-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 OGulX5Ceg1YdJ2/yn9r75WuPZpsACsgru/X8op2I5nTPro9NyEYhPQHl+RjowGuZ
 WevyuPW5FI6QUijzWXZDlw==

<SEC-DOCUMENT>0001047469-03-013980.txt : 20030421
<SEC-HEADER>0001047469-03-013980.hdr.sgml : 20030421
<ACCEPTANCE-DATETIME>20030421164118
ACCESSION NUMBER:		0001047469-03-013980
CONFORMED SUBMISSION TYPE:	20-F
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20021231
FILED AS OF DATE:		20030421

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CELESTICA INC
		CENTRAL INDEX KEY:			0001030894
		STANDARD INDUSTRIAL CLASSIFICATION:	PRINTED CIRCUIT BOARDS [3672]
		IRS NUMBER:				980185558
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		20-F
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-14832
		FILM NUMBER:		03657104

	BUSINESS ADDRESS:	
		STREET 1:		12 CONCORD PL
		STREET 2:		7TH FL
		CITY:			ONTARIO CANADA
		STATE:			A6
		ZIP:			M3C 1V7
		BUSINESS PHONE:		416442211
</SEC-HEADER>
<DOCUMENT>
<TYPE>20-F
<SEQUENCE>1
<FILENAME>a2106757z20-f.txt
<DESCRIPTION>FORM 20-F
<TEXT>
<Page>
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 21, 2003

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

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------

                                   FORM 20-F

         / /  REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR 12(G)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                                       OR
               /X/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
                                       OR
             / /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                        COMMISSION FILE NUMBER: 1-14832
                            ------------------------

                                 CELESTICA INC.
             (Exact name of registrant as specified in its charter)

                                ONTARIO, CANADA

                (JURISDICTION OF INCORPORATION OR ORGANIZATION)

                           1150 EGLINTON AVENUE EAST
                        TORONTO, ONTARIO, CANADA M3C 1H7
             (ADDRESS OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
                         ------------------------------

                   SECURITIES REGISTERED OR TO BE REGISTERED
                     PURSUANT TO SECTION 12(B) OF THE ACT:

<Table>
<S>                                              <C>
           Subordinate Voting Shares                       The Toronto Stock Exchange
               (TITLE OF CLASS)                            The New York Stock Exchange
                                                   (NAME OF EACH EXCHANGE ON WHICH REGISTERED)

    Liquid Yield Option-TM- Notes due 2020                 The New York Stock Exchange
               (TITLE OF CLASS)                    (NAME OF EACH EXCHANGE ON WHICH REGISTERED)
</Table>

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

                   SECURITIES REGISTERED OR TO BE REGISTERED
                     PURSUANT TO SECTION 12(G) OF THE ACT:
                                      N/A
                            ------------------------

              SECURITIES FOR WHICH THERE IS A REPORTING OBLIGATION
                     PURSUANT TO SECTION 15(D) OF THE ACT:
                                      N/A
                            ------------------------

    Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report.

<Table>
<S>                                              <C>
      189,538,365 Subordinate Voting Shares                    0 Preference Shares
      39,065,950 Multiple Voting Shares
</Table>

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

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/  No / /

    Indicate by check mark which financial statement item the registrant has
elected to follow. Item 17 / /  Item 18 /X/

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Page>
                               TABLE OF CONTENTS

<Table>
<Caption>
                                                                PAGE
                                                              --------
<S>                                                           <C>
PART I......................................................      1
    Item 1. Identity of Directors, Senior Management and
     Advisers...............................................      1
    Item 2. Offer Statistics and Expected Timetable.........      1
    Item 3. Key Information.................................      1
        A.  Selected Financial Data.........................      1
        B.  Capitalization and Indebtedness.................      5
        C.  Reasons for Offer and Use of Proceeds...........      5
        D.  Risk Factors....................................      5
    Item 4. Information on the Company......................     14
        A.  History and Development of the Company..........     14
        B.  Business Overview...............................     14
        C.  Organizational Structure........................     26
        D.  Description of Property.........................     26
    Item 5. Operating and Financial Review and Prospects....     27
        A.  Operating Results...............................     31
        B.  Liquidity and Capital Resources.................     35
        C.  Research and Development, Patents and Licenses,
        Etc.................................................     39
        D.  Trend Information...............................     39
    Item 6. Directors, Senior Management and Employees......     39
        A.  Directors and Senior Management.................     39
        B.  Compensation....................................     44
        C.  Board Practices.................................     49
        D.  Employees.......................................     50
        E.  Share Ownership.................................     51
    Item 7. Major Shareholders and Related Party
     Transactions...........................................     55
        A.  Major Shareholders..............................     55
        B.  Related Party Transactions......................     56
        C.  Interests of Experts and Counsel................     57
    Item 8. Financial Information...........................     57
        A.  Consolidated Statements and Other Financial
        Information.........................................     57
        B.  Significant Changes.............................     57
    Item 9. The Offer and Listing...........................     57
        A.  Offer and Listing Details.......................     57
        B.  Plan of Distribution............................     59
        C.  Markets.........................................     60
        D.  Selling Shareholders............................     60
        E.  Dilution........................................     60
        F.   Expense of the Issue...........................     60
    Item 10. Additional Information.........................     60
        A.  Share Capital...................................     60
        B.  Memorandum and Articles of Incorporation........     60
        C.  Material Contracts..............................     62
        D.  Exchange Controls...............................     62
        E.  Taxation........................................     62
        F.   Dividends and Paying Agents....................     67
        G.  Statement by Experts............................     67
        H.  Documents on Display............................     67
        I.   Subsidiary Information.........................     67
    Item 11. Quantitative and Qualitative Disclosures about
     Market Risk............................................     68
    Item 12. Description of Securities Other than Equity
     Securities.............................................     69
PART II.....................................................     69
    Item 13. Defaults, Dividend Arrearages and
     Delinquencies..........................................     69
    Item 14. Material Modifications to the Rights of
     Security Holders and Use of Proceeds...................     69
    Item 15. Controls and Procedures........................     69
    Item 16. [Reserved].....................................     69
PART III....................................................     70
    Item 17. Financial Statements...........................     70
    Item 18. Financial Statements...........................     70
    Item 19. Exhibits.......................................     70
</Table>

                                       i
<Page>
                                     PART I

    IN THIS ANNUAL REPORT, "CELESTICA," THE "COMPANY," "WE," "US" AND "OUR"
REFER TO CELESTICA INC. AND ITS SUBSIDIARIES.

    IN DECEMBER 1999, CELESTICA COMPLETED A TWO-FOR-ONE SPLIT OF OUR SUBORDINATE
VOTING SHARES AND MULTIPLE VOTING SHARES BY WAY OF A STOCK DIVIDEND. WE HAVE
RESTATED ALL HISTORICAL SHARE AND PER SHARE INFORMATION TO REFLECT THE EFFECTS
OF THIS TWO-FOR-ONE SPLIT ON A RETROACTIVE BASIS, EXCEPT WHERE WE SPECIFICALLY
STATE OTHERWISE.

    IN THIS ANNUAL REPORT, ALL DOLLAR AMOUNTS ARE EXPRESSED IN UNITED STATES
DOLLARS, EXCEPT WHERE WE STATE OTHERWISE. UNLESS WE STATE OTHERWISE, ALL
REFERENCES TO "U.S.$" OR "$" ARE TO U.S. DOLLARS AND ALL REFERENCES TO "C$" ARE
TO CANADIAN DOLLARS. UNLESS WE INDICATE OTHERWISE, ANY REFERENCE IN THIS ANNUAL
REPORT TO A CONVERSION BETWEEN U.S.$ AND C$ IS GIVEN AS OF FEBRUARY 28, 2003. AT
THAT DATE, THE NOON BUYING RATE IN NEW YORK CITY FOR CABLE TRANSFERS IN CANADIAN
DOLLARS WAS U.S.$1.00=C$1.4880, AS CERTIFIED FOR CUSTOMS PURPOSES BY THE FEDERAL
RESERVE BANK OF NEW YORK.

    UNLESS WE INDICATE OTHERWISE, ALL INFORMATION IN THIS ANNUAL REPORT IS
STATED AS OF FEBRUARY 28, 2003.

FORWARD-LOOKING STATEMENTS

    Item 4, "Information on the Company," "Management's Discussion and Analysis
of Financial Condition and Results of Operations" included in Item 5 and other
sections of this Annual Report contain forward-looking statements within the
meaning of section 27A of the Securities Act of 1933, as amended, or the
U.S. Securities Act, and section 21E of the Securities Exchange Act of 1934, as
amended, or the U.S. Exchange Act, including (without limitation) statements
concerning possible or assumed future results of operations of Celestica
preceded by, followed by or that include the words "believes," "expects,"
"anticipates," "estimates," "intends," "plans," or similar expressions. For
those statements, we claim the protection of the safe harbor for forward-
looking statements contained in the U.S. Private Securities Litigation Reform
Act of 1995.

    Forward-looking statements are not guarantees of future performance. They
involve risks, uncertainties and assumptions. You should understand that the
following important factors, in addition to those discussed in Item 3, "Key
Information -- Risk Factors," and elsewhere in this Annual Report, could affect
our future results and could cause those results to differ materially from those
expressed in such forward-looking statements: the challenges of effectively
managing our operations during uncertain economic conditions; the challenge of
responding to lower-than-expected customer demand; the effects of price
competition and other business and competitive factors generally affecting the
electronics manufacturing services, or EMS, industry; our dependence on the
information technology and communications industries; our dependence on a
limited number of customers and on industries affected by rapid technological
change; component constraints; variability of operating results among periods;
and the ability to manage our restructuring and the shift of production to lower
cost geographies.

    We disclaim any intention or obligation to update or revise any
forward-looking statements contained in this Annual Report or the documents we
incorporate by reference herein, whether as a result of new information, future
events, or otherwise.

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

    Not applicable.

ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE

    Not applicable.

ITEM 3.  KEY INFORMATION

A.  SELECTED FINANCIAL DATA

    You should read the following selected financial data together with Item 5,
"Operating and Financial Review and Prospects," the Consolidated Financial
Statements in Item 18, and the other information in this Annual Report. The
selected financial data is derived from the consolidated financial statements
for the years we present.
<Page>
    The Consolidated Financial Statements have been prepared in accordance with
Canadian generally accepted accounting principles, or GAAP. These principles
conform in all material respects with U.S. GAAP except as described in note 22
to the Consolidated Financial Statements in Item 18. For all the years
presented, the selected financial data is prepared in accordance with Canadian
GAAP. The differences between the line items under Canadian GAAP and those as
determined under U.S. GAAP are not significant except that, under U.S. GAAP:

    - our net loss for the year ended December 31, 1998 would be $6.2 million
      greater due to non-cash charges for compensation expense;

    - our net earnings for the year ended December 31, 1999 would be
      $1.9 million less due to non-cash charges for compensation expense;

    - our net earnings for the year ended December 31, 2000 would be
      $2.5 million less due to non-cash charges for compensation expense and
      $6.8 million less due to interest on the convertible debt we issued in
      August 2000, in the principal amount of $1,813.6 million, that would be
      classified as a long-term liability rather than as an equity instrument;

    - our net loss for the year ended December 31, 2001 would be $3.2 million
      greater due to non-cash charges for compensation expense, $17.7 million
      greater due to interest on convertible debt classified as a long-term
      liability rather than as an equity instrument, $2.7 million greater due to
      other charges, and $12.1 million less due to the gain on a foreign
      exchange contract; and

    - our net loss for the year ended December 31, 2002 would be $3.8 million
      greater due to non-cash charges for compensation expense, $27.8 million
      greater due to interest on convertible debt classified as a long-term
      liability rather than as an equity instrument, $26.5 million greater due
      to other charges, and $8.4 million less due to gain on repurchase of
      convertible debt.

