Document:

Exhibit 10.29

                                 As of March 25, 2003

Ultralife Batteries, Inc.
2000 Technology Parkway
Newark, NY  14513

Ultralife Batteries (UK) Ltd.
18 Nuffield Way
Abingdon, Oxfordshire, OX 14
1TG England

      Re:   Fifth Amendment to Financing Agreements ("Amendment")

Gentlemen:

      Reference is made to the Loan and Security Agreement dated June 15, 2000,
as amended, between you and the undersigned (the "Loan Agreement"). All
capitalized terms not otherwise defined herein shall have the meanings given
such terms in the Loan Agreement.

      Borrowers have requested that Lender agree to certain modifications to the
Loan Agreement. Subject to the terms and conditions hereof, the Lender agrees
with the Borrowers as follows:

      (1) Section 1.12(k) is amended to add the following at the end of such
section prior to the semi-colon (;): "(Eligible Government Accounts)".

      (2) Section 1.12(m) is deleted in its entirety and replaced with the
following:

            "(m) such Accounts of a single account debtor or its affiliates do
            not constitute more than twenty (20%) percent of all otherwise
            Eligible Accounts, except as to Eligible Kidde Safety Accounts,
            which shall not exceed $1,250,000 in the aggregate, and Eligible
            Government Accounts which shall not exceed fifty five (55%) of all
            Accounts for the period from April 1, 2003 through August 30, 2003
            and fifty (50%) percent of all Accounts thereafter (but the portion
            of the Accounts not in excess of such percentages or limits may be
            deemed Eligible Accounts);"

      (3) Section 1.14 is deleted and replaced with the following (and all
references in the Financing Agreements to "Fyrentics" shall be deemed to be
changed to "Kidde Safety"):

            "1.14 "Eligible Kidde Safety Account" shall mean any Account arising
            out of a sale of Inventory to Kidde PLC ("Kidde Safety") that
            satisfies the criteria for Eligible Accounts hereunder other than
            the limitation set forth in clause

<PAGE>

Ultralife Batteries, Inc.
Ultralife Batteries (UK) Ltd.
As of March 25, 2003
Page 2

            (e) and (m) to the definition of Eligible Accounts, which shall not
            apply; provided, however, that the aggregate outstanding amount of
            all Eligible Accounts for Kidde Safety shall not exceed $1,250,000
            (but such Eligible Accounts not in excess of such amount shall be
            deemed to be Eligible Accounts)."

      (4) Section 2.2(b) is amended to delete "one and one half (1.5%)" from the
third line thereof and to replace it with "one and three quarters (1.75%)" and
to delete "four and one half (4.5%)" in the seventh line thereof and to replace
it with "four and three quarters (4.75%)".

      (5) Section 9.7 is amended to delete clause (b)(ii) therefrom, such that
Borrowers shall not have the right to sell, transfer, or dispose of Equipment
without the prior written consent of Lender.

      (6) Section 9.15 of the Loan Agreement is deleted and replaced with the
following:

            "9.15 Adjusted Net Worth. Borrowers shall, at all times, maintain an
            Adjusted Net Worth, excluding any and all equity contributions or
            infusions to the Parent, of not less than $19,182,000.00 plus,
            commencing on January 1, 2004 and on the first day of each fiscal
            year of the Borrowers' thereafter, fifty percent (50%) of the
            consolidated net income (but not loss) of the Parent, as determined
            in accordance with GAAP excluding all of extraordinary or
            nonrecurring gains, for the Borrowers' fiscal year ending December
            31, 2003 and for each fiscal year thereafter."

      (7) The first sentence of Section 12.1(a) is deleted and replaced with the
following:

            "This Agreement and the other Financing Agreements shall become
            effective as of the date set forth on the first page hereof and
            shall continue in full force and effect for a term ending on June
            30, 2004 (the "Renewal Date"), and from year to year thereafter,
            unless sooner terminated pursuant to the terms hereof."

      (8) Section 12.1(c)(iii) is deleted and replaced with the following:

            "(iii) 0.5% (one-half of one percent) of Maximum Credit

                        From the second anniversary of the date hereof to and
                        including June 30, 2004."

<PAGE>

Ultralife Batteries, Inc.
Ultralife Batteries (UK) Ltd.
As of March 25, 2003
Page 3

      (9) Simultaneously with this Amendment, Ultralife (UK) will enter into a
supplemental agreement to the Equipment Mortgage in form and substance
satisfactory to Lender to grant to Lender a valid, first priority fixed charge
on the Equipment acquired by Ultralife (UK) since the original closing date.

      (10) Lender agrees to release its lien on the accounts receivable of
Ultralife (UK) in order to permit Ultralife (UK) to obtain financing from a UK
based financing institution, subject to an intercreditor agreement with such
financial institution acceptable to Lender.

      (11) Borrower shall engage an appraiser, acceptable to Lender, within
thirty (30) days of the date hereof to conduct an appraisal of all of Parent's
Equipment located in the United States, and shall cause such appraiser to
promptly prepare and deliver to Lender an appraisal of such Equipment in form
and substance satisfactory to Lender.

      (12) Within thirty (30) days of the date hereof, Parent shall enter into a
collateral assignment in form and substance satisfactory to Lender of the option
to acquire the real property, buildings and improvements located at 2000
Technology Parkway, Newark, New York held by Parent and shall cause such
collateral assignment to be duly recorded in the appropriate real estate
recording offices.

      (13) In connection with the execution and delivery of this Amendment,
Borrowers shall pay to Lender a fee of $25,000.00, which fee shall be fully
earned and non-refundable on the date hereof.

      (14) In connection with the execution and delivery of this Amendment, if
requested by Lender, the Borrowers shall furnish to the Lender certified copies
of all requisite corporate action and proceedings of the Borrowers in connection
with this Amendment.

      (15) Each Borrower confirms and agrees that (a) except as set forth on
Exhibit A hereto, all representations and warranties contained in the Loan
Agreement and in the other Financing Agreements are on the date hereof true and
correct in all material respects (except for changes that have occurred as
permitted by the covenants in Section 9 of the Loan Agreement), and (b) it is
unconditionally liable for the punctual and full payment of all Obligations,
including, without limitation, all charges, fees, expenses and costs (including
attorneys' fees and expenses) under the Financing Agreements, and that Borrowers
have no defenses, counterclaims or setoffs with respect to full, complete and
timely payment of all Obligations.

<PAGE>

Ultralife Batteries, Inc.
Ultralife Batteries (UK) Ltd.
As of March 25, 2003
Page 4

      (16) Borrowers hereby agree to pay to Lender all reasonable attorney's
fees and costs which have been incurred or may in the future be incurred by
Lender in connection with the negotiation and preparation of this Amendment and
any other documents and agreements prepared in connection with this Amendment.
The undersigned confirm that the Financing Agreements remain in full force and
effect without amendment or modification of any kind, except for the amendments
explicitly set forth herein. The undersigned further confirm that after giving
effect to this Amendment, no Event of Default or events which with notice or the
passage of time or both would constitute an Event of Default have occurred and
are continuing. Except as explicitly provided herein, the execution and delivery
of this Amendment by Lender shall not be construed as a waiver by Lender of any
Event of Default under the Financing Agreements. This Amendment shall be deemed
to be a Financing Agreement and, together with the other Financing Agreements,
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior dealings, correspondence, conversations
or communications between the parties with respect to the subject matter hereof.

                  [Remainder of Page Left Intentionally Blank]

<PAGE>

Ultralife Batteries, Inc.
Ultralife Batteries (UK) Ltd.
As of March 25, 2003
Page 5

      If you accept and agree to the foregoing please sign and return the
enclosed copy of this letter. Thank you.

                                                  Very truly yours,

                                                  CONGRESS FINANCIAL CORPORATION
                                                  (NEW ENGLAND)

                                                  By: /s/ Melissa Post
                                                      -------------------------
                                                      Name: Melissa Post
                                                      Title: Vice President

                                                  AGREED:

                                                  ULTRALIFE BATTERIES, INC.

                                                  By: /s/ Robert W. Fishback
                                                      -------------------------
                                                      Name: Robert W. Fishback
                                                      Title: VP - Finance & CFO

                                                  ULTRALIFE BATTERIES (UK) Ltd.

                                                  By: /s/ Peter F. Comerford
                                                      -------------------------
                                                      Name: Peter F. Comerford
                                                      Title: Director

<PAGE>

                                    Exhibit A

                            Ultralife Batteries, Inc.

                    Additional Representations and Warranties

                                 March 21, 2003

This shall update the Loan and Security Agreement by and between Congress
Financial Corporation (New England), as Lender, and Ultralife Batteries, Inc.
and Ultralife Batteries (UK) Ltd., as Borrowers, dated June 15, 2000.

