employees (and, for purposes hereof, the Administrative
          Agent shall be deemed to be contracting for and on behalf of such
          Persons) shall be liable for any action taken or omitted to be taken
          by it or them under or in connection with this Agreement except for
          its or their own gross negligence or wilful misconduct. Without
          limiting the generality of the foregoing, the Administrative Agent:

          (i)     may assume that there has been no assignment or transfer by
                  any means by any Lender of its rights hereunder, unless and
                  until the Administrative Agent has received a duly completed
                  and executed assignment in form satisfactory to it;

          (ii)    may consult with legal counsel (including the Lenders'
                  Counsel), independent public accountants and other experts of
                  reputable standing selected by it and shall not be liable for
                  any action taken or omitted to be taken in good faith by it in
                  accordance with the advice of such counsel, accountants or
                  experts;

          (iii)   shall incur no liability under or in respect of this Agreement
                  by acting upon any notice, consent, certificate or other
                  instrument or writing believed by it to be genuine and signed
                  or sent by the proper party or

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                                       -70-

                  parties or by acting upon any representation or warranty of
                  the Borrowers or any Guarantor made or deemed to be made
                  hereunder;

          (iv)    may assume that no Event of Default has occurred and is
                  continuing unless an appropriate officer charged with the
                  administration of this Agreement has actual notice or
                  knowledge to the contrary;

          (v)     may rely as to any matters of fact which might reasonably be
                  expected to be within the knowledge of any Person upon a
                  certificate signed by or on behalf of such Person; and

          (vi)    shall incur no liability for its failure to distribute to any
                  Lender the financial statements or other information provided
                  to the Administrative Agent by the Borrowers or any Guarantor.

          Further, the Administrative Agent (a) shall not have any duty to
          ascertain or to enquire as to the performance or observance of any
          of the terms, covenants or conditions of this Agreement on the part
          of any of the Borrowers or any Guarantor or to inspect the property
          (including the books and records) of any of the Borrowers or any
          Guarantor and (b) shall not be responsible to any Lender for the due
          execution, legality, validity, enforceability, genuineness,
          sufficiency or value of this Agreement or any instrument or document
          furnished pursuant hereto.

     (b)  The Administrative Agent makes no warranty or representation to any
          Lender nor shall the Administrative Agent be responsible to any Lender
          for the accuracy or completeness of the data made available to any of
          the Lenders in connection with the negotiation of this Agreement, or
          for any statements, warranties or representations (whether written or
          oral) made in or in connection with this Agreement.

     (c)  Except as otherwise provided for herein, the Administrative Agent may,
          but is not obligated to, seek the approval of the Majority Lenders to
          any consents required to be given by the Administrative Agent
          hereunder.

9.6      PROMPT NOTICE TO THE LENDERS

Subject to the provisions of Section 9.5(a)(vi), the Administrative Agent agrees
to provide to the Lenders, copies where appropriate, of all information, notices
and reports required to be given to the Administrative Agent by the Borrowers
and the Guarantors hereunder or pursuant to any other Loan Document, promptly
upon receipt of same, excepting therefrom information and notices relating
solely to the role of the Administrative Agent hereunder.

9.7      AGENT'S AUTHORITY

With respect to its Commitment and the Advances made by it as a Lender, the
Administrative Agent shall have the same rights and powers under this Agreement
as any other Lender and may

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                                       -71-

exercise the same as though they were not Agents. The Administrative Agent may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrowers and the Subsidiaries or any corporation or other
entity owned or controlled by any of them and any Person which may do business
with any of them, all as if the Administrative Agent was not the Administrative
Agent hereunder and without any duties to account therefor to the Lenders.

9.8      LENDER'S INDEPENDENT CREDIT DECISION

It is understood and agreed by each Lender that it has itself been, and will
continue to be, solely responsible for making its own independent appraisal of
and investigations into the financial condition, creditworthiness, condition,
affairs, status and nature of the Borrowers and its Subsidiaries. Accordingly,
each Lender confirms with the Administrative Agent that it has not relied, and
will not hereafter rely, on the Administrative Agent (i) to check or enquire on
its behalf into the adequacy, accuracy or completeness of any information
provided by the Borrowers or any other Person under or in connection with this
Agreement, the other Loan Documents or the transactions herein or therein
contemplated (whether or not such information has been or is hereafter
distributed to such Lender by the Administrative Agent), or (ii) to assess or
keep under review on its behalf the financial condition, creditworthiness,
condition, affairs, status or nature of the Borrowers or any Subsidiary. Each
Lender acknowledges that a copy of this Agreement has been made available to it
for review and each Lender acknowledges that it is satisfied with the form and
substance of this Agreement.

9.9      INDEMNIFICATION

Each Lender hereby agrees to indemnify the Administrative Agent (to the extent
not reimbursed by the Borrowers) in its Global Rateable Portion, from and
against any and all liabilities, obligations, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent (in its capacity as agent for the Lenders) in any way
relating to or arising out of this Agreement or any other Loan Documents or any
action taken or admitted by the Administrative Agent under or in respect of this
Agreement or any other Loan Documents; provided that no Lender shall be liable
for any portion of such liabilities, obligations, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or wilful misconduct. Without limiting
the generality of the foregoing, each Lender agrees to reimburse the
Administrative Agent promptly upon demand in the proportion specified herein in
respect of any out-of-pocket expenses (including counsel fees) incurred by the
Administrative Agent in connection with the preservation of any rights of Agents
or the Lenders under, or the enforcement of, or legal advice in respect of the
rights or responsibilities under, this Agreement or any other Loan Documents, to
the extent that the Administrative Agent is not reimbursed for such expenses by
the Borrowers.

9.10     SUCCESSOR AGENT

The Administrative Agent may, as hereinafter provided, resign at any time by
giving not less than 30 days' written notice thereof to the Lenders and the
Borrowers. The Administrative Agent may, as hereinafter provided, be removed at
any time on not less than 30 days' written

<PAGE>

                                       -72-

notice thereof by the Majority Lenders provided that the Majority Lenders have
designated a successor who is prepared to act hereunder and which is acceptable
to Celestica, acting reasonably. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor agent (the
"Successor Agent") which shall be a Lender and which shall be acceptable to the
Borrowers, acting reasonably. In the event that Scotiabank resigns or is removed
from its role as Administrative Agent hereunder, Scotiabank and each of its
branches, Affiliates and Subsidiaries, as applicable, shall be deemed to have
resigned or been removed from its role as Administrative Agent as at the same
effective date. Upon the acceptance of any appointment hereunder by a Successor
Agent, such Successor Agent shall thereupon become Administrative Agent
hereunder and shall succeed to and become vested with all the rights, powers,
privileges and duties of Scotiabank and Scotiabank shall thereupon be discharged
from its further duties and obligations as Administrative Agent under this
Agreement. After any resignation or removal of Scotiabank under this Section
9.10, the provisions of this Article 9 shall continue to enure to its benefit as
to any actions taken or omitted to be taken by it while it was Administrative
Agent hereunder.

9.11     TAKING AND ENFORCEMENT OF REMEDIES

     (a)  Each of the Lenders hereby acknowledges that, to the extent permitted
          by Applicable Law, the remedies provided hereunder to the Lenders are
          for the benefit of the Lenders collectively and acting together and
          not severally and further acknowledges that its rights hereunder are
          to be exercised not severally, but collectively by the Administrative
          Agent upon the decision of the Lenders regardless of whether
          declaration or acceleration was made pursuant to Section 8.2;
          accordingly, notwithstanding any of the provisions contained herein,
          each of the Lenders hereby covenants and agrees that it shall not be
          entitled to take any action with respect to the Facility, including,
          without limitation, any declaration or acceleration under Section 8.2,
          but that any such action shall be taken only by the Administrative
          Agent with the prior written consent of the Lenders or the Majority
          Lenders, as applicable, provided that, notwithstanding the foregoing:

          (i)     in the absence of instructions from the Lenders or from the
                  Majority Lenders, as applicable, and where in the sole opinion
                  of the Administrative Agent the exigencies of the situation
                  warrant such action, the Administrative Agent may without
                  notice to or consent of the Lenders take such action on behalf
                  of the Lenders as it deems appropriate or desirable in the
                  interest of the Lenders; and

          (ii)    the commencement of litigation before any court shall be made
                  in the name of each Lender individually unless the laws of the
                  jurisdiction of such court permit such litigation to be
                  commenced in the name of the Administrative Agent on behalf of
                  the Lenders (whether pursuant to a specific power of attorney
                  in favour of the Administrative Agent or otherwise) and the
                  Administrative Agent agrees to commence such litigation in its
                  name;

<PAGE>

                                       -73-

          each of the Lenders hereby further covenants and agrees that upon any
          such written consent being given by the Lenders or the Majority
          Lenders, as applicable, they shall co-operate fully with the
          Administrative Agent to the extent requested by the Administrative
          Agent in the collective realization including, without limitation,
          the appointment of a receiver and manager to act for their collective
          benefit; and each Lender covenants and agrees to do all acts and
          things and to make, execute and deliver all agreements and other
          instruments, including, without limitation, any instruments necessary
          to effect any registrations, so as to fully carry out the intent and
          purpose of this Section 9.11; and each of the Lenders hereby covenants
          and agrees that it has not heretofore and shall not seek, take, accept
          or receive any security for any of the obligations and liabilities of
          the Borrowers or any Guarantor hereunder or under any other document,
          instrument, writing or agreement ancillary hereto and shall not enter
          into any agreement with any of the parties hereto or thereto relating
          in any manner whatsoever to the Facility, unless all of the Lenders
          shall at the same time obtain the benefit of any such agreement.

     (b)  Notwithstanding any other provision contained in this Agreement, no
          Lender shall be required to be joined as a party to any litigation
          commenced against the Borrowers or any Guarantor by the Administrative
          Agent or the Majority Lenders hereunder (unless otherwise required by
          any court of competent jurisdiction) if it elects not to be so joined
          in which event any such litigation shall not include claims in respect
          of the rights of such Lender against the Borrowers and the Guarantors
          hereunder until such time as such Lender does elect to be so joined;
          provided that if at the time of such subsequent election it is not
          possible or practicable for such Lender to be so joined, then such
          Lender may commence proceedings in its own name in respect of its
          rights against the Borrowers and the Guarantors hereunder.

9.12     RELIANCE UPON LENDERS

The Administrative Agent shall be entitled to rely upon any certificate, notice
or other document provided to it by a Lender on behalf of all financial
institutions and Affiliates which together constitute a Lender pursuant to this
Agreement and the Administrative Agent shall be entitled to deal with the
Lenders with respect to the matters under this Agreement which are the
Administrative Agent's responsibilities without any liability whatsoever to the
Lenders for relying upon any certificate, notice or other document provided to
it by such Lender notwithstanding any lack of authority of the Lender to provide
the same or to bind the other financial institutions and Affiliates which
together constitute a Lender.