<Table>
<Caption>
                                                               YEAR ENDED DECEMBER 31
                                              ---------------------------------------------------------
                                               1998(1)     1999(1)     2000(1)     2001(1)     2002(1)
                                              ---------   ---------   ---------   ---------   ---------
                                                       (in millions, except per share amounts)
<S>                                           <C>         <C>         <C>         <C>         <C>
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
  DATA:
Revenue.....................................  $3,249.2    $5,297.2    $9,752.1    $10,004.4   $8,271.6
Cost of sales...............................   3,018.7     4,914.7     9,064.1      9,291.9    7,715.8
                                              --------    --------    --------    ---------   --------
Gross profit................................     230.5       382.5       688.0        712.5      555.8
Selling, general and administrative
  expenses..................................     130.5       202.2       326.1        341.4      298.5
Amortization of goodwill and intangible
  assets(2).................................      45.4        55.6        88.9        125.0       95.9
Integration costs related to
  acquisitions(3)...........................       8.1         9.6        16.1         22.8       21.1
Other charges(4)............................      64.7       --          --           273.1      677.8
                                              --------    --------    --------    ---------   --------
Operating income (loss).....................     (18.2)      115.1       256.9        (49.8)    (537.5)
Interest expense (income), net(5)...........      32.3        10.7       (19.0)        (7.9)      (1.1)
                                              --------    --------    --------    ---------   --------
Earnings (loss) before income taxes.........     (50.5)      104.4       275.9        (41.9)    (536.4)
Income tax expense (recovery)...............      (2.0)       36.0        69.2         (2.1)     (91.2)
                                              --------    --------    --------    ---------   --------
Net earnings (loss).........................  $  (48.5)   $   68.4    $  206.7    $   (39.8)  $ (445.2)
                                              ========    ========    ========    =========   ========
Basic earnings (loss) per share(6)..........  $  (0.47)   $   0.41    $   1.01    $   (0.26)  $  (1.98)
Diluted earnings (loss) per share(6)........  $  (0.47)   $   0.40    $   0.98    $   (0.26)  $  (1.98)

OTHER DATA:
Capital expenditures........................  $   65.8    $  211.8    $  282.8    $   199.3   $  151.4
</Table>

                                       2
<Page>

<Table>
<Caption>
                                                                  AS AT DECEMBER 31
                                              ---------------------------------------------------------
                                                1998        1999        2000        2001        2002
                                              ---------   ---------   ---------   ---------   ---------
                                                                    (in millions)
<S>                                           <C>         <C>         <C>         <C>         <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and short-term investments.............  $   31.7    $  371.5    $  883.8    $1,342.8    $1,851.0
Working capital(7)..........................  $  356.2    $1,000.2    $2,262.6    $2,339.8    $2,093.2
Capital assets..............................  $  214.9    $  365.4    $  633.4    $  915.1    $  727.8
Total assets................................  $1,636.4    $2,655.6    $5,938.0    $6,632.9    $5,806.8
Total long-term debt, including current
  portion...................................  $  135.8    $  134.2    $  132.0    $  147.4    $    6.9
Shareholders' equity........................  $  859.3    $1,658.1    $3,469.3    $4,745.6    $4,203.6
</Table>

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

(1) The consolidated statements of earnings (loss) data for:

    1998, 1999, 2000, 2001 and 2002 include the results of operations of the
    manufacturing operation acquired from Madge Networks N.V. in February 1998,
    the manufacturing operation acquired from Lucent Technologies Inc. in
    April 1998, Analytic Design, Inc. acquired in May 1998, the manufacturing
    operation acquired from Silicon Graphics Inc. in June 1998, and
    Accu-Tronics, Inc. acquired in September 1998;

    1999, 2000, 2001 and 2002 include the results of operations of International
    Manufacturing Services, Inc., or IMS, acquired December 1998, Signar SRO
    acquired in April 1999, greenfield operations established in Brazil and
    Malaysia in June 1999, VXI Electronics, Inc. acquired in September 1999, the
    assets acquired from Hewlett-Packard's Healthcare Group in October 1999, EPS
    Wireless, Inc. acquired in December 1999, and certain assets acquired from
    Fujitsu-ICL Systems Inc. in December 1999;

    2000, 2001 and 2002 include the results of operations of the assets of the
    Enterprise System Group and the Microelectronics Division of IBM in
    Minnesota and in Italy acquired in February and May 2000, respectively, NDB
    Industrial Ltda. acquired in June 2000, Bull Electronics Inc. acquired in
    August 2000, and NEC Technologies (UK) Ltd. acquired in November 2000;

    2001 and 2002 includes the results of operations of Excel Electronics, Inc.
    acquired in January 2001, certain assets of Motorola Inc. in Ireland and
    Iowa acquired in February 2001, certain assets of a repair facility of N.K.
    Techno Co., Ltd. in Japan acquired in March 2001, certain assets of
    Avaya Inc. in Arkansas and Colorado acquired in May 2001, Sagem CR s.r.o.
    acquired in June 2001, certain assets of Avaya Inc. in France acquired in
    August 2001, certain assets of Lucent Technologies Inc. in Ohio and Oklahoma
    acquired in August 2001, Primetech Electronics Inc. acquired in
    August 2001, and Omni Industries Limited acquired in October 2001; and

    2002 includes the results of operations of certain assets of NEC Corporation
    in Miyagi and Yamanashi, Japan acquired in March 2002, and certain assets of
    Corvis Corporation in the United States acquired in August 2002.

(2) Effective January 1, 1998, we revised the estimated useful life of our
    goodwill and intellectual property for accounting purposes from 20 years
    each to 10 years and 5 years, respectively.

    In 2001, the Canadian Institute of Chartered Accountants (CICA) approved
    Handbook Sections 1581, "Business combinations" and 3062, "Goodwill and
    other intangible assets." The new standards mandate the purchase method of
    accounting for business combinations and require that the value of the
    shares issued in a business combination be measured using the average share
    price for a reasonable period before and after the date the terms of the
    acquisition are agreed to and announced. The new standards are substantially
    consistent with U.S. GAAP.

    Effective July 1, 2001, goodwill acquired in business combinations completed
    after June 30, 2001 has not been amortized. Celestica has fully adopted
    these new standards as of January 1, 2002, and discontinued amortization of
    all existing goodwill. We also evaluated existing intangible assets,
    including estimates of remaining useful lives, and have reclassed
    $9.1 million from intellectual property to goodwill, as of January 1, 2002,
    to conform with the new criteria.

    Section 3062 required the completion of a transitional goodwill impairment
    evaluation within six months of adoption. Any transitional impairment would
    have been recognized as an effect of a change in accounting principle and
    would have been charged to opening retained earnings as of January 1, 2002.
    We completed the transitional goodwill impairment assessment during the
    second quarter of 2002, and determined that no impairment existed as of the
    date of adoption. Under U.S. GAAP, any transitional impairment charge would
    have been recognized in earnings as a cumulative effect of a change in
    accounting principle.

                                       3
<Page>
    Effective January 1, 2002, we had unamortized goodwill of $1,137.9 million
    which is no longer being amortized. This change in accounting policy is not
    applied retroactively and the amounts presented for prior periods have not
    been restated for this change. The following table shows the impact of this
    change as if the policy had been applied retroactively to 2001:

<Table>
<Caption>
                                                                    YEAR ENDED DECEMBER 31
                                                                  ---------------------------
                                                                      2001           2002
                                                                  ------------   ------------
                                                                     (in millions, except
                                                                      per share amounts)
    <S>                                                           <C>            <C>
    Net loss as reported........................................    $ (39.8)       $(445.2)
    Add back: goodwill amortization.............................       39.2         --
                                                                    -------        -------
    Net loss before goodwill amortization.......................    $  (0.6)       $(445.2)
                                                                    =======        =======
    Basic loss per share:
    As reported.................................................    $ (0.26)       $ (1.98)
    Before goodwill amortization................................    $ (0.07)       $ (1.98)

    Diluted loss per share:
    As reported.................................................    $ (0.26)       $ (1.98)
    Before goodwill amortization................................    $ (0.07)       $ (1.98)
</Table>

(3) These costs include costs to implement new information systems and
    processes, including salary and other costs directly related to the
    integration activities in newly acquired facilities.

(4) In 1998, other charges totaled $64.7 million ($51.5 million after income
    taxes), comprised of non-cash charges of $35.0 million relating to the
    write-down of intellectual property, $6.8 million of goodwill which became
    impaired as a result of the merger with IMS, a write-off of deferred
    financing fees and debt redemption fees of $17.8 million relating to the
    prepayment of debt with the net proceeds of our initial public offering, and
    other charges of $5.1 million.

    In 2001, other charges totaled $273.1 million ($226.4 million after income
    taxes) comprised of (a) a $237.0 million restructuring charge, and (b) a
    non-cash charge of $36.1 million relating to the annual impairment
    assessment of long-lived assets, comprised primarily of a write-down of
    goodwill and intangible assets.

    In 2002, other charges totaled $677.8 million ($562.6 million after income
    taxes) comprised primarily of (a) a $385.4 million restructuring charge,
    (b) a non-cash write-down of $203.7 million relating to the annual goodwill
    impairment assessment, (c) a non-cash write-down of $81.7 million relating
    to the annual impairment assessment of long-lived assets, primarily a
    write-down of intangible assets, and (d) a $9.6 million charge for the
    premium paid and related deferred financing costs on the redemption of our
    Senior Subordinated Notes.

(5) Interest expense (income) is comprised of interest expense incurred on
    indebtedness less interest income earned on cash and short-term investments.

(6) In 2001, we retroactively adopted the new CICA Handbook Section 3500,
    "Earnings per share," which requires the retroactive use of the treasury
    stock method for calculating diluted earnings per share. This change results
    in an earnings per share calculation which is consistent with U.S. GAAP.

    For purposes of the basic and diluted earnings (loss) per share
    calculations, the weighted average number of shares outstanding were:

<Table>
<Caption>
                                                                                 YEAR ENDED DECEMBER 31
                                                                  ----------------------------------------------------
                                                                    1998       1999       2000       2001       2002
                                                                  --------   --------   --------   --------   --------
                                                                                     (in millions)
    <S>                                                           <C>        <C>        <C>        <C>        <C>
    Basic.......................................................   103.0      167.2      199.8      213.9      229.8
    Diluted.....................................................   103.0      171.2      211.8      213.9      229.8
</Table>

(7) Calculated as current assets less current liabilities.

                                       4
<Page>
EXCHANGE RATE INFORMATION

    The rate of exchange as of February 28, 2003 for the conversion of Canadian
dollars into United States dollars was U.S. $0.6720. The following table sets
forth the exchange rates for the conversion of U.S.$1.00 into C$1.00 as at the
end of the following fiscal periods and the average exchange rates for those
periods (based upon the average of the exchange rates on the last day of each
month during the periods). The rates of exchange set forth herein are shown as,
or are derived from, the reciprocals of the noon buying rates in New York City
for cable transfers payable in Canadian dollars, as certified for customs
purposes by the Federal Reserve Bank of New York. The source of this data is the
Federal Reserve Statistical Releases.

<Table>
<Caption>
                                                    1998       1999       2000       2001       2002
                                                  --------   --------   --------   --------   --------
<S>                                               <C>        <C>        <C>        <C>        <C>
Average(1)......................................   1.4836     1.4858     1.4855     1.5487     1.5704
</Table>

<Table>
<Caption>
                                         MARCH     FEBRUARY   JANUARY    DECEMBER   NOVEMBER   OCTOBER
                                          2003       2003       2003       2002       2002       2002
                                        --------   --------   --------   --------   --------   --------
<S>                                     <C>        <C>        <C>        <C>        <C>        <C>
High..................................   1.4905     1.5315     1.5798     1.5792     1.5903     1.5943
Low...................................   1.4659     1.4880     1.5219     1.5478     1.5528     1.5610
</Table>

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

(1) Calculated by using the averages of the exchange rates as of the last day of
    each month during the period.

    The rate of exchange as of February 28, 2003 for the conversion of United
States dollars into Canadian dollars was 1.4880 (U.S.$1 = C$1.4480).

B.  CAPITALIZATION AND INDEBTEDNESS

    Not applicable.

C.  REASONS FOR OFFER AND USE OF PROCEEDS

    Not applicable.

D.  RISK FACTORS

    SHAREHOLDERS AND PROSPECTIVE INVESTORS IN CELESTICA SHOULD CAREFULLY
CONSIDER EACH OF THE FOLLOWING RISKS AND ALL OF THE OTHER INFORMATION SET FORTH
IN THIS ANNUAL REPORT. THE RISKS AND UNCERTAINTIES WE DESCRIBE BELOW ARE NOT THE
ONLY ONES FACING OUR COMPANY. ADDITIONAL RISKS AND UNCERTAINTIES NOT CURRENTLY
KNOWN TO US OR THAT WE CURRENTLY BELIEVE TO BE IMMATERIAL MAY ALSO ADVERSELY
AFFECT OUR BUSINESS.

    OUR OPERATING RESULTS FLUCTUATE

    Our annual and quarterly results have fluctuated in the past. The reasons
for these fluctuations may similarly affect us in the future. Our operating
results may fluctuate in the future as a result of many factors, including:

    - the volume of orders received relative to our manufacturing capacity;

    - fluctuations in material costs and the mix in material costs versus labor
      and manufacturing overhead costs; and

    - variations in the level and timing of orders placed by a customer due to
      the customer's attempts to balance its inventory, changes in the
      customer's manufacturing strategy or sourcing plans, and variation in
      demand for the customer's products. These changes can result from life
      cycles of customer products, competitive conditions, and general economic
      conditions.

    Any one of the following factors or combinations of these factors could also
affect our results of operations for a financial period:

    - the level of price competition as a result of the highly competitive
      nature of our business;

    - our past experience in manufacturing a particular product;

    - the degree of automation we use in the assembly process;

                                       5
<Page>
    - whether we are managing our inventories and fixed assets effectively;

    - our customer and end-market concentrations;

    - the timing of our expenditures in anticipation of increased sales;

    - increased or unexpected expenses associated with the shifting of products
      between manufacturing locations, including transfer delays from higher
      cost locations;

    - customer product delivery requirements and shortages of components or
      labor;

    - the shifting of production by our customers from our operations, to one of
      our competitor's operations; and

    - the timing of, and the price we pay for, our acquisitions and related
      integration costs.

