Document:

EXHIBIT
10.36

 

EXECUTION VERSION

 

SANMINA-SCI CORPORATION,

HADCO CORPORATION,

HADCO SANTA CLARA, INC.,

SANMINA-SCI SYSTEMS HOLDINGS, INC., 

SCI TECHNOLOGY, INC. &

SCIMEX, INC.

 

as Borrowers,

 

SANMINA-SCI SYSTEMS (CANADA) INC. &

SCI BROCKVILLE CORP.

 

as Designated Canadian Guarantors

 

 

 

LOAN, GUARANTY AND SECURITY AGREEMENT

 

Dated as of November 19, 2008

 

$135,000,000

 

 

 

CERTAIN FINANCIAL INSTITUTIONS,

 

as Lenders,

 

BANK OF AMERICA, N.A.,

 

as Agent,

 

BANC OF AMERICA SECURITIES LLC &

DEUTSCHE BANK SECURITIES INC.

 

as Joint Lead Arrangers and Joint Book Managers

 

and

 

DEUTSCHE BANK TRUST COMPANY AMERICAS

 

as Syndication Agent

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINITIONS; RULES OF CONSTRUCTION

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Accounting Terms

  	
  34

  
	
   

  	
   

  	
   

  
	
  1.3

  	
  Uniform Commercial Code

  	
  34

  
	
   

  	
   

  	
   

  
	
  1.4

  	
  Certain Matters of Construction

  	
  34

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  CREDIT FACILITIES

  	
  35

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Commitment

  	
  35

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Letter of Credit Facility

  	
  37

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  Increase in the Aggregate Commitments

  	
  40

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  INTEREST, FEES AND CHARGES

  	
  42

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Interest

  	
  42

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Fees

  	
  43

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Computation of Interest, Fees, Yield Protection

  	
  44

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  Reimbursement Obligations

  	
  44

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  Illegality

  	
  45

  
	
   

  	
   

  	
   

  
	
  3.6

  	
  Inability to Determine Rates

  	
  45

  
	
   

  	
   

  	
   

  
	
  3.7

  	
  Increased Costs; Capital Adequacy

  	
  45

  
	
   

  	
   

  	
   

  
	
  3.8

  	
  Mitigation

  	
  47

  
	
   

  	
   

  	
   

  
	
  3.9

  	
  Funding Losses

  	
  47

  
	
   

  	
   

  	
   

  
	
  3.10

  	
  Maximum Interest

  	
  47

  
	
   

  	
   

  	
   

  
	
  3.11

  	
  Removal or Replacement of a Lender

  	
  47

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  LOAN ADMINISTRATION

  	
  48

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Manner of Borrowing and Funding Loans

  	
  48

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Defaulting Lender

  	
  50

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Number and Amount of LIBOR Loans; Determination of Rate

  	
  50

  
	
   

  	
   

  	
   

  
	
  4.4

  	
  Borrower Agent

  	
  50

  
	
   

  	
   

  	
   

  
	
  4.5

  	
  One Obligation

  	
  51

  
	
   

  	
   

  	
   

  
	
  4.6

  	
  Effect of Termination

  	
  51

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  PAYMENTS

  	
  51

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  General Payment Provisions

  	
  51

  

 

i

 

	
  5.2

  	
  Repayment of Loans

  	
  51

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Payment of Other Obligations

  	
  52

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Marshaling; Payments Set Aside

  	
  52

  
	
   

  	
   

  	
   

  
	
  5.5

  	
  Post-Default Allocation of Payments

  	
  52

  
	
   

  	
   

  	
   

  
	
  5.6

  	
  Application of Payments

  	
  53

  
	
   

  	
   

  	
   

  
	
  5.7

  	
  Loan Account; Account Stated

  	
  53

  
	
   

  	
   

  	
   

  
	
  5.8

  	
  Taxes

  	
  54

  
	
   

  	
   

  	
   

  
	
  5.9

  	
  Lender Tax Information

  	
  54

  
	
   

  	
   

  	
   

  
	
  5.10

  	
  Nature and Extent of Each Borrower’s Liability

  	
  56

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  CONDITIONS PRECEDENT

  	
  58

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Conditions Precedent to Initial Loans

  	
  58

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  Conditions Precedent to All Credit Extensions

  	
  60

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  COLLATERAL

  	
  60

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Grant of Security Interest

  	
  60

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  Lien on Deposit Accounts; Cash Collateral

  	
  61

  
	
   

  	
   

  	
   

  
	
  7.3

  	
  Other Collateral

  	
  62

  
	
   

  	
   

  	
   

  
	
  7.4

  	
  No Assumption of Liability

  	
  62

  
	
   

  	
   

  	
   

  
	
  7.5

  	
  Further Assurances

  	
  62

  
	
   

  	
   

  	
   

  
	
  7.6

  	
  ULC Shares

  	
  62

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  COLLATERAL ADMINISTRATION

  	
  63

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Borrowing Base Certificates

  	
  63

  
	
   

  	
   

  	
   

  
	
  8.2

  	
  Administration of Accounts

  	
  63

  
	
   

  	
   

  	
   

  
	
  8.3

  	
  Administration of Inventory

  	
  64

  
	
   

  	
   

  	
   

  
	
  8.4

  	
  Administration of Deposit Accounts

  	
  65

  
	
   

  	
   

  	
   

  
	
  8.5

  	
  General Provisions

  	
  65

  
	
   

  	
   

  	
   

  
	
  8.6

  	
  Power of Attorney

  	
  67

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  68

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  General Representations and Warranties

  	
  68

  
	
   

  	
   

  	
   

  
	
  9.2

  	
  Complete Disclosure

  	
  74

  
	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  COVENANTS AND CONTINUING AGREEMENTS

  	
  75

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Affirmative Covenants

  	
  75

  
	
   

  	
   

  	
   

  
	
  10.2

  	
  Negative Covenants

  	
  80

  
	
   

  	
   

  	
   

  
	
  10.3

  	
  Financial Covenant

  	
  93

  

 

ii

 

	
  10.4

  	
  Post-Closing Covenants

  	
  93

  
	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  EVENTS OF DEFAULT; REMEDIES ON DEFAULT

  	
  94

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Events of Default

  	
  94

  
	
   

  	
   

  	
   

  
	
  11.2

  	
  Remedies upon Default

  	
  96

  
	
   

  	
   

  	
   

  
	
  11.3

  	
  License

  	
  97

  
	
   

  	
   

  	
   

  
	
  11.4

  	
  Setoff

  	
  97

  
	
   

  	
   

  	
   

  
	
  11.5

  	
  Remedies Cumulative; No Waiver

  	
  98

  
	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  AGENT

  	
  98

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  Appointment, Authority and Duties of Agent

  	
  98

  
	
   

  	
   

  	
   

  
	
  12.2

  	
  Agreements Regarding Collateral and Field Examination Reports

  	
  100

  
	
   

  	
   

  	
   

  
	
  12.3

  	
  Reliance By Agent

  	
  101

  
	
   

  	
   

  	
   

  
	
  12.4

  	
  Action Upon Default

  	
  101

  
	
   

  	
   

  	
   

  
	
  12.5

  	
  Ratable Sharing

  	
  101

  
	
   

  	
   

  	
   

  
	
  12.6

  	
  Indemnification of Agent Indemnitees

  	
  101

  
	
   

  	
   

  	
   

  
	
  12.7

  	
  Limitation on Responsibilities of Agent

  	
  102

  
	
   

  	
   

  	
   

  
	
  12.8

  	
  Successor Agent and Co-Agents

  	
  102

  
	
   

  	
   

  	
   

  
	
  12.9

  	
  Due Diligence and Non-Reliance

  	
  103

  
	
   

  	
   

  	
   

  
	
  12.10

  	
  Replacement of Certain Lenders

  	
  103

  
	
   

  	
   

  	
   

  
	
  12.11

  	
  Remittance of Payments and Collections

  	
  104

  
	
   

  	
   

  	
   

  
	
  12.12

  	
  Agent in its Individual Capacity

  	
  104

  
	
   

  	
   

  	
   

  
	
  12.13

  	
  Agent Titles

  	
  104

  
	
   

  	
   

  	
   

  
	
  12.14

  	
  No Third Party Beneficiaries

  	
  105

  
	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
  BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS

  	
  105

  
	
   

  	
   

  	
   

  
	
  13.1

  	
  Successors and Assigns

  	
  105

  
	
   

  	
   

  	
   

  
	
  13.2

  	
  Participations

  	
  105

  
	
   

  	
   

  	
   

  
	
  13.3

  	
  Assignments

  	
  106

  
	
   

  	
   

  	
   

  
	
  SECTION 14.

  	
  GUARANTY

  	
  106

  
	
   

  	
   

  	
   

  
	
  14.1

  	
  Guaranty of the Obligations

  	
  106

  
	
   

  	
   

  	
   

  
	
  14.2

  	
  Contribution by Guarantors

  	
  107

  
	
   

  	
   

  	
   

  
	
  14.3

  	
  Payment by Guarantors

  	
  107

  
	
   

  	
   

  	
   

  
	
  14.4

  	
  Liability of Guarantors Absolute

  	
  108

  
	
   

  	
   

  	
   

  
	
  14.5

  	
  Waivers by Guarantors

  	
  110

  
	
   

  	
   

  	
   

  
	
  14.6

  	
  Guarantors’ Rights of Subrogation, Contribution, Etc.

  	
  111

  

 

iii

 

	
  14.7

  	
  Subordination of Other Obligations

  	
  111

  
	
   

  	
   

  	
   

  
	
  14.8

  	
  Continuing Guaranty

  	
  112

  
	
   

  	
   

  	
   

  
	
  14.9

  	
  Authority of Guarantors or Borrowers

  	
  112

  
	
   

  	
   

  	
   

  
	
  14.10

  	
  Financial Condition of Borrowers

  	
  112

  
	
   

  	
   

  	
   

  
	
  14.11

  	
  Bankruptcy, Etc.

  	
  112

  
	
   

  	
   

  	
   

  
	
  SECTION 15.

  	
  MISCELLANEOUS

  	
  113

  
	
   

  	
   

  	
   

  
	
  15.1

  	
  Consents, Amendments and Waivers

  	
  113

  
	
   

  	
   

  	
   

  
	
  15.2

  	
  Indemnity

  	
  114

  
	
   

  	
   

  	
   

  
	
  15.3

  	
  Notices and Communications

  	
  114

  
	
   

  	
   

  	
   

  
	
  15.4

  	
  Performance of Obligors’ Obligations

  	
  115

  
	
   

  	
   

  	
   

  
	
  15.5

  	
  Credit Inquiries

  	
  115

  
	
   

  	
   

  	
   

  
	
  15.6

  	
  Severability

  	
  115

  
	
   

  	
   

  	
   

  
	
  15.7

  	
  Cumulative Effect; Conflict of Terms

  	
  115

  
	
   

  	
   

  	
   

  
	
  15.8

  	
  Counterparts

  	
  116

  
	
   

  	
   

  	
   

  
	
  15.9

  	
  Entire Agreement

  	
  116

  
	
   

  	
   

  	
   

  
	
  15.10

  	
  Relationship with Lenders

  	
  116

  
	
   

  	
   

  	
   

  
	
  15.11

  	
  No Advisory or Fiduciary Responsibility

  	
  116

  
	
   

  	
   

  	
   

  
	
  15.12

  	
  Confidentiality

  	
  116

  
	
   

  	
   

  	
   

  
	
  15.13

  	
  Certifications Regarding Indentures

  	
  117

  
	
   

  	
   

  	
   

  
	
  15.14

  	
  GOVERNING LAW

  	
  117

  
	
   

  	
   

  	
   

  
	
  15.15

  	
  Consent to Forum

  	
  117

  
	
   

  	
   

  	
   

  
	
  15.16

  	
  Waivers by Obligors

  	
  118

  
	
   

  	
   

  	
   

  
	
  15.17

  	
  Patriot Act Notice

  	
  118

  
	
   

  	
   

  	
   

  
	
  15.18

  	
  Judgment Currency

  	
  118

  
	
   

  	
   

  	
   

  
	
  15.19

  	
  Language

  	
  119

  
	
   

  	
   

  	
   

  
	
  15.20

  	
  Securitization Subsidiaries

  	
  119

  
	
   

  	
   

  	
   

  
	
  15.21

  	
  Discharge of Obligor Upon Sale of Obligor

  	
  119

  

 

iv

 

LIST OF EXHIBITS AND SCHEDULES

 

	
  Exhibit A

  	
  Revolver
  Note

  
	
  Exhibit B

  	
  Assignment
  and Acceptance

  
	
  Exhibit C

  	
  Assignment Notice

  
	
  Exhibit D

  	
  Form of Joinder Agreement

  
	
  Exhibit E

  	
  Form of Lockbox Control and Intercreditor
  Agreement

  
	
   

  
	
  Schedule 1.1(a)

  	
  Commitments
  of Lenders

  
	
  Schedule 1.1(b)

  	
  Designated
  Canadian Guarantors

  
	
  Schedule 2.2.4

  	
  Existing
  Letters of Credit

  
			

 

v

 

LOAN, GUARANTY AND SECURITY AGREEMENT

 

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

 

R E C I T A L S:

 

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

 

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

 

A G R E E
M E N T:

 

SECTION 1.                            DEFINITIONS;
RULES OF CONSTRUCTION

 

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

 

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

 

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

 

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

 

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

 

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

 

1

 

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

 

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

 

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

 

Adjusted Availability Block:  $25,000,000.

 

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

 

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

 

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

 

Aggregate Payments:  as defined in Section 14.2.

 

Allocable
Amount:  as defined in Section 5.10.3.

 

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

 

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

 

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

 

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

 

2

 

	
  Level

  	
   

  	
  Availability Ratio

  	
   

  	
  Base Rate

  Loans

  	
   

  	
  LIBOR

  Loans

  	
   

  
	
  I

  	
   

  	
  < 25%

  	
   

  	
  2.25

  	
  %

  	
  3.25

  	
  %

  
	
  II

  	
   

  	
  >
  25% < 50%

  	
   

  	
  2.00

  	
  %

  	
  3.00

  	
  %

  
	
  III

  	
   

  	
  >
  50% < 75%

  	
   

  	
  1.75

  	
  %

  	
  2.75

  	
  %

  
	
  IV

  	
   

  	
  >75%

  	
   

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

Bankruptcy
Code:  Title 11 of the United States Code.

 

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

 

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

 

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

 

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

 

Borrower
Agent:  as defined in Section 4.4.

 

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

 

Borrowing
Base:  on any date of determination:

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

Closing
Date:  as defined in Section 6.1.

 

Code:  the
Internal Revenue Code of 1986.

 

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

 

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

 

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

 

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

 

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

 

Consolidated
Capital Expenditures:  for any period, the aggregate of all
expenditures of Sanmina and its Subsidiaries during such period determined on a
consolidated basis that, in accordance with GAAP, are or should be included in “purchase
of property and equipment” or similar items reflected in the consolidated
statement of cash flows of Sanmina and its Subsidiaries.

 

8

 

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

 

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

 

Contributing Guarantors:  as defined in Section 14.2.

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

Dollars: 
lawful money of the United States of America.

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

ERISA:  the
Employee Retirement Income Security Act of 1974.

 

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

 

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

 

Event
of Default:  as defined in Section 11.

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

Fair Share:  as
defined in Section 14.2.

 

Fair Share Contribution Amount:  as defined in Section 14.2.

 

Fair Share Shortfall:  as defined in Section 14.2.

 

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

 

15

 

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

 

Fiscal
Month:  a fiscal month of any Fiscal Quarter.

 

Fiscal Quarter:  a fiscal quarter of any Fiscal
Year.

 

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

 

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

 

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

 

FLSA:  the
Fair Labor Standards Act of 1938.

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

Funding Guarantor:  as defined in Section 14.2.

 

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

 

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

 

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

 

Guaranteed Obligations:  as defined in Section 14.1.

 

Guarantor
Payment:  as defined in Section 5.10.3.

 

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

 

17

 

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

 

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

 

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

 

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

 

Indemnified
Taxes:  Taxes other than Excluded Taxes.

 

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

 

Indentures:  the
Senior Subordinated Indentures and the Senior Indentures.

 

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

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

Interest
Period:  as defined in Section 3.1.3.

 

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

 

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

 

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

 

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

 

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

 

19

 

IRS:  the
United States Internal Revenue Service.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

20

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

22

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

23

 

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

 

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

 

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

 

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

 

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

 

Obligee Guarantor:  as defined in Section 14.7.

 

Obligor:  each
Borrower or Guarantor.

 

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

 

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

 

OSHA:  the
Occupational Safety and Hazard Act of 1970.

 

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

 

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

 

24

 

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

 

Overadvance:  as
defined in Section 2.1.5.

 

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

 

Participant:  as
defined in Section 13.2.

 

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

 

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

 

PBGC:  the
Pension Benefit Guaranty Corporation.

 

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

 

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

 

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

 

a.             immediately prior to,
and after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing or would result therefrom;

 

b.             all transactions in
connection therewith shall be consummated, in all material respects, in
accordance with all applicable laws and in conformity with all applicable
Governmental Authorizations;

 

c.             in the case of the
acquisition of Equity Interests in which all of the Equity Interests (except
for any such Equity Interests in the nature of directors’ qualifying shares
required pursuant to applicable law) acquired or otherwise issued by such
Person or any newly formed Subsidiary of Sanmina in connection with such acquisition
shall be owned 100% by Sanmina or a Guarantor, Sanmina shall take, or cause to
be taken, promptly 

 

25

 

after the date such Person
becomes a Subsidiary of Sanmina, to the extent applicable, each of the actions
set forth in Section 10.1.9;

 

d.             in the case of an
acquisition where the consideration payable is $25,000,000 or more, Sanmina
shall have delivered to Agent at least ten (10) Business Days (or such
shorter period of time as may be agreed to by Agent) prior to such proposed
acquisition, all relevant financial information with respect to such acquired
assets or Equity Interests, including, without limitation, the aggregate
consideration for such acquisition;

 

e.             any Person or assets
or division as acquired in accordance herewith shall constitute a Permitted
Business; and

 

f.              such acquisition
shall not have been preceded by a tender offer that has not been approved by
the board of directors of such Person.

 

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

 

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

 

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

 

Permitted
Lien:  as defined in Section 10.2.2.

 

26

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

27

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Protective
Advances:  as defined in Section 2.1.6.

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

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

 

29

 

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

 

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

 

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

 

Reimbursement Date:  as defined in Section 2.2.2.

 

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

 

Report:  as
defined in Section 12.2.3.

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

31

 

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

 

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

 

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

 

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

 

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

 

32

 

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

 

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

 

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

 

Syndication
Agent:  Deutsche
Bank Trust Company Americas.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

33

 

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

 

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

 

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

 

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

 

34

 

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

 

SECTION 2.         CREDIT
FACILITIES

 

2.1           Commitment.

 

2.1.1        Loans.  Each Lender agrees, severally, on the terms
set forth herein, to make Loans to Borrowers from time to time for the period
from and including the Closing Date to the Commitment Termination Date in an
aggregate principal amount at any one time outstanding which, when added to
such Lender’s Pro Rata share of the sum of the LC Obligations then outstanding
and the aggregate principal amount of the Swingline Loans then outstanding,
does not exceed the amount of such Lender’s Commitment.  The Loans may be repaid and reborrowed as
provided herein.  In no event shall
Lenders have any obligation to honor a request for a Loan if the unpaid balance
of Loans outstanding at such time (including the requested Loan) would exceed
the Borrowing Base.

 

35

 

2.1.2        Revolver
Notes.  The Loans made by each Lender and
interest accruing thereon shall be evidenced by the records of Agent and such
Lender.  At the request of any Lender,
Borrowers shall deliver a Revolver Note to such Lender.

 

2.1.3        Use
of Proceeds.  The proceeds of Loans shall
be used by Borrowers solely (a) to satisfy existing Debt; (b) to pay
fees and transaction expenses associated with the closing of this credit
facility; (c) to pay Obligations in accordance with this Agreement; and (d) for
working capital and other lawful corporate purposes of Borrowers (including any
transaction permitted by this Agreement).

 

2.1.4        Voluntary
Reduction or Termination of Commitments. 
The Commitments shall terminate on the Revolver Termination Date, unless
sooner terminated in accordance with this Agreement.  Upon at least 10 days (or such shorter period
as may be agreed to in writing by Agent in its discretion) prior written notice
to Agent at any time, Borrower Agent may, at its option, terminate the
Commitments and this credit facility or permanently reduce the Commitments, on
a Pro Rata basis for each Lender in a
minimum amount of $25,000,000, or an increment of $1,000,000 in excess thereof;
provided that no such reduction in Commitments shall reduce the
aggregate amount of the Commitments to less than $100,000,000.  Any notice of termination or reduction given
by Borrower Agent shall be irrevocable; provided that a notice of termination
of the Commitments delivered by Borrower Agent may state that such notice is
conditioned upon the effectiveness of other credit facilities or other
financing transaction, in which case such notice may be revoked by Borrower
Agent (by notice to Agent on or prior to the specified termination date) if
such condition is not satisfied.  On the
Revolver Termination Date, Borrowers shall make Full Payment of all
Obligations.

 

2.1.5        Overadvances.  If the aggregate Loans and LC Obligations
exceed the Borrowing Base (“Overadvance”) or the aggregate Commitments
at any time, the excess amount shall be payable by Borrowers on demand by Agent, but all such Loans
shall nevertheless constitute Obligations secured by the Collateral and
entitled to all benefits of the Loan Documents. 
Unless its authority has been revoked in writing by Required Lenders,
Agent may require Lenders to honor requests for Overadvance Loans and to
forbear from requiring Borrowers to cure an Overadvance, (a) when no other
Event of Default is known to Agent, as long as (i) the Overadvance does
not continue for more than 30 consecutive days (and no Overadvance may exist
for at least five consecutive days thereafter before further Overadvance Loans
are required), and (ii) the Overadvance is not known by Agent to exceed
10% of the aggregate Commitments then in effect (less the then outstanding
amount of Protective Advances); and (b) regardless of whether an Event of
Default exists, if Agent discovers an Overadvance not previously known by it to
exist, as long as from the date of such discovery the Overadvance, (i) is
not increased by more than $5,000,000 (less the then outstanding amount of
Protective Advances), and (ii) does not continue for more than 30
consecutive days.  In no event shall
Overadvance Loans be required that would cause the outstanding Loans and LC
Obligations to exceed the aggregate Commitments and in no event shall an
Overadvance cause the sum of any Lender’s Loans and Pro Rata share of the LC
Obligations then outstanding to exceed its Commitment.  Any funding of an Overadvance Loan or
sufferance of an Overadvance shall not constitute a waiver by Agent or Lenders
of the Event of Default caused thereby. 
In no event shall any Borrower or other Obligor be deemed a beneficiary
of this Section nor authorized to enforce any of its terms.

 

36

 

2.1.6        Protective
Advances.  Agent shall be authorized, in
its discretion, at any time that any conditions in Section 6 are not satisfied, to make Base Rate Loans (“Protective
Advances”) (a) up to an aggregate amount outstanding at any time not
in excess of 10% of the aggregate Commitments then in effect (less the then
outstanding amount of Overadvances), if Agent deems such Loans necessary or
desirable to preserve or protect Collateral, or to enhance the collectibility
or repayment of Obligations; or (b) to pay any other amounts chargeable to
Obligors under any Loan Documents, including costs, fees and expenses.  Each Lender shall participate in each Protective
Advance on a Pro Rata basis; provided, that in no event shall the
aggregate amount of outstanding Protective Advances plus the aggregate amount
of outstanding Loans and LC Obligations exceed the aggregate Commitments.  Required Lenders may at any time revoke Agent’s
authority to make further Protective Advances by written notice to Agent.  Absent such revocation, Agent’s determination
that funding of a Protective Advance is appropriate shall be conclusive.

 

2.2           Letter of Credit
Facility.

 

2.2.1        Issuance
of Letters of Credit.  Issuing Bank
agrees to issue Letters of Credit from time to time until 30 days prior to the
Revolver Termination Date (or until the Commitment Termination Date, if
earlier), on the terms set forth herein, including the following:

 

a.             Each
Borrower acknowledges that Issuing Bank’s willingness to issue any Letter of
Credit is conditioned upon Issuing Bank’s receipt of a LC Application with
respect to the requested Letter of Credit, as well as such other instruments
and agreements as Issuing Bank may customarily require for issuance of a letter
of credit of similar type and amount. 
Issuing Bank shall have no obligation to issue any Letter of Credit
unless (i) Issuing Bank receives a LC Request and LC Application at least
three Business Days prior to the requested date of issuance; (ii) each LC
Condition is satisfied and (iii) if a Defaulting Lender exists, such
Lender or Borrowers have entered into arrangements satisfactory to Agent and
Issuing Bank to eliminate any funding risk associated with the Defaulting
Lender.  If Issuing Bank receives written
notice from a Lender at least five Business Days before issuance of a Letter of
Credit that any LC Condition has not been satisfied, Issuing Bank shall have no
obligation to issue the requested Letter of Credit (or any other) until such
notice is withdrawn in writing by that Lender or until Required Lenders have
waived such condition in accordance with this Agreement.  Prior to receipt of any such notice, Issuing
Bank shall not be deemed to have knowledge of any failure of LC Conditions.

 

b.             Letters
of Credit may be requested by a Borrower only (i) to support obligations
of such Borrower incurred in the Ordinary Course of Business; or (ii) for
other purposes as Agent and Lenders may approve from time to time in
writing.  The renewal or extension of any
Letter of Credit shall be treated as the issuance of a new Letter of Credit,
except that delivery of a new LC Application shall be required at the discretion
of Issuing Bank.

 

c.             Borrowers
assume (solely as between Borrowers and Secured Parties) all risks of the acts,
omissions or misuses of any Letter of Credit by the beneficiary thereof.  In connection with issuance of any Letter of
Credit, none of Agent, Issuing Bank or any Lender shall be responsible for the
existence, character, quality, quantity, condition, packing, value or delivery
of any goods purported to be represented by any Documents; any differences or 

 

37

 

variation in
the character, quality, quantity, condition, packing, value or delivery of any
goods from that expressed in any Documents; the form, validity, sufficiency,
accuracy, genuineness or legal effect of any Documents or of any endorsements
thereon; the time, place, manner or order in which shipment of goods is made;
partial or incomplete shipment of, or failure to ship, any goods referred to in
a Letter of Credit or Documents; any deviation from instructions, delay,
default or fraud by any shipper or other Person in connection with any goods,
shipment or delivery; any breach of contract between a shipper or vendor and a
Borrower; errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail,
telephone or otherwise; errors in interpretation of technical terms; the
misapplication by a beneficiary of any Letter of Credit or the proceeds
thereof; or any consequences arising from causes beyond the control of Issuing
Bank, Agent or any Lender, including any act or omission of a Governmental
Authority.  The rights and remedies of
Issuing Bank under the Loan Documents shall be cumulative.  Issuing Bank shall be fully subrogated to the
rights and remedies of each beneficiary whose claims against Borrowers are discharged
with proceeds of any Letter of Credit.

 

d.             In
connection with its administration of and enforcement of rights or remedies
under any Letters of Credit or LC Documents, Issuing Bank shall be entitled to
act, and shall be fully protected in acting, upon any certification,
documentation or communication in whatever form believed by Issuing Bank, in
good faith, to be genuine and correct and to have been signed, sent or made by
a proper Person.  Issuing Bank may consult
with and employ legal counsel, accountants and other experts to advise it
concerning its obligations, rights and remedies, and shall be entitled to act
upon, and shall be fully protected in any action taken in good faith reliance
upon, any advice given by such experts. 
Issuing Bank may employ agents and attorneys-in-fact in connection with
any matter relating to Letters of Credit or LC Documents, and shall not be
liable for the negligence or misconduct of agents and attorneys-in-fact
selected with reasonable care.

