Document:

<PAGE>

                      SECOND AMENDMENT TO CREDIT AGREEMENT
                                   AND CONSENT

            This SECOND AMENDMENT TO CREDIT AGREEMENT AND CONSENT (this
"Amendment") is dated as of November 23, 1999 and entered into by and among
Manufacturers' Services Limited, a Delaware corporation ("Company"), MSL
Overseas Finance B.V., a Netherlands private company with limited liability
("MSL Overseas"), the financial institutions listed on the signature pages
hereof, Bank of America, N.A. (successor to Bank of America National Trust
and Savings Association), as administrative agent, as collateral agent, and
as issuing lender, DLJ Capital Funding, Inc., as syndication agent, and Bank
of America International Limited as sub-agent, and is made with reference to
that certain Credit Agreement dated as of August 21, 1998, as amended
pursuant to a First Amendment to Credit Agreement and Limited Waiver, dated
as of February 26, 1999 (as so amended, the "Credit Agreement"), by and among
Company, MSL Overseas, Lenders, Sub-Agent, DLJ Capital Funding, Inc., as
Syndication Agent, and Bank of America, N.A. (successor to Bank of America
National Trust and Savings Association), as Administrative Agent, as
Collateral Agent and as Issuing Lender. Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement.

                                    RECITALS

            WHEREAS, Company, through its Subsidiary, Manufacturers' Services
Salt Lake City Operations, Inc. ("MSL SLC Ops") desires to acquire certain
assets utilized in an electronics manufacturing facility located in Salt Lake
City, Utah (the "Assets") owned and operated by 3Com Corporation pursuant to
an Asset Purchase Agreement and ancillary agreements (the "Acquisition
Agreements") pursuant to which MSL SLC Ops will acquire the Assets (the
"Acquisition"), for a cash payment of $85,000,000 plus certain assumed
liabilities, subject to an adjustment to be made within 120 days of the
closing of the Acquisition, following an audit of the inventory being
purchased and other matters;

            WHEREAS, in order to finance the Acquisition, Company proposes to
issue to Affiliates of DLJ and other investors acceptable to Agents $50,000,000
of Senior Exchangeable Preferred Stock, par value $.001 per share;

            WHEREAS, certain provisions of such preferred stock (including,
without limitation, payment of dividends, redemption and exchange) are, and will
continue to be, subject to restrictions contained in the Credit Agreement;

            WHEREAS, Company has requested and Agents and Lenders have agreed to
consent to the Acquisition; and

            WHEREAS, Company, Agents and Lenders have agreed to amend the Credit
Agreement in certain other respects (including adjusting the borrowing base
formulas for each of Company and MSL Overseas).

<PAGE>

            NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:

Section 1. AMENDMENTS TO THE CREDIT AGREEMENT

1.1 Amendment to Subsection 1.1: Definitions.

      A. Subsection 1.1 of the Credit Agreement is hereby amended by adding the
following definitions:

      "Acquisition" means the transaction described in the recitals to the
Second Amendment.

      "Senior Exchangeable Preferred Stock" means the $50.0 million senior
exchangeable preferred stock, par value $.001 per share, issued by Company on or
after the effective date of the Second Amendment, which shall pay dividends to
the holders thereof at a rate of 14% per annum until December 1, 2000 and 15%
per annum thereafter, such dividends to be payable in cash until December 1,
2000 and in kind thereafter and which shall be redeemable by Company at any time
for an amount equal to the par amount thereof plus a premium equal to the
applicable per annum dividend rate, and which must be redeemed by the Company on
November 26, 2006.

            "Second Amendment" means the Second Amendment to Credit Agreement
and Consent dated as of November 23, 1999.

      B. Subsection 1.1 of the Credit Agreement is hereby further amended by
deleting the definitions of the terms listed below and inserting the following
in lieu thereof:

            "BofA" means Bank of America, N.A. (successor to Bank of America
National Trust and Savings Association).

            "Borrowing Base Certificate" means a certificate substantially in
the form of Exhibit VI annexed to the Second Amendment delivered to
Administrative Agent by each Borrower pursuant to subsection 6.1(i).

            "Company Borrowing Base" means, as at any date of determination, the
lesser of (i) the difference between (a) the sum of (1) 90% of all Eligible
Accounts Receivable of Company and its Domestic Subsidiaries due from IBM that
are unpaid for 30 days or less from the date of the original invoice therefor,
(2) 80% of all Eligible Accounts Receivable of Company and its Domestic
Subsidiaries other than those specified in clause (1) above and (3)(i) until
December 31, 1999, 45% of all Eligible Inventory of Company and its Domestic
Subsidiaries (less such amount of Eligible Inventory to assure that Eligible
Inventory at any time does not exceed 60% of the Company Borrowing Base) and
(ii) after December 31, 1999, 35% of all Eligible Inventory of Company and its
Domestic Subsidiaries (less such amount of Eligible Inventory to assure that
Eligible Inventory at any time does not exceed 50% of the Company Borrowing
Base) and (b) the Term Loans advanced to Company and (ii) $75,000,000 minus the

                                          2
<PAGE>

Total Utilization of Revolving Loan Commitments attributable to MSL Overseas.

            "Consolidated EBITDA" means, for any period, without duplication,
the sum of amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) provisions for taxes based on income, (iv)
total depreciation expense, (v) total amortization expense, (vi) legal and out
of pocket expenses incurred in such period related to litigation with Lockheed
Martin Corporation in an amount not in excess of $800,000 in the aggregate for
all periods, (vii) the legal, advisory and out of pocket expenses incurred in
such period related to the proposed acquisition of Bull Electronics Angers and
Bull HN Information Systems, Inc. in an amount not in excess of $500,000 in the
aggregate for all periods, and (viii) other non-cash terms reducing Consolidated
Net Income less other non-cash items increasing Consolidated Net Income, all of
the foregoing determined on a consolidated basis for Company and its
Subsidiaries in conformity with GAAP; provided that all calculations of
Consolidated EBITDA for any period that includes the date of the Second
Amendment shall be made on a pro forma basis assuming that the Acquisition was
consummated on the first day of such period.

            "Foreign Borrowing Base" means as at any date of determination, as
to any Foreign Subsidiary, the difference between (a) the sum of (1) 90% of all
Eligible Accounts Receivable of a Foreign Subsidiary due from IBM that are
unpaid for 30 days or less from the date of the original invoice therefor, (2)
80% of all Eligible Accounts Receivable of such Foreign Subsidiary other than
those specified in clause (1) above and (3)(i) until December 31, 1999, 45% of
all Eligible Inventory of such Foreign Subsidiary and (ii) after December 31,
1999, 35% of all Eligible Inventory of such Foreign Subsidiary and (b) the Term
Loans allocable to such Foreign Subsidiary.

            "MSL Overseas Borrowing Base" means, as at any date of
determination, the lesser of (i) the difference between (a) the sum of (1) 90%
of all Eligible Accounts Receivable of MSL Overseas and the Company's other
Foreign Subsidiaries due from IBM that are unpaid for 30 days or less from the
date of the original invoice therefor, (2) 80% of Eligible Accounts Receivable
of MSL Overseas and Company's other Foreign Subsidiaries other than those
specified in clause (1) above and (3)(i) until December 31, 1999, 45% of all
Eligible Inventory of MSL Overseas and Company's other Foreign Subsidiaries
(less such amount of Eligible Inventory to assure that Eligible Inventory at any
time does not exceed 60% of the MSL Overseas Borrowing Base) and (ii) after
December 31, 1999, 35% of all Eligible Inventory of MSL Overseas and Company's
other Foreign Subsidiaries (less such amount of Eligible Inventory to assure
that Eligible Inventory at any time does not exceed 50% of the MSL Overseas
Borrowing Base) and (b) the Term Loans advanced to MSL Overseas and (ii)
$75,000,000 minus the Total Utilization of Revolving Loan Commitments
attributable to Company.

                                       3
<PAGE>

1.2 Amendment to Subsection 2.2: Interest on the Loans.

      A. Subsection 2.2A(a) of the Credit Agreement is hereby amended by
deleting it in its entirety and inserting the following in lieu thereof:

            "(a) Subject to the provisions of subsections 2.2E and 2.8, the Term
      Loans shall bear interest through maturity as follows:

                  (I) if a Base Rate Loan, then at the sum of the Base Rate plus
            2.75% per annum; or

                  (II) if a LIBOR Loan, then at the sum of Adjusted LIBOR plus
            3.75% per annum."

