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THIRD AMENDED AND RESTATED
  REVOLVING TERM CREDIT AGREEMENT  
    

CELESTICA INC. AND THE SUBSIDIARIES SPECIFIED AS

DESIGNATED SUBSIDIARIES HEREIN,

as Borrowers  

- and -  

CIBC WORLD MARKETS,

as Joint Lead Arranger  

- and -  

RBC CAPITAL MARKETS,

as Joint Lead Arranger and Co-Syndication Agent  

- and -  

CANADIAN IMPERIAL BANK OF COMMERCE,

as Administrative Agent  

- and -  

THE BANK OF NOVA SCOTIA,

as Documentation Agent  

- and -  

BANC OF AMERICA SECURITIES LLC

as Co-Syndication Agent  

- and -  

THE FINANCIAL INSTITUTIONS NAMED IN SCHEDULE A,

as Lenders  

UP TO U.S.$750,000,000

REVOLVING TERM CREDIT FACILITY  

Made as of June 4, 2004  

  

 
 

TABLE OF CONTENTS    
    

	 
	 
	 	Page

	ARTICLE 1	 	 	 
	 	INTERPRETATION	 	3
	 	1.1	Definitions	 	3
	 	1.2	Headings	 	24
	 	1.3	Use of Defined Terms	 	24
	 	1.4	Extended Meanings	 	24
	 	1.5	Cross References	 	25
	 	1.6	Reference to Agents or Lenders	 	25
	 	1.7	Accounting Terms	 	25
	 	1.8	Consolidated Financial Statements and Consolidated Accounts	 	25
	 	1.9	Non-Banking Days	 	25
	 	1.10	References to Time of Day	 	26
	 	1.11	Severability	 	26
	 	1.12	Currency	 	26
	 	1.13	References to Statutes	 	26
	 	1.14	References to Agreements	 	26
	 	1.15	Consents and Approvals	 	26
	 	1.16	Schedules	 	26
	
 ARTICLE 2	

 	
 	

 
	 	THE FACILITY	 	28
	 	2.1	Establishment of the Facility	 	28
	 	2.2	Purpose, Nature and Term of the Facility	 	28
	 	2.3	Availability of Advances	 	28
	 	2.4	Lenders' Obligations	 	30
	 	2.5	Repayment of Advances by Former Designated Subsidiaries	 	30
	 	2.6	Repayment of Facility	 	30
	 	2.7	Payments/Cancellation or Reduction	 	31
	 	2.8	Maturity Date	 	32
	 	2.9	Interest on Prime Rate Advances	 	32
	 	2.10	Interest on Base Rate Canada Advances	 	33
	 	2.11	[Intentionally Deleted]	 	33
	 	2.12	LIBOR Advances	 	33
	 	2.13	Method and Place of Payment	 	34
	 	2.14	Fees	 	35
	 	2.15	Conversion Options	 	35
	 	2.16	Execution of Notices	 	36
	 	2.17	Evidence of Indebtedness	 	36
	 	2.18	Interest on Unpaid Costs and Expenses	 	37
	 	2.19	Criminal Rate of Interest	 	37
	 	2.20	Compliance with the Interest Act (Canada)	 	37
	 	2.21	Nominal Rate of Interest	 	37
	 	2.22	Swing Line Facility	 	37

i

 

	 
	 
	 	Page

	 	2.23	Increase In Aggregate Commitment Amount To U.S.$750,000,000	 	40
	
 ARTICLE 3	

 	
 	

 
	 	LETTERS OF CREDIT	 	42
	 	3.1	Issuance Request	 	42
	 	3.2	Issuances	 	42
	 	3.3	Other Lenders' Participation	 	43
	 	3.4	Reimbursement	 	44
	 	3.5	Deemed Disbursements	 	45
	 	3.6	Nature of Reimbursement Obligations	 	45
	 	3.7	Indemnity for Costs	 	46
	 	3.8	Fees	 	46
	 	3.9	Existing Letters of Credit	 	47
	
 ARTICLE 4	

 	
 	

 
	 	BANKERS' ACCEPTANCES AND ACCEPTANCE NOTES	 	48
	 	4.1	Funding of Bankers' Acceptances	 	48
	 	4.2	Acceptance Fees	 	48
	 	4.3	Presigned Draft Forms	 	49
	 	4.4	Term and Interest Periods	 	50
	 	4.5	Payment on Maturity	 	50
	 	4.6	Waiver of Days of Grace	 	50
	 	4.7	Special Provisions Relating to Acceptance Notes	 	50
	 	4.8	No Market	 	51
	
 ARTICLE 5	

 	
 	

 
	 	CHANGE OF CIRCUMSTANCES AND INDEMNIFICATION	 	52
	 	5.1	[Intentionally Deleted]	 	52
	 	5.2	[Intentionally Deleted]	 	52
	 	5.3	Lender Representation	 	52
	 	5.4	[Intentionally Deleted]	 	52
	 	5.5	Increased Costs	 	52
	 	5.6	Illegality	 	53
	 	5.7	Mitigation	 	54
	 	5.8	Taxes	 	55
	 	5.9	Tax Refund	 	57
	
 ARTICLE 6	

 	
 	

 
	 	CONDITIONS PRECEDENT	 	58
	 	6.1	Conditions for Closing	 	58
	 	6.2	Conditions for First Drawdown	 	59
	 	6.3	Conditions for Subsequent Drawdowns	 	59
	 	6.4	Conditions for Material Restricted Subsidiaries and Restricted Subsidiaries	 	60

ii

 

	 
	 
	 	Page

	ARTICLE 7	 	 	 
	 	PROVISIONS RELATING TO SUBSIDIARIES	 	61
	 	7.1	Designated Subsidiaries	 	61
	 	7.2	[Intentionally Deleted]	 	63
	 	7.3	Material Restricted Subsidiaries to Provide Guarantees	 	63
	 	7.4	Unrestricted Subsidiaries	 	63
	
 ARTICLE 8	

 	
 	

 
	 	REPRESENTATIONS AND WARRANTIES	 	64
	 	8.1	Representations and Warranties	 	64
	 	8.2	Survival of Representations and Warranties	 	68
	 	8.3	Deemed Repetition of Representations and Warranties	 	69
	 	8.4	Guarantees from Chinese Material Restricted Subsidiaries	 	69
	
 ARTICLE 9	

 	
 	

 
	 	COVENANTS	 	70
	 	9.1	Affirmative Covenants	 	70
	 	9.2	Negative Covenants	 	75
	 	9.3	Financial Covenants	 	77
	
 ARTICLE 10	

 	
 	

 
	 	DEFAULT AND ACCELERATION	 	79
	 	10.1	Events of Default	 	79
	 	10.2	Acceleration	 	82
	 	10.3	Remedies with Respect to Bankers' Acceptance Advances and Letters of Credit	 	82
	 	10.4	Remedies Cumulative and Waivers	 	83
	 	10.5	Suspension of Lenders' Obligations	 	83
	 	10.6	Application of Payments After an Event of Default	 	83
	
 ARTICLE 11	

 	
 	

 
	 	THE ADMINISTRATIVE AGENT AND ADMINISTRATION OF THE FACILITY	 	85
	 	11.1	Authorization of Action	 	85
	 	11.2	Procedure for Making Advances	 	85
	 	11.3	Remittance of Payments	 	86
	 	11.4	Redistribution of Payment	 	87
	 	11.5	Duties and Obligations	 	88
	 	11.6	Prompt Notice to the Lenders	 	89
	 	11.7	Agent's Authority	 	89
	 	11.8	Lender's Independent Credit Decision	 	89
	 	11.9	Indemnification	 	90
	 	11.10	Successor Agent	 	90

iii

 

	 
	 
	 	Page

	 	11.11	Taking and Enforcement of Remedies	 	91
	 	11.12	Reliance Upon Lenders	 	92
	 	11.13	Reliance upon Administrative Agent	 	92
	 	11.14	Replacement of Cancelled Commitments	 	92
	 	11.15	Disclosure of Information	 	93
	 	11.16	Adjustments of Rateable Portions	 	94
	
 ARTICLE 12	

 	
 	

 
	 	COSTS, EXPENSES AND INDEMNIFICATION	 	96
	 	12.1	Costs and Expenses	 	96
	 	12.2	Indemnification by the Borrowers	 	96
	 	12.3	Funds	 	97
	 	12.4	General Indemnity	 	97
	 	12.5	Environmental Claims	 	98
	
 ARTICLE 13	

 	
 	

 
	 	GENERAL	 	100
	 	13.1	Term	 	100
	 	13.2	Survival	 	100
	 	13.3	Benefit of the Agreement	 	100
	 	13.4	Notices	 	100
	 	13.5	Amendment and Waiver	 	101
	 	13.6	Governing Law	 	101
	 	13.7	Further Assurances	 	102
	 	13.8	Enforcement and Waiver by the Lenders	 	102
	 	13.9	Execution in Counterparts	 	102
	 	13.10	Assignment by the Borrowers	 	102
	 	13.11	Assignments and Transfers by a Lender	 	102
	 	13.12	Certain Requirements in Respect of Merger, Etc.	 	105
	 	13.13	Set-Off	 	107
	 	13.14	Time of the Essence	 	107
	 	13.15	Advertisements	 	107

SCHEDULE
A — LENDERS 

SCHEDULE
B — LENDERS' COMMITMENTS 

SCHEDULE
C — APPLICABLE MARGIN, FACILITY FEE, UTILIZATION FEE AND LC FEE 

SCHEDULE
D — QUARTERLY CERTIFICATE ON COVENANTS 

SCHEDULE
E — CONVERSION NOTICE 

iv

 

SCHEDULE
F — DESIGNATED SUBSIDIARY AGREEMENT 

SCHEDULE
G — DRAWDOWN NOTICE AND NOTICE OF SWING LINE BORROWING 

SCHEDULE
H — GUARANTEES 

SCHEDULE
I — ROLLOVER NOTICE 

SCHEDULE
J — TRANSFER NOTICE 

SCHEDULE
K — ISSUANCE REQUEST 

SCHEDULE
L — ACCEPTANCE NOTE 

SCHEDULE
M — CONSENT LENDER NOTICE 

SCHEDULE
N — MANDATORY COST CALCULATION 

SCHEDULE
O — OPINIONS OF COUNSEL 

SCHEDULE
P — PERMITTED ENCUMBRANCE CERTIFICATE 

SCHEDULE
Q — EXISTING LETTERS OF CREDIT 

SCHEDULE
R — PERMITTED DISSOLUTIONS 

SCHEDULE
S — PERMITTED MERGERS 

v

 
 

THIRD AMENDED AND RESTATED REVOLVING TERM CREDIT AGREEMENT  
    

MADE
as of June 4, 2004. 

B
E T W E E N: 

CELESTICA INC.,

a corporation incorporated under the laws of the Province of Ontario, 

- and - 

THE SUBSIDIARIES OF CELESTICA INC. SPECIFIED HEREIN AS DESIGNATED SUBSIDIARIES,

- and -

CIBC WORLD MARKETS,

as Joint Lead Arranger, 

- and -

RBC CAPITAL MARKETS,

as Joint Lead Arranger and Co-Syndication Agent, 

- and - 

CANADIAN IMPERIAL BANK OF COMMERCE,

a Canadian chartered bank, as Administrative Agent, 

- and -

THE BANK OF NOVA SCOTIA,

as Documentation Agent, 

- and - 

BANC OF AMERICA SECURITIES LLC

as Co-Syndication Agent 

- and -

THE FINANCIAL INSTITUTIONS NAMED IN SCHEDULE A,

as Lenders. 

 

WHEREAS
Celestica Inc., the Subsidiaries of Celestica Inc. designated therein as Designated Subsidiaries, The Bank of Nova Scotia as the Administrative Agent, CIBC World Markets, as
Joint Lead Arranger and Syndication Agent, RBC Capital Markets and Banc of America Securities LLC, as Joint Lead Arrangers and Co-Documentation Agents, and the financial
institutions named therein as the Lenders are parties to a Second Amended and Restated Revolving Term Credit Agreement dated as of December 17, 2002 (as amended by the First Amendment to Second
Amended and Restated Revolving Term Credit Agreement dated as of October 31, 2003 and by the Second Amendment to Second Amended and Restated Revolving Term Credit Agreement dated as of
March 30, 2004, the "Existing Credit Agreement"), which amended and restated an Amended and Restated Revolving Term Credit Agreement dated as of
June 8, 2001 among Celestica Inc., the Subsidiaries of Celestica Inc. designated therein as Designated Subsidiaries, The Bank of Nova Scotia, as the Administrative Agent, the
Canadian Facility Agent, the U.S. Facility Agent and the U.K. Facility Agent and the financial institutions named therein as the Lenders, which amended and restated a Credit Agreement
among Celestica Inc., the Subsidiaries of Celestica Inc. designated therein as Designated Subsidiaries, The Bank of Nova Scotia as the Administrative Agent, the Canadian Facility Agent,
the U.S. Facility Agent and the U.K. Facility Agent and the financial institutions named therein as the Lenders dated as of April 22, 1999; 

AND
WHEREAS The Bank of Nova Scotia has agreed that it will be replaced as administrative agent hereunder, and Canadian Imperial Bank of Commerce has agreed to act as administrative agent hereunder,
and each of the Borrowers and Lenders has agreed to such replacement; 

AND
WHEREAS the parties hereto wish to amend and restate the Existing Credit Agreement on the terms set forth herein; 

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

2

 
ARTICLE 1

INTERPRETATION  

1.1       Definitions  

        In
this Agreement: 

"Acceptance Note" means a non-interest bearing promissory note of a Borrower substantially in the form of Schedule L delivered to a
Lender in the circumstances set out in Section 4.7(a); 

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

"Additional Compensation" has the meaning specified in Section 5.5; 

"Administrative Agent" means Canadian Imperial Bank of Commerce when acting in its capacity as administrative agent hereunder; 

"Advance" means a Prime Rate Advance, a Bankers' Acceptance Advance, a LIBOR Advance, or a Base Rate Canada Advance made by the Lenders or a Lender, as
applicable, or the issuance of a Letter of Credit and "Advances" means all of them; 

"Affected Lender" has the meaning specified in Section 5.7(b); 

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

"Agents" means the Administrative Agent, the Co-Syndication Agents and the Documentation Agent and "Agent" shall mean any one of them; 

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

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

"Applicable Margin" shall have the meaning specified in Schedule C; 

3

 

"Approved Credit Rating Agency" means any one of Standard & Poor's, Moody's and any other similar agency agreed to by Celestica and the
Administrative Agent; 

"Arm's Length" has the meaning ascribed thereto under the Income Tax Act (Canada) in effect as of
the date hereof; 

"Assenting Lender" has the meaning specified in Section 5.7(b); 

"Available Swing Line Commitment" means the monetary amount which is the Commitment of the Swing Line Lender as may be increased or decreased from time
to time pursuant to Section 2.22(j); 

"Bankers' Acceptance" means a draft or other bill of exchange in Canadian Dollars including, without limitation, a depository bill subject to the  Depository Bills and Notes
Act (Canada), drawn by Celestica or a Canadian Designated Subsidiary and accepted by a Lender in accordance with
Article 4; 

"Bankers' Acceptance Advance" means the advance of funds to a Borrower by way of creation and issuance of Bankers' Acceptances or by way of the issuance
of an Acceptance Note, in each case in accordance with the provisions of Article 4; 

"Banking Day" means a day, other than a Saturday or a Sunday and, where used in the context of a notice, delivery, payment or other communication
addressed to: 

	(i)
	the
Administrative Agent, which is also a day on which banks are not required or authorized to close in Toronto, Canada and

	(A)
	in
the case of Base Rate Canada Advances in United States Dollars, which is also a day on which banks are not required or authorized to close in New York,
New York; or

	(B)
	in
the case of LIBOR Advances in United States Dollars, which is also a day on which banks are not required or authorized to close in New York, New York or
London, England, or which is a day on which dealings are not carried on in the London interbank market; 

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

"Base Rate Canada Advance" means a loan made by the Lenders to a Borrower on which interest is payable based on the Base Rate Canada plus the Applicable
Margin; 

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

4

 

"Borrowers" means Celestica and each Designated Subsidiary from time to time and their respective permitted successors and assigns and  "Borrower" means any of
them; 

"Business" means the business of: 

	(a)
	conducting
a broad range of electronics manufacturing services, including front end design and product development, manufacturing, assembly and testing of printed circuit boards,
printed circuit board assembly, backplanes, electro-mechanical sub-assembly, memory modules, photonics, opto-electronic assembly, full system assembly, product testing, quality
assurance, failure analysis, packaging and direct order fulfilment, after market service and support, and other related manufacturing services;

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

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

	(d)
	the
design, production, distribution and sale of reference designs and power products; and

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

"Canadian BA Rate" means, for a particular term, the discount rate per annum, calculated on the basis of a year of 365 days, for Canadian Dollar
Bankers' Acceptances having such term: 

	(a)
	in
respect of the Bankers' Acceptances to be accepted by a Schedule I Lender, that appears as the CDOR average rate on the display page designated as the CDOR page (or any
replacement page) by Reuters Money Market Service (or its successor) as of 10:00 a.m. (Toronto, Canada time) on the first day of such term; and

	(b)
	in
respect of the Bankers' Acceptances or Acceptance Notes to be accepted by a Non-Schedule I Lender, as are quoted by such Non-Schedule I Lender
as of 10:00 a.m. (Toronto, Canada time) on the first day of such term, provided that such quoted rate shall in no event exceed the rate determined for Bankers' Acceptances accepted by a
Schedule I Lender pursuant to paragraph (a) of this definition plus ten basis points, each as determined by the Administrative Agent. 

"Canadian Dollars" and "Cdn.$" mean the lawful currency of Canada in immediately available funds; 

5

 

"Canadian Designated Subsidiary" means a Designated Subsidiary, (a) which was incorporated, continued, amalgamated or otherwise created in
accordance with and continues to be governed by the laws of a Province of Canada or the federal laws of Canada and which is domiciled in Canada; and (b) which has satisfied and complied with
the terms of Section 7.1(b); 

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

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

"Cash Equivalents" means any of the following: 

	(a)
	securities
with maturities of one year or less from the date of acquisition, issued or fully guaranteed by any state, commonwealth, territory or province of the United States
of America or Canada, or by any political subdivision or taxing authority thereof, and rated in the A-1, P-2 or equivalent category, or a higher category, by an Approved Credit
Rating Agency;

	(b)
	bankers'
acceptances with maturities not exceeding one year and overnight bank deposits, in each case, with any Canadian chartered bank or commercial bank incorporated in the
United States of America having capital and surplus in excess of U.S.$ 500,000,000;

	(c)
	repurchase
obligations with a term of not more than seven days for underlying securities of the types described in paragraphs (a) and (b) above, entered into with any
financial institution meeting the qualifications specified in paragraph (b) above;

	(d)
	commercial
paper, having the highest rating obtainable from an Approved Credit Rating Agency;

	(e)
	marketable
debt securities issued in the United Kingdom by Her Majesty's Government of England and Wales;

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

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

	(h)
	money
market funds at least 90% of the assets of which constitute cash equivalents of the kinds described in paragraphs (a) through (g) of this definition; 

6

 

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

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

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

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

"Chinese Material Restricted Subsidiary" has the meaning specified in Section 8.4(a); 

"CIBC" means Canadian Imperial Bank of Commerce, a Canadian chartered bank; 

"Claims" has the meaning specified in Section 12.4(a); 

"Closing" means the satisfaction of the conditions precedent set out in Section 6.1; 

"Closing Date" means the date of this Agreement; 

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

"Commitment" means the commitment of each Lender to loan a portion of the aggregate amount of the Facility, in the amount set opposite its name in
Schedule B, as such Schedule B may be amended pursuant to (a) Section 2.23 or (b) under a Transfer Notice pursuant to Section 13.11; 

"Consent Designated Subsidiaries" means a Designated Subsidiary; (a) which was not incorporated, continued, amalgamated or otherwise created in
accordance with the laws of a Province of Canada or the federal laws of Canada; and (b) which has satisfied and complied with the terms of Section 7.1(c); 

"Contingent Liability" means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently
liable for the Indebtedness of any other Person, such Indebtedness being any of the types referred to in paragraphs (a), (b), (c), (e), (f) and (g) of the definition of Indebtedness (in
the case of paragraphs (f) and (g), only to the extent that the Indebtedness described in such paragraphs comprises or relates to Indebtedness of the types referred to in
paragraphs (a), (b), (c) and (e) of the definition of Indebtedness); 

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

7

 

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

"Conversion" means the conversion of one type of Advance into another type of Advance pursuant to Section 2.15; 

"Conversion Notice" means a notice substantially in the form set out in Schedule E; 

"Corporate Reorganization" has the meaning specified in Section 13.12; 

"Debt Rating" means, at any time, Celestica's issuer credit rating provided by Standard & Poor's, or Celestica's senior implied rating provided
by Moody's, or the equivalent rating provided by any other Approved Credit Rating Agency; 

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

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

"Designated Subsidiary" means a directly or indirectly wholly-owned Restricted Subsidiary of Celestica designated by Celestica as a Canadian Designated
Subsidiary or a Consent Designated Subsidiary in accordance with and which complies with the applicable terms of Section 7.1 of this Agreement; 

"Designated Subsidiary Agreement" means an agreement substantially in the form set out in Schedule F; 

"Disbursement" has the meaning specified in Section 3.4; 

"Disbursement Date" has the meaning specified in Section 3.4; 

"Drawdown" means a drawdown of an Advance; 

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

"Drawdown Notice" means a notice substantially in the form set out in Exhibit 1 to Schedule G; 

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

	(a)
	Net
Income for such period; 

8

 

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

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

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

	(e)
	all
amounts deducted in the calculation of Net Income in respect of Interest Expense, other than the implicit financing costs of synthetic leases;

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

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

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

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

	(y)
	If
such newly acquired Restricted Subsidiary or operation: 
	(A)
	was
not, immediately prior to such acquisition, accounted for on a stand-alone basis; or

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

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

9

 

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

"Equivalent Amount" on any given date in one currency (the "first currency") of any amount denominated
in another currency (the "second currency") means the amount of the first currency which could be purchased with such amount of the second currency at
the rate of exchange quoted by the Administrative Agent at 10:00 a.m. (Toronto, Canada time) on such date for the purchase of the first currency with the second currency; 

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

"Euro" means the single currency of the Participating Member States introduced on January 1, 1999; 

"Event of Default" means any of the events described in Section 10.1; 

"Exempted Jurisdiction" has the meaning specified in Section 13.12; 

"Existing Credit Agreement" has the meaning specified in the first recital hereto; 

"Existing Letters of Credit" has the meaning specified in Section 3.9; 

"Face Amount" means, in respect of a Bankers' Acceptance, the amount payable to the holder thereof on the maturity thereof and means, in respect of a
Letter of Credit, the maximum amount payable to a beneficiary thereunder; 

"Facility" means the revolving term credit facility in an aggregate principal amount of U.S.$ 600,000,000 to be made available to the Borrowers
as set forth in Article 2 as same may be increased subject to the terms set forth herein; 

"Facility Fee" has the meaning specified in Section 2.14(a) and calculated in accordance with Schedule C; 

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

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

10

  

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

"Four-Year Unsecured Credit Agreement" means the Amended and Restated Four Year Revolving Term Credit Agreement dated as of
December 17, 2002 between Celestica and Celestica International, as borrowers, The Bank of Nova Scotia, as administrative agent, and the financial institutions named in Schedule A
thereto, as lenders, as amended by the First Amendment to Amended and Restated Four Year Revolving Term Credit Agreement dated as of October 31, 2003; 

"GAAP" means those Canadian generally accepted accounting principles as now or (except as provided in item (a) (iii) (A) of the
definition of Gross Funded Debt) hereafter adopted by the Canadian Institute of Chartered Accountants or any successor thereto; 

"Global Rateable Portion" means, with respect to any Lender, at any time, the ratio, expressed as a decimal fraction, of: 

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

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

"Gross Funded Debt" of Celestica, on a consolidated basis, means at any particular time and without duplication, the aggregate of: 

	(a)
	the
following amounts determined in accordance with GAAP:

	(i)
	the
outstanding monetary Obligations at such time;

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

	(iii)
	any
other obligations for borrowed money (including, without limitation and without duplication, all obligations (contingent or otherwise) in respect of bankers'
acceptances and letters of credit) outstanding at such time but excluding (A) the LYONs, and (b) Permitted Subordinated Indebtedness which, in accordance with GAAP as at the date of each
determination, qualifies as equity; and

	(iv)
	any
Acquired Indebtedness outstanding at such time; 

plus

11

 

	(b)
	Contingent
Liabilities of Celestica or any Restricted Subsidiary of the type referred to in paragraphs (i) to (iii) above, in existence at such time, 

but
excluding the outstanding amounts under any Permitted Securitization Transaction; 

"Guarantees" means the guarantees of each of the Guarantors substantially in the form set forth in Schedule H; 

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

"Hazardous Material" means any contaminant, pollutant, waste of any nature, hazardous or toxic substance or material or dangerous good as defined,
judicially interpreted or identified in any Environmental Law or any substance that causes harm or degradation to the surrounding environment or injury to human health and, without restricting the
generality of the foregoing, includes any pollutant, contaminant, waste, hazardous waste, deleterious substance or dangerous good present in such quantity or state that it contravenes any
Environmental Laws or gives rise to any liability or obligation under any Environmental Law; 

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

"Indebtedness" of any Person means, without duplication: 

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

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

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

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

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

12

 

	(f)
	all
Contingent Liabilities of such Person; and

	(g)
	any
Acquired Indebtedness. 