 

2.2.2        Reimbursement; Participations.

 

a.             If
Issuing Bank honors any request for payment under a Letter of Credit, Borrowers
shall pay to Issuing Bank, on the same day (“Reimbursement Date”), the
amount paid by Issuing Bank under such Letter of Credit, together with interest
at the interest rate for Base Rate Loans from the Reimbursement Date until
payment by Borrowers.  The obligation of
Borrowers to reimburse Issuing Bank for any payment made under a Letter of
Credit shall be absolute, unconditional, irrevocable, and joint and several,
and shall be paid without regard to any lack of validity or enforceability of
any Letter of Credit or the existence of any claim, setoff, defense or other
right that Borrowers may have at any time against the beneficiary.  Whether or not Borrower Agent submits a
Notice of Borrowing, Borrowers shall be deemed to have requested a Borrowing of
Base Rate Loans in an amount necessary to pay all amounts due Issuing Bank on
any Reimbursement Date and each Lender agrees to fund its Pro Rata share of
such Borrowing whether or not the Commitments have terminated, an Overadvance
exists or is created thereby, or the conditions in Section 6 are satisfied.

 

b.             Upon
issuance of a Letter of Credit, each Lender shall be deemed to have irrevocably
and unconditionally purchased from Issuing Bank, without recourse or warranty,
an undivided Pro Rata interest and participation in all LC Obligations relating
to the Letter of 

 

38

 

Credit.  If Issuing Bank makes any payment under a
Letter of Credit and Borrowers do not reimburse such payment on the
Reimbursement Date, Agent shall promptly notify Lenders and each Lender shall
promptly (within one Business Day) and unconditionally pay to Agent, for the
benefit of Issuing Bank, the Lender’s Pro Rata share of such payment.  Upon request by a Lender, Issuing Bank shall
furnish copies of any Letters of Credit and LC Documents in its possession at
such time.

 

c.             The
obligation of each Lender to make payments to Agent for the account of Issuing
Bank in connection with Issuing Bank’s payment under a Letter of Credit shall
be absolute, unconditional and irrevocable, not subject to any counterclaim,
setoff, qualification or exception whatsoever, and shall be made in accordance
with this Agreement under all circumstances, irrespective of any lack of
validity or unenforceability of any Loan Documents; any draft, certificate or
other document presented under a Letter of Credit having been determined to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; or the existence of any
setoff or defense that any Obligor may have with respect to any
Obligations.  Issuing Bank does not assume
any responsibility for any failure or delay in performance or any breach by any
Borrower or other Person of any obligations under any LC Documents.  Issuing Bank does not make to Lenders any
express or implied warranty, representation or guaranty with respect to the
Collateral, LC Documents or any Obligor. 
Issuing Bank shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties contained in, or for the
execution, validity, genuineness, effectiveness or enforceability of any LC
Documents; the validity, genuineness, enforceability, collectibility, value or
sufficiency of any Collateral or the perfection of any Lien therein; or the
assets, liabilities, financial condition, results of operations, business,
creditworthiness or legal status of any Obligor.

 

d.             No
Issuing Bank Indemnitee shall be liable to any Lender or other Person for any
action taken or omitted to be taken in connection with any LC Documents except
as a result of its actual gross negligence or willful misconduct.  Issuing Bank shall not have any liability to
any Lender if Issuing Bank refrains from any action under any Letter of Credit
or LC Documents until it receives written instructions from Required Lenders.

 

2.2.3        Cash
Collateral.  If any LC Obligations,
whether or not then due or payable, shall for any reason be outstanding at any
time (a) that an Event of Default exists, (b) that Availability is
less than zero, (c) after the Commitment Termination Date, or (d) within
20 Business Days prior to the Revolver Termination Date, then Borrowers shall,
at Issuing Bank’s or Agent’s request, Cash Collateralize the stated amount of
all outstanding Letters of Credit and pay to Issuing Bank the amount of all
other LC Obligations.  Borrowers shall, on demand by Issuing Bank or Agent from time
to time, Cash Collateralize the LC Obligations of any Defaulting Lender.  If Borrowers fail to provide any Cash
Collateral as required hereunder, Lenders may (and shall upon direction of
Agent) advance, as Loans, the amount of the Cash Collateral required (whether or not the
Commitments have terminated, an Overadvance exists or the conditions in Section 6 are satisfied).

 

2.2.4        Existing
Letters of Credit.  On the Closing Date, (i) each
Existing Letter of Credit, to the extent outstanding, shall be automatically
and without further action by the parties thereto deemed converted into Letters
of Credit issued pursuant to Section 2.2
for the account of 

 

39

 

the Obligors
set forth on Schedule 2.2.4
and subject to the provisions hereof, and for this purpose fees in respect
thereof pursuant to Section 2.2.2(a) shall
be payable (in substitution for any fees set forth in the applicable letter of
credit reimbursement agreements or applications relating to such Existing
Letters of Credit, except to the extent that such fees are also payable
pursuant to Section 2.2.2(a))
as if such Existing Letters of Credit had been issued on the Closing Date, (ii) the
Lenders set forth on Schedule 2.2.4,
or their designated Affiliates who are Issuing Banks, with respect to each such
Existing Letter of Credit shall be deemed to be the Issuing Bank with respect
to such Existing Letters of Credit, (iii) such Letters of Credit shall
each be included in the calculation of LC Obligations, and (iv) all
liabilities of the Obligors with respect to such Existing Letters of Credit
shall constitute Obligations.  No
Existing Letter of Credit converted in accordance with this Section 2.2.4 shall be amended,
extended or renewed except in accordance with the terms hereof.  Notwithstanding the foregoing, the Obligors
shall not be required to pay any additional issuance fees with respect to the
issuance of such Existing Letter of Credit solely as a result of such letter of
credit being converted to a Letter of Credit hereunder, it being understood
that the fronting, participation and other fees set forth in Section 2.2.2(a) shall otherwise
apply to such Existing Letters of Credit.

 

2.3           Increase in the
Aggregate Commitments.

 

a.             The
Borrower Agent may, at any time, by notice to Agent, request that the aggregate
amount of the Commitments be increased in an aggregate amount during the term
of this Agreement of up to $200,000,000 (in a minimum amount of $25,000,000 and
in increments of $5,000,000) (an “Accordion Increase”) to be effective
as of the date upon which the conditions set forth in Section 2.3(d) below are
fulfilled to the satisfaction of Agent (an “Accordion Effective Date”); provided,
however, that (i) in no event shall more than four Accordion Increases
occur during the term of this Agreement and (ii) no Default or Event of
Default shall have occurred and be continuing as of the date of such request or
as of the applicable Accordion Effective Date, or shall occur as a result
thereof.

 

b.             Agent
will promptly notify the Lenders of a request by the Borrower Agent for an
Accordion Increase, which notice shall include the date by which Lenders
wishing to participate in such Accordion Increase must commit to an increase in
the amount of their respective Commitments (each, a “Commitment Date”)
and shall provide that such request is made ratably to all the Lenders.  Each Lender that is willing to participate in
such Accordion Increase (each, an “Increasing Lender”) shall give
written notice to Agent on or prior to the applicable Commitment Date of the
amount by which it is willing to increase its Commitment.  If the Lenders notify Agent that they are
willing to increase the amount of their respective Commitments by an aggregate
amount that exceeds the amount of such Accordion Increase, such Accordion
Increase shall be allocated ratably among the Lenders willing to participate
therein.

 

c.             Promptly
following the applicable Commitment Date, Agent shall notify the Borrower Agent
as to the amount, if any, by which the Lenders are willing to participate in
the applicable Accordion Increase.  If
the aggregate amount by which the Lenders are willing to participate in such
Accordion Increase on the applicable Commitment Date is less than such
Accordion Increase, then the Borrower Agent may extend offers to one or more
Eligible Assignees to participate in any portion of such Accordion Increase
that has not been committed to by the Lenders as of the applicable Commitment
Date; provided, however, that the

 

40

 

Commitment of each such
Eligible Assignee shall be in an amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof (or such lesser amounts as may be necessary to
cause the aggregate increase to equal such Accordion Increase).

 

d.             On
the applicable Accordion Effective Date, each Eligible Assignee that accepts an
offer to participate in the applicable Accordion Increase in accordance with Section 2.3(c) (each such
Eligible Assignee being an “Assuming Lender”) shall become a Lender
party to this Agreement as of the applicable Accordion Effective Date and the
Commitment of each Increasing Lender for such Accordion Increase shall be so
increased by such amount (or by the amount allocated to such Lender pursuant to
the last sentence of Section 2.3(b))
as of such Accordion Effective Date and the Commitment of each Lender as set
forth on Schedule 1.1(b) shall
be adjusted accordingly; provided, that on or before the applicable
Accordion Effective Date:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

41

 

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

 

SECTION 3.         INTEREST, FEES AND
CHARGES

 

3.1           Interest.

 

3.1.1        Rates and Payment of
Interest.

 

a.             The Obligations shall bear interest (i) if
a Base Rate Loan, at the Alternate Base Rate in effect from time to time, plus
the Applicable Margin; (ii) if a LIBOR
Loan, at LIBOR for the applicable Interest Period, plus the Applicable Margin;
and (iii) if any other Obligation (including, to the extent permitted by
law, interest not paid when due), at the Alternate Base Rate in effect from
time to time, plus the Applicable Margin for Base Rate Loans.  Interest shall accrue from the date the Loan
is advanced or the Obligation is incurred or payable, until paid by
Borrowers.  If a Loan is repaid on the
same day made, one day’s interest shall accrue.

 

b.             During an Insolvency
Proceeding with respect to any Borrower, or during any other Event of Default
if Agent or Required Lenders in their discretion so elect, Obligations shall
bear interest at the Default Rate (whether before or after any judgment).  Each Borrower acknowledges that the cost and
expense to Agent and Lenders due to an Event of Default are difficult to
ascertain and that the Default Rate is a fair and reasonable estimate to
compensate Agent and Lenders for this.

 

c.             Interest accrued on
the Loans shall be due and payable in arrears, (i) on the first day of
each quarter with respect to Base Rate Loans; (ii) on the last day of any
Interest Period with respect to LIBOR Loans, provided that accrued
interest on LIBOR Loans having an Interest Period of 180 days shall also be
paid on the 90th day of each such Interest Period; (iii) on any
date of prepayment, with respect to the principal amount of Loans being
prepaid; and (iv) on the Commitment Termination Date.  Interest accrued on any other Obligations
shall be due and payable as provided in the Loan Documents and, if no payment
date is specified, shall be due and payable on
demand.  Notwithstanding the
foregoing, interest accrued at the Default Rate shall be due and payable on demand.

 

3.1.2        Application of LIBOR to
Outstanding Loans.

 

a.             Borrower
Agent may on any Business Day, subject to delivery of a Notice of
Conversion/Continuation, elect to convert any portion of the Base Rate Loans
to, or to continue any LIBOR Loan at the end of its Interest Period as, a LIBOR
Loan.  During any Default or Event of
Default, Agent may (and shall at the direction of Required Lenders) declare
that no Loan may be made, converted or continued as a LIBOR Loan.

 

b.             Whenever
Borrowers desire to convert or continue Loans as LIBOR Loans, Borrower Agent
shall give Agent a Notice of Conversion/Continuation, no later than 11:00 a.m.
at least three Business Days before the requested conversion or continuation
date.  Promptly after receiving any such
notice, Agent shall notify each Lender thereof. 
Each Notice of 

 

42

 

Conversion/Continuation
shall be irrevocable, and shall specify the amount of Loans to be converted or
continued, the conversion or continuation date (which shall be a Business Day),
and the duration of the Interest Period (which shall be deemed to be 30 days if
not specified).  If, upon the expiration
of any Interest Period in respect of any LIBOR Loans, Borrowers shall have
failed to deliver a Notice of Conversion/Continuation, they shall be deemed to have
elected to convert such Loans into Base Rate Loans.

 

3.1.3        Interest
Periods.  In connection with the making,
conversion or continuation of any LIBOR Loans, Borrowers shall select an
interest period (“Interest Period”) to apply, which interest period
shall be 30, 60, 90 or 180
days; provided, however, that:

 

a.             the
Interest Period shall commence on the date the Loan is made or continued as, or
converted into, a LIBOR Loan, and shall expire on the numerically corresponding
day in the calendar month at its end;

 

b.             if
any Interest Period commences on a day for which there is no corresponding day
in the calendar month at its end or if such corresponding day falls after the
last Business Day of such month, then the Interest Period shall expire on the
last Business Day of such month; and if any Interest Period would expire on a
day that is not a Business Day, the period shall expire on the next Business
Day; and

 

c.             no
Interest Period shall extend beyond the Revolver Termination Date.

 

3.1.4        Interest
Rate Not Ascertainable.  If Agent shall
determine that on any date for determining LIBOR, due to any circumstance
affecting the London interbank market, adequate and fair means do not exist for
ascertaining such rate on the basis provided herein, then Agent shall
immediately notify Borrower Agent of such determination.  Until Agent notifies Borrower Agent that such
circumstance no longer exists, the obligation of Lenders to make LIBOR Loans
shall be suspended, and no further Loans may be converted into or continued as
LIBOR Loans.

 

3.2           Fees.

 

3.2.1        Unused
Line Fee.  Borrowers shall pay to Agent,
for the Pro Rata benefit of Lenders, a fee accruing during each calendar
quarter when the average daily aggregate amount of Loans and LC Obligations
during the preceding calendar quarter or any portion thereof (a) is less
than 50% of the Commitments in such prior calendar quarter, at the rate of
0.625% per annum and (b) is equal to or in excess of 50% of the
Commitments in such prior calendar quarter, at a rate of 0.50% per annum, in
each case times the daily amount by which the Commitments in such calendar
quarter exceed the aggregate amount of Loans, amounts owing for any drawings
under Letters of Credit and stated amount of Letters of Credit during such
calendar quarter.   Such fee
shall be determined by Agent and be payable quarterly in arrears, on the first
day of each calendar quarter commencing on the first quarter to occur after the
Closing Date and on the Commitment Termination Date.

 

3.2.2        LC
Facility Fees.  Borrowers shall pay (a) to
Agent, for the Pro Rata benefit of Lenders, a fee equal to the Applicable
Margin in effect for LIBOR Loans times the average daily stated amount of
Letters of Credit, which fee shall be payable monthly in arrears, 

 

43

 

on the first
day of each month; (b) to Agent, for its own account, a fronting fee equal
to 0.125% per annum on the stated amount of each Letter of Credit, which fee
shall be payable quarterly in arrears, on the first day of each calendar
quarter commencing on the first quarter to occur after the Closing Date; and (c) to
Issuing Bank, for its own account, all customary charges associated with the
issuance, amending, negotiating, payment, processing, transfer and
administration of Letters of Credit, which charges shall be paid as and when
incurred.  During an Event of Default,
the fee payable under clause (a) shall be increased by 2% per annum.

 

3.2.3        Agent
Fees.  In consideration of Agent’s and
Lead Arrangers’ syndication of the Commitments and Agent’s service hereunder,
Borrowers shall pay to Agent and Lead Arrangers, respectively, for their own
account, the fees described in the Fee Letter.

 

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

 

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

 

44

 

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

 

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

 

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

 

3.7           Increased Costs;
Capital Adequacy.

 

3.7.1                       Change
in Law.  If any Change in Law shall:

 

a.                                       impose modify or deem applicable any
reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, any Lender (except any reserve requirement
reflected in LIBOR) or Issuing Bank;

 

45

 

b.             subject
any Lender or Issuing Bank to any Tax with respect to any Loan, Loan Document,
Letter of Credit or participation in LC Obligations, or change the basis of
taxation of payments to such Lender or Issuing Bank in respect thereof (except
in each case for Indemnified Taxes or Other Taxes covered by Section 5.8 and the imposition of, or
any change in the rate of, any Excluded Tax payable by such Lender or Issuing
Bank); or

 

c.             impose
on any Lender or Issuing Bank or the London interbank market any other
condition, cost or expense affecting any Loan, Loan Document, Letter of Credit
or participation in LC Obligations;

 

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

 

3.7.2        Capital
Adequacy.  If any Lender or Issuing Bank
determines that any Change in Law affecting such Lender or Issuing Bank or any
Lending Office of such Lender or such Lender’s or Issuing Bank’s holding
company, if any, regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender’s, Issuing Bank’s or holding company’s
capital as a consequence of this Agreement, or such Lender’s or Issuing Bank’s
Commitments, Loans, Letters of Credit or participations in LC Obligations, to a
level below that which such Lender, Issuing Bank or holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s,
Issuing Bank’s and holding company’s policies with respect to capital
adequacy), then from time to time upon the request of such Lender or Issuing
Bank (which request shall be accompanied by a certificate of such Lender or
Issuing Bank setting forth in reasonable detail the amount or amounts necessary
to compensate such Lender or Issuing Bank and the basis therefor), Borrowers
will pay to such Lender or Issuing Bank, as the case may be, such additional
amount or amounts as will compensate it or its holding company for any such
reduction suffered.

 

3.7.3        Compensation.  Failure or delay on the part of any Lender or
Issuing Bank to demand compensation pursuant to this Section shall not
constitute a waiver of its right to demand such compensation, but Borrowers
shall not be required to compensate a Lender or Issuing Bank for any increased
costs incurred or reductions suffered more than nine months prior to the date
that the Lender or Issuing Bank notifies Borrower Agent of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or
Issuing Bank’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the nine-month period referred to above shall be extended to include the
period of retroactive effect thereof).

 

46

 

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

 

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

 

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

 

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

 

47

 

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

 

SECTION 4.         LOAN ADMINISTRATION

 

4.1           Manner of Borrowing
and Funding Loans.

 

4.1.1        Notice of Borrowing.

 

a.             Whenever
Borrowers desire funding of a Borrowing of Loans, Borrower Agent shall give
Agent a Notice of Borrowing.  Such notice
must be received by Agent no later than 11:00 a.m. (i) on the
Business Day of the requested funding date, in the case of Base Rate Loans, and
(ii) at least three Business Days prior to the requested funding date, in
the case of LIBOR Loans.  Notices
received after 11:00 a.m. shall be deemed received on the next Business
Day.  Each Notice of Borrowing shall be
irrevocable and shall specify (A) the amount of the Borrowing, (B) the
requested funding date (which must be a Business Day), (C) whether the
Borrowing is to be made as Base Rate Loans or LIBOR Loans, and (D) in the
case of LIBOR Loans, the duration of the applicable Interest Period (which
shall be deemed to be 30 days if not specified).  In addition, in the case of a Borrowing after
the Availability Election which would result in Availability being less than
$50,000,000, the Notice of Borrowing shall demonstrate that the Fixed Charge
Coverage Ratio would be not less than 1.00 : 1.00 after giving effect to such
Borrowing as of the end of the Fiscal Quarter immediately preceding such
funding for which financial information pursuant to Section 10.1.2(a) or (b) has been delivered to Agent.

 

b.             Unless
payment is otherwise timely made by Borrowers, the becoming due of any
Obligations (whether principal, interest, fees or other charges, including Extraordinary Expenses, LC
Obligations, Cash Collateral and Bank Product Debt) shall be deemed to
be a request for Base Rate Loans on the due date, in the amount of such
Obligations.  The proceeds of such Loans
shall be disbursed as direct payment of the relevant Obligation.  In 

 

48

 

addition,
Agent may, at its option, charge such Obligations against any operating,
investment or other account of a Borrower maintained with Agent or any of its
Affiliates.

 

c.             If
Borrowers establish a controlled disbursement account with Agent or any
Affiliate of Agent, then the presentation for payment of any check or other
item of payment drawn on such account at a time when there are insufficient
funds to cover it shall be deemed to be a request for Base Rate Loans on the
date of such presentation, in the amount of the check and items presented for
payment.  The proceeds of such Loans may
be disbursed directly to the controlled disbursement account or other
appropriate account.

 

4.1.2        Fundings
by Lenders.  Each Lender shall timely
honor its Commitment by funding its Pro Rata share of each Borrowing of Loans
that is properly requested hereunder. 
Except for Borrowings to be made as Swingline Loans, Agent shall
endeavor to notify Lenders of each Notice of Borrowing (or deemed request for a
Borrowing) by 12:00 noon on the proposed funding date for Base Rate Loans or by
3:00 p.m. at least two
Business Days before any proposed funding of LIBOR Loans.  Each Lender shall fund to Agent such Lender’s
Pro Rata share of the Borrowing to the account specified by Agent in
immediately available funds not later than 2:00 p.m. on the requested
funding date, unless Agent’s notice is received after the times provided above,
in which event Lender shall fund its Pro Rata share by 11:00 a.m. on the
next Business Day.  Subject to its
receipt of such amounts from Lenders, Agent shall disburse the proceeds of the
Loans as directed by Borrower Agent. 
Unless Agent shall have received (in sufficient time to act) written
notice from a Lender that it does not intend to fund its Pro Rata share of a
Borrowing, Agent may, but shall not be obligated to, assume that such Lender
has deposited or promptly will deposit its share with Agent, and Agent may, but
shall not be obligated to, disburse a corresponding amount to Borrowers.  If a Lender’s share of any Borrowing or of
any settlement pursuant to Section 4.1.3(b) is
not received by Agent, then Borrowers agree to repay to Agent on demand the amount of such share,
together with interest thereon from the date disbursed until repaid, at the
rate applicable to the Borrowing.

 

4.1.3        Swingline Loans;
Settlement.

 

a.             Agent
may, but shall not be obligated to, advance Swingline Loans to Borrowers, up to
an aggregate outstanding principal amount equal to the greater of (i) $15,000,000
and (ii) 10% of the aggregate amount of the Commitments.  Each Swingline Loan shall constitute a Loan
for all purposes, except that payments thereon shall be made to Agent for its
own account or for the account of Lenders, as applicable.  The obligation of Borrowers to repay
Swingline Loans shall be evidenced by the records of Agent and need not be evidenced by any promissory note.

 

b.             To
facilitate administration of the Loans, Lenders and Agent agree (which
agreement is solely among them, and not for the benefit of or enforceable by
any Borrower) that settlement among them with respect to Swingline Loans and
other Loans may take place on a date determined from time to time by Agent,
which shall occur at least once each week. 
On each settlement date, settlement shall be made with each Lender in
accordance with the Settlement Report delivered by Agent to Lenders.  Between settlement dates, Agent may in its
discretion apply payments on Loans to Swingline Loans, regardless of any designation
by Borrower or any provision herein to the contrary.  Each Lender’s obligation to make settlements
with Agent is 

 

49

 

absolute and
unconditional, without offset, counterclaim or other defense, and whether or not the Commitments have
terminated, an Overadvance exists or the conditions in Section 6 are satisfied.  If, due to an Insolvency Proceeding with
respect to a Borrower or otherwise, any Swingline Loan may not be settled among
Lenders hereunder, then each Lender shall be deemed to have purchased from
Agent a Pro Rata participation in each unpaid Swingline Loan and shall transfer
the amount of such participation to Agent, in immediately available funds,
within one Business Day after Agent’s request therefor.  Agent acknowledges that it receives all Loan
proceeds, and interest and fees owing to Lenders hereunder, in its capacity as
Agent under this Agreement.

 

4.1.4        Notices.  Each Borrower authorizes Agent and Lenders to
extend, convert or continue Loans, effect selections of interest rates, and
transfer funds to or on behalf of Borrowers based on telephonic or e-mailed
instructions.  Borrowers shall confirm
each such request by prompt delivery to Agent of a Notice of Borrowing or
Notice of Conversion/Continuation, if applicable, but if it differs in any
material respect from the action taken by Agent or Lenders, the records of
Agent and Lenders shall govern.  Neither
Agent nor any Lender shall have any liability for any loss suffered by a
Borrower as a result of Agent or any Lender acting upon its understanding of
telephonic or e-mailed instructions from a person believed in good faith by
Agent or any Lender to be a person authorized to give such instructions on a
Borrower’s behalf.

 

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

 

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

 

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

 

50

 

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

 

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

 

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

 

SECTION 5.                            PAYMENTS

 

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

 

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

 

51

 

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

 

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

 

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

 

5.5           Post-Default
Allocation of Payments.

 

5.5.1                        Allocation.  Notwithstanding anything herein to the
contrary, during an Event of Default, monies to be applied to the Obligations,
whether arising from payments by Obligors, realization on Collateral, setoff or
otherwise, shall be allocated as follows:

 

a.             first, to all
costs and expenses, including Extraordinary Expenses, owing to Agent;

 

b.             second, to all
amounts owing to Agent on Swingline Loans;

 

c.             third, to all
amounts owing to Issuing Bank on LC Obligations;

 

d.             fourth, to all
Obligations constituting fees (excluding amounts relating to Bank Products);

 

e.             fifth, to all
Obligations constituting interest (excluding amounts relating to Bank Products);

 

f.              sixth, to
provide Cash Collateral for outstanding Letters of Credit;

 

g.             seventh, to
all other Obligations, other than Bank Product Debt;

 

52

 

h.             eighth, to any
Bank Product Debt that is subject in full to any reserve hereunder; and

 

i.              last, to any
other Bank Product Debt.

 

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

 

5.5.2                        Erroneous
Application.  Agent shall not be liable
for any application of amounts made by it in good faith and, if any such
application is subsequently determined to have been made in error, the sole
recourse of any Lender or other Person to which such amount should have been
made shall be to recover the amount from the Person that actually received it
(and, if such amount was received by any Lender, such Lender hereby agrees to
return it).

 

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

 

5.7           Loan
Account; Account Stated.

 

5.7.1                        Loan
Account.  Agent shall maintain in
accordance with its usual and customary practices an account or accounts (“Loan
Account”) evidencing the Debt of Borrowers resulting from each Loan or
issuance of a Letter of Credit from time to time.  Any failure of Agent to record anything in
the Loan Account, or any error in doing so, shall not limit or otherwise affect
the obligation of Borrowers to pay any amount owing hereunder.  Agent may maintain a single Loan Account in
the name of Borrower Agent, and each Borrower confirms that such arrangement
shall have no effect on the joint and several character of its liability for
the Obligations.

 

53

 

5.7.2        Entries
Binding.  Entries made in the Loan
Account shall constitute presumptive evidence of the information contained
therein.  If any information contained in
the Loan Account is provided to or inspected by any Person, then such
information shall be conclusive and binding on such Person for all purposes
absent manifest error, except to the extent such Person notifies Agent in
writing within 30 days after receipt or inspection that specific information is
subject to dispute.

 

5.7.3        Register.  Agent, acting solely for this purpose as an
agent of the Borrowers, also shall maintain a register for the recordation of
the names and addresses of the Lenders and the principal amounts of the Loans
owing to each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender for all purposes of this
Agreement, notwithstanding notice to the contrary.  The register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.

 

5.8           Taxes.

 

5.8.1        Payments
Free of Taxes.  All payments by Obligors
of Obligations shall be free and clear of and without reduction for any
Taxes.  If Applicable Law requires any
Obligor or Agent to withhold or deduct any Tax (including backup withholding or
withholding Tax), the withholding or deduction shall be based on information
provided pursuant to Section 5.9
and Agent shall pay the amount withheld or deducted to the relevant Government
Authority.  If the withholding or
deduction is made on account of Indemnified Taxes or Other Taxes, the sum
payable by Obligors shall be increased so that Agent, Lender or Issuing Bank,
as applicable, receives an amount equal to the sum it would have received if no
such withholding or deduction (including deductions applicable to additional
sums payable under this Section) had been made. 
Without limiting the foregoing, Obligors shall timely pay all Other
Taxes to the relevant Governmental Authorities.