9.13     RELIANCE UPON AGENT

The Borrower and the Guarantors shall be entitled to rely upon any certificate,
notice or other document provided to any of them by the Administrative Agent
pursuant to this Agreement and the Borrowers and the Guarantors shall be
entitled to deal with the Administrative Agent (and, except as otherwise
specifically provided, not to deal with any Lender prior to an Event of

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                                       -74-

Default) with respect to all matters under this Agreement without any liability
whatsoever to the Lenders for relying upon any certificate, notice or other
document provided to any of them by the Administrative Agent, notwithstanding
any lack of authority of the Administrative Agent to provide the same. Without
limiting the generality of the foregoing, but subject as herein otherwise
specifically provided, none of the Lenders shall have any right to enforce
directly any of the provisions of this Agreement or to communicate with the
Borrowers and the Guarantors except through the Administrative Agent in
accordance with the terms of this Agreement or as otherwise specifically
provided in this Agreement. The provisions of this Article 9 are for the benefit
of the Administrative Agent and the Lenders and, except for the provisions of
Sections 9.2, 9.12, 9.13 and 9.14, may not be relied upon by the Borrowers or
the Guarantors.

9.14     REPLACEMENT OF CANCELLED COMMITMENTS

If, at any time prior to the Maturity Date, the Commitment of any Lender or
Lenders is cancelled, or any Lender fails to perform its obligations hereunder,
the Administrative Agent may, and at the request of the Borrowers, provided that
no Default or Event of Default has occurred and is continuing, shall use its
reasonable efforts to locate one or more other Persons ("Substitute Lenders")
satisfactory to the Borrowers (who may be an existing Lender) to become a Lender
and to assume all or a portion of the Commitment so cancelled, provided that the
Administrative Agent shall not be under any obligation to assume such cancelled
Commitment itself if the Administrative Agent is unable to locate any Substitute
Lenders. Upon locating one or more Substitute Lenders, the Administrative Agent
(on behalf of each of the parties hereto other than the Borrowers, the
Guarantors and the Lender or Lenders whose Commitment has been cancelled), the
Borrowers, the Guarantors and the Substitute Lenders shall make any appropriate
amendments to this Agreement which are required to incorporate such Substitute
Lender or Lenders hereunder. If any Substitute Lender is not an existing Lender,
then Celestica shall pay to the Administrative Agent an administration fee of
U.S. $3,500.

9.15     DISCLOSURE OF INFORMATION

     (a)  The Borrowers agree that, if Celestica has given its prior written
          consent to a Person being an assignee or transferee hereunder, then
          the Administrative Agent or any Lender may provide any such assignee
          or transferee or proposed assignee or transferee pursuant to Section
          11.11 with any information it has concerning the financial condition
          of the Borrowers and their Subsidiaries other than information
          delivered by the Borrowers to the Administrative Agent and/or the
          Lenders on a confidential basis which is not in the public domain;
          provided that, for greater certainty, nothing in this Section 9.15(a)
          shall prevent the Administrative Agent or any Lender from disclosing
          the terms of this Agreement on a confidential basis to any proposed
          assignee or transferee of any Lender; and provided further that
          consent of the Borrowers shall not be required if an Event of Default
          has occurred and is continuing.

     (b)  Subject to Section 9.15(a), the Administrative Agent and each of the
          Lenders acknowledges the confidential nature of the financial,
          operational and other information and data provided and to be provided
          to it by the Borrowers pursuant

<PAGE>

                                       -75-

          hereto that is not at the time it is so provided or (other than
          through a breach of this Agreement) thereafter in the public domain
          and agrees to use reasonable efforts to prevent the disclosure of
          such information; provided, however, that:

          (i)     the Administrative Agent or any Lender may disclose all or any
                  part of such information if, (A) in the sole reasonable
                  opinion (stated in writing) of the Lenders' Counsel, such
                  disclosure is compellable by Applicable Law in connection with
                  any threatened judicial, administrative or governmental
                  proceeding or is required in connection with any actual
                  judicial, administrative or governmental proceeding or (B)
                  such disclosure is compellable by Applicable Law, provided
                  that in any such event the Administrative Agent or the Lender
                  will make reasonable efforts to provide Celestica with prompt
                  written notice of any such compellable disclosure so that
                  Celestica may seek a protective order or other appropriate
                  remedy or relief to prevent such disclosure from being made.
                  The failure to deliver such notice or, where applicable, the
                  giving of such notice, shall not preclude disclosure by the
                  Administrative Agent or the Lender where legally required in
                  the opinion of Lenders' Counsel. In any event, the
                  Administrative Agent or Lender will furnish only that portion
                  of such information which, in the reasonable opinion of the
                  Lenders' Counsel, it is legally required to disclose and will
                  exercise reasonable efforts to obtain reliable assurances that
                  confidential treatment will be accorded such information;

          (ii)    it shall incur no liability in respect of any disclosure of
                  such information to any, or pursuant to the requirements of
                  any, judicial authority, law enforcement agency, tax or
                  regulatory authority which it is required to make in
                  accordance with Applicable Law;

          (iii)   it shall inform the Borrowers, as soon as is practicable, of
                  any disclosure of such information made by it unless such
                  disclosure is in the ordinary course of its business or such
                  tax or regulatory authority or such judicial authority or law
                  enforcement agency requires the Administrative Agent or such
                  Lender not to inform the Borrowers of the disclosure of such
                  information to it;

          (iv)    the Administrative Agent and each Lender may disclose all or
                  any part of such information on a confidential basis to its
                  auditors or to Lenders' Counsel or other counsel of reputable
                  standing on a confidential basis for the purpose of seeking or
                  obtaining accounting or legal advice;

          (v)     the Administrative Agent and each Lender may disclose such
                  information on a confidential basis to any Subsidiary or
                  Affiliate of the Administrative Agent or Lender if such
                  disclosure is required in connection with the administration
                  of the Facility; and

<PAGE>

                                       -76-

          (vi)    if an Event of Default has occurred and is continuing, the
                  Administrative Agent or any Lender may disclose such
                  information to any other Agent or other Lenders on a
                  confidential basis in connection with any discussions
                  regarding or related to the resolution of such Event of
                  Default.

9.16     ADJUSTMENTS OF RATEABLE PORTIONS

     (a)  In connection with any Drawdown (other than a Drawdown of a Swing Line
          Advance), Conversion or Rollover or any reimbursement or repayment of
          an Obligation, the Administrative Agent shall, in its sole and
          unfettered discretion, have the right (but not the obligation) to make
          adjustments of the amount of such Drawdown, Conversion or Rollover
          advanced or paid by such Lender or the amount of such reimbursement or
          repayment to be received by such Lender in order to maintain the
          balances of the Advances made by each Lender in the same portion as
          the Main Facility Rateable Portion of each Lender.

     (b)  Upon the occurrence of an acceleration under Section 8.1(f), 8.1(g) or
          8.2, if, with respect to any Lender, the aggregate of all outstanding
          Advances made by such Lender is less than its Global Rateable Portion
          (after giving effect to any adjustment made pursuant to Subsection
          9.16(a)) of the aggregate of all outstanding Advances, the
          Administrative Agent may, by written notice, require such Lender to
          pay to the Administrative Agent, for the credit of the other Lenders,
          in such currency or currencies as the Administrative Agent may in its
          discretion determine, such amount as may be required so as to bring
          the aggregate of all outstanding Advances made by such Lender equal to
          its Global Rateable Portion of the aggregate of all outstanding
          Advances. The Administrative Agent shall credit the funds received
          from such Lender to any other Lender or Lenders, as it may determine
          in its discretion, so as to render the aggregate of the outstanding
          Advances made by each Lender equal to the Global Rateable Portion of
          each Lender of all outstanding Advances.

                                   ARTICLE 10
                       COSTS, EXPENSES AND INDEMNIFICATION

10.1     COSTS AND EXPENSES

Each Borrower shall pay promptly, upon request by the Administrative Agent
accompanied by reasonable supporting documentation or other evidence, all
reasonable costs and expenses in connection with the due diligence pertaining to
or the preparation, printing, execution and delivery of this Agreement and the
other documents to be delivered hereunder including, without limitation, the
reasonable fees and out-of-pocket expenses of the Lenders' Counsel with respect
thereto. Except for ordinary expenses of the Administrative Agent relating to
the day-to-day administration of this Agreement, each Borrower further agrees to
pay all reasonable out-of-pocket costs and expenses (including reasonable fees
and expenses of counsel, accountants and other experts) in connection with the
syndication of the Facility and the interpretation, preservation or enforcement
of rights of the Administrative Agent and the Lenders under this

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                                       -77-

Agreement and the Loan Documents including, without limitation, all reasonable
costs and expenses sustained by them as a result of any failure by any of the
Borrowers or Guarantors to perform or observe its obligations contained in any
of this Agreement and the Loan Documents.

10.2     INDEMNIFICATION BY THE BORROWERS

In addition to any liability of each Borrower to any Lender or the
Administrative Agent under any other provision hereof, each Borrower shall
indemnify the Lenders and the Administrative Agent and hold each Lender and the
Administrative Agent harmless against any reasonable costs or expenses incurred
by a Lender or the Administrative Agent as a result (i) of any failure by such
Borrower to fulfil any of its obligations hereunder or under any Loan Document
in the manner provided herein including, without limitation, any cost or expense
incurred by reason of the liquidation or re-employment in whole or in part of
deposits or other funds required by any Lender to fund or maintain any Advance
as a result of the failure of such Borrower to complete a Drawdown or to make
any repayment or other payment on the date required hereunder or specified by it
in any notice given hereunder; or (ii) the failure of such Borrower to pay any
other amount including, without limitation, any interest or fee due hereunder on
its due date; or (iii) as a result of the prepayment or repayment by such
Borrower of any LIBOR Advance prior to its date of maturity or the last day of
the then current Interest Period for such Advance.

10.3     FUNDS

Each amount advanced, made available, disbursed or paid hereunder shall be
advanced, made available, disbursed or paid, as the case may be, in immediately
available funds or, after notice from the Administrative Agent, in such other
form of funds as may from time to time be customarily used in the jurisdiction
in which the Advance is advanced, made available, disbursed or paid in the
settlement of banking transactions similar to the banking transactions required
to give effect to the provisions of this Agreement on the day such advance,
disbursement or payment is to be made.

10.4     GENERAL INDEMNITY

     (a)  INDEMNITY. Subject to paragraphs (b), (c) and (d) below, the Borrowers
          agree to indemnify and save harmless the Administrative Agent, the
          Lenders, their respective Affiliates involved in the syndication or
          administration of the Facility, their respective officers, directors,
          employees and agents (collectively, the "Indemnitees" and
          individually, an "Indemnitee") from and against any and all
          liabilities, claims, damages and losses (including reasonable legal
          fees and disbursements of counsel but excluding loss of profits and
          special or consequential damages) (collectively, the "Losses") as a
          result of any claims, actions or proceedings ("Claims") asserted
          against the Indemnitees, by a Person other than the Indemnitees in
          connection with the agreement of the Lenders to provide the Facility,
          the Commitments of the Lenders and the Advances made by the Lenders
          including, without limitation: (i) the costs of defending and/or
          counterclaiming or claiming over against third parties in respect of
          any Claim;

<PAGE>

                                       -78-

          and (ii) subject to the provisions set forth in paragraph (d) below,
          any Losses arising out of a settlement of any Claim made by the
          Indemnitees.