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

"Indemnified Person" has the meaning specified in Section 5.8(b); 

"Indemnifying Party" has the meaning specified in Section 12.4(c); 

"Indemnitee" has the meaning specified in Section 12.4(a); 

"Interest Expense" means, for any period, the aggregate consolidated interest expense of Celestica on a consolidated basis as determined in accordance
with GAAP including the portions of any payment made in respect of Capital Leases allocable to interest expenses but excluding (i) interest expense incurred under any Permitted Securitization
Transaction; and (ii) deferred financing costs and other non-cash interest expense; 

"Interest Payment Date" shall have the meaning set out in Section 2.9; 

"Interest Period" means relative to any LIBOR Advance, Bankers' Acceptance or Advance by way of an Acceptance Note, the period commencing on (and
including) the date on which such LIBOR Advance is made or continued as, or converted into, a LIBOR Advance or such Bankers' Acceptance or Acceptance Note is issued, and ending on (but excluding) the
day which is, in the case of a Bankers' Acceptance or Acceptance Note, approximately 30, 60, 90 or 180 days thereafter, or which in the case of any LIBOR Advance, numerically corresponds to
such date one, two, three or six months thereafter (or, if such month has no numerically corresponding date, on the last Banking Day of such month), in each case as the Borrower may select; provided,
however, that: 

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

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

13

 

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

"Issuance Request" means a request and certificate duly executed by an authorized officer of Celestica in substantially the form of Schedule K
attached hereto; 

"Issuing Bank" means CIBC or such other Lender as Celestica may designate with such Lender's agreement from time to time; 

"ITA" has the meaning specified in Section 5.3; 

"Joint Lead Arrangers" means CIBC World Markets and RBC Capital Markets;

"LC Fee" has the meaning specified in Schedule C; 

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

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

"Letter of Credit" means a standby letter of credit or a letter of guarantee issued by an Issuing Bank at the request of Celestica pursuant to
Section 3.1; 

"Letter of Credit Availability" means U.S.$50,000,000; 

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

	(a)
	the
rate of interest per annum of the offered quotations for deposits in United States Dollars for a period equal or comparable to the Interest Period in an amount comparable
to the Advance as such rate is reported on the display designated as "page 3750" or "page 3740", as applicable (or any replacement pages) by
"Telerate — The Financial Information Network" published by Telerate Systems, Inc. (or such other company or service as may be nominated by the British
Bankers' Association as the information vendor for the purpose of displaying British Bankers' Association Interest Settlement Rates for deposits in United States Dollars) at or about
10:00 a.m. (London, England time) on the applicable Rate Fixing Day; or

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

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

14

 

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

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

"LIBOR Office" means, relative to any Lender, the office of such Lender designated as such in Schedule A, if applicable, or designated in the
Transfer Notice by which a financial institution becomes a Lender pursuant to Section 13.11, or such other office of a Lender (or any successor, assign or Affiliate of such Lender) as
designated from time to time by notice from such Lender to Celestica and the Administrative Agent, whether or not outside Canada, which may be making or maintaining the LIBOR Advances of such Lender; 

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

"Loan Documents" means this Agreement, the Guarantees and the Designated Subsidiary Agreements provided for herein and all other agreements, documents
or instruments to be executed and delivered to the Administrative Agent, the Lenders or any of them by the Borrowers, the Guarantors or any of them hereunder or thereunder or pursuant hereto or
thereto; 

"Losses" has the meaning specified in Section 12.4(a); 

"LYON" has the meaning specified in Section 9.3(c); 

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

"Main Facility Rateable Portion" means, with respect to any Lender, at any time, subject to adjustment by the Administrative Agent in accordance with
Section 11.16 of this Agreement and also subject to Sections 2.3 and 4.1 of this Agreement, the ratio, expressed as a decimal fraction, of; 

	(i)
	such
Lender's Commitment at such time (or, if such Lender is the Swing Line Lender, the Main Facility Commitment) to 

15

 

	(ii)
	the
aggregate of the Commitments of all of the Lenders (other than the Swing Line Lender) at such time and the Main Facility Commitment at such time; 

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

"Mandatory Cost" means, in relation to a LIBOR Advance, an amount determined in accordance with Schedule N; 

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

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

"Material Restricted Subsidiary" means (i) each Designated Subsidiary and (ii) any other Restricted Subsidiary of Celestica whose assets
total greater than U.S.$ 150,000,000 on an unconsolidated basis on the date referenced in the most recently delivered set of financial statements delivered pursuant to
Section 9.1(a)(ii); provided, however, that, subject to Section 8.4(c), the unconsolidated assets of all Restricted Subsidiaries which are not Material Restricted Subsidiaries shall not
exceed on the date referenced in such financial statements, in the aggregate, ten per cent (10%) of the unconsolidated assets of the Borrowers and the Restricted Subsidiaries on such date, and
in the event that the unconsolidated assets of all Restricted Subsidiaries which are not Material Restricted Subsidiaries exceeds, on the date referenced in such financial statements, in the
aggregate, ten percent (10%) of the unconsolidated assets of the Borrowers and Restricted Subsidiaries, Celestica shall set out in a Schedule to the Officer's Certificate to be delivered in accordance
with Section 9.1(a)(iii) the Restricted Subsidiaries which it wishes to designate as Material Restricted Subsidiaries such that unconsolidated assets of all of the Restricted Subsidiaries which
are not Material Restricted Subsidiaries shall not exceed ten percent (10%) of the unconsolidated assets of the Borrowers and Restricted Subsidiaries on such date; 

"Maturity Date" means the third anniversary of the Closing Date; 

"Moody's" means Moody's Investors Service, Inc.; 

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

"New Issuance" has the meaning specified in Section 9.3(c); 

"Non-Schedule I Lenders" means Lenders which are not Canadian chartered banks that are listed on Schedule I to the  Bank Act (Canada);

16

 

"Notice of Amount" has the meaning specified in Section 5.5; 

"Notice of Swing Line Borrowing" means a notice substantially in the form set out in Exhibit 2 to Schedule G; 

"Notification Date" has the meaning specified in Section 12.5(c); 

"Notional BA Proceeds" means, with respect to a Bankers' Acceptance Advance, the aggregate Face Amount of the Bankers' Acceptances or principal amount
of the Acceptance Notes comprising such Bankers' Acceptance Advance, if applicable, less the aggregate of: 

	(a)
	a
discount from the aggregate face amount of such Bankers' Acceptances or principal amount of such Acceptance Notes, if applicable, calculated in accordance with normal market
practices based on the Canadian BA Rate for the term of such Bankers' Acceptances or Acceptance Notes, if applicable; and

	(b)
	the
amount of the acceptance fees determined in accordance with Section 4.2 in respect of such Bankers' Acceptance Advance; 

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

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

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

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

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

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

"Outstanding Amount" has the meaning specified in Section 2.3(c); 

17

 

"Participating Member State" means a member state of the European Communities that adopts or has adopted the Euro as its lawful currency under the
legislation of the European Union for European Monetary Union; 

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

"Pension Plan" means: 

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

	(b)
	a  "pension plan", as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multi-employer plan as defined in Section 4001(a)(3) of ERISA), and to which the Borrowers or any of the Subsidiaries or any corporation, trade or business that is, along with the Borrowers, a
member of a Controlled Group, may have liability; 

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

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

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

18

 

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

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

	(e)
	Liens
incidental to the conduct of the business or the ownership of the assets of Celestica or the relevant Restricted Subsidiary (other than those described in Clauses (f)
and (g) of this definition) which were not incurred in connection with the borrowing of money or the obtaining of advances of credit (including, without limitation, unpaid purchase price), and
which do not, in the aggregate, materially detract from the value of the assets of Celestica or any Material Restricted Subsidiary or materially interfere with the use thereof in the operation of the
business of Celestica or any Material Restricted Subsidiary;

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

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

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

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

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

19

 

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

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

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

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

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

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

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

	(r)
	Liens
in favour of the Administrative Agent, on behalf of any Issuing Bank, or any one of them, arising in connection with any collateral security provided in connection with the cash
collateralization of Letters of Credit pursuant to the terms of this Agreement. 

"Permitted Encumbrance Certificate" means a certificate in the form of Schedule P; 

"Permitted Securitization Transaction" means any transaction providing for the sale, securitization or other asset-backed financing (collectively,
"Securitization Transactions") of: 

	(i)
	trade
accounts receivable of or owing to Celestica or any Restricted Subsidiary (and/or contractual rights relating thereto) having an aggregate book value on the date
the relevant Securitization Transaction is completed that does not exceed the sum of (A) 30% of the aggregate book value of the trade accounts receivable of or owing to Celestica and its
Restricted Subsidiaries determined on a consolidated basis, before giving effect to prior Securitization Transactions of trade accounts receivable that
have not been collected, on or prior to the date on which the relevant Securitization Transaction is completed, and (B), as long as there are no Advances (other than Letters of Credit) outstanding
under this Agreement and no advances (other than letters of credit) under any other credit agreement under which Celestica or any Restricted Subsidiary is a borrower (excluding, for greater certainty,
overdraft facilities and Acquired Indebtedness), 50% of the amount by which (1) the aggregate book value of the inventory that is otherwise available for Securitization Transactions involving
inventory under (ii) below, exceeds (2) the aggregate book value of all inventory that has been subject to prior Securitization Transactions effected by Celestica and its Restricted
Subsidiaries; or 

20

  

	(ii)
	inventory
of Celestica or any Restricted Subsidiary (and/or contractual rights relating thereto) having an aggregate book value on the date the relevant Securitization
Transaction is completed that does not exceed the sum of (A) 30% of the aggregate book value of the inventory of Celestica and its Restricted Subsidiaries determined on a consolidated basis,
before giving effect to prior Securitization Transactions of inventory that has not been incorporated into product sold to a third party, on or prior to the date on which the relevant Securitization
Transaction is completed, and (B), as long as there are no Advances (other than Letters of Credit) outstanding under this Agreement and no advances (other than letters of credit) under any other
credit agreement under which Celestica or any Restricted Subsidiary is a borrower (excluding, for greater certainty, overdraft facilities and Acquired Indebtedness), 50% of the amount by which
(1) the aggregate book value of the trade accounts receivable of or owing to Celestica and its Restricted Subsidiaries that are otherwise available for Securitization Transactions of trade
accounts receivable under (i) above, exceeds (2) the aggregate book value of all trade accounts receivable that have been subject to prior Securitization Transactions effected by
Celestica and its Restricted Subsidiaries; 

provided
that the terms and conditions of all such Securitization Transactions shall be on an Arms' Length basis and on commercially reasonable and usual terms; 

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

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

21

 

"Pounds Sterling" and "£" means the lawful currency of the United Kingdom; 

"Predecessor Corporation" has the meaning described thereto in Section 13.12; 

"Predecessor Guarantee" has the meaning described thereto in Section 13.12; 

"Prime Rate" means the greater of (i) the variable rate of interest per annum, expressed on the basis of a year of 365 or 366 days, as the
case may be, established or quoted from time to time by the Administrative Agent as the reference rate of interest then in effect for determining interest rates on Canadian Dollar denominated
commercial loans made by it in Canada and (ii) the sum of (x) the rate per annum for Canadian Dollar bankers' acceptances having a term of 30 days that appears on the display page
designated as the CDOR Page (or any replacement page) by Reuters Money Market Service (or its successor) as of 10:00 a.m. on the date of determination as reported by the Administrative Agent,
and (y) 1/2 of 1% per annum; 

"Prime Rate Advance" means a loan made by the Lenders to a Borrower in Canadian Dollars on which interest is payable based on the Prime Rate plus the
Applicable Margin; 

"Property" has the meaning ascribed thereto in Section 12.5; 

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

"Reimbursement Obligation" has the meaning specified in Section 3.4; 

"Release" has the meaning specified in Section 8.1(h)(i); 

"Relevant Period" has the meaning specified in Section 2.14(a); 

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

"Rollover" means a rollover of a LIBOR Advance or a Bankers' Acceptance pursuant to and in accordance with Sections 2.12, 4.4 and 4.5; 

"Rollover Notice" means a notice substantially in the form of Schedule I; 

"Schedule I Lenders" means Lenders which are Canadian chartered banks that are listed on Schedule I to the  Bank Act (Canada); 

22

 

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

"Standard & Poor's" means Standard & Poor's Ratings Services (a division of The McGraw-Hill Companies, Inc.); 

"Stated Expiry Date" has the meaning specified in Section 3.1(b); 

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

"Substitute Lenders" has the meaning specified in Section 11.14; 

"Successor Agent" has the meaning specified in Section 11.10; 

"Successor Corporation" has the meaning specified in Section 13.12(a); 

"Swing Line Advance" means an Advance made pursuant to the provisions of Section 2.22(a); 

"Swing Line Lender" means CIBC or such other Lender as may have agreed to act as a Swing Line Lender and to which CIBC and Celestica may have agreed to
acting as a Swing Line Lender from time to time. 

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

23

 

"Take-over Bid Notice" has the meaning specified in Section 2.3(d); 

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

"Toronto Office" means the office of the Administrative Agent located at 161 Bay Street, BCE Place, 8th Floor,
Toronto, Ontario, Canada M5J 2S8 (facsimile: 416-956-3830) or such other address as either of the Administrative Agent may designate by notice to Celestica; 

"Transfer Notice" means a notice substantially in the form of Schedule J; 

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

"Unrestricted Subsidiary" means a Subsidiary of Celestica designated by Celestica as such in accordance with Section 7.4 of this Agreement and
any Subsidiary of an Unrestricted Subsidiary; and 

"Utilization Fee" has the meaning specified in Section 2.14(b) and calculated in accordance with Schedule C, 

1.2       Headings  

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

1.3       Use of Defined Terms  

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

1.4       Extended Meanings  

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

24

 

1.5       Cross References  

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

1.6       Reference to Agents or Lenders  

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

1.7       Accounting Terms  

Unless
otherwise specified, all accounting terms used herein or in any other Loan Document shall be interpreted, all accounting determinations and computations hereunder or thereunder shall be made,
and all financial statements required to be delivered hereunder or thereunder shall be prepared in accordance with GAAP and all financial data submitted pursuant to this Agreement shall be prepared in
accordance with such principles, consistently applied; provided that, if Celestica notifies the Administrative Agent that it wishes to amend any covenant in Section 9.3 to eliminate the
effect of any change in GAAP or any change in the application of accounting policies on the operation of such covenant (or the Administrative Agent notifies Celestica that the Majority Lenders wish to
amend Section 9.3 for such purpose), Celestica's compliance with such covenant shall be determined on the basis of GAAP or accounting policies in effect immediately before the relevant
change in GAAP or change in accounting policies became effective, until either such notices are withdrawn or such covenant is amended in a manner satisfactory to Celestica, the Administrative Agent
and the Majority Lenders. 

1.8       Consolidated Financial Statements and Consolidated Accounts  

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

1.9       Non-Banking Days  

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

25

 

1.10     References to Time of Day  

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

1.11     Severability  

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

1.12     Currency  

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

1.13     References to Statutes  

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

1.14     References to Agreements  

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

1.15     Consents and Approvals  

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

1.16     Schedules  

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

	 	Schedule A	 — Lenders
	 	Schedule B	 — Lenders' Commitments
	 	Schedule C	 — Applicable Margin, Facility Fee, Utilization Fee and LC Fee

26

 

	 	Schedule D	 — Quarterly Certificate on Covenants
	 	Schedule E	 — Conversion Notice
	 	Schedule F	 — Designated Subsidiary Agreement
	 	Schedule G	 — Drawdown Notice and Notice of Swing Line Borrowing
	 	Schedule H	 — Guarantees
	 	Schedule I	 — Rollover Notice
	 	Schedule J	 — Transfer Notice
	 	Schedule K	 — Issuance Request
	 	Schedule L	 — Acceptance Note
	 	Schedule M	 — Consent Lender Notice
	 	Schedule N	 — Mandatory Cost Calculation
	 	Schedule O	 — Opinions of Counsel
	 	Schedule P	 — Permitted Encumbrance Certificate
	 	Schedule Q	 — Existing Letters of Credit
	 	Schedule R	 — Permitted Dissolutions
	 	Schedule S	 — Permitted Mergers

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ARTICLE 2

THE FACILITY  

2.1       Establishment of the Facility  

Upon
the terms and subject to the conditions hereof, each of the Lenders hereby severally agrees to make its Global Rateable Portion or its Main Facility Rateable Portion, as applicable, of the
Facility available to the Borrowers as specified in Sections 2.2, 2.3 and 2.22. 

2.2       Purpose, Nature and Term of the Facility  

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

	(b)
	Advances
under the Facility shall not be used by any Borrower to finance the acquisition of, investment in, loan to or to provide working capital to an Unrestricted Subsidiary.
Letters of Credit shall not be available to support or secure any Indebtedness of an Unrestricted Subsidiary, including, without limitation, a loan or other advance to an Unrestricted Subsidiary.

	(c)
	Subject
to the terms and conditions of this Agreement (including, without limitation, Section 2.8) the Facility shall be a revolving credit facility and the Borrowers may
borrow, repay and reborrow under the Facility as they see fit at any time prior to the Maturity Date. The Facility shall terminate on the Maturity Date. 

2.3       Availability of Advances  

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

	(i)
	to
Celestica or any Designated Subsidiary, Drawdowns from Lenders, each in a minimum amount of Cdn.$5,000,000 and integral multiples of Cdn.$100,000 in excess thereof,
in Canadian Dollars by way of Prime Rate Advances;

	(ii)
	to
Celestica or any Designated Subsidiary, Drawdowns from Lenders, each in a minimum amount of Cdn.$5,000,000 and integral multiples of Cdn.$100,000 in excess thereof,
in Canadian Dollars by way of Bankers' Acceptance Advances;

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

28

 

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

	(v)
	to
Celestica, Letters of Credit from the Issuing Bank on behalf of the Lenders in, at the option of Celestica, Canadian Dollars, United States Dollars, Euros or
Pounds Sterling, in accordance with Article 3.

	(b)
	Each
Drawdown of an Advance pursuant to Section 2.3(a)(i) to (iv) shall be made by irrevocable Drawdown Notice, which Drawdown Notice shall be given by the applicable
Borrower to the Administrative Agent, not later than (x) 10:00 a.m. Toronto, Canada time on the Banking Day prior to the relevant Drawdown Date in the case of Prime Rate Advances,
Bankers' Acceptance Advances, and Base Rate Canada Advances, and (y) 10:00 a.m. London, England time and 10:00 a.m. New York, New York time on the third Banking Day
prior to the relevant Drawdown Date in the case of a LIBOR Advance in United States Dollars.

	(c)
	The
Borrowers shall have the right to convert one currency into another as they see fit, but subject to the terms of this Agreement, including, without limitation, those provisions
set out in items (i) to (iv) of subsection (a) above if the Conversion relates to an Advance other than a Swing Line Advance, providing for the manner in which the Facility is
available to each Borrower. A Borrower may not make a Drawdown under the Facility if, as a result of such Drawdown, the sum of (i) the Equivalent Amount, expressed in United States
Dollars, of the aggregate principal amount of all Prime Rate Advances and Acceptance Notes outstanding under the Facility, plus (ii) the Equivalent Amount, expressed in United States
Dollars, of the aggregate Face Amount of all Bankers' Acceptances outstanding under the Facility, plus (iii) the Equivalent Amount, expressed in United States Dollars, of the maximum
amount which may be drawn under all Letters of Credit outstanding under the Facility, plus (iv) the aggregate principal amount of all Base Rate Canada Advances outstanding under the Facility,
plus (iv) the aggregate principal amount of all LIBOR Advances outstanding under the Facility (collectively, the "Outstanding Amount") would
exceed the aggregate of all Commitments of the Lenders at such time (or such lesser amount as may be available following a cancellation in part of the Facility pursuant to Section 2.7).

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

29

 

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

2.4       Lenders' Obligations  

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

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

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

2.5       Repayment of Advances by Former Designated Subsidiaries  

Provided
that the Facility is not earlier accelerated in accordance with Article 10, a Subsidiary which is no longer a Designated Subsidiary by virtue of the delivery of a notice in writing to
the Administrative Agent to that effect by Celestica in accordance with Section 7.1(d) of this Agreement shall repay to the Administrative Agent the principal amount of Advances made by the
Lenders to such Subsidiary, together with all accrued and unpaid interest thereon, on the day which is five (5) Banking Days after the date of delivery of such notice by Celestica to the
Administrative Agent in accordance with Section 7.1(d) of this Agreement. 

2.6       Repayment of Facility  

	(a)
	In
the event that, at any time, the Outstanding Amount exceeds the maximum amount allowed pursuant to Section 2.3 due to changes in exchange rates, then Celestica shall
forthwith repay to the Administrative Agent or cause another Borrower to forthwith repay to the Administrative Agent that portion of the Outstanding Amount which is in excess of the maximum amount
allowed pursuant to Section 2.3; provided, however, that unless the Outstanding Amount exceeds One Hundred and Five Per Cent (105%) of the aggregate Commitments under the Facility, there shall
be no such obligation to make a repayment hereunder until the earlier of (i) 15 days and (ii) the next following Interest Payment Date, Drawdown Date, date of Rollover or date of
Conversion, in each case, following receipt of written notice of determination of such Outstanding Amount by the Administrative Agent to Celestica, and provided further that if such repayment would
result in the repayment of a Bankers' Acceptance Advance prior to its maturity date or the repayment of an Acceptance Note or a LIBOR Advance prior to the last day of its Interest Period, Celestica
may, or may cause another Borrower to, at its option and in lieu of repayment of such Advances, deposit with the Administrative Agent cash collateral in an amount equal to the required repayment
amount to be held by the Administrative Agent for distribution to the Lenders as repayment of a Bankers' Acceptance Advance on its maturity date (or the last day of its then current Interest Period in
the case of an Acceptance Note) or repayment of an Acceptance Note or a LIBOR Advance on the last day of its then current Interest Period, as the case may be. 

30

  

	(b)
	Provided
that the Facility is not prepaid or accelerated in accordance with Article 10, each Borrower shall repay the principal amount of all Advances made to it outstanding
under the Facility, together with accrued and unpaid interest thereon, on the Maturity Date to the Administrative Agent and, in the event that the expiry date of any Letter of Credit is after the
Maturity Date, Celestica shall on or before the Maturity Date, deposit with the Administrative Agent, on behalf of the Issuing Bank, an amount equal to the undrawn Face Amount of any such issued and
outstanding Letter of Credit. Such amount shall be held by the Administrative Agent in an interest-bearing account and shall be applied to satisfy Celestica's obligations pursuant to
Section 3.4 in the event that the Issuing Bank is called upon by a beneficiary to honour a Letter of Credit. Following the expiry of all such Letters of Credit, the Administrative Agent shall
pay to Celestica the amounts so deposited, together with any interest accrued thereon less any amount paid by the Administrative Agent to the Issuing Bank. At any time that any Letter of Credit shall
be reduced in accordance with Section 3.1(c)(ii), Celestica's obligations under this Section 2.6(b) shall be reduced accordingly, subject to reinstatement in the event any payment in
respect of such Letter of Credit is recovered by any beneficiary in any manner from the Issuing Bank.

	(c)
	All
repayments of the Facility by the Borrowers shall be in a minimum amount equal to the minimum amount of a Drawdown of each type of Advance set out in Section 2.3
and amounts in excess thereof in integral multiples of U.S.$100,000, or the Equivalent Amounts thereof in the currency in which each Advance is denominated except in the event of a Rollover of
an Advance into a lesser amount than the Advance then outstanding or a repayment pursuant to paragraphs (a) and (b) of Section 2.6 which may be in any amount. Repayments of any
Advance outstanding under the Facility shall be made in the currency in which such Advance is denominated. 

2.7       Payments/Cancellation or Reduction  

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

31

 

	(a)
	if
any such repayment relates to Bankers' Acceptances, Acceptance Notes or Letters of Credit, which have not matured, the Borrower to which such Advance was made shall, at such time,
deposit in a cash collateral account opened and maintained by the Administrative Agent such amount as may be required to yield an amount equal to the aggregate undiscounted Face Amount of such
instruments on the maturity dates thereof;

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

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

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

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

2.8       Maturity Date  

Subject
to Section 2.7, Section 10.2 and Section 10.5, the Facility shall be available until the Maturity Date. Notwithstanding the termination of availability of the Facility,
until all of the Obligations (other than contingent indemnity obligations) of the Borrowers shall have been fully and indefeasibly paid and satisfied and all financing arrangements among the Borrowers
and the Lenders with respect to the Obligations shall have been cancelled or terminated, all of the rights and remedies of the Lenders and the Agents under this Agreement and the other Loan Documents
shall survive. 

2.9       Interest on Prime Rate Advances  

Interest
on each Prime Rate Advance shall accrue at a rate per annum equal to the Prime Rate in effect from time to time during the period of time that the Prime Rate Advance is outstanding plus the
Applicable Margin. Such interest shall be payable to the Administrative Agent at its Toronto Office in Canadian Dollars monthly in arrears on the first Banking Day of the following month (each herein
referred to as an "Interest Payment Date") in each year for the period from and including the Drawdown Date for such Advance (or, if applicable, the
date on which such Advance was converted into a Prime Rate Advance) or the preceding Interest Payment Date for such Prime Rate Advance, as the case may be, to and including the day preceding such
Interest Payment Date and shall be calculated on the principal amount of the Prime Rate Advance from time to time outstanding during such period and on the basis of the actual number of days elapsed
in a year of 365 or 366 days (in the case of an Interest Payment Date occurring in a leap year). Changes in the Prime Rate shall cause an automatic and immediate adjustment of the interest rate
payable on Prime Rate Advances without the necessity of any notice to the Borrowers. 

32

 

2.10     Interest on Base Rate Canada Advances  

Interest
on each Base Rate Canada Advance shall accrue at a rate per annum equal to the Base Rate Canada in effect from time to time during the period of time that the Base Rate Canada Advance is
outstanding plus the Applicable Margin. Such interest shall be payable to the Administrative Agent at its Toronto Office in United States Dollars monthly in arrears on each Interest Payment
Date in each year for the period from and including the Drawdown Date for such Advance (or, if applicable, the date on which such Advance was converted into a Base Rate Canada Advance) or the
preceding Interest Payment Date for such Base Rate Canada Advance, as the case may be, to and including the day preceding such Interest Payment Date and shall be calculated on the principal amount of
the Base Rate Canada Advance from time to time outstanding during such period and on the basis of the actual number of days elapsed and the number of days deemed to be included in a year by the
definition of the rate used to set Base Rate Canada. Changes in the Base Rate Canada shall cause an automatic and immediate adjustment of the interest rate payable on Base Rate Canada Advances without
the necessity of any notice to the Borrowers. 

2.11     [Intentionally Deleted]  

2.12     LIBOR Advances  

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

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

33

 

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

	(d)
	[Intentionally Deleted]

	(e)
	If
a LIBOR Advance to a Borrower is neither repaid on the last day of an Interest Period nor converted into another type of Advance on such date pursuant to Section 2.15,
and if the Administrative Agent has not received a Rollover Notice or a Conversion Notice specifying the term of the next Interest Period for such LIBOR Advance at or before 10:00 a.m.
(local time in Toronto, Canada) on the third Banking Day prior to the last day of the then current Interest Period, then the outstanding LIBOR Advance shall be deemed to be converted, by way of
Conversion on the last day of the then current Interest Period, into a Base Rate Canada Advance.