 

5.8.2        Payment.  Obligors shall indemnify, hold harmless and
reimburse (within 10 days after demand therefor) Agent, Lenders and Issuing
Bank for any Indemnified Taxes or Other Taxes (including Indemnified Taxes and
Other Taxes attributable to amounts payable under this Section) withheld or
deducted by any Obligor or Agent, or paid by Agent, any Lender or Issuing Bank,
with respect to any Obligations, Letters of Credit or Loan Documents, whether
or not such Taxes were properly asserted by the relevant Governmental
Authority, and including all penalties, interest and reasonable expenses
relating thereto.  A certificate as to
the amount of any such payment or liability delivered to Borrower Agent by
Agent, or by a Lender or Issuing Bank (with a copy to Agent), shall be
conclusive absent manifest error.  As
soon as practicable after any payment of Taxes by an Obligor, Borrower Agent
shall deliver to Agent a receipt from the Governmental Authority or other evidence
of payment satisfactory to Agent.

 

5.9           Lender
Tax Information.

 

5.9.1        Status
of Lenders.  Each Lender shall deliver
documentation and information to Agent and Borrower Agent, at the times
reasonably requested by Agent or Borrower Agent, sufficient to permit Agent or
Obligors to determine (a) whether or not 

 

54

 

payments made with respect to Obligations are subject to Taxes, (b) if
applicable, the required rate of withholding or deduction, and (c) such
Lender’s entitlement to any available exemption from, or reduction of,
applicable Taxes for such payments or otherwise to establish such Lender’s
status for withholding tax purposes in the applicable jurisdiction.

 

5.9.2        Documentation.  If a Borrower is resident for tax purposes in
the United States, any Lender that is a “United States person” within the
meaning of section 7701(a)(30) of the Code shall deliver to Agent and
Borrower Agent IRS Form W-9 or such other documentation or information
prescribed by Applicable Law or reasonably requested by Agent or Borrower Agent
to determine whether such Lender is subject to backup withholding or
information reporting requirements.  If
any Foreign Lender is entitled to any exemption from or reduction of United
States withholding tax for payments with respect to the Obligations, it shall
deliver to Agent and Borrower Agent on or prior to the date on which it becomes
a Lender hereunder (and from time to time thereafter upon the request of Agent
or Borrower Agent, but only if such Foreign Lender is legally entitled to do
so), (a) IRS Form W-8BEN claiming eligibility for benefits of an
income tax treaty to which the United States is a party; (b) IRS Form W-8ECI;
(c) IRS Form W-8IMY and all required supporting documentation; (d) in
the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, IRS Form W-8BEN
and a certificate showing such Foreign Lender is not (i) a “bank” within
the meaning of section 881(c)(3)(A) of the Code, (ii) a “10
percent shareholder” of any Obligor within the meaning of
section 881(c)(3)(B) of the Code, or (iii) a “controlled foreign
corporation” described in section 881(c)(3)(C) of the Code; or (e) any
other form prescribed by Applicable Law as a basis for claiming exemption from
or a reduction in withholding tax, together with such supplementary
documentation necessary to allow Agent and Borrowers to determine the
withholding or deduction required to be made.

 

5.9.3        Lender
Obligations.  Each Lender and Issuing
Bank shall promptly notify Borrowers and Agent of any change in circumstances
that would change any claimed exemption or reduction.  Each Lender and Issuing Bank shall indemnify,
hold harmless and reimburse (within 10 days after demand therefor) Borrowers
and Agent for any Taxes, losses, claims, liabilities, penalties, interest and
expenses (including reasonable attorneys’ fees) incurred by or asserted against
a Borrower or Agent by any Governmental Authority due to such Lender’s or
Issuing Bank’s failure to deliver, or inaccuracy or deficiency in, any
documentation required to be delivered by it pursuant to this Section.  Each Lender and Issuing Bank authorizes Agent
to set off any amounts due to Agent under this Section against any amounts
payable to such Lender or Issuing Bank under any Loan Document.

 

5.9.4        If
a Lender determines, in its sole discretion, that it has received a refund of
any Indemnified Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to Section 5.8, such Lender shall pay over such refund to the
Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section 5.8 with respect to the
Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of such Lender and without interest (other than any interest paid by
the relevant governmental authority with respect to such refund), provided that
the Borrower, upon the request of such Lender, agrees to repay the amount paid
over to the Borrower (plus any penalties, interest or other charges imposed by
the relevant governmental authority) to such Lender in the event such Lender is

 

55

 

required to repay such refund to such governmental authority.  This Section 5.9.4 shall not be
construed to require any Lender to make available its tax returns (or any other
information relating to its Taxes that it deems confidential) to the Borrower
or any other person.

 

5.10         Nature
and Extent of Each Borrower’s Liability.

 

5.10.1                  Joint
and Several Liability.  Each Borrower
agrees that it is jointly and severally liable for, and absolutely and
unconditionally guarantees to Agent and Lenders the prompt payment and
performance of, all Obligations and all agreements under the Loan
Documents.  Each Borrower agrees that its
guaranty obligations hereunder constitute a continuing guaranty of payment and
not of collection, that such obligations shall not be discharged until Full
Payment of the Obligations, and that such obligations are absolute and
unconditional, irrespective of (a) the genuineness, validity, regularity,
enforceability, subordination or any future modification of, or change in, any
Obligations or Loan Document, or any other document, instrument or agreement to
which any Obligor is or may become a party or be bound; (b) the absence of
any action to enforce this Agreement (including this Section) or any other Loan
Document, or any waiver, consent or indulgence of any kind by Agent or any
Lender with respect thereto; (c) the existence, value or condition of, or
failure to perfect a Lien or to preserve rights against, any security or
guaranty for the Obligations or any action, or the absence of any action, by
Agent or any Lender in respect thereof (including the release of any security
or guaranty); (d) the insolvency of any Obligor; (e) any election by
Agent or any Lender in an Insolvency Proceeding for the application of Section 1111(b)(2) of
the Bankruptcy Code; (f) any borrowing or grant of a Lien by any other
Borrower, as debtor-in-possession under Section 364 of the Bankruptcy Code
or otherwise; (g) the disallowance of any claims of Agent or any Lender
against any Obligor for the repayment of any Obligations under Section 502
of the Bankruptcy Code or otherwise; or (h) any other action or
circumstances that might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor, except Full Payment of all Obligations.

 

5.10.2                  Waivers.

 

a.               Each Borrower
expressly waives, to the extent permitted by law, all rights that it may have
now or in the future under any statute, at common law, in equity or otherwise,
to compel Agent or Lenders to marshal assets or to proceed against any Obligor,
other Person or security for the payment or performance of any Obligations
before, or as a condition to, proceeding against such Borrower.  Each Borrower waives, to the extent permitted
by law, all defenses available to a surety, guarantor or accommodation
co-obligor other than Full Payment of all Obligations.  It is agreed among each Borrower, Agent and
Lenders that the provisions of this Section 5.10
are of the essence of the transaction contemplated by the Loan Documents and
that, but for such provisions, Agent and Lenders would decline to make Loans
and issue Letters of Credit.  Each
Borrower acknowledges that its guaranty pursuant to this Section is
necessary to the conduct and promotion of its business, and can be expected to
benefit such business.

 

b.               Agent and Lenders
may, in their discretion, pursue such rights and remedies as they deem
appropriate, including realization upon Collateral, without affecting any
rights and remedies under this Section 5.10.  If, in taking any action in connection with
the exercise of any rights or remedies, Agent or any Lender shall forfeit any
other rights or remedies, 

 

56

 

including the right to enter a deficiency judgment against any Borrower
or other Person, whether because of any Applicable Laws pertaining to “election
of remedies” or otherwise, each Borrower consents to such action and waives, to
the extent permitted by law, any claim based upon it, even if the action may
result in loss of any rights of subrogation that any Borrower might otherwise
have had.  Any election of remedies that
results in denial or impairment of the right of Agent or any Lender to seek a
deficiency judgment against any Borrower shall not impair any other Borrower’s
obligation to pay the full amount of the Obligations.  Each Borrower waives, to the extent permitted
by law, all rights and defenses arising out of an election of remedies, such as
nonjudicial foreclosure with respect to any security for the Obligations, even
though that election of remedies destroys such Borrower’s rights of subrogation
against any other Person.  Agent may bid
all or a portion of the Obligations at any foreclosure or trustee’s sale or at
any private sale, and the amount of such bid need not be paid by Agent but
shall be credited against the Obligations. 
The amount of the successful bid at any such sale, whether Agent or any
other Person is the successful bidder, shall be conclusively deemed to be the
fair market value of the Collateral, and the difference between such bid amount
and the remaining balance of the Obligations shall be conclusively deemed to be
the amount of the Obligations guaranteed under this Section 5.10, notwithstanding that any present or future
law or court decision may have the effect of reducing the amount of any
deficiency claim to which Agent or any Lender might otherwise be entitled but
for such bidding at any such sale.

 

5.10.3                  Extent of
Liability; Contribution.

 

a.               Notwithstanding
anything herein to the contrary, each Borrower’s liability under this Section 5.10 shall be limited to the
greater of (i) all amounts for which such Borrower is primarily liable, as
described below, and (ii) such Borrower’s Allocable Amount.

 

b.               If any Borrower makes
a payment under this Section 5.10
of any Obligations (other than amounts for which such Borrower is primarily
liable) (a “Guarantor Payment”) that, taking into account all other
Guarantor Payments previously or concurrently made by any other Borrower,
exceeds the amount that such Borrower would otherwise have paid if each
Borrower had paid the aggregate Obligations satisfied by such Guarantor
Payments in the same proportion that such Borrower’s Allocable Amount bore to
the total Allocable Amounts of all Borrowers, then such Borrower shall be entitled
to receive contribution and indemnification payments from, and to be reimbursed
by, each other Borrower for the amount of such excess, pro rata based upon
their respective Allocable Amounts in effect immediately prior to such
Guarantor Payment.  The “Allocable
Amount” for any Borrower shall be the maximum amount that could then be
recovered from such Borrower under this Section 5.10
without rendering such payment voidable under Section 548 of the
Bankruptcy Code or under any applicable state fraudulent transfer or conveyance
act, or similar statute or common law.

 

c.               Nothing contained in
this Section 5.10 shall limit
the liability of any Borrower to pay Loans made directly or indirectly to that
Borrower (including Loans advanced to any other Borrower and then re-loaned or
otherwise transferred to, or for the benefit of, such Borrower), LC Obligations
relating to Letters of Credit issued to support such Borrower’s business, and
all accrued interest, fees, expenses and other related Obligations with respect
thereto, for which such Borrower shall be primarily liable for all purposes
hereunder.  Agent and Lenders shall have
the right, at any time in their discretion, to condition Loans and Letters of 

 

57

 

Credit upon a separate calculation of borrowing availability for each
Borrower and to restrict the disbursement and use of such Loans and Letters of
Credit to such Borrower.

 

5.10.4                  Joint
Enterprise.  Each Borrower has requested that Agent
and Lenders make this credit facility available to Borrowers on a combined
basis, in order to finance Borrowers’ business most efficiently and
economically.  Borrowers’ business is a
mutual and collective enterprise, and Borrowers believe that consolidation of
their credit facility will enhance the borrowing power of each Borrower and
ease the administration of their relationship with Lenders, all to the mutual
advantage of Borrowers.  Borrowers
acknowledge and agree that Agent’s and Lenders’ willingness to extend credit to
Borrowers and to administer the Collateral on a combined basis, as set forth
herein, is done solely as an accommodation to Borrowers and at Borrowers’
request.

 

SECTION 6.                            CONDITIONS
PRECEDENT

 

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

 

a.              Notes shall have been
executed by Borrowers and delivered to each Lender that requests issuance of a
Note.  Each other Loan Document to be
entered into as of the Closing Date shall have been duly executed and delivered
to Agent by each of the signatories thereto, and each Obligor shall be in
compliance with all terms thereof.

 

b.              Agent shall have
received, except as otherwise provided in this Agreement, (i) acknowledgments
of all filings or recordations necessary to perfect its Liens in the Collateral,
as well as UCC and Lien searches and other evidence satisfactory to Agent that
such Liens are the only Liens upon the Collateral, except Permitted Liens and (ii) all
Lien Waivers requested by Agent.

 

c.              Reserved.

 

d.              Agent shall have
received certificates, in form and substance satisfactory to it, from a
knowledgeable Senior Officer of each Obligor certifying that, after giving
effect to the initial Loans and transactions hereunder, as of the Closing Date (i) such
Obligor is Solvent; (ii) no Default or Event of Default exists; (iii) the
representations and warranties set forth in Section 9
are true and correct; and (iv) such Obligor has complied with all
agreements and conditions to be satisfied by it under the Loan Documents as of
the Closing Date (unless waived by Agent).

 

e.              Agent shall have
received a certificate of a duly authorized officer of each Obligor, certifying
(i) that attached copies of such Obligor’s Organic Documents are true and
complete, and in full force and effect, without amendment except as shown; (ii) that
an attached copy of resolutions authorizing execution and delivery of the Loan
Documents is true and complete, and that such resolutions are in full force and
effect, were duly adopted, have not been amended, modified or revoked, and
constitute all resolutions adopted with respect to this credit facility; and (iii) to
the title, name and signature of each Person authorized to sign the Loan 

 

58

 

Documents.  Agent may conclusively
rely on this certificate until it is otherwise notified by the applicable
Obligor in writing.

 

f.              Agent
shall have received a written opinion of Wilson Sonsini Goodrich &
Rosati, P.C., as well as any local counsel to Obligors or Agent, in form and
substance reasonably satisfactory to Agent.

 

g.             Agent
shall have received copies of the charter documents of each Obligor, certified
by the Secretary of State or other appropriate official of such Obligor’s
jurisdiction of organization.  Agent
shall have received good standing certificates for each Obligor, issued by the
Secretary of State or other appropriate official of such Obligor’s jurisdiction
of organization.

 

h.             Agent
shall have received copies of policies or certificates of insurance for the
insurance policies carried by Obligors, all in compliance with the Loan
Documents.

 

i.              Agent
shall have completed its business, financial and legal due diligence of
Obligors, including (i) completion and a roll-forward of its previous
field examination, with results satisfactory to Agent; (ii) completion of
the inventory appraisal conducted by Emerald Technology Valuations with results
satisfactory to Agent; (iii) a satisfactory review of Sanmina’s contracts
with its customers; and (iv) a satisfactory review of the terms of Sanmina’s
ongoing legal entity rationalization program. 
Since September 29, 2007 there shall not have occurred any event or
circumstance that had or could be reasonably expected, either individually or
in the aggregate, to have a Material Adverse Effect.

 

j.              Obligors
shall have paid all fees and expenses (including the reasonable fees and
expenses of counsel (including any local counsel) for Agent) to be paid to
Agent, the Lead Arrangers and Lenders on the Closing Date.

 

k.             Agent and the Lenders shall have received
all documentation and other information required by regulatory authorities
under applicable Anti-Terrorism Laws and “know your customer” rules and
regulations.

 

l.              Reserved.

 

m.            There shall be no action, suit,
investigation or proceeding pending or, to the knowledge of the Borrowers,
threatened in writing in any court or before any arbitrator or Governmental
Authority that, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

 

n.             Agent, Syndication Agent and the Lead
Arrangers shall have received, in form and substance reasonably satisfactory to
them, (a) financial projections of the Borrowers and their subsidiaries
evidencing the ability of Sanmina and its Subsidiaries to comply with the financial
covenant set forth in Section 10.3
and (b) a summary of preliminary year-end results for the Fiscal Year
ended September 27, 2008.

 

o.             Agent
shall have received a “pay-off” letter in form and substance reasonably
satisfactory to Agent with respect to the repayment in full and the termination
of any 

 

59

 

commitment to make extensions of credit under that certain Amended and
Restated Credit and Guaranty Agreement dated December 16, 2005 among
Sanmina, certain guarantors party thereto, certain lenders and financial
institutions party thereto and Agent, as administrative agent (as amended,
restated, supplemented or otherwise modified).

 

p.             Agent
shall have received a Borrowing Base Certificate prepared as of October 25,
2008.  Upon giving effect to the initial
funding of Loans and issuance of Letters of Credit, and the payment by Borrowers of all fees and expenses
incurred in connection herewith, Availability shall be at least $75,000,000.

 

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

 

a.             No
Default or Event of Default shall exist at the time of, or result from, such
funding, issuance or grant;

 

b.             The
representations and warranties of each Obligor in the Loan Documents (i) that
are not qualified by “materiality” shall be true and correct in all material
respects on the date of, and upon giving effect to, such funding, issuance or
grant and (ii) that are qualified by “materiality” shall be true and
correct on and as of such date, except, in each case, to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct in all material respects (except if
qualified by “materiality”, shall be true and correct) as of such earlier date;

 

c.             All
conditions precedent in any other Loan Document shall be satisfied;

 

d.             The
aggregate principal amount of all Loans and the aggregate undrawn amount of all
Letters of Credit outstanding, after giving effect to the applicable Borrowing
or issuance or renewal of a Letter of Credit, shall not exceed the Borrowing
Base on such date; and

 

e.             With
respect to issuance of a Letter of Credit, the LC Conditions shall be
satisfied.

 

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

 

SECTION 7.                            COLLATERAL

 

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

 

60

 

a.               all Accounts and all
Supporting Obligations, Chattel Paper, Documents and Instruments in respect
thereof or relating thereto;

 

b.              all Deposit Accounts
(except accounts used for collections for transactions permitted by Section 10.2.5(e) or Section 10.2.5(f));

 

c.              all Inventory;

 

d.              the Pledged
Securities;

 

e.              all notes from a
Canadian Obligor referred to in Section 10.2.1(i);

 

f.               all monies, whether or
not in the possession or under the control of Agent, a Lender, or a bailee or
Affiliate of Agent or a Lender,
including any Cash Collateral;

 

g.              all accessions to,
substitutions for, and all replacements, products, and cash and non-cash
Proceeds of the foregoing, including Proceeds of and unearned premiums with
respect to insurance policies, and claims against any Person for loss, damage
or destruction of any Collateral; and

 

h.              all books and records
(including customer lists, files, correspondence, tapes, computer programs,
print-outs and computer records) pertaining to the foregoing.

 

7.2           Lien
on Deposit Accounts; Cash Collateral.

 

7.2.1                        Deposit
Accounts.  To further secure the prompt
payment and performance of all Obligations, each Obligor hereby grants to
Agent, for the benefit of Secured Parties, a continuing security interest in
and Lien upon all amounts credited to any Deposit Account of such Obligor,
including any sums in any blocked or lockbox accounts or in any accounts into
which such sums are swept.  Each Obligor
hereby authorizes and directs each bank or other depository to deliver to Agent,
upon request, all balances in any Deposit Account maintained by such Obligor,
without inquiry into the authority or right of Agent to make such request.  Agent may make any such request during a
Trigger Period.

 

7.2.2                        Cash Collateral.  Any Cash Collateral may be invested, at Agent’s
discretion, in Cash Equivalents, but Agent shall have no duty to do so,
regardless of any agreement or course of dealing with any Obligor, and shall
have no responsibility for any investment or loss other than for a loss from an
investment in other than Cash Equivalents. 
Each Obligor hereby grants to Agent, for the benefit of Secured Parties,
a security interest in all Cash Collateral held from time to time and all
proceeds thereof, as security for the Obligations, whether such Cash Collateral
is held in a Cash Collateral Account or elsewhere.  Agent may apply Cash Collateral to the
payment of any Obligations, in such order as Agent may elect, as they become
due and payable.  Each Cash Collateral
Account and all Cash Collateral shall be under the sole dominion and control of
Agent.  No Obligor or other Person
claiming through or on behalf of any Obligor shall have any right to any Cash
Collateral, until Full Payment of all Obligations or until such time as such
Obligations are no longer required to be Cash-Collateralized, as determined by
Agent in accordance with the terms hereof.

 

61

 

7.3           Other
Collateral.

 

7.3.1        Certain
After-Acquired Collateral.  Subject to Section 10.4.1, Borrowers shall
promptly notify Agent in writing if, after the Closing Date, any Obligor
obtains any interest in any Collateral consisting of Deposit Accounts or the
treasurer or assistant treasurer of Borrower Agent becomes aware of Collateral
with a value in excess of $5,000,000 consisting of Chattel Paper, Documents or
Instruments, and, upon Agent’s request, shall promptly take such actions as
Agent deems appropriate to effect Agent’s duly perfected, first priority Lien
(subject to Permitted Liens referred to in Section
10.2.2(a), (c), (d), (f),
(g), (i), (u), (v)) upon such Collateral, including
obtaining any appropriate possession, control agreement or Lien Waiver.  If any Collateral is in the possession of a
third party (other than Inventory in-transit), at Agent’s request, Obligors
shall obtain an acknowledgment that such third party holds the Collateral for
the benefit of Agent.

 

7.3.2        Pledged
Securities.  Each Obligor hereby consents
to the grant by each other Obligor of a security interest in and Lien upon all
Pledged Securities of such Obligor to Agent and, without limiting the
foregoing, consents to the transfer of any Pledged Securities to Agent or its
nominee while an Event of Default exists and to the substitution of Agent or
its nominee as a partner in any partnership or member in any limited liability
company with all the rights and powers related thereto

 

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

 

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

 

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

 

62

 

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

 

SECTION 8.                            COLLATERAL
ADMINISTRATION

 

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

 

8.2           Administration
of Accounts.

 

8.2.1        Records
and Schedules of Accounts.  Each Obligor
shall keep accurate and complete records of its Accounts, including all
payments and collections thereon, and shall 

 

63

 

submit to Agent sales, collection, reconciliation and other reports in
form reasonably satisfactory to Agent, on such periodic basis as Agent may
reasonably request (but in no more than monthly unless an Event of Default
exists).  Each Obligor shall also provide
to Agent, on or before the 18th day of each month, a detailed aged
trial balance of all of its Accounts as of the end of the preceding month,
specifying each Account’s Account Debtor name, address and amount.  If Borrower Agent becomes aware that any of
the forty largest Account Debtors (or any Controlling Affiliate of such Account
Debtor) obligated under any Eligible Account (as determined by reference to the most recent
Borrowing Base Certificate delivered pursuant to Section 8.1) commences an Insolvency Proceeding
(or the controlling Affiliate thereof in the case of an Account Debtor that is
a subsidiary), Borrower Agent shall notify Agent of such occurrence promptly
(and in any event within two Business Days) after Borrower Agent has knowledge
thereof.

 

8.2.2        Taxes.  If an Account of any Obligor includes a
charge for any Taxes, Agent is authorized, in its discretion, to pay the amount
thereof to the proper taxing authority for the account of such Obligor and to
charge Obligors therefor; provided, however, that neither Agent nor Lenders shall
be liable for any Taxes that may be due from Obligors or with respect to any
Collateral.

 

8.2.3        Account
Verification.  During any Trigger Period,
Agent shall have the right at any time, in the name of Agent, any designee of
Agent or any Obligor, to verify the validity, amount or any other matter
relating to any Accounts of Obligors by mail, telephone or otherwise.  Obligors shall cooperate fully with Agent in
an effort to facilitate and promptly conclude any such verification process.  Agent shall endeavor to give Borrower Agent
prior notice of Agent’s intention to conduct such verifications by telephone;
provided that the failure by Agent to give such notice shall not limit the
right of Agent to conduct such verifications.

 

8.2.4        Maintenance
of Dominion Account.  Each Borrower
hereby agrees that during any Trigger Period each Lockbox Cash Collateral
Account and each Proceeds Cash Collateral Account shall automatically be deemed
a Dominion Account.  Neither Agent nor
Lenders assume any responsibility to Obligors for any lockbox arrangement or
Dominion Account, including any claim of accord and satisfaction or release
with respect to any Payment Items accepted by any bank.

 

8.2.5        Proceeds
of Collateral.  Obligors shall request in
writing and otherwise take all necessary steps to ensure that all payments on
Accounts constituting Collateral or otherwise relating to Collateral are made
directly to a Lockbox Cash Collateral Account or a Proceeds Cash Collateral
Account.  If any Obligor or Subsidiary
receives cash or Payment Items with respect to any Collateral, it shall hold
same in trust for Agent and promptly (not later than the next Business Day)
deposit same into a Cash Collateral Account (except that during a Trigger
Period all such cash and Payment Items shall be held in trust and promptly
deposited in a Dominion Account).

 

8.3           Administration
of Inventory.

 

8.3.1        Records
and Reports of Inventory.  Each Obligor
shall keep accurate and complete records of its Inventory and shall submit to
Agent inventory and reconciliation reports

 

64

 

in form reasonably satisfactory to Agent, on such periodic basis as
Agent may reasonably request (but no more than monthly unless an Event of
Default exists).  Each Obligor shall
conduct a physical inventory at least once per calendar year (and on a more
frequent basis if requested by Agent when an Event of Default exists) and
periodic cycle counts consistent with historical practices, and shall provide
to Agent upon request a report based on each such inventory and count promptly
upon completion thereof, together with such supporting information as Agent may
reasonably request.  Upon reasonable
prior notice, Agent may observe each physical count.

 

8.3.2        Returns
of Inventory.  No Obligor shall return
any Inventory to a supplier, vendor or other Person, whether for cash, credit
or otherwise, unless (a) such return is in the Ordinary Course of Business
consistent with past practices; (b) no
Default, Event of Default or Overadvance exists or would result therefrom; and (c) any
payment received by an Obligor for a return is (i) promptly remitted to
Agent for application to the Loans, if any are outstanding, or (ii) if no
Loans are outstanding, promptly in a Cash Collateral Account (subject to Section 8.2.5).

 

8.3.3        Acquisition,
Sale and Maintenance.  No Obligor shall
acquire or accept any Inventory on consignment or approval, and shall take all
steps to assure that all Inventory is produced in accordance with the FLSA.  No Obligor shall sell any Inventory on
consignment or approval or any other basis under which the customer may return
or require an Obligor to repurchase such Inventory.  Obligors shall use, store and maintain all
Inventory with reasonable care and caution, in accordance in all material
respects with applicable standards of any insurance and in conformity in all
material respects with all Applicable Law, and shall make current rent payments
(within applicable grace periods provided for in leases and unless such rent
payment is being Properly Contested) at all locations where any Collateral is
located.

 

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

 

8.5           General
Provisions.

 

8.5.1        Location
of Collateral.  All tangible items of
Collateral, other than Inventory in transit, shall at all times be kept by
Obligors at the business locations set forth in Schedule 8.5.1 to the Disclosure Letter, except that
Obligors may (a) make sales or other dispositions of Collateral in
accordance with Section 10.2.5;
and (b) move Collateral to another location in the United States or
Canada.  Borrower Agent shall provide to
Agent at the end of 

 

65

 

each Fiscal Month or at such other time as requested by Agent a list of
any locations to which tangible items of Collateral having a book value in
excess of $5,000,000, with respect to Collateral located in the United States,
or $100,000, with respect to Collateral located in Canada,  have been moved to the extent such locations
are not listed on Schedule 8.5.1
to the Disclosure Letter or have not been previously notified to Agent pursuant
to this Section 8.5.1.

 

8.5.2                        Insurance
of Collateral; Condemnation Proceeds.

 

a.              Each Obligor shall
maintain insurance with respect to the Collateral, covering casualty, hazard,
theft, malicious mischief, flood and other risks, in amounts, with endorsements
and with insurers (with a Best Rating of at least A7, unless otherwise approved
by Agent) reasonably satisfactory to Agent (and Agent agrees that insurance in
effect on the Closing Date is satisfactory). 
All proceeds with respect to the Collateral under each policy shall be
payable to Agent to be applied as set forth in clause (b) below.  From time to time upon request, Obligors
shall deliver to Agent the originals or certified copies of its insurance
policies.  Unless Agent shall agree
otherwise, each policy shall include satisfactory endorsements (i) showing
Agent as additional insured or loss payee, as applicable; (ii) requiring
30 days prior written notice to Agent in the event of cancellation of the
policy for any reason whatsoever; and (iii) specifying that the interest
of Agent shall not be impaired or invalidated by any act or neglect of any
Obligor or the owner of the Property, nor by the occupation of the premises for
purposes more hazardous than are permitted by the policy.  If any Obligor fails to provide and pay for any
insurance, Agent may, at its option, but shall not be required to, procure the
insurance and charge Obligors therefor. 
Each Obligor agrees to deliver to Agent, promptly as rendered, copies of
all reports made to insurance companies for claims in excess of
$1,000,000.  While no Event of Default
exists, Obligors may settle, adjust or compromise any insurance claim, as long
as the proceeds are delivered to Agent as required hereunder.  If an Event of Default exists, only Agent
shall be authorized to settle, adjust and compromise such claims.