Section 8.2, "Financial Statements; No Material Adverse Change", is updated as
follows:

            In October 2002, the Company sold a portion of its equity investment
      in Ultralife Taiwan, Inc., reducing its ownership interest from
      approximately 30% to approximately 11%. In exchange, the Company received
      total consideration of $2.4 million in cash and the return of 700,000
      shares of the Company's common stock. Previously, the Company had reported
      that it expected to record at least a $2.4 million non-operating gain on
      this transaction; however, because the accounting issues are complex, the
      Company and its independent auditors have not yet finalized the
      appropriate accounting treatment of the Company's investment. It is likely
      that the Company will be required to restate prior period financial
      results relating to the accounting for its equity ownership interest in
      UTI. Although these restatements would only affect non-operating earnings,
      they may nonetheless have a negative impact on previously reported
      earnings per share. In connection with these restatements, the Company may
      be required to amend certain of its prior filings with the Securities and
      Exchange Commission (the "SEC") and may be required to file other reports
      with the SEC, including a Form 10-Q for the three months ended December
      31, 2002.

Section 8.6, "Litigation", is updated as follows:

            In August 1998, the Company, its Directors, and certain underwriters
      were named as defendants in a complaint filed in the United States
      District Court for the District of New Jersey by certain shareholders,
      purportedly on behalf of a class of shareholders, alleging that the
      defendants, during the period April 30, 1998 through June 12, 1998,
      violated various provisions of the federal securities laws in connection
      with an offering of 2,500,000 shares of the Company's Common Stock. The
      complaint alleged that the Company's offering documents were materially
      incomplete, and as a result misleading, and that the purported class
      members purchased the Company's Common Stock at artificially inflated
      prices and were damaged thereby. Upon a motion made on behalf of the
      Company, the Court dismissed the shareholder action, without prejudice,
      allowing the complaint to be refiled. The shareholder action was
      subsequently refiled, asserting substantially the same claims as in the

<PAGE>

Ultralife Batteries, Inc.
Ultralife Batteries (UK) Ltd.
As of March 25, 2003
Page 7

      prior pleading. The Company again moved to dismiss the complaint. By
      Opinion and Order dated September 28, 2000, the Court dismissed the
      action, this time with prejudice, thereby barring plaintiffs from any
      further amendments to their complaint and directing that the case be
      closed. Plaintiffs filed a Notice of Appeal to the Third Circuit Court of
      Appeals and the parties submitted their briefs. Subsequently, the parties
      notified the Court of Appeals that they had reached an agreement in
      principle to resolve the outstanding appeal and settle the case upon terms
      and conditions which require submission to the District Court for
      approval. Upon application of the parties and in order to facilitate the
      parties' pursuit of settlement, the Court of Appeals issued an Order dated
      May 18, 2001 adjourning oral argument on the appeal and remanding the case
      to the District Court for further proceedings in connection with the
      proposed settlement.

            Subsequent to the parties entering into the settlement agreement,
      the Company's insurance carrier commenced liquidation proceedings. The
      insurance carrier informed the Company that in light of the liquidation
      proceedings, it would no longer fund the settlement. In addition, the
      value of the insurance policy is in serious doubt. In April 2002, the
      Company and the insurance carrier for the underwriters offered to proceed
      with the settlement. Plaintiffs' counsel has accepted the terms of the
      proposed settlement, amounting to $175,000 for the Company, and the matter
      must now be approved by the Court and by the shareholders comprising the
      class. Based on the terms of the proposed settlement, the Company has
      established reserves for its share of the settlement costs and associated
      expenses.

            In the event settlement is not reached, the Company will continue to
      defend the case vigorously. The amount of alleged damages, if any, cannot
      be quantified, nor can the outcome of this litigation be predicted.
      Accordingly, management cannot determine whether the ultimate resolution
      of this litigation could have a material adverse effect on the Company's
      financial position and results of operations.

            A retail end-user of a product manufactured by one of Ultralife's
      customers (the "Customer"), has made a claim against the Customer wherein
      it is asserted that the Customer's product, which is powered by an
      Ultralife battery, does not operate according to the Customer's product
      specification. No claim has been filed against Ultralife. However, in the
      interest of fostering good customer relations, in September 2002,
      Ultralife has agreed to lend technical support to the Customer in defense
      of its claim. Additionally, Ultralife will honor its warranty by replacing
      any batteries that may be determined to be defective. In the event a claim
      is filed against Ultralife and it is ultimately determined that
      Ultralife's product

<PAGE>

Ultralife Batteries, Inc.
Ultralife Batteries (UK) Ltd.
As of March 25, 2003
Page 8

      was defective, replacement of batteries to this Customer or end-user may
      have a material adverse effect on the Company's financial position and
      results of operations.

Section 8.11, "Environmental Compliance", is updated as follows:

            In conjunction with the Company's purchase/lease of its Newark, New
      York facility in 1998, the Company entered into a payment-in-lieu of tax
      agreement which provides the Company with real estate tax concessions upon
      meeting certain conditions. In connection with this agreement, a
      consulting firm performed a Phase I and II Environmental Site Assessment
      which revealed the existence of contaminated soil and ground water around
      one of the buildings. The Company retained an engineering firm which
      estimated that the cost of remediation should be in the range of $230,000.
      This cost, however, is merely an estimate and the cost may in fact be much
      higher. In February, 1998, the Company entered into an agreement with a
      third party which provides that the Company and this third party will
      retain an environmental consulting firm to conduct a supplemental Phase II
      investigation to verify the existence of the contaminants and further
      delineate the nature of the environmental concern. The third party agreed
      to reimburse the Company for fifty percent (50%) of the cost of correcting
      the environmental concern on the Newark property. The Company has fully
      reserved for its portion of the estimated liability. Test sampling was
      completed in the spring of 2001, and the engineering report was submitted
      to the New York State Department of Environmental Conservation (NYSDEC)
      for review. NYSDEC reviewed the report and, in January 2002, recommended
      additional testing. The Company responded by submitting a work plan to
      NYSDEC, which was approved in April 2002. The Company has sought proposals
      from engineering firms to complete the remedial work contained in the work
      plan, but it is unknown at this time whether the final cost to remediate
      will be in the range of the original estimate, given the passage of time.
      Because this is a voluntary remediation, there is no requirement for the
      company to complete the project within any specific time frame. The
      ultimate resolution of this matter may have a significant adverse impact
      on the results of operations in the period in which it is resolved.
      Furthermore, the Company may face claims resulting in substantial
      liability which could have a material adverse effect on the Company's
      business, financial condition and the results of operations in the period
      in which such claims are resolved.<PAGE>

                                                                    EXHIBIT 10.1

                                                               EXECUTION VERSION

                            THIRD AMENDMENT AGREEMENT

                  This THIRD AMENDMENT AGREEMENT (this "Amendment") is entered
into as of February 13, 2003, among SOLECTRON CORPORATION, a Delaware
corporation (the "Borrower"), GOLDMAN SACHS CREDIT PARTNERS L.P. ("GSCP"), as
sole lead arranger, sole book runner and co-syndication agent, JPMORGAN CHASE
BANK ("JPMorgan"), as co-syndication agent, THE BANK OF NOVA SCOTIA
("Scotiabank"), as documentation agent, each lender from time to time party to
the Credit Agreement referred to below (each, a "Lender," and collectively, the
"Lenders"), and Bank of America, N.A., as Administrative Agent.

                  The Borrower, GSCP, JPMorgan, Scotiabank, the Lenders, and the
Administrative Agent entered into a Credit Agreement dated as of February 14,
2002, which agreement was amended by an Amendment Agreement dated as of June 18,
2002, and a Second Amendment Agreement dated as of August 19, 2002 (as in effect
as of the date of this Amendment, the "Credit Agreement").

                  The Borrower has requested that the Lenders agree to certain
amendments to the Credit Agreement, and the Lenders have agreed to such request,
subject to the terms and conditions of this Amendment.

                  In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:

1.       Definitions; References; Interpretation.

                  (a)      Unless otherwise specifically defined herein, each
term used herein (including in the Recitals hereof) which is defined in the
Credit Agreement shall have the meaning assigned to such term in the Credit
Agreement.

                  (b)      As used herein, "Amendment Documents" means this
Amendment, the Consent and Agreement related hereto and the Credit Agreement (as
amended by this Amendment).

                  (c)      Each reference to "this Agreement," "hereof,"
"hereunder," "herein" and "hereby" and each other similar reference contained in
the Credit Agreement, and each reference to "the Credit Agreement" and each
other similar reference in the other Loan Documents, shall from and after the
Effective Date refer to the Credit Agreement as amended hereby.