	(f)
	[Intentionally Deleted]

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

2.13     Method and Place of Payment  

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

	(b)
	Except
as provided in Section 4.2 with respect to Acceptance Fees and Section 3.8 with respect to fees for Letters of Credit, all payments of principal, interest and
fees hereunder shall be made for value at or before 12:00 noon (local time in Toronto, Canada) on the day such amount is due by deposit or transfer thereof to the account of the Administrative Agent
maintained at its Toronto Office. Payments received after such time shall be deemed to have been made on the next following Banking Day. 

34

 

	(c)
	Subject
to Section 11.16, each Lender shall be entitled to its Main Facility Rateable Portion of each repayment or prepayment of principal of a Prime Rate Advance (other than a
Swing Line Advance), a LIBOR Advance, Acceptance Note, Base Rate Canada Advance (other than a Swing Line Advance) or payment of the Face Amount of Bankers' Acceptances made to Celestica or a Canadian
Designated Subsidiary.

	(d)
	Notwithstanding
Section 2.12(c), in the event that a Borrower is required to pay Additional Compensation to a Lender, such Borrower may prepay all or any portion of the
Advances made by such Lender to such Borrower, without any obligation to prepay any portion of the Advances made by other Lenders to whom the Borrower is not required to pay Additional Compensation;
provided, however, that any prepayment of a Bankers' Acceptance Advance or LIBOR Advance shall be subject to the provisions of Section 12.2. 

2.14     Fees  

	(a)
	During
the period commencing on the date hereof and ending on the Maturity Date (in this Section 2.14, the "Relevant Period"),
Celestica on behalf of itself and the other Borrowers shall pay to the Administrative Agent for the account of the Lenders in accordance with each Lender's Global Rateable Portion a fee (the  "Facility Fee") calculated at the rate per annum set forth in Schedule C on the aggregate Commitments (after giving effect to any cancellation
and reduction pursuant to Section 2.7) hereunder during the Relevant Period from day to day which fee shall be payable quarterly in arrears.

	(b)
	During
the Relevant Period, Celestica on behalf of itself and the other Borrowers shall pay to the Administrative Agent for the account of the Lenders in accordance with each Lender's
Global Rateable Portion a fee (the "Utilization Fee") calculated at the rate per annum set forth in Schedule C on the aggregate principal amount
of all outstanding Advances hereunder for each day during the Relevant Period on which the aggregate principal amount of all outstanding Advances exceed 33.333% of the aggregate Commitments (after
giving effect to any increase, cancellation or reduction pursuant to Sections 2.3, 2.7 and 2.23) hereunder, which fee shall be payable quarterly in arrears. 

2.15     Conversion Options  

Subject
to the provisions of this Agreement (including, without limitation, Section 4.5), provided that no Event of Default has occurred and is continuing, a Borrower may convert any type of
Advance outstanding under the Facility as follows: 

	(a)
	provided
that the relevant Borrower thereunder is Celestica or a Canadian Designated Subsidiary, a Prime Rate Advance or a portion thereof into a Bankers' Acceptance Advance by giving
the Administrative Agent a Conversion Notice no later than 10:00 a.m. one (1) Banking Day prior to the date of the proposed Conversion; 

35

 

	(b)
	provided
that the relevant Borrower thereunder is Celestica or a Canadian Designated Subsidiary, the Face Amount of a Bankers' Acceptance or the principal amount of any Acceptance
Notes, as applicable, or a portion thereof into a Prime Rate Advance on the maturity date of the Bankers' Acceptance or the last day of the then current Interest Period of such Acceptance Note by
giving the Administrative Agent a Conversion Notice no later than 10:00 a.m. one (1) Banking Day prior to the date of the proposed Conversion;

	(c)
	a
Base Rate Canada Advance or a portion thereof into a LIBOR Advance by giving the Administrative Agent a Conversion Notice no later than 10:00 a.m. three (3) Banking
Days prior to the date of the proposed Conversion; and

	(d)
	a
LIBOR Advance or a portion thereof into a Base Rate Canada Advance on the last day of the Interest Period of the relevant LIBOR Advance by giving the Administrative Agent a
Conversion Notice no later than 10:00 a.m. one (1) Banking Day prior to the date of the proposed Conversion. 

An
Advance may not be converted into an Advance denominated in a currency other than the currency in which the original Advance was made; however, an Advance denominated in one currency may be repaid
concurrently with the Drawdown of an Advance denominated in another currency. 

2.16     Execution of Notices  

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

2.17     Evidence of Indebtedness  

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

36

 

2.18     Interest on Unpaid Costs and Expenses  

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

2.19     Criminal Rate of Interest  

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

2.20     Compliance with the Interest Act (Canada)  

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

2.21     Nominal Rate of Interest  

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

2.22     Swing Line Facility  

	(a)
	Swing Line Advances.    Subject to subsections (b) and (k), the Swing Line Lender hereby agrees, on the terms
and conditions set forth in this Agreement, to make Swing Line Advances in Canadian Dollars or United States Dollars to Celestica or any Canadian Designated Subsidiary from time to time from
the date hereof to the Maturity Date but in any event not later than the Maturity Date. 

37

 

	(b)
	Limitation on Swing Line Advances.    No Swing Line Advance shall be made by the Swing Line Lender if:

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

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

	(c)
	Amount of Each Swing Line Advance.    Each Swing Line Advance in Canadian Dollars and each Swing Line Advance in
United States Dollars shall be in an aggregate principal amount of Cdn.$1,000,000 or U.S.$1,000,000, as the case may be, or any integral multiple thereof.

	(d)
	Interest Rates.    Each Swing Line Advance shall bear interest on the outstanding principal amount thereof, for each day from
the date such Swing Line Advance is made until it becomes due, at a rate per annum equal to, in the case of Swing Line Advances in Canadian Dollars, the Prime Rate plus the Applicable Margin, and, in
the case of Swing Line Advances in United States Dollars, the Base Rate Canada plus the Applicable Margin.

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

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

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

38

 

	(h)
	Maturity of Swing Line Advances.    Any Swing Line Advance outstanding on the seventh day after such Swing Line Advance, if
not repaid by such Borrower on such seventh day, shall convert to, in the case of a Swing Line Advance in Canadian Dollars, a Prime Rate Advance or, in a case of a Swing Line Advance in
United States Dollars, a Base Rate Canada Advance, as the case may be. If, prior to the seventh day after such Swing Line Advance was made, the Administrative Agent declares the Advances to be
immediately due and payable or the Commitments automatically terminate, each as set out in Section 10.2, such Swing Line Advance shall be due and payable on the date of such declaration by the
Administrative Agent or automatic termination.

	(i)
	Refunding Unpaid Swing Line Advances.    If any Swing Line Advance is converted, pursuant to subsection (h),
to another form of Advance, the Swing Line Lender shall forthwith notify the Administrative Agent and the Administrative Agent shall, by notice to the Lenders (including the Swing Line Lender
in its capacity as Lender), require the Lenders to pay to the Administrative Agent, for the account of the Swing Line Lender, their Main Facility Rateable Portion of the aggregate amount of such other
form of Advance. Such other form of Advance shall constitute, in the case of a Swing Line Advance in Canadian Dollars, a Prime Rate Advance and, in the case of a Swing Line Advance in
United States Dollars, a Base Rate Canada Advance, provided that if the Lenders are prevented from making such Advances by provisions of applicable bankruptcy laws or otherwise, the amount so
paid by each Lender shall constitute a purchase by it of a participation in the unpaid principal amount of such converted Swing Line Advances. Any such notice to the Lenders shall specify the date on
which such payments are to be made by them. No later than 12:00 noon Toronto, Canada time on the date so specified each Lender shall pay the amount so notified to it in immediately available funds to
the Administrative Agent for the account of the Swing Line Lender. Each Lender's obligations to make payments for the account of the Swing Line Lender under this subsection shall be absolute and
unconditional and shall not be affected by any circumstance provided that no Lender shall be obligated to make any payment to the Administrative Agent under this Section with respect to a Swing Line
Advance made by the Swing Line Lender at a time when such Swing Line Lender had received written notice from Celestica or the Administrative Agent that a Default had occurred and was continuing.
Notwithstanding the provisions of this Section 2.22(i), if Export Development Canada ("EDC") is prevented from making such Advances or from
purchasing such participation by any Applicable Law, EDC's Main Facility Rateable Portion of such Swing Line Advance to be so converted shall not be converted and shall remain outstanding as a Swing
Line Advance, and EDC shall provide to the Swing Line Lender a guarantee of payment of such amount, which guarantee shall be in form and substance satisfactory to the Swing Line Lender. 

39

 

	(j)
	Increasing or Decreasing Available Swing Line Commitment.    At any time and from time to time, Celestica may, by written
notice to the Administrative Agent, increase or decrease the Available Swing Line Commitment, provided that the Available Swing Line Commitment shall at no time exceed U.S.$25,000,000 less the amount,
if any, that the Commitment of the Swing Line Lender has been reduced pursuant to Section 2.7 or be less than zero.

	(k)
	Take-over Bids.    If a Borrower wishes to make a Drawdown of a Swing Line Advance for the purpose of financing a
Take-over Bid, such Borrower shall deliver to the Swing Line Lender a Take-over Bid Notice at least ten (10) Banking Days prior to the day on which it gives to the Swing
Line Lender a telephonic notice or Notice of Swing Line Borrowing requesting such Drawdown. Such Take-over Bid Notice shall include the details of such Take-over Bid. As soon
as possible, but in any event within five (5) Banking Days of the giving of the Take-over Bid Notice, the Swing Line Lender shall, acting reasonably and in good faith, determine
whether or not it wishes to fund such Swing Line Advance. Notwithstanding any other provisions hereof, if the Swing Line Lender determines that it does not wish to fund such Swing Line Advance, the
Swing Line Lender shall not be required to fund such Swing Line Advance, and the Swing Line Lender shall be considered to be acting reasonably and in good faith if it determines that it does not wish
to fund such Swing Line Advance based on any of its internal regulatory, take-over bid and credit policies and procedures. 

2.23     Increase In Aggregate Commitment Amount To U.S.$750,000,000  

	(a)
	Notwithstanding
any other provision of this Agreement, each of the parties hereto agree that Celestica may, from time to time and at any time, give notice to the Administrative Agent
that one or more Lenders or other financial institutions (each an "Additional Lender") have agreed to make additional or new commitments (each an  "Additional
Commitment") hereunder (provided, however, that Celestica shall not be entitled to give such notice at any time at which the aggregate
Commitments are equal to U.S.$750,000,000 (or such lesser amount as may be available following a cancellation in part of the Facility pursuant to Section 2.7)). Upon receipt of such written
notice, each party hereto hereby irrevocably authorizes the Administrative Agent to:

	(i)
	insert
the name of the Additional Lender that will become a Lender on Schedule A;

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

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

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

40

  

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

	(b)
	Each
of the parties hereto agrees that it will promptly execute and deliver all such documents, including, without limitation, all such additional conveyances, transfers and consents
and other assurances, and do all such other acts and things as may from time to time be desirable in order to better evidence or give effect to this Section 2.23. 

41

 

ARTICLE 3

LETTERS OF CREDIT  

3.1       Issuance Request  

By
delivering to the Administrative Agent and the Issuing Bank an Issuance Request at or before 12:00 noon, Toronto, Canada time, Celestica may request, from time to time prior to the Maturity Date
and on not less than three nor more than ten Banking Days' notice, that the Issuing Bank issue an irrevocable standby letter of credit or letter of guarantee in such form as may be requested by
Celestica and approved by the Issuing Bank (each a "Letter of Credit") in support of financial obligations of a Restricted Subsidiary incurred in such
Restricted Subsidiary's ordinary course of business and which are described in such Issuance Request, provided that, if the form of the letter of credit requested by such Borrower is in a language
other than English, Celestica shall provide to the Administrative Agent and the Issuing Bank not less than
ten nor more than twenty Banking Days notice. Upon receipt of an Issuance Request, the Administrative Agent shall, within twenty (20) days of the receipt thereof, notify the Lenders thereof.
Each Letter of Credit shall, by its terms: 

	(a)
	be
issued in a Face Amount which when aggregated with the Face Amounts of all other outstanding Letters of Credit does not exceed (or would not, upon its issuance, exceed) the then
Letter of Credit Availability;

	(b)
	be
stated to expire on a date (its "Stated Expiry Date") not later than one year from the Maturity Date; and

	(c)
	on
or prior to its Stated Expiry Date:

	(i)
	terminate
immediately upon notice to the Issuing Bank thereof from the beneficiary thereunder that all obligations covered thereby have been terminated, paid or
otherwise satisfied in full, and

	(ii)
	reduce,
in part, immediately and to the extent that the beneficiary thereunder has notified the Issuing Bank thereof that the obligations covered thereby have been paid
or otherwise satisfied in part. 

Celestica
may request Letters of Credit to be denominated in Canadian Dollars, in United States Dollars, and in Pounds Sterling or, if the Issuing Bank in its sole and absolute discretion
agrees, in Euros. The provisions of Section 6.2 shall apply to Letters of Credit issued contemporaneously on the first Drawdown Date and, thereafter, Section 6.3 (with the exception of
Section 6.3(a)) shall apply at the time of issuance of any Letter of Credit as if such issuance were a Drawdown. 

3.2       Issuances  

On
the terms and subject to the conditions of this Agreement, the Issuing Bank shall issue Letters of Credit in accordance with the Issuance Requests made therefor. The Issuing Bank will make
available the original of each Letter of Credit which it issues in accordance with the Issuance Request therefor to the beneficiary thereof. The Issuing Bank shall notify the Administrative Agent of
each issuance of or amendment to any Letter of Credit on the day upon which such issuance or amendment occurs and will promptly provide each of the Administrative Agent and the Lenders with a copy of
such Letter of Credit or amendment thereof. 

42

 

3.3       Other Lenders' Participation  

Each
Letter of Credit issued pursuant to Section 3.2 shall, effective upon its issuance and without further action, be issued on behalf of all Lenders (including the Issuing Bank) in their
respective Main Facility Rateable Portions. Each Lender shall, to the extent of its Main Facility Rateable Portion, be deemed irrevocably to have participated in the issuance of the Letter of Credit
and shall be deemed to have purchased from the Issuing Bank an interest in each Letter of Credit equal to its Main Facility Rateable Portion of the Face Amount of each Letter of Credit; provided,
however, that in the event that any Letter of Credit is denominated in a currency other than United States Dollars, each of the Lenders, other than the Issuing Bank, shall be deemed to have
purchased from the Issuing Bank an interest in each Letter of Credit equal to its Main Facility Rateable Portion of the Equivalent Amount, expressed in United States Dollars and determined on
the date of issuance, of the Letter of Credit. Each Lender shall be responsible to reimburse promptly the Issuing Bank for Reimbursement Obligations which have not been reimbursed by Celestica in
accordance with Section 3.4 or which have been reimbursed by Celestica but must be returned, restored or disgorged by the Issuing Bank for any reason and each Lender shall, to the extent
of its Main Facility Rateable Portion, be entitled to receive from the Administrative Agent its Main Facility Rateable Portion of the fee received by the Administrative Agent with respect to each
Letter of Credit payable pursuant to Section 3.8(b). In the event that Celestica shall fail to reimburse the Issuing Bank or if for any reason Advances shall not be made to fund any
Reimbursement Obligation, all as provided in Section 3.4 and in an amount equal to the amount of any drawing on or by the Issuing Bank under a Letter of Credit, or in the event the
Issuing Bank must, for any reason, return, restore or disgorge such reimbursement, the Issuing Bank shall promptly notify each Lender of the unreimbursed amount of such drawing and such Lender's
respective Main Facility Rateable Portion of the Face Amount of such Letter of Credit. Each Lender shall make available to the Issuing Bank, whether or not any Default shall have occurred and be
continuing, an amount equal to its respective Main Facility Rateable Portion of the Face Amount of such Letter of Credit in same day or immediately available funds at the office of the Issuing Bank
specified in such notice not later than 10:00 a.m. local time on the Banking Day after the date notified by the Issuing Bank. In the event that any Lender fails to make available to the Issuing
Bank the amount of such Lender's participation in such Letter of Credit as provided herein, the Issuing Bank shall be entitled to recover such amount on demand from such Lender together with interest
at a daily rate consistent with market practice. Nothing in this Section shall be deemed to prejudice the right of any Lender to recover from the Issuing Bank any amounts made available by such Lender
to the Issuing Bank pursuant to this Section in the event that it is determined by a court of competent jurisdiction in a final, non-appealable decision that the payment with respect to
such Letter of Credit by the Issuing Bank in respect of which payment was made by such Lender constituted gross negligence or wilful misconduct on the part of the Issuing Bank. The Issuing Bank shall
distribute to each other Lender which has paid all amounts payable by it under this Section with respect to any Letter of Credit issued by the Issuing Bank such other Lender's Main Facility Rateable
Portion of all payments received by the Issuing Bank from Celestica in reimbursement of drawings honoured by the Issuing Bank under such Letter of Credit when such payments are received. 

43

 

3.4       Reimbursement  

The
Issuing Bank will notify Celestica and the Administrative Agent promptly following the presentment for payment of any drawing under a Letter of Credit which notice shall include the date (a  "Disbursement Date") such payment shall be made. Subject to the terms and provisions of such Letter of Credit, the Issuing Bank shall make such payment
to the beneficiary (or its designee) of such Letter of Credit (each, a "Disbursement"). Unless Celestica has made alternative arrangements with the
Issuing Bank with respect to payment to the Administrative Agent of an amount sufficient to permit the Issuing Bank to discharge its obligations under the Letter of Credit together with that amount
equal to any and all charges and expenses which the Issuing Bank may pay or incur in respect to such Letter of Credit, at or prior to 12:00 noon, Toronto, Canada time on the Disbursement Date,
Celestica will reimburse the Issuing Bank for all amounts disbursed under the Letter of Credit together with that amount equal to any and all charges and expenses which the Issuing Bank may pay or
incur in respect of such drawing under such Letter of Credit, failing which any such payment so payable shall be deemed to be (i) a Drawdown of a Prime Rate Advance if payment under such Letter
of Credit was made in Canadian Dollars; (ii) a Drawdown of a Base Rate Canada Advance if payment under such Letter of Credit was made in United States Dollars; or (iii) a Drawdown
of a Base Rate Canada Advance in the Equivalent Amount in United States Dollars on the date of such Disbursement of the aggregate of the amount so disbursed and all such charges and expenses if
payment under such Letter of Credit was made in Euros or Pounds Sterling; provided that the provisions of Section 6.3 regarding conditions for subsequent Drawdowns shall not apply to such
Advances. In the event that any amount so payable by the Issuing Bank exceeds the amount available to be drawn down by Celestica under the Facility, then forthwith upon receipt of such notice,
Celestica shall provide to the Issuing Bank an amount equal to such excess amount. Celestica's obligation (a "Reimbursement Obligation") to reimburse
the Issuing Bank with respect to each Disbursement, and each Lender's obligation to make participation payments in each drawing which has not been reimbursed by Celestica, shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff, counterclaim, or defence to payment which Celestica may have or have had against any Lender or any beneficiary of a Letter
of Credit, including any defence based upon the occurrence of any Default, any draft, demand or certificate or other document presented under a Letter of Credit proving to be forged, fraudulent,
invalid or insufficient, the failure of any Disbursement to conform to the terms of the applicable Letter of Credit (if, in the Issuing Bank's good faith opinion, such Disbursement is determined to be
appropriate) or any non-application or misapplication by the beneficiary of the proceeds of such Disbursement, or the legality, validity, form, regularity, or enforceability of such Letter
of Credit; provided, however, that nothing herein shall adversely affect the right of Celestica to commence any proceeding against the Issuing Bank for any wrongful Disbursement made by the Issuing
Bank under a Letter of Credit as a result of gross negligence or wilful misconduct (as determined by a final, non-appealable decision of a court of competition jurisdiction) on the part of
the Issuing Bank. 

44

 

3.5       Deemed Disbursements  

Upon
the declaration by the Administrative Agent that all Advances are immediately due and payable or are due and payable on demand pursuant to Section 10.2, Celestica shall immediately deposit
with the Administrative Agent, on behalf of the Issuing Bank, an amount equal to the undrawn Face Amount of all issued and outstanding Letters of Credit. If such deposit is not received by the
Administrative Agent, on behalf of the Issuing Bank, within 15 days of such declaration by the Administrative Agent, the Administrative Agent may, with the consent of the Majority Lenders, deem
a Drawdown Notice to have been delivered by Celestica requesting (i) a Drawdown of a Prime Rate Advance in an amount equal to the undrawn Face Amount of outstanding Letters of Credit
denominated in Canadian Dollars, (ii) a Drawdown of a Base Rate Canada Advance in an amount equal to the undrawn Face Amount of outstanding Letters of Credit denominated in U.S. Dollars,
and (iii) a Drawdown of a Base Rate Canada Advance in the Equivalent Amount in United States Dollars of the undrawn Face Amount of outstanding Letters of Credit denominated in Euros or
Pounds Sterling. Such Advances shall be made and the Lenders shall fund such Advances in accordance with Section 11.2 notwithstanding the provisions of Section 6.3. Any amounts so
received by the Administrative Agent, on behalf of the Issuing Bank, from Celestica pursuant to this Section shall be held as collateral security for the repayment of Celestica's obligations in
connection with the Letters of Credit issued by the Issuing Bank. At any time when such Letters of Credit shall terminate pursuant to Section 3.1(c)(i) or be reduced pursuant to
Section 3.1(c)(ii), the obligations of Celestica under this Section shall be reduced accordingly (subject, however, to reinstatement in the event any payment in respect of such Letters of
Credit is recovered by any beneficiary in any manner from the Issuing Bank), and the Administrative Agent, on behalf of the Issuing Bank, will return to Celestica the amount, if any, by which the
aggregate amount deposited by Celestica with the Administrative Agent, together with any interest accrued thereon, exceeds the aggregate amount paid by the Administrative Agent for application by the
Issuing Bank to any Reimbursement Obligation of Celestica and the aggregate amount of any unpaid Reimbursement Obligations of Celestica. 

If,
pursuant to Section 10.2, the Administrative Agent withdraws its declaration that all Advances are immediately due and payable or are due and payable on demand, or at such time when all
Events of Default shall have been cured or waived, the Administrative Agent, on behalf of the Issuing Bank, shall return to Celestica all amounts then on deposit with the Administrative Agent
(together with any interest thereon) pursuant to this Section 3.5. 

3.6       Nature of Reimbursement Obligations  

Celestica
shall assume all risks of the acts, omissions, or misuse of any Letter of Credit it has requested by the beneficiary thereof. Neither the Issuing Bank nor any Lender (except to the extent of
its own gross negligence or wilful misconduct, as determined by a final, non-appealable decision of a court of competent jurisdiction) shall be responsible for: 

	(a)
	the
form, validity, sufficiency, accuracy, genuineness, or legal effect of any Letter of Credit or any document submitted by any party in connection with the application for or
issuance of a Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent, or forged; 

45

 

	(b)
	the
form, validity, sufficiency, accuracy, genuineness, or legal effect of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the
rights or benefits thereunder or proceeds thereof in whole or in part, which may prove to be invalid or ineffective for any reason;

	(c)
	failure
of the beneficiary to comply fully with conditions required in order to demand payment under a Letter of Credit;

	(d)
	errors,
omissions, interruptions, or delays in transmission or delivery of any messages, by mail, telecopier, or otherwise; or

	(e)
	any
loss or delay in the transmission or otherwise of any document or draft required in order to make a Disbursement under a Letter of Credit or of the proceeds thereof. 

None
of the foregoing shall affect, impair, or prevent the vesting of any of the rights or powers granted to the Issuing Bank or any Lender hereunder. Any action taken or omitted to be taken by the
Issuing Bank in good faith shall be binding upon Celestica and shall not subject the Issuing Bank to any resulting liability to Celestica. 

3.7       Indemnity for Costs  

Celestica
shall indemnify the Issuing Bank against any and all costs, damages, expenses, taxes (other than taxes on overall net income, assets or capital), claims and demands which the Issuing Bank
may incur or sustain by reason of or arising in any way whatsoever in connection with the operating, establishing or paying of the amounts payable under a Letter of Credit or arising in connection
with any amounts payable by the Issuing Bank thereunder. 

3.8       Fees  

	(a)
	At
the time of issuance of a Letter of Credit, Celestica shall pay to the Administrative Agent, for the account of the Issuing Bank, an issuing fee in an amount equal to the product
of (i) the Face Amount of the Letter of Credit, (ii) 0.1%, and (iii) a fraction, the numerator of which is the number of days in the term of the Letter of Credit and the
denominator of which is 365 (or 366 in the case of a leap year).

	(b)
	Celestica
shall pay to the Administrative Agent for the rateable account of the Lenders, in respect of each Letter of Credit issued hereunder, a quarterly fee calculated daily on each
day in each fiscal quarter during the term of such Letter of Credit in an amount equal to the sum of the products obtained on each such day by multiplying (i) the undrawn portion of the Face
Amount of the Letter of Credit on such day, (ii) the LC Fee and (iii) a fraction, the numerator of which is one (1) and denominator of which is 365 (or 366 in the case of a day
occurring in a leap year). Such fee shall be payable by Celestica to the Administrative Agent on the first Business Day of the next following fiscal quarter. The fee shall in turn be distributed by
the Administrative Agent to the Lenders on the first Business Day of each fiscal quarter in accordance with the Lenders' respective Main Facility Rateable Portions as at the last day of the prior
fiscal quarter. 

46

 

	(c)
	Celestica
shall pay to the Administrative Agent, for the account of the Issuing Bank, an amendment fee in United States Dollars in respect of each amendment to any Letter of
Credit in such amount as is usual and customary for the Issuing Bank to charge its customers, and such fee shall be payable by Celestica to the Administrative Agent, for the account of the Issuing
Bank, at the time of request for such amendment.

	(d)
	In
the event that the currency in which a Letter of Credit is expressed to be drawn is a currency other than United States Dollars or Canadian Dollars, for the purposes of
assessing the fees payable under this Section 3.8, the Face Amount payable under the Letter of Credit shall be deemed to be the Equivalent Amount in United States Dollars of such other
currency on the date on which such fee is to be assessed. 

3.9       Existing Letters of Credit  

Notwithstanding
any other provision hereof, each of the Letters of Credit listed on Schedule Q (each, an "Existing Letter of Credit") shall expire on its Stated Expiry Date. Subject to the
terms of this Agreement, CIBC shall be the Issuing Bank in respect of Letters of Credit issued to replace each Existing Letter of Credit. 