    In addition, most of our customers typically do not commit to firm
production schedules for more than 30 to 90 days in advance. Accordingly, we
cannot forecast the level of customer orders with certainty. This makes it
difficult to order appropriate levels of materials and to schedule production
and maximize utilization of our manufacturing capacity. In the past, we have
been required to increase staffing, purchase materials, and incur other expenses
to meet the anticipated demand of our customers. Sometimes these anticipated
orders from certain customers have failed to materialize, and sometimes delivery
schedules have been deferred as a result of changes in the customer's business
needs. On other occasions, customers have required rapid and sudden increases in
production which have placed an excessive burden on our manufacturing capacity.
Deferred delivery schedules result in a delay, and may result in a reduction in
our revenue from these customers, and also may lead to excess capacity at
affected facilities. Also, certain customers may be unable to pay us or
otherwise meet their commitments under their agreements or purchase orders with
us.

    Any of these factors or a combination of these factors could have a material
adverse effect on our results of operations.

    Prospective investors should not rely on results of operations in any past
period to indicate what our results will be for any future period.

    WE HAVE HAD RECENT OPERATING LOSSES

    We generated net earnings in each of the years from 1993 through 1996, and
in 1999 and 2000. We recorded net losses of $6.9 million in 1997, $48.5 million
in 1998, $39.8 million in 2001, and $445.2 million in 2002. In 1997, we incurred
$13.3 million of integration costs related to acquisitions and a $13.9 million
credit loss, with these charges totaling $27.2 million ($17.0 million after
income taxes). In 1998, we incurred $8.1 million of integration costs related to
acquisitions, a $41.8 million write-down of intellectual property and goodwill,
a write-off of deferred financing fees and debt redemption fees of
$17.8 million, and $5.1 million of charges related to the acquisition of IMS
with these charges totaling $72.8 million ($56.5 million after income taxes). In
2001, we incurred $22.8 million of integration costs related to acquisitions,
$237.0 million of restructuring charges, and a $36.1 million write-down of
certain assets, primarily goodwill and intangible assets, with these charges
totaling $295.9 million ($245.2 million after income taxes). In 2002, we
incurred $21.1 million of integration costs related to acquisitions,
$385.4 million of restructuring charges, a $285.4 million write-down of certain
assets, primarily goodwill and intangible assets, and $9.6 million in deferred
financing costs and debt redemption fees, with these charges totaling
$701.5 million ($582.2 million after income taxes). We may not be profitable in
future periods. In response to the continued limited visibility in end markets,
we plan to further reduce our manufacturing capacity. The reduction in capacity
will result in an estimated pre-tax restructuring charge of between
$50.0 million and $70.0 million, to be recorded during 2003. If end-market
conditions were to weaken significantly from current levels, we may undertake
additional restructuring activities, thereby reducing profitability in future
periods.

    WE ARE EXPOSED TO CHANGES IN GENERAL ECONOMIC CONDITIONS

    As a result of unfavorable general economic conditions and reduced demand
for technology capital goods, our sales have been particularly volatile in
recent quarters. Specifically, since the first fiscal quarter of 2001, we have
seen declines in the demand for products in the end markets that we serve. If
global economic conditions in

                                       6
<Page>
the markets we serve do not improve, we may experience a continued material
adverse impact on our business, operating results and financial condition.

    THE WAR IN IRAQ, ACTS OF TERRORISM, AND OTHER POLITICAL AND ECONOMIC
     DEVELOPMENTS COULD ADVERSELY AFFECT OUR BUSINESS

    Increased international political instability, evidenced by the threat or
occurrence of terrorist attacks, enhanced national security measures, sustained
military action in Iraq, other conflicts in the Middle East and Asia, strained
international relations arising from these conflicts and the related decline in
consumer confidence and continued economic weakness, may hinder our ability to
do business and may adversely affect our stock price. Any escalation in these
events or similar future events may disrupt our operations or those of our
customers and suppliers and may affect the availability of materials needed to
manufacture our products or the means to transport those materials to
manufacturing facilities and finished products to customers. These events have
had and may continue to have an adverse impact on the U.S. and world economy in
general and customer confidence and spending in particular, which in turn
adversely affects our revenues and results of operations. The impact of these
events on the volatility of the U.S. and world financial markets could increase
the volatility in our stock price and may limit the capital resources available
to us and our customers or suppliers.

    WE ARE UNCLEAR HOW THE SEVERE ACUTE RESPIRATORY SYNDROME (SARS) OUTBREAK
     WILL IMPACT OUR BUSINESS

    We, our suppliers, and our customers have manufacturing operations in Asia,
the geographic region most directly affected by the current outbreak of the SARS
virus. Existing bans being imposed by some employers on non-essential travel to
this region could begin to impact business in that region, including
postponement of factory maintenance and delay in customer qualification of our
manufacturing facilities for new programs. The continuation of this disease
outbreak in Asia, or its expansion in other regions where we or our customers or
suppliers have operations, could also disrupt our manufacturing supply chain and
adversely affect our operations through higher operating expenses, lower or
delayed production volumes resulting in weaker than expected utilization of our
facilities, and delays in product transfer activities from higher to lower cost
facilities as we implement our restructuring programs.

    OUR RESULTS CAN BE AFFECTED BY LIMITED AVAILABILITY OF COMPONENTS

    A significant portion of our costs reflects component purchases. A majority
of the products we manufacture require one or more components that we order from
sole-source suppliers of these particular components. Supply shortages for a
particular component can delay production of all products using that component
or cause price increases in the services we provide. In addition, at various
times there have been industry-wide shortages of electronic components. Such
shortages, or future fluctuations in material costs, may have a material adverse
effect on our business or cause our results of operations to fluctuate from
period to period. Also, we rely on a variety of common carriers for materials
transportation and route materials through various world ports. A work stoppage,
strike or shutdown of a major port or airport could result in manufacturing and
shipping delays or expediting charges, which could have a material adverse
effect on our results of operations.

    WE DEPEND ON CERTAIN INDUSTRIES

    Our financial performance depends on our customers' viability, financial
stability, and the demand for our customers' end-market products. Our customers,
in turn, depend substantially on the growth of the information technology and
communications industries. These industries are characterized by rapidly
changing technologies and shortening product life cycles. These industries have
been experiencing severe revenue erosion, pricing and margin pressures, excess
inventories, and increased difficulty in attracting capital. These factors
affecting the information technology and communications industries in general,
and the impact these factors might have from time to time on our customers in
particular, could continue to have a material adverse effect on our business.

    WE FACE CUSTOMER CREDIT RISK

    We generate significant accounts receivable and inventory balances in
providing manufacturing services to our customers. We may encounter significant
delays or defaults in payments owed to us by customers.

                                       7
<Page>
    WE DEPEND ON A LIMITED NUMBER OF CUSTOMERS

    Our three largest customers in 2002 were IBM Corporation, Sun
Microsystems Inc., and Lucent Technologies Inc., which each represented more
than 10% of our total 2002 revenue and collectively represented 48% of our total
2002 revenue. Our next seven largest customers collectively represented 37% of
our total revenue in 2002. IBM Corporation, Sun Microsystems Inc., and Lucent
Technologies Inc., our three largest customers in 2001, each represented more
than 10% of our total 2001 revenue and collectively represented 55% of our total
2001 revenue. Our next seven largest customers represented 29% of total 2001
revenue. We expect to continue to depend upon a relatively small number of
customers for a significant percentage of our revenue.

    Our mix of business with customers in higher complexity communications and
information technology products had a major impact on our results in 2002 as
spending in these areas was adversely affected. We saw the biggest declines in
revenues from our top 10 customers, which represent over 80% of our business.

    Other than in the case of asset acquisitions, otherwise known as "OEM
divestitures," we generally do not enter into long-term supply commitments with
our customers. Instead, we bid on a project basis and have supply contracts or
purchase orders in place for each project. We are dependent on customers to
fulfill the terms associated with these orders and/or contracts. Significant
reductions in, or the loss of, sales to any of our largest customers would have
a material adverse effect on us. OEM divestitures often entail long-term supply
agreements between ourselves and the OEM customer, and we are similarly
dependent on customers to fulfill their obligations under these contracts.

    OUR CUSTOMERS MAY CANCEL THEIR ORDERS, CHANGE PRODUCTION QUANTITIES OR DELAY
     PRODUCTION

    Our customers are increasingly dependent on EMS providers for new product
introductions and rapid response times to volume requirements. We generally do
not obtain firm, long-term purchase commitments from our customers and we often
experience reduced lead-times in customers' orders. Customers may cancel their
orders, change production quantities, or delay production for a number of
reasons. The uncertain economic condition of our customers' end markets and
general order volume volatility has resulted, and may continue to result, in
some of our customers delaying or canceling the delivery of some of the products
we manufacture for them, and placing purchase orders for lower volumes of
products than previously anticipated. Cancellation, reduction, or delays by a
significant customer, or by a group of customers, would seriously harm our
results of operations by reducing the volumes of products manufactured and
delivered by us for the customers in that period. Such order changes could also
cause a delay in the repayment to us for inventory expenditures we incurred in
preparation for the customer orders. Order cancellations and delays could also
lower asset utilization, resulting in higher productive assets and lower
margins.

    WE FACE RISKS ARISING FROM THE RESTRUCTURING OF OUR OPERATIONS

    We have undertaken numerous initiatives to restructure and reduce our
capacity in response to the difficult economic climate, with the intention of
improving utilization and realizing cost savings in the future. These
initiatives have included changing the number and location of our production
facilities, largely to align our capacity and infrastructure with anticipated
customer demand, and to rationalize our footprint worldwide. This alignment
includes transferring programs from higher cost geographies to lower cost
geographies. The process of restructuring entails, among other activities,
moving product production between facilities, reducing staff levels, realigning
our business processes and reorganizing our management. Any failure to
successfully execute these initiatives can have a material adverse impact on our
results. If, in the future, our customer demand falls, or we are required to
reduce prices, at a rate exceeding the rate at which we are able to reduce our
costs, this could have a material adverse impact on our operating results.

    WE MAY NOT BE ABLE TO RESTRUCTURE QUICKLY ENOUGH IN SOME OF OUR KEY
     MANUFACTURING REGIONS, SUCH AS EUROPE

    We have operations in multiple regions around the world. As a result, we are
subject to different regulatory requirements governing how quickly we are able
to reduce manufacturing capacity and terminate related employees. Restrictions
on our ability to close under-performing facilities will result in higher
expenses associated with carrying excess capacity and infrastructure during our
restructuring activities.

                                       8
<Page>
    CHANGES IN OUR INDUSTRY REQUIRE US TO MOVE A SIGNIFICANT PORTION OF OUR
     MANUFACTURING BASE TO LOWER COST REGIONS

    With the significant and severe weakness in technology end markets over the
past two years, our customers require significant cost reductions in order to
maintain sales and improve their financial performance. This environment has
resulted in an accelerated movement of our production from higher cost regions
such as North America and western Europe to lower cost regions such as Asia,
Latin America and Central Europe. This accelerated move could impact current and
future results by such factors as increasing the risks associated with
transferring production to new regions where skills or experience may be more
limited than in higher cost regions, higher operating expenses during the
transition, and additional restructuring costs associated with the decrease in
production levels in higher cost geographies.

    WE FACE RISKS DUE TO OUR INTERNATIONAL OPERATIONS

    During 2002, approximately 40% of our revenue was produced from locations
outside of North America. In addition, we purchased material from international
suppliers for much of our business, including our North American business. We
believe that our future growth depends in large part on our ability to increase
our business in international markets and, as we describe above, the shift of
much of our production to lower cost geographies. We will continue to expand our
operations outside of North America. This expansion will require significant
management attention and financial resources. International operations are
subject to inherent risks, which may adversely affect us, including:

    - labor unrest;

    - unexpected changes in regulatory requirements;

    - tariffs, import and export duties, value-added taxes and other barriers;

    - less favorable intellectual property laws;

    - difficulties in staffing and managing foreign sales and support
      operations;

    - longer accounts receivable payment cycles and difficulties in collecting
      payments;

    - changes in local tax rates and other potentially adverse tax consequences,
      including the cost of repatriation of earnings;

    - lack of acceptance of locally manufactured products in other foreign
      countries;

    - burdens of complying with a wide variety of foreign laws, including
      changing import and export regulations which could erode our profit
      margins or restrict exports;

    - adverse changes in Canadian and U.S. trade policies with the other
      countries in which we maintain operations;

    - political instability;

    - potential restrictions on the transfer of funds;

    - inflexible employee contracts that restrict our flexibility in responding
      to business downturns; and

    - foreign exchange risks.

    We have either purchased or built manufacturing facilities in numerous Asian
countries, including Thailand, Malaysia, China, Indonesia, and Singapore, and
are subject to the significant political, economic, and legal risks associated
with doing business in these countries. For instance, under its current
leadership, the Chinese government has instituted a policy of economic reform
which has included encouraging foreign trade and investment, and greater
economic decentralization. However, the Chinese government may discontinue or
change these policies, and these policies may not be successful. Moreover,
despite progress in developing its legal system, China does not have a
comprehensive and highly developed system of laws, particularly as it relates to
foreign investment activities and foreign trade. Enforcement of existing and
future laws and contracts is uncertain, and implementation and interpretation of
such laws may be inconsistent. As the Chinese legal system develops, new laws
and changes to existing laws may adversely affect foreign operations in China.
While Hong Kong has had a long history of promoting foreign investment, its
incorporation into China means that the uncertainty related to China and its
policies may now also affect Hong Kong. Thailand and Indonesia have also had a
long history of promoting foreign investment but have experienced economic and
political turmoil and a significant devaluation of their currencies in the
recent past. There is a risk that economic and political turmoil may result in
the reversal of current policies encouraging foreign investment and trade,
restrictions on the transfer of funds overseas, employee turnover, labor unrest,
or other domestic problems that could adversely affect us.