                  (d)      The rules of interpretation set forth in Sections
1.02 and 1.05 of the Credit Agreement shall be applicable to this Amendment.

2.       Amendments to Credit Agreement. Subject to the terms and conditions
hereof, the Credit Agreement shall be amended as follows, effective as of the
date of satisfaction of the conditions set forth in Section 4 (the "Effective
Date"):

                                       1.

<PAGE>

                  (b)      Amendments to Article I of the Credit Agreement.

                           (1)      The defined term "Applicable Rate" shall be
amended as follows:

                                    (A)      By replacing the table contained
therein with the following table:

<TABLE>
<CAPTION>
                                                                     APPLICABLE
                                                                    UTILIZATION       APPLICABLE
                                                  APPLICABLE          FEE RATE        UTILIZATION
                                                   LIBO RATE           (USAGE          FEE RATE
                DEBT RATINGS       APPLICABLE     AND LETTERS       GREATER THAN     (USAGE EQUAL
PRICING             S&P/          FACILITY FEE     OF CREDIT        33% BUT LESS     TO OR GREATER
 LEVEL            MOODY'S             RATE         FEE RATE           THAN 66%)        THAN 66%)
-------         ------------      ------------    -----------       ------------     -------------
<S>            <C>                <C>             <C>               <C>              <C>
   1            BBB/Baa2            17.5 bps        70.0 bps          12.5 bps         12.5 bps
                (or higher)

   2            BBB-/Baa3           25.0 bps       100.0 bps          25.0 bps         25.0 bps

   3            BB+/Ba1             30.0 bps       120.0 bps          25.0 bps         25.0 bps

   4            BB/Ba2              40.0 bps       135.0 bps          50.0 bps         50.0 bps

   5            BB-/Ba3             50.0 bps       175.0 bps          50.0 bps        100.0 bps

   6            B+/B1               62.5 bps       212.5 bps          50.0 bps        100.0 bps
                (or lower)
</TABLE>

                                    (B)      In the defined term "Debt Rating"
contained therein, by replacing the phrase "Level 5" with "Level 6".

                           (2)      The defined term "Cash Interest Coverage
Ratio" shall be amended in its entirety to read as follows:

                  "Cash Interest Coverage Ratio" means, as of any date of
         determination, the ratio of:

                           (a)      the sum of (i) Consolidated EBITDA for the
         fiscal quarter ending on such date, (ii) the Non-Cash Restructuring
         Charges deducted in calculating Consolidated Net Income for such fiscal
         quarter, (iii) the Goodwill Impairment Charges deducted in calculating
         Consolidated Net Income for such fiscal quarter, (iv) the Cash
         Restructuring Charges deducted in calculating Consolidated Net Income
         for such fiscal quarter, provided, that the cumulative aggregate amount
         of Cash Restructuring Charges

                                       2.

<PAGE>

         from and after November 30, 2002, shall not exceed $200,000,000.00, and
         (v) charges for such fiscal quarter relating to inventory write-downs
         taken in accordance with GAAP on or after November 30, 2002, and on or
         before February 29, 2004, not to exceed $150,000,000.00 in the
         aggregate; to

                           (b)      Consolidated Cash Interest Charges during
such fiscal quarter.

                           (3)      The defined term "Cash Restructuring
Charges" shall be amended by deleting the proviso at the end thereof.

                           (4)      The defined term "Class" shall be amended by
(A) replacing the word "and" with a comma (",") and (B) inserting the following
before the period at the end thereof: " and (d) the Additional Secured
Obligation Providers."

                           (5)      The defined term "Consolidated EBITDA" shall
be amended in its entirety to read as follows:

                  "Consolidated EBITDA" means, for any period, for the Borrower
         and its Subsidiaries on a consolidated basis, an amount equal to (a)
         Consolidated Net Income, plus (b) (i) Consolidated Interest Charges,
         (ii) the amount of taxes, based on or measured by income, used or
         included in the determination of such Consolidated Net Income, and
         (iii) the amount of depreciation and amortization expense deducted in
         determining such Consolidated Net Income, minus (or plus) (c) gains (or
         losses) on the retirement of Indebtedness to the extent increasing (or
         decreasing) Consolidated Net Income.

                           (6)      The defined term "Consolidated Tangible Net
Worth" shall be amended in its entirety to read as follows:

                  "Consolidated Tangible Net Worth" means, as of any date of
         determination, for the Borrower and its Subsidiaries on a consolidated
         basis, (a) Shareholders' Equity of the Borrower and its Subsidiaries on
         that date minus (b) the Intangible Assets of the Borrower and its
         Subsidiaries on that date plus (c) (i) the cumulative aggregate
         after-tax Non-Cash Restructuring Charges deducted in calculating
         Consolidated Net Income in any quarter ending after November 30, 2002,
         (ii) the cumulative aggregate Goodwill Impairment Charges deducted in
         calculating Consolidated Net Income in any quarter ending after
         November 30, 2002, (iii) the cumulative aggregate after-tax Cash
         Restructuring Charges deducted in calculating Consolidated Net Income
         in any quarter ending after November 30, 2002, and (iv) after-tax
         charges relating to inventory write-downs taken in accordance with GAAP
         from November 30, 2002, to February 29, 2004, not to exceed
         $150,000,000.00 in the aggregate; provided, that for purposes of
         calculating Consolidated Tangible Net Worth, such cumulative aggregate
         Non-Cash Restructuring Charges and Cash Restructuring Charges shall not
         exceed $400,000,000.00; and provided, further, that to the extent any
         Goodwill Impairment Charge results in any upward adjustment of
         Shareholders' Equity of the Borrower and its Subsidiaries, then such
         adjustment shall be excluded from the calculation of Consolidated
         Tangible Net Worth as of such date of determination for purposes of
         testing the Borrower's compliance with Section 7.13(b) (the intent of
         the parties being that the effect of any such Goodwill

                                       3.

<PAGE>

         Impairment Charge and any related adjustment effected as part of the
         calculation of Consolidated Tangible Net Worth for the purposes of
         testing the Borrower's compliance with Section 7.13(b) be neutral).

                           (7)      The defined term "Lenders" shall be amended
by inserting ", the Security Agreement" after "Pledge Agreement" and by
inserting the following at the end thereof: "and any Additional Secured
Obligation Providers".

                           (8)      The defined term "Loan Documents" shall be
amended by inserting after the phrase "the Pledge Agreement," the phrase "the
Security Agreement,".

                           (9)      The defined term "Maturity Date" shall be
amended by replacing clause (b) with the following text: "(b) for Additional
Secured Obligations and Interest Rate Swaps, such maturity date as set forth in
the applicable Additional Secured Obligation Document or Joinder Agreement".

                           (10)     The defined term "Non-Cash Restructuring
Charges" shall be amended by deleting the proviso at the end thereof.

                           (11)     The defined term "Obligations" shall be
amended in the proviso by:

                                    (A)      Inserting after the phrase "the
Pledge Agreement," the following: "the Security Agreement,";

                                    (B)      Inserting after the phrase
"Interest Rate Swaps" the following: ", Additional Secured Obligations";

                                    (C)      Inserting the following proviso at
the end: ", and provided, further, that for purposes of the Security Agreement,
"Obligations" shall exclude (i) any Interest Rate Swap and Joinder Agreement in
respect of any Interest Rate Swap secured by any cash collateral, and (ii) any
Additional Secured Obligations to the extent that they arise from any
liabilities in respect of (A) the mark-to-market value of any foreign exchange
contracts exceeding $75,000,000 at any time outstanding, or (B) any treasury
management facilities exceeding three days' exposure."

                           (12)     The defined term "Permitted Acquisition"
shall be amended by (A) replacing the period at the end thereof with a semicolon
and (B) inserting the following proviso thereafter:

         "and provided, further, that the aggregate amount of Permitted
         Acquisitions during any twelve-month period beginning on or after
         November 30, 2002, shall not exceed $300,000,000.00."

                           (13)     The defined term "Receivables" shall be
amended in its entirety to read as follows:

                                       4.

<PAGE>

                  "Receivables" means all rights to payment arising out of the
         sale or lease of goods or the performance of services in the ordinary
         and usual course of business, however evidenced.

                           (14)     The following additional defined terms shall
be inserted in the proper alphabetical order:

                  "Additional Secured Obligations" means any direct or indirect
         liability, contingent or otherwise, of the Borrower or any of its
         Subsidiaries in respect of any foreign exchange and cash management
         services (including treasury, depository, overdraft, credit or debit
         card, electronic funds transfer and other cash management arrangements)
         provided by any Lender, including obligations for the payment of fees,
         interest, charges, expenses, attorneys' fees and disbursements in
         connection therewith.