47

 
ARTICLE 4

BANKERS' ACCEPTANCES AND ACCEPTANCE NOTES  

4.1       Funding of Bankers' Acceptances  

If
the Administrative Agent receives from Celestica or a Canadian Designated Subsidiary a Drawdown Notice or a Rollover Notice or a Conversion Notice requesting an Advance or a Rollover or a
Conversion into a Bankers' Acceptance Advance, the Administrative Agent shall notify each of the Lenders, prior to 11:30 a.m. (Toronto, Canada time) on the first Banking Day prior to the date
of such Advance, of such request and each Lender's Main Facility Rateable Portion of such Advance except that, if the Face Amount of a draft which would otherwise be accepted by a Lender would not be
Cdn.$100,000, or an integral multiple thereof, such Face Amount shall be increased or reduced by the Administrative Agent in its sole and unfettered discretion to the nearest integral multiple of
Cdn.$100,000. Each Lender shall, not later than 11:30 a.m. (Toronto, Canada time) on the date of each Advance by way of Bankers' Acceptance under the Facility (whether in respect of a Drawdown
or pursuant to a Rollover or Conversion), accept drafts of such Borrower who has delivered such Drawdown Notice, Rollover Notice or Conversion Notice which are presented to it for acceptance and which
have an aggregate face amount equal to such Lender's Main Facility Rateable Portion of the total Advance being made by way of Bankers' Acceptances on such date. With respect to each Drawdown of or
Rollover of or Conversion into Bankers' Acceptances, each Lender shall not be required to accept any draft which has a Face Amount which is not an integral multiple of Cdn.$100,000. Subject to this
Section and Section 2.3, each Lender shall purchase its Main Facility Rateable Portion of any Bankers' Acceptances. Concurrently with the acceptance of drafts of such Borrower as aforesaid,
each Lender shall make available to the Administrative Agent its Main Facility Rateable Portion of the Notional BA Proceeds with respect to such Advance. The Administrative Agent shall, upon
fulfilment by such Borrower of the conditions set out in Section 6.2 or Section 6.3, as applicable, make such Notional BA Proceeds available to such Borrower on the date of such Advance
by crediting the Designated Account of such Borrower. 

4.2       Acceptance Fees  

With
respect to each draft of Celestica or a Canadian Designated Subsidiary accepted pursuant hereto, such Borrower shall pay to the Administrative Agent for the account of the Lenders, as the case
may be, in advance, an acceptance fee calculated at the rate per annum, on the basis of a year of 365 days or 366 days in the case of a leap year, equal to the Applicable Margin
pertaining to the Canadian BA Rate on the Face Amount of such Bankers' Acceptance or the principal amount of an Acceptance Note, as applicable for its term, being the actual number of days in the
period commencing on the date of acceptance of such Borrower's draft or the date of such Acceptance Note and ending on but excluding the maturity date of the Bankers' Acceptance or Acceptance Note.
Such acceptance fees shall be
non-refundable and shall be fully earned on the first day of the Interest Period of the Acceptance Note. Such acceptance fees shall be paid by the Borrower whose draft has been accepted by
the Administrative Agent deducting the amount thereof on behalf of the Lenders from what would otherwise be Notional BA Proceeds funded pursuant to Section 4.1. 

48

 

4.3       Presigned Draft Forms  

	(a)
	Subject
to paragraph (b) of this Section 4.3, in order to enable the Lenders to create Banker's Acceptances or Acceptance Notes in the manner specified in this
Article 4, Celestica and each Canadian Designated Subsidiary shall supply each Lender with such number of drafts as it may reasonably request, duly signed on behalf of such Borrower. Each
Lender hereby indemnifies each such Borrower from and against any damages, losses, costs, expenses or other claims incurred by such Borrower and arising by reason of or resulting from any loss or
improper use thereof by such Lender, will exercise and cause its agents to exercise such care in the custody and safekeeping of such drafts as it would exercise in the custody and safekeeping of
similar property owned by it and will, upon request by any such Borrower, promptly advise such Borrower of the number and designations, if any, of uncompleted drafts held by it for and on behalf of
such Borrower. The signature of any officer of the applicable Borrower on a draft may be mechanically reproduced by the applicable Borrower and any Banker's Acceptance or Acceptance Note bearing a
facsimile signature of a duly authorized officer of a Borrower shall be binding upon the applicable Borrower as if it had been manually signed by such person even if such person no longer holds office
on the date of its acceptance by the Lender or at any time after such date. No Lender shall be liable for its failure to accept a draft as required hereby if the cause of such failure is, in whole or
in part, due to the failure of the applicable Borrower to provide drafts to such Lender on a timely basis in accordance with the terms hereof.

	(b)
	Each
of Celestica and each Canadian Designated Subsidiary hereby irrevocably appoints each Lender as its attorney to sign and endorse on its behalf, manually or by facsimile or
mechanical signature, any Banker's Acceptance or Acceptance Note necessary to enable each Lender to make Advances in the manner specified in this Article 4. All Banker's Acceptances or
Acceptance Notes signed or endorsed on behalf of the applicable Borrower by a Lender shall be binding on such Borrower, all as if duly signed or endorsed by such Borrower. Each Lender shall
(i) maintain a record with respect to any Banker's Acceptance or Acceptance Note completed in accordance with this Section 4.3(b), voided by it for any reason, accepted and purchased or
purchased or exchanged, and cancelled at its respective maturity; and (ii) retain such records in the manner and for the statutory periods provided by Applicable Law and make such records
available to Celestica and each Canadian Designated Subsidiary acting reasonably. On request by Celestica or any Canadian Designated Subsidiary, a Lender shall cancel and return to the possession of
such Borrower all Banker's Acceptances or Acceptance Notes which have been pre-signed or pre-endorsed on behalf of such Borrower and which are held by such Lender and are not
required to make Advances in accordance with this Article 4. 

49

 

4.4       Term and Interest Periods  

The
Interest Period of any Bankers' Acceptance shall be specified in the draft and in the Drawdown Notice, Conversion Notice or Rollover Notice related thereto and the Interest Period for any
Acceptance Note shall be specified in the Drawdown Notice, Conversion Notice or Rollover Notice related thereto and Interest Period of any Bankers' Acceptance and the Interest Period of an Acceptance
Note shall be for periods of approximately 30, 60, 90 or 180 days, unless otherwise agreed to by the Administrative Agent. The Interest Period of each Bankers' Acceptance shall mature, and the
Interest Period of an Acceptance Note shall end, on a Banking Day. Each Borrower who delivers a Drawdown Notice, Rollover Notice or Conversion Notice shall ensure that no Bankers' Acceptance issued
pursuant thereto shall have an Interest Period ending after the Maturity Date and that no Acceptance Note issued pursuant thereto shall have an Interest Period ending after the Maturity Date. 

4.5       Payment on Maturity  

A
Borrower which has received a Bankers' Acceptance Advance shall pay to the Administrative Agent, for the account of the Lenders, on the maturity date of such Bankers' Acceptance and the last day of
the Interest Period of an Acceptance Note an amount equal to the Face Amount of such maturing Bankers' Acceptance or the principal amount of such Acceptance Note, as the case may be; provided that
such Borrower may, at its option, so reimburse the Lenders, in whole or in part, by delivering to the Administrative Agent no later than 10:00 a.m. two (2) Banking Days prior to the
maturity date of a maturing Bankers' Acceptance or the last day of the Interest Period of an Acceptance Note, as the case may be, a Rollover Notice specifying the term of the Bankers' Acceptances or
the next Interest Period for such Acceptance Note, as the case may be, and presenting drafts or Acceptance Notes to the Lenders for acceptance and purchase having, in the case of reimbursement in
whole by replacement Bankers' Acceptances or Acceptance Notes, an aggregate Face Amount equal to the Face Amount of the maturing Bankers' Acceptances or principal amount of the Acceptance Notes. In
the event that a Borrower fails to deliver a Conversion Notice or Rollover Notice and fails to make payment to the Administrative Agent in respect of the maturing Bankers' Acceptance Advance, the Face
Amount of the maturing Bankers' Acceptances and the principal amount of the Acceptance Notes forming part of such Bankers' Acceptance Advance shall be deemed to be converted to a Prime Rate Advance on
the relevant maturity date. 

4.6       Waiver of Days of Grace  

Each
of Celestica and any Canadian Designated Subsidiary Borrower renounces and shall not claim any days of grace for the payment of any Bankers' Acceptance or Acceptance Notes. 

4.7       Special Provisions Relating to Acceptance Notes  

	(a)
	Each
Borrower and each Lender hereby acknowledges and agrees that from time to time certain Lenders which are Non-Schedule I Lenders may not be authorized to or
may, as a matter of general corporate policy, elect not to accept or purchase Bankers' Acceptance drafts, and the Borrowers and each Lender agree that any such Lender may purchase Acceptance Notes of
any of Celestica or any Canadian Designated Subsidiary in accordance with the provisions of Section 4.7(b) in lieu of creating Bankers' Acceptances for its account. 

50

  

	(b)
	In
the event that any Lender described in Section 4.7(a) above is unable to, or elects as a matter of general corporate policy not to, accept or purchase Bankers' Acceptances
hereunder, such Lender shall not be required to accept or purchase Bankers' Acceptances hereunder, but rather, if Celestica or any Canadian Designated Subsidiary requests the acceptance of such
Bankers' Acceptances, that Borrower shall deliver to such Lender an Acceptance Note or Acceptance Notes of such Borrower having the same maturity as the Bankers' Acceptances to be accepted and in an
aggregate principal amount equal to the face amount of such Bankers' Acceptances. Each such Lender hereby agrees to purchase Acceptance Notes from such Borrower at a purchase price equal to the
Notional BA Proceeds which would have been applicable if a Bankers' Acceptance draft had been accepted by it and such Acceptance Notes shall be governed by the provisions of this Article 4 as
if they were Bankers' Acceptances. 

4.8       No Market  

If
the Administrative Agent determines in good faith and notifies Celestica in writing that, by reason of circumstances affecting the Canadian money market, there is no market for Bankers'
Acceptances, then the right of Celestica or any Canadian Designated Subsidiary to request Bankers' Acceptance Advances shall be suspended until the Administrative Agent, acting reasonably, determines
that the circumstances causing such suspension no longer exists and the Administrative Agent so notifies Celestica. In such circumstances, any Drawdown Notice for a Bankers' Acceptance Advance which
is outstanding shall be cancelled and the Drawdown requested therein shall, at the option of Celestica or any Canadian Designated Subsidiary delivering such Drawdown Notice, either not be made or be
made as a Prime Rate Advance. 

51

 
ARTICLE 5

CHANGE OF CIRCUMSTANCES AND INDEMNIFICATION  

5.1       [Intentionally Deleted]  

5.2       [Intentionally Deleted]  

5.3       Lender Representation  

Each
Lender, save and except for KeyBank National Association, represents to each of Celestica and each Designated Subsidiary and the Administrative Agent that it is either not a
non-resident of Canada for the purposes of the Income Tax Act (Canada) (the "ITA") or
is an "authorized foreign bank" (as defined in the ITA) that holds and will at all times, hold all of its rights and benefits hereunder as part of its "Canadian banking business" (as defined in the
ITA) and that it is beneficially entitled to the principal, interest and fees payable to it under the Loan Documents. The foregoing representation shall be true and correct and shall be deemed to be
given by each Lender on each day that a payment of interest, principal or fees is to be made to it pursuant to a Loan Document. 

5.4       [Intentionally Deleted]  

5.5       Increased Costs  

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

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

	(b)
	imposes,
modifies or deems applicable any reserve, deposit, ratio or similar requirements or otherwise imposes any cost on any Lender in funding or maintaining all or any of the
Advances or its Commitment (including, without limitation, any such requirement imposed by the Board of Governors of the United States Federal Reserve System or by the Bank of England or The
Financial Services Authority), or 

52

 

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

and
the result of any of the foregoing is to increase the cost to a Lender, reduce the income receivable by it or reduce the effective return on the capital of such Lender in respect of any Advances
and/or its Commitment to an extent which such Lender believes to be material (after consultation with Celestica), the Lender shall give notice thereof to the Administrative Agent and the
Administrative Agent shall give notice thereof to the Borrowers (herein called a "Notice of Amount") stating the event by reason of which it believes it
is entitled to Additional Compensation (as hereinafter defined), such cost and/or such reduction in such return (or such proportion of such reduction as is, in the reasonable and  bona fide opinion of
such Lender, attributable to its obligations hereunder), the amount of such Additional Compensation (as hereinafter defined)
incurred by such Lender and supplying reasonable supporting evidence (including, in the event of change of Applicable Law, a photocopy of the Applicable Law evidencing such change together with a
certificate of a duly authorized officer of the Lender setting forth the Additional Compensation and the basis for calculation of such Additional Compensation and an opinion in writing of such
Lender's counsel confirming such change); provided that the Lender shall not be required to disclose any information required to be kept confidential by Applicable Law (in which case the requirement
of such confidentiality shall be supported by an opinion of such Lender's counsel) within ten (10) Banking Days of the date of receipt of any Notice of Amount, the amount set out therein (in
this Article 5 referred to as "Additional Compensation") shall be paid to the Lender by Celestica (if applicable, on behalf of the relevant
Designated Subsidiary) to the Lender. In the event such Lender subsequently recovers all or part of the Additional Compensation paid by the Borrowers, it shall repay an equal amount to such Borrowers. 

5.6       Illegality  

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

53

 

5.7       Mitigation  

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

	(i)
	Additional
Compensation being paid by a Borrower to a Lender under Section 5.5; or

	(ii)
	a
reduction of all or any of an Advance by such Lender or the Lender's Commitment pursuant to Section 5.6; or

	(iii)
	the
prepayment of the portion of the Advances outstanding to it pursuant to Section 5.6; or

	(iv)
	the
payment of any amount by an Obligor under Section 5.8; 

then
such Lender, promptly upon becoming aware of the same and the possible results thereof, shall notify the Administrative Agent thereof and the Administrative Agent shall notify the Borrowers
thereof and, in consultation with the Borrowers shall take such steps, if any, as such Lender in its bona fide opinion considers appropriate to mitigate
the effects of such circumstances. Without limiting the generality of the foregoing, if it is commercially reasonable, such Lender shall make reasonable efforts to limit the incidence of any such
Additional Compensation and seek recovery for the account of the Borrowers upon the Borrower's request and at the Borrower's expense; provided that such Lender in its reasonable determination suffers
no appreciable economic, legal, regulatory or other disadvantage. In all events, the Lenders shall promptly co-operate with the Borrowers to the extent possible, to rearrange the affected
availment to one that may not be affected by such change, but failure to effect a change in availment shall not relieve the relevant Borrower of its obligation to pay the Additional Compensation.
Notwithstanding the foregoing provisions, a Lender shall only be entitled to rely upon the provisions of Section 5.5 if and for so long as it is not treating the Borrowers in any materially
different or in any less favourable manner than is applicable to any other customers of any relevant Lender, where such other customers are bound by similar provisions to the foregoing provisions of
Section 5.5. 

54

 

	(b)
	If
any Lender seeks Additional Compensation pursuant to Section 5.5 hereof (the "Affected Lender"), then the relevant Borrowers
may indicate to the Administrative Agent in writing that they desire to (i) replace the Affected Lender with one or more of the other Lenders, and/or (ii) amend a Drawdown Notice or
Notice of Swing Line Borrowing to reduce the amount sought to be borrowed to reflect the reduced amount hereunder, and the Administrative Agent shall then forthwith give notice to the other Lenders
that any Lender or Lenders may, in the aggregate, advance all or part of the Affected Lender's Main Facility Rateable Portion of such Advance and, in the aggregate, assume all or part of the Affected
Lender's Commitment and obligations hereunder and acquire all or part of the rights of the Affected Lender and assume all or part of the obligations of the Affected Lender under each of the other Loan
Documents (but in no event shall any other Lender or the Administrative Agent be obliged to do so). If a Lender shall so agree in writing (herein collectively called the  "Assenting Lenders" and
individually called an "Assenting Lender") with respect to such advance,
acquisition and assumption, the Main Facility Rateable Portion of such Advance of each Assenting Lender (other than a Swing Line Advance) and the Commitment and the obligations of such Assenting
Lender under this Agreement and the rights and obligations of such Assenting Lender under each of the other Loan Documents shall be increased accordingly on a date mutually acceptable to such
Assenting Lender and the Borrowers. On such date, the Assenting Lender shall advance to the relevant Borrowers the relevant portion of the Affected Lender's Main Facility Rateable Portion of the
outstanding Advances (other than Swing Line Advances) and the relevant Borrowers shall prepay to the Affected Lender the Advances of the Affected Lender then outstanding, together with all interest
accrued thereon and all other amounts owing to the Affected Lender hereunder, and, upon such advance and prepayment, the Affected Lender shall cease to be a "Lender" for purposes of this Agreement and
shall no longer have any obligations hereunder. Upon the assumption of the Affected Lender's Commitment as aforesaid by an Assenting Lender, Schedule B hereto shall be deemed to be
amended to increase the Commitment of such Assenting Lender by the amount of such assumption and to reduce the Commitment of the Affected Lender by a like amount. If no Assenting Lender is found, then
in such event, the relevant Borrower is entitled to repay the Affected Lender and reduce its obligations hereunder by such amount so repaid. 

5.8       Taxes  

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

	(i)
	the
sum payable shall be increased by such additional amount as may be necessary so that after making all required deductions or withholdings (including deductions or
withholdings applicable to additional amounts paid under this Section 5.8), the relevant Lenders or the Administrative Agent, as applicable, receive a net amount equal to the full amount they
would have received if no deduction or withholding had been made;

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

55

 

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

	(iv)
	such
Obligor shall deliver to the relevant Lender or Administrative Agent, as applicable, as soon as practicable after it has made such payment to the applicable
authority (x) a copy of such receipt as is issued by such authority evidencing the deduction or withholding of all amounts required to be deducted or withheld from the sum payable hereunder or
(y) if such a receipt is not available from such authority, notice of the payment of such amount deducted or withheld; 

provided
that the obligations of an Obligor to pay additional amounts pursuant to this Section 5.8 shall not apply with respect to Taxes arising solely by reason of a Lender or the
Administrative Agent, as applicable, having a connection with the jurisdiction that imposes the Taxes other than merely by the execution of this Agreement, receipt of payments under this Agreement,
the holding and disposition of Advances, the performance of its obligations or the enforcement of its rights under this Agreement. 

	(b)
	Without
prejudice to the foregoing provisions of this Section 5.8, if the Administrative Agent or any Lender (in this Section 5.8, an  "Indemnified Person") is required at any time (whether before or
after any Obligor has discharged all of its other obligations hereunder) to make any
payment on account of any Tax which an Obligor is required to withhold in accordance with Section 5.8(a) hereof or for which an Obligor is otherwise required to indemnify a Lender or the
Administrative Agent pursuant to Sections 5.8(a), (c) or (d) hereof, or if any liability in respect of any such payment is asserted, imposed, levied or assessed against such Indemnified
Person, the Obligor in respect of which such sum was received or receivable shall, within 30 days of written demand of the Administrative Agent or Lender, promptly indemnify such Indemnified
Person against such payment or liability, together with interest, penalties and expenses payable or incurred in connection therewith including, without limitation, any Tax imposed by any jurisdiction
on or in relation to any amounts paid to or for the account of such Indemnified Person pursuant to this Section 5.8. An Indemnified Person intending to make a claim pursuant to this
Section 5.8 shall notify the Obligor of the event in respect of which it believes it is entitled to make such claim and supply reasonable supporting evidence including a copy of the relevant
portion of any written assessment, provided that any such Indemnified Person shall not be required to disclose any information required to be kept confidential by regulation or contract (in which case
the basis of such confidentiality, at the request and expense of the Borrowers, shall be supported by an opinion of counsel of reputable standing).

	(c)
	If
an Obligor fails to pay any Taxes required to be paid by it pursuant to this Section 5.8 when due to the appropriate taxing authority or fails to remit to the Administrative
Agent, for the account of the respective Lenders, for the account of the Administrative Agent or for the Administrative Agent's own account, as applicable, the required receipts or other documentary
evidence required by Section 5.8(a)(ii), the Obligor shall indemnify the Lenders or the Administrative Agent, as applicable, for any incremental Taxes, interest or penalties that may become
payable by any Lender or the Administrative Agent as a result of any such failure. For purposes of this Section 5.8, a distribution by the Administrative Agent or any Lender to or for the
account of any Lender shall be deemed a payment by the Obligor. 

56

 

	(d)
	Each
Obligor will indemnify the Lenders and the Administrative Agent for the full amount of Taxes imposed by any jurisdiction and paid by such Lender or the Administrative Agent, as
applicable with respect to any amounts payable pursuant to this Section 5.8, and any liability arising therefrom or with respect thereto, whether or not such Taxes were correctly or
legally asserted. This indemnification shall be made within 30 days from the date such Lender or the Administrative Agent, as applicable makes written demand therefor which demand shall
identify the nature and amount of Taxes for which indemnification is being sought and shall include a copy of the relevant portion of any written assessment from the relevant taxing authority
demanding payment of such Taxes.

	(e)
	Without
prejudice to the survival of any other agreement contained herein, the agreements and obligations contained in this Section 5.8 shall survive the payment in full of
principal, interest, fees and any other amounts payable hereunder and the termination of this Agreement and the Guarantees. 

5.9       Tax Refund  

	(a)
	If,
following the imposition of any Tax on any payment by any Obligor in consequence of which such Obligor pays an additional amount under Section 5.8(a), any Lender receives
or is granted a refund of any Tax actually paid by it which in such Lender's sole opinion (acting in good faith) is attributable to such additional amount paid by such Obligor and is both identifiable
and quantifiable by it without requiring such Lender or its professional advisers to expend a material amount of time or incur a material cost in so identifying or quantifying (any of the foregoing,
to the extent so identifiable and quantifiable, being referred to as a "refund"), such Lender shall, to the extent that it can do so without prejudice
to the retention of the relevant refund and subject to such Obligor's obligation to repay promptly on demand by the Lender the amount to such Lender if the relevant refund is subsequently disallowed
or cancelled, reimburse such Obligor promptly after receipt of such refund by such Lender with such amount as such Lender shall in its sole opinion but in good faith have concluded to be the amount or
value of the relevant refund.

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

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ARTICLE 6

CONDITIONS PRECEDENT  

6.1       Conditions for Closing  

The
following conditions shall be satisfied on or prior to Closing: 

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

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

	(i)
	a
certified copy of its Organic Documents,

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

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

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

	(c)
	there
shall have been no Material Adverse Change since March 31, 2004;

	(d)
	no
Default or Event of Default shall have occurred and be continuing;

	(e)
	each
Borrower shall have executed and delivered to the Administrative Agent a confirmation of its Guarantee;

	(f)
	opinions
of Borrowers' Counsel, substantially in the form of Schedule O, shall have been delivered to the Administrative Agent;

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

	(h)
	the
Borrowers shall have paid all fees and expenses relating to the Facility provided for in this Agreement as set out in Section 2.14 and any other Loan Document, to
the extent then owing; and 

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	(i)
	all
amounts owing by the Borrowers under the Four-Year Unsecured Credit Agreement shall have been fully repaid and such Four-Year Unsecured Credit Agreement
shall have been terminated and cancelled and shall cease to be of any further force and effect. 

The
conditions set forth in this Section 6.1 are inserted for the sole benefit of the Lenders and may be waived by the Administrative Agent on behalf of the Lenders in whole or in part, with or
without terms or conditions. Prior to waiving any condition set forth in this Section 6.1, the Administrative Agent shall consult with the Joint Lead Arrangers and shall act reasonably given
the views of each of the Joint Lead Arrangers with respect of such waiver. 

6.2       Conditions for First Drawdown  

The
following conditions shall be satisfied by the Borrowers on or prior to the earlier of the first Drawdown Date and the first deemed Drawdown pursuant to Section 3.4 or 3.5: 

	(a)
	the
representations and warranties set forth in Section 8.1 shall be true and correct in all material respects on and as of the Drawdown Date, both before and after giving
effect to the Drawdown of such Advance and to the application of proceeds therefrom on the Drawdown Date;

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

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

	(d)
	the
conditions set out in Section 6.4 shall be satisfied notwithstanding that the period within which such conditions are to be satisfied pursuant thereto may not have expired. 

6.3       Conditions for Subsequent Drawdowns  

The
following conditions shall be satisfied by the Borrower requesting an Advance at or prior to the time of each Drawdown of an Advance under the Facility (other than a deemed Drawdown pursuant to
the provisions of Section 3.4 or 4.5) subsequent to the first Drawdown after the date hereof: 

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

	(b)
	the
representations and warranties set forth in Section 8.1 shall be, mutatis mutandis, true and correct in all material
respects on and as of the Drawdown Date, both before and after giving effect to the Drawdown of such Advance and to the application of proceeds therefrom on the Drawdown Date; 

59

 

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

	(d)
	if
the Borrower requesting the Advance is a Restricted Subsidiary that has become a Designated Subsidiary, the Guarantee required by Section 9.1(m) to have been
delivered by that Designated Subsidiary shall have been delivered to the Administrative Agent notwithstanding that the 45 day period referred to therein may not have expired. 

6.4       Conditions for Material Restricted Subsidiaries and Restricted Subsidiaries  

The
following conditions shall be satisfied by the Material Restricted Subsidiaries or all Restricted Subsidiaries, as applicable, within forty-five (45) days (in the case of
paragraphs (a), (b) and (d)) or 90 days (in the case of paragraph (c)) of the date of this Agreement, or such later date as Celestica and the Administrative Agent, for and
on behalf of the Lenders, may agree; provided that the following conditions shall be satisfied on or prior to the first Drawdown Date: 

	(a)
	each
Material Restricted Subsidiary shall have executed and delivered to the Administrative Agent (i) a confirmation of its Guarantee if previously provided in connection with
the Existing Credit Agreement, or (ii) a Guarantee;

	(b)
	opinions
of local counsel to each Material Restricted Subsidiary, substantially in the form of Schedule O or otherwise in form and substance satisfactory to the Lenders'
Counsel and the Administrative Agent, acting reasonably, shall have been delivered to the Administrative Agent;

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

	(d)
	each
Material Restricted Subsidiary shall have delivered to the Administrative Agent all documents, agreements, instruments and certificates requested by the Administrative Agent or
the Lenders' Counsel, acting reasonably. 