      B. Subsection 2.2A(b) of the Credit Agreement is hereby amended by
deleting it in its entirety and inserting the following in lieu thereof:

            "(b) Subject to the provisions of subsections 2.2E and 2.8, the
      Revolving Loans shall bear interest through maturity as follows:

                  (I) if a Base Rate Loan, then at the sum of the Base Rate plus
            the Base Rate Margin set forth in the table below opposite the
            Consolidated Leverage Ratio for the four-Fiscal Quarter period for
            which the applicable Margin Determination Certificate has been
            delivered pursuant to subsection 6.1(iv); or

                  (II) if a LIBOR Loan, then at the sum of Adjusted LIBOR plus
            the LIBOR Margin set forth in the table below opposite the
            Consolidated Leverage Ratio for the four-Fiscal Quarter period for
            which the applicable Margin Determination Certificate has been
            delivered pursuant to subsection 6.1(iv):

            Consolidated Leverage Ratio       Applicable LIBOR  Applicable Base
            ---------------------------            Margin         Rate Margin
                                                   ------         -----------
             Greater than or equal to   3.0:1.00   3.25%            2.25%

             Greater than or equal to   2.5:1.00
             but less than              3.0:1.00   3.00%            2.00%

             Less than                  2.5:1.00   2.75%            1.75%

provided that, for the period between November 23, 1999 and February 29, 2000,
the applicable margin for Revolving Loans that are LIBOR Loans shall be 3.0% per
annum and for Revolving Loans that are Base Rate Loans shall be 2.0% per annum.

Upon delivery of the Margin Determination Certificate by Company to
Administrative Agent pursuant to subsection 6.1(iv), the applicable margins
shall automatically be adjusted in accordance with such Margin Determination
Certificate, such adjustment to become effective on

                                        4
<PAGE>

the next succeeding Business Day following the receipt by Administrative Agent
of such Margin Determination Certificate, provided that, for the period
commencing on March 1, 2000, the applicable margins shall be determined by
reference to the Margin Determination Certificate most recently received by
Administrative Agent and provided further that, if at any time a Margin
Determination Certificate is not delivered at the tune required pursuant to
subsection 6.1(iv), from the time such Margin Determination Certificate was
required to be delivered until delivery of such Margin Determination
Certificate, such applicable margins shall be the maximum percentage amount for
the relevant Loan set forth above."

1.3 Amendment to Subsection 7.5: Restricted Junior Payments.

      Subsection 7.5 of the Credit Agreement is hereby amended by adding the
following at the end thereof:

      "provided, further, that, so long as no Potential Event of Default or
Event of Default has occurred and is continuing or would be caused thereby, on
or prior to December 1, 2000, Company may pay cash dividends on the Preferred
Stock aggregating not in excess of $7.0 million."

1.4 Amendment to Subsection 7.8: Consolidated Capital Expenditures.

      Subsection 7.8 of the Credit Agreement is hereby amended by deleting the
number "10.0" in the second column of the table set forth therein opposite
"1999" and inserting "15.0" in lieu thereof.

1.5 Amendment to Exhibits and Schedules.

      Exhibit VI to the Credit Agreement is hereby amended by deleting it in its
entirety and inserting Exhibit VI hereto in lieu thereof.

      Schedule 5.1 to the Credit Agreement is hereby amended by deleting it in
its entirety and inserting Schedule 5.1 hereto in lieu thereof.

      Schedule 5.6 to the Credit Agreement is hereby amended by deleting it in
its entirety and inserting Schedule 5.6 hereto in lieu thereof

Section 2. CONSENT

            Subject to the terms and conditions set forth herein and in reliance
on the representations and warranties of Borrowers herein contained, Lenders
hereby (a) consent to the Acquisition and (b) agree that Company's and its
Subsidiaries' ability to make Investments and make Consolidated Capital
Expenditures after the Second Amendment Effective Date pursuant to the terms of
the Credit Agreement shall not be affected by this Consent or the Acquisition.

                                       5
<PAGE>

Section 3. LIMITATION OF CONSENT

            Without limiting the generality of the provisions of subsection 12.6
of the Credit Agreement, the consent set forth in Section 2 shall be limited
precisely as written and is provided solely with respect to the Acquisition on
the terms and conditions described above and set forth in the Acquisition
Agreements, and nothing in this Amendment shall be deemed to constitute a waiver
of compliance by Borrowers with respect to (i) subsection 7.3, 7.7 or 7.8 of the
Credit Agreement in any other instance or (ii) any other term, provision or
condition of the Credit Agreement or any other instrument or agreement referred
to therein.

            Except as expressly set forth herein, the terms, provisions and
conditions of the Credit Agreement and the other Loan Documents shall remain in
full force and effect and in all other respects are hereby ratified and
confirmed.

Section 4. CONDITIONS TO EFFECTIVENESS

            Section 1 and Section 2 of this Amendment shall become effective
only upon the effectiveness of this Amendment as provided in Section 6 and upon
satisfaction of the following conditions precedent (the date of satisfaction of
such conditions being referred to herein as the "Second Amendment Effective
Date"). Company shall deliver to Administrative Agent the following:

      1. Resolutions of the Board of Directors of (a) Company, approving and
authorizing the Acquisition, the issuance of the Preferred Stock and the
execution, delivery, and performance of this Amendment, certified as of the
Second Amendment Effective Date by the corporate secretary or an assistant
secretary and (b) MSL Overseas, approving and authorizing the execution,
delivery and performance of the Amendment, certified as of the Second Amendment
Effective Date by its managing director, in each case as being in full force and
effect without modification or amendment;

      2. Signature and incumbency certificates of the officers, managing
director or proxyholder, as the case may be, of each Borrower executing this
Amendment;

      3. The opinions of counsel to Company and counsel to MSL Overseas in form
and substance satisfactory to the Agents and their counsel; and

      4. Receipt by Administrative Agent, on behalf of each Lender who executes
and delivers a signature page to this Second Amendment on or prior to November
23, 1999, of a fee equal to one-fourth of one percent (.25%) of the sum of such
Lender's Revolving Exposure and Term Loan Exposure.

                                       6
<PAGE>

Section 5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS

            In order to induce Lenders to enter into this Amendment, each
Borrower hereby represents, warrants and agrees that after giving effect to this
Amendment:

                  (a) as of the date hereof, there exists no Event of Default or
            Potential Event of Default under the Credit Agreement;

                  (b) all representations and warranties contained in the Credit
            Agreement and the other Loan Documents are true, correct and
            complete in all material respects on and as of the date hereof
            except to the extent such representations and warranties
            specifically relate to an earlier date, in which case they were
            true, correct and complete in all material respects on and as of
            such earlier date;

                  (c) as of the date hereof, each Borrower has performed all
            agreements to be performed on its part as set forth in the Credit
            Agreement, unless performance of any such agreements has been
            previously waived;

                  (d) a true, correct and complete copy of the Acquisition
            Agreements, certified by an officer of Company, will be provided to
            Agents on or prior to the closing of the Acquisition; and

                  (e) as soon as practicable after the execution of this
            Amendment and the closing of the Acquisition, Company will take all
            necessary action to (i) ensure that the Liens securing the
            Obligations under the Credit Agreement remain First Priority Liens,
            and (ii) comply with the provisions of subsections 6.8 and 6.9 of
            the Credit Agreement.

Section 6. COUNTERPARTS; EFFECTIVENESS

            This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Amendment, subject to the provisions of Section 4 hereof, shall
become effective upon the execution of counterparts hereof by Company, MSL
Overseas, Administrative Agent, Collateral Agent, Syndication Agent, Sub-Agent
and by Requisite Lenders and, in each case, receipt by Company, MSL Overseas,
Administrative Agent, Collateral Agent, Syndication Agent and Sub-Agent of
written notification of such execution and authorization of delivery thereof.

                                       7
<PAGE>

Section 7. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND OTHER LOAN
           DOCUMENTS

            On and after the Second Amendment Effective Date:

                  (a) each reference in the Credit Agreement to "this
            Agreement", "hereunder", "hereof", "herein" or words of like import
            referring to the Credit Agreement, and each reference in the other
            Loan Documents to the "Credit Agreement", "thereunder", "thereof" or
            words of like import referring to the Credit Agreement shall mean
            and be a reference to the Credit Agreement as amended hereby;

                  (b) except as specifically amended by this Amendment, the
            Credit Agreement and the other Loan Documents shall remain in full
            force and effect and are hereby ratified and confirmed; and

                  (c) the execution, delivery and performance of this Amendment
            shall not, except as expressly provided herein, constitute a waiver
            of any provision of, or operate as a waiver of any right, power or
            remedy of Collateral Agent, Administrative Agent, or any of the
            Lenders under the Credit Agreement or any of the other Loan
            Documents.