                                       9
<Page>
    OUR RECENT CAPACITY REDUCTION ACTIVITIES AND MANUFACTURING RESTRUCTURING
     PROGRAMS MAY IMPACT OUR ABILITY TO MEET THE GROWTH NEEDS OF OUR CUSTOMERS

    With the significant and severe weakness in technology end markets over the
past two years, we have experienced poor asset utilization and responded by
significantly reducing our manufacturing infrastructure. If our customers were
to experience sharp and unforecasted improvements in demand, the removal of this
infrastructure could potentially impact customer satisfaction and limit our
ability to grow if we are not able to respond to higher volumes required by our
customers.

    WE FACE FINANCIAL RISKS DUE TO FOREIGN CURRENCY FLUCTUATIONS

    The principal currency in which we conduct our operations is U.S. dollars.
However, some of our subsidiaries transact business in foreign currencies, such
as Canadian dollars, Mexican pesos, British pounds sterling, Euros, Singapore
dollars, Japanese yen, Brazilian reais, and the Thai baht. We may sometimes
enter into hedging transactions to minimize our exposure to foreign currency and
interest rate risks. Our current hedging activity is designed to reduce the
variability of our foreign currency costs and consists of contracts to purchase
or sell these foreign currencies at future dates. In general, these contracts
extend for periods of less than 19 months. Our hedging transactions may not
successfully minimize foreign currency risk.

    INTEREST RATE DECREASES WILL REDUCE INTEREST INCOME ON OUR PORTFOLIO OF CASH
     EQUIVALENTS AND SHORT-TERM INVESTMENTS

    The primary objective of our investment activities is to preserve principal
while, at the same time, maximize yields without significantly increasing risk.
To achieve this objective, we maintain our portfolio of cash equivalents and
short-term investments in a variety of securities, including both government and
corporate obligations, certificates of deposit, and money market funds. If
interest rates, and therefore interest income, were to fall significantly, there
may be a material adverse impact on our financial results.

    WE DEPEND ON HIGHLY SKILLED PERSONNEL

    The recruitment of personnel for the EMS industry is highly competitive. We
believe that our future success will depend, in part, on our ability to continue
to attract and retain highly skilled executive, technical, and management
personnel. We generally do not have employment or non-competition agreements
with our employees. To date we have been successful in recruiting and retaining
executive, managerial, and technical personnel. However, the loss of services of
certain of these employees could have a material adverse effect on us.

    WE ARE IN A HIGHLY COMPETITIVE INDUSTRY

    We are in a highly competitive industry. We compete against numerous
domestic and foreign companies. Two of our competitors, Flextronics
International and Solectron Corporation, each have revenue in excess of
$12.0 billion for fiscal 2002 and one of our competitors, Sanmina-SCI
Corporation, has revenue in excess of $8.0 billion for fiscal 2002. We also face
indirect competition from the manufacturing operations of our current and
prospective customers, which continually evaluate the merits of manufacturing
products internally rather than using EMS providers. Some of our competitors
have more geographically diversified international operations, a greater
production presence in lower cost geographies as well as substantially greater
manufacturing, financial, procurement, research and development, and marketing
resources than we have. These competitors may create alliances and rapidly
acquire significant market share. Accordingly, our current or potential
competitors may develop or acquire services comparable or superior to those we
develop, combine or merge to form significant competitors, or adapt more quickly
than we will to new technologies, evolving industry trends and changing customer
requirements. Competition has caused and may continue to cause price reductions,
reduced profits, or loss of market share, any of which could materially and
adversely affect us. We may not be able to compete successfully against current
and future competitors, and the competitive pressures that we face may
materially adversely affect us. The EMS industry has been experiencing an
increase in excess manufacturing capacity. This has and will continue to exert
additional pressures on pricing for components and services, thereby increasing
the competitive pressures in the EMS industry. Excess capacity will limit the
industries ability to attain economics of scale and other synergies.

                                       10
<Page>
    WE DEPEND ON THE CONTINUING TREND OF OUTSOURCING BY OEMS

    Future growth in our revenue depends on new outsourcing opportunities in
which we assume additional manufacturing and supply chain management
responsibilities from OEMs. To the extent that these opportunities are not
available, either because OEMs decide to perform these functions internally or
because they use other EMS providers, our future growth will be limited.

    WE MAY BE UNABLE TO KEEP PACE WITH TECHNOLOGY CHANGES

    We continue to evaluate the advantages and feasibility of new manufacturing
processes. Our future success will depend in part upon our ability to develop
and to market manufacturing services which meet changing customer needs, to
maintain technological leadership, and to successfully anticipate or respond to
technological changes in production and manufacturing processes in
cost-effective and timely ways. Our manufacturing processes, test development
efforts, and design capabilities may not be successful.

    OUR CUSTOMERS MAY BE ADVERSELY AFFECTED BY RAPID TECHNOLOGICAL CHANGE

    Our customers compete in markets that are characterized by rapidly changing
technology, evolving industry standards, and continuous improvements in products
and services. These conditions frequently result in short product life cycles.
Our success will depend largely on the success achieved by our customers in
developing and marketing their products. If technologies or standards supported
by our customers' products become obsolete or fail to gain widespread commercial
acceptance, our business could be materially adversely affected.

    WE MAY BE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY

    We believe that certain of our proprietary intellectual property rights and
information give us a competitive advantage. Accordingly, we have taken, and
intend to continue to take, appropriate steps to protect this proprietary
information. These steps include signing non-disclosure agreements with
customers, suppliers, employees, and other parties and implementing rigid
security measures. Our protection measures may not be sufficient to prevent the
misappropriation or unauthorized disclosure of our property or information.

    There is also a risk that infringement claims may be brought against us or
our customers in the future. If someone does successfully assert an infringement
claim, we may be required to spend significant time and money to develop a
manufacturing process that does not infringe upon the rights of such other
person or to obtain licenses for the technology, process or information from the
owner. We may not be successful in such development or any such licenses may not
be available on commercially acceptable terms, if at all. In addition, any
litigation could be lengthy and costly and could adversely affect us even if we
are successful in such litigation.

    WE ARE SUBJECT TO THE RISK OF INCREASED INCOME TAXES

    Our business operations are carried on in a number of countries, including
countries where:

    - tax incentives have been extended to encourage foreign investment; or

    - income tax rates are low.

    We develop our tax position based upon the anticipated nature and conduct of
our business and the tax laws, administrative practices and judicial decisions
now in effect in the countries in which we have assets or conduct business, all
of which are subject to change or differing interpretations, possibly with
retroactive effects.

    OUR COMPLIANCE WITH ENVIRONMENTAL LAWS COULD BE COSTLY

    Like others in similar businesses, we are subject to extensive environmental
laws and regulations in numerous jurisdictions. Our environmental policies and
practices have been designed to ensure compliance with these laws and
regulations consistent with local practice. Future developments and increasingly
stringent regulation could require us to incur additional expenditures relating
to environmental matters at any of the facilities. Achieving and maintaining
compliance with present, changing, and future environmental laws could restrict
our ability to modify or expand our facilities or continue production. This
compliance could also require us to acquire costly equipment or to incur other
significant expenses.

                                       11
<Page>
    Some of our operating sites have a history of industrial use. Soil and
groundwater contamination have occurred at some of our facilities. Certain
environmental laws impose liability for the costs of removal or remediation of
hazardous or toxic substances on an owner, occupier or operator of real estate,
even if such person or company was not aware of or responsible for the presence
of such substances. In addition, in some countries in which we have operations,
any person or company who arranges for the disposal or treatment of hazardous or
toxic substances at a disposal or treatment facility may be liable for the costs
of removal or remediation of such substances at such facility, whether or not
the person or company owns or operates the facility. From time to time we
investigate, remediate, and monitor soil and groundwater contamination at
certain of our operating sites. In certain instances where soil or groundwater
contamination existed prior to our ownership or occupation of a site, landlords
or former owners have contractually retained responsibility and liability for
the contamination and its remediation. However, failure of such former owners or
landlords to perform, as the result of financial inability or otherwise, could
result in our company being required to remediate such contamination.

    Except for facilities we acquired in the Omni transaction, we obtained
Phase I or similar environmental assessments, or reviewed recent assessments
initiated by others, for most of the manufacturing facilities that we own or
lease at the time we either acquired or leased such facilities. Typically, these
assessments include general inspections without soil sampling or groundwater
analysis. Where contamination is suspected, Phase II intrusive environmental
assessments (including soil and/or groundwater testing) are usually performed.
These assessments have not revealed any environmental liability that we believe,
based on current information, will have a material adverse effect on us, in part
because of the contractual retention of liability for some contamination and its
remediation by landlords and former owners. Our assessments may not reveal all
environmental liabilities and current assessments are not available for all
facilities. Consequently, there may be material environmental liabilities of
which we are not aware. In addition, ongoing clean up and containment operations
may not be adequate for purposes of future laws. The conditions of our
properties could be affected in the future by the conditions of the land or
operations in the vicinity of the properties (such as the presence of
underground storage tanks). These developments and others (such as increasingly
stringent environmental laws, increasingly strict enforcement of environmental
laws by governmental authorities, or claims for damage to property or injury to
persons resulting from the environmental, health, or safety impact of our
operations) may cause us to incur significant costs and liabilities that could
have a material adverse effect on us.

    OUR LOAN AGREEMENTS CONTAIN RESTRICTIVE COVENANTS

    Certain of our outstanding loan agreements contain financial and operating
covenants that limit our management's discretion with respect to certain
business matters. Among other things, these covenants restrict our ability and
our subsidiaries' ability to incur additional debt, create liens or other
encumbrances, change the nature of our business, sell or otherwise dispose of
assets, and merge or consolidate with other entities.

    POTENTIAL ADVERSE EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE

    Future sales of our subordinate voting shares in the public market, or the
issuance of subordinate voting shares upon the exercise of stock options or
otherwise, could adversely affect the market price of the subordinate voting
shares.

    As of February 28, 2003, we had 189,102,903 subordinate voting shares and
39,065,950 multiple voting shares outstanding. All of the subordinate voting
shares are freely transferable without restriction or further registration under
the U.S. Securities Act, except for shares held by our affiliates (as defined in
the U.S. Securities Act). Shares held by our affiliates include all of the
multiple voting shares and 3,483,238 subordinate voting shares held by Onex. An
affiliate may not sell shares in the United States unless the sale is registered
under the U.S. Securities Act or an exemption from registration is available.
Rule 144 adopted under the U.S. Securities Act permits our affiliates to sell
our shares in the United States subject to volume limitations and requirements
relating to manner of sale, notice of sale and availability of current public
information with respect to Celestica.

    In addition, as of February 28, 2003, there were approximately 33,497,000
subordinate voting shares reserved for issuance under our employee share
purchase and option plans and for director compensation,

                                       12
<Page>
including outstanding options to purchase approximately 25,536,000 shares. The
issuances and/or sale of such shares could adversely affect the market price of
the subordinate voting shares.

    OUR COMPANY IS CONTROLLED BY ONEX CORPORATION

    Onex owns, directly or indirectly, all of the outstanding multiple voting
shares and less than 1% of the outstanding subordinate voting shares. The number
of shares owned by Onex, together with those shares Onex has the right to vote,
represent 84% of the voting interest in Celestica and approximately 2% of the
outstanding subordinate voting shares. Accordingly, Onex exercises a controlling
influence over our business and affairs and has the power to determine all
matters submitted to a vote of our shareholders where our shares vote together
as a single class. Onex has the power to elect our directors and to approve
significant corporate transactions such as certain amendments to our articles of
incorporation, mergers, amalgamations, plans of arrangement, and the sale of all
or substantially all of our assets. Onex' voting power could have the effect of
deterring or preventing a change in control of our company that might otherwise
be beneficial to our other shareholders. Under our revolving credit facilities,
if Onex ceases to control Celestica and if our shares cease to be widely held
("widely held" meaning that no one person owns more than 20% of the votes), our
lenders could demand repayment. Gerald W. Schwartz, the Chairman, President and
Chief Executive Officer of Onex and one of our directors, owns shares with a
majority of the voting rights of the shares of Onex. Mr. Schwartz, therefore,
effectively controls our affairs. For additional information about our principal
shareholders, please turn to Item 7(A), "Major Shareholders."