The
conditions set forth in this Section 6.4 are inserted for the sole benefit of the Lenders and may be waived by the Administrative Agent on behalf of the Lenders in whole or in part, with or
without terms or conditions. Prior to waiving any condition set forth in this Section 6.4, the Administrative Agent shall consult with the Joint Lead Arrangers and shall act reasonably given
the views of each of the Joint Lead Arrangers with respect of such waiver. 

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   ARTICLE 7

PROVISIONS RELATING TO SUBSIDIARIES  

7.1       Designated Subsidiaries  

	(a)
	The
Administrative Agent and the Lenders acknowledge and agree and Celestica hereby confirms that Celestica has designated Celestica International as a Canadian Designated Subsidiary
and that there are not, on the date hereof, any other Designated Subsidiaries.

	(b)
	Celestica
may, from time to time and at any time hereafter, designate any other wholly-owned qualifying Restricted Subsidiary as a Canadian Designated Subsidiary provided that:

	(i)
	all
Lenders shall have previously consented in writing to the designation of such Subsidiary as a Canadian Designated Subsidiary;

	(ii)
	such
Subsidiary was incorporated, continued, amalgamated or otherwise created in accordance with and continues to be governed by the laws of a province of Canada or the
federal laws of Canada and which is domiciled in Canada;

	(iii)
	such
Restricted Subsidiary, prior to becoming a Designated Subsidiary, shall have executed and delivered to the Administrative Agent a Designated Subsidiary Agreement
and, if it has not already done so, a Guarantee substantially in the form of Schedule H; and

	(iv)
	the
Restricted Subsidiary which is proposed to become a Designated Subsidiary shall have delivered to the Administrative Agent:

	(A)
	a
certified copy of the proposed Designated Subsidiary's Organic Documents;

	(B)
	a
certified copy of the resolutions authorizing it to enter into, execute and deliver the Designated Subsidiary Agreement and the Guarantee, if applicable, and to perform its
obligations thereunder;

	(C)
	a
certificate as to the incumbency of its officers signing the Designated Subsidiary Agreement and the Guarantee, if applicable,

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

	(E)
	an
opinion of counsel to the Designated Subsidiary in form of Schedule O with only those changes which are reasonably satisfactory to the Lenders' Counsel and counsel to the
Designated Subsidiary; 

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	(c)
	Celestica
may, from time to time and at any time hereafter, designate any other wholly-owned Restricted Subsidiary which does not fall within the definition of  "Canadian Designated Subsidiary" as a Consent
Designated Subsidiary, provided that:

	(i)
	all
Lenders shall have previously consented in writing to the designation of such Subsidiary as a Consent Designated Subsidiary;

	(ii)
	Celestica
shall have obtained the agreement in writing of a Lender located in the jurisdiction where such Consent Designated Subsidiary is resident, to utilize, subject
to the terms of this Agreement, a portion of the Commitment of such Lender or its Affiliate to make Advances to the Consent Designated Subsidiary and such Lender shall have delivered a notice to the
Administrative Agent in the form of Schedule M;

	(iii)
	such
Subsidiary, prior to becoming a Consent Designated Subsidiary, shall have executed and delivered to the Administrative Agent a Designated Subsidiary
Agreement substantially in the form of Schedule F and a Guarantee substantially in the form of Schedule H, with such changes as the Administrative Agent and the Consent Designated
Subsidiary may reasonably require on the advice of their respective counsel to reflect local legal requirements; and

	(iv)
	the
Restricted Subsidiary which is proposed to be designated as a Consent Designated Subsidiary shall have provided to the Administrative Agent such number of copies as
the Administrative Agent may request of:

	(A)
	a
certified copy of the proposed Consent Designated Subsidiary's Organic Documents;

	(B)
	the
resolutions authorizing it to enter into, execute and deliver the Designated Subsidiary Agreement and the Guarantee, if applicable, and to perform its obligations thereunder;

	(C)
	a
certificate to the incumbency of its officers signing the Consent Designated Subsidiary Agreement and the Guarantee, if applicable;

	(D)
	a
certificate of status, good standing or like certificate with respect to such Consent Designated Subsidiary issued by appropriate government officials of the jurisdiction of its
incorporation; and

	(E)
	an
opinion of counsel to the Consent Designated Subsidiary in the form of Schedule O with only those changes which are reasonably satisfactory to the Lenders' Counsel and
counsel to the Consent Designated Subsidiary; and 

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	(d)
	Celestica
may, from time to time and at any time hereafter, terminate the designation of a Designated Subsidiary as such by the delivery of written notice to the Administrative Agent
and from and after the day which is five (5) Banking Days after receipt of such notice, the subject Subsidiary shall no longer be a Designated Subsidiary and shall have no further right or
ability to obtain further Advances under the Facility. 

7.2       [Intentionally Deleted]  

7.3       Material Restricted Subsidiaries to Provide Guarantees  

	(a)
	Each
Subsidiary of Celestica which is or becomes a Material Restricted Subsidiary shall comply with the requirements of Subsection 9.1(m).

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

7.4       Unrestricted Subsidiaries  

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

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

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

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

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

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

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

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	(i)
	immediately
upon giving effect to such designation, Celestica shall remain in compliance with all covenants set out in Section 9.3 on a pro-forma
(four quarter) basis; and

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

ARTICLE 8

REPRESENTATIONS AND WARRANTIES  

8.1       Representations and Warranties  

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

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

	(b)
	Validity, etc.    Each Obligor has duly executed and delivered each Loan Document to which it is a party and, except as set
out in Section 8.4(a), each such Loan Document constitutes a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms.

	(c)
	Due Authorization, Non-contravention etc.    The execution, delivery and performance by each Obligor of each Loan
Document to which it is a party are within its corporate powers, have been duly authorized by all necessary corporate action by it, and do not

	(i)
	contravene
its Organic Documents;

	(ii)
	contravene
any Applicable Law or contractual restriction; or

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

64

 

	(d)
	Government Approval, Regulation, etc.    Except as set out in Section 8.4(a), no authorization or approval or other
action by, and no consent from, notice to or filing with, any Official Body or other Person is required for the due execution, delivery or performance by any Obligor of any Loan Document to which it
is a party or in order to render any such Loan Document legal, valid, binding or enforceable against such Obligor.

	(e)
	Financial Statements.    The consolidated unaudited financial statements of Celestica and its Subsidiaries as at
March 31, 2004 fairly present the financial condition of Celestica and its Subsidiaries as at such date and the results of their operations for the fiscal quarter then ended, in accordance with
GAAP consistently applied. Since March 31, 2004 there has been no Material Adverse Change;

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

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

	(h)
	Compliance with Environmental Laws.    Each of the Borrowers and the Subsidiaries and all facilities and property now or
formerly owned, operated or leased by them:

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

65

 

	(ii)
	have
no contingent liabilities in connection with any Release or likely Release of Hazardous Materials and have not Released or caused or permitted the Release of
Hazardous Materials, and have no knowledge of Releases by others, at, on or under any property now or previously owned, operated or leased by Celestica and its Material Restricted Subsidiaries that,
with respect to any of the foregoing, singly or in the aggregate, would reasonably be likely to have a Material Adverse Effect;

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

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

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

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

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

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

66

 

	(ix)
	is
not listed or proposed for listing on the National Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state list of sites or Persons requiring
investigation or clean up where the liability imposition and allocation regime provided for in the applicable state Environmental Law is similar to CERCLA, including, without limitation, the ability
of governments and other parties to recover costs from other responsible or potentially responsible persons, except for any such listing or proposed listing which would not reasonably be likely to
have a Material Adverse Effect. 

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

	(j)
	No Default or Event of Default.    No Default or Event of Default has occurred and is continuing.

	(k)
	Accuracy of Information.    All factual information heretofore or contemporaneously furnished by or on behalf of Celestica in
writing to the Administrative Agent for the purposes of or in connection with this Agreement is true and accurate in every material respect on the date as of which such information is dated or
certified and as of the date of execution and delivery of this Agreement, and such information is not incomplete by omitting to state any material fact necessary to make such information not
misleading.

	(l)
	No Action for Winding-Up or Bankruptcy.    There has been no involuntary action taken against any of the
Borrowers or any Restricted Subsidiary for any such corporation's winding-up, dissolution, liquidation, bankruptcy, receivership, administration or similar or analogous events in respect
of such corporation or all or any material part of its assets or revenues.

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

67

 

	(n)
	Pension Plans.    Except as would not be reasonably likely to have a Material Adverse Effect, (i) all Pension Plans
are duly established, registered, qualified, administered and invested in compliance with the terms thereof, any applicable collective agreements and Applicable Law; (ii) no events have
occurred and no action has been taken by any Person which would reasonably be likely to result in the termination or partial termination of any Pension Plan, whether by declaration of any
Superintendent of Pensions or otherwise; (iii) none of the Borrowers have withdrawn any assets held in respect of any Pension Plan except as permitted under the terms thereof and Applicable
Laws; (iv) no Pension Plan has a "solvency deficiency" or "going concern unfunded liability" as
defined in the Pension Benefits Act (Ontario) and the regulations enacted thereunder, as amended; (v) all contributions, premiums and other
payments required to be paid to or in respect of each Pension Plan have been paid in a timely fashion in accordance with the terms thereof and Applicable Law and no taxes, penalties or fees are owing
or exigible in respect of any Pension Plan; and (vi) no actions, suits, claims, or proceedings are pending or, to the knowledge of the Borrower, threatened in respect of any Pension Plan or its
assets, other than routine claims for benefits. For the purposes of this section, and for greater certainty, "Applicable Law" shall include, without
limitation, any federal or provincial pension benefits legislation and the Income Tax Act (Canada).

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

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

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

8.2       Survival of Representations and Warranties  

The
representations and warranties set out in this Article 8 and in any Loan Document shall survive the execution and delivery of this Agreement and the making of any Advances to the
Borrowers, notwithstanding any investigations or examinations which may be made by the Administrative Agent or any Lender or any counsel to any of them. 

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8.3       Deemed Repetition of Representations and Warranties  

Each
of the representations set out in Section 8.1 shall be true and correct in all material respects and shall be deemed to be given on the occurrence of (i) the Drawdown, Conversion or
Rollover of an Advance, (ii) the acceptance of drafts presented for acceptance as Bankers' Acceptances or Acceptance Notes, and (iii) the issuance of a Letter of Credit, in each case by
reference to the facts and circumstances existing on the date of such Drawdown or acceptance or issuance. 

8.4       Guarantees from Chinese Material Restricted Subsidiaries  

	(a)
	Pursuant
to the Applicable Laws of the People's Republic of China ("PRC"), it is necessary to obtain the verification and approval of
the relevant local branch of the State Administration of Foreign Exchange ("SAFE") in respect of any currency conversions and any payments out of the
PRC or any payments to foreign-invested financial institutions in the PRC pursuant to any Guarantee provided by a Material Restricted Subsidiary established under the Applicable Laws of the PRC (a
"Chinese Material Restricted Subsidiary") and in order to ensure the legality, validity, effectiveness, enforceability or admissibility in evidence of a
Guarantee made by it, a Chinese Material Restricted Subsidiary must register such Guarantee, or any change, amendment or modification of such Guarantee with the SAFE (such verification and approval
of, and registration with, the relevant local branch of the SAFE with respect to a Guarantee, a "SAFE Registration").

	(b)
	In
connection with Section 9.1(m), Celestica shall cause each Chinese Material Restricted Subsidiary to file as soon as reasonably practicable after execution of a Guarantee or
any confirmation, change, amendment or modification of a Guarantee any necessary documents with the relevant local branch of the SAFE and to use commercially reasonable efforts in order to complete
the SAFE Registration.

	(c)
	For
the purposes of the proviso in the definition of Material Restricted Subsidiary, the unconsolidated assets of any Chinese Material Restricted Subsidiary that has provided a
Guarantee or any confirmation, change, amendment or modification of a Guarantee for which no SAFE Registration has been obtained shall be considered to be unconsolidated assets of a Restricted
Subsidiary that is not a Material Restricted Subsidiary, until such time as the SAFE Registration of such Guarantee or such confirmation, change, amendment or modification of such Guarantee has been
completed. 

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ARTICLE 9

COVENANTS  

9.1       Affirmative Covenants  

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

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

	(i)
	within
60 days after the end of each of its fiscal quarters in each fiscal year, commencing with the fiscal quarter ending June 30, 2004, the unaudited
financial statements of Celestica on a consolidated basis, each consisting of a balance sheet, statement of income and statement (in the form customarily prepared by Celestica for internal reporting
purposes) of changes in financial position as at the end of such fiscal quarter and for the period commencing with the end of the previous fiscal quarter and ending with the end of such fiscal
quarter, together with the figures for the year-to-date and setting forth, in each case, in comparative form to the figures for the corresponding fiscal quarter of the previous
fiscal year;

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

	(iii)
	within
60 days after the end of each fiscal quarter of Celestica in each fiscal year, commencing with the fiscal quarter ending June 30, 2004, an
Officer's Certificate of Celestica substantially in the form of Schedule D stating that:

	(A)
	Celestica
is in compliance with the covenants set forth in this Article 9 and that no Default or Event of Default has occurred and is continuing (or specifying such
non-compliance or Default or Event of Default and stating what action, if any, Celestica is taking or is causing to be taken in connection therewith) and providing a calculation of the
ratios referred to in Sections 9.3(a) and (b), and a statement as to the amount and calculation of EBITDA, Interest Expense, Gross Funded Debt and cash or Cash Equivalents maintained in
compliance with Section 9.3(c), in each case as at the last day of the relevant period; and 

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	(B)
	Celestica
has determined that the unconsolidated assets of all Restricted Subsidiaries which are not Material Restricted Subsidiaries do not, or will not, after giving effect to the
Guarantees delivered by the Restricted Subsidiaries listed in a schedule thereto, exceed ten per cent (10%) of the unconsolidated assets of the Borrowers and the Restricted Subsidiaries on the
date referenced in the most recently delivered set of financial statements delivered pursuant to Section 9.1(a)(ii); 

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

	(v)
	such
other information respecting the condition or operations, financial or otherwise, of Celestica or any Subsidiary (other than an Unrestricted Subsidiary) as any
Lender through the Administrative Agent may from time to time reasonably request. 

	(b)
	Corporate Status.    Subject to transactions undertaken in compliance with Section 13.12, Celestica shall remain a
corporation duly incorporated and validly subsisting under the laws of the Province of Ontario or the federal laws of Canada and each of the Restricted Subsidiaries shall remain validly organized and
existing and in good standing under the laws of its jurisdiction of formation or continuance.

	(c)
	Maintenance of Business and Properties.    Each of Celestica and each Restricted Subsidiary shall, and shall cause each of
its Subsidiaries (except for Unrestricted Subsidiaries) to, continue its business, maintain, preserve, protect and keep its properties in good repair, working order and condition, reasonable wear and
tear excepted, and make necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly conducted at all times unless Celestica or such
Restricted Subsidiary determines in good faith that the continued maintenance of any of its properties is no longer desirable.

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

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

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

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

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

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

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

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

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

	(j)
	Designated Subsidiaries to Remain Subsidiaries.    Each Designated Subsidiary (or its Successor Corporation within the
meaning of Section 13.12) shall remain a directly or indirectly wholly-owned Subsidiary of Celestica, except where the laws of the jurisdiction of incorporation of such Designated Subsidiary
require qualifying shares of such Designated Subsidiary to be owned by another Person.

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

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

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	(m)
	Material Restricted Subsidiary Guarantees.
	(i)
	Subject
to clauses (ii) and (iii), Celestica shall: 
	(A)
	within
45 days of the acquisition or incorporation of a Subsidiary which is a Restricted Subsidiary, whose assets total greater than U.S.$150,000,000 on an unconsolidated basis
on the date of such acquisition or incorporation; and

	(B)
	upon
the designation of a Restricted Subsidiary as a Material Restricted Subsidiary on the Schedule to the Officer's Certificate delivered pursuant to Section 9.1(a)(iii)
within 45 days of such delivery of the Officer's Certificate making such designation, 

cause
such Material Restricted Subsidiary to (I) authorize, execute and deliver a Guarantee to the Administrative Agent substantially in the form of Schedule H with such changes as the
Administrative Agent and the Material Restricted Subsidiary may necessarily require on the advice of their respective counsel to reflect local legal requirements; (II) deliver to the
Administrative Agent certified copies of its Organic Documents and a resolution authorizing the Guarantee, a certificate of its officers signing the Guarantee and a certificate of status, good
standing or like certificate with respect to it issued by appropriate government officials of its jurisdiction of incorporation; (III) cause to be delivered an opinion of counsel to the newly
acquired or incorporated Material Restricted Subsidiary substantially in the form of Schedule O, with only those changes which are satisfactory to the Lender's Counsel; and (IV) comply
with Section 8.4(b) with respect to any Chinese Material Restricted Subsidiary. 

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

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

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

9.2       Negative Covenants  

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

	(a)
	No Merger, Amalgamation, etc.    None of the Borrowers or any Restricted Subsidiary shall, directly or indirectly, merge,
amalgamate or enter into any similar or other business combination pursuant to statutory authority or otherwise with any other Person except upon compliance with Section 13.12.

	(b)
	Restriction on Disposition of Assets.    None of the Borrowers or any Restricted Subsidiary shall sell, assign, transfer,
lease, convey or otherwise dispose of any property, assets or investments, (in each case a "sale") other than: 
	(i)
	sales
made in compliance with Section 13.12; or

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

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

	(iv)
	sale/leaseback
transactions of: 
	(A)
	any
real property owned by a Borrower or Restricted Subsidiary; and

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

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

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

	(vii)
	sales
of any fixed assets together with associated intellectual property not otherwise permitted in clauses (i) to (vi) above, subject to an aggregate
limit of sales under this clause (vii) in any fiscal year by the Borrowers and Restricted Subsidiaries in an amount equal to 10% of the aggregate net book value of the fixed assets plus 10% of
the aggregate net book value of intellectual property of Celestica on a consolidated basis (the "disposition allowance") and provided that, in any
fiscal year commencing with fiscal year ending on December 31, 2003 in which the Borrowers and Restricted Subsidiaries do not sell fixed assets and associated intellectual property under this
clause (vii) having aggregate net book values totalling the disposition allowance, the Borrowers and Restricted Subsidiaries may carry forward into the following fiscal years the unused
disposition allowance, which unused disposition allowance is deemed to be U.S.$100,000,000 for the fiscal year ending December 31, 2003, and further provided that none of the Borrowers or
Restricted Subsidiaries shall sell any intellectual property under this clause (vii) unless such sale is incidental to a sale of fixed assets; or

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

	(c)
	Restriction on Certain Inter-Company Transactions.    Except as otherwise permitted by this Section 9.2, none of the
Borrowers or any Restricted Subsidiary shall enter into any agreement or complete any transaction with any other Borrower or any Restricted Subsidiary during the occurrence and continuance of a
Default or where such agreement or transaction, alone or as part of a series of previously or concurrently occurring agreements or transactions, would reasonably be likely to have a Material Adverse
Effect.

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

	(e)
	Restriction on Non-Arm's Length Transactions.    The Borrowers shall not, and shall not permit any Restricted
Subsidiary to, enter into any transaction or agreement with any Person which is not at Arm's Length with the Borrowers or such Restricted Subsidiary (other than other Borrowers, Restricted
Subsidiaries or Unrestricted Subsidiaries) unless, 

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

	(ii)
	such
transaction or agreement complies with the terms of Section 9.2(c). 

	(f)
	Restriction on Change of Business.    None of the Borrowers or the Restricted Subsidiaries shall, either directly or
indirectly, enter into any business other than the Business without the prior written consent of the Majority Lenders.

	(g)
	No Change in Accounting Treatment or Reporting Practices.    Subject to the provisions of Section 1.7, none of the
Borrowers nor any Restricted Subsidiary shall make any material change in its accounting or reporting or financial reporting practices, except as consistent with GAAP or Applicable Law, which changes
shall be disclosed to the Lenders.

	(h)
	Restrictions on Transactions with Unrestricted Subsidiaries.    No Borrower shall, or shall permit any Restricted Subsidiary
to, 
	(i)
	sell
assets or lend monies to any Unrestricted Subsidiary unless such sale is permitted pursuant to (A) Section 9.2(b)(vi) and such sale or loan is
in the ordinary course of business and is on terms no less favourable to such Borrower or such Restricted Subsidiary as would be obtainable in a comparable transaction with a Person which is at Arm's
Length with the Borrower or such Restricted Subsidiary or (B) Section 9.2(b)(vii); or

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

9.3       Financial Covenants  

	(a)
	Minimum EBITDA:Interest Expense Ratio.    Celestica shall maintain an EBITDA:Interest Expense ratio, calculated on a rolling
four quarter basis of at least 3.5:1.0. 

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	(b)
	Maximum Gross Funded Debt:EBITDA Ratio.    Celestica shall maintain a Gross Funded Debt:EBITDA ratio calculated on a rolling
four quarter basis of not more than: 
	(i)
	4.0:1.0
during the fiscal quarter ending June 30, 2004;

	(ii)
	3.75:1.0
during the fiscal quarter ending September 30, 2004;

	(iii)
	3.50:1.0
during the fiscal quarter ending December 31, 2004; and

	(iv)
	3.25:1.0
thereafter. 

	(c)
	In
the event that at any time and from time to time after the date hereof Celestica receives proceeds from any public offering or private placement of securities issued by Celestica
evidencing Indebtedness after the date hereof (the "New Issuance"), Celestica and/or any one of its Material Restricted Subsidiaries shall maintain in cash (in U.S. Dollars, Canadian
Dollars, Euros or Pounds Sterling) or Cash Equivalents an amount equal to the lesser of (a) the aggregate proceeds of all New Issuances net of fees and the
out-of-pocket costs of issuance, and (b) the aggregate principal amount of the then outstanding Liquid Yield OptionTM Notes which have been issued by
Celestica prior to the date hereof (each, a "LYON"), which shall be reduced by the amount of any payments made by Celestica to repurchase outstanding LYONs, during the period ending on the earlier of
(i) August 2, 2005, and (ii) the date on which no LYONs issued by Celestica prior to the date hereof remain outstanding.

	(d)
	Calculation of Financial Ratios.    For the purposes of Sections 9.3(a) and (b) all of the calculations shall
be made on a consolidated basis in accordance with the provisions of Sections 1.7 and 1.8. 

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ARTICLE 10

DEFAULT AND ACCELERATION  

10.1     Events of Default  

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

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

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

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

	(d)
	if,
on, prior to or in connection with any Indebtedness having a principal amount, individually or in the aggregate, in excess of U.S.$50,000,000 becoming Acquired Indebtedness,
(i) a default shall have occurred in the payment when due, whether by acceleration or otherwise, of any such Acquired Indebtedness, or (ii) a default shall occur or shall have occurred
in the performance or observance of any obligation or condition with respect to such Indebtedness or as a result of such Indebtedness becoming Acquired Indebtedness, if the effect of such default is
to accelerate the maturity of such Acquired Indebtedness or such default shall continue unremedied and unwaived for any applicable grace period of time sufficient to permit the holder or holders of
such Acquired Indebtedness, or any trustee or agent for such holders, to have the right to cause such Acquired Indebtedness to become due and payable prior to its expressed maturity; provided that
where such Acquired Indebtedness has a principal amount individually or in the aggregate, of up to and including U.S.$100,000,000, a default described in clauses (i) or (ii) shall only
be an Event of Default under this Agreement if unremedied for 60 days from the date such Indebtedness becomes Acquired Indebtedness; 

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

	(f)
	any
judgment or order for the payment of money in excess of U.S.$25,000,000, which is not covered by insurance, shall be rendered against any Borrower or any Restricted Subsidiary and
either: 
	(i)
	enforcement
proceedings shall have been commenced by any creditor upon such judgment or order; or

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

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

	(ii)
	apply
for, consent to, or acquiesce in, the appointment of a trustee, receiver, receiver and manager, liquidator, sequestrator, administrator or other custodian in
connection with the insolvency of a Borrower or a Restricted Subsidiary or any property of any thereof except as permitted under Section 13.12, or make a general assignment for the
benefit of creditors;

	(iii)
	in
the absence of an application referred to in Section 10.1(g)(ii), consent or acquiescence, permit or suffer to exist the appointment of a trustee, receiver,
receiver and manager, liquidator, sequestrator, administrator or other custodian for a Borrower or a Restricted Subsidiary or for a substantial part of the property of any of them except as permitted
under Section 13.12, and such trustee, receiver, receiver and manager, liquidator, sequestrator, administrator or other custodian shall not be discharged within 60 days, provided
that the Borrowers hereby expressly authorize the Administrative Agent and each Lender to appear in any court conducting any relevant proceeding relating to any of them or any Restricted Subsidiary
during such 60-day period to preserve, protect and defend their rights under the Loan Documents; 

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	(iv)
	permit
or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement, administration or other case or proceeding under any bankruptcy,
insolvency or similar law, or any dissolution, winding up, administration or liquidation proceeding, in respect of any Borrower or any Restricted Subsidiary (except as permitted under
Section 13.12), and, if any such case or proceeding is not commenced by such Borrower or such Restricted Subsidiary, such case or proceeding shall be consented to or acquiesced in by such
Borrower or such Restricted Subsidiary or shall result in the entry of an order for relief or shall remain for 60 days undismissed, provided that each Borrower and each Restricted Subsidiary is
hereby deemed to expressly authorize the Administrative Agent and each Lender to appear in any court conducting any such case or proceeding relating to any of them or any Restricted Subsidiary during
such 60-day period to preserve, protect and defend their rights under the Loan Documents; or

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

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

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

	(j)
	any
Borrower or any governmental authority declares, orders or proposes to order a full or partial wind up of any Pension Plan which, in either case, would reasonably be likely to
have a Material Adverse Effect or if any of the following events shall occur with respect to a Pension Plan: 
	(i)
	the
institution of any step by a Borrower, any member of its Controlled Group or any other Person to terminate a Pension Plan if, as a result of such termination, the
Borrowers or any such member of its Controlled Group would reasonably be likely to be required to make a contribution to such Pension Plan or could reasonably expect to incur a liability or obligation
to such Pension Plan which, in either case, would reasonably be likely to have a Material Adverse Effect; or 

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

10.2     Acceleration  

Upon
the occurrence of an Event of Default (other than as set forth in Section 10.1(g) or (h)) and at any time thereafter while an Event of Default is continuing, the Administrative
Agent may, in consultation with the Lenders (and, if so instructed by the Majority Lenders, shall) by written notice to the Borrowers: 

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

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

If,
pursuant to this Section 10.2, the Administrative Agent declares any Advances made to the Borrowers to be due and payable on demand, then, and at any time thereafter, the Administrative
Agent may (and, if so instructed by the Majority Lenders, shall) by written notice to the Borrowers call for repayment of such Advances on such date or dates as it may specify in such notice
(whereupon the same shall become due and payable on such date together with accrued interest thereon and any other sums then owed by the Borrowers hereunder or under any other Loan Document and the
provisions of Section 10.4 shall apply) or withdraw its declaration with effect from such date as it may specify in such notice. 