                  "Additional Secured Obligation Documents" means any documents,
         instruments or agreements evidencing any Additional Secured
         Obligations.

                  "Additional Secured Obligation Provider" means any Lender
         making credit extensions to the Borrower or any Subsidiaries pursuant
         to any Additional Secured Obligation Documents.

                  "Annualized EBITDA" means (a) for the fiscal quarter of the
         Borrower ending on February 28, 2003, Consolidated EBITDA for such
         fiscal quarter multiplied by 4.0, (b) for the two-fiscal-quarter period
         of the Borrower ending on May 31, 2003, Consolidated EBITDA for such
         period multiplied by 2.0, (c) for the three-fiscal-quarter period of
         the Borrower ending on August 31, 2003, Consolidated EBITDA for such
         period divided by 0.75 and (d) for each four-fiscal-quarter period of
         the Borrower ending on November 30, 2003, and thereafter, Consolidated
         EBITDA for such period. For purposes of calculating Annualized EBITDA,
         Consolidated EBITDA for any period shall include (i) the Non-Cash
         Restructuring Charges deducted in calculating Consolidated Net Income
         for such period, (ii) the Goodwill Impairment Charges deducted in
         calculating Consolidated Net Income for such period, (iii) the Cash
         Restructuring Charges deducted in calculating Consolidated Net Income
         for such period, provided that the cumulative aggregate amount of Cash
         Restructuring Charges taken from and after the quarter ending on
         November 30, 2002, shall not exceed $200,000,000.00 in the aggregate,
         and (iv) charges for such period relating to inventory write-downs
         taken in accordance with GAAP from November 30, 2002, to February 29,
         2004, not to exceed $150,000,000.00 in the aggregate.

                  "Approved Foreign Receivables Debtor" means (i) any
         Receivables Debtor located in Japan or a country in North America or
         Europe that is a member of the Organization for Economic Cooperation
         and Development and (ii) any other Receivables Debtor who is not a
         resident of or located in the United States and is not organized under
         the laws of the United States or any state thereof approved in writing
         by the Required Lenders.

                  "Borrowing Base" means, as of any date of determination, the
         sum of (a) the then applicable Receivables Advance Rate multiplied by
         the aggregate Dollar amount of the

                                       5.

<PAGE>

         Receivables of the Borrower and its U.S. Subsidiaries as of the last
         day of the most recently ended calendar month and (b) 100% of the
         amount of Eligible Cash Collateral as of the last day of the most
         recently ended calendar month.

                  "Borrowing Base Certificate" means a certificate signed by a
         Responsible Officer of the Borrower, in substantially the form of
         Exhibit N, with such changes thereto as the Administrative Agent may
         from time to time reasonably request.

                  "Borrowing Base Date" means October 31, 2003, if the Borrower
         shall not have consummated a Minimum Capital Raise on or before such
         date.

                  "Capital Raise" means one or more issuances by the Borrower
         after February 13, 2003, of new Debt Securities in an aggregate amount
         of at least $300,000,000.00.

                  "Debt Securities" means Indebtedness of the Borrower of the
         type contemplated by clause (a) of the definition of Indebtedness and
         having a maturity date occurring on or after August 13, 2005.

                  "Eligible Cash Collateral" means all Dollar-denominated cash
         and cash equivalents pledged to the Collateral Agent, for the benefit
         of the Lenders, as collateral for the Obligations, and which are held
         by the Administrative Agent pursuant to documentation in form and
         substance reasonably satisfactory to the Administrative Agent. Any such
         cash collateral shall be maintained in interest bearing deposit
         accounts at Bank of America or other institutions satisfactory to it
         and shall be subject to such Lien documentation as the Administrative
         Agent shall reasonably request. Such collateral shall be subject to a
         valid, first priority Lien in favor of the Collateral Agent, for the
         benefit of the Lenders. Cash Collateral for the L/C Obligations shall
         not constitute Eligible Cash Collateral. Notwithstanding the foregoing,
         in no event shall the Lien documentation restrict the ability of the
         Borrower to access or withdraw such cash or cash equivalents unless an
         Event of Default shall have occurred and is continuing or the sum of
         the Outstanding Amount of all Revolving Loans and L/C Obligations and
         the 364-Day Outstanding Amount shall exceed the Borrowing Base then in
         effect.

                  "Excluded U.S. Subsidiary" means a U.S. Subsidiary that is a
         dormant, inactive or name-holding Subsidiary and that does not own or
         hold any collateral of the type described in the Security Agreement
         with a book value equal to or exceeding $10,000.00. Notwithstanding the
         foregoing, the term "Excluded U.S. Subsidiary" shall include any
         Special Purpose Subsidiary and U.S. Robotics Corporation.

                  "Ineligible Receivables" means, with respect to the
         Receivables of the Borrower or any U.S. Subsidiary, any of the
         following:

                           (a)      Receivables for which the Borrower's or such
         Subsidiary's right to receive payment has not been fully earned by
         performance or is contingent upon the fulfillment of any condition
         whatsoever or which otherwise do not arise from a bona fide completed
         transaction;

                                       6.

<PAGE>

                           (b)      Receivables which constitute a contra
         account or against which there are asserted any requests for
         adjustment, defenses, counterclaims, discounts (other than normal trade
         discounts granted in the ordinary course of business), credits or
         offsets of any nature, whether well-founded or otherwise, to the extent
         thereof;

                           (c)      Receivables that do not comply with all
         applicable Laws in any material respect;

                           (d)      Receivables which represent a prepayment or
         progress payment or arising out of the placement of goods on
         consignment, guaranteed sale or other arrangement by reason of which
         the payment by the Receivables Debtor may be conditional or contingent;

                           (e)      Receivables which are not owned by the
         Borrower or applicable U.S. Subsidiary free and clear of all Liens and
         rights of others (other than the Liens in favor of the Collateral Agent
         on behalf of the Lenders and other nonconsensual Permitted Liens);

                           (f)      Receivables in which the Collateral Agent on
         behalf of the Lenders shall not have a valid and perfected
         first-priority Lien;

                           (g)      Receivables owing by any officer, director,
         employee, agent, partner, Subsidiary or Affiliate of the Borrower;

                           (h)      Receivables owing by the United States or
         any department, agency or instrumentality thereof unless the
         Administrative Agent has agreed to the contrary in writing and the
         Borrower or applicable U.S. Subsidiary has complied with the Federal
         Assignment of Claims Act with respect to such Receivables;

                           (i)      Receivables denominated in a currency other
         than Dollars or owing by any Receivables Debtor who is not a resident
         of or located in the United States and is not organized under the laws
         of the United States or any state thereof (other than any Approved
         Foreign Receivables Debtor);

                           (j)      Receivables not paid in full within 60 days
         from the invoice due date;

                           (k)      Receivables owing by any Receivables Debtor
         or any of its Affiliates who has failed to make full payment within 60
         days from the invoice due date on more than 10% of the aggregate amount
         of Receivables owing to the Borrower and its U.S. Subsidiaries by such
         Receivables Debtor;

                           (l)      that portion of Receivables owing by any
         single Receivables Debtor or any of its Affiliates whose S&P/Moody's
         Rating is not at least BBB-/Baa3 which exceeds 10% of the aggregate
         amount of Receivables owing to the Borrower and its U.S. Subsidiaries
         by all Receivables Debtors;

                                       7.

<PAGE>

                           (m)      Receivables owing by any Receivables Debtor
         or any of its Affiliates who is the subject of a proceeding under any
         Debtor Relief Law;

                           (n)      Receivables which are evidenced by a
         promissory note or other instrument;

                           (o)      Receivables with respect to which the terms
         or conditions prohibit or restrict assignment or collection rights
         unless such prohibitions or restrictions are not enforceable under
         applicable law;

                           (p)      Receivables of any Receivables Debtor whose
         S&P/Moody's Rating or whose Affiliate's S&P/Moody's Rating is lower
         than the lower of B-/B3; and

                           (q)      Receivables with respect to which the
         Administrative Agent, in its reasonable discretion, deems the
         creditworthiness or financial condition of the Receivables Debtor to be
         unsatisfactory or the prospect of payment or performance to be impaired
         in any material respect, and other Receivables which, in the
         Administrative Agent's reasonable discretion, are otherwise ineligible.