    In private placements outside of the United States, certain subsidiaries of
Onex have offered exchangeable debentures due 2025 that are exchangeable and
redeemable under certain circumstances during their 25-year term for 9,214,320
subordinate voting shares. In addition, 1,757,467 subordinate voting shares may
be delivered, at the option of Onex or certain persons related to Onex, to
satisfy the obligations of such persons under equity forward agreements. If the
issuers of the exchangeable debentures elect or the party to the equity forward
agreements elects to deliver solely subordinate voting shares and no cash upon
the exchange or redemption, or at maturity or acceleration, of the debentures or
the settlement of the equity forward agreement, as the case may be, the number
of shares owned by Onex, together with those shares Onex has the right to vote,
would, if such delivery had occurred on February 28, 2003, represent in the
aggregate 78% of the voting interest in our company.

    POTENTIAL VOLATILITY OF SHARE PRICE

    The markets for our subordinate voting shares are highly volatile. The
trading price of subordinate voting shares could fluctuate widely in response
to:

    - quarterly variations in our operations and financial results;

    - announcements by us or our competitors of technological innovations, new
      products, new contracts or acquisitions;

    - changes in our prices or the prices of our competitors' products and
      services;

    - changes in our product mix;

    - changes in our growth rate as a whole or for a particular portion of our
      business;

    - general conditions in the EMS industry; and

    - systemic fluctuations in the stock markets.

    The stock markets have fluctuated widely in the past. The securities of many
technology companies, including companies in the EMS industry, have experienced
extreme price and volume fluctuations, which often have been unrelated to the
companies' operating performance. These broad market fluctuations may adversely
affect the market price of the subordinate voting shares.

                                       13
<Page>
    POTENTIAL UNENFORCEABILITY OF CIVIL LIABILITIES AND JUDGMENTS

    We are incorporated under the laws of the Province of Ontario, Canada. Most
of our directors, controlling persons and officers are residents of Canada.
Also, a substantial portion of our assets and the assets of these persons are
located outside of the United States. As a result, it may be difficult for
shareholders to initiate a lawsuit within the United States against these
non-U.S. residents, or to enforce, in the U.S., judgments which are obtained in
a U.S. court against us or these persons. It may also be difficult for
shareholders to enforce a U.S. judgment in Canada or to succeed in a Canadian
court, in a lawsuit based only on U.S. securities laws.

ITEM 4.  INFORMATION ON THE COMPANY

A.  HISTORY AND DEVELOPMENT OF THE COMPANY

    Celestica was incorporated in Ontario, Canada under the name Celestica
International Holdings Inc. on September 27, 1996. Since that date, we have
amended our articles of incorporation on various occasions principally to modify
our corporate name and our share capital. Our legal name and commercial name is
Celestica Inc. We are a corporation domiciled in the Province of Ontario, Canada
and operate under the Ontario Business Corporations Act. Our principal executive
offices are located at 1150 Eglinton Avenue East, Toronto, Ontario, Canada
M3C 1H7 and our telephone number is (416) 448-5800. Our Web site is
http://www.celestica.com. Information on our Web site is not incorporated by
reference in this Annual Report.

    We are a world leader in the delivery of innovative electronics
manufacturing services. We operate a highly sophisticated global manufacturing
network with operations in Asia, Europe, and the Americas, providing a broad
range of services to leading OEMs. A recognized leader in quality, technology,
and supply chain management, Celestica provides competitive advantage to
customers by improving time-to-market, scalability, and manufacturing
efficiency.

    As an important IBM manufacturing unit, Celestica provided manufacturing
services to IBM for more than 75 years. In 1993, we began providing EMS services
to non-IBM customers. In October 1996, Celestica was purchased from IBM by an
investor group, led by Onex, which included our management.

OUR ACQUISITIONS

    A listing of our acquisitions since 1998 is included in note (1) to the
Selected Financial Data table, see Item 3, "Key Information -- Selected
Financial Data."

    In 2002, we completed the acquisition of:

    - certain manufacturing assets of NEC Corporation in Miyagi and Yamanashi,
      Japan; and

    - certain assets from Corvis Corporation in the United States.

    In connection with these acquisitions, we also entered into supply
agreements. The aggregate purchase price for these acquisitions was
$111.0 million.

    Certain information concerning capital expenditures, including acquisitions
and financing activities, is set forth in notes 3, 9, 10, 11, and 20 to the
Consolidated Financial Statements in Item 18, and Item 5, "Operating and
Financial Review and Prospects -- Management's Discussion and Analysis of
Financial Condition and Results of Operations."

    Certain information concerning our divestiture activities, such as
restructuring, is set forth in note 13 to the Consolidated Financial Statements
in Item 18, in Item 4, "Information on the Company -- Description of Property,"
and Item 5, "Operating and Financial Review and Prospects -- Management's
Discussion and Analysis of Financial Condition and Results of Operations."

B.  BUSINESS OVERVIEW

    Our goal is to be the "partner of choice" in EMS. We believe we are uniquely
positioned to achieve this goal given our position as one of the major EMS
providers worldwide and our widely recognized skills in our core areas of
competency. The Company's strategy is to (i) maintain our leadership position in
the areas of

                                       14
<Page>
technology, quality, and supply chain management, (ii) develop profitable,
strategic relationships with industry leaders, (iii) continually expand the
range of the services we provide to OEMs, (iv) diversify our customer base,
serving a wide variety of end markets, (v) selectively pursue strategic
acquisitions, and (vi) steadily improve our operating margins. We believe that
the successful implementation of this strategy will allow us to achieve superior
financial performance and enhance shareholder value.

    We have operations in the Americas, Europe, and Asia. We provide a wide
variety of products and services to our customers, including the manufacture,
assembly, and test of complex printed circuit assemblies, or PCAs, and the full
system assembly of final products. In addition, we provide a broad range of EMS
services from product design to worldwide distribution and after-sales support.

    Celestica targets industry-leading OEMs primarily in the information
technology and communications sectors. Celestica supplies products and services
to over 100 OEMs. In the aggregate, our top ten customers represented over 80%
of revenue in 2002. The products we manufacture can be found in a wide array of
end products, including: cell phones and pagers, electronic metering devices,
hubs and switches, LAN and WAN networking cards, laser printers, mainframe
computers, mass storage devices, medical products, modems, multimedia
peripherals, PBX switches, personal computers, PDAs, photonic devices, routers,
scalable processors, servers, switching products, token ring products, video
broadcasting equipment, wireless base stations, wireless loop systems, and
workstations.

    Our principal competitive advantages are our advanced capabilities and
leadership in the areas of technology, quality and supply chain management. We
are an industry leader in a wide range of advanced manufacturing technologies,
using established and emerging process technologies. We believe our test
capabilities are among the best in the industry and enable us to produce highly
reliable products, including products that are critical to the functioning of
our customers' products and systems. Our size, geographic reach, and leading
expertise in supply chain management allow us to purchase materials effectively
and to deliver products to customers faster, thereby reducing overall product
costs and reducing the time to market.

    We believe that our highly skilled workforce gives us a distinct competitive
advantage. Through innovative compensation and broad-based employee stock
ownership, we have developed a unique entrepreneurial, participative and
team-based culture.

ELECTRONICS MANUFACTURING SERVICES INDUSTRY

    OVERVIEW

    The EMS industry is comprised of companies that provide a range of
manufacturing services to OEMs. The industry (i) has experienced rapid growth in
the past and has potential for growth in the future as the market for
outsourcing, as a whole, grows, (ii) is highly fragmented and (iii) is poised
for continuing consolidation due to the advantages of scale and geographic
diversity. In 2002, two EMS providers -- Flextronics International and Solectron
Corporation -- each achieved total revenue in excess of $12.0 billion, and two
EMS providers -- Celestica and Sanmina-SCI Corporation -- each achieved total
revenue in excess of $8.0 billion.

    We see numerous industry vectors that are fueling the EMS industry. These
include the continuing trend of information technology and communications
companies to outsource their electronics manufacturing and to divest their
manufacturing assets; OEMs in Japan increasingly execute an electronics
manufacturing outsourcing strategy; the increasing adoption of an outsourcing
strategy by the industrial, medical, military, and consumer electronics
industries; and OEMs increasingly looking to the EMS industry to reduce their
overall cost of goods sold and to provide a full range of services including
design, system build, order fulfillment, reverse logistics, and other related
manufacturing and customer support services.

    In the current weak economic environment, the industry is dealing with the
challenges of low utilization rates and the shifting of more production and
manufacturing infrastructure to lower cost geographies. However, we believe that
as the trend to outsourcing continues, OEMs will increasingly outsource more of
their manufacturing and related services to EMS providers. This trend will favor
larger EMS providers that have clear advantages of scale, financial strength,
geographic diversity, and leading supply chain capabilities, and is expected to
lead to a sustained period of consolidation in the EMS industry.

                                       15
<Page>
    EVOLUTION OF THE EMS INDUSTRY

    Historically, OEMs were fully integrated. They invested heavily in
manufacturing assets, establishing facilities around the world to support the
manufacture, service and distribution of their products. Since the 1970s, the
EMS market has evolved significantly. In the early stages of development of the
EMS industry, EMS companies acted as subcontractors and performed simple
material assembly functions mainly on a consignment basis for
OEMs. Accordingly, the relationship between OEMs and EMS providers tended
originally to be transactional in nature.

    Significant advancements in manufacturing process technology in the 1980s
enabled EMS companies to provide cost savings to OEMs while at the same time
increasing the quality of their products. Furthermore, as the capabilities of
EMS companies expanded, an increasing number of OEMs adopted and became
increasingly reliant upon manufacturing outsourcing strategies. In recent years,
large sophisticated EMS companies have further expanded their capabilities to
include providing services in support of their OEM customers, ranging from
design to advanced manufacturing, final distribution and after-sales support.
For the services they provide, the larger EMS companies generally have a lower
cost structure, superior technological know-how and more advanced manufacturing
processes relative to most of the OEM customers they serve. In this environment,
OEMs have begun increasingly to outsource front-end design functions as well as
back-end full system assembly, product test, test development, order fulfillment
and distribution functions.

    By outsourcing their manufacturing and related services, OEMs are able to
focus on their core competencies, including product development, sales,
marketing and customer service, while leveraging the expertise of EMS providers
for design, procurement, assembly and test operations, and supply chain
management. As a result, larger, more sophisticated EMS providers have
established strong strategic relationships with many of their OEM customers.

    The Company believes that the principal reasons OEMs establish relationships
with EMS providers include the following:

    DECREASE TIME TO MARKET.  Electronics products are experiencing increasingly
shorter product life cycles, requiring OEMs to continually reduce the time
required to bring products to market. OEMs can significantly improve product
development cycles and enhance time to market by benefiting from the expertise
and infrastructure of EMS providers. This includes capabilities relating to
design, quick-turn prototype development and rapid ramp-up of new products to
high volume production, with the critical support of worldwide supply chain
management.

    REDUCE OPERATING COSTS AND INVESTED CAPITAL.  As electronics products have
become more technically advanced, the manufacturing process has become
increasingly automated, requiring greater levels of investment in capital
equipment. EMS companies enable OEMs to gain access to advanced manufacturing
facilities, supply chain management and engineering capabilities, additional
capacity, greater flexibility for both product ramp-up and changeover, and the
economies of scale which EMS companies provide. As a result, OEMs can reduce
overall operating costs, working capital and capital investment requirements.

    FOCUS RESOURCES ON CORE COMPETENCIES.  The electronics industry is
experiencing greater levels of competition and rapid technological change. In
this environment, many OEMs are seeking to focus on their core competencies of
product development, sales, marketing and customer service, and to outsource
design, manufacturing and related requirements to their EMS partners.

    ACCESS LEADING MANUFACTURING TECHNOLOGIES.  Electronics products and
electronics manufacturing technology have become increasingly sophisticated and
complex, making it difficult for many OEMs to maintain the necessary
technological expertise and focus required to efficiently manufacture products
internally. By working closely with EMS providers, OEMs gain access to high
quality manufacturing expertise and capabilities in the areas of advanced
process, interconnect and test technologies.

    UTILIZE EMS COMPANIES' PROCUREMENT, INVENTORY MANAGEMENT AND LOGISTICS
EXPERTISE.  OEMs who manufacture internally are faced with greater complexities
in planning, procurement and inventory management due to frequent design
changes, short product life cycles and product demand fluctuations. OEMs can
address

                                       16
<Page>
these complexities by outsourcing to EMS providers that (i) possess
sophisticated supply chain management capabilities, and (ii) can leverage
significant component procurement advantages to lower product costs.

    IMPROVE ACCESS TO GLOBAL MARKETS.  OEMs are generally increasing their
international activities in an effort to expand sales through access to foreign
markets. EMS companies with worldwide capabilities are able to offer such
OEMs global manufacturing solutions, to meet local content requirements,
distribute products efficiently around the world and lower costs.

    KEY SUCCESS FACTORS

    Celestica believes that the following are the key success factors for EMS
providers seeking to establish and expand relationships with leading OEMs:

    SOPHISTICATED TECHNOLOGICAL CAPABILITIES.  The desire among OEMs to increase
product performance, functionality and quality is driving a requirement for
increasingly complex assembly and test technologies. EMS companies that possess
sophisticated skills in manufacturing technology, and that continually innovate
and develop advanced assembly and test techniques, provide a competitive
advantage to their OEM customers. We believe that as the trend to outsourcing
continues, OEMs will increasingly outsource more complex products.