 

b.              Any proceeds of
insurance covering the Collateral and any awards arising from condemnation or
expropriation of any Collateral in each case exceeding $1,000,000 shall be paid
to Agent to be applied in accordance with the terms of Section 5.2.  Any such proceeds or awards that relate to
Inventory shall be applied to payment of the Loans, and then to any other
Obligations outstanding, and then any remaining balance deposited in a Cash
Collateral Account (subject to Section 8.2.5).

 

c.              Borrower Agent shall
promptly provide written notice to Agent in the event a loss, theft, damage or
destruction occurs with respect to any Collateral if the amount not covered by
insurance exceeds the Dollar Equivalent of $5,000,000.

 

8.5.3                        Protection
of Collateral.  All expenses of
protecting, storing, warehousing, insuring, handling, maintaining and shipping
any Collateral, all Taxes payable with respect to any Collateral (including any
sale thereof), and all other payments required to be made by Agent to any
Person to realize upon any Collateral, shall be borne and paid by
Borrowers.  Agent shall not be liable or
responsible in any way for the safekeeping of any Collateral (except for
reasonable care of Collateral in Agent’s actual possession), for any loss or
damage thereto (except for reasonable care in its custody while Collateral is
in Agent’s actual possession), for 

 

66

 

any diminution in the value thereof, or for any act or default of any
warehouseman, carrier, forwarding agency or other Person whatsoever, but the
same shall be at Obligors’ sole risk.

 

8.5.4                        Defense
of Title to Collateral.  Each Obligor
shall at all times defend its title to Collateral and Agent’s Liens therein
against all Persons, claims and demands whatsoever, except Permitted Liens.

 

8.5.5                        Proceeds
of Collateral.  Each Obligor shall at all
times maintain in Cash Collateral Accounts all proceeds of Collateral and not
commingle such proceeds with proceeds of accounts collected under the
Receivables Purchase Facility or any other factoring or securitization
arrangement except during any “ramp-up” period with respect to the Receivables
Purchase Facility or any other factoring or securitization arrangement if and
only if Agent, the relevant Borrowers and the agent under such facility or
arrangement have entered into an agreement in respect of any commingled
proceeds substantially in the form of Exhibit E.

 

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

 

a.              Endorse an Obligor’s
name on any Payment Item or other proceeds of Collateral (including proceeds of
insurance) that come into Agent’s possession or control; and

 

b.              During an Event of
Default, (i) notify any Account Debtors of the assignment of their
Accounts, demand and enforce payment of Accounts by legal proceedings or
otherwise, and generally exercise any rights and remedies with respect to
Accounts; (ii) settle, adjust, modify, compromise, discharge or release
any Accounts or other Collateral, or any legal proceedings brought to collect
Accounts or Collateral; (iii) sell or assign any Accounts and other
Collateral upon such terms, for such amounts and at such times as Agent deems
advisable; (iv) collect, liquidate and receive balances in Deposit
Accounts or investment accounts, and take control, in any manner, of proceeds
of Collateral; (v) prepare, file and sign an Obligor’s name to a proof of
claim or other document in a bankruptcy of an Account Debtor, or to any notice,
assignment or satisfaction of Lien or similar document; (vi) receive, open
and dispose of mail addressed to an Obligor, and notify postal authorities to
deliver any such mail to an address designated by Agent; (vii) endorse any
Chattel Paper, Document, Instrument, bill of lading, or other document or
agreement relating to any Accounts, Inventory or other Collateral; (viii) use
an Obligor’s stationery and sign its name to verifications of Accounts and
notices to Account Debtors; (ix) use information contained in any data
processing, electronic or information systems relating to Collateral; (x) make
and adjust claims under insurance policies; (xi) take any action as may be
necessary or appropriate to obtain payment under any letter of credit, banker’s
acceptance or other instrument for which an Obligor is a beneficiary; and
(xii) take all other actions as Agent deems appropriate to fulfill any
Obligor’s obligations under the Loan Documents.

 

67

 

SECTION 9.                            REPRESENTATIONS
AND WARRANTIES

 

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

 

9.1.1        Organization
and Qualification.  Each Borrower and
Subsidiary is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization. 
Each Borrower and Subsidiary is duly qualified, authorized to do
business and in good standing as a foreign corporation, company or other
entity, as applicable, in each jurisdiction where failure to be so qualified
could reasonably be expected to have a Material Adverse Effect.

 

9.1.2        Power
and Authority.  Each Obligor is duly authorized
to execute, deliver and perform the Loan Documents to which it is a party.  The execution, delivery and performance of
the Loan Documents to which it is a party have been duly authorized by all
necessary action on the part of each Obligor, and do not (a) require any
consent or approval of any holders of Equity Interests of any Obligor, other
than those already obtained; (b) contravene the Organic Documents of any
Obligor; (c) violate or cause a default under any Applicable Law or
Material Contract; or (d) result in or require the imposition of any Lien
(other than Permitted Liens) on any Property of any Obligor.

 

9.1.3        Enforceability.  Each Loan Document is a legal, valid and
binding obligation of each Obligor party thereto, enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).

 

9.1.4        Capital
Structure.  Schedule 9.1.4 to the Disclosure Letter shows as of the
Closing Date, for each Borrower and Subsidiary, its name, its jurisdiction of
organization, its issued Equity Interests, the holders of its Equity Interests
(excluding Sanmina), and all agreements binding on such holders with respect to
their Equity Interests.  Each Borrower
has good title to its Equity Interests in its direct Subsidiaries, subject only
to Agent’s Lien, and all such Equity Interests are duly issued, fully paid and non-assessable
(to the extent applicable).  There are no
outstanding purchase options, warrants, subscription rights, agreements to
issue or sell, convertible interests, phantom rights or powers of attorney
(other than those granted under any Loan Document or pursuant to any agreement,
document or instrument related to Debt permitted under Section 10.2.1) relating to Equity
Interests of any Borrower (other than Sanmina) or Subsidiary.

 

9.1.5        Title
to Properties; Priority of Liens.  Each
Borrower and Subsidiary has good and marketable title to (or valid leasehold
interests in) all of its Real Estate, and good title to all of its personal
Property, including all Property reflected in any financial statements
delivered to Agent or Lenders, in each case free of Liens except Permitted
Liens.  Each Borrower and Subsidiary has
paid and discharged all lawful claims that, if unpaid, could become a Lien on
its Properties, other than Permitted Liens. 
All Liens of Agent in the Collateral are duly perfected (except to the
extent that perfection with respect to such Collateral is not required under
any 

 

68

 

Loan Document), first priority Liens, subject only to Permitted Liens
that are expressly allowed to have priority over Agent’s Liens.

 

9.1.6                        Accounts.  Agent may rely, in determining which Accounts
are Eligible Accounts, on all statements and representations made by Obligors
with respect thereto.  Obligors warrant,
with respect to each Account at the time it is shown as an Eligible Account in
a Borrowing Base Certificate, that:

 

a.              it is genuine and in
all respects what it purports to be, and is not evidenced by a judgment;

 

b.              it arises out of a
completed, bona fide sale and delivery of goods in
the Ordinary Course of Business consistent
with past practices, and substantially in accordance with any purchase
order, contract or other document relating thereto;

 

c.              it is for a sum
certain, maturing as stated in the invoice covering such sale, a copy of which
has been furnished or is available to Agent on request;

 

d.              it is not subject to
any offset, Lien (other than Agent’s Lien or Permitted Liens referred to in Section 10.2.2(a), (c), (d),
(g) and Section 10.2.1(s)),
deduction, defense, dispute, counterclaim or other adverse condition except as
arising in the Ordinary Course of Business and disclosed to Agent or as
contemplated by clause (f) below; and it is absolutely owing by the
Account Debtor, without contingency in any respect;

 

e.              no purchase order,
agreement, document or Applicable Law restricts grants of security interests in
such Account to Agent (unless under Applicable Law the restriction is
ineffective), and the applicable Borrower is the sole payee or remittance party
shown on the invoice;

 

f.               no extension, compromise,
settlement, modification, credit, deduction or return has been authorized with
respect to the Account, except discounts or allowances granted in the Ordinary
Course of Business consistent with past
practices for prompt payment that are reflected on the face of the
invoice related thereto and in the reports submitted to Agent hereunder; and

 

g.              to the best of
Obligors’ knowledge, (i) there are no facts or circumstances that are
reasonably likely to impair the enforceability or collectibility of such
Account; (ii) the Account Debtor had the capacity to contract when the
Account arose, continues to meet the applicable Obligor’s customary credit
standards, is Solvent, is not contemplating or subject to an Insolvency
Proceeding, and has not failed, or suspended or ceased doing business; and (iii) there
are no proceedings or actions threatened in writing or pending against any
Account Debtor that could reasonably be expected to have a material adverse
effect on the Account Debtor’s financial condition.

 

9.1.7                        Financial
Statements.  The consolidated balance
sheets, and related statements of income, cash flow and shareholder’s equity,
of Sanmina and its Subsidiaries that have been and are hereafter delivered to
Agent and Lenders, are prepared in accordance with GAAP (subject to changes
from audit and year end adjustments and the absence of footnotes in 

 

69

 

the case of unaudited financial statements and the absence of
amortization charges in the case of monthly financial statements delivered
pursuant to Section 6.1), and
fairly present in all material respects the financial positions and results of
operations of Sanmina and its Subsidiaries at the dates and for the periods
indicated.  All projections delivered from
time to time by Borrowers to Agent and Lenders have been prepared in good
faith, based on reasonable assumptions in light of the circumstances at such
time (it being understood that projections are not to be viewed as facts and
that actual results during the period or periods covered by the projections may
differ from the projections and that such differences may be material).  Since September 29, 2007, there has been
no change in the condition, financial or otherwise, of Sanmina and its
Subsidiaries, taken as a whole, that could reasonably be expected to have a
Material Adverse Effect.  Each Obligor is
Solvent.

 

9.1.8        Surety
Obligations.  No Borrower or Subsidiary
is obligated as surety or indemnitor under any bond or other contract that
assures payment or performance of any obligation of any Person, except as
permitted hereunder.

 

9.1.9        Taxes.  Each Borrower and Subsidiary has filed all
material federal, state, provincial, territorial, municipal, local and foreign
tax returns and other reports that it is required by law to file, and has paid
and remitted, or made provision for the payment and remittance of, all its
material Taxes that are due and payable, except to the extent being Properly
Contested; provided that for the purposes of this Section 9.1.9, any such Taxes, tax
returns or other reports required to be filed, paid or remitted under
Applicable Law in Canada shall be deemed material.  The provision for Taxes on the books of each
Borrower and Subsidiary has been established in accordance with GAAP for all
years not closed by applicable statutes, and for its current Fiscal Year.

 

9.1.10      Brokers.  There are no brokerage commissions, finder’s
fees or investment banking fees payable in connection with any transactions
contemplated by the Loan Documents.

 

9.1.11      Intellectual
Property.  Each Borrower and Subsidiary
owns or has the lawful right to use all material Intellectual Property
necessary for the conduct of its business, without conflict in any material
respect with any Intellectual Property rights of others.  There is no pending or, to any Borrower’s
knowledge, threatened (in writing) Intellectual Property Claim with respect to
any Borrower, any Subsidiary or any of their Property (including any
Intellectual Property) which could reasonably be expected to have a Material
Adverse Effect.  Except as disclosed on Schedule 9.1.11 to the Disclosure
Letter, no Borrower or Subsidiary pays or owes any Royalty or other
compensation to any Person in excess of $1,500,000 annually with respect to any
License of Intellectual Property.

 

9.1.12      Governmental
Approvals.  Each Borrower and Subsidiary
has, is in compliance with, and is in good standing with respect to, all
material Governmental Approvals necessary to conduct its business and to own,
lease and operate its Properties.  All
necessary import, export or other licenses, permits or certificates for the
import or handling of any goods or other Collateral have been procured and are
in effect, and Borrowers and Subsidiaries have complied with all foreign and
domestic laws with respect to the shipment and importation of any goods or
Collateral, except where noncompliance could not reasonably be expected to have
a Material Adverse Effect.

 

70

 

9.1.13      Compliance with
Laws.  Each Borrower and Subsidiary has
duly complied, and its Properties and business operations are in compliance, in
all respects with all Applicable Law, except where noncompliance could not
reasonably be expected to have a Material Adverse Effect.  There have been no citations, notices or
orders of material noncompliance issued to any Borrower or Subsidiary under any
Applicable Law.  No Inventory has been
produced in violation of the FLSA.

 

9.1.14      Compliance with
Environmental Laws.  Except as disclosed
on Schedule 9.1.14 to the
Disclosure Letter, to the best of their knowledge no Borrower’s or Subsidiary’s
past or present operations, Real Estate or other Properties are subject to any
federal, state, provincial, territorial, local or foreign investigation to
determine whether any material remedial action is needed to address any
environmental pollution, hazardous material or environmental clean-up.  No Borrower or Subsidiary has received any
Environmental Notice in respect of any material properties of such Person.  No Borrower or Subsidiary has any material
contingent liability with respect to any Environmental Release, environmental
pollution or hazardous material on any Real Estate now or previously owned,
leased or operated by it.

 

9.1.15      Burdensome
Contracts.  No Borrower or Subsidiary is
a party or subject to any contract, agreement or charter restriction that could
reasonably be expected to have a Material Adverse Effect.  No Borrower or Subsidiary is party or subject
to any Restrictive Agreement, except as shown on Schedule 9.1.15 to the Disclosure Letter or as permitted
by Section 10.2.13.  No such Restrictive Agreement prohibits the
execution, delivery or performance of any Loan Document by an Obligor.

 

9.1.16      Litigation.  Except as shown on Schedule 9.1.16 to the Disclosure Letter, there are no
proceedings or investigations pending or, to any Borrower’s knowledge,
threatened in writing against any Borrower or Subsidiary, or any of their
businesses, operations or Properties, that (a) relate to any Loan
Documents or transactions contemplated thereby; or (b) could reasonably be
expected to have a Material Adverse Effect. 
No Borrower or Subsidiary is in default with respect to any order,
injunction or judgment of any Governmental Authority binding on it.

 

9.1.17      No Defaults.  No event or circumstance has occurred or
exists that constitutes a Default or Event of Default.  No Borrower or Subsidiary is in material
default, and no event or circumstance has occurred or exists that with the
passage of time or giving of notice would constitute a material default, under
any Material Contract.  To the best of
their knowledge, there is no basis upon which any party (other than a Borrower
or Subsidiary) could terminate a Material Contract prior to its scheduled
termination date.

 

9.1.18      ERISA.  Except as disclosed on Schedule 9.1.18 to the Disclosure
Letter:

 

a.             Each Plan is in
compliance in all material respects with the applicable provisions of ERISA,
the Code, and other federal and state laws. 
Each Plan that is intended to qualify under Section 401(a) of
the Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with
respect thereto and, to the knowledge of Borrowers, nothing has occurred which
would prevent, or cause the loss of, such qualification.  Each Obligor and ERISA Affiliate has made all
required

 

71

 

contributions
to each Plan subject to Section 412 of the Code, and no application for a
funding waiver or an extension of any amortization period pursuant to Section 412
of the Code has been made with respect to any Plan.

 

b.             There are no
pending or, to the knowledge of Borrowers, threatened (in writing) claims,
actions or lawsuits, or action by any Governmental Authority, with respect to
any Plan that could reasonably be expected to have a Material Adverse
Effect.  There has been no prohibited
transaction or violation of the fiduciary responsibility rules with
respect to any Plan that has resulted in or could reasonably be expected to
have a Material Adverse Effect.

 

c.             (i) No ERISA
Event has occurred or is reasonably expected to occur; (ii) no Pension
Plan has any Unfunded Pension Liability; (iii) no Obligor or ERISA
Affiliate has incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA); (iv) no Obligor or ERISA
Affiliate has incurred, or reasonably expects to incur, any liability (and no
event has occurred which, with the giving of notice under Section 4219 of
ERISA, would result in such liability) under Section 4201 or 4243 of ERISA
with respect to a Multiemployer Plan; and (v) no Obligor or ERISA
Affiliate has engaged in a transaction that could be subject to Section 4069
or 4212(c) of ERISA.

 

d.             With respect to any
Foreign Plan, (i) all employer and employee contributions required by law
or by the terms of the Foreign Plan have been made, or, if applicable, accrued,
in accordance with normal accounting practices; (ii) the fair market value
of the assets of each funded Foreign Plan, the liability of each insurer for
any Foreign Plan funded through insurance, or the book reserve established for
any Foreign Plan, together with any accrued contributions, is sufficient to
procure or provide for the accrued benefit obligations with respect to all
current and former participants in such Foreign Plan according to the actuarial
assumptions and valuations most recently used to account for such obligations
in accordance with applicable generally accepted accounting principles; and (iii) it
has been registered as required and has been maintained in good standing with
applicable regulatory authorities.

 

e.             (i) The
Canadian Subsidiaries have no Canadian Plan other than those listed on Schedule 9.1.18 to the Disclosure
Letter, and all monthly and other payments in respect of such Canadian Plans
which are pension plans (on account of contributions, special contributions or
unfunded liability or solvency deficiencies) or otherwise are accurately set
forth in Schedule 9.1.18 to
the Disclosure Letter.  No Canadian Plan
has been terminated or partially terminated or is insolvent or in reorganization,
nor have any proceedings been instituted to terminate, in whole or in part, or
reorganize any Canadian Plan.

 

(ii)           No Canadian Subsidiary has ceased to
participate (in whole or in part) as a participating employer in any Canadian
Plan which is a pension plan or has withdrawn from any Canadian Plan which is a
pension plan in a complete or partial withdrawal, nor has a condition occurred
which if continued would result in a complete or partial withdrawal.

 

(iii)          No Canadian Subsidiary has any
unfunded liability on windup or withdrawal liability, including contingent
withdrawal or windup liability, to any Canadian Plan or any solvency deficiency
in respect of any Canadian Plan.

 

72

 

(iv)          No Canadian Subsidiary has any
unfunded liability on windup or any liability in respect of any Canadian Plan
(including to the FSCO) other than for required insurance premiums or
contributions or remittances which have been paid, contributed and remitted
when due.

 

(v)           The Canadian Subsidiaries have made
all contributions to their Canadian Plans required by law or the terms thereof
to be made by them when due, and they are not in arrears in the payment of any
contribution, payment, remittance or assessment or in default in filing any
reports, returns, statements, and similar documents in respect of the Canadian
Plans required to be made or paid by them pursuant to any Canadian Plan, any
law, act, regulation, directive or order or any employment, union, pension,
deferred profit sharing, benefit, bonus or other similar agreement or
arrangement.

 

(vi)          No Canadian Subsidiary is liable or,
to the best of the Borrowers’ knowledge, alleged to be liable, to any employee
or former employee, director or former director, officer or former officer or
other Person resulting from any violation or alleged violation of any Canadian
Plan, any fiduciary duty, any law or agreement in relation to any Canadian Plan
or has any unfunded pension or like obligations or solvency deficiency
(including any past service or experience deficiency funding liabilities),
other than accrued obligations not yet due, for which it has made full
provision in its books and records.

 

(vii)         All vacation pay, bonuses, salaries and
wages, to the extent accruing due, are properly reflected in the Canadian
Subsidiaries’ books and records.

 

(viii)        Without limiting the foregoing, all of
the Canadian Subsidiaries’ Canadian Plans are duly registered where required
by, and are in compliance and good standing in all material respects under, all
applicable laws, acts, statutes, regulations, orders, directives and
agreements, including, without limitation, the Income Tax Act (Canada), the Supplemental Pension Plans Act (Québec)
and the Pension Benefits Act
(Ontario), any successor legislation thereto, and other Applicable Laws of any
jurisdiction.

 

(ix)           No Canadian Subsidiary has made any
application for a funding waiver or extension of any amortization period in
respect of any Canadian Plan.

 

(x)            There has been no prohibited
transaction or violation of any fiduciary responsibilities with respect to any
Canadian Plan.

 

(xi)           There are no outstanding or pending
or threatened (in writing) investigations, claims, suits or proceedings in
respect of any Canadian Plans (including to assert rights or claims to
benefits) that could give rise to a Material Adverse Effect.

 

9.1.19      Trade Relations.  There exists no actual or threatened (in
writing) termination, limitation or modification of any business relationship
between any Borrower or Subsidiary and any customer or supplier, or any group
of customers or suppliers, who individually or in the aggregate are material to
the business of such Borrower or Subsidiary. 
There exists no condition or circumstance that could reasonably be
expected to impair the ability of any Borrower or Subsidiary to conduct its
business at any time hereafter in substantially the same manner as conducted on
the Closing Date.

 

73

 

9.1.20      Labor Relations.  Except as described on Schedule 9.1.20 to the Disclosure
Letter, as of the Closing Date no Borrower or Subsidiary is party to or bound
by any collective bargaining agreement, management agreement or consulting
agreement.  Except as described on Schedule 9.1.20 to the Disclosure Letter,
there are no material grievances, disputes or controversies with any union or
other organization of any Borrower’s or Subsidiary’s employees, or, to any
Borrower’s knowledge, any asserted or threatened (in writing) strikes, work
stoppages or demands for collective bargaining.

 

9.1.21      Payable
Practices.  No Borrower or Subsidiary has
made any material change in its historical accounts payable practices from
those in effect on the Closing Date.

 

9.1.22      Not a Regulated
Entity.  No Obligor is (a) an “investment
company” or a “person directly or indirectly controlled by or acting on behalf
of an investment company” within the meaning of the Investment Company Act of
1940; or (b) subject to regulation under the Federal Power Act, the
Interstate Commerce Act, any public utilities code or any other Applicable Law
regarding its authority to incur Borrowed Money.

 

9.1.23      Margin Stock.  No Borrower or Subsidiary is engaged,
principally or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.  No Loan proceeds or Letters of Credit will be
used by Borrowers to purchase or carry, or to reduce or refinance any Debt
incurred to purchase or carry, any Margin Stock or for any related purpose governed
by Regulations T, U or X of the Board of Governors.

 

9.1.24      Insurance.  The insurance coverage of the Obligors as in
effect on the Closing Date complies with the requirements of Section 8.5.2 and is outlined as to
carrier, policy number, expiration date, type, amount and deductibles on Schedule 9.1.24 to the Disclosure
Letter.

 

9.1.25      Senior
Indebtedness.  The Obligations (to the
extent they fall within the definition of “Senior Debt” in the applicable
Senior Subordinated Indenture) are hereby designated as “Designated Senior Debt”
for purposes of and as defined in each Senior Subordinated Indenture.  Sanmina has taken all actions necessary for
the Obligations (to the extent they fall within the definition of “Senior Debt”
in the applicable Senior Subordinated Indenture) to constitute “Senior Debt”
and “Designated Senior Debt” for the purposes of and as defined in each Senior
Subordinated Indenture.

 

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

 

74

 

SECTION 10.                     COVENANTS AND
CONTINUING AGREEMENTS

 

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

 

10.1.1      Inspections; Appraisals.

 

a.             Permit Agent from
time to time, subject (except when a Default or Event of Default exists) to
reasonable notice and normal business hours, to visit and inspect the
Properties of any Borrower or Subsidiary for the purpose of conducting an
annual (or more frequently at Agent’s discretion) field audit (which field
audit shall include the right to inspect, audit and make extracts from any
Borrower’s or Subsidiary’s books and records, and discuss with its officers,
employees, agents, advisors and independent accountants such Borrower’s or
Subsidiary’s business, financial condition, assets, prospects and results of
operations).  Lenders may participate in
any such visit or inspection, at their own expense.  Neither Agent nor any Lender shall have any
duty to any Borrower to make any inspection, nor to share any results of any
inspection, appraisal or report with any Borrower.  Borrowers acknowledge that all inspections,
appraisals and reports are prepared by Agent and Lenders for their purposes,
and Borrowers shall not be entitled to rely upon them.  Notwithstanding anything to the contrary
herein, no Borrower or Subsidiary will be required to disclose, permit the
inspection, examination or making of extracts, or discussion of, any document,
information or other matter that (i) constitutes non-financial trade
secrets or non-financial proprietary information, (ii) in respect of which
disclosure to Agent (or its designated representative) is then prohibited by
Applicable Law or any agreement binding on such Borrower or any Subsidiary
which agreement was not entered into in contemplation of this Agreement and
does not apply to the Collateral or (iii) is subject to attorney-client or
similar privilege or constitutes attorney work product.

 

b.             Reimburse Agent for
all reasonable charges, costs and expenses of Agent in connection with (i) examinations
of any Obligor’s books and records or any other financial or Collateral matters
as Agent deems appropriate, up to three times per Loan Year; and (ii) appraisals of
Inventory up to three times per Loan
Year; provided, however, that if an examination or
appraisal is initiated during the existence of a Default or Event of Default,
all reasonable charges, costs and expenses therefor shall be reimbursed by
Borrowers without regard to such limits. 
Subject to and without limiting the foregoing, Borrowers specifically
agree to pay Agent’s then standard charges for each day that an employee of
Agent or its Affiliates is engaged in any examination activities, and shall pay
the standard charges of Agent’s internal appraisal group.  This Section shall not be construed to
limit Agent’s right to conduct examinations or to obtain appraisals at any time
in its discretion, nor to use third parties for such purposes.

 

10.1.2      Financial and Other
Information.  Keep adequate records and
books of account with respect to its business activities, in which proper
entries are made that are sufficient to prepare financial statements in
accordance with GAAP; and furnish to Agent and Lenders:

 

a.             as soon as
available, and in any event within 90 days after the end of each Fiscal Year, balance sheets as of
the end of such Fiscal Year and the related statements of income, cash flow and
stockholders’ equity for such Fiscal Year, on consolidated basis for Sanmina
and its Subsidiaries, which consolidated statements shall be audited and
certified

 

75

 

(without
qualification as to going concern or scope of audit and shall state that such
consolidated financial statements fairly present, in all material respects, the
consolidated financial position of Sanmina and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated in conformity with GAAP and that the audit by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards in the United
States) by a firm of independent certified public accountants of recognized
standing selected by Sanmina and reasonably acceptable to Agent (it being
understood that KPMG LLP is acceptable to Agent), and shall set forth in
comparative form corresponding figures for the preceding Fiscal Year;

 

b.             (i) as soon as
available, and in any event within 45 days after the end of each of the first
three Fiscal Quarters in any Fiscal Year, unaudited balance sheets as of the
end of such Fiscal Quarter and the related statements of income, cash flow and
stockholder’s equity for such Fiscal Quarter and for the portion of the Fiscal
Year then elapsed, on consolidated basis for Sanmina and its Subsidiaries,
setting forth in comparative form corresponding figures for the preceding
Fiscal Year and certified by the chief financial officer of Borrower Agent as
prepared in accordance with GAAP and fairly presenting in all material respects
the financial position and results of operations for Sanmina and its
Subsidiaries for such Fiscal Quarter and period, subject to normal year-end
adjustments and the absence of footnotes and (ii) as soon as available,
and in any event within 45 days after the end of each Fiscal Quarter in any
Fiscal Year, a written summary (by account debtor) of the accounts sold in such
Fiscal Quarter in connection with the Receivables Purchase Facility;

 

c.             concurrently with
delivery of financial statements under clauses (a) and (b) above,
or more frequently if requested by Agent while a Default or Event of Default
exists, a Compliance Certificate executed by the chief financial officer or
treasurer of Borrower Agent;

 

d.             concurrently with
delivery of financial statements under clause (a) above, copies of
all management letters and other material reports submitted to Borrowers by
their accountants in connection with such financial statements;

 

e.             not later than 30 days after
the end of each Fiscal Year, projections of Sanmina’s consolidated balance
sheets, results of operations, cash flow and Availability for the next Fiscal
Year, quarter by quarter;

 

f.              at Agent’s
request, a listing of each Obligor’s trade payables, specifying the trade
creditor and balance due, in form and substance reasonably satisfactory to
Agent;

 

g.             promptly after the
sending or filing thereof, copies of any proxy statements, financial statements
or reports that any Obligor has made generally available to its shareholders;
and copies of any regular, periodic and special reports or registration
statements or prospectuses that any Obligor files with the Securities and
Exchange Commission (it being understood that any Current Report on 8-K report
filed with the Securities and Exchange Commission shall be furnished to Agent
only) or any other Governmental Authority, or any securities exchange
(excluding listing applications and other routine reports filed with any
securities exchange);

 

76

 

h.             such other reports
and information (financial or otherwise) as Agent may request from time to time
in connection with any Collateral or any Borrower’s, Subsidiary’s or other
Obligor’s financial condition or business.