Section 8. GOVERNING LAW

            THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

Section 9. ACKNOWLEDGMENT AND CONSENT BY GUARANTORS

            Each guarantor listed on the signature pages hereof ("Guarantors")
hereby acknowledges that it has read this Amendment and consents to the terms
thereof and further hereby confirms and agrees that, notwithstanding the
effectiveness of this Amendment, the obligations of each Guarantor under its
applicable Guaranty shall not be impaired or affected and the applicable
Guaranty is, and shall continue to be, in full force and effect and is hereby
confirmed and ratified in all respects.

                [the remainder of page intentionally left blank]

                                       8
<PAGE>

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

                                        COMPANY:

                                        MANUFACTURERS' SERVICES LIMITED

                                        By:
                                            ---------------------------

                                        Title:
                                              -------------------------

                                        MSL OVERSEAS:

                                        MSL OVERSEAS FINANCE B.V.

                                        By:
                                            ---------------------------

                                        Title:
                                              -------------------------

                                        BANK OF AMERICA, N.A.
                                        (successor to Bank of America NT&SA),
                                        as Administrative Agent and as
                                        Collateral Agent

                                        By: /s/ Liliana Claar
                                            ---------------------------

                                               LILIANA CLAAR
                                        Title: Vice President
                                              -------------------------

                                        BANK OF AMERICA INTERNATIONAL
                                        LIMITED, as Sub-Agent

                                        By: /s/ Julie A. Chadney
                                            ---------------------------

                                               JULIE A. CHADNEY
                                        Title: Vice President
                                              -------------------------

                                      S-1
<PAGE>

                                        LENDERS:

                                        BANK OF AMERICA, N.A.,
                                        (successor to Bank of America NT&SA),
                                        individually and as Issuing Lender

                                        By: /s/ Robert Kosche
                                            ---------------------------

                                        Title: Vice President
                                              -------------------------

                                        DLJ CAPITAL FUNDING, INC.,
                                        individually and as Syndication Agent

                                        By: /s/ Eric Swanson
                                            ---------------------------

                                        Title: Managing Director
                                              -------------------------

                                        FLEET NATIONAL BANK

                                        By: /s/
                                            ---------------------------

                                        Title: Vice President
                                              -------------------------

                                        ERSTE BANK

                                        By: /s/ Anca Trifan
                                            ---------------------------

                                               ANCA TRIFAN
                                        Title: Vice President
                                              -------------------------

                                        By: /s/ John S. Runnion
                                            ---------------------------

                                               JOHN S. RUNNION
                                        Title: First Vice President
                                              -------------------------

                                      S-2
<PAGE>

                                        BLACK DIAMOND CLO 1998-1 LTD.

                                        By: /s/ John H. Cullinane
                                            ---------------------------

                                               JOHN H. CULLINANE
                                        Title: DIRECTOR
                                              -------------------------

                                        BDC FINANCE LLC

                                        By:
                                            ---------------------------

                                        Title:
                                              -------------------------

                                        BLACK DIAMOND INTERNATIONAL
                                        FUNDING, LTD

                                        By: /s/ David Dyer
                                            ---------------------------

                                               DAVID DYER
                                        Title: DIRECTOR
                                              -------------------------

                                        CANADIAN IMPERIAL BANK OF
                                        COMMERCE

                                        By: /s/
                                            ---------------------------

                                        Title:
                                              -------------------------

                                        PAM CAPITAL FUNDING, LP
                                        By: Highland Capital Management, L.P.
                                           as Collateral Manager

                                        By: /s/ Mark K. Okada
                                            ---------------------------

                                        Title: Executive Vice President
                                              -------------------------

                                      S-3
<PAGE>

                                        SRV-HIGHLAND INC.

                                        By: /s/ Kelly C. Walker
                                            ---------------------------

                                               KELLY C. WALKER
                                        Title: VICE PRESIDENT
                                              -------------------------

                                        HIGHLAND LEGACY LIMITED
                                        By: Highland Capital Management, L.P.
                                            as Collateral Manager

                                        By: /s/ Mark K. Okada
                                            ---------------------------

                                        Title: Executive Vice President
                                              -------------------------

                                       S-4
<PAGE>

                                        GUARANTORS:

                                        MANUFACTURERS' SERVICES LIMITED

                                        By: /s/ [ILLEGIBLE]
                                            ---------------------------

                                        Title: VP & TREASURER
                                              -------------------------

                                        MANUFACTURERS' SERVICES CENTRAL
                                        U.S. OPERATIONS, INC.

                                        By: /s/ Dale Johnson
                                            ---------------------------

                                        Title: EXEC. V.P.
                                              -------------------------

                                        MANUFACTURERS' SERVICES WESTERN
                                        U.S. OPERATIONS, INC

                                        By: /s/ Dale Johnson
                                            ---------------------------

                                        Title: EXEC. V.P.
                                              -------------------------

                                        MANUFACTURERS' SERVICES ATHLONE
                                        LIMITED

                                        By: /s/ Dale Johnson
                                            ---------------------------

                                        Title: DIRECTOR
                                              -------------------------

                                        MSL OVERSEAS FINANCE BV

                                        By: /s/ Dale Johnson
                                            ---------------------------

                                        Title: MANAGING DIRECTOR
                                              -------------------------

                                      S-5
<PAGE>

                                        MANUFACTURERS' SERVICES
                                        SINGAPORE PTE LTD

                                        By: /s/ Dale Johnson
                                            ---------------------------

                                        Title: DIRECTOR
                                              -------------------------

                                        GLOBAL MANUFACTURERS' SERVICES
                                        VALENCIA, SA

                                        By: /s/ Dale Johnson
                                            ---------------------------

                                        Title: SOLE ADMINISTRATOR
                                              -------------------------

                                      S-6

<PAGE>

                                 SCHEDULE 5.1
                                      TO
               SECOND AMENDMENT TO CREDIT AGREEMENT AND CONSENT
                                    AND TO
                          CREDIT AGREEMENT AS AMENDED

                            SUBSIDIARIES OF COMPANY

1.  Manufacturers' Services Central US Operations, Inc.        Minnesota

2.  Manufacturers' Services Western US Operations, Inc.        California

3.  MSL Japan Ltd                                              Japan

4.  MSL Offshore Finance BV                                    Netherlands

5.  MSL Overseas Finance BV                                    Netherlands

6.  MSL SPV Spain, Inc.                                        Delaware

7.  Global Manufacturers' Services Valencia SA                 Spain

8.  MSL SPV Ireland, Inc.                                      Delaware

9.  Manufacturers' Services Athlone Ltd                        Ireland

10. Manufacturers' Services Singapore Pte Ltd                  Singapore

11. MSL Technology Services (Malaysia) Sdn Bhd                 Malaysia

12. Manufacturers' Services Salt Lake City Operations, Inc.    Delaware

Each subsidiary is 100% owned, either directly or indirectly, by
Manufacturers' Services Limited.

<PAGE>

                                 SCHEDULE 5.6
                                      TO
               SECOND AMENDMENT TO CREDIT AGREEMENT AND CONSENT
                                    AND TO
                         CREDIT AGREEMENT AS AMENDED

                                  LITIGATION

      On or about October 29, 1998, Lockheed Martin Corporation commenced an
action in the Circuit Court for Montgomery County Maryland, entitled LOCKHEED
MARTIN CORPORATION v. DLJ MERCHANT BANKING II, INC., DLJ MERCHANT BANKING
PARTNERS, DLJ MERCHANT BANKING, INC., DLJ MERCHANT BANKING PARTNERS, L.P. AND
DLJ MERCHANT BANKING PARTNERS II, L.P., Case No 193819. The complaint alleges
that the Company breached an August 10, 1997 agreement to acquire a
subsidiary of plaintiff, Lockheed Martin Commercial Electronics Company
("LMCE"), and also breached an implied obligation of good faith and fair
dealing in exercising its contractual right to terminate the agreement. The
complaint alleges that the purchase price for the acquisition, inclusive of
real estate, was $140 million, subject to certain purchase price adjustments,
and, subsequent to the alleged breach, plaintiff sold the subsidiary,
exclusive of real estate, for $70 million. The defendants moved to discuss
the complaint, or in the alternative, for summary judgment, on January 15,
1999. Argument on this motion has been scheduled for January 2000.
Proceedings and discovery to date have largely involved preliminary matters
relating to jurisdiction and revenue. There has been no discovery to date on
issues relating to the merits of the complaint. The Company commends that a
material adverse change in LMCE's business allowed the Company to terminate
the agreement.