    LARGE-SCALE AND FLEXIBLE PRODUCTION CAPACITY.  Increasingly, leading
OEMs are seeking to outsource large-scale manufacturing programs. Generally
those EMS providers that can meet the volume and sensitive time-to-market
requirements associated with these programs will be able to exploit these
opportunities. EMS providers must be of a certain scale and diversity to be
awarded large-scale programs, as OEMs are often seeking partners with the
resources to support simultaneous product launches in multiple geographic
markets.

    GLOBAL SUPPLY CHAIN MANAGEMENT SKILLS.  EMS providers must possess the
skills required to optimize many aspects of the OEM's global supply chain, from
managing a sophisticated supplier base, component selection and cost-effective
procurement to inventory management and rapid distribution direct to end
customers. Therefore, EMS providers who lack the sophisticated material resource
planning and information technology systems necessary to effectively optimize
the supply chain will be significantly disadvantaged in the marketplace.

    BROAD SERVICE OFFERING.  In order to establish strategic relationships with
OEM customers, EMS companies must be able to effectively provide a broad
portfolio of services. These services include front-end product design and
design for manufacturability, component selection and procurement, quick-turn
prototyping, PCA test, product assurance and failure analysis, as well as
back-end functions such as full system assembly, order fulfillment, worldwide
distribution and after-sales support, including repair services. The complex
nature of certain services such as front-end design and testing requires a
significant investment in highly trained engineering personnel.

    COMPETITIVE COSTS.  EMS companies with global plant networks can simplify
and shorten an OEM's supply chain, significantly reduce the time it takes to
bring products to market, and significantly reduce the total cost of an OEM's
product. EMS providers that have significant capability in lower cost regions
such as Mexico, Asia, and Central Europe can provide lower cost manufacturing
solutions to their OEM customers. As a result of these trends, many large
OEMs tend to work with a smaller number of EMS providers that, as worldwide
suppliers, can meet their needs in multiple geographic markets at the lowest
cost.

    MARKET CONSOLIDATION

    The Company believes that larger EMS providers that possess the above-noted
attributes will be well positioned to take advantage of the future outsourcing
trend. Conversely, the Company believes that smaller providers who seek to serve
leading OEMs, and compete directly with larger EMS providers, will generally be
disadvantaged due to a lack of scale and their difficulty in meeting OEM
requirements relating to technology, capacity, supply chain management, broad
service offerings, global manufacturing capabilities, and competitive costs.

    The EMS industry continues to experience large-scale acquisition activity,
primarily through the sale of facilities and manufacturing operations from
OEMs to larger EMS providers. OEMs have tended to award these

                                       17
<Page>
opportunities to larger EMS providers that possess the capital, management
expertise and advanced systems required to integrate the acquired business
effectively as the acquiror in most cases becomes an important supplier to the
OEM post-acquisition. For the EMS provider, these acquisitions have been driven
by the need for additional capacity or capability, a desire to enter new
geographic or product markets and services, or a desire to establish or further
develop a customer relationship with a particular OEM.

    Given this environment, Celestica believes that the EMS industry may
experience significant consolidation, driven by the continued trend among
OEMs to outsource large-volume programs to leading EMS providers, the continued
disposition of OEM manufacturing assets to these companies and acquisition
activity among EMS businesses themselves.

CELESTICA'S STRATEGY

    Celestica's goal is to be the "partner of choice" in EMS. To achieve this
goal, Celestica works closely with OEM customers to proactively identify and
fulfill each of their requirements, and exceed their expectations in areas such
as price, delivery, quality, reliability and serviceability. By deploying the
following strategy, we believe that Celestica will maximize customer
satisfaction, achieve superior financial performance, and enhance shareholder
value:

    LEVERAGE LEADERSHIP IN TECHNOLOGY, QUALITY AND SUPPLY CHAIN MANAGEMENT.  We
are committed to maintaining our leadership position in the areas of technology,
quality and supply chain management. Our modern plants and leading technological
capabilities enable us to produce complex and highly sophisticated products to
meet the rigorous demands of our OEM customers. The Company's Customer Gateway
Centre strategy provides customer access to the Company's broad base of
services, capabilities, skills, geographic coverage and larger production
facilities. Our commitment to quality in all aspects of our business allows us
to deliver consistently reliable products to our OEM customers. The systems and
processes associated with our leadership in supply chain management enable us to
rapidly ramp operations to meet customer needs, flexibly shift capacity in
response to product demand fluctuations, and effectively distribute products
directly to end customers. We often work closely with many suppliers to
influence component design for the benefit of OEM customers. We have been
recognized through numerous customer and industry achievement awards.

    DEVELOP AND ENHANCE RELATIONSHIPS WITH LEADING OEMS.  Celestica seeks
profitable, strategic relationships with industry leaders in the information
technology and communications sectors. To this end, we pursue opportunities
which exploit our competitive advantages in the areas of technology, quality and
supply chain management. This strategy has allowed us to establish strong
manufacturing relationships with leading OEMs. We are also committed to
diversification of our customer base and to expanding our global presence as
required by our customers.

    BROADEN SERVICE OFFERINGS.  We continually expand the breadth and depth of
the services we provide to OEMs. Although we traditionally offered our services
in connection with the production of higher-end and more complex products, we
have significantly broadened our offering of services to facilitate the
manufacture of a broader spectrum of products and to support the full product
lines of leading OEMs. In the past few years, we have acquired additional
capabilities in prototyping and PCA design, embedded system design, full system
assembly and repair services. We will expand our capabilities and service
offerings on a global basis as required by our customers.

    DIVERSIFY END MARKETS.  Celestica has a diversified customer base whose
products serve the communications, server, storage and other, workstation and
personal computer industries. In 2002, revenue by end-market users was as
follows: communications -- 45%; servers -- 26%; storage and other -- 22%; and
workstations and personal computer -- 7%. Celestica targets industry-leading
OEMs, primarily in the information technology and communications sectors. In
addition to this, Celestica's strategy includes increasing its diversification
across other end markets, such as aerospace, military, industrial, medical,
consumer, and automotive, to reduce the risk of reliance on certain sectors.

                                       18
<Page>
    SELECTIVELY PURSUE STRATEGIC ACQUISITIONS.  Celestica has completed numerous
acquisitions. We will continue selectively to seek acquisition opportunities in
order to (i) further develop strategic relationships with leading OEMs,
(ii) expand our capacity and capability, (iii) diversify into new market
sectors, (iv) broaden our service offerings, and (v) optimize our global
positioning. Celestica has developed and deployed a comprehensive integration
strategy that includes establishing a common culture at all locations with
broad-based workforce participation, providing a single marketing "face" to
customers worldwide, deploying common information technology platforms,
leveraging global procurement and transferring best practices among operations
worldwide.

    INCREASE OPERATING EFFICIENCY.  While operating margins were relatively
stable for the past two years, operating margins fell in 2002 as a result of
revenue declines and weaker facilities utilization. Management is committed to
applying our proven strategies and processes to enhance margins around the
world. Additionally, we are executing our plan to improve overall financial
margins by (i) completing our restructuring program, (ii) leveraging corporate
procurement capabilities to lower materials costs, (iii) increasing utilization
of facilities to take advantage of significant operating leverage,
(iv) deploying corporate cost reduction and productivity enhancement initiatives
on a global basis, (v) consistently applying best practices among our operations
worldwide, and (vi) compensating our employees based in part on the achievement
of earnings targets. In addition, we will continue our intensive focus on
maximizing asset turnover which, combined with the margin enhancements described
above, we believe will increase our return on invested capital.

CELESTICA'S BUSINESS

    EMS SERVICES

    Celestica is positioned as a value-added provider within the EMS industry
with a full spectrum of products and services to capitalize on the extensive
technological know-how and intellectual capital within Celestica. We believe
that our ability to deliver this wide spectrum of services to our OEM customers
provides us with a competitive advantage over EMS providers focused in few
service areas. Celestica offers a full range of manufacturing services including
those discussed below.

    SUPPLY CHAIN MANAGEMENT.  We utilize our fully integrated enterprise
resource planning and supply chain management system to enable us to optimize
materials management from supplier to end customer. Effective management of the
supply chain is critical to the success of OEMs as it directly impacts the time
required to deliver product to market and the capital requirements associated
with carrying inventory.

    DESIGN.  Celestica's design team works with OEM product developers in the
early stages of product development. The design team uses advanced design tools
to enable new product ideas to progress from electrical and ASIC design, to
simulation and physical layout to design for manufacturability. Electronic
linkages between the customer, the design group, and the manufacturing group at
Celestica help to ensure that new designs are released rapidly, smoothly, and
cohesively into production.

    PROTOTYPING.  Prototyping is a critical stage in the development of new
products which is enhanced by linkages between OEM and EMS engineers.
Celestica's prototyping and new product introduction centers, referred to as
"Customer Gateway Centres," are strategically located, enabling us to provide a
quick response to customer demands facilitating greater collaboration between
our engineers and those customers, and providing a seamless entry to our larger
manufacturing facilities.

    PRODUCT ASSEMBLY AND TEST.  We use sophisticated technology in the assembly
and testing of our products, and have continually made significant investments
in developing new assembly and test process techniques and improving product
quality, reducing cost, and improving delivery time to customers. Celestica
works independently and with customers and suppliers to develop leading assembly
and test technologies.

    FULL SYSTEM ASSEMBLY.  Celestica provides full system assembly services to
OEMs. These services require sophisticated logistics capabilities to rapidly
procure components, assemble products, perform complex testing, and distribute
products to customers around the world. Celestica's full system assembly
services involve combining a wide range of sub-assemblies (including PCA) and
employing advanced test techniques to various sub-assemblies and final end
products. Increasingly, OEMs require custom build-to-order system solutions with

                                       19
<Page>
very short lead times. We are focused on exploiting this trend through our
advanced supply chain management capabilities.

    PRODUCT ASSURANCE.  Celestica provides product assurance to our OEM
customers. Celestica's product assurance team performs product life testing and
full circuit characterization to ensure that designs meet or exceed required
specifications. Celestica is accredited as a National Testing Laboratory capable
of testing to international standards (E.G., Canadian Standards Association and
Underwriters Laboratories). Celestica believes that this service allows
customers to attain product certification significantly faster than is customary
in the EMS industry.

    FAILURE ANALYSIS.  Celestica's extensive failure analysis capabilities
concentrate on identifying the root cause of failures and determining corrective
action. Root causes of failures typically relate to inherent component defects
or design robustness deficiencies. Products are subjected to various
environmental extremes, including temperature, humidity, vibration, voltage, and
rate of use, and field conditions are simulated in failure analysis laboratories
which also employ advanced electron microscopes, spectrometers, and other
advanced equipment. We are proficient in discovering failures before products
are shipped and, more importantly, our highly qualified engineers are very pro
active in working in partnership with suppliers and customers to implement
resolutions.

    PACKAGING AND GLOBAL FULFILLMENT.  Celestica designs and tests packaging of
products for bulk shipment or single end-customer use. We have a sophisticated
integrated system for managing complex international order fulfillment, allowing
us to ship worldwide and, in many cases, directly to the OEMs' end customers.

    AFTER-SALES SUPPORT.  Celestica offers a wide range of after-sales support
services. This support can be individualized to meet each customer's
requirements and includes field failure analysis, product upgrades, repair, and
engineering change management.

    QUALITY MANAGEMENT

    One of our strengths has been our ability to consistently deliver high
quality services and products. Celestica has an extensive quality management
system that focuses on continual process improvement and achieving high customer
satisfaction. Celestica employs a variety of advanced statistical engineering
techniques and other tools to assist in improving product and service quality.
All of our principal facilities are ISO certified to ISO 9001 or ISO 9002
standards. Most of our principal facilities are also certified to the ISO 14001
(environmental) standards.

    We believe that our success is directly linked to high customer
satisfaction. As such, a portion of the compensation of employees is based on
the results of extensive customer satisfaction surveys conducted on Celestica's
behalf by an independent consultant.

    GEOGRAPHIES

    In 2002, approximately 56% of Celestica's revenue was produced in North
America. Facilities in Asia and Europe generated approximately 23% and 21%,
respectively, of Celestica's revenue in 2002. A listing of our principal
locations is included in Item 4, "Information on the Company -- Description of
Property." We are focused on expanding our resources and capability in lower
cost geographies. We believe that locating in lower cost geographic regions such
as Central Europe and Asia complements our service offerings by providing lower
cost manufacturing solutions to our OEM customers for certain price-sensitive
applications.

    Certain information concerning geographic segments is set forth in note 20
to the Consolidated Financial Statements in Item 18.

    SALES AND MARKETING

    Sales and marketing at Celestica is an integrated set of processes designed
to provide a single "face" to the customer worldwide. Celestica's coordination
of efforts with key global customers has been enhanced by the creation of
customer-focused units each headed by a group general manager to oversee the
entire relationship with such customers. We have a global network comprised of
direct sales representatives, operational and project managers, account
executives, and supply chain management, as well as senior executives.
Celestica's

                                       20
<Page>
sales resources are directed at multiple management and staff levels within
target accounts. Sales offices are located in proximity to key customers and
markets.

    Celestica has adopted a focused marketing approach targeted at creating
profitable, strategic relationships with leading OEMs primarily in the
information technology and communications sectors.