 

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

 

10.1.3      Notices.  Notify Agent (for distribution to the
Lenders) in writing, promptly after a Borrower’s obtaining knowledge thereof,
of any of the following that affects an Obligor:  (a) the non-frivolous threat in writing
or commencement of any proceeding or investigation, whether or not covered by
insurance, that if adversely determined could reasonably be expected to have a
Material Adverse Effect; (b) any pending or threatened labor dispute,
strike or walkout, or the expiration of any material labor contract, in each
case involving employees of an Obligor or any of its Subsidiaries; (c) any
default under or termination (other than at the end of its term in accordance
with such Material Contract) of a Material Contract; (d) the existence of
any Default or Event of Default; (e) any judgment in an amount exceeding
$10,000,000; (f) the assertion of any Intellectual Property Claim, if an
adverse resolution could reasonably be expected to have a Material Adverse
Effect; (g) any violation or asserted violation of any Applicable Law
(including ERISA, OSHA, FLSA, or any Environmental Laws), if an adverse
resolution could reasonably be expected to have a Material Adverse Effect; (h) the
occurrence of any ERISA Event in an amount exceeding $10,000,000 or similar
occurrence in respect of a Canadian Plan; or (i) the discharge of or any
withdrawal or resignation by Borrowers’ independent accountants.

 

10.1.4      Landlord and Storage
Agreements.  Upon request, provide Agent
with copies of all agreements from time to time in effect between an Obligor
and any landlord, warehouseman, processor, shipper, bailee or other Person that
owns any premises at which any Collateral may be kept or that otherwise may
possess or handle any Collateral.

 

10.1.5      Compliance with
Laws.  Comply with all Applicable Laws,
including ERISA, Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws, and laws
regarding collection, payment and remittance of Taxes, and maintain all
Governmental Approvals necessary to the ownership of its Properties or conduct
of its business, unless failure to comply (other than failure to comply with
applicable Anti-Terrorism Laws) or maintain could not reasonably be expected to
have a Material Adverse Effect.

 

10.1.6      Taxes.  Pay, remit and discharge all material Taxes
prior to the date on which they become delinquent or penalties attach, unless
such Taxes are being Properly Contested; provided that Taxes that are
determined to have been due as a result of a subsequent audit notwithstanding a
good faith determination by the Obligors that such Taxes were not

 

77

 

payable at the
time such Taxes are determined to have been due shall not be deemed to be
delinquent for purposes of this Section 10.1.6
so long as such Taxes are paid and discharged promptly following the auditor’s
determination that the Taxes were due, unless such determination is being
Properly Contested and, provided, further, that for the purposes
of this Section 10.1.6, all
Taxes required to be paid, remitted or discharged under Applicable Law in
Canada shall be deemed material.

 

10.1.7      Insurance.  In addition to the insurance required
hereunder with respect to Collateral, maintain insurance with insurers (with a Best Rating of at least
A7, unless otherwise approved by Agent, which approval shall not be
unreasonably withheld, delayed or conditioned) reasonably satisfactory to Agent,
(a) with respect to the Properties and business of Borrowers and
Subsidiaries of such type (including product liability, workers’ compensation,
larceny, embezzlement, or other criminal misappropriation insurance), in such
amounts, and with such coverages and deductibles as are customary for companies
similarly situated; and (b) business interruption insurance in such
amounts, and with such coverages and deductibles as are customary for companies
similarly situated.

 

10.1.8      Licenses.  Keep each material License affecting any
Collateral (including the manufacture, distribution or disposition of Inventory)
or any other material Property of Borrowers and Subsidiaries in full force and
effect; promptly notify Agent of any material modification to any such License,
or entry into any new material License; pay all Royalties when due except for
Royalties being properly contested; and notify Agent of any default or breach
asserted by any Person to have occurred under any material License.

 

10.1.9      Future Subsidiaries.

 

a.             Promptly notify
Agent upon any Person becoming a Subsidiary and, if such Person is a Domestic
Subsidiary (other than an Insignificant Subsidiary or a Person otherwise
excluded from the definition of Guarantor), cause it to guaranty the
Obligations in a manner satisfactory to Agent by executing and delivering the
Joinder Agreement attached hereto as Exhibit D
and such other documents, instruments and agreements reasonably requested by
Agent and to take such other actions as Agent shall require to evidence and
perfect a Lien in favor of Agent (for the benefit of Secured Parties) on all
Collateral of such Person, including delivery of such legal opinions, in
form and substance reasonably satisfactory to Agent, as it shall deem
appropriate.  At the Borrower Agent’s
request, any Subsidiary referred to herein can be designated a Borrower rather
than a Guarantor as provided in the Joinder Agreement.  No Property of any Subsidiary referred
to herein shall be permitted to be included in the Borrowing Base until Agent
has received and approved, in its Credit Judgment, (A) a collateral
examination or audit with respect to such Property, including an appraisal by
an independent appraisal firm reasonably acceptable to Agent, (B) all UCC,
PPSA or other search results necessary to confirm Agent’s first priority Lien
(subject to Liens permitted with respect to Eligible Accounts and Eligible
Inventory by the respective definition thereof) on all of such Property, and (C) such
customary certificates (including a solvency certificate), resolutions,
financial statements, legal opinions, and other documentation as Agent may
reasonably request (including as required by Sections 10.1.1
and 10.1.11).

 

78

 

b.             If, at any time and
from time to time after the Closing Date, any Subsidiary that is not an Obligor
because it is an Insignificant Subsidiary (i) ceases to be an
Insignificant Subsidiary as of the end of the most recently ended Fiscal
Quarter or (ii) is requested in writing by the Borrower Agent to be an
Obligor under the Loan Documents, such Subsidiary shall become an Obligor
pursuant to the terms hereof, and the Borrower Agent and the other Obligors
shall, not later than forty-five (45) days after the end of such Fiscal
Quarter, cause such Subsidiary to become an Obligor and to execute all
applicable documents in respect thereof as required by clause (a) above.

 

10.1.10    Existence.  Except as otherwise permitted hereunder, each
Obligor will, and will cause each of its Subsidiaries to, at all times preserve
and keep in full force and effect its existence and all rights and franchises,
licenses and permits material to its business; provided, no Obligor or any of
its Subsidiaries shall be required to preserve any such existence, right or
franchise, licenses and permits if the preservation thereof is no longer
desirable in the conduct of the business of such Person and that the loss
thereof is not disadvantageous in any material respect to such Person or to
Lenders.

 

10.1.11    Further
Assurances.  At any time or from time to
time upon the request of Agent, each Obligor will, at its expense, promptly
execute, acknowledge and deliver such further documents and do such other acts
and things as Agent may reasonably request in order to effect fully the
purposes of the Loan Documents.  In
furtherance and not in limitation of the foregoing, each Obligor shall take
such actions as Agent may reasonably request from time to time to ensure that
the Obligations are guarantied by the Guarantors and are secured by the
Collateral of the Borrowers and the Guarantors. 
Notwithstanding anything to the contrary contained herein, if an Event
of Default has occurred and is continuing, Agent shall have the right to
require any Obligor to execute and deliver documentation, consents,
authorizations, approvals and orders in form and substance reasonably satisfactory
to Agent and as Agent shall deem necessary to grant to Agent, for the benefit
of the Secured Parties, a valid and perfected first priority lien on any
Collateral not otherwise required hereunder, except to the extent such
requirements are prohibited by other agreements binding on such Obligor or
illegal under Applicable Law, and no reasonable alternative structure can be
devised having substantially the same effect as such actions that would not be
prohibited or illegal under Applicable Law.

 

10.1.12    Payment of
Obligations.  Pay and discharge as the
same shall become due and payable, all its material obligations and
liabilities, including all lawful material claims which, if unpaid, would by
law become a Lien upon its Property unless the same are being contested in good
faith by appropriate proceedings diligently conducted and adequate reserves to
the extent required in accordance with GAAP are being maintained by such
Borrower or such Subsidiary.

 

10.1.13    Maintenance of
Properties.  Borrower Agent shall and
shall cause each of its Subsidiaries to: 
(a) maintain, preserve and protect all of their respective material
Properties and Equipment necessary to the operation of their respective
businesses in good working order and condition, ordinary wear and tear
excepted; and (b) make all necessary repairs thereto and renewals and
replacements thereof; in each of the foregoing clauses (a) and (b),
except where the failure to do so could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

79

 

10.1.14    Canadian Plans.  The Borrowers shall cause each of its and
their Subsidiaries’ Canadian Plans to be duly qualified and administered in all
respects in compliance with, as applicable, the Supplemental
Pension Plans Act (Québec) and the Pension
Benefits Act (Ontario) and all other Applicable Laws (including
regulations, orders and directives), and the terms of the Canadian Plans and
any agreements relating thereto.  The Borrowers
shall ensure that it and its Canadian Subsidiaries:

 

a.                                       have
no unfunded, solvency, or deficiency on windup liability and no accumulated
funding deficiency (whether or not waived), or any amount of unfunded benefit
liabilities in respect of any Canadian Plan, including any Canadian Plan to be
established and administered by it or them;

 

b.                                      all
amounts required to be paid by it or them are paid when due;

 

c.                                       no
liability upon it or them or Lien on any of its or their Property arises or
exists in respect of any Canadian Plan;

 

d.                                      make
all required contributions to any Canadian Plan when due;

 

e.                                       not
engage in a prohibited transaction or violation of the fiduciary responsibility
rules with respect to any Canadian Plan that could reasonably be expected to
result in liability; and

 

f.                                         has
no Lien on any of its or their property that arises or exists in respect of any
Canadian Plan.

 

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

 

10.2.1                  Permitted
Debt.  Create, incur, guarantee or suffer
to exist any Borrowed Money, except:

 

a.                                       the
Obligations;

 

b.                                      Subordinated
Debt;

 

c.                                       Permitted
Purchase Money Debt;

 

d.                                      Borrowed
Money (other than the Obligations and Permitted Purchase Money Debt), but only
to the extent outstanding on the Closing Date, listed on Schedule 10.2.1 to the Disclosure
Letter (and other non-material Debt of Borrowers or any Subsidiary existing on
the Closing Date in an aggregate principal amount not to exceed $5,000,000) and
not satisfied with proceeds of the initial Loans;

 

e.                                       Hedging
Agreements entered into by an Obligor or Subsidiary;

 

80

 

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

 

g.             Permitted
Contingent Obligations;

 

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

 

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

 

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

 

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

 

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

 

81

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

82

 

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

 

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

 

a.             Liens in favor of Agent;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

83

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

84

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

85

 

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

 

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

 

10.2.3     Distributions; Upstream
Payments.

 

a.             Declare
or make any Distributions, other than:

 

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

 

ii.             Upstream
Payments;

 

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

 

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

 

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

 

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

 

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

 

86

 

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

 

10.2.4     Restricted Investments.  Make any Restricted Investment, except:

 

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

 

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

 

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

 

d.             Consolidated
Capital Expenditures;

 

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

 

f.              Intercompany
Debt permitted by Section 10.2.1;

 

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

 

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

 

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

 

j.              guaranty
and similar obligations permitted by Section 10.2.1;

 

87

 

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

 

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

 

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

 

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

 

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

 

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

 

q.             Permitted
Pool Transactions;

 

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

 

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

 

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

 

88

 

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

 

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

 

a.             a
Permitted Asset Disposition;

 

b.             Investments
made in accordance with Section 10.2.4;

 

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

 

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

 

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

 

89

 

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

 

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

 

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

 

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

 

i.              the
granting of Permitted Liens;

 

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

 

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

 

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

 

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

 

n.             Permitted
Pool Transactions;

 

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

 

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

 

90

 

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

 

10.2.6      Reserved.

 

10.2.7      Restrictions on
Payment of Certain Debt.  If the
Availability Conditions are not satisfied at the time thereof, make any
payments (whether voluntary or mandatory, or a prepayment, redemption,
retirement, defeasance or acquisition) with respect to any (a) Subordinated
Debt, except regularly scheduled payments of principal, interest and fees and
payments upon mandatory redemption or prepayment, but only to the extent
permitted under any subordination agreement relating to such Debt (and a Senior
Officer of Borrower Agent shall certify to Agent, not less than five Business Days
prior to the date of payment, that all conditions under such agreement have
been satisfied); or (b) Borrowed Money (other than the Obligations) prior
to its due date (except scheduled payments of principal, interest and fees and
payments upon mandatory redemption or prepayment) under the agreements
evidencing such Debt as in effect on the Closing Date (or as amended thereafter
with the consent of Agent); provided that, Borrowers and their Subsidiaries may
honor any conversion request by a holder of any Convertible Indebtedness of
Sanmina or any of its Subsidiaries and make cash payments in lieu of fractional
shares in connection with the conversion of any Convertible Indebtedness.

 

10.2.8      Fundamental
Changes.  Change its name or conduct
business under any fictitious name; change its tax or other organizational
identification number; change its form or jurisdiction of organization or
merge, amalgamate, combine or consolidate with any Person, or liquidate, wind
up its affairs or dissolve itself, in each case whether in a single transaction
or in a series of related transactions, except (i) for mergers,
amalgamations or consolidations of a wholly-owned Subsidiary with another
wholly-owned Subsidiary or into a Borrower, (ii) any Foreign Subsidiary of
Sanmina may be merged, consolidated or amalgamated with or into any other
Foreign Subsidiary or be liquidated, wound up or dissolved; (iii) in
connection with a Permitted Acquisition (including a “squeeze out” merger); (iv) in
connection with the 2009 Corporate Reorganization; and (v) changes in its
name, tax or other organizational identification number or form of jurisdiction
of organization upon 30 days prior written notice to Agent and provided that as
a result of any such change no Lien granted to Agent hereunder ceases to be a
valid, perfected Lien with the priority required hereunder.

 

10.2.9      Reserved.

 

10.2.10    Plans.  Become party to any Multiemployer Plan,
Canadian Plan or Foreign Plan, other than any in existence on the Closing Date.

 

10.2.11    Tax Consolidation.  File or consent to the filing of any
consolidated income tax return with any Person other than Borrowers and
Subsidiaries.

 

91

 

10.2.12    Accounting
Changes.  Make any material change in
accounting treatment or reporting practices, except as required by GAAP or
Applicable Law and in accordance with Section 1.2;
or change its Fiscal Year.

 

10.2.13    Restrictive
Agreements.  Become a party to any
Restrictive Agreement, other than restrictions (i) in agreements
evidencing Debt permitted by Section 10.2.1(c) or
Section 10.2.1(l) that impose
restrictions on the property so acquired; (ii) by reason of customary
provisions restricting assignments, subletting or other transfers contained in
leases, licenses, joint venture agreements and other agreements entered into in
the Ordinary Course of Business; (iii) that are or were created by virtue
of any transfer of, agreement to transfer or option or right with respect to
any property, assets or Equity Interests not otherwise prohibited under this
Agreement; (iv) in the Indentures, the Senior Notes or the Senior
Subordinated Notes or in other documents related to such Debt; (v) contained
in agreements or documents evidencing Debt or other obligations permitted by Section 10.2.1(n) so long as any such encumbrance
or restriction applies only to the Foreign Subsidiary issuing such Debt or
other obligation and its Subsidiaries; (vi) imposed on a Subsidiary and
existing at the time it became a Subsidiary if such restrictions were not
created in connection with or in anticipation of the transaction or series of
transactions pursuant to which such Subsidiary became a Subsidiary or was
acquired by Sanmina and only to the extent applying to such Subsidiary; (vii) under
or in connection with any joint venture agreements, partnership agreement,
stock sale agreements and other similar agreements; provided that (A) any such agreements are entered into
in the Ordinary Course of Business and in good faith, and (B) such
restrictions are reasonably customary for such agreements; (viii) under
any agreement, instrument or contract affecting property or a Person at the
time such property or Person was acquired by Sanmina or any of its
Subsidiaries, so long as such restriction relates solely to the property or
Person so acquired and was not created in connection with or in anticipation of
such acquisition; (ix) existing by virtue of, or arising under, applicable
law, regulation, order, approval, license, permit, grant or similar
restriction, in each case issued or imposed by a Governmental Authority; (x) that
result from any Refinancing Debt of Debt referred to in clause (iv), (v),
(vi), (vii) or (viii) of this Section 10.2.13;
provided that the restrictions existing under or by reason of any such agreement,
instrument or contract are not materially less favorable, taken as a whole, to
the Lenders that those under the agreement evidencing the Debt being
refinanced; (xi) customary subrogation waivers in guaranties permitted
under this Agreement, and (xii) contained in agreements or documents
entered into in connection with the transactions contemplated by the
Receivables Purchase Facility or sales or securitizations of receivables and
Related Assets permitted by Section 10.2.5(e) or
(f); (xiii) specific property
encumbered to secure payment of particular Debt or to be sold pursuant to an
executed agreement with respect to a Disposition permitted under Section 10.2.5;
(xiv) restrictions in agreements entered into in connection with the
incurrence of Permitted Liens, to the extent they condition, prohibit or limit
the ability of Agent or Lenders from obtaining a Lien only on the property,
rights and assets subject to such Permitted Lien (but excluding any of the
Collateral); (xv) arising in connection with grants from any Governmental
Authority; and (xvi) existing on the Closing Date and set forth in Section 10.2.13 to the Disclosure Letter.

 

10.2.14    Hedging
Agreements.  Enter into any Hedging
Agreement, except to hedge risks arising in the Ordinary Course of Business
(consistent with past practices) and not for speculative purposes.

 

92

 

10.2.15    Conduct of
Business.  Engage in any business, other
than its business as conducted on the Closing Date or any Permitted Business,
and in each case any activities incidental thereto.

 

10.2.16    Affiliate
Transactions.  Enter into or be party to
any transaction with an Affiliate, except (a) transactions contemplated or
permitted by the Loan Documents; (b) payment of reasonable compensation to
officers and employees for services actually rendered, benefit plans for
officers and employees entered into or maintained and established in the
Ordinary Course of Business, and loans and advances permitted by Section 10.2.4; (c) payment of customary directors’
fees and indemnities; (d) transactions between Sanmina and any of its
Subsidiaries or between any Subsidiaries; (e) transactions with Affiliates
that were consummated prior to the Closing Date, as shown on Schedule 10.2.16 to the Disclosure Letter; and (f) transactions
with Affiliates upon fair and reasonable terms fully disclosed to Agent and no
less favorable than would be obtained in a comparable arm’s-length transaction
with a non-Affiliate.

 

10.2.17    Use of Proceeds.  Use the proceeds of any Loan, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry Margin Stock or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund indebtedness originally
incurred for such purpose.

 

10.2.18    Amendments to
Subordinated Debt  or
Indentures.  Amend, supplement or
otherwise modify the Indentures, any other document, instrument or agreement
relating to the Senior Notes or any Subordinated Debt, if such modification (a) increases
the principal balance of such Debt, or increases any required payment of
principal or interest; (b) accelerates the date on which any installment
of principal or any interest is due, or adds any additional redemption, put or
prepayment provisions; (c) shortens the final maturity date or otherwise
accelerates amortization; (d) increases the interest rate; (e) increases
or adds any fees or charges (excluding any fees or charges for amendments,
consents or waivers); (f) modifies any covenant in a manner or adds any
representation, covenant or default that is, more onerous or restrictive in any
material respect for any Borrower or Subsidiary, or that is otherwise
materially adverse to any Borrower, any Subsidiary or Lenders; or (g) results
in the Obligations not constituting “Senior Debt” under the Senior Subordinated
Indentures or otherwise not being fully benefited by the subordination
provisions thereof.

 

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

 

10.3.1      Fixed Charge Coverage
Ratio.  After the Availability Election,
maintain a Fixed Charge Coverage Ratio of at least 1.0 to 1.0 for each period
of four Fiscal Quarters ending during or immediately before any Trigger Period.

 

10.4         Post-Closing
Covenants.

 

10.4.1      Notwithstanding
anything herein or in any other Loan Document to the contrary, not later than
30 days following the Closing Date or such later date as Agent may determine in
its sole discretion, the Agent shall receive copies of one or more executed
Deposit

 

93

 

Account
Control Agreements in form and substance reasonably satisfactory to it as
required under Section 8.4.

 

10.4.2      Not later than 15 days
following the Closing Date or such later date as Agent may determine in its
sole discretion, Agent shall have been provided with an executed copy of the
credit agreement entered into in connection with the Receivables Purchase
Facility, which agreement shall be (i) reasonably satisfactory to Agent
and (ii) in substantially the same form as the draft of such agreement
presented to Agent on or immediately prior to the Closing Date.

 

SECTION 11.                     EVENTS
OF DEFAULT; REMEDIES ON DEFAULT

 

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

 

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

 

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

 

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

 

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

 

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

 

94

 

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

 

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

 

h.             Reserved.

 

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

 

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

 

95

 

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

 

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

 

m.            A
Change of Control occurs.

 

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

 

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

 

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

 

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

 

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

 

96

 

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

 

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

 

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

 

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11.5         Remedies Cumulative; No Waiver.

 

11.5.1      Cumulative
Rights.  All covenants, conditions,
provisions, warranties, guaranties, indemnities and other undertakings of
Obligors contained in the Loan Documents are cumulative and not in derogation
or substitution of each other.  In
particular, the rights and remedies of Agent and Lenders are cumulative, may be
exercised at any time and from time to time, concurrently or in any order, and
shall not be exclusive of any other rights or remedies that Agent and Lenders
may have, whether under any agreement, by law, at equity or otherwise.  All rights and remedies shall continue in
full force and effect until Full Payment of all Obligations.

 

11.5.2      Waivers.  No waiver or course of dealing shall be
established by (a) the failure or delay of Agent or any Lender to require
strict performance by Borrowers with any terms of the Loan Documents, or to
exercise any rights or remedies with respect to Collateral or otherwise; (b) the
making of any Loan or issuance of any Letter of Credit during a Default, Event
of Default or other failure to satisfy any conditions precedent; or (c) acceptance
by Agent or any Lender of performance by any Obligor under any Loan Documents
in a manner other than that specified therein. 
It is expressly acknowledged by Borrowers that any failure to satisfy a
financial covenant on a measurement date shall not be cured or remedied by
satisfaction of such covenant on a subsequent date.

 

SECTION 12.                     AGENT

 

12.1         Appointment,
Authority and Duties of Agent.

 

12.1.1      Appointment and
Authority.  Each Lender appoints and
designates Bank of America as Agent hereunder. 
Agent may, and each Lender authorizes Agent to, enter into all Loan
Documents to which Agent is intended to be a party and accept all Security
Documents, for Agent’s benefit and the Pro Rata benefit of Lenders.  Each Lender agrees that any action taken by
Agent or Required Lenders in accordance with the provisions of the Loan
Documents, and the exercise by Agent or Required Lenders of any rights or
remedies set forth therein, together with all other powers reasonably incidental
thereto, shall be authorized by and binding upon all Lenders.  Without limiting the generality of the
foregoing, Agent shall have the sole and exclusive authority to (a) act as
the disbursing and collecting agent for Lenders with respect to all payments
and collections arising in connection with the Loan Documents; (b) execute
and deliver as Agent each Loan Document, including any intercreditor or
subordination agreement, and accept delivery of each Loan Document from any
Obligor or other Person; (c) act as collateral agent for Secured Parties
for purposes of perfecting and administering Liens under the Loan Documents,
and for all other purposes stated therein; (d) manage, supervise or
otherwise deal with Collateral; (e) consent to the addition of obligors on
Schedule 1.1(b) to
the Disclosure Letter as contemplated in the definition of Receivables Purchase
Facility and (f) take any Enforcement Action or otherwise exercise any
rights or remedies with respect to any Collateral under the Loan Documents,
Applicable Law or otherwise.  The duties
of Agent shall be ministerial and administrative in nature, and Agent shall not
have a fiduciary relationship with any Lender, Secured Party, Participant or
other Person, by reason of any Loan Document or any transaction relating
thereto.  Agent alone shall be authorized
to determine whether any Accounts or Inventory constitute Eligible Accounts or
Eligible Inventory, or whether to impose or release any reserve, and to
exercise its Credit Judgment in connection therewith, which determinations and
judgments, if exercised in good faith, shall exonerate Agent from liability to
any Lender or other Person for any error in judgment.  For the purposes of creating a solidarité active in

 

98

 

accordance
with Article 1541 of the Civil Code of Québec between Agent, on the one
hand, and each other Secured Party, taken individually on the other hand, each
Obligor and each such Secured Party acknowledge and agree with Agent that such
Secured Party and Agent are hereby conferred the legal status of solidary
creditors of each such Obligor in respect of all Obligations owed by each such
Obligor to Agent and such Secured Party hereunder and under the other Loan
Documents (collectively, the “Solidary Claim”) and that, accordingly,
but subject (for the avoidance of doubt) to Article 1542 of the Civil Code
of Québec, each such Obligor is irrevocably bound towards Agent and each other
Secured Party in respect of the entire Solidary Claim of Agent and such.  As a result of the foregoing, the parties
hereto acknowledge that Agent and each other Secured Party shall at all times
have a valid and effective right of action for the entire Solidary Claim of
Agent and such Secured Party and the right to give full acquittance for
it.  Accordingly, and without limiting
the generality of the foregoing, Agent, as solidary creditor with each other
Secured Party, shall at all times have a valid and effective right of action in
respect of the Solidary Claim and the right to give a full acquittance for
same.  By its execution of the Loan
Documents to which it is a party, each such Obligor and Secured Party not a
party hereto shall also be deemed to have accepted the stipulations hereinabove
provided.  The parties further agree and
acknowledge that such Liens (hypothecs) under the Security Documents and the
other Loan Documents shall be granted to Agent, for its own benefit and for the
benefit of the other Secured Party, as solidary creditor as hereinabove set
forth.

 

12.1.2      Duties.  Agent shall not have any duties except those
expressly set forth in the Loan Documents. 
The conferral upon Agent of any right shall not imply a duty on Agent’s
part to exercise such right, unless instructed to do so by Required Lenders in
accordance with this Agreement.

 

12.1.3      Agent
Professionals.  Agent may perform its
duties through agents and employees. 
Agent may consult with and employ Agent Professionals, and shall be
entitled to act upon, and shall be fully protected in any action taken in good
faith reliance upon, any advice given by an Agent Professional.  Agent shall not be responsible for the
negligence or misconduct of any agents, employees or Agent Professionals
selected by it with reasonable care.