                  "Liquidity Ratio" means, as of any date of determination, the
         ratio of: (a) the sum of (i) cash, (ii) cash equivalents, (iii)
         marketable securities and (iv) accounts receivable, in each case not
         subject to a Lien (other than Liens in favor of the Collateral Agent
         pursuant to the Loan Documents and any nonconsensual Permitted Liens);
         to (b) (i) all accounts payable of the Borrower and its Subsidiaries on
         a consolidated basis and (ii) Consolidated Indebtedness other than (A)
         Subordinated Indebtedness, (B) Indebtedness under LYONs, (C)
         Attributable Indebtedness of the Borrower and its Subsidiaries on a
         consolidated basis in respect of capital leases and Synthetic Lease
         Obligations which are fully cash collateralized, (D) Indebtedness of
         the Borrower and its Subsidiaries on a consolidated basis described in
         clause (b) of the definition of "Indebtedness," unless any such
         Indebtedness constitutes a matured reimbursement obligation or matured
         payment obligation and is no longer contingent unless cash
         collateralized, or described in clause (c) of the definition of
         "Indebtedness," and (E) any Guarantee Obligations related to any of the
         foregoing.

                  "Minimum Capital Raise" means, at any time after February 13,
         2003, the receipt by the Borrower of (a) aggregate gross proceeds
         through one or more (i) issuances by the Borrower of equity or (ii)
         incurrences of unsecured Indebtedness not amortizing or maturing prior
         to February 14, 2005, and/or (b) aggregate Net Proceeds in respect of
         any divestitures of assets or property by the Borrower, or any
         combination thereof, in an amount of at least $300,000,000.00, in cash
         or cash equivalents.

                  "Net Proceeds" means, with respect to any divestiture of
         assets or property by any Person, the aggregate consideration received
         by such Person from such divestiture minus the amount of reasonable
         fees and commissions actually paid by such Person to Persons other than
         such Person or any Affiliate of such Person in connection therewith.

                                       8.

<PAGE>

                  "Receivables Advance Rate" means, as of any date of
         determination, (a) 50% or (b) if the percentage of the Receivables of
         the Borrower and its U.S. Subsidiaries constituting Ineligible
         Receivables as of the last day of the most recently ended calendar
         month exceeds 40%, 50% minus 90% of the amount by which such percentage
         exceeds 40%.

                  "Receivables Debtor" means any Person obligated on a
         Receivable.

                  "S&P/Moody's Rating" means, with respect to any Person as of
         any date of determination, the rating assigned by either S&P or Moody's
         to such Person's senior unsecured non-credit enhanced long-term debt.

                  "Security Agreement" means the Security Agreement made by the
         Borrower and each U.S. Subsidiary (other than the Excluded U.S.
         Subsidiaries) in favor of the Collateral Agent for the benefit of the
         Lenders, in substantially the form of Exhibit M.

                  "364-Day Lender" means, at any time, a lender party to the
364-Day Credit Agreement.

                  "364-Day Outstanding Amount" means, at any time, the aggregate
         outstanding principal amount of all loans under the 364-Day Credit
         Agreement.

                           (15)     The defined terms "Cash Interest Coverage
Ratio Compliance Date" and "Restructuring Charges" shall be deleted.

                  (c)      Amendments to Article II of the Credit Agreement.

                           (1)      Section 2.01 shall be amended by inserting
the following at the end of the first sentence thereof:

         "; and provided, further, that at any time after the Borrowing Base
         Date, the sum of the Outstanding Amount of all Revolving Loans and L/C
         Obligations and the 364-Day Outstanding Amount shall not exceed the
         Borrowing Base then in effect"

                           (2)      Section 2.04 shall be amended by inserting
the following at the end thereof:

         "At any time after the Borrowing Base Date, if the sum of the
         Outstanding Amount of all Revolving Loans and L/C Obligations and the
         364-Day Outstanding Amount shall exceed the Borrowing Base then in
         effect, the Borrower, upon becoming aware of such excess, shall
         immediately prepay Revolving Loans or loans under the 364-Day Credit
         Agreement, or a combination thereof, in an amount equal to such
         excess."

                           (3)      Section 2.08(c) shall be amended by
inserting before the word "respectively" the following: "and the fee letter
dated January 30, 2003, between the Borrower, Bank of America and Banc of
America Securities LLC".

                           (4)      Section 2.12 shall be deleted in its
entirety.

                                       9.

<PAGE>

                           (5)      Section 2.13(a) shall be amended by deleting
clauses (i) and (1) in their entirety.

                  (d)      Amendments to Article IV of the Credit Agreement.

                           (1)      Section 4.02(d) shall be renumbered as
Section 4.02(e).

                           (2)      A new Section 4.02(d) shall be inserted
therein as follows:

                  "(d)     If such Credit Extension is on or after the Borrowing
         Base Date, the Borrower shall have delivered to the Administrative
         Agent the completed Borrowing Base Certificate, together with the
         related collateral reports, required under Section 6.16, and the
         statements contained therein shall be true, correct and complete on and
         as of the date of such Credit Extension as though made on and as of
         such date, except for changes in the information set forth in such
         Borrowing Base Certificate in the ordinary course of business. The
         giving of any Request for Credit Extension and the acceptance by the
         Borrower of the proceeds of a Credit Extension shall each be deemed a
         certification to the Administrative Agent and the Lenders that on and
         as of the date of such Credit Extension such statements are true,
         correct and complete, except for changes in the information set forth
         in such Borrowing Base Certificate in the ordinary course of business."

                  (e)      Amendment to Article V of the Credit Agreement.
Section 5.18 shall be amended in its entirety to read as follows:

                  "5.18 SECURITY INTEREST. The Loan Documents create for the
         benefit of the Lenders a valid and perfected security interest in the
         collateral described in the Pledge Agreement (except that with respect
         to the pledge of any Capital Stock of First Tier Foreign Subsidiaries,
         a perfected security interest to the extent applicable), subject to no
         other Liens (other than as expressly permitted by the Pledge
         Agreement), and a valid and perfected security interest in the
         collateral described in the Security Agreement, subject to no other
         Liens (other than Liens expressly permitted by the Security Agreement),
         securing in each case the payment of the Obligations, and all filings
         and other actions necessary or desirable to perfect or protect such
         security interests have been duly taken or arrangements therefor
         reasonably satisfactory to the Administrative Agent have been made."

                  (f)      Amendments to Article VI of the Credit Agreement.

                           (1)      Section 6.14 shall be amended by:

                                    (A)      amending subsection (a)(ii) by
replacing the phrase "SLR C.V. (as defined therein)" with the phrase "SLR C.V.
(as defined therein) or any entity organized under the laws of the Cayman
Islands holding all of the Capital Stock of SLR C.V. (provided that SEH (as
defined therein) holds at least 90% of the Capital Stock of such entity)"; and

                                    (B)      adding a new subsection (c) thereto
as follows:

                                      10.

<PAGE>

                  "(c)     If, at any time, the Borrower incorporates, creates
         or acquires any additional U.S. Subsidiary (other than an Excluded U.S.
         Subsidiary), or the status of any Excluded U.S. Subsidiary (other than
         U.S. Robotics Corporation) shall change so that it no longer meets the
         definition of "Excluded U.S. Subsidiary," then, at the Borrower's
         expense:

                           (i)      within 45 days after such incorporation,
                  creation or acquisition, or after any U.S. Subsidiary no
                  longer qualifies as an Excluded U.S. Subsidiary, the Borrower
                  shall (A) cause such U.S. Subsidiary to duly execute and
                  delivery to the Administrative Agent a security agreement in
                  substantially the form of Exhibit M or a supplement thereto
                  and (B) deliver evidence satisfactory to the Administrative
                  Agent that the Lien granted to the Collateral Agent for the
                  benefit of the Lenders on the collateral described in such
                  security agreement is a valid and perfected security interest
                  and that no Lien (other than Liens permitted by the Security
                  Agreement) exists on any such collateral other than the Lien
                  granted to the Collateral Agent for the benefit of the Lenders
                  and the 364-Day Lenders pursuant to the Loan Documents; and

                           (ii)     at any time and from time to time, the
                  Borrower shall promptly execute and deliver all further
                  instruments and documents and take all such other action as
                  the Administrative Agent may reasonably believe necessary or
                  desirable to obtain the full benefits of, or in perfecting and
                  preserving the Liens of, the pledges and guaranties
                  contemplated by this Section 6.14."

                           (2)      A new Section 6.16 shall be added thereto as
                  follows:

                           "6.16 BORROWING BASE CERTIFICATE. The Borrower shall
                  deliver to the Administrative Agent by no later than October
                  31, 2003, unless a Minimum Capital Raise has been consummated
                  on or before such date, (a) a completed Borrowing Base
                  Certificate and (b) full and complete reports with respect to
                  the Receivables of the Borrower and its U.S. Subsidiaries,
                  including information as to concentration, aging, identity of
                  Receivables Debtors, letters of credit securing Receivables,
                  disputed Receivables and other matters, as the Administrative
                  Agent shall reasonably request. After the Borrowing Base Date,
                  the Borrower shall deliver to the Administrative Agent, as
                  soon as available but in any event by no later than ten
                  Business Days after the end of each calendar month, a
                  completed Borrowing Base Certificate, together with the
                  related collateral reports described above."