    CUSTOMERS

    Celestica targets industry-leading customers primarily in the information
technology and communications sectors. Celestica supplies products and services
to over 100 OEMs, including such industry leaders as Avaya Inc., Cisco
Systems Inc., Dell Computer Corporation, EMC Corporation, Hewlett-Packard
Corporation, IBM Corporation, Lucent Technologies Inc., Motorola Inc., NEC
Corporation, and Sun Microsystems Inc.

    During 2002, Celestica's three largest customers, IBM Corporation, Sun
Microsystems Inc., and Lucent Technologies Inc., each represented in excess of
10% of total revenue and in the aggregate represented 48% of total revenue.
During 2001, Celestica's three largest customers, IBM Corporation, Sun
Microsystems Inc., and Lucent Technologies Inc., each represented in excess of
10% of total revenue and in the aggregate represented 55% of total revenue.
Celestica's next seven largest customers represented approximately 37% of
Celestica's total revenue in 2002 (compared with 29% for the next seven largest
customers in 2001).

    We generally enter into supply arrangements in connection with our
acquisition of facilities from OEMs. These arrangements generally govern the
conduct of business between the parties relating to, among other things, the
manufacture of products which were previously produced at that facility by the
seller itself. Such arrangements, which in certain instances contain limited
overhead contribution provisions or limited revenue or product volume
guarantees, range from one to five years. There can be no assurance that these
arrangements will be renewed. As a result of the weak economic environment,
these supply agreements have been affected by order cancellations and
rescheduling as our customers' base-business volumes have decreased.

    TECHNOLOGY AND RESEARCH AND DEVELOPMENT

    We use advanced technology in the assembly and testing of the products we
manufacture. We believe that our processes and skills are among the most
sophisticated in the industry, which provides us with advantages over many of
our smaller and less sophisticated competitors.

    Our customer-focused factories are highly flexible and are continually
reconfigured to meet customer-specific product requirements. Celestica has
extensive capabilities across a broad range of specialized assembly process
technologies, including chip on board, chip scale packaging, flip chip attach,
tape automated bonding, wire bonding, multi-chip module, ball grid array, micro
ball grid array, tape ball grid array, and column grid array. We also work with
a wide range of substrate types from thin flexible printed circuit boards to
highly complex, dense multilayer boards.

    Our assembly capabilities are complemented by advanced test capabilities.
Technologies include high speed functional testing, burn-in, vibration, radio
frequency, in-circuit, and in-situ dynamic thermal cycling stress testing. We
believe that our inspection technology, which includes X-ray laminography,
three-dimensional laser paste volumetric inspection, and scanning electron
microscopy, is among the most sophisticated in the EMS industry. Furthermore,
Celestica employs internally-developed automated robotic technology to perform
in-process repair.

    Our ongoing research and development activities include the development of
processes and test technologies as well as some focused product development.
Celestica is proactive in developing manufacturing techniques which take
advantage of the latest component and product designs and packaging. We often
work with industry groups to advance the state of technology in the industry.

    SUPPLY CHAIN MANAGEMENT

    Celestica has strong relationships with a broad range of suppliers. We use
electronic data interchange with our key suppliers and ensure speed of supply
through the use of automated receiving and full-service distribution
capabilities. During 2002, Celestica procured and managed over $6.0 billion in
materials and related services. We

                                       21
<Page>
view this size of procurement as an important competitive advantage as it
enhances our ability to obtain better pricing, influence component packaging and
design, and obtain supply of components in constrained markets.

    We utilize two fully integrated enterprise systems which provide
comprehensive information on our logistics, financial and engineering support
functions. One system is used in Asia, Brazil, and Europe and the other system
is common throughout the rest of Celestica's operations. These systems provide
management with the data required to manage the logistical complexities of the
business. These systems are augmented by and integrated with other applications
such as shop floor controls, component database management and design tools.

    We employ a strategy of risk minimization relative to our inventory and
generally order materials and components only to the extent necessary to satisfy
existing customer orders. Celestica has implemented specific inventory
management strategies with certain suppliers such as "supplier managed
inventory" (pulling inventory at the production line on an as-needed basis) and
"real-time component pricing" (the ability to obtain the advantage of the most
recent price change in component pricing) designed to minimize the risk to us of
cost fluctuations. In providing contract manufacturing services to our
customers, we are largely protected from the risk of fluctuations in inventory
costs, as these costs are generally passed through to customers.

    Almost all of the products manufactured or assembled by Celestica require
one or more components, one or more of which may be ordered from a sole-source
supplier. Some of these components could be rationed in response to supply
shortages. We attempt to ensure continuity of supply of these components. In
cases where unanticipated customer demand or supply shortages occur, we attempt
to arrange for alternative sources of supply, where available, or to defer
planned production in response to the anticipated unavailability of the critical
components. In some cases, supply shortages will substantially curtail
production of all full system assemblies using a particular component. In
addition, at various times there have been industry-wide shortages of electronic
components. There can be no assurance that such shortages, or future
fluctuations in material cost, will not have a material adverse effect on our
results of operations, business, prospects and financial condition.

    INTELLECTUAL PROPERTY

    We hold licenses to various technologies which we acquired in connection
with acquisitions from Fujitsu-ICL, Hewlett-Packard, IBM Corporation, NEC
Corporation, and other companies. We believe that we have secured access to all
required technology that is material to the current conduct of our business.

    We regard our manufacturing processes and certain designs as proprietary
trade secrets and confidential information. We rely largely upon a combination
of trade secret laws, non-disclosure agreements with our customers and suppliers
and our internal security systems, confidentiality procedures, and employee
confidentiality agreements to maintain the trade secrecy of our designs and
manufacturing processes. Although we take steps to protect our trade secrets,
there can be no assurance that misappropriation will not occur.

    Celestica currently has a limited number of patents and patent applications
pending. However, we believe that the rapid pace of technological change makes
patent protection less significant than such factors as the knowledge and
experience of management and personnel and our ability to develop, enhance, and
market manufacturing services.

    We license some technology from third parties which we use in providing
manufacturing services to our customers. We believe that such licenses are
generally available on commercial terms from a number of licensors. Generally,
the agreements governing such technology grant to Celestica non-exclusive,
worldwide licenses with respect to the subject technology and terminate upon a
material breach by Celestica of the terms of the licensing agreement.

    COMPETITION

    The EMS industry is comprised of a large number of domestic and foreign
companies, of which two companies, Flextronics International and Solectron
Corporation, each had revenue in excess of $12.0 billion for fiscal year 2002
and two companies, Celestica and Sanmina-SCI Corporation, each had revenue in
excess of $8.0 billion for fiscal year 2002. We also face competition from
current and prospective customers which evaluate our capabilities against the
merits of manufacturing products internally. We compete with different

                                       22
<Page>
companies depending on the type of service or geographic area. Certain of our
competitors may have greater manufacturing, financial, research and development,
and marketing resources than we do. We believe that the primary basis of
competition in our targeted markets is manufacturing technology, quality,
responsiveness, the provision of value-added services, and price. To remain
competitive, we believe we must continue to provide technologically advanced
manufacturing services, maintain quality levels, offer flexible delivery
schedules, deliver finished products on a reliable basis, and compete favorably
on the basis of price.

    HUMAN RESOURCES

    As of December 31, 2002, we employ over 40,000 permanent and temporary
(contract) employees worldwide. Given the variable nature of our project flow
and the quick response time required by our customers, it is critical that we be
able to quickly ramp-up and ramp-down our production to maximize efficiency. To
achieve this, our strategy has been to employ a skilled temporary labor force,
as required.

    Culturally, Celestica is team-oriented, values-driven, empowerment-based,
dynamic, and results-oriented, with an overriding sensitivity to customer
service and quality at all levels. This environment is a critical factor for us
to be able to fully utilize the intellectual capital of our employees. We have
never experienced a work stoppage or strike. We believe that our employee
relations are good. Certain of our employees in the United Kingdom, France,
Italy, Mexico, U.S., Japan and Brazil are represented by unions.

    ENVIRONMENTAL MATTERS

    Celestica is subject to extensive environmental, health, and safety laws and
regulations, including measures relating to the release, use, storage,
treatment, transportation, discharge, disposal, and remediation of contaminants,
hazardous substances and wastes, as well as practices and procedures applicable
to the construction and operation of our plants. We believe that we are in
compliance in all material respects with current environmental laws. However,
there can be no assurance that we will not experience difficulties with our
efforts to maintain material compliance at our facilities, or to comply either
with currently applicable environmental laws or environmental laws as they
change in the future, or that our continued compliance efforts (or failure to
comply with applicable requirements) will not have a material adverse effect on
our results of operations, business, prospects, and financial condition. Our
need to comply with present and changing future environmental laws could
restrict our ability to modify or expand our facilities or continue production
and could require us to acquire costly equipment or to incur other significant
expense.

    Some of our operating sites have a history of industrial use. As is typical
for such businesses, soil and groundwater contamination has occurred. We from
time to time investigate, remediate and monitor soil and groundwater
contamination at certain of our operating sites.

    Except for the facilities we acquired in the Omni transaction, Phase I
or similar environmental assessments (which involve general inspections without
soil sampling or ground water analysis) were obtained for most of the
manufacturing facilities leased or owned by Celestica in connection with our
acquisition or lease of such facilities. Where contamination is suspected,
Phase II intrusive environmental assessments (including soil and/or groundwater
testing) are usually performed. We expect to conduct such environmental
assessments in respect of future property acquisitions where consistent with
local practice. These environmental assessments have not revealed any
environmental liability that we believe, based on current information, will have
a material adverse effect on our results of operations, business, prospects or
financial condition, nor are we aware that we have any such material
environmental liability, in part because of the contractual retention of
liability for some contamination and its remediation by landlords and former
owners at some sites. It is possible that our assessments do not reveal all
environmental liabilities or that there are material environmental liabilities
of which we are not presently aware or that future changes in law or enforcement
standards will cause us to incur significant costs or liabilities in the future.

    BACKLOG

    Although we obtain firm purchase orders from our customers, OEM customers
typically do not make firm orders for delivery of products more than 30 to
90 days in advance. We do not believe that the backlog of

                                       23
<Page>
expected product sales covered by firm purchase orders is a meaningful measure
of future sales, since orders may be rescheduled or canceled.

    SEASONALITY

    With a significant exposure to information technology and communications
infrastructure products, the Company has historically seen a level of
seasonality in its quarterly revenue patterns. This seasonality has generally
resulted in lower volumes in the Company's first quarter, gradually increasing
throughout the year, culminating in higher revenue in the fourth quarter.
Seasonality is also reflective of the mix and complexity of the products
manufactured. As a result of the current weak and uncertain economic
environment, it is difficult to predict the extent and impact of seasonality on
our business.

GLOSSARY

<Table>
<S>                                     <C>
Ball grid array...................      A silicon chip packaging technique that provides high
                                        interconnection density at a low cost, high thermal
                                        electrical performance, high reliability and high card
                                        assembly yields. This technology uses an array of solder
                                        balls to connect the silicon chip to the printed circuit
                                        board.

Chip on board.....................      A generic term for the use of unpackaged or "bare" silicon
                                        that is attached to the surface of the printed circuit
                                        board. The "bare" silicon is often sealed with an epoxy to
                                        strengthen reliability. Chip on board allows for space
                                        savings as well as faster signal processing speeds. Examples
                                        of chip on board are flip chip attach, tape automated
                                        bonding and wire bonded chips.

Consignment.......................      An outsourcing method in which the outsourcing company
                                        provides most or all of the materials required for the
                                        products, and the EMS provider supplies only the
                                        manufacturing service.

EMS...............................      Electronics manufacturing services.

Flip chip attach..................      A type of chip on board that involves attaching the "bare"
                                        silicon directly to the printed circuit board using solder.

Full system assembly..............      The assembly of a variety of PCAs and other
                                        subassemblies/components into a final product, such as a
                                        server, workstation or personal computer. Full system
                                        assembly typically includes the testing and distribution of
                                        the final product.

In-circuit test...................      One of the first electrical tests performed on completed
                                        PCAs, where small portions of the PCAs can be individually
                                        tested down to the silicon chip level.

In-situ dynamic thermal cycling
  stress testing..................      The electrical testing of PCAs while varying temperature, in
                                        an effort to uncover potential defects in assembly and
                                        electronics components.

Interconnect technology...........      The series of techniques used to electrically connect
                                        silicon chips, substrates and other electronics components
                                        together to create a functional product.

LAN...............................      "Local area network." Multiple computers linked together to
                                        facilitate shared communications in a local or office
                                        environment.

Multi-chip module.................      A packaging technique that combines multiple silicon chips
                                        together into a single functional device.

OEM...............................      Original equipment manufacturer.

PBX switch........................      "Private branch exchange switch." A switch used in a
                                        telephone system consisting of central office trunks, a
                                        switchboard and extension telephones which may be
                                        interconnected with the trunks or with each other through
                                        the
</Table>

                                       24
<Page>
<Table>
<S>                                     <C>
                                        switchboard and associated equipment. These switches are
                                        typically used within a single company, office or building.

PCAs..............................      "Printed circuit assemblies." Printed circuit boards which
                                        are populated with various electronics components to form
                                        functional products.