Upon
the occurrence of an Event of Default set forth in Section 10.1(g) or (h), the Commitments shall automatically terminate and the outstanding principal amount of all outstanding
Advances (together with accrued interest thereon and any other sums then owed by the Borrowers hereunder or under any other Loan Document and the provisions of Section 10.4 shall apply) shall
automatically be and become immediately due and payable, without notice or demand. 

10.3     Remedies with Respect to Bankers' Acceptance Advances and Letters of Credit  

If
any Event of Default shall occur and be continuing such that the entire principal amount of the Advances then outstanding and all accrued and unpaid interest thereon and all other payments due
hereunder or under any other Loan Document which are unpaid shall become immediately due and payable in accordance with the provisions of Section 10.2, then the Administrative Agent may (and,
if so instructed by the Majority Lenders shall), by written notice to the Borrowers, require the Borrowers to pay to the Administrative Agent (i) on behalf of the Lenders, an amount equal to
the Face Amount of outstanding Bankers' Acceptances and the principal amount of all outstanding Acceptance Notes and (ii) on behalf of the Issuing Bank, an amount equal to the undrawn Face
Amount of any Letters of Credit issued and outstanding under the Letter of Credit Facility. 

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10.4     Remedies Cumulative and Waivers  

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

10.5     Suspension of Lenders' Obligations  

Without
prejudice to the rights which arise out of this Agreement or by law, the occurrence of an Event of Default shall, while such Event of Default shall be continuing, relieve the Lenders of all
obligations to make any Advances hereunder (whether or not any Drawdown Notice in respect of any such Advance shall have been received by the Administrative Agent prior to the occurrence of an Event
of Default) or to accept or comply with any Drawdown Notice, Conversion Notice or Rollover Notice or accept or purchase drafts or Bankers' Acceptances or Acceptance Notes in replacement of maturing
Bankers' Acceptances or Acceptance Notes. Without prejudice to the rights which arise out of this Agreement or by law, the occurrence of an Event of Default shall, while such Event of Default is
continuing, relieve the Issuing Lender of all obligations to issue Letters of Credit hereunder (whether or not any Issuance Request in respect of any such Letter of Credit shall have been received by
the Administrative Agent and the Issuing Bank prior to the occurrence of an Event of Default) or to comply with any Issuance Request. 

10.6     Application of Payments After an Event of Default  

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

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

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

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	(c)
	to
amounts due hereunder as fees;

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

	(e)
	to
amounts due hereunder as interest; and

	(f)
	to
amounts due hereunder as principal. 

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ARTICLE 11

THE ADMINISTRATIVE AGENT AND

ADMINISTRATION OF THE FACILITY  

11.1     Authorization of Action  

Each
Lender hereby irrevocably appoints and authorizes the Administrative Agent to be its agent in its name and on its behalf and to exercise such rights or powers granted to the Administrative Agent
under this Agreement and the Loan Documents to the extent specifically provided herein and therein and on the terms hereof and thereof, together with such rights, powers and discretions as are
reasonably incidental thereto. As to any matters not expressly provided for by this Agreement or the Loan Documents, the Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be fully protected as against the Lenders in so acting or refraining from acting) upon the instructions of the Majority
Lenders, and such instructions shall be binding upon all Lenders; provided, however, that the Administrative Agent shall not be required to take any action which exposes the Administrative Agent to
liability in such capacity, which could result in the Administrative Agent incurring any costs and expenses or which is contrary to this Agreement or Applicable Law. 

11.2     Procedure for Making Advances  

	(a)
	The
Administrative Agent shall make Advances available to the relevant Borrowers as required hereunder by debiting the account of the Administrative Agent to which the Lenders' Main
Facility Rateable Portions of such Advances have been credited in accordance with Section 11.2(b) (or causing such account to be debited) and, in the absence of other arrangements agreed
to by the Administrative Agent and Celestica in writing, by transferring (or causing to be transferred) like funds in accordance with the instructions of the Borrower as set forth in the Drawdown
Notice in respect of each Advance; provided that the obligation of the Administrative Agent hereunder shall be limited to taking such steps as are commercially reasonable to implement such
instructions, which steps once taken shall constitute conclusive and binding evidence that such funds were advanced hereunder in accordance with the provisions relating thereto and the Administrative
Agent shall not be liable for any damages, claims or costs which may be suffered by the Borrower and occasioned by the failure of such Advance to reach the designated destination, except to the extent
such damages, claims or costs are the result of the gross negligence or wilful misconduct (as determined by a final, non-appealable decision of a court of competent jurisdiction) of the
Administrative Agent. 

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

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

	(d)
	Where
a Drawdown under the Facility and a repayment of an Advance under the Facility are to occur on the same day, the Administrative Agent shall not make available to the relevant
Borrower the amount of the Advance to be drawn down until the Administrative Agent is satisfied that it has received irrevocable and irreversible payment of the amount to be prepaid or repaid.
Notwithstanding the foregoing, in the absence of gross negligence or wilful misconduct (as determined by a final, non-appealable decision of a court of competent jurisdiction) on the part
of the Administrative Agent, the risk of non-receipt of the amount to be repaid is that of the Lenders and not of the Administrative Agent.

	(e)
	This
Section 11.2 shall not apply to Swing Line Advances. 

11.3     Remittance of Payments  

Forthwith
after receipt of any repayment of principal or payment of interest or fees pursuant to any provision of this Agreement, the Administrative Agent which has received such repayment or payment
shall remit to each Lender its Main Facility Rateable Portion thereof; provided, however, that the Administrative Agent shall be entitled to set off against and deduct from any amount payable to a
Lender any outstanding amounts payable by such Lender to the Administrative Agent pursuant to Section 11.2(b). Forthwith after receipt of any payment of Facility Fees pursuant to
Section 2.14, the Administrative Agent shall remit to each Lender its Main Facility Rateable Portion of such payment. If the Administrative Agent, on the assumption that it will receive on any
particular date a payment of principal, interest or fees hereunder, remits such payment to the Lenders and the Borrowers fail to make such payment, each of the Lenders agrees to repay to the
Administrative Agent forthwith on demand the amount received by it together with all reasonable costs and expenses incurred by the Administrative Agent in connection therewith to the extent not
reimbursed by the Borrower and interest thereon at the rate and calculated in the manner applicable to the Advance in respect of which such payment was made for each day from the date such amount is
remitted to the Lenders, the exact amount of the repayment required to be made by the Lenders pursuant hereto to be as set forth in a certificate delivered by the Administrative Agent to each Lender,
which certificate shall be conclusive and binding for all purposes in the absence of manifest error. The Administrative Agent shall make appropriate entries in the register maintained by it to reflect
the foregoing. 

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11.4     Redistribution of Payment  

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

	(b)
	Subject
to the other terms and conditions of this Agreement, if at any time the proportion which any Lender (a "Recovering Lender") has
received or recovered (whether by payment or combination of accounts or otherwise) in respect of its portion of any payment to be made under this Agreement by a Borrower for the account of such
Recovering Lender and one or more other Lenders is greater (the amount of the excess being in this Section 11.4 called the "excess amount") than
the proportion thereof received or recovered by the Lender or Lenders receiving or recovering the smallest proportion thereof, then: 
	(i)
	the
Recovering Lender shall, within two Banking Days following such receipt or recovery, pay to the Administrative Agent an amount equal to the excess amount; and

	(ii)
	the
Agent shall treat the amount received by it from the Recovering Lender pursuant to paragraph (i) above as if such amount had been received by it from such
Borrower pursuant to its obligations under this Agreement and shall pay the same to the Persons entitled thereto (including such Recovering Lender)  pro rata to their respective entitlements thereto
in which event, for all purposes in connection herewith, the Recovering Lender shall be deemed
only to have received or recovered from such Borrower that portion of the excess amount which is actually paid to the Recovering Lender by the Administrative Agent pursuant to this
Section 11.4(b)(ii). 

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	(c)
	If
a Lender that has paid an excess amount to the Administrative Agent in accordance with Section 11.4(b)(i) is required to refund the whole (or a portion) of such excess
amount to the Borrower, then each of the other Lenders shall pay to the Administrative Agent for the account of that Lender the whole (or that proportion) of the amount received by it as a result of
the distribution in respect of that excess amount made by the Administrative Agent pursuant to Section 11.4(b)(ii). 

11.5     Duties and Obligations  

	(a)
	None
of the Agents nor any of their respective directors, officers, agents or employees (and, for purposes hereof, each of the Agents shall be deemed to be contracting for and on
behalf of such Persons) shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement except for its or their own gross negligence or wilful
misconduct, as determined by a final, non-appealable decision of a court of competent jurisdiction. Without limiting the generality of the foregoing, each Agent: 
	(i)
	may
assume that there has been no assignment or transfer by any means by any Lender of its rights hereunder, unless and until the Administrative Agent has received a
duly completed and executed assignment in form satisfactory to it;

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

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

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

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

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

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

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

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

11.6     Prompt Notice to the Lenders  

Subject
to the provisions of Section 11.5(a)(vi), the Administrative Agent agrees to provide to the Lenders, copies where appropriate, of all information, notices and reports required to be
given to the Administrative Agent by the Borrowers and the Guarantors hereunder or pursuant to any other Loan Document, promptly upon receipt of same, excepting therefrom information and notices
relating solely to the role of the Administrative Agent hereunder. 

11.7     Agent's Authority  

With
respect to its Commitment and the Advances made by it as a Lender, an Agent shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it
were not an Agent. An Agent may accept deposits from, lend money to, and generally engage in any kind of business with the Borrowers and the Subsidiaries or any corporation or other entity owned or
controlled by any of them and any Person which may do business with any of them, all as if the Agent was not an Agent hereunder and without any duties to account therefor to the Lenders. 

11.8     Lender's Independent Credit Decision  

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

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11.9     Indemnification  

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

11.10   Successor Agent  

The
Administrative Agent may, as hereinafter provided, resign at any time by giving not less than 30 days' written notice thereof to the Lenders and the Borrowers. The Administrative Agent may,
as hereinafter provided, be removed at any time on not less than 30 days' written notice thereof by the Majority Lenders provided that the Majority Lenders have designated a successor who is
prepared to act hereunder and which is acceptable to Celestica, acting reasonably. Upon any such resignation or removal, the Majority Lenders shall have the right to appoint a successor agent (the  "Successor
Agent") which shall be a Lender and which shall be acceptable to the Borrowers, acting reasonably. Upon the acceptance of any appointment
hereunder by a Successor Agent, such Successor Agent shall thereupon become Administrative Agent hereunder and shall succeed to and become vested with all the rights, powers, privileges and duties of
CIBC and CIBC shall thereupon be discharged from its further duties and obligations as Administrative Agent under this Agreement. After any resignation or removal of CIBC under this
Section 11.10, the provisions of this Article 11 shall continue to enure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent hereunder. 

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   11.11   Taking and Enforcement of Remedies  

	(a)
	Each
of the Lenders hereby acknowledges that, to the extent permitted by Applicable Law, the remedies provided hereunder to the Lenders are for the benefit of the Lenders collectively
and acting together and not severally and further acknowledges that its rights hereunder are to be exercised not severally, but collectively by the Administrative Agent upon the decision of the
Lenders or the Majority Lenders, as applicable, regardless of whether declaration or acceleration was made pursuant to Section 10.2; accordingly, notwithstanding any of the provisions contained
herein, each of the Lenders hereby covenants and agrees that it shall not be entitled to take any action with respect to the Facility, including, without limitation, any declaration or acceleration
under Section 10.2, but that any such action shall be taken only by the Administrative Agent with the prior written consent of the Lenders or the Majority Lenders, as applicable, provided that,
notwithstanding the foregoing: 
	(i)
	in
the absence of instructions from the Lenders or from the Majority Lenders, as applicable, and where in the sole opinion of the Administrative Agent the exigencies of
the situation warrant such action, the Administrative Agent may without notice to or consent of the Lenders take such action on behalf of the Lenders as it deems appropriate or desirable in the
interest of the Lenders; and

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

each
of the Lenders hereby further covenants and agrees that upon any such written consent being given by the Lenders or the Majority Lenders, as applicable, they shall co-operate fully
with the Administrative Agent to the extent requested by the Administrative Agent in the collective realization including, without limitation, the appointment of a receiver and manager to act for
their collective benefit; and each Lender covenants and agrees to do all acts and things and to make, execute and deliver all agreements and other instruments, including, without limitation, any
instruments necessary to effect any registrations, so as to fully carry out the intent and purpose of this Section 11.11; and each of the Lenders hereby covenants and agrees that it has
not heretofore and shall not seek, take, accept or receive any security for any of the obligations and liabilities of the Borrowers or any Guarantor hereunder or under any other document, instrument,
writing or agreement ancillary hereto and shall not enter into any agreement with any of the parties hereto or
thereto relating in any manner whatsoever to the Facility, unless all of the Lenders shall at the same time obtain the benefit of any such agreement. 

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

11.12   Reliance Upon Lenders  

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

11.13   Reliance upon Administrative Agent  

The
Borrower and the Guarantors shall be entitled to rely upon any certificate, notice or other document provided to any of them by the Administrative Agent pursuant to this Agreement and the
Borrowers and the Guarantors shall be entitled to deal with the Administrative Agent (and, except as otherwise specifically provided, not to deal with any Lender prior to an Event of Default) with
respect to all matters under this Agreement without any liability whatsoever to the Lenders for relying upon any certificate, notice or other document provided to any of them by the Administrative
Agent, notwithstanding any lack of authority of the Administrative Agent to provide the same. Without limiting the generality of the foregoing, but subject as herein otherwise specifically provided,
none of the Lenders shall have any right to enforce directly any of the provisions of this Agreement or to communicate with the Borrowers and the Guarantors except through the Administrative Agent in
accordance with the terms of this Agreement or as otherwise specifically provided in this Agreement. The provisions of this Article 11 are for the benefit of the Agents and the Lenders and,
except for the provisions of Sections 11.2, 11.13, 11.14 and 11.15, may not be relied upon by the Borrowers or the Guarantors. 

11.14   Replacement of Cancelled Commitments  

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

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11.15   Disclosure of Information  

The
Administrative Agent and each of the Lenders acknowledges the confidential nature of this Agreement, the financial, operational and other information and data provided and to be provided to it by
the Borrowers pursuant hereto that is not at the time it is so provided or (other than through a breach of this Agreement) thereafter in the public domain and agrees not to disclose such information;
provided, however, that: 

	(a)
	the
Administrative Agent and each Lender may disclose all or any part of such information to any proposed assignee or transferee or participant of any Lender or to any potential
direct or indirect swap counterparty and its counsel, provided that such Person has executed and delivered to the Administrative Agent or such Lender a confidentiality agreement in a form satisfactory
to the Administrative Agent or such Lender, which terms shall include an agreement to comply with this Section 11.15;

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

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

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

	(e)
	the
Administrative Agent and each Lender may disclose all or any part of such information to its auditors or to Lenders' Counsel or other counsel of reputable standing for the purpose
of seeking or obtaining accounting or legal advice, provided that any such auditors (except where such auditor is the Auditor General of Canada, in which case such disclosure may be made on a
non-confidential basis) or counsel are bound by a professional duty of confidentiality;

	(f)
	the
Administrative Agent and each Lender may disclose such information to any employees, agents, officers and directors of the Administrative Agent or any Lender, and of any
Subsidiary or Affiliate of the Administrative Agent or any Lender (a "Representative"), if such disclosure is required in connection with the administration of the Facility, provided that the
Administrative Agent or such Lender shall be responsible for a breach by any of its Representatives of the obligation not to disclose such information;

	(g)
	the
Administrative Agent and each Lender may disclose such information to any nationally recognized rating agency that requires access to information about the Administrative Agent's
or such Lender's investment portfolio in connection with ratings issued with respect to the Administrative Agent or such Lender, provided that the Administrative Agent or such Lender will request that
confidential treatment will be accorded such information; and

	(h)
	the
Administrative Agent and each Lender may disclose all or any part of such information with the prior written consent of Celestica. 

11.16   Adjustments of Rateable Portions  

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

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	(b)
	Upon
the occurrence of an acceleration under Section 10.1(g), 10.1(h) or 10.2, if, with respect to any Lender, the aggregate of all outstanding Advances made by such Lender is
less than its Global Rateable Portion (after giving effect to any adjustment made pursuant to Subsection 11.16(a)) of the aggregate of all outstanding Advances, the Administrative Agent may, by
written notice, require such Lender to pay to the Administrative Agent, for the credit of the other Lenders, in such currency or currencies as the Administrative Agent may in its discretion determine,
such amount as may be required so as to bring the aggregate of all outstanding Advances made by such Lender equal to its Global Rateable Portion of the aggregate of all outstanding Advances. The
Administrative Agent shall credit the funds received from such Lender to any other Lender or Lenders, as it may determine in its discretion, so as to render the aggregate of the outstanding Advances
made by each Lender equal to the Global Rateable Portion of each Lender of all outstanding Advances. 

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ARTICLE 12

COSTS, EXPENSES AND INDEMNIFICATION  

12.1     Costs and Expenses  

Each
Borrower shall pay promptly, upon request by the Administrative Agent accompanied by reasonable supporting documentation or other evidence, all reasonable costs and expenses in connection with
the due diligence pertaining to or the preparation, printing, execution and delivery of this Agreement and the other documents to be delivered hereunder including, without limitation, the reasonable
fees and out-of-pocket expenses of the Lenders' Counsel with respect thereto. Except for ordinary expenses of the Administrative Agent relating to the
day-to-day administration of this Agreement, each Borrower further agrees to pay all reasonable out-of-pocket costs and expenses (including reasonable
fees and expenses of counsel, accountants and other experts) in connection with the syndication of the Facility and the interpretation, preservation or enforcement of rights of the Administrative
Agent and the Lenders under this Agreement and the Loan Documents including, without limitation, all reasonable costs and expenses sustained by them as a result of any failure by any of the Borrowers
or Guarantors to perform or observe its obligations contained in any of this Agreement and the Loan Documents. The Borrowers further agree to pay all reasonable out-of-pocket
expenses of the Issuing Bank with respect to the issuance and administration of Letters of Credit. 

12.2     Indemnification by the Borrowers  

In
addition to any liability of each Borrower to any Lender or any Agent under any other provision hereof, each Borrower shall indemnify the Lenders and the Agents and hold each Lender and each Agent
harmless against any reasonable costs or expenses incurred by a Lender or an Agent as a result of (i) any failure by such Borrower to fulfil any of its obligations hereunder or under any Loan
Document in the manner provided herein including, without limitation, any cost or expense incurred by reason of the liquidation or re-employment in whole or in part of deposits or other
funds required by any Lender to fund or maintain any Advance as a result of the failure of such Borrower to complete a Drawdown or to make any repayment or other payment on the date required hereunder
or specified by it in any notice given hereunder; or (ii) the failure of such Borrower to pay any other amount including, without limitation, any interest or fee due hereunder on its due date;
or (iii) the prepayment or repayment by such Borrower of any LIBOR Advance or Bankers' Acceptance Advance prior to its date of maturity or the last day of the then current Interest Period for
such Advance; or (iv) any failure by a Borrower or Designated Subsidiary to fulfill any of its obligations under any interest rate swap agreements entered into during the term of this Agreement
by such Borrower or Designated Subsidiary with any Person who was, at the time such interest rate swap agreement was entered into, a Lender. The indemnity in Section 12.2, to the extent
that it relates to clause (iv), shall survive the termination of this Agreement and the Commitments hereunder and shall remain in full force and effect until such time as the parties to such
interest rate swap agreements have no obligations thereunder. 

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12.3     Funds  

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

12.4     General Indemnity  

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

	(b)
	Limitations to Indemnity.    The foregoing obligations of indemnification shall not apply to (i) any Losses suffered
by the Indemnitees or any of them or to any Claim asserted against the Indemnitees or any of them to the extent such Loss or Claim has resulted from the gross negligence or wilful misconduct (as
determined by a final, non-appealable decision of a court of competent jurisdiction) of the Indemnitees or any of them; or (ii) any Losses with respect to Taxes for which an
Indemnitee may claim an indemnity from an Obligor pursuant to Section 5.8(b) of this Agreement.

	(c)
	Notification.    Whenever a Lender or an Agent shall have received notice that a Claim has been commenced or threatened,
which, if successful, would subject a Borrower (the "Indemnifying Party") to the indemnity provisions of this Section 12.4, the Lender or the
Agent shall as soon as reasonably possible notify (to the extent permitted by law) the Indemnifying Party in writing of the Claim and of all relevant information the Lender or the Agent possesses
relating thereto; provided, however, that failure to so notify the Indemnifying Party shall not release it from any liability which it may have on account of the indemnity set forth in this
Section 12.4, except to the extent that the Indemnifying Party shall have been materially prejudiced by such failure. 

97

 

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

Notwithstanding
the foregoing, in the event the Indemnitee, acting reasonably, does not agree with the manner or timeliness in which the legal counsel of the Indemnifying Party is carrying on the
defence of the Claim, or, pursuant to the opinion of a reputable counsel retained by the Indemnitee, there may be one or more legal defences available different from the one carried on by the legal
counsel of the Indemnifying Party, the Indemnitee shall have the right to assume its own defence in the Claim by appointing its own legal counsel. The costs and the expenses sustained by the
Indemnitee shall be at the expense of the Indemnifying Party provided that the Indemnifying Party shall only be liable for the costs and expenses of one firm of separate counsel, in addition to the
costs of any local counsel that may be required. 

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

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

12.5     Environmental Claims  

	(a)
	Indemnity.    Subject to paragraphs (b), (c) and (d) below, the Borrowers agree to indemnify and save harmless
the Indemnitees from and against any and all Losses as a result of any Claims asserted against the Indemnitees by a Person other than the Indemnitees with respect to any material presence or Release
on, into, onto, under or from any property owned, leased or operated by any of the Borrowers or any Subsidiary (the "Property") of any Hazardous
Material regardless of whether caused by, or within the control of, the Borrower or any Subsidiary or which arises out of or in connection with any action of, or failure to act by, the Borrowers or
any Subsidiary or any predecessor or successor thereof in contravention of any present or future applicable Environmental Laws, whether or not having the force of law, including, without limitation:
(i) the costs of defending and/or counterclaiming or claiming over against third parties in respect of any such Claim; and (ii) subject to the provisions set forth in
paragraph (d) below, any Losses arising out of a settlement made by the Indemnitees of any Claim. 

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	(b)
	Limitations to Indemnity.    The foregoing obligations of indemnification shall not apply to any Losses suffered by the
Indemnitees or any of them or to any Claim asserted against the Indemnitees or any of them which relates directly to any action or omission taken by any of the Indemnitees while in possession or
control of the Property which is grossly negligent or constitutes wilful misconduct (as determined by a final, non-appealable decision of a court of competent jurisdiction) but shall apply
to any Claim occurring during such period that relates to a continuation of conditions previously in existence or of a practise previously employed by any Obligor.

	(c)
	Notification.    Whenever an Indemnitee shall have received notice that a Claim has been commenced or threatened, which, if
successful, would subject the Borrowers to the indemnity provisions of this Section 12.5, the Indemnitee shall as soon as reasonably possible and in any event on or before the expiry of the
date (the "Notification Date") which is the earlier of (i) the tenth Banking Day after the receipt of such notice by the Indemnitee, and
(ii) such date as will afford sufficient time for the Borrowers to prepare and file a timely answer to the Claim, notify the Borrowers of the Claim and of all relevant information the
Indemnitee possesses relating thereto. If the Indemnitee shall fail to so notify the Borrowers and provide it with such information on or before the Notification Date, the Borrowers shall not have any
liability hereunder in respect of any Losses suffered by the Indemnitee in respect of such Claim to the extent such Losses may be reasonably attributable to such failure by the Indemnitee.

	(d)
	Defence and Settlement.    The provisions of Section 12.4(d) shall apply to any Claims under this Section 12.5.

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ARTICLE 13

GENERAL  

13.1     Term  

The
Facility shall expire on the Maturity Date. 

13.2     Survival  

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

13.3     Benefit of the Agreement  

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

13.4     Notices  

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

	(i)
	If
to the Borrowers: 

1150
Eglinton Avenue East,

Toronto, Ontario, Canada

M3C 1H7 

Attention:
Senior Vice President and Treasurer 

Telecopier:
416-448-2280 

with
a copy to: 

1150
Eglinton Avenue East,

Toronto, Ontario

M3C 1H7 

Attention:
Senior Vice President and Chief Legal Officer 

Telecopier:
416-448-2817 

	(ii)
	If
to the Administrative Agent: 

100

  

Canadian
Imperial Bank of Commerce

161 Bay Street

BCE Place, 8th Floor

Toronto, Ontario

M5J 2S8 

Attention:
Director, Agency 

Telecopier:
(416) 956-3830 

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

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

13.5     Amendment and Waiver  

This
Agreement and any Loan Documents collateral hereto may be modified or amended and a waiver of any breach of any term or provision of this Agreement shall be effective only if the Borrowers, the
Administrative Agent and the Majority Lenders so agree in writing, provided that in all cases the Borrowers shall be entitled to rely upon the Administrative Agent, without further inquiry in respect
of any amendments or waivers agreed to by the Administrative Agent and which the Administrative Agent has confirmed have been agreed to by the Majority Lenders; provided further, however, that no
amendment, waiver or consent, unless in writing and signed by all of the Lenders shall: (i) increase the
Commitment of any Lender or subject any Lender to any additional obligation; (ii) reduce the principal of, or interest on, the Advances or reduce any fees hereunder; (iii) postpone any
date fixed for any payment of principal of, or interest on, the Advances or any other amounts payable hereunder; (v) amend the definition of Majority Lenders; (vi) amend or release any
Guarantee, except to the extent that a release of a Guarantee may be effected pursuant to a transaction subject to Section 13.12 or is otherwise authorized pursuant to the terms of this
Agreement and except to the extent that an amendment, as determined by the Administrative Agent and Lenders' Counsel, each acting reasonably, does not materially impair the enforceability or
unconditionality of such Guarantee; or (vii) amend this Section 13.5; and provided, further, that no amendment, waiver or consent, unless in writing and signed by the
Administrative Agent, Swing Line Lender, Issuing Bank or Administrative Agent, as applicable, in addition to the Lenders required herein above to take such action, affects the rights or duties of the
Administrative Agent, Swing Line Lender, Issuing Bank or Administrative Agent, as applicable, under this Agreement or any Advance. A waiver of any breach of any term or provision of this Agreement
shall be limited to the specific breach waived. 