     (b)  LIMITATIONS TO INDEMNITY. The foregoing obligations of indemnification
          shall not apply to (i) any Losses suffered by the Indemnitees or any
          of them or to any Claim asserted against the Indemnitees or any of
          them to the extent such Loss or Claim has resulted from the gross
          negligence or wilful misconduct of the Indemnitees or any of them; and
          (ii) any Losses with respect to Taxes for which an Indemnitee may
          claim an indemnity from an Obligor pursuant to Section 3.5(b) of this
          Agreement.

     (c)  NOTIFICATION. Whenever a Lender or the Administrative Agent shall have
          received notice that a Claim has been commenced or threatened, which,
          if successful, would subject a Borrower (the "Indemnifying Party") to
          the indemnity provisions of this Section 10.4, the Lender or Agent
          shall as soon as reasonably possible notify (to the extent permitted
          by law) the Indemnifying Party in writing of the Claim and of all
          relevant information the Lender or the Administrative Agent possesses
          relating thereto; provided, however, that failure to so notify the
          Indemnifying Party shall not release it from any liability which it
          may have on account of the indemnity set forth in this Section 10.4,
          except to the extent that the Indemnifying Party shall have been
          materially prejudiced by such failure.

     (d)  DEFENCE AND SETTLEMENT. The Indemnifying Party shall have the right,
          but not the obligation, to assume the defence of any Claim in any
          jurisdiction with legal counsel of reputable standing in order to
          protect the rights and interest of the Indemnitees. In such respect,
          (i) the Indemnifying Party shall require the consent of the
          Indemnitees to the choice of legal counsel in connection with the
          Claim, which consent shall not be unreasonably withheld or delayed;
          and (ii) without prejudice to the rights of the Indemnitees to retain
          counsel and participate in the defence of the Claim, the Indemnifying
          Party and the Indemnitees shall make all reasonable efforts to
          co-ordinate their course of action in connection with the defence of
          such Claim. The related costs and expenses sustained in such respect
          by the Indemnitees shall be at the expense of the Indemnifying Party,
          provided that the Indemnifying Party shall only be liable for the
          costs and expenses of one firm of separate counsel in addition to the
          cost of any local counsel that may be required. If the Indemnifying
          Party fails to assume defence of the Claim, the Indemnitees will (upon
          further notice to the Borrowers) have the right to undertake, at the
          expense of the Indemnifying Party, the defence, compromise or
          settlement of the Claim on behalf and for the account and risk of the
          Indemnifying Party, subject to the right of the Indemnifying Party to
          assume the defence of the Claim at any time prior to settlement,
          compromise or final determination thereof.

Notwithstanding the foregoing, in the event the Indemnitee, acting reasonably,
does not agree with the manner or timeliness in which the legal counsel of the
Indemnifying Party is carrying on the defence of the Claim, or, pursuant to the
opinion of a reputable counsel retained by the Indemnitee, there may be one or
more legal defences available different from the one carried on

<PAGE>

                                       -79-

by the legal counsel of the Indemnifying Party, the Indemnitee shall have the
right to assume its own defence in the Claim by appointing its own legal
counsel. The costs and the expenses sustained by the Indemnitee shall be at the
expense of the Indemnifying Party provided that the Indemnifying Party shall
only be liable for the costs and expenses of one firm of separate counsel, in
addition to the costs of any local counsel that may be required.

The Indemnifying Party shall not be liable for any settlement of any Claim
effected without its written consent (which shall not be unreasonably withheld
or delayed). In addition, the Indemnifying Party will not, without the prior
written consent of the Indemnitee (which consent shall not be unreasonably
withheld or delayed), settle, compromise or consent to the entry of any judgment
in or otherwise seek to terminate any Claim or threatened Claim in respect of
which indemnification or contribution may be sought hereunder.

If an offer for settlement made to any Indemnitee which the Indemnifying Party
has recommended for acceptance is rejected by the Indemnitee and the final
liability of the Indemnitee in respect of such action and all related damages is
greater than such offer, the liability of the Indemnifying Party will only be to
indemnify the Indemnitee up to the amount of such offer.

10.5     ENVIRONMENTAL CLAIMS

     (a)  INDEMNITY. Subject to paragraphs (b), (c) and (d) below, the Borrowers
          agree to indemnify and save harmless the Indemnitees from and against
          any and all Losses as a result of any Claims asserted against the
          Indemnitees by a Person other than the Indemnitees with respect to any
          material presence or Release on, into, onto, under or from any
          property owned, leased or operated by any of the Borrowers or any
          Subsidiary (the "PROPERTY") of any Hazardous Material (as hereinafter
          defined) regardless of whether caused by, or within the control of,
          the Borrower or any Subsidiary or which arises out of or in connection
          with any action of, or failure to act by, the Borrowers or any
          Subsidiary or any predecessor or successor thereof in contravention of
          any present or future applicable Environmental Laws, whether or not
          having the force of law, including, without limitation: (i) the costs
          of defending and/or counterclaiming or claiming over against third
          parties in respect of any such Claim; and (ii) subject to the
          provisions set forth in paragraph (d) below, any Losses arising out of
          a settlement made by the Indemnitees of any Claim. "HAZARDOUS
          MATERIAL" means any contaminant, pollutant, waste of any nature,
          hazardous or toxic substance or material or dangerous good as defined,
          judicially interpreted or identified in any Environmental Law or any
          substance that causes harm or degradation to the surrounding
          environment or injury to human health and, without restricting the
          generality of the foregoing, includes any pollutant, contaminant,
          waste, hazardous waste, deleterious substance or dangerous good
          present in such quantity or state that it contravenes any
          Environmental Laws or gives rise to any liability or obligation under
          any Environmental Law.

<PAGE>

                                       -80-

     (b)  LIMITATIONS TO INDEMNITY. The foregoing obligations of indemnification
          shall not apply to any Losses suffered by the Indemnitees or any of
          them or to any Claim asserted against the Indemnitees or any of them
          which relates directly to any action or omission taken by any of the
          Indemnitees while in possession or control of the Property which is
          grossly negligent or constitutes wilful misconduct but shall apply to
          any Claim occurring during such period that relates to a continuation
          of conditions previously in existence or of a practise previously
          employed by any Obligor.

     (c)  NOTIFICATION. Whenever an Indemnitee shall have received notice that a
          Claim has been commenced or threatened, which, if successful, would
          subject the Borrowers to the indemnity provisions of this Section
          10.5, the Indemnitee shall as soon as reasonably possible and in any
          event on or before the expiry of the date (the "Notification Date")
          which is the earlier of (i) the tenth Banking Day after the receipt of
          such notice by the Indemnitee, and (ii) such date as will afford
          sufficient time for the Borrowers to prepare and file a timely answer
          to the Claim, notify the Borrowers of the Claim and of all relevant
          information the Indemnitee possesses relating thereto. If the
          Indemnitee shall fail to so notify the Borrowers and provide it with
          such information on or before the Notification Date, the Borrowers
          shall not have any liability hereunder in respect of any Losses
          suffered by the Indemnitee in respect of such Claim to the extent such
          Losses may be reasonably attributable to such failure by the
          Indemnitee.

     (d)  DEFENCE AND SETTLEMENT. The provisions of Section 10.4(d) shall apply
          to any Claims under this Section 10.5.

                                   ARTICLE 11
                                     GENERAL

11.1     TERM

The Facility shall expire on the Maturity Date.

11.2     SURVIVAL

All covenants, agreements, representations and warranties made herein or in
certificates delivered in connection herewith by or on behalf of the Borrowers
and each Guarantor shall survive the execution and delivery of this Agreement
and the making of the Drawdowns hereunder and shall continue in full force and
effect so long as there is any obligation of the Borrowers and each Guarantor to
the Administrative Agent, and the Lenders hereunder.

11.3     BENEFIT OF THE AGREEMENT

This Agreement shall enure to the benefit of and be binding upon the successors
and permitted assigns of the Borrowers and the successors and permitted assigns
of the Administrative Agent and the Lenders.

<PAGE>

                                       -81-

11.4     NOTICES

All notices, requests, demands or other communications to or from the parties
hereto shall be in writing and shall be given by overnight delivery service, by
hand delivery or by telecopy to the addressee as follows:

          (i)     If to the Borrowers:

                  7th Floor
                  12 Concorde Place
                  Toronto, Ontario, Canada
                  M3C 3R8

                  Attention:       Corporate Treasurer
                  Telecopier:      416-448-2280

          (ii)    If to the Administrative Agent (in respect of all matters):

                  The Bank of Nova Scotia
                  Loan Syndications
                  44 King Street West, 17th Floor
                  Toronto, Ontario, Canada
                  M5H 1H1

                  Attention:       Managing Director
                  Telecopier:      416-866-3329

          (iii)   if to a Lender, at the addresses set out in Schedule A or in
                  the relevant Transfer Notice;

or at such other address or to such other individual as the Borrowers may
designate by notice to the Administrative Agent and as the Administrative Agent
or a Lender may designate by notice to the Borrowers and the Lenders or the
Administrative Agent, as the case may be.

11.5     AMENDMENT AND WAIVER

This Agreement and any Loan Documents collateral hereto may be modified or
amended and a waiver of any breach of any term or provision of this Agreement
shall be effective only if the Borrowers, the Administrative Agent and the
Majority Lenders so agree in writing, provided that in all cases the Borrowers
shall be entitled to rely upon the Administrative Agent, without further inquiry
in respect of any amendments or waivers agreed to by the Administrative Agent
and which the Administrative Agent has confirmed have been agreed to by the
Majority Lenders; provided further, however, that no amendment, waiver or
consent, unless in writing and signed by all of the Lenders shall: (i) increase
the Commitment of any Lender or subject any Lender to any additional obligation;
(ii) reduce the principal of, or interest on, the Advances or reduce any fees
hereunder; (iii) postpone any date fixed for any payment of principal of, or
interest on, the

<PAGE>

                                       -82-

Advances or any other amounts payable hereunder; (iv) change the Global Rateable
Portion of any Lender except for adjustments thereto made by the Administrative
Agent in accordance with the terms of this Agreement, or the aggregate unpaid
principal amount of the Advances, or the number of Lenders which shall be
required for the Lenders to take any action hereunder; (v) amend the definition
of Majority Lenders; (vi) amend or release any Guarantee, except to the extent
that a release of a Guarantee may be effected pursuant to a transaction subject
to Section 11.12 or is otherwise authorized pursuant to the terms of this
Agreement and except to the extent that an amendment, as determined by the
Administrative Agent and Lenders' Counsel, each acting reasonably, does not
materially impair the enforceability of such Guarantee; or (vii) amend this
Section 11.5; and provided, further, that no amendment, waiver or consent,
unless in writing and signed by the Administrative Agent or Swing Line Lender,
as applicable, in addition to the Lenders required herein above to take such
action, affects the rights or duties of the Administrative Agent or Swing Line
Lender, as applicable, under this Agreement or any Advance. A waiver of any
breach of any term or provision of this Agreement shall be limited to the
specific breach waived.

11.6     GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of
the Province of Ontario and the laws of Canada applicable therein. The
Administrative Agent, Lenders and Borrowers agree that any legal suit, action or
proceeding arising out of this Agreement or any Loan Document may be instituted
in the courts of Ontario, and the Administrative Agent, Lenders and Borrowers
hereby accept and irrevocably submit to the nonexclusive jurisdiction of said
courts and acknowledge their competence and agree to be bound by any judgment
thereof.