 

12.1.4      Instructions of
Required Lenders.  The rights and
remedies conferred upon Agent under the Loan Documents may be exercised without
the necessity of joinder of any other party, unless required by Applicable Law.  Agent may request instructions from Required
Lenders with respect to any act (including the failure to act) in connection
with any Loan Documents, and may seek assurances to its satisfaction from
Lenders of their indemnification obligations under Section 12.6 against all Claims that could be incurred
by Agent in connection with any act. 
Agent shall be entitled to refrain from any act until it has received
such instructions or assurances, and Agent shall not incur liability to any
Person by reason of so refraining. 
Instructions of Required Lenders shall be binding upon all Lenders, and
no Lender shall have any right of action whatsoever against Agent as a result
of Agent acting or refraining from acting in accordance with the instructions
of Required Lenders.  Notwithstanding the
foregoing, instructions by and consent of all Lenders shall be required in the
circumstances described in Section 15.1.1,
and in no event

 

99

 

shall Required
Lenders, without the prior written consent of each Lender, direct Agent to
accelerate and demand payment of Loans held by one Lender without accelerating
and demanding payment of all other Loans, nor to terminate the Commitments of
one Lender without terminating the Commitments of all Lenders.  In no event shall Agent be required to take
any action that, in its opinion, is contrary to Applicable Law or any Loan
Documents or could subject any Agent Indemnitee to personal liability.

 

12.2                           Agreements
Regarding Collateral and Field Examination Reports.

 

12.2.1      Lien Releases; Care of
Collateral.  Lenders authorize Agent to
release any Lien with respect to any Collateral (a) upon Full Payment of
the Obligations; (b) that is the subject of an Asset Disposition which
Borrowers certify in writing to Agent is a Permitted Asset Disposition or an
Asset Disposition permitted under Section 10.2.5
or a Lien which Obligors certify is a Permitted Lien entitled to priority over
Agent’s Liens (and Agent may rely conclusively on any such certificate without
further inquiry); (c) that does not constitute a material part of the
Collateral; or (d) with the written consent of all Lenders; provided,
however, that any Lien with respect to receivables (to the extent such
receivables are owing from an Account Debtor listed on Schedule 1.1 to the
Disclosure Letter, as such schedule may be amended from time to time as
contemplated by the definition of “Receivables Purchase Facility”) and Related
Assets transferred pursuant to the Receivables Purchase Facility shall be
automatically released without further action by Agent.  Agent shall have no obligation whatsoever to
any Lenders to assure that any Collateral exists or is owned by an Obligor, or
is cared for, protected, insured or encumbered, nor to assure that Agent’s
Liens have been properly created, perfected or enforced, or are entitled to any
particular priority, nor to exercise any duty of care with respect to any
Collateral.

 

12.2.2      Possession of
Collateral.  Agent and Lenders appoint
each Lender as agent (for the benefit of Secured Parties) for the purpose of
perfecting Liens in any Collateral held or controlled by such Lender, to the
extent such Liens are perfected by possession or control.  If any Lender obtains possession or control
of any Collateral, it shall notify Agent thereof and, promptly upon Agent’s
request, deliver such Collateral to Agent or otherwise deal with it in
accordance with Agent’s instructions.

 

12.2.3      Reports.  Agent shall promptly forward to each Lender,
when complete, copies of any field audit, examination or appraisal report
prepared by or for Agent with respect to any Obligor or Collateral (“Report”).  Each Lender agrees (a) that neither Bank
of America nor Agent makes any representation or warranty as to the accuracy or
completeness of any Report, and shall not be liable for any information
contained in or omitted from any Report; (b) that the Reports are not
intended to be comprehensive audits or examinations, and that Agent or any
other Person performing any audit or examination will inspect only specific
information regarding Obligations or the Collateral and will rely significantly
upon Obligors’ books and records as well as upon representations of Obligors’
officers and employees; and (c) to keep all Reports confidential and
strictly for such Lender’s internal use, and not to distribute any Report (or
the contents thereof) to any Person (except to such Lender’s Participants,
attorneys and accountants) or use any Report in any manner other than
administration of the Loans and other Obligations.  Each Lender agrees to indemnify and hold
harmless Agent and any other Person preparing a Report from any action such
Lender may take as a result of or any conclusion it may draw from any Report,
as well as from any Claims arising in connection with any third parties that
obtain any information contained in a Report through such Lender.

 

100

 

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

 

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

 

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

 

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

 

101

 

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

 

12.8         Successor Agent and Co-Agents.

 

12.8.1      Resignation;
Successor Agent; Defaulting Agent.

 

a.                                       Subject to the
appointment and acceptance of a successor Agent as provided below, Agent may
resign at any time by giving at least 30 days written notice thereof to Lenders
and Borrowers.  Upon receipt of such
notice, Required Lenders shall have the right to appoint a successor Agent
which shall be (a) a Lender or an Affiliate of a Lender; or (b) a
commercial bank that is organized under the laws of the United States or any
state or district thereof, has a combined capital surplus of at least
$200,000,000 and (provided no Default or Event of Default exists) is reasonably
acceptable to Borrowers.  If no successor
agent is appointed prior to the effective date of the resignation of Agent, then
Agent may appoint a successor agent from among Lenders.  Upon acceptance by a successor Agent of an
appointment to serve as Agent hereunder, such successor Agent shall thereupon
succeed to and become vested with all the powers and duties of the retiring
Agent without further act, and the retiring Agent shall be discharged from its
duties and obligations hereunder but shall continue to have the benefits of the
indemnification set forth in Sections 12.6
and 15.2.  Notwithstanding any Agent’s resignation, the
provisions of this Section 12
shall continue in effect for its benefit with respect to any actions taken or
omitted to be taken by it while Agent. 
Any successor to Bank of America by merger or acquisition of stock or
this loan shall continue to be Agent hereunder without further act on the part
of the parties hereto, unless such successor resigns as provided above.

 

b.                                      In the event
that Agent becomes a Defaulting Agent, Required Lenders, in their sole and
absolute discretion, shall have the right at any time thereafter to remove such
Defaulting Agent and to select and appoint a successor Agent.  Upon acceptance by a successor Agent of an
appointment to serve as Agent hereunder, such successor Agent shall thereupon
succeed to and become vested with all of the powers and duties of the replaced
Agent without further act; provided, however, that subject to the
provisions of Section 12.7,
the removal of a 

 

102

 

Defaulting Agent shall not
impair or impede any rights and remedies at law or in equity otherwise
available to Lenders with respect to the acts or omissions of such Defaulting
Agent.

 

12.8.2      Separate
Collateral Agent.  It is the intent of
the parties that there shall be no violation of any Applicable Law denying or
restricting the right of financial institutions to transact business in any
jurisdiction.  If Agent believes that it
may be limited in the exercise of any rights or remedies under the Loan
Documents due to any Applicable Law, Agent may appoint an additional Person who
is not so limited, as a separate collateral agent or co-collateral agent.  If Agent so appoints a collateral agent or
co-collateral agent, each right and remedy intended to be available to Agent
under the Loan Documents shall also be vested in such separate agent.  Every covenant and obligation necessary to
the exercise thereof by such agent shall run to and be enforceable by it as
well as Agent.  Lenders shall execute and
deliver such documents as Agent deems appropriate to vest any rights or
remedies in such agent.  If any
collateral agent or co-collateral agent shall die or dissolve, become incapable
of acting, resign or be removed, then all the rights and remedies of such
agent, to the extent permitted by Applicable Law, shall vest in and be
exercised by Agent until appointment of a new agent.

 

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

 

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

 

103

 

12.11       Remittance of Payments and Collections.

 

12.11.1            Remittances Generally.  All payments by any Lender to Agent shall be
made by the time and on the day set forth in this Agreement, in immediately
available funds.  If no time for payment
is specified or if payment is due on demand by Agent and request for payment is
made by Agent by 11:00 a.m. on a Business Day, payment shall be made by
Lender not later than 2:00 p.m. on such day, and if request is made after
11:00 a.m., then payment shall be made by 11:00 a.m. on the next
Business Day.  Payment by Agent to any
Lender shall be made by wire transfer, in the type of funds received by
Agent.  Any such payment shall be subject
to Agent’s right of offset for any amounts due from such Lender under the Loan
Documents.

 

12.11.2            Failure to Pay.  If any Lender fails to pay any amount when
due by it to Agent pursuant to the terms hereof, such amount shall bear interest
from the due date until paid at the rate determined by Agent as customary in
the banking industry for interbank compensation.  In no event shall Borrowers be entitled to
receive credit for any interest paid by a Lender to Agent, nor shall any
Defaulting Lender be entitled to interest on any amounts held by Agent pursuant
to Section 4.2.

 

12.11.3            Recovery of Payments.  If Agent pays any amount to a Lender in the
expectation that a related payment will be received by Agent from an Obligor
and such related payment is not received, then Agent may recover such amount
from each Lender that received it.  If
Agent determines at any time that an amount received under any Loan Document
must be returned to an Obligor or paid to any other Person pursuant to
Applicable Law or otherwise, then, notwithstanding any other term of any Loan
Document, Agent shall not be required to distribute such amount to any Lender.  If any amounts received and applied by Agent
to any Obligations are later required to be returned by Agent pursuant to
Applicable Law, each Lender shall pay to Agent, on demand, such Lender’s Pro Rata share of the amounts
required to be returned.

 

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

 

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

 

104

 

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

 

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

 

SECTION 13.       BENEFIT OF AGREEMENT;
ASSIGNMENTS AND PARTICIPATIONS

 

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

 

13.2         Participations.

 

13.2.1      Permitted
Participants; Effect.  Any Lender may, in the ordinary course of its business and in
accordance with Applicable Law, at any time sell to a financial institution (“Participant”)
a participating interest in the rights and obligations of such Lender under any
Loan Documents.  Despite any sale by a
Lender of participating interests to a Participant, such Lender’s obligations
under the Loan Documents shall remain unchanged, such Lender shall remain
solely responsible to the other parties hereto for performance of such
obligations, such Lender shall remain the holder of its Loans and Commitments
for all purposes, all amounts payable by Borrowers shall be determined as if
such Lender had not sold such participating interests, and Borrowers and Agent
shall continue to deal solely and directly with such Lender in connection with
the Loan Documents.  Each Lender
shall be solely responsible for notifying its Participants of any matters under
the Loan Documents, and Agent and the other Lenders shall not have any
obligation or liability to any such Participant.  A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 5.8
unless Borrowers agree otherwise in writing.

 

13.2.2      Voting
Rights.  Each Lender shall retain the
sole right to approve, without the consent of any Participant, any amendment,
waiver or other modification of any Loan Documents other than that which
forgives principal, interest or fees, reduces the stated interest rate or fees
payable with respect to any Loan or Commitment in which such Participant has an
interest, postpones the Commitment Termination Date or any date fixed for any
regularly scheduled payment of principal, interest or fees on such Loan or
Commitment, or releases any Borrower, all or substantially all of the value of
the guaranties of the Obligations made by the Guarantors or substantial portion
of the Collateral.

 

105

 

13.2.3      Benefit of
Set-Off.  Borrowers agree that each
Participant shall have a right of set-off in respect of its participating
interest to the same extent as if such interest were owing directly to a
Lender, and each Lender shall also retain the right of set-off with respect to
any participating interests sold by it. 
By exercising any right of set-off, a Participant agrees to share with
Lenders all amounts received through its set-off, in accordance with Section 12.5 as if such Participant
were a Lender.

 

13.3         Assignments.

 

13.3.1      Permitted
Assignments.  A Lender may assign to an
Eligible Assignee any of its rights and obligations under the Loan Documents,
as long as (a) each assignment is of a constant, and not a varying,
percentage of the transferor Lender’s rights and obligations under the Loan
Documents and, in the case of a partial assignment, is in a minimum principal
amount of $5,000,000 (unless otherwise agreed by Agent in its discretion and,
except during the occurrence and continuance of a Default or an Event of Default,
Sanmina) and integral multiples of $1,000,000 in excess of that amount; (b) except
in the case of an assignment in whole of a Lender’s rights and obligations, the
aggregate amount of the Commitments retained by the transferor Lender is at
least $5,000,000 (unless otherwise agreed by Agent in its discretion); and (c) the
parties to each such assignment shall execute and deliver to Agent, for its
acceptance and recording, an Assignment and Acceptance.  Nothing herein shall limit the right of a
Lender to pledge or assign any rights under the Loan Documents to (i) any
Federal Reserve Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors and any Operating Circular
issued by such Federal Reserve Bank, or (ii) counterparties to swap
agreements relating to any Loans; provided, however, that any
payment by Borrowers to the assigning Lender in respect of any
Obligations assigned as described in this sentence shall satisfy Borrowers’
obligations hereunder to the extent of such payment, and no such assignment
shall release the assigning Lender from its obligations hereunder.

 

13.3.2      Effect; Effective Date.  Upon delivery
to Agent of an assignment notice in the form of Exhibit C and a processing fee of $3,500 (unless
otherwise agreed by Agent in its discretion), the assignment shall become effective as specified in the notice, if
it complies with this Section 13.3.  From such effective date, the
Eligible Assignee shall for all purposes be a Lender under the Loan Documents,
and shall have all rights and obligations of a Lender thereunder.  Upon consummation of an assignment, the
transferor Lender, Agent and Borrowers shall make appropriate arrangements for
issuance of replacement and/or new Notes, as applicable.  The transferee Lender shall comply with Section 5.9 and deliver,
upon request, an administrative questionnaire satisfactory to Agent.

 

SECTION 14.       GUARANTY

 

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

 

106

 

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

 

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

 

107

 

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

 

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

 

14.4.1      This Guaranty is a guaranty of payment
when due and not of collectability.  This
Guaranty is a primary obligation of each Guarantor and not merely a contract of
surety;

 

14.4.2      Agent may enforce this Guaranty upon the
occurrence and during the continuance of an Event of Default notwithstanding
the existence of any dispute between any Borrower and any Secured Party with
respect to the existence of such Event of Default;

 

14.4.3      The obligations of each Guarantor
hereunder are independent of the obligations of any Borrower and the
obligations of any other guarantor (including any other Guarantor) of the
obligations of any Borrower, and a separate action or actions may be brought
and prosecuted against such Guarantor whether or not any action is brought
against such Borrower or any of such other guarantors and whether or not any
Borrower or such other guarantors are joined in any such action or actions;

 

14.4.4      Payment by any Guarantor of a portion, but
not all, of the Guaranteed Obligations shall in no way limit, affect, modify or
abridge any Guarantor’s liability for any portion of the Guaranteed Obligations
which has not been paid.  Without
limiting the generality of the foregoing, if Agent is awarded a judgment in any
suit brought to enforce any Guarantor’s covenant to pay a portion of the
Guaranteed Obligations, such judgment shall not be deemed to release such
Guarantor from its covenant to pay the portion of the Guaranteed Obligations
that is not the subject of such suit, and such judgment shall not, except to
the extent satisfied by such Guarantor, limit, affect, modify or abridge any
other Guarantor’s liability hereunder in respect of the Guaranteed Obligations;

 

14.4.5      Any Secured Party, upon such terms as it
deems appropriate, without notice or demand and without affecting the validity
or enforceability hereof or giving rise to any reduction, limitation,
impairment, discharge or termination of any Guarantor’s liability hereunder,
from time to time may (i) renew, extend, accelerate, increase the rate of
interest on, or otherwise change the time, place, manner or terms of payment of
the Guaranteed Obligations; (ii) settle, compromise, release or discharge,
or accept or refuse any offer of performance with respect to, or substitutions
for, the Guaranteed Obligations or any agreement relating thereto and/or
subordinate the payment of the same to the payment of any other obligations; (iii) request
and accept other guaranties of the Guaranteed Obligations and take and hold
security for the payment hereof or the Guaranteed Obligations; (iv) release,
surrender, exchange, substitute,

 

108

 

compromise, settle, rescind,
waive, alter, subordinate or modify, with or without consideration, any
security for payment of the Guaranteed Obligations, any other guaranties of the
Guaranteed Obligations, or any other obligation of any Person (including any
other Guarantor) with respect to the Guaranteed Obligations; (v) enforce
and apply any security now or hereafter held by or for the benefit of such
Secured Party in respect hereof or the Guaranteed Obligations and direct the
order or manner of sale thereof, or exercise any other right or remedy that
such Secured Party may have against any such security, in each case as such Secured
Party in its discretion may determine consistent herewith or the applicable
Hedging Agreement and any applicable security agreement, including foreclosure
on any such security pursuant to one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially reasonable, and
even though such action operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of any Guarantor against
any Borrower or any security for the Guaranteed Obligations; and (vi) exercise
any other rights available to it under the Loan Documents or the Hedging
Agreements; and

 

14.4.6      This Guaranty and the obligations of
Guarantors hereunder shall be valid and enforceable and shall not be subject to
any reduction, limitation, impairment, discharge or termination for any reason
(other than payment in full of the Guaranteed Obligations), including the
occurrence of any of the following, whether or not any Guarantor shall have had
notice or knowledge of any of them:  (i) any
failure or omission to assert or enforce or agreement or election not to assert
or enforce, or the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any right,
power or remedy (whether arising under the Loan Documents or the Hedging
Agreements, at law, in equity or otherwise) with respect to the Guaranteed
Obligations or any agreement relating thereto, or with respect to any other
guaranty of or security for the payment of the Guaranteed Obligations; (ii) any
rescission, waiver, amendment or modification of, or any consent to departure
from, any of the terms or provisions (including provisions relating to events
of default) hereof, any of the other Loan Documents, any of the Hedging
Agreements or any agreement or instrument executed pursuant thereto, or of any
other guaranty or security for the Guaranteed Obligations, in each case whether
or not in accordance with the terms hereof or such Loan Document, such Hedging
Agreement or any agreement relating to such other guaranty or security; (iii) the
Guaranteed Obligations, or any agreement relating thereto, at any time being
found to be illegal, invalid or unenforceable in any respect; (iv) the
application of payments received from any source (other than payments received
pursuant to the other Loan Documents or any of the Hedging Agreements or from
the proceeds of any security for the Guaranteed Obligations, except to the
extent such security also serves as collateral for indebtedness other than the
Guaranteed Obligations) to the payment of indebtedness other than the
Guaranteed Obligations, even though any Secured Party might have elected to
apply such payment to any part or all of the Guaranteed Obligations; (v) any
Secured Party’s consent to the change, reorganization or termination of the
corporate structure or existence of Sanmina or any of its Subsidiaries and to
any corresponding restructuring of the Guaranteed Obligations; (vi) any
failure to perfect or continue perfection of a security interest in any
collateral which secures any of the Guaranteed Obligations; (vii) any
defenses, set-offs or counterclaims which any Borrower may allege or assert
against any Secured Party in respect of the Guaranteed Obligations, including
failure of consideration, breach of warranty, payment, statute of frauds,
statute of limitations, accord and satisfaction and usury; and (viii) any
other act 

 

109

 

or thing or omission, or
delay to do any other act or thing, which may or might in any manner or to any
extent vary the risk of any Guarantor as an obligor in respect of the
Guaranteed Obligations.

 

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

 

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

 

110

 

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

 

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

 

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

 

111

 

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

 

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

 

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

 

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

 

14.11                     Bankruptcy, Etc.

 

14.11.1            So long as any Guaranteed
Obligations remain outstanding, no Guarantor shall, without the prior written
consent of Agent acting pursuant to the instructions of Required Lenders,
commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency case or proceeding of or against any Borrower or
any other Guarantor.  The obligations of
Guarantors hereunder shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any case or proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of any Borrower or any Guarantor or
by any defense which any Borrower or any other Guarantor may have by reason of
the order, decree or decision of any court or administrative body resulting
from any such proceeding.

 

14.11.2            Each Guarantor acknowledges and
agrees that any interest on any portion of the Guaranteed Obligations which
accrues after the commencement of any case or proceeding referred to in Section 14.11.1 above (or, if interest
on any portion of the Guaranteed Obligations ceases to accrue by operation of
law by reason of the commencement of such case or 

 

112

 

proceeding, such interest as
would have accrued on such portion of the Guaranteed Obligations if such case
or proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of Guarantors and Secured Parties that
the Guaranteed Obligations which are guaranteed by Guarantors pursuant hereto
should be determined without regard to any rule of law or order which may
relieve any Borrower of any portion of such Guaranteed Obligations.  Guarantors will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay Agent, or allow the claim of Agent in
respect of, any such interest accruing after the date on which such case or
proceeding is commenced.

 

14.11.3            In the event that all or any portion
of the Guaranteed Obligations are paid by Borrowers, the obligations of
Guarantors hereunder shall continue and remain in full force and effect or be
reinstated, as the case may be, in the event that all or any part of such
payment(s) are rescinded or recovered directly or indirectly from any
Secured Party as a preference, fraudulent transfer or otherwise, and any such
payments which are so rescinded or recovered shall constitute Guaranteed Obligations
for all purposes hereunder.

 

SECTION 15.                     MISCELLANEOUS

 

15.1         Consents, Amendments and Waivers.

 

15.1.1      Amendment. 
No modification of any Loan Document, including any extension or
amendment of a Loan Document or any waiver of a Default or Event of Default,
shall be effective without the prior written agreement of Agent (with the
consent of Required Lenders) and each Obligor party to such Loan Document;
provided, however, that

 

a.                                       without the
prior written consent of Agent, no modification shall be effective with respect
to any provision in a Loan Document that relates to any rights, duties or
discretion of Agent;

 

b.                                      without the
prior written consent of Issuing Bank, no modification shall be effective with
respect to any LC Obligations or Section 2.2;

 

c.                                       without the
prior written consent of each affected Lender, no modification shall be
effective that would (i) increase the Commitment of such Lender; or (ii) reduce
the amount of, or waive or delay payment of, any principal, interest or fees
payable to such Lender; and

 

d.                                      without the
prior written consent of all Lenders (except a Defaulting Lender as provided in
Section 4.2), no modification
shall be effective that would (i) extend the Revolver Termination Date; (ii) alter
Section 5.5, 7.1 (except to add
Collateral), 12.5 or 15.1; (iii) amend the definitions of
Borrowing Base (and the defined terms used in such definition), Pro Rata or
Required Lenders; (iv) increase any advance rate, decrease the
Availability Block or increase total Commitments except in accordance with the
provisions of Section 2.3; (vi) release
all or substantially all of the Collateral, except as currently contemplated by
the Loan Documents; (vii) release any Obligor from liability for any
Obligations, if such Obligor is Solvent at the time of the release (other than
the release of less than all or substantially all of the

 

113

 

value of the Guaranties of
the Obligations made by the Guarantor) or (viii) waive any of the
conditions of Section 6.1.

 

15.1.2      Limitations.  The agreement of Borrowers shall not be
necessary to the effectiveness of any modification of a Loan Document that
deals solely with the rights and duties of Lenders, Agent and/or Issuing Bank
as among themselves.  Only the consent of
the parties to the Fee Letter or any agreement relating to a Bank Product shall
be required for any modification of such agreement, and any non-Lender that is
party to a Bank Product agreement shall have no right to participate in any
manner in modification of any other Loan Document.  Any waiver or consent granted by Lenders
hereunder shall be effective only if in writing and only for the matter
specified.  No consent of any party shall
be required to add an Obligor in accordance with Section 10.1.9 and no consent of the Lenders shall be
required for an amendment or modification to the extent expressly provided
herein that such amendment or modification can be made by an Obligor and/or
Agent.

 

15.1.3      Payment for Consents.  No Borrower will, directly or indirectly, pay
any remuneration or other thing of value, whether by way of additional
interest, fee or otherwise, to any Lender (in its capacity as a Lender
hereunder) as consideration for agreement by such Lender with any modification of
any Loan Documents, unless such remuneration or value is concurrently paid, on
the same terms, on a Pro Rata basis to all Lenders providing their consent.

 

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

 

15.3         Notices and Communications.

 

15.3.1      Notice Address.  Subject to Section 4.1.4,
all notices and other communications by or to a party hereto shall be in
writing and shall be given to any Borrower, at Borrower Agent’s address shown
on the signature pages hereof, and to any other Person at its address
shown on the signature pages hereof (or, in the case of a Person who
becomes a Lender after the Closing Date, at the address shown on its Assignment
and Acceptance), or at such other address as a party may hereafter specify by
notice in accordance with this Section 15.3.  Each such notice or other communication shall
be effective only (a) if given by facsimile transmission, when transmitted
to the applicable facsimile number, if confirmation of receipt is received; (b) if
given by mail, three Business Days after deposit in the mail, with first-class
postage pre-paid, addressed to the applicable address; or (c) if given by
personal delivery, when duly delivered to the notice address with receipt
acknowledged.  Notwithstanding the
foregoing, no notice to Agent pursuant to Section 2.1.4,
2.2, 3.1.2, or 4.1.1
shall be effective until actually received by the individual to whose attention
at Agent such notice is required to be sent. 
Any written notice or other communication that is not sent in conformity
with the foregoing provisions shall 

 

114

 

nevertheless be effective on
the date actually received by the noticed party.  Any notice received by Borrower Agent shall
be deemed received by all Borrowers.

 

15.3.2      Electronic Communications; Voice Mail.  Electronic mail and internet websites may be
used only for routine communications, such as financial statements, Borrowing
Base Certificates and other information required by Section 10.1.2, administrative matters, distribution of
Loan Documents for execution, and matters permitted under Section 4.1.4.  Agent and Lenders make no assurances as to
the privacy and security of electronic communications.  Except as expressly provided therein,
electronic and voice mail may not be used as effective notice under the Loan
Documents.

 

15.3.3      Non-Conforming Communications.  Agent and Lenders may rely upon any notices
purportedly given by or on behalf of any Obligor even if such notices were not
made in a manner specified herein, were incomplete or were not confirmed, or if
the terms thereof, as understood by the recipient, varied from a later
confirmation.  Each Obligor shall
indemnify and hold harmless each Indemnitee from any liabilities, losses, costs
and expenses arising from any telephonic communication purportedly given by or
on behalf of an Obligor.

 

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

 

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

 

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

 

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

 

115

 

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

 

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

 

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

 

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

 

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

 

116

 

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

 

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

 

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

 

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

 

117

 

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

 

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

 

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

 

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

 

118

 

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

 

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

 

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

 

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

 

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

 

119

 

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

 

	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
  Sanmina-SCI
  Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Walter Boileau

  
	
   

  	
  Name:

  	
  Walter
  Boileau

  
	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
  Address:

  
	
   

  	
   

  	
  2700
  North First Street

  
	
   

  	
   

  	
  San
  Jose, California 95134

  
	
   

  	
   

  	
  Attn:
  Treasurer

  
	
   

  	
   

  	
  Telecopy:
  (408) 964-3644

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Hadco
  Corporation

  
	
   

  	
  Hadco
  Santa Clara, Inc.

  
	
   

  	
  Sanmina-SCI
  Systems Holdings, Inc.

  
	
   

  	
  SCI
  Technology, Inc.