<PAGE>

                               EXHIBIT VI

                     FORM OF BORROWING BASE CERTIFICATE

                              ---------------

     Reference is made to the Credit Agreement dated as of August 21, 1998,
as amended pursuant to a First Amendment to Credit Agreement and Limited
Waiver, dated as of February 26, 1999, as amended pursuant to a Second
Amendment to Credit Agreement and Consent, dated as of November 23, 1999
(such agreement, as it may be amended, amended and restated, supplemented and
or otherwise modified from time to time, the "CREDIT AGREEMENT"; capitalized
terms used herein without definition shall have the meanings set forth in the
Credit Agreement) by and among Manufacturers' Services Limited, a Delaware
corporation ("COMPANY"), MSL Overseas Finance BV, a Netherlands private
company with limited liability ("MSL OVERSEAS"), the lenders party thereto,
DLJ Capital Funding, Inc., as Syndication Agent, Bank of America, N.A.
(successor to Bank of America National Trust and Savings Association), as
administrative agent for Lenders, as letter of credit issuing bank, and as
collateral agent and Bank of America International Limited, as Sub-Agent.

     Pursuant to Section 6.1(i) of the Credit Agreement, the undersigned
treasurer of the Company hereby certifies that attached hereto as Annexes A,
B [and C] are a true and accurate calculation of the Company Borrowing Base
(Annex A), the MSL Overseas Borrowing Base (Annex B) [and the Foreign Borrowing
Base (Annex C)] as of               ,      determined in accordance with the
requirements of the Credit Agreement.

     IN WITNESS WHEREOF, the undersigned has caused this certificate to be
duly executed as of                 ,      .

                                          MANUFACTURERS' SERVICES LIMITED

                                          By
                                            ---------------------------
                                          Title: Treasurer

<PAGE>

                                ANNEX A

                      TO BORROWING BASE CERTIFICATE

                           -------------, -----

I.    ACCOUNTS RECEIVABLE OF COMPANY AND
      DOMESTIC SUBSIDIARIES

<TABLE>
<CAPTION>

      <S>   <C>                                              <C>

        1.   Total Accounts Receivable                        $
                                                                ------------

        2.   Less: Accounts Receivable which remain unpaid
             for more than 90 days after the due date         $(            )
                                                                ------------

        3.   Less: Other ineligible Accounts Receivable
             according to the definition of "Eligible
             Accounts Receivable"                             $(            )
                                                                ------------

        4.   Accounts Receivable determined ineligible by
             Requisite Lenders                                $(            )
                                                                ------------

        5.   Eligible Accounts Receivable
             (I.1 LESS I.2 LESS I.3 LESS I.4)                 $
                                                                ------------

        6.   Eligible Accounts Receivable due from IBM
             that are unpaid for 30 days or less from the
             due date ("IBM Eligible Accounts Receivable")    $
                                                                ------------

        7.   Percentage of IBM Eligible Accounts Receivable
             to be included in Borrowing Base                         90%

        8.   IBM Eligible Accounts Receivable to be
             included in Borrowing Base (I.6 TIMES I.7)        $
                                                                ------------

        9.   Eligible Accounts Receivable other than those
             specified in I.6                                  $
                                                                ------------

        10.  Percentage of Eligible Accounts Receivable
             specified in I.9 above to be included in
             Borrowing Base                                           80%

        11.  Eligible Accounts Receivable other than those
             specified in I.6 above to be included in
             Borrowing Base (I.9 TIMES I.10)                   $
                                                                ------------

        12.  Total Eligible Accounts Receivable to be
             included in Borrowing Base (I.8 PLUS I.11)        $
                                                                ------------

</TABLE>

                                       2

<PAGE>

II.   INVENTORIES OF THE COMPANY AND DOMESTIC
      SUBSIDIARIES

      [A. PRIOR TO DECEMBER 31, 1999]

<TABLE>
<CAPTION>

   <S>    <C>                                            <C>

        1.   [Total Inventory                                 $
                                                               -------------

        2.   Less ineligible inventory according to
             the definition of "Eligible Inventory"           $(            )
                                                                ------------

        3.   Otherwise ineligible inventory determined by
             Administrative Agent to be acceptable for
             borrowing purposes                               $
                                                               -------------

        4.   Eligible Inventory
             (II.1 LESS II.2 PLUS II.3)                       $
                                                               -------------

        5.   Percentage of Eligible Inventory to be
             included in the Borrowing Base                         45%

        6.   Preliminary Eligible Inventory to be included
             in the Borrowing Base (II.4 TIMES II.5)          $
                                                               -------------

        7.   Adjustment, if any, to ensure that Eligible
             Inventory does not exceed 60% of Borrowing
             Base                                             $(            )
                                                                ------------

        8.   Eligible Inventory to be included in Borrowing
             Base (II.6 MINUS II.7)]                          $
                                                               -------------

      [B. AFTER DECEMBER 31, 1999]

        1.   [Total Inventory                                 $
                                                               -------------

        2.   Less ineligible inventory according to
             the definition of "Eligible Inventory"           $(            )
                                                                ------------

        3.   Otherwise ineligible inventory determined by
             Administrative Agent to be acceptable for
             borrowing purposes                               $
                                                               -------------

        4.   Eligible Inventory
             (II.1 LESS II.2 PLUS II.3)                       $
                                                               -------------

        5.   Percentage of Eligible Inventory to be
             included in the Borrowing Base                         35%

</TABLE>

                                       3

<PAGE>

<TABLE>
<S>         <C>                                              <C>

        6.   Preliminary Eligible Inventory to be included
             in the Borrowing Base
             (II.4 TIMES II.5)                                $
                                                               -------------

        7.   Adjustment, if any, to ensure that Eligible
             Inventory does not exceed 50% of Borrowing Base  $(            )
                                                               -------------

        8.   Eligible Inventory to be included in Borrowing
             Base (II.6 MINUS II.7)]                          $
                                                               --------------

III.  COMPANY BORROWING BASE

        1.   Eligible Accounts Receivable plus Eligible
             Inventory (I.12 PLUS II.8)                       $
                                                               --------------

        2.   Less Term Loans advanced to Company              $(            )
                                                               -------------

        3.   Company Borrowing Base
             (III.1 MINUS III.2)
                                                               --------------

IV.   AVAILABLE COMPANY BORROWING BASE

        1.   Aggregate principal amount of outstanding
             Revolving Loans of Company                       $
                                                               --------------

        2.   Letter of Credit usage by the Company            $
                                                               --------------

        3.   Total Utilization of Revolving Loan Commitments
             by Company (IV.1 PLUS IV.2)                      $
                                                               --------------

        4.   Total Utilization of Revolving Loan Commitments
             by MSL Overseas (B.IV.3)                         $
                                                               --------------

        5.   $75,000,000 minus Total Utilization of Revolving
             Loan Commitments by MSL Overseas                 $
                                                               --------------

        6.   Available Company Borrowing Base
             (LESSER OF III.3 and IV.5)                       $
                                                               --------------
</TABLE>

<PAGE>

<TABLE>
<S>      <C>                                                       <C>
V.    APPLICABLE CREDIT EXTENSION TO COMPANY

      1.  Credit Extension Available to Company
         (IV.6 MINUS IV.3)                                         $
                                                                   -----------
</TABLE>

<PAGE>

                                   ANNEX B

                        TO BORROWING BASE CERTIFICATE

                                          ,
                            --------------  ----

<TABLE>
<S>      <C>                                                        <C>
I.   ACCOUNTS RECEIVABLE OF MSL OVERSEAS AND FOREIGN SUBSIDIARIES*

     1.  Accounts Receivable

           MSL Ireland                                              $
                                                                    -----------
           MSL Spain                                                $
                                                                    -----------
           MSL Singapore                                            $
                                                                    -----------

         Total Accounts Receivable                                  $
                                                                    -----------
     2.  Less: Accounts Receivable which remain unpaid for
         more than 90 days after the due date                       $(         )
                                                                    -----------

     3.  Less other ineligible Accounts Receivable according
         to the definition of "Eligible Accounts Receivable"        $(         )
                                                                    -----------

     4.  Accounts Receivable determined ineligible by
         Requisite Lenders                                          $(         )
                                                                    -----------

     5.  Eligible Accounts Receivable
         (I.1 LESS I.2 LESS I.3 LESS I.4)                           $(         )
                                                                    -----------

     6.  Eligible Accounts Receivable due from IBM that are
         unpaid for 30 days or less from the due date ("IBM
         Eligible Accounts Receivable")                             $
                                                                    -----------

     7.  Percentage of IBM Eligible Accounts Receivable to
         be included in Borrowing Base                                  90%

     8.  IBM Eligible Accounts Receivable to be included in
         Borrowing Base (I.6 TIMES I.7)                             $
                                                                    -----------

     9.  Eligible Accounts Receivable other than those
         specified in I.6 above                                     $
                                                                    -----------
</TABLE>

-------------------
* All Accounts Receivable and Inventory of MSL Malaysia are ineligible.