                           (3)      A new Section 6.17 shall be added thereto as
                  follows:

                           "6.17 SECURITY AGREEMENT COLLATERAL. Not later than
                  March 31, 2003, the Borrower shall deliver to the
                  Administrative Agent to the extent not delivered prior
                  thereto: (a) evidence satisfactory to the Administrative Agent
                  that the Lien granted to the Collateral Agent for the benefit
                  of the Lenders in the collateral described in the Security
                  Agreement is a perfected security interest, subject to no
                  other Liens (other than Liens permitted thereby), (b)
                  confirmation of the accuracy

                                      11.

<PAGE>

                  of its prior certification of the U.S. Subsidiaries and the
                  Excluded U.S. Subsidiaries, and (c) such other items as
                  reasonably requested by the Administrative Agent in connection
                  with the Security Agreement, including opinions of counsel to
                  the Borrower and the U.S. Subsidiaries party to the Security
                  Agreement, search reports and other certificates and
                  documents."

                  (g)      Amendments to Article VII of the Credit Agreement.

                           (1)      Section 7.01 shall be amended by:

                                    (A)      amending subsection (j) in its
entirety to read as follows:

                           "(j)     [Reserved];"

                                    (B)      deleting the second proviso in
subsection (k);

                                    (C)      amending subsection (n) by
replacing "$50,000,000.00" with "$215,000,000.00"; and

                                    (D)      amending subsection (u) in its
entirety to read as follows:

                           "(u)     additional Liens on its U.S. property,
                  assets or revenue securing Indebtedness in an aggregate amount
                  so secured at any time not exceeding $10,000,000.00; and"

                                    (E)      adding a new subsection (v) as
follows:

                           "(v)     additional Liens on its non-U.S. property,
                  assets or revenue securing Indebtedness in an aggregate amount
                  so secured at any time not exceeding $75,000,000.00;"

                                    (F)      in the proviso at the end thereof,
replacing "Section 7.01(u)" with "Section 7.01(v)").

                           (2)      Section 7.03 shall be amended by:

                                    (A)      amending subsection (b) by adding
the following proviso at the end thereof:

                  "provided that any Capital Raise of Debt Securities, to the
                  extent that the proceeds of such issuance are applied within
                  180 days thereafter to the purchase, redemption, repayment,
                  tender or other refinancing of any such Indebtedness then
                  outstanding, shall be deemed to be issued in compliance with
                  this Section 7.03(b)"

                                    (B)      amending subsection (d) by
replacing "$75,000,000.00" with "$215,000,000.00"; and

                                      12.

<PAGE>

                                    (C)      amending subsection (f) in its
entirety to read as follows:

                           "(f)     [Reserved];"

                           (3)      Section 7.05(f) shall be amended in its
entirety to provide as follows:

                           "(f)     [Reserved];"

                           (4)      Section 7.06 shall be amended by:

                                    (A)      amending subsection (f) by adding
the following proviso before the word "and" at the end thereof:

                  "and provided, further, that, notwithstanding anything to the
                  contrary in this Section 7.06(f), the Borrower shall not make
                  any Restricted Junior Payment of the type described in clause
                  (ii) of the definition of Restricted Junior Payment to the
                  extent it relates to common stock of the Borrower;"

                                    (B)     deleting the last sentence thereof.

                           (5)      Section 7.10 shall be amended in its
entirety to provide as follows:

                           "7.10 CAPITAL EXPENDITURES. Make or become legally
                  obligated to make any expenditure in respect of the purchase
                  or other acquisition of any fixed or capital asset (excluding
                  normal replacements and maintenance which are properly charged
                  to current operations, Permitted Acquisitions, and
                  acquisitions of assets as a result of the termination of
                  Synthetic Lease Obligations), except for capital expenditures
                  not exceeding, in the aggregate for the Borrower and its
                  Subsidiaries for any consecutive four-quarter period beginning
                  on September 1, 2001, and each four-quarter period beginning
                  on each September 1 thereafter an amount equal to
                  $300,000,000.00."

                           (6)      Section 7.11(b) shall be amended in its
entirety to provide as follows:

                           "(b)     [Reserved];"

                           (7)      Section 7.13 shall be amended in its
entirety to provide as follows:

                           "7.13    FINANCIAL COVENANTS.

                           (a)      Maximum Debt to Annualized EBITDA Ratio.
                  Permit the ratio of Consolidated Indebtedness (other than
                  Indebtedness under the ACES and the LYONS) to Annualized
                  EBITDA as of the end of any fiscal quarter of the Borrower to
                  be greater than the ratio set forth opposite such fiscal
                  quarter below:

                                      13.

<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------
     FISCAL QUARTER ENDING          MAXIMUM RATIO
-------------------------------------------------
<S>                                 <C>
November 30, 2002                    3.25 to 1.0
-------------------------------------------------
February 28, 2003                    4.50 to 1.0
-------------------------------------------------
May 31, 2003                         4.25 to 1.0
-------------------------------------------------
August 31, 2003                      4.25 to 1.0
-------------------------------------------------
November 30, 2003                    3.75 to 1.0
-------------------------------------------------
February 29, 2004                    3.50 to 1.0
-------------------------------------------------
May 31, 2004                         3.50 to 1.0
-------------------------------------------------
August 31, 2004, and thereafter      3.25 to 1.0
-------------------------------------------------
</TABLE>

                           (b)      Consolidated Tangible Net Worth. Permit
                  Consolidated Tangible Net Worth as of the end of any fiscal
                  quarter of the Borrower ending on November 30, 2002, or
                  thereafter to be less than the sum of (i) $1,660,880,000.00,
                  (ii) an amount equal to 50% of Consolidated Net Income earned
                  in each fiscal quarter ending after November 30, 2002 (with no
                  deduction for a new loss in any such fiscal quarter), and
                  (iii) an amount equal to 50% of the aggregate increases in
                  Shareholders' Equity of the Borrower and its Subsidiaries
                  after November 30, 2002, by reason of the issuance and sale of
                  Capital Stock of the Borrower (including upon any conversion
                  of debt securities of the Borrower into such Capital Stock)
                  during any fiscal quarter of the Borrower ending subsequent to
                  November 30, 2002.

                           (c)      Cash Interest Coverage Ratio.

                                    (i)      Before the occurrence of any
                           Capital Raise, permit the Cash Interest Coverage
                           Ratio, as of the end of any fiscal quarter of the
                           Borrower, to be less than the ratio set forth
                           opposite such fiscal quarter below:

<TABLE>
<CAPTION>
--------------------------------------
FISCAL QUARTER ENDING    MINIMUM RATIO
--------------------------------------
<S>                      <C>
November 30, 2002          2.7 to 1.0
--------------------------------------
February 28, 2003          2.7 to 1.0
--------------------------------------
May 31, 2003              2.85 to 1.0
--------------------------------------
</TABLE>

                                      14.

<PAGE>

<TABLE>
-----------------------------------
<S>                     <C>
August 31, 2003          2.8 to 1.0
-----------------------------------
November 30, 2003       3.15 to 1.0
-----------------------------------
February 29, 2004       3.15 to 1.0
-----------------------------------
May 31, 2004             3.5 to 1.0
-----------------------------------
August 31, 2004          3.5 to 1.0
-----------------------------------
November 30, 2004        4.0 to 1.0
-----------------------------------
</TABLE>

                                    (ii)     From and after the occurrence of
                           one or more Capital Raises, permit the Cash Interest
                           Coverage Ratio, as of the end of any fiscal quarter
                           of the Borrower, to be less than the ratio of:

                                            (A)      the product of (1) the
                                    numerator of the ratio set forth opposite
                                    such fiscal quarter above and (2) the
                                    projected Consolidated Cash Interest Charges
                                    for such fiscal quarter contained in the
                                    Company Plan dated January 30, 2003,
                                    provided to the Lenders; to

                                            (B)      the sum of (1) the
                                    projected Consolidated Cash Interest Charges
                                    for such fiscal quarter contained in such
                                    Company Plan and (2) the actual Consolidated
                                    Cash Interest Charges in connection with
                                    such Capital Raises during such fiscal
                                    quarter (as adjusted to take into account
                                    any Swap Contacts entered into on the
                                    closing date of such Capital Raises);

                           provided, however, that under no circumstances shall
                           the Borrower permit the Cash Interest Coverage Ratio
                           calculated under this Section 7.13(c)(ii), as of the
                           end of any fiscal quarter of the Borrower, to be less
                           than the ratio set forth opposite such fiscal quarter
                           below:

<TABLE>
<CAPTION>
----------------------------------------
FISCAL QUARTER ENDING      MINIMUM RATIO
----------------------------------------
<S>                        <C>
November 30, 2002           2.0 to 1.0
---------------------------------------
February 28, 2003           2.0 to 1.0
---------------------------------------
May 31, 2003               1.75 to 1.0
---------------------------------------
August 31, 2003            1.75 to 1.0
---------------------------------------
November 30, 2003, and      2.0 to 1.0
---------------------------------------
thereafter
---------------------------------------
</TABLE>

                                      15.