13.6     Governing Law  

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

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13.7     Further Assurances  

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

13.8     Enforcement and Waiver by the Lenders  

Subject
to Section 11.11, the Lenders shall have the right at all times to enforce the provisions of this Agreement and agreements to be delivered pursuant hereto in strict accordance with the
terms hereof and thereof, notwithstanding any conduct or custom on the part of the Lenders in refraining from so doing at any time or times. The failure of the Lenders at any time or times to enforce
their rights under such provisions, strictly in accordance with the same, shall not be construed as having created a custom in any way or manner, modified or waived the same. All rights and remedies
of the Lenders are cumulative and concurrent and the exercise of one right or remedy shall not be deemed a waiver or release of any other right or remedy. 

13.9     Execution in Counterparts  

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

13.10   Assignment by the Borrowers  

The
rights and obligations of the Borrowers under this Agreement are not assignable to any other Person, except in accordance with Article 7, without the prior written consent of all of the
Lenders, which consent shall not be unreasonably withheld. 

13.11   Assignments and Transfers by a Lender  

	(a)
	With
the prior written consent of the Administrative Agent and Celestica, such consent not to be unreasonably withheld or delayed, any Lender may, at any time, assign all or any of
its rights and benefits hereunder or transfer in accordance with Section 13.11(b) all or any of its rights, benefits and obligations hereunder; provided that in the event that such assignment
would give rise to a claim for increased costs pursuant to Article 5, it shall not be unreasonable for Celestica to withhold its consent to such assignment. Any assignment or transfer shall be
with respect to a minimum Commitment of U.S.$10,000,000 and integral multiples of U.S.$1,000,000 in excess thereof. A lesser amount may be assigned or transferred by any Lender if such amount
represents the remaining balance of such Lender's Commitment. Notwithstanding the foregoing, the consent of the Administrative Agent and Celestica is not required in connection with the assignment or
transfer of all or any of the rights, benefits and obligations hereunder (i) to any Subsidiary or Affiliate of a Lender or to any other Lender hereunder provided that notice is given to the
Administrative Agent and Celestica, and provided that, in either case, any such assignment or transfer does not give rise to a claim for increased costs pursuant to Article 5 or any
obligation on the part of an Obligor to deduct or withhold any Taxes from or in respect of any sum payable hereunder to the Administrative Agent or the Lenders, in either case, in excess of what would
have been the case without such assignment, or such assignee waives the rights to any benefits under Section 5.8; or (ii) to any Person if an Event of Default has occurred and is
continuing. 

102

 

	(b)
	If
any Lender assigns all or any of its rights and benefits hereunder in accordance with Section 13.11(a), then, unless and until the assignee has agreed with the
Administrative Agent and the other Lenders (in a Transfer Notice or otherwise) that it shall be under the same obligations towards each of them as it would have been under if it had been an original
party hereto as a Lender, none of the Administrative Agent or any of the other Lenders or the Borrowers shall be obliged to recognize such assignee as having the rights against each of them which it
would have had if it had been such a party hereto.

	(c)
	If
any Lender wishes to assign all or any of its rights, benefits and/or obligations hereunder as contemplated in Section 13.11(a), then such transfer may be effected upon: 
	(i)
	receipt
of the written consent of the Administrative Agent and Celestica as referred to in Section 13.11(a) delivered to the relevant assignee by the
Administrative Agent unless an Event of Default has occurred and is continuing in which case consent of Celestica shall not be required;

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

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

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

103

 

	(iv)
	to
the extent that in such Transfer Notice the Lender party thereto seeks to transfer its rights and obligations hereunder, each of the Obligors and such Lender shall
be released from further obligations towards one another hereunder and their respective rights against one another shall be cancelled (such rights and obligations being referred to in this
Section 13.11(c) as "discharged rights and obligations");

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

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

	(d)
	Each
of the parties hereto confirms that: 
	(i)
	the
delivery to an assignee of a Transfer Notice signed by a Lender constitutes an irrevocable offer (subject to the conditions of Section 13.11(c)) by each of
the parties hereto to accept such transferee (subject to the conditions set out herein) as a Lender party hereto with the rights and obligations so expressed to be transferred;

	(ii)
	such
offer may be accepted by such assignee by the execution of such Transfer Notice by such assignee and upon fulfilment of the conditions set forth in
Section 13.11(c); and

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

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

	(f)
	No
transfer pursuant to this Section 13.11 shall, unless the Administrative Agent otherwise decides in its absolute discretion and notifies the parties to such transfer
accordingly, be effective if the date for effectiveness of such transfer on the day on which the Administrative Agent receives the applicable Transfer Notice is on, or less than five Banking Days
before, the day for the payment of any interest or fee hereunder. 

104

 

	(g)
	Any
Lender may participate all or any part of its interest hereunder, provided that any such participation does not give rise to a claim for increased costs pursuant to
Article 5 or any obligation on the part of an Obligor to deduct or withhold any Taxes from or in respect of any sum payable hereunder to an Agent or the Lenders, or such Lender and
participant waive the right to any benefits under Section 5.8 and, in such case, notice of such participation has been given to the Administrative Agent and Celestica. Such participant shall
not be entitled to any vote as a Lender. The Borrowers shall not be obligated to deal with any participant and shall be entitled to deal solely with the Lender and the Lender shall not be released
from any of its obligations to the Borrowers as a result of such participation except to the extent that the participant has fulfilled such obligations. Such participants shall be bound to the same
confidentiality provisions with respect to the Facility, the Borrowers and the Subsidiaries as are applicable to the Lenders. 

13.12   Certain Requirements in Respect of Merger, Etc.  

No
Borrower shall, and the Borrowers shall not permit any Restricted Subsidiary (in each case, a "Predecessor Corporation") to, enter into any
transaction (whether by way of liquidation, dissolution, amalgamation, merger, transfer, sale or otherwise) whereby all or substantially all of its undertaking, property and assets would become the
property of any other Person or, in the case of any such amalgamation or merger, of the continuing company resulting therefrom, or whereby the obligation of the Predecessor Corporation to pay amounts
under this Agreement would become subject to novation or assumed or undertaken by any other such Person or continuing company (a "Corporate Reorganization"), provided that it may do so (and if the
Predecessor Corporation is a Borrower or a Material Restricted Subsidiary such Person or continuing company shall become a party to this Agreement or to the Guarantee provided by such Material
Restricted Subsidiary, as the case may be) if: 

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

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

105

 

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

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

	(e)
	such
transaction will not result in any claim for increased costs pursuant to Section 5.5 or result in any Tax being levied on or payable by the Administrative Agent or
any Lender (except for Taxes on the overall net income or capital of the Administrative Agent or a Lender provided there is no increase in such Taxes as a result of such transaction);

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

	(g)
	an
opinion of Borrowers' counsel substantially in the form and as to matters addressed in the opinion of Borrowers' Counsel delivered pursuant to Section 6.1 shall have been
delivered to the Administrative Agent;

	(h)
	each
of the covenants set forth in Section 9.3 shall be satisfied on an actual and pro forma basis after giving effect to
such transaction; and

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

Sections 13.12(a),
(b) and (g) shall not apply to (i) the liquidation or dissolution of the Restricted Subsidiaries listed in Schedule R; (ii) the merger of the
Restricted Subsidiaries listed in Schedule S; (iii) the sale of assets of Celestica Ireland Limited to Manufacturers' Services Athlone Limited and subsequent dissolution of Celestica
Ireland Limited; (iv) the sale of assets of Celestica Services Singapore Pte. Ltd. to Celestica Services Singapore Limited Electronics (S) Pte. Ltd. and subsequent
dissolution of Celestica Services Singapore Pte. Ltd. or (v) the sale of assets of MSL Technology Services (Malaysia) Sdn. Bhd. to Celestica Electronics (M) Sdn. Bhd. and
subsequent dissolution of MSL Technology Services (Malaysia) Sdn. Bhd. 

This
Section 13.12 shall not apply to permit any consolidation, amalgamation or merger by or of Celestica unless, as the result thereof, the Successor Corporation is Celestica. 

A
Successor Corporation shall not be required to comply with Section 13.12(b) and (g) in respect of a Corporate Reorganization where one or more of the participants in the subject
Corporate Reorganization is a Predecessor Corporation which is a Borrower or Restricted Subsidiary existing under the laws of an Exempted Jurisdiction and which, prior to the completion of such
Corporate Reorganization, delivered a Guarantee in accordance with Section 9.1(m) (i) and the Guarantee delivered by such Predecessor Corporation (the  "Predecessor Guarantee") has not been
terminated or released. In this paragraph, "Exempted Jurisdiction"
means: 

106

 

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

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

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

13.13   Set-Off  

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

13.14   Time of the Essence  

Time
shall be of the essence in this Agreement. 

13.15   Advertisements  

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

107

 

IN WITNESS WHEREOF the parties hereto have executed this Agreement. 

	 	 	CELESTICA INC.
	

 	
 	

By:	

/s/  PAUL NICOLETTI      
	 	 	 	
 Name: Paul Nicoletti

Title: Senior Vice-President and Corporate Treasurer

DESIGNATED SUBSIDIARY  

	 	 	CELESTICA INTERNATIONAL INC.
	

 	
 	

By:	

/s/  PAUL NICOLETTI      
	 	 	 	
 Name: Paul Nicoletti

Title: Corporate Treasurer

108

 

	 	 	CANADIAN IMPERIAL BANK OF COMMERCE,

as Administrative Agent
	

 	
 	

By:	

/s/  GEOFF BOND      
	 	 	 	
 Name: Geoff Bond

Title: Managing Director, Loan Syndications
	

 	
 	

By:	

/s/  WARREN LOBO      
	 	 	 	
 Name: Warren Lobo

Title: Director

109

Signature Page for Canadian Imperial Bank of Commerce, as Lender  

	 	 	CANADIAN IMPERIAL BANK OF COMMERCE
	

 	
 	

By:	

/s/  STEVE NISHIMURA      
	 	 	 	
 Name: Steve Nishimura

Title: Managing Director
	

 	
 	

By:	

/s/  DAVID J. COHEN      
	 	 	 	
 Name: David J. Cohen

Title: Director

Signature Page for Bank of America, N.A., Canada Branch as Lender  

	 	 	BANK OF AMERICA, N.A., CANADA BRANCH
	

 	
 	

By:	

/s/  NELSON LAM      
	 	 	 	
 Name: Nelson Lam

Title: Vice President
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

Signature Page for Royal Bank of Canada, as Lender  

	 	 	ROYAL BANK OF CANADA
	

 	
 	

By:	

/s/  STEPHANIE BABICH-ALLEGRA      
	 	 	 	
 Name: Stephanie Babich-Allegra

Title: Authorized Signatory
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

Signature Page for Export Development Canada, as Lender  

	 	 	EXPORT DEVELOPMENT CANADA
	

 	
 	

By:	

/s/  DAVID BARON      
	 	 	 	
 Name: David Baron

Title: Financial Services Manager
	

 	
 	

By:	

/s/  DENIS L'HEUREUX      
	 	 	 	
 Name: Denis L'Heureux

Title: Financial Services Manager

Signature Page for The Bank of Nova Scotia, as Lender  

	 	 	THE BANK OF NOVA SCOTIA
	

 	
 	

By:	

/s/  STEVE TORRENS      
	 	 	 	
 Name: Steve Torrens

Title: Managing Director — Media & Communications
	

 	
 	

By:	

/s/  DEREK ORANGE      
	 	 	 	
 Name: Derek Orange

Title: Associate Director — Media & Communications

Signature Page for Credit Suisse First Boston Toronto Branch, as Lender  

	 	 	CREDIT SUISSE FIRST BOSTON TORONTO BRANCH
	

 	
 	

By:	

/s/  ALAN DAOUST / PETER CHAUVIN      
	 	 	 	
 Name: Alan Daoust / Peter Chauvin

Title: Director / Vice President

Signature Page for Deutsche Bank AG, Canada Branch, as Lender  

	 	 	DEUTSCHE BANK AG, CANADA BRANCH
	

 	
 	

By:	

/s/  PAUL JURIST      
	 	 	 	
 Name: Paul Jurist

Title: Managing Director and Principal Officer
	

 	
 	

By:	

/s/  ROBERT A. JOHNSTON      
	 	 	 	
 Name: Robert A. Johnston

Title: Vice President

Signature Page for KeyBank National Association, as Lender  

	 	 	KEYBANK NATIONAL ASSOCIATION
	

 	
 	

By:	

/s/  VIJAYA N. KULKARNI      
	 	 	 	
 Name: Vijaya N. Kulkarni

Title: Assistant Vice President
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

Signature Page for National Bank of Canada, as Lender  

	 	 	NATIONAL BANK OF CANADA
	

 	
 	

By:	

/s/  ED SUSTAR      
	 	 	 	
 Name: Ed Sustar

Title: Vice President
	

 	
 	

By:	

/s/  BRIAN SMITH      
	 	 	 	
 Name: Brian Smith

Title: Managing Director

Signature Page for Citibank N.A., Canadian Branch, as Lender  

	 	 	CITIBANK N.A., CANADIAN BRANCH
	

 	
 	

By:	

/s/  DALJEET LAMBA      
	 	 	 	
 Name: Daljeet Lamba

Title: Vice President
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

Signature Page for Congress Financial Corporation (Canada), as Lender  

	 	 	CONGRESS FINANCIAL CORPORATION (CANADA)
	

 	
 	

By:	

/s/  WAYNE R. EHGOETZ      
	 	 	 	
 Name: Wayne R. Ehgoetz

Title: President
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

 
 
 

SCHEDULE C
  
    APPLICABLE MARGIN, LC FEE, FACILITY FEE AND UTILIZATION FEE    
    

	

	 
	 	LEVEL I
	 	LEVEL II
	 	LEVEL III
	 	LEVEL IV
	 	LEVEL V1
	 	LEVEL VI

	

	Debt Rating2

(Approved Credit Rating Agency)	 	>BBB+/Baa1	 	BBB/Baa2	 	BBB-/Baa3	 	BB+/Ba1	 	BB/Ba2	 	<BB/Ba2
	

	LIBOR / BA Applicable Margin3 /LC Fee	 	75.0 bps	 	85.0 bps	 	95.0 bps	 	125.0 bps	 	127.5 bps	 	160.0 bps
	

	Prime / Base Rate Canada Applicable Margin	 	0.0 bps	 	0.0 bps	 	0.0 bps	 	25.0 bps	 	32.5 bps	 	60.0 bps
	

	Facility Fee4	 	12.5 bps	 	15.0 bps	 	17.5 bps	 	25.0 bps	 	35.0 bps	 	40.0 bps
	

	Utilization Fee5	 	25.0 bps	 	25.0 bps	 	25.0 bps	 	25.0 bps	 	25.0 bps	 	25.0 bps
	

	1
	Level
V will apply at Closing.

	2
	In
the event of a split rating, the higher rating shall apply, unless there are two or more gradations between ratings, in which case, the rating one level below the
higher rating shall apply.

	3
	"Applicable
Margin" expressed as basis points per annum.

	4
	Facility
Fee is payable on the aggregate Commitments (after giving effect to any cancellation, reduction, or increase pursuant to Section 2.7) regardless of usage
and shall be calculated in accordance with Section 2.14(a).

	5
	Utilization
Fee is payable on the aggregate outstanding Advances (after giving effect to any cancellation, reduction, or increase of the Commitments pursuant to
Sections 2.7 and 2.23) and shall be calculated in accordance with Section 2.14(b). 

 
 
 

SCHEDULE N
  
    CALCULATION OF THE MANDATORY COST    
    

1.     General  

The
Mandatory Cost is the weighted average of the rates for each Lender calculated below by the Administrative Agent on the first day of a Term. The Administrative Agent must distribute each amount of
Mandatory Cost among the Lenders on the basis of the rate for each Lender. 

2.     For a Lender lending from the U.K.  

	(a)
	The
relevant rate for a Lender lending from the U.K. is calculated in accordance with the following formulae: 

for
a Loan in Sterling: 

	 	AB + C(B - D) + E × 0.01	 	per cent. per annum	 	 
	 	
	 	 	 	 
	 	100 - (A + C)	 	 	 	 

for
any other Loan: 

	 	E × 0.01	 	per cent. per annum	 	 
	 	
	 	 	 	 
	 	300	 	 	 	 

where
on the day of application of the formula: 

	(A)
	is
the percentage of that Lender's eligible liabilities (in excess of any stated minimum) which the Bank of England requires it to hold on a non-interest-bearing deposit
account in accordance with its cash ratio requirements;

	(B)
	is
LIBOR for that Term;

	(C)
	is
the percentage of that Lender's eligible liabilities which the Bank of England requires it to place as a special deposit;

	(D)
	is
the interest rate per annum allowed by the Bank of England on a special deposit; and

	(E)
	is
calculated by the Administrative Agent as being the average of the rates of charge supplied by the Lenders to the Administrative Agent under paragraph (d) below and
expressed in pounds per £1 million.

	(b)
	For
the purposes of this paragraph 2:

	(i)
	eligible liabilities and special deposit have the meanings given to them
at the time of application of the formula by the Bank of England; 

 

	(ii)
	fees rules means the then current rules on periodic fees in the Supervision Manual of the FSA Handbook; and

	(iii)
	tariff base has the meaning given to it in the fees rules. 

	(c)
	(i)      In
the application of the formulae, A, B, C and D are included as figures and not as percentages, e.g. if A = 0.5% and B = 15%, AB is calculated
as 0.5 × 15. A negative result obtained by subtracting D from B is taken as zero.

	(ii)
	Each
rate calculated in accordance with a formula is, if necessary, rounded upward to four decimal places.

	(d)
	(i)      Each
Lender must supply to the Administrative Agent the rate of charge payable by that Lender to the Financial Services Authority under the fees rules (calculated by
that Lender as being the average of the rates of charge applicable to that Lender but, for this purpose, applying any applicable discount and ignoring any minimum fee required under the fees rules)
and expressed in pounds per £1 million of the tariff base of that Lender.

	(ii)
	Each
Lender must promptly notify the Administrative Agent of any change to the rate of charge.

	(e)
	(i)      Each
Lender must supply to the Administrative Agent the information required by it to make a calculation of the rate for that Lender. The Administrative Agent may
assume that this information is correct in all respects.

	(ii)
	If
a Lender fails to do so, the Administrative Agent may assume that the Lender's obligations in respect of cash ratio deposits, special deposits and the fees rules are
the same as those of a typical bank from its jurisdiction of incorporation with a lending office in the U.K.

	(iii)
	The
Administrative Agent has no liability to any Party if its calculation over or under compensates any Lender. 

3.     For a Lender lending from a lending office in a Participating Member State  

	(a)
	The
relevant rate for a Lender lending from a lending office in a Participating Member State is the percentage rate per annum notified by that Lender to the Administrative Agent as
its cost of complying with the minimum reserve requirements of the European Central Bank.

	(b)
	If
a Lender fails to specify a rate under paragraph (a) above, the Administrative Agent will assume that the Lender has not incurred any such cost. 

4.     Changes  

The
Administrative Agent may, after consultation with the Company and the Lenders, notify all the Parties of any amendment to this Schedule which is required to reflect: 

2

 

	(a)
	any
change in law or regulation; or

	(b)
	any
requirement imposed by the Bank of England, the Financial Services Authority or the European Central Bank (or, in any case, any successor authority). 

Any
notification will be, in the absence of manifest error, conclusive and binding on all the Parties. 

3

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THIRD AMENDED AND RESTATED REVOLVING TERM CREDIT AGREEMENT

SCHEDULE C

SCHEDULE NQuickLinks
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EXHIBIT 4.1  

 
 

MERCER INTERNATIONAL INC.
  
    2004 Stock Incentive Plan    
    

SECTION 1.    ESTABLISHMENT AND PURPOSE  

        The Plan was adopted by the Board of Trustees on April 27, 2004 and shall become effective upon approval by the Company's shareholders as provided for in
Section 16(a) hereof. The purpose of the Plan is to promote the long-term success of the Company and the creation of stockholder value by (a) encouraging Employees and
Outside Trustees to focus on critical long-range objectives, (b) encouraging the attraction and retention of Employees and Outside Trustees with exceptional qualifications and
(c) linking Employees and Outside Trustees directly to stockholder interests through increased stock ownership. The Plan seeks to achieve this purpose by providing for Awards in the form of
restricted shares, options (which may constitute incentive stock options or nonstatutory stock options) and/or stock appreciation rights. 

SECTION 2.    DEFINITIONS  

        (a)   "Affiliate" shall mean any entity other than a Subsidiary, if the Company and/or one of more Subsidiaries own not less
than 50% of such entity. 

        (b)   "Award" shall mean any award of an Option, a SAR or a Restricted Share under the Plan. 

        (c)   "Board of Trustees" shall mean the Board of Trustees of the Company, as constituted from time to time. 

        (d)   "Change in Control" shall mean the occurrence of any of the following events: 

        (i)    Any
"person" (as defined below) who by the acquisition or aggregation of securities, is or becomes the  "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company's then outstanding securities ordinarily (and apart from rights accruing under special circumstances) having the right to vote at
elections of trustees (the "Base Capital Stock"); except that any change in the relative beneficial ownership of the Company's securities by any person
resulting solely from a reduction in the aggregate number of outstanding shares of Base Capital Stock, and any decrease thereafter in such person's ownership of securities, shall be disregarded until
such person increases in any manner, directly or indirectly, such person's beneficial ownership of any securities of the Company; or 

        (ii)   The
consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if persons who were not stockholders of
the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the voting power of the
outstanding securities of each of (A) the continuing or surviving entity and (B) any direct or indirect parent corporation of such continuing or surviving entity; or 

        (iii)  The
sale, transfer or other disposition of all or substantially all of the Company's assets. 

        For
purposes of subsection (d)(ii) above, the term "person" shall have the same meaning as when used in Sections 13(d)
and 14(d) of the Exchange Act but shall exclude: (1) a trustee or other fiduciary holding securities under an employee benefit plan maintained by the Company or a Parent or Subsidiary;
and (2) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the Stock. 

 

        Any
other provision of this Section 2(d) notwithstanding, a transaction shall not constitute a Change in Control if its sole purpose is to change the state or jurisdiction of the
Company's incorporation, to convert the Company from a Massachusetts trust organized under the laws of the State of Washington to a company or corporate form or to create a holding company that will
be owned in substantially the same proportions by the persons who held the Company's securities immediately before such transaction. 

        (e)   "Code" shall mean the Internal Revenue Code of 1986, as amended. 

        (f)    "Committee" shall mean the Compensation Committee as designated by the Board of Trustees, which is authorized to
administer the Plan, as described in Section 3 hereof. 

        (g)   "Company" shall mean Mercer International Inc., a Massachusetts trust organized pursuant to the laws of the State
of Washington, or any successor. 

        (h)   "Employee" shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary. 

        (i)    "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 

        (j)    "Exercise Price" shall mean, in the case of an Option, the amount for which one Share may be purchased upon exercise of
such Option, as specified in the applicable Stock Option Agreement. "Exercise Price" shall mean, in the case of a SAR, an amount, as specified in the applicable SAR Agreement, which is subtracted from
the Fair Market Value of one Share in determining the amount payable upon exercise of such SAR. 

        (k)   "Fair Market Value" with respect to a Share, shall mean the market price of one Share, determined by the Committee as
follows: 

        (i)    If
the Stock was traded on The Nasdaq Stock Market, then the Fair Market Value shall be equal to the last reported sale price quoted for such date by The Nasdaq Stock
Market; 

        (ii)   If
the Stock was traded on a United States stock exchange or the Toronto Stock Exchange on the date in question, then the Fair Market Value shall be equal to the
closing price reported for such date by the applicable composite-transactions report; 

        (iii)  If
the Stock was traded over-the-counter on the date in question but was not traded on The Nasdaq Stock Market, then the Fair Market Value
shall be equal to the last transaction price quoted for such date by the OTC Bulletin Board or, if not so quoted, shall be equal to the mean between the last reported representative bid and asked
prices quoted for such date by the principal automated inter-dealer quotation system on which the Stock is quoted or, if the Stock is not quoted on any such system, by the "Pink Sheets" published by
the National Quotation Bureau, Inc.; or 

        (iv)  If
none of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate. 

        In
all cases, the determination of Fair Market Value by the Committee shall be conclusive and binding on all persons. 

        (l)    "ISO" shall mean an employee incentive stock option described in Section 422 of the Code. 

2

 

        (m)  "Lead Trustee" shall mean the Lead Trustee, as appointed from time to time, of the Board of Trustees of the Company. 

        (n)   "Nonstatutory Option" or "NSO" shall mean an employee stock option that
is not an ISO. 

        (o)   "Offeree" shall mean an individual to whom the Committee has offered the right to acquire Shares under the Plan (other
than upon exercise of an Option). 

        (p)   "Option" shall mean an ISO or Nonstatutory Option granted under the Plan and entitling the holder to purchase Stock. 

        (q)   "Optionee" shall mean an individual or estate who holds an Option or SAR. 

        (r)   "Outside Trustee" shall mean a member of the Board of Trustees who is not an Employee of the Company, a Parent or a
Subsidiary. Service as an Outside Trustee shall be considered Service for all purposes of the Plan, except as provided in Section 4(a). 

        (s)   "Parent" shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the
Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be a Parent commencing as of such date. 

        (t)    "Participant" shall mean an individual or estate who holds an Award. 

        (u)   "Plan" shall mean this 2004 Stock Incentive Plan of Mercer International Inc., as amended from time to time. 

        (v)   "Purchase Price" shall mean the consideration for which one Share may be acquired under the Plan (other than upon
exercise of an Option), as specified by the Committee. 

        (w)  "Restricted Share" shall mean a Share awarded under the Plan. 

        (x)   "Restricted Stock Agreement" shall mean the agreement between the Company and the recipient of a Restricted Share which
contains the terms, conditions and restrictions pertaining to such Restricted Share. 

        (y)   "Restricted Stock Award" shall mean an Award of Restricted Shares under the Plan. 

        (z)   "SAR" shall mean a stock appreciation right granted under the Plan. 