  
	
   

  	
  Scimex, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Walter Boileau

  
	
   

  	
  Name:

  	
  Walter
  Boileau

  
	
   

  	
  Title:

  	
  Vice
  President and Treasurer

  
	
   

  	
  Address:

  
	
   

  	
   

  	
  c/o
  Sanmina-SCI Corporation

  
	
   

  	
   

  	
  2700
  North First Street

  
	
   

  	
   

  	
  San
  Jose, California 95134

  
	
   

  	
   

  	
  Attn:
  Treasurer

  
	
   

  	
   

  	
  Telecopy:
  (408) 964-3644

  

 

[Signature
Page to Loan, Guaranty and Security Agreement]

 

 

	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  SCI
  Brockville Corp.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Shelly L. Byers

  
	
   

  	
  Name:

  	
  Shelly
  L. Byers

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
  Address:

  
	
   

  	
   

  	
  c/o
  Sanmina-SCI Corporation

  
	
   

  	
   

  	
  2700
  North First Street

  
	
   

  	
   

  	
  San
  Jose, California 95134

  
	
   

  	
   

  	
  Attn:
  Treasurer

  
	
   

  	
   

  	
  Telecopy:
  (408) 964-3644

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Sanmina-SCI
  Systems (Canada) Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Walter Boileau

  
	
   

  	
  Name:

  	
  Walter
  Boileau

  
	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
  Address:

  
	
   

  	
   

  	
  c/o
  Sanmina-SCI Corporation

  
	
   

  	
   

  	
  2700
  North First Street

  
	
   

  	
   

  	
  San
  Jose, California 95134

  
	
   

  	
   

  	
  Attn:
  Treasurer

  
	
   

  	
   

  	
  Telecopy:
  (408) 964-3644

  

 

[Signature Page to Loan, Guaranty
and Security Agreement]

 

 

	
   

  	
  AGENT AND LENDERS:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as
  Agent and Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Stephen King

  
	
   

  	
  Name:

  	
  Stephen
  King

  
	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
  Address:

  
	
   

  	
   

  	
  55
  South Lake Avenue

  
	
   

  	
   

  	
  Pasadena,
  California 91101

  
	
   

  	
   

  	
  Attn:
  Client Manager

  
	
   

  	
   

  	
  Telecopy:
  (626) 584-4602

  
				

 

[Signature Page to Loan, Guaranty
and Security Agreement]

 

 

	
   

  	
  DEUTSCHE BANK TRUST COMPANY 

  AMERICAS, as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Paul O’Leary

  
	
   

  	
  Name:

  	
  Paul
  O’Leary

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Erin Morrissey

  
	
   

  	
  Name:

  	
  Erin
  Morrissey

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  	
  60
  Wall Street, 2nd Floor

  
	
   

  	
   

  	
  New
  York, New York 10005

  
	
   

  	
   

  	
  Attn:
  Paul J. O’Leary

  
	
   

  	
   

  	
  Telecopy:
  (212) 250-6133

  

 

[Signature Page to Loan, Guaranty
and Security Agreement]

 

 

	
   

  	
  SIEMENS FINANCIAL SERVICES, INC.,

  
	
   

  	
  as
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Jim Fuller

  
	
   

  	
  Name:

  	
  Jim
  Fuller

  
	
   

  	
  Title:

  	
  VP
  and Co-Head

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Mark Picillo

  
	
   

  	
  Name:

  	
  Mark
  Picillo

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  	
  170
  Wood Ave. South

  
	
   

  	
   

  	
  Iselin,
  New Jersey 08830

  
	
   

  	
   

  	
  Attn:

  	
   

  
	
   

  	
   

  	
  Telecopy:
  (732) 590-6648

  

 

[Signature Page to Loan, Guaranty
and Security Agreement]

 

 

	
   

  	
  MERRILL LYNCH COMMERCIAL FINANCE

  CORP, as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Matt Christensen

  
	
   

  	
  Name:

  	
  Matt
  Christensen

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  	
  4
  World Financial Center

  
	
   

  	
   

  	
  250
  Vesey Street

  
	
   

  	
   

  	
  New York, New York 10080

  
	
   

  	
   

  	
  Attn: Dan
  Spencer

  
	
   

  	
   

  	
  Telecopy: (312)
  269-1348

  
				

 

[Signature Page to Loan, Guaranty
and Security Agreement]Exhibit 4.8

 

AMENDED
AND RESTATED REGISTRATION RIGHTS AGREEMENT

 

THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, dated as of April 21,
2008 (this “Agreement”), is by and among AGA MEDICAL HOLDINGS, INC., a
Delaware corporation (the “Company”), WELSH, CARSON, ANDERSON &
STOWE IX, L.P., a Delaware limited partnership (“WCAS”), WCAS CAPITAL
PARTNERS IV, L.P., a Delaware limited partnership (“WCAS CP IV”), and
each of the other individuals and entities from time to time named on Schedule
I hereto under the heading “WCAS Investors” (together with WCAS IX and WCAS
CP IV, each a “WCAS Investor” and collectively, the “WCAS Investors”),
FRANCK L. GOUGEON (“Gougeon”), GOUGEON SHARES, LLC, a Minnesota limited
liability company (the “Gougeon LLC”), and THE FRANCK L. GOUGEON
REVOCABLE TRUST UNDER AGREEMENT DATED JUNE 28, 2006 (together with Gougeon and
the Gougeon LLC, the “Gougeon Investors”).  The WCAS Investors and the Gougeon Investors
are referred to herein, each as an “Investor” and collectively, as the “Investors”.

 

RECITALS

 

WHEREAS, the Investors are, as of the date hereof, all the stockholders
of the Company;

 

WHEREAS, certain of the WCAS Investors, Gougeon and the Company are
each party to that certain Registration Rights Agreement, dated as of July 25,
2005 (as amended through the date hereof, the “Prior Agreement”);

 

WHEREAS, the parties hereto wish to enter into this Agreement to amend,
restate and supersede in its entirety, the Prior Agreement, to provide for,
among other things, certain rights of the Investors in respect of their shares
of Registrable Stock (as hereinafter defined), and certain other matters.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto hereby agree to
amend and restate the Prior Agreement in its entirety to provide as follows:

 

SECTION 1.  Certain
Definitions.  For purposes of this
Agreement, the following terms have the meanings set forth below:

 

“Class A Common Stock”
means the Class A Common Stock, par value $0.01 per share, of the Company.

 

“Commission” means the
Securities and Exchange Commission, or any other federal agency at the time
administering the Securities Act.

 

 

“Common Stock” means the
Common Stock, par value $0.01 per share, of the Company.

 

“Exchange Act” means the Securities Exchange Act of 1934, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, as the same may be amended from time to time.

 

“IPO Date” means the date on which Common Stock shall have been
first sold to the public in a Public Offering.

 

“Public Offering” means the sale of shares of Common Stock to
the public pursuant to an effective registration statement (other than a
registration statement on Form S-4 or S-8 or any successor form) filed
under the Securities Act.

 

“Registrable Stock” means, at any time, (x) all shares of
Common Stock now or hereafter held by the Investors, including all shares from
time to time issued or issuable upon the conversion, exercise or exchange of
any securities directly or indirectly convertible into or exercisable or
exchangeable for Common Stock, that are now or hereafter held by the Investors,
including the Series A Preferred Stock and Class A Common Stock (it
being understood that, with respect to any determination hereunder of the
number of shares of Registrable Stock at any time held by one or more
Investors, all such shares of Common Stock that are issuable upon any such
conversion, exercise or exchange shall be deemed to have been issued at the
time of such determination) and (y) any shares of Common Stock issuable
with respect to the foregoing by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise.  As to any particular Registrable Stock, such
shares shall cease to be Registrable Stock (i) when a registration
statement with respect to the sale of such shares shall have been declared
effective under the Securities Act and such shares shall have been disposed of
in accordance with such registration statement, (ii) when such shares
shall have been sold pursuant to Rule 144 (or any successor provision)
under the Securities Act, (iii) when, with respect to the holder thereof,
all such shares held by such holder become eligible for sale under Rule 144
of the Securities Act (or any similar or successor rule), (iv) when such
shares shall have been otherwise transferred and new certificates for such
shares properly not bearing a legend restricting further transfer shall have
been delivered by the Company or (v) when such shares cease to be
outstanding.

 

“Securities Act” means the Securities Act of 1933, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, as the same may be amended from time to time.

 

“Series A Preferred Stock” means the Series A
Convertible Preferred Stock, par value $0.001 per share, of the Company.

 

SECTION 2.  Registration
Rights.

 

(a)           Demand
Registration Rights.  Subject to the
conditions and restrictions set forth in this Section 2, if the Company
shall at any time from and after the IPO Date be requested 

 

2

 

by WCAS or Gougeon (the
Investor that makes such request, being the “Initiating Investor”) in a
writing that states the number of shares of Registrable Stock to be sold and
the intended method of disposition thereof (each such written request, a “Demand
Request”), to effect a registration under the Securities Act of all or any
portion of the Registrable Stock then held by the Investors, the Company shall
promptly notify in writing (each such notice, a “Demand Registration Notice”)
each other Investor who holds Registrable Stock of such proposed registration
and shall use its commercially reasonable efforts to register under the
Securities Act (each such registration, a “Demand Registration”), for
public sale in accordance with the method of disposition specified in such
Demand Request, the number of shares of Registrable Stock specified in such
Demand Request (plus the number of shares of Registrable Stock specified in any
written request for registration of shares of Registrable Stock that is
received from each other Investor receiving the Demand Registration Notice within
20 days after receipt by such other Investor of such Demand Registration
Notice).  In addition, with the written
consent of the Initiating Investor, the Company shall be entitled to include in
any Demand Registration, for sale in accordance with the method of disposition
specified by the Initiating Investor, shares of Common Stock to be sold by the
Company for its own account or for the account of other holders.  In the event that the proposed method of
disposition specified by the Initiating Investor shall be an underwritten
public offering, (i) the managing underwriter shall be selected by the
Initiating Investor, subject to the approval of the Company, not to be
unreasonably withheld, conditioned or delayed, and (ii) the number of
shares of Registrable Stock to be included in such an offering shall be
included in such offering on the same terms and conditions as the shares
otherwise being sold through underwriters under such registration and may be
reduced if and to the extent that, in the good faith opinion of the managing
underwriter of such offering, inclusion of all shares would adversely affect
the marketing (including the offering price) of the Registrable Stock to be
sold, and, in the case of any such reduction, shares shall be included in such
offering to the extent so permissible on the following basis: (A) with
respect to any Demand Registration where WCAS is the Initiating Investor (1) first,
all Registrable Stock proposed to be included by the WCAS Investors shall be
included (subject to pro  rata reduction among the WCAS Investors
seeking to include Registrable Stock in such offering based on the number of
such shares of Registrable Stock held by the WCAS Investors), (2) second,
all Registrable Stock proposed to be included by the Investors other than WCAS
Investors shall be included (subject to pro  rata reduction among
such Investors other than the WCAS Investors seeking to include Registrable
Stock in such offering based on the number of such shares of Registrable Stock
held by such other Investors)  and (3) third,
to the extent provided above, Common Stock proposed to be included by the
Company for the account of the Company or other stockholders of the Company
shall be included; and (B) with respect to any Demand Registration where
Gougeon is the Initiating Investor (1) first, all Registrable Stock
proposed to be included by the Gougeon Investors shall be included (subject to pro
rata reduction among the Gougeon Investors seeking to include
Registrable Stock in such offering based on the number of such shares of
Registrable Stock held by the Gougeon Investors), (2) second, all
Registrable Stock proposed to be included by the Investors other than the
Gougeon Investors shall be included (subject to pro  rata
reduction among such Investors other than the Gougeon Investors seeking to
include Registrable Stock in such offering based on the number of such shares
of Registrable Stock held by such other Investors) and (3) third,
to the extent provided above, Common Stock proposed to be included by the Company
for the account of the Company or other stockholders of the Company shall be
included.  The Company shall abandon any
Demand Registration upon the request of the 

 

3

 

Initiating Investor and
neither the Company nor such Initiating Investor shall have any liability to
any Investor with respect to such abandonment.

 

(b)           Short-Form Registration
Qualification.  From and after the
IPO Date, the Company shall use its commercially reasonable efforts to qualify
under the provisions of the Securities Act, and thereafter, to continue to
qualify at all times, for registration on Form S-3 or any successor
thereto. In the event the Company fails to so qualify, the Company shall be
required to effect Demand Registrations on Form S-1 or any successor
thereto to the same extent as the Company would be required to effect Demand
Registrations on Form S-3 or any successor thereto.

 

(c)           Certain Provisions Relating to
Demand Registrations.  In connection
with a Demand Registration, the Company shall be obligated to effect such
Demand Registration in accordance with the following provisions:

 

(i)            except
for Demand Registrations withdrawn at the request of the Initiating Investor,
the obligations of the Company under Section 2(a) above to effect a
Demand Registration shall be deemed satisfied only when, subject to the cutback
provisions set forth in Section 2(a), a registration statement covering
all of the shares of Registrable Stock specified in the applicable Demand
Request and in each notice delivered by any other Investor requesting
registration of Registrable Stock in response to the Demand Registration Notice
for sale in accordance with the intended method of disposition specified by the
Initiating Investor in the Demand Request shall have become effective and
remained effective through the end of the period of distribution of the
registration contemplated thereby (determined as provided in the last paragraph
of Section 2(e)); and

 

(ii)           Without
the consent of the Initiating Investor, which will not be unreasonably
withheld, conditioned or delayed, the Company will not, and the Investors agree
that, subject to Section 2(a), the Company shall not be required to,
effect or file for any registration of its Common Stock, whether for its own
account or that of other holders, from the date of receipt of a Demand Request
until the completion of the period of distribution (determined as provided in
the last paragraph of Section 2(e)) of the Registrable Stock covered by
the registration statement filed pursuant to such Demand Request.

 

(d)           Piggyback Registration Rights.  If at any time the Company proposes to
register any of its Common Stock or any other equity securities (or other
securities convertible into equity securities) of the Company under the
Securities Act for sale to the public for cash, whether for its own account or
for the account of other security holders or both (other than a Demand
Registration or a registration on Form S-4 or Form S-8 promulgated
under the Securities Act (or any successor forms thereto) or any other form not
available for registering the Registrable Stock for sale to the public), as
soon as practicable prior to the filing of such registration statement with the
Commission, it will give written notice of its intention to effect such
registration (each such notice a “Piggyback Notice”) to (i) if such
proposed registration is being made in connection with the Company’s initial
Public Offering, each of WCAS, the Gougeon Investors and, unless WCAS elects to
waive its rights under this Section 2(d) as provided below with
respect to such registration within ten days of receiving its Piggyback 

 

4

 

Notice, the other
Investors or (ii) if such proposed registration is to occur after the IPO
Date, to each Investor.  Upon the written
request of any Investor, given within 20 days after the giving of the Piggyback
Notice to such Investor entitled to receipt thereof, to register any of its
Registrable Stock (which request shall state the number of shares of
Registrable Stock to be so registered and the intended method of disposition
thereof), the Company will use its commercially reasonable efforts to cause the
Registrable Stock, as to which registration shall have been so requested, to be
included in the securities to be covered by the registration statement proposed
to be filed by the Company, all to the extent required to permit the sale or
other disposition by such Investor of such Registrable Stock so registered; provided,
that nothing herein shall prevent the Company from abandoning or delaying such
registration at any time. 
Notwithstanding anything to the contrary contained herein, in connection
with any registration statement to be filed prior to the IPO Date, if WCAS elects
to waive its rights under this Section 2(d) with respect to such
registration and the related initial Public Offering, such waiver shall be
effective as a waiver of the rights of all Investors other than the Gougeon
Investors under this Section 2(d) with respect to such registration
and offering.  In the event that any
registration referred to in this Section 2(d) shall be, in whole or
in part, an underwritten public offering, such Registrable Stock shall be
included in the underwriting on the same terms and conditions as the shares
otherwise being sold through underwriters under such registration.  The number of shares of Registrable Stock to
be included in such an underwritten offering may be reduced if and to the
extent that, in the good faith opinion of the managing underwriter of such
offering, inclusion of all shares would adversely affect the marketing
(including the offering price) of the shares to be sold, and, in the case of
any such reduction, shares shall be included in such offering to the extent so
permissible on the following basis: (x) in the case of the Company’s
initial Public Offering (1) first, all shares proposed to be
included by the Company for the account of the Company shall be included, (2) second,
all Registrable Stock proposed to be included by the Gougeon Investors shall be
included (subject to pro rata
reduction among the Gougeon Investors seeking to include Registrable Stock in
such offering based on the number of such shares of Registrable Stock held by
the Gougeon Investors) up to an amount of Registrable Stock that can be sold in
such Public Offering for an aggregate $105,000,000, (3) third, all
Registrable Stock proposed to be included by the WCAS Investors shall be
included (subject to pro rata
reduction among the WCAS Investors seeking to include Registrable Stock in such
offering based on the number of such shares of Registrable Stock held by the
WCAS Investors) up to an amount of Registrable Stock that can be sold in such
Public Offering for an aggregate of $105,000,000 (subject to adjustment to give
effect to any shares of Registrable Stock distributed by WCAS and WCAS CP IV to
their respective partners prior to such Public Offering), (4) fourth,
all Registrable Stock proposed to be included by the Investors that have not
been otherwise included shall be included (subject to pro rata
reduction among the Investors seeking to include Registrable Stock in such
offering based on the number of such shares of Registrable Stock held by such
Investors) and (5) finally, Common Stock proposed to be included by
the Company for the account of other stockholders of the Company shall be
included, and (y) in the case of any subsequent Public Offering (1) first,
all shares proposed to be included by the Company for the account of the Company
shall be included, (2) second, all Registrable Stock proposed to be
included by the WCAS Investors shall be included (subject to pro rata reduction among the WCAS Investors seeking to
include Registrable Stock in such offering based on the number of such shares
of Registrable Stock held by the WCAS Investors) up to an amount of Registrable
Stock that can be sold in such Public Offering for an amount equal to the
proceeds received by the Gougeon Investors in the 

 

5

 

Company’s initial Public
Offering less the aggregate amount of proceeds
received by the WCAS Investors in respect of Registrable Stock included in
previous Public Offerings (subject to adjustment to give effect to any shares
Registrable Stock distributed by WCAS and WCAS CP IV to their respective
partners prior to such Public Offering, but after the previous Public
Offering), (3) third, all Registrable Stock proposed to be included
by the Investors that have not been otherwise included shall be included
(subject to pro rata reduction among the Investors
seeking to include Registrable Stock in such offering based on the number of
such shares of Registrable Stock held by such Investors) and (4) finally,
Common Stock proposed to be included by the Company for the account of other
stockholders of the Company shall be included.

 

Each Investor
agrees to keep any information it receives from the Company pursuant to Section 2(a),
including any Demand Registration Notice, and this Section 2(d), including
any Piggyback Notice, confidential until it is publicly disclosed or such
proposed registration is abandoned.  Each
Investor acknowledges that trading on material non-public information is a
violation of the U.S. securities laws, and each Investor agrees not to do so in
respect of its Registrable Stock.

 

(e)           Certain Registration Procedures.  If and whenever the Company is required by
the provisions of this Section 2 to use its commercially reasonable
efforts to effect the registration of Registrable Stock under the Securities
Act, the Company will, as expeditiously as possible:

 

(i)            prepare
(and afford the Investors Counsel (as hereinafter defined) reasonable
opportunity to review and comment thereon) and file with the Commission a
registration statement with respect to such securities and use its commercially
reasonable efforts to cause such registration statement to become and remain
effective through the end of the period of distribution contemplated thereby
(determined as provided in the last paragraph of Section 2(e));

 

(ii)           prepare
(and afford the Investors Counsel reasonable opportunity to review and comment
thereon) and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective through the end of
period of distribution contemplated thereby (determined as provided in the last
paragraph of Section 2(e)) and comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Stock covered
by such registration statement in accordance with the selling Investors’
intended method of disposition set forth in such registration statement through
the end of such period of distribution;

 

(iii)          furnish
to each selling Investor and to each underwriter such number of copies of the
registration statement and the prospectus included therein (including each
preliminary prospectus) as such persons may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Stock
covered by such registration statement;

 

6

 

(iv)          use
its commercially reasonable efforts to register or qualify the Registrable
Stock covered by such registration statement under the securities or blue sky
laws of such jurisdictions as the selling Investors, the Investors Counsel or,
in the case of an underwritten public offering, the managing underwriter, shall
reasonably request; provided, that the Company will not be required to (x) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 2(e)(iv), (y) subject itself
to taxation in any such jurisdiction in which it would not otherwise be subject
to taxation but for this Section 2(e)(iv) or (z) consent to
general service of process in any jurisdiction in which it would not otherwise
be subject to general service of process but for this Section 2(e)(iv);

 

(v)           immediately
notify each selling Investor under such registration statement and each
underwriter, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event as a result
of which the prospectus contained in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances then existing, not misleading (and upon
receipt of any such notice, each selling Investor agrees to suspend sales of
Registrable Stock covered by such prospectus until such time as the Company
notifies it that the prospectus (as supplemented or amended) no longer includes
any untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances then existing, not misleading);

 

(vi)          use
its commercially reasonable efforts (if the offering is underwritten) to
furnish, at the request of the selling Investors or the Investors Counsel, on
the date that Registrable Stock is delivered to the underwriters for sale
pursuant to such registration:  (A) an
opinion and/or letter dated such date of counsel representing the Company for
the purposes of such registration, addressed to the underwriters and to each
selling Investor, and reasonably satisfactory to the underwriters covering
substantially the same matters as are customarily covered in opinions and/or
letters of issuer’s counsel delivered to underwriters in underwritten public
offerings of securities, and (B) a letter dated such date from the
independent public accountants retained by the Company, addressed to the
underwriters, stating that they are independent public accountants within the
meaning of the Securities Act and that, in the opinion of such accountants, the
financial statements of the Company included in the registration statement or
the prospectus, or any amendment or supplement thereof, comply as to form in
all material respects with the applicable accounting requirements of the
Securities Act, and such letter shall additionally cover such other financial
matters (including information as to the period ending no more than five business
days prior to the date of such letter) with respect to the registration in
respect of which such letter is being given as such underwriters, the selling
Investors or the Investors Counsel may reasonably request; and

 

(vii)         make
available for inspection by the selling Investors, any underwriter
participating in any distribution pursuant to such registration statement, the
Investors Counsel and any accountant or other agent retained by the selling
Investors or such underwriters, all financial and other records, pertinent
corporate documents and 

 

7

 

properties of the Company, and cause the Company’s
officers, directors and employees to supply all information reasonably
requested by the selling Investors, the Investors Counsel or any of such
underwriters, attorneys, accountants or agents in connection with such
registration statement and permit the selling Investors, the Investors Counsel
and such underwriters, attorneys, accountants or agents to participate in the
preparation of such registration statement; provided, however,
that any information that is designated in writing by the Company, in good
faith, as confidential at the time of delivery of such information, shall be
kept confidential by such Person unless (i) disclosure of such information
is required by court or administrative order, (ii) disclosure of such
information, in the opinion of counsel to such Person, is necessary to avoid or
correct a misstatement or omission of a material fact in a registration
statement, prospectus or any supplement or post-effective amendments thereto or
disclosure is otherwise required by law or (iii) such information becomes
generally available to the public other than as a result of a disclosure or
failure to safeguard such information by such Person.  Without limiting the foregoing, no such
information shall be used by any such Person as the basis for any market
transactions in securities of the Company or its subsidiaries in violation of
applicable law.

 

For purposes of Sections 2(c), 2(e)(i) and 2(e)(ii) above,
the “period of distribution” of Registrable Stock in an underwritten
public offering shall be deemed to extend until each underwriter has completed
the distribution of all securities purchased by it, and the period of
distribution of Registrable Stock in any other registration shall be deemed to
extend until the sale of all Registrable Stock covered thereby; provided,
that (x) in the case of the Company’s initial Public Offering the period
of distribution shall not exceed 180 days after the IPO Date and (y) in
the case of any other Public Offering the period of distribution shall not
exceed 90 days after the shares are first sold to the public in such offering.

 

(f)            Information From Selling
Investors.  In connection with each
registration hereunder, Investors selling Registrable Stock will furnish to the
Company in writing such information with respect to themselves and the proposed
distribution by them as shall be reasonably necessary in order to assure compliance
with federal and applicable state securities laws.

 

(g)           Underwriting Agreement.  In connection with any registration pursuant
to this Section 2 that covers an underwritten public offering, the Company
and the Investors selling Registrable Stock each agree to enter into a written
agreement with the managing underwriters selected in the manner herein provided
in such form and containing such provisions as are customary in the securities
business for such an arrangement between major underwriters, selling stockholders
and a company of the Company’s size and investment stature; provided,
that in the case of any Demand Registration, such agreement shall be reasonably
satisfactory to the Initiating Investor.

 

(h)           Expenses.  The Company will pay all Registration
Expenses (as defined below) incurred in complying with Section 2 of this
Agreement; provided, however, that the Company will not be
required to pay for any Registration Expenses for any Demand Registration if
the registration request is subsequently withdrawn at the request of the
Initiating Investor, in which event the Initiating Investor will bear such
expenses, unless withdrawal is based upon 

 

8

 

material adverse
information concerning the Company of which the Initiating Investor was not
aware at the time of such request.  All
Selling Expenses (as defined below) incurred in connection with any registered
offering of securities that, pursuant to this Section 2, includes
Registrable Stock, shall be borne by the participating sellers in proportion to
the number of shares sold by each, or by such persons, including the Company if
the Company is a seller, as they may agree. 
All expenses incident to performance of or compliance by the Company
with Section 2 hereof, including all Commission, stock exchange, The
NASDAQ Stock Market, Inc. (“Nasdaq”) or the Financial Industry
Regulatory Authority (“FINRA”) registration and filing fees (including
fees and expenses incurred in connection with the listing of the Common Stock
of the Company on any securities exchange or exchanges or Nasdaq), printing,
distribution and related expenses, fees and disbursements of counsel and
independent public accountants for the Company, all reasonable fees and
disbursements of one firm counsel for the Investors selected by the WCAS (or,
in the event of a Demand Registration where Gougeon is the Initiating Investor,
such counsel shall be selected by Gougeon) (the “Investors Counsel”),
all fees and expenses incurred in connection with compliance with state
securities or blue sky laws and the rules of the FINRA or any securities
exchange and fees of transfer agents and registrars, but excluding any Selling
Expenses, are herein called “Registration Expenses”.  All underwriting discounts and selling
commissions and transfer taxes applicable to the sale of Registrable Stock are
herein called “Selling Expenses”.

 

(i)            Additional
Limitations on the Company’s Registration Obligations.  The Company shall be entitled to defer any
registration requested hereunder or to suspend the rights of selling Investors
to make sales pursuant to a registration statement otherwise required to be
kept effective hereunder if the Company determines in good faith that there
exists a material proposed transaction (including any proposed acquisition or
disposition) or material corporate development that would be required to be
disclosed in such registration statement and the disclosure of which would
either have a material adverse effect on such material proposed transaction or
material corporate development or the Company; provided, that (i) such
delay or suspension shall not continue beyond 90 days after the Company effects
such delay or suspension and (ii) the Company’s right to delay or suspend
any such registration shall not be exercised more than one time in any 12-month
period.  In the case of notice suspending
an effective Registration Statement, each Investor will immediately discontinue
any sales of Registrable Shares pursuant to such Registration Statement until
such Investor has received copies of a supplemented or amended prospectus or
until such Investor is advised in writing by the Company that the then-current
prospectus may be used and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such prospectus.  Without limiting the
foregoing, the Company shall not be required to effect any Demand Registration (A) during
the period starting with the date 30 days prior to the Company’s good faith
estimate of the date of filing of, and ending on the last day of the “period of
distribution” (as defined in Section 2(e)) of, a Company initiated
registration, and (B) if the Company has previously effected two (2) Demand
Registrations requested by such Initiating Investor; provided that any
effected Demand Registration in which the Initiating Investor is unable to
include at least 75% of the number of shares of Registrable Stock requested in
the related Demand Request shall not count toward the number of previously
effected Demand Registrations under this clause (B).

 

9

 

SECTION 3. 
Indemnification Rights and Obligations In Respect of Registered
Offerings of Registrable Stock.

 

(a)           Company
Indemnification of Selling Investors. 
In the event of a registration of any of the Registrable Stock under the
Securities Act pursuant to Section 2 of this Agreement, the Company will
indemnify and hold harmless each seller of Registrable Stock thereunder and
each other person, if any, who controls such seller within the meaning of the
Securities Act and each underwriter and each person who controls any
underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, (or actions in respect
thereof) to which such seller, underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Registrable Stock was
registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (and in the case of any preliminary or final prospectus, in light of
the circumstances under which they were made) not misleading, and will
reimburse each such seller, each such underwriter and each such controlling
person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, that the Company will not be liable in any such case
if and to the extent that any such loss, claim, damage, liability or action
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission so made in conformity with information
furnished by such seller, such underwriter or such controlling person in
writing specifically for use in such registration statement or prospectus; provided,
further, that the indemnity agreement contained in this Section 3(a) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld).