11.7     FURTHER ASSURANCES

Each Obligor shall promptly cure any default in its execution and delivery of
this Agreement or in any of the other instruments referred to or contemplated
herein to which it is a party. Each Obligor, at its expense, will promptly
execute and deliver, or cause to be executed and delivered, to the
Administrative Agent, upon request, all such other and further documents,
agreements, certificates and instruments in compliance with, or accomplishment
of the covenants and agreements of such Obligor hereunder or more fully to state
the obligations of such Obligor as set out herein or to make any recording, file
any notice or obtain any consents, all as may be necessary or appropriate in
connection therewith.

11.8     ENFORCEMENT AND WAIVER BY THE LENDERS

Subject to Section 9.11, the Lenders shall have the right at all times to
enforce the provisions of this Agreement and agreements to be delivered pursuant
hereto in strict accordance with the terms hereof and thereof, notwithstanding
any conduct or custom on the part of the Lenders in refraining from so doing at
any time or times. The failure of the Lenders at any time or times to enforce
their rights under such provisions, strictly in accordance with the same, shall
not be construed as having created a custom in any way or manner, modified or
waived the same. All rights and remedies of the Lenders are cumulative and
concurrent and the exercise of one right or remedy shall not be deemed a waiver
or release of any other right or remedy.

<PAGE>

                                       -83-

11.9     EXECUTION IN COUNTERPARTS

This Agreement may be executed in counterparts, each of which shall be
considered an original and all of which taken together shall constitute a single
agreement.

11.10    ASSIGNMENT BY THE BORROWERS

The rights and obligations of the Borrowers under this Agreement are not
assignable to any other Person, except in accordance with Article 5, without the
prior written consent of all of the Lenders, which consent shall not be
unreasonably withheld.

11.11    ASSIGNMENTS AND TRANSFERS BY A LENDER

     (a)  With the prior written consent of the Administrative Agent and
          Celestica, such consent not to be unreasonably withheld or delayed,
          any Lender may, at any time, assign all or any of its rights and
          benefits hereunder or transfer in accordance with Section 11.11(b) all
          or any of its rights, benefits and obligations hereunder; provided
          that in the event that such assignment would give rise to a claim for
          increased costs pursuant to Article 3, it shall not be unreasonable
          for Celestica to withhold its consent to such assignment. Any
          assignment or transfer shall be with respect to a minimum Commitment
          of U.S. $25,000,000 and integral multiples of U.S. $1,000,000 in
          excess thereof. A lesser amount may be assigned or transferred by any
          Lender if such amount represents the remaining balance of such
          Lender's Commitment. Notwithstanding the foregoing, the consent of the
          Administrative Agent and Celestica is not required in connection with
          the assignment or transfer of all or any of the rights, benefits and
          obligations hereunder (i) to any Subsidiary or Affiliate of a Lender
          or to any other Lender hereunder provided that notice is given to the
          Administrative Agent and Celestica, and provided that, in either case,
          any such assignment or transfer does not give rise to a claim for
          increased costs pursuant to Article 3 or any obligation on the part of
          an Obligor to deduct or withhold any Taxes from or in respect of any
          sum payable hereunder to the Administrative Agent or the Lenders, in
          either case, in excess of what would have been the case without such
          assignment, or such assignee waives the rights to any benefits under
          Section 3.5; or (ii) to any financial institution if an Event of
          Default has occurred and is continuing.

     (b)  If any Lender assigns all or any of its rights and benefits hereunder
          in accordance with Section 11.11(a), then, unless and until the
          assignee has agreed with the Administrative Agent and the other
          Lenders (in a Transfer Notice or otherwise) that it shall be under the
          same obligations towards each of them as it would have been under if
          it had been an original party hereto as a Lender, none of the
          Administrative Agent or any of the other Lenders or the Borrowers
          shall be obliged to recognize such assignee as having the rights
          against each of them which it would have had if it had been such a
          party hereto.

<PAGE>

                                       -84-

     (c)  If any Lender wishes to assign all or any of its rights, benefits
          and/or obligations hereunder as contemplated in Section 11.11(a), then
          such transfer may be effected upon:

          (i)     receipt of the written consent of the Administrative Agent and
                  Celestica as referred to in Section 11.11(a) delivered to the
                  relevant assignee by the Administrative Agent unless an Event
                  of Default has occurred and is continuing in which case
                  consent of Celestica shall not be required;

          (ii)    the delivery to and countersignature by the Lender of a duly
                  completed and duly executed Transfer Notice; and

          (iii)   if any Lender wishes to assign any of its rights, benefits
                  and/or obligations hereunder to a financial institution which
                  is not a Lender or a Subsidiary or Affiliate of a Lender, such
                  Lender shall have paid to the Administrative Agent a fee in
                  the amount of U.S. $3,500;

                  in which event, on the later of the effective date, if any,
                  specified in such Transfer Notice and the fifth Banking Day
                  after the date of delivery of such Transfer Notice to the
                  Administrative Agent (unless the Administrative Agent agrees
                  to a shorter period):

          (iv)    to the extent that in such Transfer Notice the Lender party
                  thereto seeks to transfer its rights and obligations
                  hereunder, each of the Obligors and such Lender shall be
                  released from further obligations towards one another
                  hereunder and their respective rights against one another
                  shall be cancelled (such rights and obligations being referred
                  to in this Section 11.11(c) as "discharged rights and
                  obligations");

          (v)     each of the Obligors and the assignee party thereto shall
                  assume obligations towards one another and/or acquire rights
                  against one another which differ from such discharged rights
                  and obligations only insofar as such Obligor and such Assignee
                  have assumed and/or acquired the same in place of such Obligor
                  and such Lender; and

          (vi)    the Administrative Agent, such assignee and the other Lenders
                  shall acquire the same rights and assume the same obligations
                  between themselves as they would have acquired and assumed had
                  such assignee been an original party hereto as a Lender with
                  the rights and/or obligations acquired or assumed by it as a
                  result of such transfer.

     (d)  Each of the parties hereto confirms that:

          (i)     the delivery to an assignee of a Transfer Notice signed by a
                  Lender constitutes an irrevocable offer (subject to the
                  conditions of Section 11.11(c)) by each of the parties hereto
                  to accept such transferee (subject to

<PAGE>

                                       -85-

                  the conditions set out herein) as a Lender party hereto with
                  the rights and obligations so expressed to be transferred;

          (ii)    such offer may be accepted by such assignee by the execution
                  of such Transfer Notice by such assignee and upon fulfilment
                  of the conditions set forth in Section 11.11(c); and

          (iii)   the provisions of this Agreement shall apply to the contract
                  between the parties thereto arising as a result of acceptance
                  of such offer.

     (e)  The Administrative Agent shall not be obliged to accept any Transfer
          Notice received by it hereunder and no such Transfer Notice may take
          effect on any day on or after the receipt by the Administrative Agent
          of a Drawdown Notice and prior to the date for the making of the
          proposed Advance.

     (f)  No transfer pursuant to this Section 11.11 shall, unless the
          Administrative Agent otherwise decides in its absolute discretion and
          notifies the parties to such transfer accordingly, be effective if the
          date for effectiveness of such transfer on the day on which the
          Administrative Agent receives the applicable Transfer Notice is on, or
          less than five Banking Days before, the day for the payment of any
          interest or fee hereunder.

     (g)  Any Lender may participate all or any part of its interest hereunder,
          provided that any such participation does not give rise to a claim for
          increased costs pursuant to Article 3 or any obligation on the part of
          an Obligor to deduct or withhold any Taxes from or in respect of any
          sum payable hereunder to the Administrative Agent or the Lenders, or
          such Lender and participant waive the right to any benefits under
          Section 3.5 and, in such case, notice of such participation has been
          given to the Administrative Agent and Celestica. Such participant
          shall not be entitled to any vote as a Lender. The Borrowers shall not
          be obligated to deal with any participant and shall be entitled to
          deal solely with the Lender and the Lender shall not be released from
          any of its obligations to the Borrowers as a result of such
          participation except to the extent that the participant has fulfilled
          such obligations. Such participants shall be bound to the same
          confidentiality provisions with respect to the Facility, the Borrowers
          and the Guarantors as are applicable to the Lenders.

11.12    CERTAIN REQUIREMENTS IN RESPECT OF MERGER, ETC.

No Borrower shall, and the Borrowers shall not permit any Restricted Subsidiary
(in each case, a "Predecessor Corporation") to, enter into any transaction
(whether by way of liquidation, dissolution, amalgamation, merger, transfer,
sale or otherwise) whereby all or substantially all of its undertaking, property
and assets would become the property of any other Person or, in the case of any
such amalgamation or merger, of the continuing company resulting therefrom, or
whereby the obligation of the Predecessor Corporation to pay amounts under this
Agreement would become subject to novation or assumed or undertaken by any other
such Person or

<PAGE>

                                       -86-

continuing company (a "Corporate Reorganization"), provided that it may do so
(and if the Predecessor Corporation is a Borrower or a Material Restricted
Subsidiary such Person or continuing company shall become a party to this
Agreement or to the Guarantee provided by such Material Restricted Subsidiary,
as the case may be) if:

     (a)  such other Person or continuing company (herein referred to as a
          "Successor Corporation") is a Borrower or Restricted Subsidiary;

     (b)  where required in the reasonable opinion of Lenders' Counsel, a
          Successor Corporation which is a Borrower or Material Restricted
          Subsidiary shall execute and/or deliver to the Administrative Agent an
          agreement supplemental hereto or to the Guarantee or Guarantees
          executed by a Predecessor Corporation or Predecessor Corporations, as
          the case may be, in form reasonably satisfactory to the Administrative
          Agent and execute and/or deliver such other instruments, if any, which
          to the reasonable satisfaction of the Administrative Agent and in the
          opinion of Lenders' Counsel are necessary to evidence (i) the
          assumption by the Successor Corporation of liability under each Loan
          Document to which the Predecessor Corporation is a party for the due
          and punctual payment of all money payable by the Predecessor
          Corporation thereunder, and (ii) the covenant of the Successor
          Corporation to pay the same and (iii) the agreement of the Successor
          Corporation to observe and perform all the covenants and obligations
          of the Predecessor Corporation under each Loan Document to which the
          Predecessor Corporation was a party and to be bound by all the terms
          of each such Loan Document so far as they relate to the Predecessor
          Corporation which instruments, if any, shall be in form reasonably
          satisfactory to the Administrative Agent;

     (c)  such transaction would not have a Material Adverse Effect;

     (d)  all Other Taxes payable as a result of such transaction have been
          paid;

     (e)  such transaction will not result in any claim for increased costs
          pursuant to Section 3.2 or result in any Tax being levied on or
          payable by the Administrative Agent or any Lender (except for Taxes on
          the overall net income or capital of the Administrative Agent or a
          Lender provided there is no increase in such Taxes as a result of such
          transaction);

     (f)  such transaction will not cause, or have the result of the
          Administrative Agent, the Lenders or any of them being in default
          under, noncompliance with, or violation of, any Applicable Law;

     (g)  an opinion of Borrowers' counsel substantially in the form and as to
          matters addressed in the opinion of Borrowers' Counsel delivered
          pursuant to Section 4.1 shall have been delivered to the
          Administrative Agent;

     (h)  each of the covenants set forth in Section 7.3 shall be satisfied on
          an actual and pro forma basis after giving effect to such transaction;
          and

<PAGE>

                                       -87-

     (i)  no Default or Event of Default shall have occurred and be continuing
          or will occur as a result of such transaction.