        (aa) "SAR Agreement" shall mean the agreement between the Company and an Optionee which contains the terms, conditions and
restrictions pertaining to his or her SAR. 

        (bb) "Service" shall mean service as an Employee or Outside Trustee. 

        (cc) "Share" shall mean one share of Stock, as adjusted in accordance with Section 10 (if applicable). 

        (dd) "Stock" shall mean the common shares of beneficial interest of the Company. 

        (ee) "Stock Option Agreement" shall mean the agreement between the Company and an Optionee that contains the terms,
conditions and restrictions pertaining to his Option. 

        (ff)  "Subsidiary" shall mean any corporation, if the Company and/or one or more other Subsidiaries own not less than 50% of
the total combined voting power of all classes of outstanding stock of such corporation. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date. 

3

 

        (gg) "Total and Permanent Disability" shall mean that the Optionee is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted, or can be expected to last, for a continuous period of not less than
12 months. 

        (hh) "Trustees" shall mean the members of the Board of Trustees, and "Trustee" shall mean any one of them. 

SECTION 3.    ADMINISTRATION  

        (a)   Committee Composition.    The Plan shall be administered by the Committee. The Committee shall consist of three
or more trustees of the Company, who shall be appointed by the Board of Trustees. In addition, the composition of the Committee shall satisfy (i) such requirements as the Securities and
Exchange Commission may establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act;
(ii) such requirements as the Internal Revenue Service may establish for outside trustees acting under plans intended to qualify for exemption under Section 162(m)(4)(C) of the Code; and
(iii) such requirements as may be established by any quotation system or stock exchange upon which the Company's Stock may be quoted or listed. 

        (b)   Committee Responsibilities.    Subject to the provisions of the Plan, the Committee shall have full authority
and discretion to take the following actions: 

        (i)    To
interpret the Plan and to apply its provisions; 

        (ii)   To
adopt, amend or rescind rules, procedures and forms relating to the Plan; 

        (iii)  To
authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan; 

        (iv)  To
determine when Stock is to be awarded or offered for sale and when Options are to be granted under the Plan; 

        (v)   To
select the Offerees and Optionees; 

        (vi)  To
determine the number of Shares to be offered to each Offeree or to be made subject to each Option; 

        (vii) To
prescribe the terms and conditions of each award or sale of Stock, including (without limitation) the Purchase Price, the vesting of the award (including
accelerating the vesting of awards, either at the time of the award or sale or thereafter, without the consent of the Offeree or Optionee) and to specify the provisions of the Restricted Stock
Agreement relating to such award or sale; 

        (viii) To
prescribe the terms and conditions of each Option, including (without limitation) the Exercise Price, the vesting or duration of the Option (including accelerating
the vesting of the Option), the provisions of any Restricted Stock Agreement or Stock Option Agreement, and whether such Option is to be classified as an ISO or as a Nonstatutory Option; 

        (ix)  To
amend any outstanding Restricted Stock Agreement or Stock Option Agreement, subject to applicable legal restrictions and to the consent of the Offeree or Optionee
who entered into such agreement if the Offeree's or Optionee's rights or obligations would be adversely affected; 

4

 

        (x)   To
prescribe the consideration for the grant of each Option or other right under the Plan and to determine the sufficiency of such consideration; 

        (xi)  To
determine the disposition of each Option or other right under the Plan in the event of an Optionee's or Offeree's divorce or dissolution of marriage; 

        (xii) To
determine whether Options or other rights under the Plan will be granted in replacement of other grants under an incentive or other compensation plan of an acquired
business; 

        (xiii) To
correct any defect, supply any omission, or reconcile any inconsistency in the Plan, any Stock Option Agreement or any Restricted Stock Agreement; and 

        (xiv) To
take any other actions deemed necessary or advisable for the administration of the Plan. 

        Subject
to the requirements of applicable law, the Committee may designate persons other than members of the Committee to carry out its responsibilities and may prescribe such conditions
and limitations as it may deem appropriate, except that the Committee may not delegate its authority with regard to the selection for participation of or the granting of Options or other rights under
the Plan to persons subject to Section 16 of the Exchange Act. All decisions, interpretations and other actions of the Committee shall be final and binding on all Offerees, all Optionees, and
all persons deriving their rights from an Offeree or Optionee. No member of the Committee shall be liable for any action that he has taken or has failed to take in good faith with respect to the Plan,
any Option, or any right to acquire Shares under the Plan. 

SECTION 4.    ELIGIBILITY  

        (a)   General Rule.    Only Employees shall be eligible for the grant of ISOs. Only Employees and Outside Trustees
shall be eligible for the grant of Restricted Shares, Nonstatutory Options or SARs. 

        (b)   Automatic Grants to Outside Trustees.

        (i)    On
the first business day following the conclusion of the annual meeting of the Company's stockholders at which the Plan is approved by vote of the Company's
stockholders, each Outside Trustee who immediately after such meeting has been in office for at least six months other than the Lead Trustee shall receive a Restricted Stock Award of 5,000 Restricted
Shares. The Restricted Shares subject to each Restricted Stock Award granted under this Section 4(b)(i) shall fully vest on the first anniversary of the date of grant. Notwithstanding the
foregoing, each Restricted Share granted under this Section 4(b)(i) shall immediately vest upon a Change in Control. 

        (ii)   On
the first business day following the conclusion of each regular annual meeting of the Company's stockholders, commencing with the annual meeting occurring after the
annual meeting approving the Plan, each Outside Trustee who was not elected to the Board of Trustees for the first time at such meeting and who will continue serving as a member of the Board of
Trustees thereafter shall receive a Restricted Stock Award of 2,500 Restricted Shares (subject to adjustment under Section 10), provided that such Outside Trustee has served on the Board of
Trustees for at least six months. The Restricted Shares subject to each Restricted Stock Award granted under this Section 4(b)(ii) shall fully vest on the first anniversary of the date of
grant. Notwithstanding the foregoing, all Restricted Shares granted under this Section 4(b)(ii) shall immediately vest upon a Change in Control. 

        (c)   Ten-Percent Stockholders.    An Employee who owns more than 10% of the total combined voting power
of all classes of outstanding stock of the Company, a Parent or Subsidiary shall not be eligible for the grant of an ISO unless such grant satisfies the requirements of Section 422(c)(5) of the
Code. 

        (d)   Attribution Rules.    For purposes of Section 4(c) above, in determining stock ownership, an Employee
shall be deemed to own the stock owned, directly or indirectly, by or for such Employee's brothers, sisters, spouse, ancestors and lineal descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be deemed to be owned proportionately by or for its stockholders, partners or beneficiaries. 

5

 

        (e)   Outstanding Stock.    For purposes of Section 4(c) above, "outstanding stock" shall include all stock
actually issued and outstanding immediately after the grant. "Outstanding stock" shall not include shares authorized for issuance under outstanding options, warrants or convertible securities held by
the Employee or by any other person. 

SECTION 5.    STOCK SUBJECT TO PLAN  

        (a)   Basic Limitation.    Shares offered under the Plan shall be authorized but unissued Shares or treasury Shares.
The maximum aggregate number of Options, SARs and Restricted Shares awarded under the Plan shall not exceed 1,000,000 Shares. The limitations of this Section 5(a) shall be subject to adjustment
pursuant to Section 10. The number of Shares that are subject to Options or other rights outstanding at any time under the Plan shall not exceed the number of Shares which then remain available
for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan. 

        (b)   Option/SAR Limitation.    Subject to the provisions of Section 10, no Participant may receive Awards
under the Plan in any calendar year that relate to more than 150,000 Shares, except that grants to a Participant in the calendar year in which his or her service first commences shall not relate to
more than 250,000 Shares. 

        (c)   Additional Shares.    If Restricted Shares or Shares issued upon the exercise of Options are forfeited, then
such Shares shall again become available for Awards under the Plan. If Options or SARs are forfeited or terminate for any other reason before being exercised, then the corresponding Shares shall again
become available for Awards under the Plan. If SARs are exercised, then only the number of Shares (if any) actually issued in settlement of such SARs shall reduce the number available in
Section 5(a) and the balance shall again become available for Awards under the Plan. 

SECTION 6.    RESTRICTED SHARES  

        (a)   Restricted Stock Agreement.    Each grant of Restricted Shares under the Plan shall be evidenced by a
Restricted Stock Agreement between the recipient and the Company. Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Restricted Stock Agreements entered into under the Plan need not be identical. 

        (b)   Payment for Awards.    Subject to the following sentence, Restricted Shares may be sold or awarded under the
Plan for such consideration as the Committee may determine, including (without limitation) cash, cash equivalents, past services and future services. To the extent that an Award consists of newly
issued Restricted Shares, the Award recipient shall furnish consideration with a value not less than the par value of such Restricted Shares in the form of cash, cash equivalents, Stock or past
services rendered to the Company (or a Parent or Subsidiary), as the Committee may determine. 

        (c)   Vesting.    Each Award of Restricted Shares may or may not be subject to vesting. Vesting shall occur, in full
or in installments, upon satisfaction of the conditions specified in the Restricted Stock Agreement. A Restricted Stock Agreement may provide for accelerated vesting in the event of the Participant's
death, disability or retirement or other events. The Committee may determine, at the time of granting Restricted Shares of thereafter, that all or part of such Restricted Shares shall become vested in
the event that a Change in Control occurs with respect to the Company. 

        (d)   Voting and Dividend Rights.    The holders of Restricted Shares awarded under the Plan shall have the same
voting, dividend and other rights as the Company's other stockholders. A Restricted Stock Agreement, however, may require that the holders of Restricted Shares invest any cash dividends received in
additional Restricted Shares. Such additional Restricted Shares shall be subject to the same conditions and restrictions as the Award with respect to which the dividends were paid. 

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        (e)   Restrictions on Transfer of Shares.    Restricted Shares shall be subject to such rights of repurchase, rights
of first refusal or other restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Restricted Stock Agreement and shall apply in addition to any general
restrictions that may apply to all holders of Restricted Shares. 

SECTION 7.    TERMS AND CONDITIONS OF OPTIONS  

        (a)   Stock Option Agreement.    Each grant of an Option under the Plan shall be evidenced by a Stock Option
Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not
inconsistent with the Plan and which the Committee deems appropriate for inclusion in a Stock Option Agreement. The Stock Option Agreement shall specify whether the Option is an ISO or an NSO. The
provisions of the various Stock Option Agreements entered into under the Plan need not be identical. Options may be granted in consideration of a reduction in the Optionee's other compensation. 

        (b)   Number of Shares.    Each Stock Option Agreement shall specify the number of Shares that are subject to the
Option and shall provide for the adjustment of such number in accordance with Section 10. 

        (c)   Exercise Price.    Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of an ISO
shall not be less than 100% of the Fair Market Value of a Share on the date of grant, except as otherwise provided in 4(c), and the Exercise Price of an NSO shall not be less 85% of the Fair Market
Value of a Share on the date of grant. Notwithstanding the foregoing, a Stock Option Agreement may specify that the exercise price of an NSO may vary in accordance with a predetermined formula.
Subject to the foregoing in this Section 7(c), the Exercise Price under any Option shall be determined by the Committee at its sole discretion. The Exercise Price shall be payable in one of the
forms described in Section 8. 

        (d)   Withholding Taxes.    As a condition to the exercise of an Option, the Optionee shall make such arrangements as
the Committee may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise. The Optionee shall also make such
arrangements as the Committee may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with the disposition of Shares acquired
by exercising an Option. 

        (e)   Exercisability and Term.    Each Stock Option Agreement shall specify the date when all or any installment of
the Option is to become exercisable. The Stock Option Agreement shall also specify the term of the Option; provided that the term of an ISO shall in no event exceed 10 years from the date of
grant (five years for Employees described in Section 4(c)). A Stock Option Agreement may provide for accelerated exercisability in the event of the Optionee's death, disability, or retirement
or other events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee's Service. Options may be awarded in combination with SARs, and such an
Award may provide that the Options will not be exercisable unless the related SARs are forfeited. Subject to the foregoing in this Section 7(e), the Committee at its sole discretion shall
determine when all or any installment of an Option is to become exercisable and when an Option is to expire. 

        (f)    Exercise of Options Upon Termination of Service.    Each Stock Option Agreement shall set forth the extent to
which the Optionee shall have the right to exercise the Option following termination of the Optionee's Service with the Company and its Subsidiaries, and any right any executor or administrator of the
Optionee's estate or any person who has acquired such Option(s) directly from the Optionee by bequest or inheritance shall have to exercise the Option. Such provisions shall be determined in the sole
discretion of the Committee, need not be uniform among all Options issued pursuant to the Plan and may reflect distinctions based on the reasons for termination of Service. 

        (g)   Effect of Change in Control.    The Committee may determine, at the time of granting an Option or thereafter,
that such Option shall become exercisable as to all or part of the Stock subject to such Option in the event that a Change in Control occurs with respect to the Company. 

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        (h)   Leaves of Absence.    An Employee's Service shall cease when such Employee ceases to be actively employed by
the Company (or any Subsidiary) as determined in the sole discretion of the Board of Trustees. For purposes of Options, Service does not terminate when an Employee goes on a bona fide leave of absence
approved by the Company in writing, if the terms of the leave provide for continued service crediting, or when continued service crediting is required by applicable law. However, for purposes of
determining whether an Option is entitled to ISO status, an Employee's Service will be treated as terminating 90 days after such Employee went on leave, unless such Employee's right to return
to active work is guaranteed by law or by a contract. Service terminates in any event when the approved leave ends, unless such Employee immediately returns to active work. The Board of Trustees shall
determine which leaves count toward Service, and when Service terminates for all purposes under the Plan. 

        (i)    No Rights as a Stockholder.    An Optionee, or a transferee of an Optionee, shall have no rights as a
stockholder with respect to any Stock covered by his Option until the date of the issuance of a stock certificate for such Stock. No adjustments shall be made except as provided in Section 10. 

        (j)    Modification, Extension and Renewal of Options.    Within the limitations of the Plan, including the provisions
of section 7(c) of the Plan, the Committee may modify, extend or renew outstanding Options. The foregoing notwithstanding, no modification of an Option shall, without the consent of the
Optionee, materially adversely affect his or her rights or obligations under such Option or reduce the Exercise Price of any Options below the Exercise Price on the date of grant other than for
adjustments resulting from subdivisions or consolidations of Shares, dividends payable in Stock, recapitalizations, spin-offs or similar occurrences as provided for in section 10(a)
hereof." 

        (k)   Restrictions on Transfer of Shares.    Any Shares issued upon exercise of an Option shall be subject to such
special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable
Stock Option Agreement and shall apply in addition to any general restrictions that may apply to all holders of Stock. 

        (l)    Buyout Provisions.    The Committee may at any time: (a) offer to buy out for a payment in cash or cash
equivalents an Option previously granted; or (b) authorize an Optionee to elect to cash out an Option previously granted, in either case at such time and based upon such terms and conditions as
the Committee shall establish. 

SECTION 8.    PAYMENT FOR SHARES  

        (a)   General Rule.    The entire Exercise Price or Purchase Price of Shares issued under the Plan shall be payable
in lawful money of the United States of America at the time when such Shares are purchased, except as provided in Section 8(b) through Section 8(g) below. 

        (b)   Surrender of Stock.    To the extent that a Stock Option Agreement so provides, payment may be made all or in
part by surrendering, or attesting to the ownership of, Stock which has already been owned by the Optionee or his representative. Such Stock shall be valued at Fair Market Value on the date when the
new Stock is purchased under the Plan. The Optionee shall not surrender, or attest to the ownership of, Stock in payment of the Exercise Price if such action would cause the Company to recognize
compensation expense (or additional compensation expense) with respect to the Option for financial reporting purposes. 

        (c)   Services Rendered.    At the discretion of the Committee, Stock may be awarded under the Plan in consideration
of services rendered to the Company or a Subsidiary prior to the award. If Stock is awarded without the payment of a Purchase Price in cash, the Committee shall make a determination (at the time of
the award) of the value of the services rendered by the Offeree and the sufficiency of the consideration to meet the requirements of Section 6(b). 

        (d)   Net Exercise.    Payment of the Exercise Price by an Optionee or of the Purchase Price by a recipient of a
Restricted Share (a "Recipient") may be made by reducing the number of Shares an Optionee or a Recipient receives upon exercise or purchase,
respectively (a "Net Exercise"). To effect a Net Exercise, the total number of shares that an Optionee or Recipient would receive shall be reduced by
the quotient of: (i) the aggregate Exercise Price or Purchase Price, as applicable, for all Shares purchased; and (ii) the Fair Market Value of a Share on the date the Company receives
written notice of exercise or purchase (the "Exercise Date"). For example, if an Optionee exercises an Option to purchase 10,000 Shares for an aggregate
exercise price of $60,000, and the Fair Market Value of a Share on the Exercise Date is $10.00 the Optionee would receive 4,000 Shares in a Net Exercise. 

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        (e)   Cashless Exercise.    To the extent that a Stock Option Agreement so provides, payment may be made all or in
part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell Stock and to deliver all or part of the sale proceeds to the Company in payment of
the aggregate Exercise Price. 

        (f)    Exercise/Pledge.    To the extent that a Stock Option Agreement so provides, payment may be made all or in part
by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker or lender to pledge Stock, as security for a loan, and to deliver all or part of the loan
proceeds to the Company in payment of the aggregate Exercise Price. 

        (g)   Other Forms of Payment.    To the extent that a Stock Option Agreement or Restricted Stock Agreement so
provides, payment may be made in any other form that is consistent with applicable laws, regulations and rules. 

        (h)   Limitations under Applicable Law.    Notwithstanding anything herein or in a Stock Option Agreement or
Restricted Stock Agreement to the contrary, payment may not be made in any form that is unlawful, as determined by the Committee in its sole discretion. 

SECTION 9.    STOCK APPRECIATION RIGHTS  

        (a)   SAR Agreement.    Each grant of a SAR under the Plan shall be evidenced by a SAR Agreement between the Optionee
and the Company. Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various SAR
Agreements entered into under the Plan need not be identical. SARs may be granted in consideration of a reduction in the Optionee's other compensation. 

        (b)   Number of Shares.    Each SAR Agreement shall specify the number of Shares to which the SAR pertains and shall
provide for the adjustment of such number in accordance with Section 10. 

        (c)   Exercise Price.    Each SAR Agreement shall specify the Exercise Price. A SAR Agreement may specify an Exercise
Price that varies in accordance with a predetermined formula while the SAR is outstanding. 

        (d)   Exercisability and Term.    Each SAR Agreement shall specify the date when all or any installment of the SAR is
to become exercisable. The SAR Agreement shall also specify the term of the SAR. A SAR Agreement may provide for accelerated exercisability in the event of the Optionee's death, disability or
retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee's service. SARs may be awarded in combination with Options, and
such an Award may provide that the SARs will not be exercisable unless the related Options are forfeited. A SAR may be included in an ISO only at the time of grant but may be included in an NSO at the
time of grant or thereafter. A SAR granted under the Plan may provide that it will be exercisable only in the event of a Change in Control. 

        (e)   Effect of Change in Control.    The Committee may determine, at the time of granting a SAR or thereafter, that
such SAR shall become fully exercisable as to all Stock subject to such SAR in the event that a Change in Control occurs with respect to the Company. 

        (f)    Exercise of SARs.    Upon exercise of a SAR, the Optionee (or any person having the right to exercise the SAR
after his or her death) shall receive from the Company (a) Stock, (b) cash or (c) a combination of Stock and cash, as the Committee shall determine. The amount of cash and/or the
Fair Market Value of Stock received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of the Shares subject to the SARs
exceeds the Exercise Price. 

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        (g)   Modification or Assumption of SARs.    Within the limitations of the Plan, the Committee may modify, extend or
assume outstanding SARs or may accept the cancellation of outstanding SARs (whether granted by the Company or by another issuer) in return for the grant of new SARs for the same or a different number
of shares and at the same or a different exercise price. The foregoing notwithstanding, no modification of a SAR shall, without the consent of the holder, may alter or impair his or her rights or
obligations under such SAR. 

SECTION 10.    ADJUSTMENT OF SHARES  

        (a)   Adjustments.    In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in
Stock, a declaration of a dividend payable in a form other than Stock in an amount that has a material effect on the price of Stock, a combination or consolidation of the outstanding Stock (by
reclassification or otherwise) into a lesser number of Shares, a recapitalization, a spin-off or a similar occurrence, the Committee shall make such adjustments as it, in its sole
discretion, deems appropriate in one or more of: 

        (i)    The
number of Options, SARs and Restricted Shares available for future Awards under Section 5; 

        (ii)   The
limitations set forth in Sections 5(a) and (b); 

        (iii)  The
number of Shares covered by each outstanding Option and SAR; or 

        (iv)  The
Exercise Price under each outstanding Option and SAR. 

        Except
as provided in this Section 10, a Participant shall have no rights by reason of any issue by the Company of stock of any class or securities convertible into stock of any
class, any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class. 

        (b)   Dissolution or Liquidation.    To the extent not previously exercised or settled, Options and SARs shall
terminate immediately prior to the dissolution or liquidation of the Company. 

        (c)   Reorganizations.    In the event that the Company is a party to a merger or other reorganization, outstanding
Awards shall be subject to the agreement of merger or reorganization. Such agreement shall provide for: 

        (i)    The
continuation of the outstanding Awards by the Company, if the Company is a surviving corporation; 

        (ii)   The
assumption of the outstanding Awards by the surviving corporation or its parent or subsidiary; 

        (iii)  The
substitution by the surviving corporation or its parent or subsidiary of its own awards for the outstanding Awards; 

        (iv)  Full
exercisability or vesting and accelerated expiration of the outstanding Awards; or 

        (v)   Settlement
of the full value of the outstanding Awards in cash or cash equivalents followed by cancellation of such Awards. 

10

 

        (d)   Reservation of Rights.    Except as provided in this Section 10, an Optionee or Offeree shall have no
rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend or any other increase or decrease in the number of shares of stock of any class. Any
issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to,
the number or Exercise Price of Shares subject to an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. 

SECTION 11.    AWARDS UNDER OTHER PLANS  

        The Company may grant awards under other plans, programs or agreements. Such awards may be settled in the form of Stock issued under this Plan. Such Stock, if
issued under this Plan, shall, when issued, reduce the number of Shares available under Section 5. 

SECTION 12.    PAYMENT OF TRUSTEE'S FEES IN SECURITIES  

        (a)   Effective Date.    No provision of this Section 12 shall be effective unless and until the Board of
Trustees has determined to implement such provision. 

        (b)   Elections to Receive NSOs or Restricted Shares.    An Outside Trustee may elect to receive his or her annual
retainer payments and/or meeting fees from the Company in the form of cash, NSOs or Restricted Shares, or a combination thereof, as determined by the Board of Trustees. Such NSOs and Restricted Shares
shall be issued under the Plan. An election under this Section 12 shall be filed with the Company in such form as may be prescribed by the Board from time to time. 

        (c)   Number and Terms of NSOs or Restricted Shares.    The number of NSOs or Restricted Shares to be granted to
Outside Trustees in lieu of annual retainers and meeting fees that would otherwise be paid in cash shall be calculated in a manner determined by the Board of Trustees. The terms of such NSOs or
Restricted Shares shall also be determined by the Board of Trustees. 

SECTION 13.    LEGAL AND REGULATORY REQUIREMENTS  

        Shares shall not be issued under the Plan unless the issuance and delivery of such Shares complies with (or is exempt from) all applicable requirements of law,
including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations and the regulations of any quotation
system or stock exchange on which the Company's securities may then be quoted or listed, and the Company has obtained the approval or favorable ruling from any governmental agency which the Company
determines is necessary or advisable. 

SECTION 14.    WITHHOLDING TAXES  

        (a)   General.    To the extent required by applicable federal, state, local or foreign law, a Participant or his or
her successor shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan. The Company shall not be required to
issue any Shares or make any cash payment under the Plan until such obligations are satisfied. 

        (b)   Share Withholding.    The Committee may permit a Participant to satisfy all or part of his or her withholding
or income tax obligations by having the Company withhold all or a portion of any Stock that otherwise would be issued to him or her or by surrendering all or a portion of any Stock that he or she
previously acquired. Such Stock shall be valued at its Fair Market Value on the date when taxes otherwise would be withheld in cash. In no event may a Participant have Stock withheld that would
otherwise be issued to him or her in excess of the number of Shares necessary to satisfy the legally required minimum tax withholding. 

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SECTION 15.    NO EMPLOYMENT RIGHTS  

        No provision of the Plan, nor any right or Option granted under the Plan, shall be construed to give any person any right to become, to be treated as, or to
remain an Employee. The Company and its Subsidiaries reserve the right to terminate any person's Service at any time and for any reason, with or without notice. 

SECTION 16.    DURATION AND AMENDMENT  

        (a)   Effectivenes.    The Company shall seek shareholder approval for the Plan at its annual meeting (the "Meeting")
of stockholders to be held on June 14, 2004 (as the same may be adjourned, reconvened or reset). The Plan shall become effective upon approval by a simple majority of the votes cast at the
Meeting. Notwithstanding any other provision herein, in the event the Plan is not approved at the Meeting, it shall be null and void for all purposes. 

        (b)   Term of the Plan.    The Plan, as set forth herein, shall terminate automatically on June 14, 2014 and
may be terminated on any earlier date pursuant to Subsection (c) below. 

        (c)   Right to Amend or Terminate the Plan.    The Board of Trustees may amend the Plan at any time and from time to
time. Rights and obligations under any Option granted before amendment of the Plan shall not be materially impaired by such amendment, except with consent of the person to whom the Option was granted.
An amendment of the Plan shall be subject to the approval of the Company's stockholders only to the extent required by applicable laws, regulations or rules. 

        (d)   Effect of Amendment or Termination.    No Shares shall be issued or sold under the Plan after the termination
thereof, except upon exercise of an Option granted prior to such termination. The termination of the Plan, or any amendment thereof, shall not affect any Share previously issued or any Option
previously granted under the Plan. 

SECTION 17.    EXECUTION  

        To record the adoption of the Plan by the Board of Trustees on April 27, 2004, the Company has caused its authorized officer and/or trustee to execute the
same. 

	 	 	
MERCER INTERNATIONAL INC.
	
 	
 	

By:	
 	

/s/  WILLIAM D. MCCARTNEY      

	 	 	Name:	 	William D. McCartney
	 	 	Title:	 	Trustee

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MERCER INTERNATIONAL INC. 2004 Stock Incentive Plan

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