<PAGE>

                           (d)      Liquidity Ratio. Permit the Liquidity Ratio
                  (i) as of the fiscal quarters of the Borrower ending November
                  30, 2002, February 28, 2003, May 31, 2003, August 31, 2003,
                  November 30, 2003, and February 28, 2004, to be less than 1.2
                  to 1.0 and (ii) as of the fiscal quarters of the Borrower
                  ending May 31, 2004, and thereafter to be less than 1.0 to
                  1.0; provided, however, that if after November 30, 2002, the
                  Borrower issues new senior Debt Securities in an aggregate
                  principal amount of at least $300,000,000.00 but less than
                  $500,000,000.00, the Borrower shall not permit the Liquidity
                  Ratio for any fiscal quarter of the Borrower ending after such
                  issuance to be less than 1.0 to 1.0; and provided, further,
                  that if after November 30, 2002, the Borrower issues new
                  senior Debt Securities in an aggregate principal amount equal
                  to or greater than $500,000,000.00, the Borrower shall not
                  permit the Liquidity Ratio for any fiscal quarter of the
                  Borrower ending after such issuance to be less than 0.9 to
                  1.0.

                           (e)      Minimum Cash. Permit at any time, in respect
                  of the Borrower and its U.S. Subsidiaries: (i) the sum of (A)
                  cash-on-hand, (B) cash equivalents and (C) marketable
                  securities, in each case not subject to a Lien (other than
                  Liens in favor of the Collateral Agent pursuant to the Loan
                  Documents and any nonconsensual Permitted Liens) or any other
                  restrictions, to be less than (ii) the sum of (X)
                  $500,000,000.00, (Y) the aggregate Outstanding Amount of
                  Revolving Loans and L/C Obligations and (Z) the 364-Day
                  Outstanding Amount.

                  With respect to any period during which a Permitted
                  Acquisition or an asset sale has occurred (each, a "Subject
                  Transaction"), for purposes of determining compliance with the
                  financial covenants set forth in this Section 7.13,
                  Consolidated EBITDA and the components of Consolidated Cash
                  Interest Charges shall be calculated with respect to such
                  period on a pro forma basis (including pro forma adjustments
                  arising out of events which are directly attributable to a
                  Subject Transaction, are factually supportable and are
                  expected to have a continuing impact, in each case determined
                  on a basis consistent with Article 11 of Regulation S-X
                  promulgated under the Securities Act of 1933, as amended from
                  time to time, and any successor statute, and as interpreted by
                  the staff of the Securities and Exchange Commission, which
                  would include cost savings resulting from head count
                  reduction, closure of facilities and similar restructuring
                  charges, which pro forma adjustments shall be certified by the
                  chief financial officer of the Borrower) using the historical
                  audited, if available, financial statements of any business so
                  acquired or to be acquired or sold or to be sold and the
                  consolidated financial statements of the Borrower and its
                  Subsidiaries which shall be reformulated as if such Subject
                  Transaction, and any Indebtedness incurred or repaid in
                  connection therewith, had been consummated or incurred or
                  repaid at the beginning of such period (and assuming that such
                  Indebtedness bears interest during any portion of the
                  applicable measurement period prior to the relevant

                                      16.

<PAGE>

                  acquisition at the weighted average of the interest rates
                  applicable to outstanding Loans incurred during such period)."

                           (8)      Section 7.14 shall be amended in its
                  entirety to provide as follows:

                           "7.14 LYONs. Voluntarily redeem for cash any LYONs,
                  or voluntarily acquire for cash any LYONs from holders
                  thereof, in part or in whole, unless immediately before and
                  after giving effect to such proposed actions unrestricted
                  cash, cash equivalents and short-term Investments of the
                  Borrower (determined on a consolidated basis) plus unused
                  amounts under the Commitments and the commitments under the
                  364-Day Credit Agreement exceed $950,000,000.00, and
                  immediately before and after giving effect to such proposed
                  actions, no Default or Event of Default would exist. Upon the
                  receipt by the Administrative Agent of a notice confirming the
                  Investment Grade Ratings of the Borrower, this Section 7.14
                  shall be terminated and be of no further force or effect."

                  (h)      Amendment to Article VIII of the Credit Agreement.
Section 8.01(b) shall be amended in its entirety to provide as follows:

                           "(b)     Specific Covenants. The Borrower fails to
                  perform or observe any term, covenant or agreement contained
                  in any of Sections 6.03, 6.05, 6.12 or 6.16 or Article VII;"

                  (i)      Amendments to Article IX of the Credit Agreement.
Section 9.11 shall be amended by inserting the following after "encumbering" in
clause (i): "any assets constituting collateral under the Security Agreement
or".

                  (j)      Amendments to Annexes to the Credit Agreement.

                           (1)      Schedules 2.03, 5.09, 5.13, 7.01, 7.02, 7.03
and 7.11 to the Credit Agreement shall be amended in their entirety in the form
of Annexes 5 to 11, respectively, to this Amendment.

                           (2)      Schedule 7.13 to the Credit Agreement shall
be deleted.

                           (3)      Exhibit C to the Credit Agreement shall be
amended by amending Schedules 2 and 3 thereto in the form of Annex 1 to this
Agreement.

                           (4)      New Exhibits M and N shall be added to the
Credit Agreement in the form of Annexes 2 and 3 respectively, to this Amendment.

3.       Representations and Warranties. The Borrower hereby represents and
warrants to the Administrative Agent and the Lenders as follows:

                  (a)      No Default or Event of Default has occurred and is
continuing (or would result from the amendment of the Credit Agreement
contemplated hereby).

                                      17.

<PAGE>

                  (b)      The execution, delivery and performance by the
Borrower of the Amendment Documents have been duly authorized by all necessary
corporate and other action and do not and will not require any registration
with, consent or approval of, or notice to or action by, any Person (including
any Governmental Authority) in order to be effective and enforceable.

                  (c)      The Amendment Documents constitute the legal, valid
and binding obligations of the Borrower, enforceable against it in accordance
with their respective terms, except to the extent that the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting creditor's rights generally and by equitable
principles (regardless of whether enforcement is sought in equity or at law).

                  (d)      All representations and warranties of the Borrower
contained in the Credit Agreement are true and correct (except to the extent
such representations and warranties expressly refer to an earlier date, in which
case they shall be true and correct as of such earlier date and except that this
subsection (d) shall be deemed instead to refer to the last day of the most
recent quarter and year for which financial statements have then been delivered
in respect of the representation and warranty made in Section 5.05 of the Credit
Agreement and to take into account any amendments to the Schedules to the Credit
Agreement and other disclosures made in writing by the Borrower to the
Administrative Agent and the Lenders after the Closing Date and approved by the
Administrative Agent and the Required Lenders).

                  (e)      There has occurred since August 31, 2002, no event or
circumstance that has resulted or could reasonably be expected to result in a
Material Adverse Effect.

                  (f)      The Borrower is entering into this Amendment on the
basis of its own investigation and for its own reasons, without reliance upon
the Administrative Agent and the Lenders or any other Person.

                  (g)      The Borrower's obligations under the Credit Agreement
and under the other Loan Documents are not subject to any defense, counterclaim,
set-off, right of recoupment, abatement or other claim.

4.       Conditions of Effectiveness.

                  (a)      The effectiveness of Section 2 of this Amendment
shall be subject to the satisfaction of each of the following conditions
precedent:

                           (1)      The Administrative Agent shall have received
from the Borrower and each of the Lenders a duly executed original (or, if
elected by the Administrative Agent, an executed facsimile copy) of this
Amendment.

                           (2)      The Administrative Agent shall have received
the consent of the Subsidiaries of the Borrower party to the Pledge Agreement,
the Interco Subordination Agreement or the Guaranty, in form and substance
satisfactory to the Administrative Agent, in their capacities as such, to the
execution and delivery hereof by the Borrower.

                                      18.

<PAGE>

                           (3)      The Administrative Agent shall have received
from the Borrower a certificate certifying the U.S. Subsidiaries and the
Excluded U.S. Subsidiaries, which certification the Borrower may update at any
time prior to March 31, 2003.