Sections 11.12(a), (b) and (g) shall not apply to the respective liquidation or
dissolution of Celestica Ireland B.V. and Celestica Power Systems USA Inc.

This Section 11.12 shall not apply to permit any consolidation, amalgamation or
merger by or of Celestica unless, as the result thereof, the Successor
Corporation is Celestica.

A Successor Corporation shall not be required to comply with Section 11.12(b)
and (g) in respect of a Corporate Reorganization where one or more of the
participants in the subject Corporate Reorganization is a Predecessor
Corporation which is a Borrower or Restricted Subsidiary existing under the laws
of an Exempted Jurisdiction and which, prior to the completion of such Corporate
Reorganization, delivered a Guarantee in accordance with Section 7.1(m)(i) and
the Guarantee delivered by such Predecessor Corporation (the "PREDECESSOR
GUARANTEE") has not been terminated or released. In this paragraph, "EXEMPTED
JURISDICTION" means:

          (i)     the Province of Ontario, unless, following the date hereof,
                  the laws of such Province change in a manner that would
                  adversely affect the enforceability of the Predecessor
                  Guarantee against the Successor Corporation;

          (ii)    Canada, unless following the date hereof, the laws of Canada
                  or the laws of the Province of Canada which govern such
                  Guarantee change in a manner that would adversely affect the
                  enforceability of the Predecessor Guarantee against the
                  Successor Corporation; and

          (iii)   the State of Delaware, unless, following the date hereof, the
                  laws of such State change in a manner that would adversely
                  affect the enforceability of the Predecessor Guarantee against
                  the Successor Corporation.

11.13    LOCATION OF LENDERS

Unless otherwise agreed between the Administrative Agent and Celestica, each
Lender shall be resident in Canada. In respect of any Lender which assigns or
shares part of its Commitment with an Affiliate or Subsidiary, the provisions of
Article 9 relating to the appointment and authorization of the Administrative
Agent and the indemnification of the Administrative Agent shall apply equally to
each such Affiliate and Subsidiary.

11.14    SET-OFF

If an Event of Default has occurred, the Administrative Agent and Lender shall
have the right to set off against any accounts, credits or balances maintained
by the Obligors with the Administrative Agent or any Lender, any amount due
hereunder.

11.15    TIME OF THE ESSENCE

Time shall be of the essence in this Agreement.

<PAGE>

                                       -88-

11.16    ADVERTISEMENTS

The Administrative Agent and the Lenders agree that prior to any advertisement
with respect to this transaction, the Administrative Agent shall obtain the
written consent of Celestica as to the form and content of such advertisement,
such consent not to be reasonably withheld and to be provided as soon as
practicable.

11.17    DESIGNATION

Celestica, as issuer pursuant to the Indenture dated as of November 18, 1996
originally among Celestica International Inc. as issuer and Celestica Inc. and
Celestica Corporation as guarantors (the "TRUST INDENTURE"), as amended, hereby
designates the Facility and all Advances made under this Agreement as
"Designated Senior Debt" in accordance with the terms of the Trust Indenture,
subject to the consent of the lenders under the Senior Unsecured Credit
Agreement.

<PAGE>

                                      -89-

IN WITNESS WHEREOF the parties hereto have executed this Agreement.

                             THE BANK OF NOVA SCOTIA,
                             as Administrative Agent

                             By: /s/ Robert Hosie
                                 ----------------------------------------------
                                 Name:    Robert Hosie
                                 Title:   Managing Director

                             By: /s/ Paul Phillips
                                 ----------------------------------------------
                                 Name:    Paul Phillips
                                 Title:   Director

                              CELESTICA INC.

                              By: /s/ F. Graham Thouret
                                  ---------------------------------------------
                                  Name:   F. Graham Thouret
                                  Title:  Vice-President and Corporate Treasurer

                              CELESTICA INTERNATIONAL INC.

                              By: /s/ F. Graham Thouret
                                  ---------------------------------------------
                                  Name:    F. Graham Thouret
                                  Title:   Vice-President and Treasurer

<PAGE>

                           SIGNATURE PAGE FOR THE BANK OF NOVA SCOTIA, AS LENDER

                                 THE BANK OF NOVA SCOTIA

                                 By: /s/ Robert Miret
                                     ------------------------------------------
                                     Name:    Robert Miret
                                     Title:   Managing Director

                                  By: /s/ Paul Phillips
                                      -----------------------------------------
                                      Name:    Paul Phillips
                                      Title:   Director

<PAGE>

                            SIGNATURE PAGE FOR BANK OF AMERICA CANADA, AS LENDER

                                 BANK OF AMERICA CANADA

                             By: /s/ D. R. Chung
                                 ----------------------------------------------
                                 Name:     Donald R. Chung
                                 Title:    Vice President, Corporate Investment
                                           Banking

<PAGE>

                              SIGNATURE PAGE FOR ROYAL BANK OF CANADA, AS LENDER

                                   ROYAL BANK OF CANADA

                                   By: /s/ Tom Fairbrother
                                       ----------------------------------------
                                       Name:     Tom Fairbrother
                                       Title:    Senior Account Manager

                                   By: /s/ Sandra Lokoff
                                       ----------------------------------------
                                       Name:     Sandra Lokoff
                                       Title:    Senior Manager

<PAGE>

                SIGNATURE PAGE FOR CANADIAN IMPERIAL BANK OF COMMERCE, AS LENDER

                                  CANADIAN IMPERIAL BANK OF COMMERCE

                                  By: /s/ Vlada Dekina
                                      -----------------------------------------
                                      Name:     Vlada Dekina
                                      Title:    Director

                                  By: /s/ David White
                                      -----------------------------------------
                                      Name:     David White
                                      Title:    Managing Director

<PAGE>

                                   SIGNATURE PAGE FOR CITIBANK CANADA, AS LENDER

                                   CITIBANK CANADA

                                   By: /s/ Roderick J. Smith
                                       ----------------------------------------
                                       Name:     Roderick J. Smith
                                       Title:    Managing Director

<PAGE>

                 SIGNATURE PAGE FOR CREDIT SUISSE FIRST BOSTON CANADA, AS LENDER

                                   CREDIT SUISSE FIRST BOSTON CANADA

                                   By:    /s/ Alain Daoust
                                          -------------------------------------
                                          Name:     Alain Daoust
                                          Title:    Director

                                   By:    /s/ Peter Chauvin
                                          -------------------------------------
                                          Name:     Peter Chauvin
                                          Title:    Vice President

<PAGE>

                   SIGNATURE PAGE FOR DEUTSCHE BANK AG, CANADA BRANCH, AS LENDER

                                  DEUTSCHE BANK AG, CANADA BRANCH

                                  By:  /s/ Paul Juris
                                       ----------------------------------------
                                       Name:     Paul Juris
                                       Title:    Managing Director

                                  By:  /s/ Robert Johnston
                                       ----------------------------------------
                                       Name:     Robert Johnston
                                       Title:    Vice President

<PAGE>

                           SIGNATURE PAGE FOR THE BANK OF NOVA SCOTIA (ON ITS
                           OWN ACCOUNT), AS LENDER IN RESPECT OF THE COMMITMENT
                           OF NATIONAL WESTMINSTER BANK PLC

                                       THE BANK OF NOVA SCOTIA (ON ITS OWN
                                       ACCOUNT, AND NOT AS AGENT), AS LENDER IN
                                       RESPECT OF THE COMMITMENT OF NATIONAL
                                       WESTMINSTER BANK PLC

                                       By: /s/ Paul Phillips
                                           ------------------------------------
                                           Name:      Paul Phillips
                                           Title:     Director

<PAGE>

                           SIGNATURE PAGE FOR NATIONAL BANK OF CANADA, AS LENDER

                                NATIONAL BANK OF CANADA

                                By:  /s/ Laura Dottori
                                     ------------------------------------------
                                     Name:     Laura Dottori
                                     Title:    Vice President

                                By:  /s/ Jon Clarke
                                     ------------------------------------------
                                     Name:     Jon Clarke
                                     Title:    ManagerPrepared by MERRILL CORPORATION

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EXHIBIT 10.41    
  

Partnership agreement  

 of SDI—Molan GmbH & Co. KG  

  
 

    Partnership agreement    
  

Concerning

a limited commercial partnership with a GmbH as general partner

trading under the name

SDI—Molan GmbH & Co. KG 

between

	

1.	
 	

SDI Germany GmbH, Grüneburgweg 102, 60323 Frankfurt am Main, duly represented by its managing director Thomas W. Cresante
	

 	
 	

(hereafter, "SDI Germany")
	

and
	

2.	
 	

Mr. Klaus-Jürgen Dittrich, Schwedenschanze 9 c, 28832 Achim,
	

3.	
 	

Mr. Frank Dittrich, Lüneburger Straße 20, 28203 Bremen.
	
Preamble
	

Whereas
	

(1)	
 	

SDI Germany's parent company Special Devices, Incorporated (hereafter, "SDI USA"), seated in 14370 White Sage Road, Moorpark, California 93021, USA, is engaged in the development, manufacture and worldwide distribution and sale of automotive
pyrotechnic safety devices, including air bag initiators and micro gas generators. In this field, SDI USA already holds substantial market shares in the USA and keeps close contact with customers in the US, Europe and Asia especially in the field of
its air bag initiators.
	

Whereas
	

(2)	
 	

Klaus-Jürgen Dittrich and Frank Dittrich are the sole shareholders of Anhaltinische Chemische Fabriken (ACF) GmbH (hereafter, "ACF") in Schönebeck. ACF, together with its sister company Molan Werk Dittrich GmbH & Co. KG (hereafter,
"Molan"), is engaged in the development, manufacture, distribution and sale of automotive pyrotechnic safety devices, including micro gas generators and seat belt buckle pretensioners in Europe.
	

Whereas
	

(3)	
 	

SDI USA is the only shareholder of SDI Germany, and J.F. Lehman Equity Investors I, L.P., 2001 Jefferson Davis Highway, Suite 607, Arlington, Virginia 22202, and JFL Co-Invest I, L.P., 2001 Jefferson Davis Highway, Suite 607, Arlington, Virginia
22202 (collectively, "Lehman") are major shareholders of SDI USA,
	

The parties now agree on the following:
	
§ 1—Trade Name and Headquarters
	

The company's trade name is:
	
SDI—Molan GmbH & Co. KG.
	

The company's registered seat is Schönebeck.

	
§ 2—Business of the Company
	

(1)	
 	

The company's business is:
	

 	
 	

(a)	
 	

the development, production, marketing, distribution and sale of air bag initiators, micro gas generators and seat belt buckles and pyrotechnic pretentioners (the "Products") in the countries listed in Appendix 1 (the "Territory");
and
	

 	
 	

(b)	
 	

all further commercial and legal transactions and other acts that are connected to the aforementioned business purpose.
	