                                       6

<PAGE>

<TABLE>
<S>      <C>                                                        <C>
    10.  Percentage of Eligible Accounts Receivable specified in
         I.9 above to be included in Borrowing Base                         80%

    11.  Eligible Accounts Receivable other than those specified
         in I.6 above to be included in Borrowing Base
         (I.9 TIMES I.10)                                           $
                                                                    -----------

    12.  Total Eligible Accounts Receivable to be included in
         Borrowing Base (I.8 PLUS I.11)                             $
                                                                    -----------

II. INVENTORIES OF MSL OVERSEAS AND COMPANY'S FOREIGN SUBSIDIARIES

    [A. PRIOR TO DECEMBER 31, 1999]

     1.  [Inventory

         MSL Ireland                                                $
                                                                    -----------
         MSL Spain                                                  $
                                                                    -----------
         MSL Singapore                                              $
                                                                    -----------

         Total Inventory                                            $
                                                                    -----------

     2.  Less ineligible inventory according to the definition
         of "Eligible Inventory"                                    (          )
                                                                    -----------

     3.  Otherwise ineligible Inventory determined by
         Administrative Agent to be acceptable for borrowing
         purposes                                                   $
                                                                    -----------

     4.  Eligible Inventory
         (II.1 LESS II.2 PLUS II.3)                                 $
                                                                    -----------

     5.  Percentage of Eligible Inventory to be included in
         Borrowing Base                                                  45%

     6.  Preliminary Eligible Inventory to be included in
         Borrowing Base (II.4 TIMES II.5)                           $
                                                                    -----------

     7.  Adjustment, if any, to ensure that Eligible Inventory
         does not exceed 60% of Borrowing Base                      $(         )
                                                                    -----------

     8.  Eligible Inventory to be included in Borrowing Base
         (II.6 LESS II.7)                                           $         ]
                                                                    -----------
                                                                    -----------

</TABLE>

                                       7

<PAGE>

<TABLE>
<S>      <C>                                                        <C>
[B. AFTER DECEMBER 31, 1999]
     1.  [Inventory

         MSL Ireland                                                $
                                                                    -----------
         MSL Spain                                                  $
                                                                    -----------
         MSL Singapore                                              $
                                                                    -----------

         Total Inventory                                            $
                                                                    -----------

     2.  Less ineligible inventory according to the definition
         of "Eligible Inventory"                                    $(         )
                                                                    -----------

     3.  Otherwise ineligible Inventory determined by
         Administrative Agent to be acceptable for borrowing
         purposes
                                                                    -----------

     4.  Eligible Inventory
         (II.1 LESS II.2 PLUS II.3)                                 $
                                                                    -----------

     5.  Percentage of Eligible Inventory to be included in
         Borrowing Base                                                 35%

     6.  Preliminary Eligible Inventory to be included in
         Borrowing Base (II.4 TIMES II.5)                           $
                                                                    -----------

     7.  Adjustment, if any, to ensure that Eligible Inventory
         does not exceed 50% of Borrowing Base                      $(         )
                                                                    -----------

     8.  Eligible Inventory to be included in Borrowing Base
         (II.6 LESS II.7)                                           $          ]
                                                                    -----------
                                                                    -----------

III. MSL OVERSEAS BORROWING BASE
     1.  Eligible Accounts Receivable plus Eligible Inventory
         (I.7 PLUS II.8)                                            $
                                                                    -----------

     2.  Less Term Loans advanced to MSL Overseas                   (          )
                                                                    -----------

     3.  MSL Overseas Borrowing Base (III.1 MINUS III.2)            $
                                                                    -----------
                                                                    -----------

</TABLE>

                                       8
<PAGE>

<TABLE>
<S>      <C>                                                        <C>
IV.  APPLICABLE MSL OVERSEAS BORROWING BASE
     1.  Aggregate principal amount of outstanding
         Revolving Loans of MSL Overseas                            $
                                                                    -----------

     2.  Letter of Credit usage by MSL Overseas                     $
                                                                    -----------

     3.  Total Utilization of Revolving Loan Commitments
         by MSL Overseas (IV.1 PLUS IV.2)                           $
                                                                    -----------

     4.  Total Utilization of Revolving Loan Commitments
         by Company (A.IV.3)                                        $
                                                                    -----------

     5.  $75,000,000 MINUS Total Utilization of Revolving
         Loan Commitments by Company                                $
                                                                    -----------

     6.  Available MSL Overseas Borrowing Base (LESSER OF
         III.3 and IV.5)                                            $
                                                                    -----------
                                                                    -----------

V.   APPLICABLE CREDIT EXTENSION TO MSL OVERSEAS

     1.  Credit Extension Available to Company
         (IV.6 MINUS IV.3)                                          $
                                                                    -----------
                                                                    -----------

</TABLE>

                                       9
<PAGE>

                                     ANNEX C

                          TO BORROWING BASE CERTIFICATE

                              --------------, -----

I. ACCOUNTS RECEIVABLE OF FOREIGN SUBSIDIARY

   1.  Total Accounts Receivable                                  $
                                                                  ----------

   2.  Less: Accounts Receivable which remain unpaid for
       more than 90 days after the due date                       $(        )
                                                                  ----------

   3.  Less: Other ineligible Accounts Receivable according
       to the definition of "Eligible Accounts Receivable"        $(        )
                                                                  ----------

   4.  Accounts Receivable determined ineligible by
       Requisite Lenders                                          $(        )
                                                                  ----------

   5.  Eligible Accounts Receivable
       (I.1 LESS I.2 LESS I.3 LESS I.4)                           $
                                                                  ----------

   6.  Eligible Accounts Receivable due from IBM that are
       unpaid for 30 days or less from the due date ("IBM
       Eligible Accounts Receivable")                             $
                                                                  ----------

   7.  Percentage of IBM Eligible Accounts Receivable to
       be included in Borrowing Base                                  90%

   8.  IBM Eligible Accounts Receivable to be included in
       Borrowing Base (I.6 TIMES I.7)                             $
                                                                  ----------

   9.  Eligible Accounts Receivable other than those
       specified in I.6                                           $
                                                                  ----------

   10. Percentage of Eligible Accounts Receivable specified
       in I.9 above to be included in Borrowing Base                  80%

   11. Eligible Accounts Receivable other than those
       specified in I.6 above to be included in Borrowing
       Base (I.9 TIMES I.10)                                      $
                                                                  ----------

   12. Total Eligible Accounts Receivable to be included in
       Borrowing Base (I.8 PLUS I.11)                             $
                                                                  ----------

                                 10
<PAGE>

II. INVENTORY OF FOREIGN SUBSIDIARY

     [A. PRIOR TO DECEMBER 31, 1999]

     1. [Total Inventory                                          $
                                                                  ----------

     2. Less ineligible inventory according to the definition
        of  "Eligible Inventory"                                  $(        )
                                                                  ----------
     3. Otherwise ineligible inventory determined by
        Administrative Agent to be acceptable for borrowing
        purposes                                                  $
                                                                  ----------

     4. Eligible Inventory
        (II.1 LESS II.2 PLUS II.3)                                $
                                                                  ----------

     5. Percentage of Eligible Inventory to be included in
        the Borrowing Base                                           45%

     6. Eligible Inventory to be included in the Borrowing
        Base
        (II.4 TIMES II.5)]                                        $
                                                                  ----------

    [B. AFTER DECEMBER 31, 1999]

     1. [Total Inventory                                          $
                                                                  ----------

     2. Less ineligible inventory according to the definition
        of "Eligible Inventory"                                   $(       )
                                                                  ----------

     3. Otherwise ineligible inventory determined by
        Administrative Agent to be acceptable for borrowing
        purposes                                                  $
                                                                  ----------

     4. Eligible Inventory
        (II.1 LESS II.2 PLUS II.3)                                $
                                                                  ----------

     5. Percentage of Eligible Inventory to be included in
        the Borrowing Base                                            35%

     6. Eligible Inventory to be included in the Borrowing
        Base
        (II.4 TIMES II.5)]                                        $
                                                                  ----------

                                       11

<PAGE>

III. FOREIGN SUBSIDIARY BORROWING BASE

     1. Eligible Accounts Receivable plus Eligible Inventory
        (I.12 plus II.8)                                          $
                                                                  ----------

     2. Less Term Loans allocable to Foreign Subsidiary           $(        )
                                                                  ----------

     3. Foreign Subsidiary Borrowing Base
        (III.1 MINUS III.2)
                                                                  ----------

IV.  APPLICABLE CREDIT EXTENSION TO FOREIGN SUBSIDIARY

     1. Aggregate principle amount of Overseas Subsidiary
        Loans allocable to Foreign Subsidiary                     $
                                                                  ----------

     2. Available Foreign Subsidiary Borrowing Base
        (III.3 MINUS IV.1)                                        $
                                                                  ----------