 

(b)           Selling Investor Indemnification
of the Company and the Other Selling Stockholders.  In the event of a registration of any of the
Registrable Stock under the Securities Act pursuant to Section 2 of this
Agreement, each seller of such Registrable Stock thereunder, severally and not
jointly, will indemnify and hold harmless the Company and each person, if any,
who controls the Company within the meaning of the Securities Act, each officer
of the Company who signs the registration statement, each director of the
Company, each underwriter and each person who controls any underwriter within
the meaning of the Securities Act, and each other seller of Registrable Stock
and each person who controls any such other seller of Registrable Stock,
against all losses, claims, damages or liabilities, joint or several, (or
actions in respect thereof) to which the Company or such officer or director or
underwriter or other seller or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the registration statement under which such Registrable Stock was registered
under the Securities Act, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
(and in the 

 

10

 

case of any preliminary
or final prospectus, in light of the circumstances under which they were made)
not misleading, and will reimburse the Company and each such officer, director,
underwriter, other seller of Registrable Stock and controlling person for any
legal or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
that such seller will be liable hereunder in any such case if and only to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with information
pertaining to such seller, as such, furnished in writing to the Company by such
seller specifically for use in such registration statement or prospectus; provided,
further, that the liability of each seller hereunder shall be limited to
the proceeds (net of underwriting discounts and commissions) received by such
seller from the sale of Registrable Stock covered by such registration
statement; provided, further, that the indemnity agreement
contained in this Section 3(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of such seller of Registrable Stock
(which consent shall not be unreasonably withheld).

 

(c)           Indemnification Procedures.  Promptly after receipt by an indemnified
party hereunder of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party hereunder, notify the indemnifying party in writing thereof,
but the omission so to promptly notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party other than
under this Section 3.  In case any
such action shall be brought against any indemnified party and it shall
promptly notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 3 for any legal expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation and of liaison with counsel so selected; provided,
that if the defendants in any such action include both the indemnified party
and the indemnifying party and, based on the opinion of counsel, the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party, or if, based on the opinion of counsel,
the interests of the indemnified party reasonably may be deemed to conflict
with the interests of the indemnifying party, the indemnified party shall have
the right to select a separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the reasonable
expenses and fees of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as incurred.  Notwithstanding the foregoing, any
indemnified party shall have the right to retain its own counsel in any such
action, but the fees and disbursements of such counsel shall be at the expense
of such indemnified party; provided that such fees and expenses shall be at the
expense of the indemnifying party if (i) the indemnifying party shall have
failed to retain counsel for the indemnified person as aforesaid or (ii) the
indemnifying party and such indemnified party shall have mutually agreed to the
retention of such counsel and the payment thereof by the indemnifying
party.  It is understood that the
indemnifying party shall not, in connection with any action or related actions
in the same jurisdiction, be liable for the fees and disbursements of 

 

11

 

more than one separate
firm qualified in such jurisdiction to act as counsel for all indemnified
parties.  No indemnifying party, in the
defense of any such claim or litigation, shall, except with the consent of such
indemnified party, which consent shall not be unreasonably withheld, consent to
entry of any judgment or enter into any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a party
and indemnity was sought hereunder by such indemnified party unless such
judgment or settlement includes as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.  The indemnification of underwriters provided
for in this Section 3 shall be on such other terms and conditions as are at
the time customary and reasonably required by such underwriters as provided in Section 2(g).

 

(d)           Contribution.  If the indemnification provided for in
Sections 3(a) and 3(b) above is unavailable or insufficient to hold
harmless an indemnified party under such Sections in respect of any losses,
claims, damages or liabilities or actions in respect thereof referred to
therein, then each indemnifying party shall in lieu of indemnifying such
indemnified party contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or actions in
such proportion as appropriate to reflect the relative fault of the Company, on
the one hand, and the underwriters or the sellers of such Registrable Stock, on
the other, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or actions as well as any other
relevant equitable considerations, including the failure to give any notice
under Section 3(c) above.  The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact relates to
information supplied by the Company, on the one hand, or the underwriters or
the sellers of such Registrable Stock, on the other, and to the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.  The
Company and each of the Investors agrees that it would not be just and
equitable if contributions pursuant to this Section were determined by pro
rata allocation (even if all of the sellers of such Registrable Stock were
treated as one entity for such purpose) or by any other method of allocation
which did not take account of the equitable considerations referred to above in
this Section.  The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or action in respect thereof, referred to above in this Section, shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim.  Notwithstanding the provisions
of this Section, the sellers of such Registrable Stock shall not be required to
contribute any amount in excess of the amount, if any, by which the total price
at which the Registrable Stock sold by each of them was offered to the public
exceeds the amount of any damages which they are otherwise required to pay by
reason of such untrue or alleged untrue statement or omission.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act), shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation.

 

SECTION 4.  Rule 144.  The Company agrees with the Investors that,
from and after the IPO Date, it shall file any and all reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder, or, if the Company is not
thereafter required to file any such reports, it shall, upon the written
request of any Investor, make publicly available such information as is
necessary to permit sales pursuant to Rule 144 under the Securities
Act.  Upon the written request of any
Investor, the 

 

12

 

Company shall promptly
furnish to such Investor a written statement by the Company as to its
compliance with the reporting requirements set forth in this Section 4.

 

SECTION 5.  Duration of
Agreement.  All provisions of this
Agreement shall survive so long as any Investor owns any Registrable Stock and
shall terminate with respect to any Investor at such time as it no longer owns
any Registrable Stock.  The Company may
make a written request of any Investor, at any time or from time to time, that
such Investor confirm whether such Investor holds any Registrable Stock.

 

SECTION 6.  Market
Stand-off.  Each Investor hereby
agrees that it will not, without the prior written consent of the managing
underwriter, during the period commencing on the date of the final prospectus
relating to a Public Offering and ending on the date specified by the Company
and the managing underwriters (not to exceed 180 days) (i) lend, offer, sell,
contract to sell, sell any option or contract to purchase, or otherwise
transfer or dispose of, directly or indirectly, and shares of Common Stock or
any securities convertible into or exercisable into or exchangeable for Common
Stock, or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, regardless of whether the foregoing transactions are to be
settled by delivery of Common Stock, securities, cash, or otherwise.  The underwriters in connection with such
Public Offering are intended third-party beneficiaries of this Section 6
and shall have the right, power and authority to enforce the provisions hereof
as though they were a party hereto.  The
Company may impose stop-transfer restrictions with respect to the Registrable
Stock of each Investor or its permitted assigns until the end of such period.

 

SECTION 7. 
Miscellaneous.

 

(a)           Additional
Registration Rights.  Without the
consent of WCAS, the Company shall not grant any registration rights to any
other person that are inconsistent or conflict with the registration rights
granted hereunder.

 

(b)           Headings.  Headings of sections of this Agreement are
inserted for convenience of reference only and shall not affect the
interpretation hereof.

 

(c)           Severability.  Each provision of this Agreement shall be
treated as a separate and independent clause, and the unenforceability of any
one clause shall in no way impair the enforceability of any of the other
clauses contained herein.  If one or more
of the provisions contained in this Agreement shall for any reason be held to
be unenforceable, such provision or provisions shall be construed by the
appropriate judicial body by limiting or reducing it or them, so as to be
enforceable to the maximum extent compatible with applicable law, and no other
provision hereof shall be affected by such holding, limitation or reduction.

 

(d)           Benefits of Agreement.  This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns and nothing in this Agreement (except as specified in Section 6),
expressed or implied, is intended to confer on any person other than the
parties hereto, their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.  The rights and obligations of the parties
hereto shall not be assigned without the consent of WCAS, 

 

13

 

in the case of any
assignment by the Company, or the Company, in the case of any assignment by any
Investor, and any attempted assignment in violation of this Section 7(d) shall
be null and void; provided, that any Investor’s rights hereunder are
assignable to a transferee in connection with any transfer of Registrable Stock
(including by means of transferring securities that are directly or indirectly
convertible into or exercisable or exchangeable for Registrable Stock) so long
as (i) such transferee expressly agrees to become bound hereby as an “Investor”
hereunder pursuant to a written instrument in form and substance reasonably
satisfactory to the Company, (ii) notice of such transfer is given to the
Company and WCAS, and (iii) the Company consents in writing, which consent
shall not be unreasonably withheld, conditioned or delayed; provided, further,
that the Company’s consent shall not be required pursuant to clause (iii) if
such transferee is (A) in the case of any Investor that is an individual,
the Investor’s family member or a trust for the benefit of the Investor, or (B) in
the case of any other Investor, a subsidiary, parent, partner, limited partner,
retired partner, affiliate or stockholder of the Investor (including in the
case of an Investor that is a private equity fund, any side fund, successor
fund or predecessor fund of such Investor).

 

(e)           Entire Agreement;
Modification.  This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supercedes all prior agreements and understandings, oral and
written, between the parties hereto with respect to the subject matter
hereof.  This Agreement may not be
modified or amended except by a writing signed by the Company and WCAS; provided,
that no provision of this Agreement may be modified or amended in a manner
materially adverse to an Investor, other than WCAS (in its capacity as an
Investor hereunder), if such modification or amendment affects such Investor
disproportionately relative to the other Investors, except with the written
consent of such Investor; provided, further, that,
notwithstanding the foregoing, upon the written agreement of only the Company
and WCAS, additional Investors may be added to this Agreement.  Except as otherwise provided herein, any
waiver of any provision of this Agreement must be in a writing signed by the
party against whom enforcement of such waiver is sought.

 

(f)            Notices.  All notices, requests, instructions and other
documents that are required to be or may be given or delivered pursuant to the
terms of this Agreement shall be in writing and shall be sufficient in all
respects if delivered by hand or national overnight courier service,
transmitted by facsimile (subject to electronic confirmation of such facsimile
transmission) or mailed by registered or certified mail, postage prepaid, as
follows:

 

If to the
Company, to it at:

 

AGA Medical
Holdings, Inc.

5050 Nathan
Lane North

Plymouth, MN
55442

Facsimile
number: (763) 513-9226

Attention:
Chief Executive Officer

General
Counsel

 

with a copy to:

 

 

14

 

Welsh, Carson, Anderson &
Stowe

320 Park Avenue, Suite 2500

New York, NY 10022

Facsimile:  (212) 893-9559

Attention:  Sean M. Traynor

 

and

 

Franck L. Gougeon

4729 Annaway Drive

Edina, MN 55436

Facsimile (763) 521-7143

 

If to any Investor, to it at
the address set forth on Schedule I hereto, with an additional copy to:

 

Ropes & Gray LLP

1211 Avenue of the Americas

New York, New York 10036

Facsimile:  (646) 728-1513

Attention:  Othon A. Prounis, Esq.

 

and

 

Simpson Thacher &
Bartlett LLP

425 Lexington Avenue

New York, NY 10017

Facsimile:  (212) 455-2502

Attention:  Kenneth B. Wallach, Esq.

 

and

 

Moss & Barnett, a
Professional Association

90 South Seventh Street, Suite 4800

Minneapolis, Minnesota 55402

Facsimile: (612) 877-5999

Attention:  Richard J. Kelber, Esq./Arthur
W. Dickinson, Esq.

 

or such other address or addresses as any party hereto shall have
designated by notice in writing to the other parties hereto.  Such notices, requests, instructions and
other documents shall be deemed given or delivered (i) five business days
following sending by registered or certified mail, postage prepaid, (ii) one
business day following sending by national overnight courier service, (iii) the
day of sending, if sent by facsimile prior to 5:00 p.m. (New York City
time) on any business day or the next succeeding business day if sent by
facsimile after 5:00 p.m. (New York City time) on any business day or on
any day other than a business day or (iv) when delivered, if delivered by
hand.

 

15

 

(g)           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  Any or all such counterparts may be executed by
facsimile.

 

(h)           Changes in Registrable Stock.  If, and as often as, there are any changes in
the Registrable Stock by way of stock split, stock dividend, combination or
reclassification, or through merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made
in the provisions hereof as may be required so that the rights and privileges
granted hereby shall continue with respect to the Registrable Stock as so
changed and the Company shall make appropriate provision in connection with any
merger, consolidation, reorganization or recapitalization that any successor to
the Company (or resulting parent thereof) shall agree, as a condition to the
consummation of any such transaction, to expressly assume the Company’s
obligations hereunder.

 

(i)            Governing Law.  This Agreement, the rights of the parties and
all actions, claims or suits arising in whole or in part under or in connection
herewith, will be governed by and construed in accordance with the domestic
substantive laws of the State of New York (regardless of the laws that might
otherwise govern under applicable principles or rules of conflicts of law
to the extent such principles or rules are not mandatorily applicable by
statute and would require the application of the laws of another jurisdiction).

 

(j)            Jurisdiction; Venue; Service of
Process.

 

(i)            Jurisdiction.  Each party to this Agreement, by its
execution hereof, (a) hereby irrevocably submits to the exclusive
jurisdiction of the state courts of the State of New York or the United States
District Court located in New York County in the State of New York for the
purpose of any action, claims or suit between the parties arising in whole or
in part under or in connection with this Agreement, (b) hereby waives to
the extent not prohibited by applicable law, and agrees not to assert, by way
of motion, as a defense or otherwise, in any such action, claim or suit, any
claim that it is not subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from attachment or execution,
that any such action, claim or suit brought in one of the above-named courts
should be dismissed on grounds of forum non conveniens,
should be transferred or removed to any court other than one of the above-named
courts, or should be stayed by reason of the pendency of some other proceeding
in any other court other than one of the above-named courts, or that this
Agreement or the subject matter hereof may not be enforced in or by such court and
(c) hereby agrees not to commence any such action, claim or suit other
than before one of the above-named courts. 
Notwithstanding the previous sentence a party may commence any action,
claim or suit in a court other than the above-named courts solely for the
purpose of enforcing an order or judgment issued by one of the above-named
courts.

 

(ii)           Venue.  Each party agrees that for any action, claim
or suit between the parties arising in whole or in part under or in connection
with this Agreement, such party bring actions, claims and suits only in courts
located in New York County in the State of New York.  Each party further waives any claim and will
not assert that venue should properly lie in any other location within the
selected jurisdiction.

 

16

 

(iii)          Service
of Process.  Each party hereby (a) consents
to service of process in any action, claim or suit between the parties arising
in whole or in part under or in connection with this Agreement in any manner
permitted by New York law, (b) agrees that service of process made in
accordance with clause (a) or made by registered or certified mail, return
receipt requested, at its address specified pursuant to Section 7(f), will
constitute good and valid service of process in any such action, claim or suit
and (c) waives and agrees not to assert (by way of motion, as a defense,
or otherwise) in any such action, claim or suit any claim that service of
process made in accordance with clause (a) or (b) does not constitute
good and valid service of process.

 

(k)           Specific
Performance.  Each of the parties
acknowledges and agrees that the other parties would be damaged irreparably in
the event any of the provisions of this Agreement are not performed in
accordance with their specific terms or otherwise are breached or
violated.  Accordingly, each of the
parties agrees that, without posting bond or other undertaking, the other
parties will be entitled to an injunction or injunctions to prevent breaches or
violations of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action, claim or suit
instituted in any court of the United States or any state thereof having
jurisdiction over the parties and the matter in addition to any other remedy to
which it may be entitled, at law or in equity. 
Each party further agrees that, in the event of any action for specific
performance in respect of such breach or violation, it will not assert that the
defense that a remedy at law would be adequate.

 

(l)            Waiver of Jury
Trial.  TO THE EXTENT NOT PROHIBITED
BY APPLICABLE LAW THAT CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT
THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY
RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR
IN CONNECTION WITH THIS AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING,
AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  THE PARTIES AGREE THAT ANY OF THEM MAY FILE
A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING,
VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE
ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING
TO THIS AGREEMENT WILL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY
A JUDGE SITTING WITHOUT A JURY.

 

(m)          Interpretation.  As used herein, the words “hereof”, “herein”,
“herewith” and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and the word “Section” refers to a Section of
this Agreement unless otherwise specified. 
Whenever the words “include”, “includes” or “including” are used in this
Agreement they shall be deemed to be followed by the words “without limitation”.  The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such terms.

 

[Signature Page to
Follow]

 

17

 

IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Registration Rights Agreement to be duly executed as of the day and
year first above written.

 

	
   

  	
   

  	
   

  
	
   

  	
  AGA MEDICAL
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brigid
  A. Makes

  
	
   

  	
   

  	
  Name: Brigid
  A. Makes

  
	
   

  	
   

  	
  Title:
  Senior Vice President and Chief 

  Financial Officer

  
				

 

[Signature Page to Amended and Restated Registration Rights Agreement
of AGA Medical Holdings, Inc.]

 

 

	
   

  	
  WELSH, CARSON, ANDERSON & STOWE 

  IX, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  WCAS IX
  Associates LLC,

  
	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan
  Rather

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:
  Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WCAS
  MANAGEMENT CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan
  Rather

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WCAS CAPITAL
  PARTNERS IV, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  WCAS CP IV
  Associates LLC,

  
	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan
  Rather

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:
  Managing Member

  

 

[Signature Page to Amended and Restated
Registration Rights Agreement of AGA Medical Holdings, Inc.]

 

 

	
   

  	
  Patrick J. Welsh

  
	
   

  	
  Russell L. Carson

  
	
   

  	
  Bruce K. Anderson

  
	
   

  	
  Thomas E. McInerney

  
	
   

  	
  Robert A. Minicucci

  
	
   

  	
  Jonathan M. Rather IRA Charles Schwab & Co., Inc.
  Custodian

  
	
   

  	
  Sanjay Swani

  
	
   

  	
  D. Scott Mackesy

  
	
   

  	
  John D. Clark

  
	
   

  	
  James R. Matthews

  
	
   

  	
  John Almedia, Jr.

  
	
   

  	
  Sean M. Traynor

  
	
   

  	
  Michael E. Donovan

  
	
   

  	
  Eric J. Lee

  
	
   

  	
  Brian T. Regan

  
	
   

  	
  Lucas Garman

  
	
   

  	
  David Mintz

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan
  Rather

  
	
   

  	
   

  	
  Jonathan M.
  Rather

  
	
   

  	
   

  	
  Individually
  and as Attorney-In-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WCAS PROFIT
  SHARING PLAN

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan
  Rather

  
	
   

  	
   

  	
  Jonathan M.
  Rather

  
	
   

  	
   

  	
  Authorized
  Person

  

 

[Signature Page to Amended and Restated
Registration Rights Agreement of AGA Medical Holdings, Inc.]

 

 

	
   

  	
  /s/ Paul Queally

  
	
   

  	
  Paul B. Queally

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  P. BRIAN QUEALLY JR. EDUCATIONAL

   TRUST U/ADTD 6/11/98

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul
  Queally

  
	
   

  	
   

  	
  Paul B.
  Queally

  
	
   

  	
   

  	
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ERIN F. QUEALLY EDUCATIONAL TRUST 

  U/ADTD 6/11/98

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul
  Queally

  
	
   

  	
   

  	
  Paul B.
  Queally

  
	
   

  	
   

  	
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SEAN P. QUEALLY EDUCATIONAL TRUST 

  U/ADTD 6/11/98

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul
  Queally

  
	
   

  	
   

  	
  Paul B.
  Queally

  
	
   

  	
   

  	
  Trustee

  
	
   

  	
   

  	
   

  

[Signature Page to Amended and Restated
Registration Rights Agreement of AGA Medical Holdings, Inc.]

 

 

	
   

  	
  /s/ Anthony de Nicola

  
	
   

  	
  Anthony J. de Nicola

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DE NICOLA HOLDINGS LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anthony
  de Nicola

  
	
   

  	
   

  	
  Anthony J.
  de Nicola

  
	
   

  	
   

  	
  General
  Partner

  

 

[Signature Page to Amended and Restated
Registration Rights Agreement of AGA Medical Holdings, Inc.]

 

 

	
   

  	
  THE BRUCE K. ANDERSON 2004 

  IRREVOCABLE TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary R.
  Anderson

  
	
   

  	
   

  	
  Name: Mary
  R. Anderson

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BRUCE K. ANDERSON TTEE U/A DTD 

  11/9/04 BRUCE K. ANDERSON LIVING 

  TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce K.
  Anderson

  
	
   

  	
   

  	
  Name: Bruce
  K. Anderson

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE PATRICK WELSH 2004 IRREVOCABLE 

  TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carol A.
  Welsh

  
	
   

  	
   

  	
  Name: Carol
  A. Welsh

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PATRICK WELSH TTEE U/A DTD 5/9/05

  PATRICK WELSH REVOCABLE TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick J.
  Welsh

  
	
   

  	
   

  	
  Name:
  Patrick J. Welsh

  
	
   

  	
   

  	
  Title:

  

 

[Signature Page to Amended and Restated
Registration Rights Agreement of AGA Medical Holdings, Inc.]

 

 

	
   

  	
  /s/ Thomas
  Scully

  
	
   

  	
  Thomas
  Scully

  

 

[Signature Page to Amended and Restated
Registration Rights Agreement of AGA Medical Holdings, Inc.]

 

 

	
   

  	
  /s/ Stacey
  Bellet

  
	
   

  	
  Stacey Bellet

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Suzanne
  Bellet Price

  
	
   

  	
  Suzanne
  Bellet Price

  

 

[Signature Page to Amended and Restated
Registration Rights Agreement of AGA Medical Holdings, Inc.]

 

 

	
   

  	
   

  	
   

  
	
   

  	
  SELECT
  GLOBAL INVESTORS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rocco A.
  Ortenzio

  
	
   

  	
   

  	
  Name: Rocco
  A. Ortenzio

  
	
   

  	
   

  	
  Title:
  General Partner

  
				

 

[Signature Page to Amended and Restated
Registration Rights Agreement of AGA Medical Holdings, Inc.]

 

 

	
   

  	
  /s/ Lauren
  Melkus

  
	
   

  	
  Lauren
  Melkus

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Jeffrey
  Jay

  
	
   

  	
  Jeffery Jay

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Joelle
  Kayden

  
	
   

  	
  Joelle
  Kayden

  

 

[Signature Page to Amended and Restated
Registration Rights Agreement of AGA Medical Holdings, Inc.]

 

 

	
   

  	
  /s/ Franck
  L. Gougeon

  
	
   

  	
  Franck L.
  Gougeon

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GOUGEON
  SHARES, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Franck
  L. Gougeon

  
	
   

  	
   

  	
  Franck L.
  Gougeon

  
	
   

  	
   

  	
  Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE FRANCK L. GOUGEON REVOCABLE

  TRUST UNDER AGREEMENT DATED

  JUNE 28, 2006

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Franck
  L. Gougeon

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

[Signature Page to Amended and Restated
Registration Rights Agreement of AGA Medical Holdings, Inc.]

 

 

SCHEDULE I

Schedule of Investors

	
  The WCAS Investors:

  
	
  Welsh, Carson, Anderson &
  Stowe IX, L.P.

  
	
  WCAS Capital Partners IV, L.P.

  
	
  Patrick Welsh TTEE U/A
  DTD 5/9/05 Patrick Welsh Revocable Trust

  
	
  Patrick Welsh 2004 Irrevocable
  Trust

  
	
  Russell L. Carson

  
	
  Bruce K. Anderson TTEE U/A DTD
  11/9/04 Bruce K. Anderson Living Trust

  
	
  Bruce K. Anderson 2004
  Irrevocable Trust

  
	
  Thomas E. McInerney

  
	
  Robert A. Minicucci

  
	
  Anthony J. de Nicola

  
	
  De Nicole Holdings LP

  
	
  Paul B. Queally

  
	
  P. Brian Queally Jr.
  Educational Trust U/ADTD 6/11/98

  
	
  Erin F. Queally Educational
  Trust U/ADTD 6/11/98

  
	
  Sean P. Queally Educational
  Trust U/ADTD 6/11/98

  
	
  Jonathan M. Rather IRA Charles
  Schwab & Co., Inc. Custodian

  
	
  Sanjay Swani

  
	
  D. Scott Mackesy

  
	
  John D. Clark

  
	
  James R. Matthews

  
	
  John Almeida, Jr.

  
	
  Sean M. Traynor

  
	
  WCAS Profit Sharing Plan

  
	
  Michal E. Donovan

  
	
  Eric J. Lee

  
	
  Brian T. Regan

  
	
  Lucas Garman

  
	
  David Mintz

  
	
  Joelle Kayden

  
	
  WCAS Profit Sharing Plan

  
	
  WCAS Management Corporation

  
	
  Address for Notices:

  
	
  c/o Welsh Carson Anderson
  & Stowe

  
	
  320 Park Avenue, Suite
  2500

  New York, NY 10022-6815

  Attention: Sean Traynor

  Facsimile: 212-893-9566

  
	
   

  
	
  Lauren Melkus

  
	
  Address for Notices:

  
	
  2 Fifth Avenue

  
	
  New York, NY 10011

  
	
  Facsimile: 212-921-2290

  
	
   

  
	
  With a copy to:

  
	
  Welsh Carson Anderson
  & Stowe

  
	
  c/o Welsh Carson Anderson
  & Stowe

  
	
  320 Park Avenue, Suite
  2500

  New York, NY 10022-6815

  Attention: Sean Traynor

  Facsimile: 212-893-9566

  
	
   

  
	
  Stacey Bellet

  
	
  Suzanne Bellet Price

  
	
  Address for Notices:

  
	
  125 East 72nd Street, Apt.
  11-D

  
	
  New York, NY 10021

  
	
  Attention: Dave Bellet

  
	
  Facsimile: 212-439-6171

  

 

[Amended and Restated Registration Rights Agreement of AGA Medical
Holdings, Inc.]

 

 

	
  With a copy to:

  
	
  Welsh Carson Anderson
  & Stowe

  
	
  c/o Welsh Carson Anderson
  & Stowe

  
	
  320 Park Avenue, Suite
  2500

  New York, NY 10022-6815

  Attention: Sean Traynor

  Facsimile: 212-893-9566

  
	
   

  
	
  Select Global Investors, L.P.

  
	
  Address for Notices:

  
	
  4718 Old Gettysburg Road,
  Suite 405

  
	
  Mechanicsburg, PA 17055

  
	
  Attention: Rocco A.
  Ortenzio

  
	
  Facsimile: 717-972-1050

  
	
   

  
	
  With a copy to:

  
	
  Welsh Carson Anderson
  & Stowe

  
	
  c/o Welsh Carson Anderson
  & Stowe

  
	
  320 Park Avenue, Suite
  2500

  New York, NY 10022-6815

  Attention: Sean Traynor

  Facsimile: 212-893-9566

  
	
   

  
	
  Jeffrey Jay

  
	
  Address for Notices:

  
	
  c/o Great Point Partners,
  LLC

  
	
  165 Mason Street, 3rd
  Floor

  
	
  Greenwich, CT 06830

  
	
  Attention: Jeffrey Jay

  
	
  Facsimile: 203-971-3320

  
	
   

  
	
  With a copy to:

  
	
  Welsh Carson Anderson
  & Stowe

  
	
  c/o Welsh Carson Anderson
  & Stowe

  
	
  320 Park Avenue, Suite
  2500

  New York, NY 10022-6815

  Attention: Sean Traynor

  Facsimile: 212-893-9566

  
	
   

  
	
  The Gougeon Investors:

  
	
  Franck L. Gougeon

  
	
  Gougeon Shares, LLC

  
	
  The Franck L. Gougeon Revocable
  Trust

  
	
  Address for Notices:

  
	
  4729 Annaway Drive

  
	
  Edina, MN 55436

  
	
  Facsimile: 763-521-7143

  

 

[Amended and Restated Registration Rights
Agreement of AGA Medical Holdings, Inc.]

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