(2)	
 	

If at any time it becomes unlawful under United States law for the partnership to operate, sell its Products, or otherwise engage in business in any country included in the Territory, Appendix 1 shall be deemed to be amended to exclude such
country to the extent of such legal prohibition until such legal prohibition has been removed.
	

(3)	
 	

The partnership shall conduct its business within the Territory and shall not operate outside the Territory. Production of products shall take place at ACF's existing facility at Schönebeck.
	

(4)	
 	

The partnership may acquire participations in other companies conducting a similar business, set up branch offices and incorporate subsidiaries.
	
§ 3—Partners; Partnership Capital
	

(1)	
 	

The general partner is:
	

SDI—Molan Verwaltungs GmbH
	

 	
 	

(hereafter, the "General Partner"). The General Partner shall not render contributions or hold a share in the partnership's assets, profits or losses.
	

(2)	
 	

The founding limited partners (hereafter, the "Initial Limited Partners") are:
	

 	
 	

(a)	
 	

SDI Germany GmbH, Grüneburgweg 102, 60323 Frankfurt am Main with a limited partner's capital contribution to the nominal value of Fifty Thousand Euro (Euro 50,000)
	

 	
 	

(b)	
 	

Klaus-Jürgen Dittrich, Achim, born February 21, 1944 with a limited partner's capital contribution to the nominal value of Forty-seven Thousand Five Hundred Euro (Euro 47,500)
	

 	
 	

(c)	
 	

Frank Dittrich, Bremen, born January 13, 1965 with a limited partner's capital contribution to the nominal value of Two Thousand Five Hundred Euro (Euro 2,500)
	

 	
 	

The limited partner contributions shall be rendered in cash upon request by the General Partner. The amount of their contributions will be registered in the commercial register as their liability amounts.

	

(3)	
 	

In addition to the cash contributions, Klaus-Jürgen Dittrich and Frank Dittrich shall cause ACF and Molan to transfer to the partnership the entire business of ACF and Molan as it relates to the Products, including all existing technology,
know-how, customer contracts, purchase orders, work-in process, inventory and supplies, equipment and personnel associated therewith. The transfer shall become effective on July 1, 2001, unless ACF/Molan and the partnership mutually agree upon a
later date. Technology, know-how, customer contracts and purchase orders shall be transferred to the partnership as a capital contribution. Work-in-process, inventory and supplies existing on the transfer date and useable in the partnership's
business (as determined by the Supervisory Board) shall be transferred to the partnership at ACF/Molan's actual cost. Trade accounts receivable and payable related to the transferred business but arising prior to the transfer date shall remain with
ACF/Molan. The production facility and equipment shall be transferred to the partnership pursuant to lease agreement executed between the partnership and ACF or Molan, as appropriate. Certain persons employed by ACF in the business will be
transferred to the partnership by operation of law, and shall become employed by the partnership. Certain administrative services will be provided by ACF to the partnership pursuant to a separate services agreement to be entered into by ACF and the
partnership.
	

(4)	
 	

Subject to Sections 3(5) and 3(6) hereof, in addition to its cash contribution, SDI Germany shall cause SDI USA to transfer to the partnership the entire business of SDI USA with respect to the Products as it relates to the Territory, including all
existing technology, know-how, customer contracts and purchase orders related thereto. The transfer shall become effective on July 1, 2001, unless SDI USA and the partnership mutually agree upon a later date.
	

(5)	
 	

It is recognized and acknowledged that SDI USA currently produces two types of air bag initiators, referred to as "standard" and "AGI" initiators, and that it is currently developing a new initiator referred to as the "GSI" initiator. If customers in
the Territory desire to purchase the standard or AGI initiators and the partnership is incapable of producing these initiators, or if the partnership otherwise lacks the production capacity to satisfy the demand for any type of initiator from
customers in the Territory, SDI Germany will cause SDI USA to manufacture the required initiators and supply them to the customers either directly or through the partnership on terms approved by the Supervisory Board of the General
Partner.
	

(6)	
 	

It is recognized and acknowledged that SDI USA has entered into agreements (hereafter, the "Master Purchase Agreements") with certain customers (hereafter, the "MPA Customers") to supply the Products to the MPA Customer's various plants throughout
the world. A list of the current MPA Customers is attached as Appendix 2. It is acknowledged and agreed that SDI USA shall maintain its contractual relationship as supplier to the MPA Customers worldwide (including the Territory).
	

(7)	
 	

SDI Germany shall cause SDI USA to work closely with the partnership on those elements of any Master Purchase Agreement involving the Territory, and to include the Territory in any future Master Purchase Agreement only after consultation with and
approval by the partnership. Consistent with Sections 3(4) and 16(1) hereof, SDI Germany shall cause SDI USA to execute and meet through the partnership all of SDI USA's rights and obligations under the Master Purchase Agreements as they relate to
the Territory. Pursuant to this arrangement, the partnership shall fulfill all purchase orders under Master Purchase Agreements for MPA Customers in the Territory. The partnership shall outsource to SDI USA any purchase orders in excess of its
production capacity. Existing Master Purchase Agreements nearing expiration shall be fulfilled through the partnership for their remaining term only if reasonably practical and beneficial to the partnership.
	

(8)	
 	

The parties recognize and acknowledge that the list of MPA Customers will change over time, and that companies that are not currently MPA Customers may become MPA Customers in the future. The parties shall work together to promote the development of
MPA Customers by SDI USA, to maintain an accurate list of MPA Customers, and to treat all such MPA Customers in the manner described in this Section 3.

	

(9)	
 	

The partnership shall endeavor to coordinate with SDI USA on its pricing to non-MPA Customers so as not to be inconsistent with the pricing policy reflected in the Master Purchase Agreements with respect to the Territory.
	

(10)	
 	

All products or technology developed by the partnership (hereafter, "Joint Venture Products") shall be licensed by the partnership to SDI USA for unrestricted use outside the Territory. The license shall provide that (i) no royalty shall be
payable by SDI USA to the partnership for sales of the Joint Venture Products in the United States, and (ii) a reasonable license fee shall be paid by SDI USA to the partnership for sales of the Joint Venture Products outside the United States.
The reasonable fee will be determined in good faith negotiations between SDI USA and the partnership, represented by the General Partner. A reasonable fee shall not be paid in case that the Dittrichs or one of their affiliates and SDI USA do business
jointly together in countries outside the Territory.
	
§ 4—Liability; No Obligation to make an additional Contribution
	

The limited partners do not assume any financial obligations, liabilities or obligations to make additional payments to the partnership or third persons that exceed the obligation to render the stipulated contributions mentioned in § 3 (2). This
also applies in the case of liquidation. An obligation to make an additional contribution can only be decided with all partners' votes. The limited liability according to §§ 171 et seq. Commercial Code shall sustain.
	
§ 5—Organs, Management; Representation
	

(1)	
 	

The partnership's organs are the General Partner and the partners' meeting.
	

(2)	
 	

The management and representation of the partnership is the duty of the General Partner which is represented by its duly appointed managing director(s). The General Partner and its managing director(s) are released from the restraints of § 181
Civil Code.
	

(3)	
 	

The General Partner is obliged to give a written report to the limited partners on all essential business incidences once a year in addition to the written report to be given at the regular partners' meeting.
	

(4)	
 	

Inter partes the following legal actions of the general partner are subject to prior written consent of the supervisory board of the General Partner or—in the absence of a supervisory board—shareholders meeting of the General
Partner:
	

 	
 	

(a)	
 	

Annual operating plans, capital plans and budgets
	

 	
 	

(b)	
 	

Multi-year strategic plans
	

 	
 	

(c)	
 	

Technology planning, product strategy, R&D investments
	

 	
 	

(d)	
 	

Marketing strategy (to ensure consistency with the global branding of SDI USA)
	

 	
 	

(e)	
 	

Proposals, quotes and pricing agreements with customers (including participation under the global contracts of SDI USA)
	

 	
 	

(f)	
 	

Appointment, dismissal and compensation of key personnel who have reached a certain level within the organization (to be established by the Supervisory Board)
	

 	
 	

(g)	
 	

Appointment and dismissal of the "Prokuristen" (official with general commercial power of representation)
	

 	
 	

(h)	
 	

Opening and closing of branch offices and foundation of subsidiaries
	

 	
 	

(i)	
 	

Purchase and disposition of interests in other companies
	

 	
 	

(j)	
 	

Purchase, sale and encumbrance of land and rights equivalent to real property
	

 	
 	

(k)	
 	

Investments and capital expenditures that exceed the sum of Euro 5,000,—in any individual case

	

 	
 	

(l)	
 	

Assumption of guarantee obligations and provision of securities of all kinds for third party debts
	

 	
 	

(m)	
 	

Taking up loans and the increase of current account credit lines at banks
	

 	
 	

(n)	
 	

Granting unsecured credits in any individual case other than trade accounts receivable
	

 	
 	

(o)	
 	

Issuing of promissory notes and bills of exchange (drafts)
	

 	
 	

(p)	
 	

Concluding contracts of employment with a longer period of notice than six months or with annual salaries that exceed the amount of Euro 30,000,—
	

 	
 	

(q)	
 	

Granting pensions and related benefits of any kind beyond the current company pension schemes
	

 	
 	

(r)	
 	

Entering into continuing obligations (e.g. lease and hire contracts) with a fixed commitment of more than two years.
	

 	
 	

(s)	
 	

Entering into contracts with partners, managers, their affiliates or their relatives in the meaning of § 15 General Tax Code including the granting of credits
	

 	
 	

(t)	
 	

Selection of the CPA or tax advisor to prepare annual accounts
	

 	
 	

(u)	
 	

The waiver or release of legal rights, forgiveness of indebtedness, or the settlement of any claim of the partnership involving an amount in excess of Euro 10,000
	
§ 6—Company General Meeting; Subject Matter
	

(1)	
 	

Regular partners' meetings shall take place once every fiscal year.
	

(2)	
 	

Extraordinary partners' meetings shall take place when requested by the General Partner or limited partners who jointly hold at least 33% of the total liable capital of the company.
	

(3)	
 	

The partners' meeting shall be convened by registered letter from the General Partner indicating the agenda and observing the time limit of one month. The time limit starts when the letters to the partners are dispatched. The summons are duly served
on the partner when it is sent to his address recently indicated by himself. If the General Partner does not follow a request to call for a partners' meeting according to section (2) within 5 days, then every limited partner has the right
to summon the partners' meeting by himself.
	

(4)	
 	

Every partner has the right to submit motions to the partners' meeting. These motions shall be in writing and submitted to the General Partner with a copy to each limited partner at least two weeks before the partners' meeting.
	

(5)	
 	

The partners' meeting particularly decides over the following matters:
	

 	
 	

(a)	
 	

Approval of the annual accounts which shall be prepared by a tax advisor or a certified public accountant.
	

 	
 	

(b)	
 	

The use of the annual result and of the liquidity surplus (including distributions to the limited partners) as long as the partnership agreement does not contain a special rule
	

 	
 	

(c)	
 	

Discharge of the General Partner
	

 	
 	

(d)	
 	

Any amendment to the partnership agreement
	

 	
 	

(e)	
 	

Exclusion of partners and admission of new partners
	

 	
 	

(f)	
 	

The dissolution of the partnership
	

 	
 	

(g)	
 	

All other matters that must be decided by the partners by law unless this partnership agreement provides otherwise
	

(6)	
 	

The General Partner chairs the partners' meeting.