                                  12

<PAGE>

                              [LETTERHEAD]

November 24, 1999                                              OUR FILE NUMBER
VIA FACSIMILE                                                      218.107-017
-------------
TO THE PERSONS LISTED ON                                  WRITER'S DIRECT DIAL
THE FACSIMILE COVER SHEET                                         213-430-7492

             Re: MANUFACTURERS' SERVICES LIMITED       WRITER'S E-MAIL ADDRESS
                 CREDIT AGREEMENT - SECOND                   cwessling@omm.com
                 -------------------------
                 AMENDMENT
                 ---------

Ladies and Gentlemen:

     Please be advised that as of the date hereof all conditions precedent to
the effectiveness of that certain Second Amendment to Credit Agreement and
Consent (the "Amendment"), entered into by and among Manufacturers' Services
Limited, a Delaware corporation (the "Company"), MSL Overseas Finance, B.V.,
a Netherlands private company with limited liability ("MSL Overseas"), the
financial institutions listed on the signature pages thereof, DLJ Capital
Funding, Inc., as syndication agent, Bank of America, N.A. (successor to Bank
of America NT&SA), as administrative agent, issuing lender and collateral
agent, and Bank of America International Limited, as sub-agent, amending that
certain Credit Agreement dated as of August 21, 1998, as amended pursuant to
a First Amendment to Credit Agreement and Limited Waiver, dated as of
February 26, 1999, by and among Company, MSL Overseas, the financial
institutions listed on the signature pages thereof, DLJ Capital Funding,
Inc., as syndication agent, Bank of America, N.A. (successor to Bank of
America NT&SA), as administrative agent, issuing lender and collateral agent,
and Bank of America International Limited, as sub-agent contained in Section 4
of the Amendment have been satisfied and the Amendment is effective.

     Please find attached change pages to the Amendment, marked against the
version you previously received and reflecting certain changes made to
conform the Amendment to the senior exchangeable preferred stock documents.
Hard copies of the executed Amendment will be distributed next week.

     Please do not hesitate to contact me in the meantime if you should have
any questions.

                                            Very truly yours,

                                            /s/CAROLYN WESSLING
                                               --------------------------
                                               Carolyn Wessling
                                               for O'MELVENY & MYERS LLP

Attachments

cc:   Michael Newman, Esq.
LA1872703.1<PAGE>

                              EMPLOYMENT AGREEMENT

      EMPLOYMENT AGREEMENT dated as of January 20, 1995 by and between
Manufacturers' Services Limited, a Delaware corporation (the "Company"), and
Kevin C. Melia ("Executive").

      WHEREAS, Executive is currently serving as Chairman of the Board, Chief
Executive Officer and President of the Company;

      WHEREAS, the Company has entered into a Securities Purchase Agreement
dated as of January 20, 1995 (the "Securities Purchase Agreement") by and among
certain investors denominated collectively therein as the "DLJ Entities",
Executive and certain other investors denominated collectively therein as the
"Founders" and the Company;

      WHEREAS, Executive is one of the Founders and Executive and the Company
wish to enter into this Agreement, including without limitation the restrictive
covenants set forth in Section 6, in connection with the sale of Common Stock
(as hereinafter defined) to the DLJ Entities pursuant to the Securities Purchase
Agreement;

      WHEREAS, the Company considers it essential to its best interest and the
best interest of its stockholders to foster the continued employment of
Executive by the Company from and after the date of the closing of such purchase
of Common Stock; and

      WHEREAS, Executive is willing so to continue his employment on the
terms hereinafter set forth in this Agreement;

      NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:

      1. Definitions. (a) As used herein, the following terms shall have the
meanings set forth below:

      "Agreement" means this Employment Agreement.

      "Base Salary" has the meaning set forth in Section 4.1 hereof.

      "Board" means the Board of Directors of the Company.

      "Bonus" has the meaning set forth in Section 4.2 hereof.

      "Cause" means (i) Executive's Willful and continued failure substantially
to perform his duties as described herein (other than (x) as a result of total
or partial incapacity due to physical or mental illness, (y) for Good Reason, or
(z) as a result of the Company's material

<PAGE>

breach of its obligations under this Agreement) following the notice and cure
period provided for in Section 5.1, (ii) Executive's dishonesty in the
performance of his duties or (iii) the conviction of Executive of, or the entry
of a plea of guilty by Executive to, a felony involving the Executive's personal
conduct under the laws of the United States or any state thereof or conviction
of, or the entry of a plea of guilty to, a crime involving the Executive's
personal conduct in any other jurisdiction in which the Company does business
which would constitute a felony under the laws of the United States or any state
thereof if such crime had been committed within the jurisdiction of the United
States or any state thereof.

      "Code" means the Internal Revenue Code of 1986, as amended.

      "Common Stock" means the common stock, par value $.001 per share, of the
Company.

      "Company" means Manufacturers' Services Limited, a Delaware corporation.

      "Compensation Committee" means the Compensation Committee of the Board.

      "Confidential Information" has the meaning set forth in Section 7 hereof.

      "Disability" means physical or mental incapacity resulting in Executive
being unable for a period of six (6) consecutive months or for an aggregate of
six (6) months in any twenty-four (24) consecutive month period to perform his
duties. Any question as to the existence of the Disability of Executive as to
which Executive and the Company cannot agree shall be determined in writing by a
qualified independent physician mutually acceptable to Executive and the
Company. If Executive and the Company cannot agree as to a qualified independent
physician, each shall appoint such a physician and those two physicians shall
select a third who shall make such determination in writing. The determination
of Disability made in writing to the Company and Executive shall be final and
conclusive for all purposes of this Agreement.

      "Effective Date" means January 20, 1995.

      "Employment Term" has the meaning set forth in Section 2 hereof.

      "Executive" means Kevin C. Melia.

      "Fair Market Value" means, with respect to any share of Common Stock the
right to purchase or sell which is granted hereunder, the fair market value of
such share of Common Stock at the time of exercise of such right to purchase or
sell as determined by the Board. If Executive shall object to any such
determination, the Board shall retain an independent appraiser reasonably
satisfactory to Executive to determine such fair market value.

                                      -2-
<PAGE>

      "Good Reason" means:

            (i) Executive is not elected or appointed to, or is removed from,
      the positions described in Section 3 hereof for any reason other than for
      Cause or by reason of Executive's death or Disability;

            (ii) Executive is assigned duties and responsibilities that are
      inconsistent, in a material respect, with the scope of duties and
      responsibilities associated with Executive's position as described in
      Section 3 hereof;

            (iii) the Company appoints an employee to a position at the Company
      senior to that of the Executive;

            (iv) the Company requires Executive to relocate to an area more than
      100 miles from Executive's current location;

            (v) breach by the Company of any of its material agreements under
      this Agreement; or

            (vi) a fifty percent (50%) change in ownership (other than as a
      result of a public offering) or a sale of substantially all of the Common
      Stock or substantially all of the assets of the Company to one other
      party.

      "Initial Term" has the meaning set forth in Section 2 hereof.

      "Management Stock Option Plan" means the 1995 Non-Qualified Stock Option
Plan of the Company.

      "Note" means a three year term note bearing interest at the Prime Rate.

      "Notice of Termination" means a written notice which shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision so indicated.

      "Options" means options to purchase capital stock of the Company granted
to Executive pursuant to any stock option plan of the Company.

      "Other Stockholders" has the meaning assigned to such term in the
Stockholders Agreement.

      "Permitted Transferee" has the meaning assigned to Permitted Transferees
of Other Stockholders in the Stockholders Agreement.

                                      -3-
<PAGE>

      "Prime Rate" means the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.

      "Put Right" has the meaning set forth in Section 5.2(c) hereof.

      "Stockholders Agreement" means the Stockholders Agreement dated as of
January 20, 1995 by and among the Company, the Founders and the DLJ Entities.

      "Willful" means, when applied to any action or omission of Executive, that
Executive, in acting or omitting to act, did so without a good faith belief that
such action or omission was in, or was not contrary to, to the best interests of
the Company.

      2. Term of Employment. Subject to the provisions of Sections 5.1 - 5.4
herein, inclusive, Executive shall be employed by the Company for a period
commencing on the Effective Date and ending on the third anniversary thereof
(the "Initial Term"); provided that the Employment Term shall be automatically
extended thereafter until terminated by not less than three months' prior
written notice given by the Company or Executive to the other of its or his, as
the case may be, intent to terminate this Agreement (the Initial Term, together
with any extensions thereof, is hereinafter referred to as the "Employment
Term").