                           (4)      The Administrative Agent shall have received
from the Borrower and each of its U.S. Subsidiaries a duly executed original
(or, if elected by the Administrative Agent, an executed facsimile copy) of the
Security Agreement, substantially in the form of Annex 3.

                           (5)      The Administrative Agent shall have executed
the amendment to the Intercreditor Agreement, substantially in the form of Annex
4 and shall have received from Bank of America (in its capacities as
Administrative Agent under the 364-Day Credit Agreement and as Collateral Agent)
a duly executed original thereof.

                           (6)      The Administrative Agent shall have received
from the Borrower a duly completed Compliance Certificate signed by a
Responsible Officer of the Borrower in respect of the fiscal quarter of the
Borrower ended November 30, 2002.

                           (7)      The Administrative Agent shall have received
evidence of payment by the Borrower of all fees, costs and expenses due and
payable as of the Effective Date hereunder and under the Credit Agreement,
including any fees arising under or referenced in Section 5 of this Amendment
and any costs and expenses payable under Section 6(g) of this Amendment
(including the Administrative Agent's Attorney Costs, to the extent invoiced on
or prior to the Effective Date).

                           (8)      The Administrative Agent shall have received
from the Borrower, in form and substance satisfactory to the Administrative
Agent, copies of the resolutions passed by the board of directors of the
Borrower, certified as of the Effective Date by the Secretary or an Assistant
Secretary of the Borrower, authorizing the execution, delivery and performance
of this Amendment, the Security Agreement and each other document, agreement or
instrument to be executed and delivered by it pursuant thereto, together with
such incumbency certificates and/or other certificates of Responsible Officers
of the Borrower, as the Administrative Agent may require to establish the
identities of and verify the authority and capacity of each Responsible Officer
thereof authorized to act as such in connection with this Amendment and each
other Loan Document to which the Borrower is a party.

                           (9)      The Administrative Agent shall have received
an opinion of counsel to the Borrower, in form and substance satisfactory to the
Administrative Agent, and addressed to the Administrative Agent and the Lenders,
dated the Effective Date.

                           (10)     The Administrative Agent shall have received
all other documents it or the Required Lenders may reasonably request relating
to any matters relevant hereto, all in form and substance satisfactory to the
Administrative Agent.

                           (11)     The Effective Date shall have occurred on or
before February 13, 2003.

                                      19.

<PAGE>

                  (b)      For purposes of determining compliance with the
conditions specified in Section 4(a), each Lender that has executed this
Amendment shall be deemed to have consented to, approved or accepted, or to be
satisfied with, each document or other matter either sent, or made available for
inspection, by the Administrative Agent to such Lender for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to such Lender.

                  (c)      From and after the Effective Date, the Credit
Agreement is amended as set forth herein. Except as expressly amended pursuant
hereto, the Credit Agreement shall remain unchanged and in full force and effect
and is hereby ratified and confirmed in all respects.

                  (d)      The Administrative Agent will notify the Borrower and
the Lenders of the occurrence of the Effective Date.

5.       Fees. The Borrower shall pay (a) to the Administrative Agent for the
account of each of Bank of America and Banc of America Securities LLC ("BAS")
the fees set forth in that certain letter agreement dated as of January 30,
2003, by and between Bank of America, BAS and the Borrower, and (b) to each of
GSCP, JPMorgan and Scotiabank such fees as are set forth in separate letter
agreements by and between each such Person and the Borrower. Such fees shall be
due and payable by the Borrower on the dates set forth in such letter
agreements.

6.       Miscellaneous.

                  (a)      The Borrower acknowledges and agrees that the
execution and delivery by the Administrative Agent and the Lenders of this
Amendment shall not be deemed to create a course of dealing or an obligation to
execute similar waivers or amendments under the same or similar circumstances in
the future.

                  (b)      This Amendment shall be binding upon and inure to the
benefit of the parties hereto and thereto and their respective successors and
assigns.

                  (c)      This Amendment shall be governed by and construed in
accordance with the law of the State of New York (including Sections 5-1401 and
5-1402 of the General Obligations Law of the State of New York), provided that
the Administrative Agent and the Lenders shall retain all rights arising under
Federal law.

                  (d)      This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Each of
the parties hereto understands and agrees that this document (and any other
document required herein) may be delivered by any party thereto either in the
form of an executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy original, and
that receipt by the Administrative Agent of a facsimile transmitted document
purportedly bearing the signature of a Lender or the Borrower shall bind such
Lender or the Borrower, respectively, with the same force and effect as the
delivery of a hard copy original. Any failure by the Administrative Agent to
receive the hard copy executed original of such document shall not diminish the
binding effect of receipt of the

                                      20.

<PAGE>

facsimile transmitted executed original of such document of the party whose hard
copy page was not received by the Administrative Agent.

                  (e)      This Amendment and the other Amendment Documents
contain the entire and exclusive agreement of the parties hereto with reference
to the matters discussed herein. This Amendment supersedes all prior drafts and
communications with respect hereto. This Amendment may not be amended except in
accordance with the provisions of Section 10.01 of the Credit Agreement.

                  (f)      If any term or provision of this Amendment shall be
deemed prohibited by or invalid under any applicable law, such provision shall
be invalidated without affecting the remaining provisions of this Amendment, the
Credit Agreement or the Loan Documents.

                  (g)      The Borrower agrees to pay or reimburse Bank of
America (including in its capacities as Collateral Agent and as Administrative
Agent), GSCP, JPMorgan and Scotiabank upon demand, for all reasonable costs and
expenses (including reasonable Attorney Costs) incurred by Bank of America
(including in its capacities as Collateral Agent and as Administrative Agent),
GSCP, JPMorgan and Scotiabank in connection with the development, preparation,
negotiation, execution and delivery of the Amendment Documents.

                            [Signature pages follow]

                                      21.

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.

                                        SOLECTRON CORPORATION

                                        By: /s/ Perry G. Hayes
                                            --------------------------------
                                        Title: Treasurer and Vice President
                                               of Investor Relations

                                        BANK OF AMERICA, N.A., as Administrative
                                        Agent and Lender

                                        By: /s/ James P. Johnson
                                            --------------------------------
                                        Title: Managing Director

                                        GOLDMAN SACHS CREDIT PARTNERS
                                        L.P., AS SOLE LEAD ARRANGER,
                                        SOLE BOOK RUNNER AND CO-SYNDICATION
                                        AGENT AND A LENDER

                                        By: /s/ Stephen King
                                            --------------------------------
                                            Authorized Signatory
                                            Name:  Stephen King
                                            Title: Vice President

                                        THE BANK OF NOVA SCOTIA

                                        By: /s/ Kemp Leonard
                                            --------------------------------
                                            Name:  Kemp Leonard
                                            Title: Director

                                        BNP PARIBAS

                                        By: /s/ Jean Plassard
                                            --------------------------------
                                            Name:  Jean Plassard
                                            Title: Managing Director

                                        By: /s/ Rafael C. Lumanian
                                            --------------------------------
                                            Name:  Rafael C. Lumanian
                                            Title: Director

                                        CSAM FUNDING II

                                        By: /s/ David H. Lerner
                                            --------------------------------
                                            Name:  David H. Lerner
                                            Title: Authorized Signatory

                                        THE DEVELOPMENT BANK OF SINGAPORE LTD.,
                                        LOS ANGELES AGENCY

                                        By: /s/ Charles Ong
                                            --------------------------------
                                            Name:  Charles Ong
                                            Title: General Manager
                                                   DBS Bank Los Angeles

                                        FLEET NATIONAL BANK, AS L/C ISSUER
                                        AND A LENDER

                                        By: /s/ Greg Roux
                                            --------------------------------
                                            Name:  Greg Roux
                                            Title: Director

                                        JPMORGAN CHASE BANK

                                        By: /s/ William P. Rindfuss
                                            --------------------------------
                                            Name:  William P. Rindfuss
                                            Title: Vice President

                                        MORGAN STANLEY SENIOR FUNDING, INC.

                                        By: /s/ Jaap L. Tonckens
                                            --------------------------------
                                            Name:  Jaap L. Tonckens
                                            Title: Vice President
                                                   Morgan Stanley Senior Funding

                                        THE ROYAL BANK OF SCOTLAND PLC

                                        By: /s/ Jonathan Barrow
                                            --------------------------------
                                            Name:  Jonathan Barrow
                                            Title: Vice President

                                        STANDARD CHARTERED BANK

                                        By: /s/ Mary Machado-Schammel
                                            --------------------------------
                                            Name:  Mary Machado-Schammel
                                            Title: Sr. Vice President

                                        By: /s/ Andrew Y. Ng
                                            --------------------------------
                                            Name:  Andrew Y. Ng
                                            Title: Vice President
                                                   Standard Chartered Bank NY

                                      22.

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