	
§ 7—Decisions; Minutes
	

(1)	
 	

The partners' meeting is a quorum when it was properly summoned and when limited partners who jointly hold at least 75% of the votes are present or represented. If the partners' meeting is not a quorum the chairman can summon a new general meeting
with identical agenda as long as he observes the conditions of § 6. This resummoned meeting has a quorum if more than 50% of the liable capital of the partnership attend or are represented. Partners who are unable to attend may be represented by
written proxy. The holder of a proxy shall be either another partner or an individual who is a tax advisor, attorney at law or a certified public accountant, or an executive of a partner if a partner is a legal entity.
	

(2)	
 	

The decisions of the partners' meeting have to be made by affirmative vote of at least seventy-five percent (75%) of the capital represented at the meeting as long as the partnership agreement or mandatory statutory provisions do not require higher
majorities. Decisions regarding the modification of the partnership agreement, the dissolution of the partnership, the admission of new partners, the release of limited partners from the non-compete covenant (§16) or the increase/decrease of the
partnership's capital require the affirmative vote of 100% of the capital represented in the general meeting. Decisions to enforce the non-compete covenant (Section 16 hereof) shall be made by majority vote of the partners, excluding the partner
against whom enforcement is sought.
	

(3)	
 	

Every EURO 500 (in words: Euro five hundred) of the contribution's nominal amount grant one vote.
	

(4)	
 	

If all partners agree, resolutions can be passed in writing, by telephone or by telefax.
	

(5)	
 	

Partners' resolutions passed in the partners' meeting or by telephone have to be recorded. The protocol shall be signed by the General Partner and forwarded to all partners promptly.
	

(6)	
 	

Resolutions can only be challenged by filing action with the competent court within a period of one month after dispatch of the recording of the relevant resolution or written/telefax resolution.
	
§ 8—Partner's Accounts
	

For every limited partner three capital accounts will be established:
	

 	
 	

(a)	
 	

The contributions of the limited partners shall be booked on Capital Account I. Capital Account I is inalterable and fixed. It shall establish the basis for the participation in the partnership's assets, the liquidation credit, the shares in profits
and losses and in the voting right.
	

 	
 	

(b)	
 	

Limited partners' shares in losses and profits are booked on Capital Account II until the share in loss is compensated. Exceeding shares in profit are booked on Capital Account III for the limited partners' benefit. A debit balance in Capital Account
II will not constitute a claim by the partnership towards the limited partners. An obligation to make an additional contribution which goes beyond § 169 I HGB does not exist for the limited partners.
	

 	
 	

(c)	
 	

Shares in profits as well as all further payments are booked on Capital Account III as far as they are not booked on Capital Account II.
	

 	
 	

(d)	
 	

Capital Accounts I and II are not interest-bearing. Interest has to be paid for Capital Account III at a rate of 2% for the credit balance.
	
§ 9—Fiscal Year; Financial Statement; Inspection Rights
	

(1)	
 	

The fiscal year is the calendar year. The first fiscal year is a shortened fiscal year. It starts with the registration of the partnership in the commercial register and ends the following 31st of December.

	

(2)	
 	

The balance sheet and profit and loss account (annual accounts) shall be drawn up in accordance with applicable German commercial law (Handelsgesetzbuch) and German principles of proper book keeping. The balance sheet shall be drawn up by the General
Partner within six months after the end of each fiscal year.
	

(3)	
 	

Upon dissenting assessments of the tax office or later modifications resulting from periodic tax audits the balance sheet succeeding the amended valid tax assessment notice shall be adjusted correspondingly.
	

(4)	
 	

The limited partners inspection right according to § 166 Commercial Code remains unaffected. Every limited partner is entitled to execute his inspection right at his cost by a person who is bound to professional confidentiality.
	
§ 10—Distribution of Profits and Losses; Withdrawal; Capital Increase
	

(1)	
 	

The General Partner is entitled to an annual remuneration for assuming personal liability regardless of the partnership annual results of Euro 2,500. In addition, the General Partner is entitled to reimbursement for its expenses incurred in the
performance of its duties as the General Partner.
	

(2)	
 	

The limited partners participate in the remaining annual surplus or the partnership's annual deficit in accordance with their capital shares (Capital Account I).
	

(3)	
 	

Withdrawals that are debited in Capital Account I are not permitted as these accounts are kept as firm capital accounts. Drawdowns from Capital Account II may be made during the running fiscal year by the limited partners for due taxes and other
levies if such taxes and levies are incurred by the participation in the partnership. This includes in particular income, clerical, donation and inheritance tax.
	

(4)	
 	

In the event that the U.S. revenue authorities should impute to SDI USA income with respect to the License Agreement between SDI USA and the partnership (or with respect to any other transaction between SDI USA and the partnership), any corresponding
deduction allowed by the U.S. revenue authorities in connection with the determination of the operating results of the partnership shall be allocated entirely to SDI Germany, provided there is no negative impact on the other limited
partners.
	
§11—Term of the Partnership, Withdrawal
	

(1)	
 	

The partnership starts at the moment of registration in the commercial register.
	

(2)	
 	

The partnership has been established for an indefinite time.
	

(3)	
 	

Each limited partner shall have the right to withdraw from the partnership by giving at least 18 months prior written notice of its or his election to withdraw. The withdrawal shall become effective at the end of a fiscal year, however, not
earlier than December 31, 2011. Notice of withdrawal shall be given by registered letter addressed to the General Partner. The General Partner shall immediately inform all limited partners about the withdrawal. A withdrawal by the General
Partner is not permitted. The right to withdraw for an important reason remains unaffected. A withdrawal from the partnership shall only be effective if the withdrawing partner also withdraws as a shareholder of the General Partner.
	

(4)	
 	

In the event a limited partner withdraws from the partnership it will be continued among the remaining partners as of the time the withdrawal becomes effective unless the remaining partners decide to liquidate the partnership.
	

(5)	
 	

If the remaining partners do not elect to liquidate the partnership, the partnership shall pay a compensation to the withdrawing partner which shall correspond to the interest's market value which shall be calculated as follows.

	

(6)	
 	

The compensation shall be the sum of (i) the balance of the withdrawing partner's capital accounts plus his pro rata share in disclosed reserves, if any, and (ii) his pro rata share in the partnership's assets (liquidation value). The
liquidation value including any hidden reserves (i.e., unrealised appreciation) shall be calculated according to the limited contribution's value resulting from the commercial balance sheet that is drawn
up on the date of withdrawal. In the liquidation balance sheet, assets and liabilities shall be estimated corresponding to their market value. The withdrawing partner does not participate in pending business transactions. A possible goodwill of the
company has to be considered.
	

(7)	
 	

The compensation will be determined by the auditor or tax advisor who prepares the annual accounts as of the effective date of the withdrawal or—if the withdrawal does not become effective at the end of a fiscal year—the auditor/tax advisor
who prepared the most recent accounts preceding the effective date of the withdrawal. The General Partner shall forward the calculation promptly to all limited partners. If the withdrawing limited partner contests the amount of the remuneration
within one month after obtaining knowledge of the determined amount he is entitled to have a new determination made by an independent certified public accountant (CPA). This CPA shall be retained by the partnership upon nomination by the Institute of
Auditors (IdW) at Düsseldorf. The withdrawing limited partner has to pay the costs if the CPA determines that the interest value is not at least 5% greater than the value determined by the partnership's auditors/tax consultants. The decision of
the auditor nominated by IdW shall be binding on all parties.
	

(8)	
 	

The compensation will be paid in five equal annual instalments. The first instalment is due at the first anniversary of the effective date of the withdrawal. The partnership's solvency has to be considered when paying. If it is necessary for the
partnership's economic concerns the partnership is entitled to suspend the payments for one year. For the remaining credit interest has to be paid. The interest rate is 2% over the key rate of the European Central Bank p.a. Interests have to be paid
from the day on which the partner withdrew. Interest is payable with each instalment of principal. The remaining limited partners shall provide collateral for the outstanding portion of the compensation.
	

(9)	
 	

The partnership is entitled to pay the compensation within a shorter term.
	
§ 12—Expulsion of Limited Partners
	

(1)	
 	

A limited partner may be expelled from the partnership for important reasons, such as a severe violation of the partner's duties, the commencement of insolvency proceedings over the partner's assets or the denial to commence such proceedings due to
insufficient assets, attachment proceedings of a partner's creditors in his limited partner's interest if the limited partner does not remedy such attachments within 60 days, or the expulsion as
shareholder of the General Partner.
	

(2)	
 	

The expulsion of a limited partner requires a vote of 75% of the votes of the partners. The partner who might be subject to expulsion is excluded from this vote.
	

(3)	
 	

The expelled partner is entitled to a compensation which shall be calculated and payable in accordance with § 11(6), (7), (8) and (9) of this Agreement, but no interest shall be payable to such expelled limited partner and the
remaining limited partners shall not be required to provide collateral.
	
§ 13—Transfer of Company Shares; Rights of Pre-emption and Tag Along Rights
	

(1)	
 	

The transfer of a partner's interest requires all limited partners' written consent in any case, except as otherwise provided in subsection 2 of this § 13.

	

(2)	
 	

A limited partner may sell its interest or portions thereof to any other limited partners without the other partners' consent. The transfer of interests to companies in which a limited partner holds a controlling majority is also permitted without
the other partners' consent provided that the Initial Limited Partner at all times remains the holder of a controlling majority in the company to which he transferred his partnership interest. For purposes of this Section 13(2), a "controlling
majority in a company" shall mean ownership of more than 75 percent of the voting rights and capital stock of the company.
	

(3)	
 	

If a limited partner (the "Selling Limited Partner") wishes to transfer his limited partner's share or part of his limited partner's share (other than pursuant to Section 13(2) above) with or without consideration, and the written consent of the
other limited partners (the "Non-Selling Limited Partners") is obtained pursuant to Section 13(1) above, the Selling Limited Partner may transfer such share or partial share subject to the pre-emptive and other rights set forth in Sections 13(4),
 (5) and (6).
	

(4)	
 	

The Non-Selling Limited Partners are entitled to pre-emptive rights regarding the interest to be sold by the Selling Limited Partner at the following terms. The Selling Limited Partner shall inform the General Partner and the Non-Selling Limited
Partners of his intention in writing. In the notice, the Selling Limited Partner shall state the following:
	

 	
 	

a)	
 	

Name/company and address/seat of the Selling Limited Partner
	

 	
 	

b)	
 	

Name/company and address/seat of the proposed purchaser
	

 	
 	

c)	
 	

terms of proposed sale, including purchase price resp. other return for the intended assignment
	

 	
 	

d)	
 	

If applicable, due date of purchase price resp. other return
	

 	
 	

e)	
 	

Nominal value of the limited partner's shares intended to be transferred
	

 	
 	

f)	
 	

If applicable, warranties taken by the limited partner willing to sell
	

(5)	
 	

Each Non-Selling Limited Partner shall be entitled to exercise his pre-emptive right for a quota in the interest that is subject to an anticipated transfer to a third party that correspond to his quota in the company. If one limited partner waives
its pre-emptive right the other limited partners' quota increase in accordance with their quotas in the company. Each Non-Selling Limited Partner shall inform the General Partner within one month after he receives the above information whether he
will exercise his right of pre-emption. If less than all the Non-Selling Limited Partners exercise their pre-emptive right, the General Partner will notify those partners who did exercise their pre-emptive right that they have the right to purchase
an additional share in the Selling Limited Partner's interest. Those partners then must notify the General Partner within 10 additional days whether they elect to purchase the additional share. The General Partner will inform all partners of the
results. Each Non-Selling Limited Partner may only exercise his right of pre-emption with regard to the total interest that is attributable to his right of pre-emption. If terms of the purchase agreement with the third party change after a limited
partner has waived or not exercised his pre-emptive right his pre-emptive right shall revive.
	