      3. Position. (a) During the term hereof, Executive shall be appointed and
shall serve as Chief Executive Officer and President of the Company and in the
performance of such duties shall report directly to (and only to) the Board.
Subject to applicable law and the overall policy directives of the Board,
Executive shall have complete autonomy with respect to the day-to-day management
of the business and affairs of the Company and shall have all executive powers
and authority which are necessary to enable him to discharge his duties as
President and Chief Executive Officer of the Company.

      (b) During the term of his employment hereunder, Executive shall serve on
the Board and as Chairman of the Board.

      (c) During the term of his employment hereunder, the Company shall not
employ or otherwise retain any other person who is afforded executive
responsibilities equal to or greater than those of Executive.

      (d) During the term of his employment hereunder, Executive shall in good
faith and consistent with his ability, experience and talent perform the duties
set forth in this Section 3 and shall devote all of his productive time and
efforts to the performance of such duties.

                                      -4-
<PAGE>

      4. Compensation

      4.1 Base Salary. The Company shall pay Executive an annual base salary
("Base Salary") at the initial rate of $150,000 to be increased by the Company
to the annual rate of $350,000 in the event that the Company achieves
$75,000,000 in revenues in any one fiscal quarter as reflected in the
consolidated financial statements for such fiscal quarter (such increase to take
effect promptly after the receipt by the Board of the consolidated financial
statements for such fiscal quarter). Base Salary shall be payable in regular
installments in accordance with the Company's usual payment practices but not
less frequently than semi-monthly during the Employment Term. Base Salary shall
be reviewed at least semi-annually on an ongoing basis for adjustment in
accordance with Executive's performance.

      4.2 Bonus. With respect to each fiscal year, all or part of which is
contained in the Employment Term, Executive shall be eligible to receive, in
addition to his Base Salary, a cash bonus (the "Bonus") consisting of (i) a
"Target Bonus" paid quarterly if earned at a rate of up to 50% of his Base
Salary, plus (ii) a "Super Achievement Bonus" paid annually if earned at a rate
of up to an additional 50% of Base Salary. The Target Bonus and Super
Achievement Bonus will be based on the Company achieving a certain percentage of
EBIT for such fiscal year as established in the "Annual Operating Plan" and in
the "DLJ Memo", respectively, as defined and illustrated in Exhibit A, which is
attached hereto and incorporated herein by reference. The Bonus will be payable
promptly following the receipt by the Board of the consolidated audited
financial statements for such fiscal year.

      4.3 Benefits. Executive shall be entitled to participate in all of the
Company's incentive and benefit plans and arrangements, including, without
limitation, all employee incentive and benefit plans or arrangements currently
available or made available in the future by the Company to its senior
executives, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements, but on a basis no less
favorable than that afforded to any other director, officer or employee of the
Company. The Company shall also provide to Executive all health, major medical,
hospitalization and disability insurance on the same terms as such benefits are
provided to other senior executives of the Company. Executive will be entitled
to four (4) weeks paid vacation for each twelve (12) month period following the
Effective Date. Unused vacation from any year may be utilized only in the next
succeeding year, and in no event will Executive receive cash compensation for
unused vacation from a prior year.

      4.4 Business Expenses. Reasonable travel, entertainment and other business
expenses incurred by Executive in the performance of his duties hereunder shall
be reimbursed by the Company in accordance with Company policies.

      5. Termination. Executive's employment may be terminated by either party
at any time. In the event of any such termination, the rights of the parties
will be determined as set forth in this Section 5.

                                      -5-
<PAGE>

      5.1 Termination For Cause by the Company. (a) If Executive's employment is
terminated by the Company for Cause, he shall be entitled to receive his Base
Salary through the date of termination. All vested and unvested Options held by
Executive, any Permitted Transferee of Executive or any trust for the benefit
thereof at the time of termination will terminate upon termination of
Executive's employment pursuant to this Section 5.1. All other benefits due
Executive following termination of Executive's employment pursuant to this
Section 5.1 shall be determined in accordance with the plans, policies and
practices of the Company. If Executive's employment is proposed to be terminated
for Cause pursuant to clause (i) of the definition of Cause, the Company shall
give Executive written notice of the event or circumstances constituting Cause
and thirty (30) days from the date of such notice to cure such event or
circumstances, if curable.

      (b) In the event of termination of Executive for Cause, the Company shall
have the right to purchase from Executive, any Permitted Transferee of Executive
or any trust for the benefit thereof all shares of Common Stock then owned by
Executive, any Permitted Transferee of Executive or any trust for the benefit
thereof at a price per share payable, at the option of the Company, in cash or a
Note, in an amount equal to the lesser of Fair Market Value and the initial cost
per share of such share of Common Stock.

      5.2 Executive's Disability or Death. (a) If Executive's employment
hereunder is terminated in the event of Executive's Disability or death,
Executive (or his estate) shall continue to receive the higher of (i) one year's
Base Salary calculated at the level at the time of Executive's Disability or
death plus an amount equal to the previous year's Bonus received by Executive
and (ii) Base Salary of Executive for the remainder of the Initial Term as if
such termination had not occurred, reduced by any disability benefits paid in
lieu of Base Salary under the Company's employee benefit plans as then in
effect. All other benefits due Executive following termination of Executive's
employment for Disability or death shall be determined in accordance with the
plans, policies and practices of the Company.

      (b) In the event Executive's Employment is terminated by death or
Disability, (i) vested Options held at the time of termination by Executive, any
Permitted Transferee of Executive or any trust for the benefit thereof will
remain outstanding, (ii) Options scheduled to vest over time will continue to
vest in accordance with the vesting schedule set forth in the stock option award
plan or agreement applicable to such Options and (iii) all other Options will
terminate.

      (c) In the event Executive's employment is terminated by death or
Disability, Executive, any Permitted Transferee of Executive or any trust for
the benefit thereof shall have the right to sell to the Company (x) all shares
of Common Stock then owned by Executive, any Permitted Transferee of Executive
or any trust for the benefit thereof and (y) all shares of Common Stock to be
acquired upon the exercise of all vested Options then held by Executive, any
Permitted Transferee of Executive or any trust for the benefit thereof, at a
price per share payable, at the option of the Company, in cash or a Note, equal
to Fair Market Value (less, in the case of any share of Common Stock subject to
vested Options, the

                                      -6-
<PAGE>

applicable exercise price of such Options) (the "Put Right"); provided that (i)
such Put Right will only arise during a sixty (60) day period following
termination of Executive's employment by the Company by death or Disability and
(ii) the purchase by the Company will not constitute an event of default under
the terms of any of the Company's outstanding debt obligations.

      5.3. Termination of Employment Without Cause by the Company. (a) If
Executive's employment is terminated by the Company without Cause (other than by
reason of Disability or death), Executive shall continue to receive his Base
Salary for the remainder of the Initial Term as if such termination had not
occurred or, if greater, the sum of (i) one year's Base Salary calculated at the
level at the time of Executive's termination and (ii) an amount equal to the
previous year's Bonus received by Executive.

      (b) In the event of such a termination of employment by the Company
without Cause, during the period from the date of termination through the date
Executive ceases receiving payments in lieu of Base Salary pursuant to Section
5.3(a) above, Executive will continue to receive any welfare benefits provided
to him pursuant to Section 4.3 hereof at a level substantially comparable to
that in effect immediately prior to such termination or the Company will pay
Executive, in cash, the equivalent value of such welfare benefits after payment
of any of Executive's applicable taxes. All other benefits due Executive
following such termination of employment by the Company without Cause shall be
determined in accordance with the plans, policies and practices of the Company.

      (c) In the event of such a termination of employment by the Company
without Cause, Executive, any Permitted Transferee of Executive or any trust for
the benefit thereof shall have the Put Right; provided that (i) such Put Right
will only arise during a sixty (60) day period following termination of
Executive's employment by the Company without Cause and (ii) the purchase by the
Company will not constitute an event of default under the terms of any of the
Company's outstanding debt obligations.

      (d) In the event of a termination of employment by the Company without
Cause, (i) vested Options held by Executive, any Permitted Transferee of
Executive or any trust of the benefit thereof at the time of such termination
will remain outstanding and subject to the Put Right, (ii) Options scheduled to
vest over time will continue to vest in accordance with the vesting schedule set
forth in the stock option award plan or agreement applicable to such Options and
(iii) all other Options will terminate; provided that if Executive fails to
comply with any of the provisions of Section 6.1 of this Agreement the Options
described in clauses (i) and (ii) of this sentence will immediately thereupon
terminate.

      (e) If Executive's employment is terminated by Executive for Good Reason,
such termination shall be treated for purposes of this Section 5.3 as a
termination of Executive's employment by the Company without Cause. Executive
shall give the Company written notice of the event or circumstance constituting
Good Reason and thirty (30) days from the date of such notice to cure such event
or circumstance, if curable.

                                      -7-
<PAGE>

      5.4 Voluntary Termination of Employment by Executive. (a) If Executive
terminates his employment with the Company for any reason (other than death,
Disability or Good Reason as provided in Sections 5.2 and 5.3 hereof), Executive
shall be entitled to the same payments he would have received if his employment
had been terminated by the Company for Cause.

      (b) Upon a voluntary termination, (i) vested Options held by Executive,
any Permitted Transferee of Executive or any trust for the benefit thereof at
the time of such termination will remain outstanding and (ii) all other Options
will terminate.

      (c) Upon a voluntary termination, the Company shall have the right to
purchase from Executive, any Permitted Transferee of Executive or any trust for
the benefit thereof all shares of Common Stock then owned by Executive, any
Permitted Transferee of Executive or any trust for the benefit thereof at a
price per share payable, at the option of the Company, in cash or a Note, in an
amount equal to Fair Market Value. Such right must be exercised within twelve
(12) months following such transaction and shall lapse from and after the date
of the initial public offering of shares of Common Stock.

      (d) Upon a voluntary termination, the Company shall have the right at any
time (without regard to whether any exercise notice has been delivered) to
purchase from Executive, any Permitted Transferee of Executive or any trust for
the benefit thereof all vested Options then held by Executive, any Permitted
Transferee of Executive or any trust for the benefit thereof at an aggregate
price payable, at the option of the Company, in cash or a Note, in an amount
calculated by subtracting the aggregate exercise price of such vested Options
from the aggregate Fair Market Value of the shares of Common Stock for which
such vested Options are exercisable. Such right must be exercised within twelve
(12) months following such termination and shall lapse from and after the date
of the initial public offering of shares of Common Stock.

      5.5 Mitigation. Anything in this Agreement to the contrary
notwithstanding, in the event that Executive provides services for pay to anyone
other than the Company or any of its affiliates or subsidiaries from the date of
termination of Executive's employment hereunder until the date Executive ceases
receiving payments pursuant to Sections 5.1 - 5.4 hereof, inclusive, any medical
or other welfare benefits to which Executive is entitled from the Company during
such period pursuant to this Agreement shall be reduced by the medical and other
welfare benefits which Executive is eligible to receive during such period as a
result of Executive's performing such services.

      5.6 Notice of Termination. Any purported termination of employment by the
Company or by Executive shall be communicated by written Notice of Termination
to the other party hereto.

                                      -8-
<PAGE>

      6. Non-Competition; Non-Solicitation.

      6.1 Non-Competition. Executive acknowledges and recognizes the highly
competitive nature of the businesses of the company and accordingly agrees that
during the Employment Term or during any period that Executive receives or is
entitled to receive any severance payments under this Agreement or under any
other severance arrangement of the Company, Executive will not enter into
competitive endeavors and will not undertake any commercial activity which is
contrary to the best interests of the Company or its affiliates, including
becoming an employee, officer, director, agent or owner of any outstanding
shares of, or any other equity interest in, any company, firm, business, person
or other entity in any geographic area which derives more than ten percent (10%)
of its profits, revenues or earnings before taxes from electronic contract
manufacturing; provided, that Executive may own up to two percent (2%) of the
stock of any such company whose stock is registered for public trading.

      6.2 Non-Solicitation. In the event of a termination of employment of
Executive for any reason, Executive shall refrain from directly or indirectly
soliciting or hiring employees of the Company, directly or indirectly inducing
any such employees to terminate their employment by the Company, or seeking to
employ any such employees, in each case, for two years after Executive's
termination; provided that in the event of a termination without Cause, the
restrictions in this clause 6.2 shall lapse on the first anniversary of the date
of such termination.

      7. Confidentiality. Executive acknowledges that the nature of Executive's
engagement by the Company is such that Executive will have access to
Confidential Information (as hereinafter defined) which has value to the
Company. During and after his employment by the Company, Executive shall keep
all of the Confidential Information in confidence and shall not disclose any of
the same to any other person, except the Company's personnel, agents and
representatives and other persons designated in writing by the Company or except
as otherwise required by law. The term "Confidential Information", as used
herein, means all information or material relating to the Company not generally
known by non-Company personnel which (i) is marked "Confidential Information",
"Proprietary Information" or other similar marking, (ii) is known by Executive
to be considered confidential and proprietary by the Company or (iii) derives
value by virtue of the fact that it is not generally known; provided that the
term "Confidential Information" does not include information that was or becomes
generally available publicly other than through disclosure by Executive in
violation of this Agreement.

      8. Non-Compliance. If after termination Executive fails to comply with any
provisions of Section 6 the Company shall have the right to purchase from
Executive, any Permitted Transferee of Executive or any trust for the benefit
thereof all shares of Common Stock then owned by Executive, any Permitted
Transferee of Executive or any trust for the benefit thereof at a price per
share payable, at the option of the Company, in cash or a Note,

                                      -9-
<PAGE>

in an amount equal to the lesser of Fair Market Value and the initial cost per
share of such share of Common Stock.

      9. Specific Performance. Executive acknowledges and agrees that the
Company's remedies at law for a breach or threatened breach of any of the
provisions of Sections 6.1, 6.2 or 7 hereof would be inadequate and, in
recognition of this fact, Executive agrees that, in the event of such a breach
or threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to obtain equitable relief in the form of
specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available; provided,
however, that if the Company obtains any such equitable relief at any time
during the Initial Term, it shall thereby waive its rights under Section 8
hereof.

      10. Enforceability. It is expressly understood and agreed that although
Executive and the Company consider the restrictions contained in Sections 6.1,
6.2 and 7 hereof to be reasonable, if a final judicial determination is made by
a court of competent jurisdiction that the time or territory or any other
restriction contained in this Agreement is an unenforceable restriction against
Executive, the provisions of this Agreement shall not be rendered void but shall
be deemed amended to apply as to such maximum time and territory and to such
maximum extent as such court may judicially determine or indicate to be
enforceable. Alternatively, if any court of competent jurisdiction finds that
any restriction contained in this Agreement is unenforceable, and such
restriction cannot be amended so as to make it enforceable, such finding shall
not affect the enforceability of any of the other restrictions contained herein.

      11. Miscellaneous.

      11.1. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.

      11.2. Entire Agreement; Amendments. This Agreement contains the entire
understanding of the parties with respect to the employment of Executive by the
Company. There are no restrictions, agreements, promises, warranties, covenants
or undertakings between the parties with respect to the subject matter herein
other than those expressly set forth herein; however, this Agreement shall not
supersede the Securities Purchase Agreement, the Stockholders Agreement or any
stock option agreement or indemnification agreement between Executive and the
Company, which agreements shall be interpreted in accordance with their terms.
This Agreement may not be altered, modified, or amended except by written
instrument signed by the parties hereto.

      11.3. No Waiver. The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver of
such party's rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.

                                      -10-
<PAGE>

      11.4. Severability. In the event that any one or more of the provisions of
this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not be affected thereby.

      11.5 Assignment. Absent the prior written consent of the Company, this
Agreement shall not be assignable by Executive, except that Executive may assign
payments due hereunder to a trust established for the exclusive benefit of any
Permitted Transferee of Executive.

      11.6. Successors; Binding Agreement. This Agreement shall inure to the
benefit of and be binding upon personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees of
Executive and successors and assigns of the Company.

      11.7. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
given to the respective addresses or telecopy numbers set forth on the execution
page or this Agreement, provided that all notices to the Company shall be
directed to the attention of the Board with a copy to the Secretary of the
Company or to such other address as either party may have furnished to the other
in writing in accordance herewith. Each such notice or other communication shall
be effective (i) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified on the execution page of this Agreement if a copy of
such notice or other communication is sent by certified mail, return receipt
requested, and is posted within one business day, or is personally delivered,
whether by courier or otherwise, within two business days, after the date of
such telecopy, (ii) if given by prepaid overnight courier, one business day
after deposit with such courier or (iii) if given by United States mail, postage
prepaid, three business days after deposit with the United States postal
service; provided that notice of change of address shall be effective only upon
receipt.

      11.8. Withholding Taxes. The Company may withhold from any amounts payable
under this Agreement such Federal, state and local taxes as may be required to
be withheld pursuant to any applicable law or regulation.

      11.9. Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

                                      -11-
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.

                                          ---------------------------------
                                          Kevin C. Melia
                                          24 Grasshopper Lane
                                          Acton, MA 01720
                                          Fax: (508)266-1839

                                          MANUFACTURERS' SERVICES LTD.

                                          By:
                                             ------------------------------
                                             Thompson Dean, Director

                                          200 Baker Avenue
                                          Concord, Massachusetts 01742
                                          Fax: (508)287-5635

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]