(6)	
 	

To the extent limited partners are entitled to a pre-emptive right according to the foregoing section but not to a pre-emptive right with regard to the shares in the General Partner, they are entitled to demand that the Selling Limited Partner sells
his share (or an equivalent portion of his share) in the General Partner to the limited partner(s) who exercise(s) his/their pre-emptive right(s). The consideration for the share (or pro-rata share) in the General Partner shall be their book
value.

	

(7)	
 	

Any Non-Selling Limited Partner who does not exercise his or its pre-emptive rights shall be entitled to demand that his or its interest and share in the General Partner shall be purchased by the prospective purchaser at the same terms as agreed
between the prospective purchaser and the Selling Limited Partner. If the prospective purchaser is not prepared to acquire such interests or the related shares in the General Partner, the partners whose interests are not purchased by the third party
purchaser may demand from the Selling Limited Partner that he or it shall acquire the remaining interests and their shares in the General Partner at the terms agreed with the third party purchaser or in the absence of such agreement for the share in
the General Partner such share's nominal value. If only a portion of a limited partner's interest is subject to a sale to a third party the above rights and obligations apply with regard to a pro-rata portion of the other partners'
interests.
	

(8)	
 	

If SDI USA disposes of a majority interest in SDI Germany (other than to a subsidiary) or if Lehman disposes of more than forty percent (40%) of its current capital interest or voting rights in SDI USA (other than to a subsidiary), Klaus-Jürgen
Dittrich and Frank Dittrich may demand that SDI USA acquires their interests in the partnership at market value to be calculated in accordance with § 11 (6), (7), (8) and (9) ("Put-Option"). Klaus-Jürgen Dittrich and Frank
Dittrich may exercise this right only jointly—as long as both are limited partners of the Company—and (i) if they also transfer their shares in the General Partner to SDI USA and
(ii) if they exercise their Put Option within a period of 120 days running from the date of obtaining written knowledge of the change of control in SDI Germany or SDI USA. In the event that either Klaus-Jürgen Dittrich or Frank
Dittrich is not a limited partner of the Company anymore (because of decease, transfer of shares, withdrawal or any other reasons) the remaining limited partner (Klaus-Jürgen Dittrich or Frank Dittrich) is entitled to solely exercise his rights
mentioned in the sentence before. A disposal of a majority interest shall be defined for the purpose of this provision as a transfer of shares that has the result that the disposing shareholder's voting rights or capital rights in the relevant
company fall below 50%. The term "subsidiary" means any company in which the shareholder directly or indirectly holds more than 75% of the voting rights and capital stock.
	
§ 14—Liens on Company Shares
	

The pledging of Company shares as well as the granting of an usufruct in a share or the conclusion of a trust agreement or a sub-participation, that grants the sub-participant the same rights as the usufructuary, require consent by all limited
partners. The same applies if the limited partner wishes to cede, pledge or debit in any other way claims connected with his limited partner share.
	
§ 15—Decease of a Limited Partner
	

(1)	
 	

In the event one of the limited partners dies, the Company shall not be dissolved but shall be continued with the limited partner's legal heirs. The same applies to the legatees of a limited partner. Heirs or legatees other than Frank Dittrich and
Klaus-Jürgen Dittrich, can be expelled from the company by resolution with a majority of the votes of the remaining Limited Partners within one year after they obtain knowledge of a partner's death, subject to the following § 15 (2). The
compensation to be paid to the expelled heir or legatee shall be subject to § 11(6), (7), (8) and (9).

	

(2)	
 	

If Frank Dittrich dies earlier than Klaus-Jürgen Dittrich, and Klaus-Jürgen Dittrich is not the heir or legatee of Frank Dittrich, then Klaus-Jürgen Dittrich shall have an option (the "Call Option") to purchase the limited partnership
interest of Frank Dittrich from the heirs or legatees of Frank Dittrich. Upon the death of Frank Dittrich, the General Partner shall determine the identity of the heirs or legatees of Frank Dittrich and shall provide this information to the limited
partners in writing. Klaus-Jürgen Dittrich shall be entitled to exercise his Call Option within a period of 90 days after the death of Frank Dittrich by giving written notice to the heirs or legatees of Frank Dittrich, to the General
Partner and to all other limited partners. The compensation to be paid to the heirs or legatees of Frank Dittrich shall be subject to § 11 (6), (7), (8) and (9). If Klaus-Jurgen Dittrich fails to exercise his Call Option, the remaining
limited partners may exercise their rights to expel the heirs or legatees of Frank Dittrich in accordance with Section 15(1) above.
	

(3)	
 	

Several heirs are required to appoint a joint representative within three months after the death of the testator, who is authorized to exercise the partner rights of the heirs. In the case that the heirs do not appoint such a representative within
the mentioned time, the business management shall appoint such a representative; then the heirs are required to give the appointed person authority. The same applies to the legatees of a limited partner.
	

(4)	
 	

If a deceased partner has appointed an estate trustee for his interest in the company the trustee shall be entitled to exercise the partners' rights for the heirs.
	
§ 16—Non-compete; Obligation of Confidentiality
	

(1)	
 	

Subject to Sections 3(5) and 3(6) hereof, no partner including all current and future limited partners—contrary to § 165 German Commercial Code (HGB)—nor any of their Affiliates (as defined below), shall engage, directly or indirectly,
in the manufacture, distribution, marketing or sale of Competing Products (as defined below) in the Territory. Indirect competition shall include (without limitation) the acquisition of any ownership interest in any company or business organization
that is engaged, directly or indirectly or through any Affiliate, in the manufacture, distribution, marketing or sale of Competing Products in the Territory; provided, however, that the ownership of less
than three percent (3%) of the outstanding voting shares of any publicly held company which otherwise would be prohibited by this Section shall not constitute a violation of this Section. Klaus-Jürgen Dittrich and Frank Dittrich agree that they
shall not engage, directly or indirectly or through any Affiliate, in the development, manufacture, distribution, marketing or sale of Competing Products outside the Territory except any business in cooperation or in a joint venture with SDI USA
outside the Territory. SDI Germany hereby grants and ensures that neither SDI USA nor Lehman (while it owns an interest in SDI USA) shall violate the non-compete clause of § 16 and that SDI USA and Lehman (while it owns an interest in SDI USA)
are bound by this clause in the same way as if they were limited partners to the Company themselves.
	

(2)	
 	

The term "Competing Product" means any of the following for use in automobiles (i) air bag initiators, (ii) micro gas generators, (iii) seat belt buckles, or (iv) pyrotechnic pretensioners, whether or not currently manufactured by
SDI USA, Klaus-Jürgen Dittrich or Frank Dittrich or any of their Affiliates, and any product that would be a suitable replacement or substitute for any of the foregoing.
	

(3)	
 	

The term "Affiliate", as applied to any person, means any person that directly or indirectly controls, or is controlled by that person, or is under common control with that person. For purposes of this definition, "control" (including, with
correlative meaning, the terms "controlled by" and "under common control with"), as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of
such person, whether through the ownership of voting securities, by contract or otherwise. For purposes of this clause, the term "person" shall mean any individual and any legal entity.

	

(4)	
 	

If a partner or any of his/its Affiliates violates the above non-compete covenant, and such violation continues for a period of sixty (60) days after such partner receives written notice from another partner describing the violation, he/it shall
be liable to the partnership to pay a penalty in the amount of E 100,000 for each violation. If an ongoing action constitutes a violation each month that the violation is continuing shall be deemed one separate violation. The concept of
regarding a continuing violation as only one violation (Fortsetzungszusammenhang) shall not apply. In addition § 112 and § 113 German Commercial Code (HGB) shall apply.
	

(5)	
 	

The limited partners shall be obligated to keep silent on all confidential material and company secrets, especially all business and trade secrets, that come into their knowledge through their actions for the Company.
	
§ 17—Final Clauses
	

(1)	
 	

Agreements of the partners with each other and with the Company concerning the Company relations must be in writing, notwithstanding the legal duty to record a contract by notarial deed.
	

(2)	
 	

In the event that individual clauses of this agreement are or become ineffective, nevertheless the agreement as a whole remains effective. By way of (even supplementary) interpretation the very provisions apply, which, as far as possible, correspond
to the economic objectives of the ineffective clauses. In the case that an interpretation is excluded on legal grounds, the contracting parties are obliged to determine equivalent supplementary stipulations. This also applies if, upon the execution
or the interpretation of the agreement, an omission or loophole is revealed.
	

(3)	
 	

All disputes arising in connection with this Agreement or its validity shall be settled in accordance with the Arbitration Rules of the German Institution of Arbitration e.V. (DIS) without recourse to the ordinary courts of law. The place of
arbitration shall be Frankfurt. The arbitration tribunal consists of three arbitrators. The language of the arbitral proceeding shall be English.
	

(4)	
 	

This agreement shall be governed exclusively by the law of the Federal Republic of Germany. The binding language of this agreement shall be German solely.
	

(5)	
 	

The notarial costs of this agreement and its execution will be paid by the Company.
	

(6)	
 	

The Company shall at all times comply with the applicable laws of the United States (including, without limitation, the Foreign Corrupt Practices Act), the European Union and other applicable governing bodies. Periodic audits shall be undertaken to
ensure such compliance.

Bremen, this 26th day of June, 2001 

Appendix 1:
The Territory 

Appendix 2:
Current MPA Customers 

 
 

APPENDIX 1
  
    THE TERRITORY    
  

European
Economic Community (EEC) 

Switzerland 

Scandinavia—Sweden,
Norway, Denmark 

Finland

Poland

Czech
Republic 

Slovakia

Serbia,
Croatia, Herzegovina, Macedonia, Slovenia (to the extent permitted by U.S. law) 

Hungary 

Bulgaria 

Romania 

Albania 

Bosnia
(to the extent permitted by U.S. law) 

Ukraine

Belarus

Turkey

Estonia

Latvia

Lithuania

Russia

Other
countries considered—Middle Eastern and African countries to be included if and when permitted by U.S. law and agreed to by all limited partners 

 
 

APPENDIX 2
  
    THE MPA CUSTOMERS    
  

Autoliv
ASP, Inc. and its global operating divisions and its Affiliates 

TRW, Inc.
and its global operating divisions and its Affiliates 

Atlantic
Research Company (ARC) and its global operating divisions and its Affiliates 

Takata, Inc.
and its global operating divisions and its Affiliates 

QuickLinks

EXHIBIT 10.41

Partnership agreement

APPENDIX 1 THE TERRITORY

APPENDIX 2 THE MPA CUSTOMERS

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