PDA...............................      "Personal Digital Assistant." A small form factor portable
                                        computing device.

Scalable processor................      A processor system that allows for the combination of
                                        multiple microprocessors together to provide significantly
                                        higher processing power and speed.

SMT...............................      "Surface mount technology." A manufactured technology for
                                        attaching electronics components directly onto the surface
                                        of printed circuit boards.

Substrate.........................      Also referred to as a "printed circuit board" or "board." A
                                        substrate acts as a carrier to provide very dense wiring
                                        between silicon chips. A substrate can take the form of
                                        ceramic, plastic, film or fibreglass sheets with embedded
                                        copper wiring.

Tape automated bonding............      A type of chip on board that involves attaching "bare"
                                        silicon through a mass bonding method. The silicon possesses
                                        gold- or tin-plated copper lead frames which are mounted
                                        directly to the printed circuit board.

Tape ball grid array..............      A ball grid array silicon chip which is packaged on a thin
                                        tape/film carrier.

Three-dimensional laser paste
  volumetric inspection...........      An inspection system that uses a laser light source and a
                                        camera for image capture in a controlled process. It is used
                                        to measure the volume of solder paste that has been screened
                                        onto a printed circuit board in order to ensure solder
                                        quality.

Token ring........................      A type of LAN technology.

WAN...............................      "Wide area network." A communications network that covers a
                                        wide geographic area, such as a province, state or country.

Wire bonding......................      A method of attaching a "bare" silicon chip on a board. This
                                        process involves ultrasonically bonding fine aluminum wire
                                        (the size of a human hair) from the silicon chip to the PCB.
                                        This procedure is often performed in a clean room
                                        environment.

Wireless base stations............      A base station transmitter used in digital cellular
                                        telephone networks. This is the electrical communication
                                        device that links a cellular telephone to the telephone
                                        network.

Wireless loop system..............      A system providing wireless communications between the
                                        telephone network box on a residential street and all of the
                                        homes in the neighborhood, eliminating buried telephone
                                        cable to homes. This system can also be used in an office
                                        campus environment.

X-ray laminography................      An inspection process used for examining the quality of
                                        solder joints in an array package like ball grid array and
                                        column grid array. The technique is very similar to that of
                                        a CAT scan in the medical industry. The assembly is x-rayed
                                        in slices down through the solder joints, and the images are
                                        compared to a known good image for solder quality.
</Table>

                                       25
<Page>
C.  ORGANIZATIONAL STRUCTURE

    We conduct our business through subsidiaries operating on a worldwide basis.
The following companies are considered significant subsidiaries and each of them
is wholly-owned:

    Celestica (U.S.) Inc., a Delaware corporation.

    Celestica Corporation, a Delaware corporation.

    Celestica Europe Inc., an Ontario corporation.

    Celestica Hong Kong Limited, a Hong Kong corporation.

    Celestica Liquidity Management Hungary Limited Liability Company, a
    Hungarian corporation.

D.  DESCRIPTION OF PROPERTY

    The following table summarizes our principal facilities as of February 28,
2003. Our facilities are used to manufacture printed circuit boards, assemble
final systems and configuration, and for other related manufacturing and
customer support activities.

<Table>
<Caption>
                                                              MANUFACTURING
FACILITY                                                      SQUARE FOOTAGE   OWNED/LEASED
- --------                                                      --------------   -------------
                                                              (in thousands)
<S>                                                           <C>              <C>
Toronto, Ontario............................................       888            Owned
Montreal, Quebec............................................       180            Owned
Oklahoma City, Oklahoma(1)..................................       430            Leased
Denver, Colorado............................................       300            Leased
Little Rock, Arkansas.......................................       424            Owned
Fort Collins, Colorado......................................       200            Leased
Rochester, Minnesota(1).....................................       200            Leased
Chippewa Falls, Wisconsin...................................       127            Owned
Salem, New Hampshire........................................       139            Leased
San Jose, California........................................       131            Leased
Dallas, Texas...............................................        69            Leased
Mt. Pleasant, Iowa..........................................        69            Leased
Milwaukie, Oregon...........................................        61            Leased
Chelmsford, Massachusetts(1)................................        37            Leased
Raleigh, North Carolina.....................................        26            Leased
Austin, Texas...............................................        51            Leased
Kidsgrove, England..........................................       375            Owned
Telford, England............................................        50            Owned
Vimercate, Italy............................................       550            Owned
Santa Palombo, Italy........................................       150            Owned
Dublin, Ireland.............................................       210            Owned
Saumur, France..............................................       142            Owned
Rajecko, Czech Republic.....................................       170            Owned
Kladno, Czech Republic......................................       166            Owned
Monterrey, Mexico...........................................       214            Leased
Monterrey, Mexico...........................................       113            Owned
Queretaro, Mexico...........................................        77            Leased
Jaguariuna, Brazil..........................................       142            Leased
Shanghai, China.............................................       273            Owned
Dongguan, China.............................................       172            Leased
China(2)....................................................       208         Owned/Leased
Shatin, Hong Kong...........................................        82            Leased
Indonesia(3)(4).............................................        46         Owned/Leased
Johor Bahru, Malaysia(3)....................................       491            Leased
</Table>

                                       26
<Page>

<Table>
<Caption>
                                                              MANUFACTURING
FACILITY                                                      SQUARE FOOTAGE   OWNED/LEASED
- --------                                                      --------------   -------------
                                                              (in thousands)
<S>                                                           <C>              <C>
Kulim, Malaysia.............................................       324            Owned
Malaysia....................................................        40            Leased
Singapore...................................................       298            Leased
Singapore...................................................        65            Owned
Laem Chabang, Thailand......................................       422            Leased
Japan(2)....................................................       566         Owned/Leased
Rayong, Thailand............................................        41            Leased
</Table>

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

(1) As part of our restructuring plans, we have announced that we will close
    this site by the end of 2003.

(2) This represents three facilities.

(3) This represents two facilities.

(4) As part of our restructuring plans, we have announced that we will close one
    of the two sites by the end of 2003.

    Celestica's principal executive office is located at 1150 Eglinton Avenue
East, Toronto, Ontario M3C 1H7. All of our principal facilities are ISO
certified to ISO 9001 or ISO 9002 standards. Most of our principal facilities
are also certified to the ISO 14001 (environmental) standards.

    The leases for our leased facilities expire between 2003 and 2056. Celestica
currently expects to be able to extend the terms of expiring leases or to find
replacement facilities on reasonable terms.

    As part of our restructuring plans, we have consolidated facilities and
changed our strategic focus as to the number and geography of sites. We are
rationalizing our footprint worldwide to increase the percentage of our
facilities in lower cost geographies. See Item 5, "Operating and Financial
Review and Prospects -- Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Operating Results" for additional
information concerning our restructurings.

ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
  OPERATIONS

    THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF CELESTICA SHOULD BE READ IN CONJUNCTION WITH THE CONSOLIDATED
FINANCIAL STATEMENTS IN ITEM 18. ALL DOLLAR AMOUNTS ARE EXPRESSED IN
U.S. DOLLARS.

    CERTAIN STATEMENTS CONTAINED IN THE FOLLOWING MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, INCLUDING, WITHOUT
LIMITATION, STATEMENTS CONTAINING THE WORDS BELIEVES, ANTICIPATES, ESTIMATES,
EXPECTS, AND WORDS OF SIMILAR IMPORT, CONSTITUTE FORWARD-LOOKING STATEMENTS.
FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE
RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS. THESE RISKS AND
UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO: THE CHALLENGES OF EFFECTIVELY
MANAGING OUR OPERATIONS DURING UNCERTAIN ECONOMIC CONDITIONS; THE CHALLENGE OF
RESPONDING TO LOWER-THAN-EXPECTED CUSTOMER DEMAND; THE EFFECTS OF PRICE
COMPETITION AND OTHER BUSINESS AND COMPETITIVE FACTORS GENERALLY AFFECTING THE
EMS INDUSTRY; OUR DEPENDENCE ON THE INFORMATION TECHNOLOGY AND COMMUNICATIONS
INDUSTRIES; OUR DEPENDENCE ON A LIMITED NUMBER OF CUSTOMERS AND ON INDUSTRIES
AFFECTED BY RAPID TECHNOLOGICAL CHANGE; COMPONENT CONSTRAINTS; VARIABILITY OF
OPERATING RESULTS AMONG PERIODS; AND THE ABILITY TO MANAGE OUR RESTRUCTURING AND
THE SHIFT OF PRODUCTION TO LOWER COST GEOGRAPHIES. THESE AND OTHER RISKS AND
UNCERTAINTIES AND FACTORS ARE DISCUSSED IN THIS ANNUAL REPORT. SEE ITEM 3, "KEY
INFORMATION -- RISK FACTORS."

    WE DISCLAIM ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY
FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE
EVENTS OR OTHERWISE.

OVERVIEW

    Celestica is a world leader in providing electronics manufacturing services
to OEMs in the information technology and communications industries. Celestica
provides a wide variety of products and services to its customers, including the
high-volume manufacture of complex printed circuit board assemblies and the full

                                       27
<Page>
system assembly of final products. In addition, the Company is a leading-edge
provider of design, repair and engineering services, supply chain management and
power products. Celestica operates facilities in the Americas, Europe and Asia.

    2002 was a challenging year as the information technology and communications
end markets remained weak. Revenue for 2002 was $8.3 billion, down 17% from
$10.0 billion for 2001. The reduced demand for Celestica's products and services
contributed to the decrease in revenue and margins for 2002. Revenue from
existing customers decreased for the second consecutive year.

    Historically, acquisitions have contributed significantly to the Company's
growth, with 2001 being the most active year for acquisitions, in terms of the
number of acquisitions closed and the total purchase price. Growth from
acquisitions in 2002, however, was minimal. Celestica continues to evaluate
acquisition opportunities and anticipates that acquisitions will continue to
contribute to its future growth.

    In 2001, the Company announced its first restructuring plan in response to
the weakened end markets. The continued downturn into 2002 resulted in the
Company announcing further restructuring actions, which it expects to complete
by the end of 2003. The restructurings were focused on consolidating facilities
and increasing capacity in lower cost geographies. The Company expects that it
will have a better-balanced manufacturing footprint when all of the planned
restructuring actions, including those announced in January 2003, are completed.
See "-- Recent Developments."

    In the fourth quarter of 2002, Celestica recorded impairment losses totaling
$285.4 million, in connection with its annual impairment tests of goodwill and
long-lived assets, based on factors and conditions at the time the assessments
were performed. Conditions in the marketplace deteriorated significantly from
January 1, 2002, when the Company completed its evaluation of the transitional
goodwill impairment, as required by the new goodwill standards. Future
impairment tests may result in additional impairment charges.

    In 2002, management focused on reducing working capital, and increased its
cash balance to its highest level in the Company's history. Cash earned from
operations in 2002 fully funded the Company's 2002 acquisitions of
$111.0 million, repayment of $130.0 million of subordinated debt, the repurchase
of $32.5 million in capital stock and the repurchase of convertible debt for an
aggregate purchase price of $100.3 million.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

    Celestica prepares its financial statements in accordance with generally
accepted accounting principles (GAAP) in Canada with a reconciliation to United
States GAAP, as disclosed in note 22 to the Consolidated Financial Statements.

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenue and expenses during the
reporting period. Significant accounting policies and methods used in
preparation of the financial statements are described in note 2 to the
Consolidated Financial Statements. The Company evaluates its estimates and
assumptions on a regular basis, based on historical experience and other
relevant factors. Significant estimates are used in determining, but not limited
to, the allowance for doubtful accounts, inventory valuation, income tax
valuation allowances, the fair value of reporting units for purposes of goodwill
impairment tests, the useful lives and valuation of intangible assets, and
restructuring charges. Actual results could differ materially from those
estimates and assumptions.

    REVENUE RECOGNITION:

    Celestica derives most of its revenue from OEM customers. The contractual
agreements with its key customers generally provide a framework for its overall
relationship with the customer. Celestica recognizes product revenue upon
shipment to the customer as performance has occurred, all customer specified
acceptance criteria have been tested and met, and the earnings process is
considered complete. Actual production volumes are based on purchase orders for
the delivery of products. These orders typically do not commit to firm
production schedules for more than 30 to 90 days in advance. Celestica minimizes
its risk relative to its inventory by ordering materials and components only to
the extent necessary to satisfy existing customer orders. Celestica is largely
protected from the risk of inventory cost fluctuations as these costs are
generally passed through to customers.

                                       28
<Page>
    ALLOWANCE FOR DOUBTFUL ACCOUNTS:

    Celestica records an allowance for doubtful accounts related to accounts
receivable that are considered to be impaired. The allowance is based on the
Company's knowledge of the financial condition of its customers, the aging of
the receivables, current business environment, customer and industry
concentrations, and historical experience. A change to these factors could
impact the estimated allowance and the provision for bad debts recorded in
selling, general and administrative expenses.

    INVENTORY VALUATION:

    Celestica values its inventory on a first-in, first-out basis at the lower
of cost and replacement cost for production parts, and at the lower of cost and
net realizable value for work in progress and finished goods. Celestica
regularly adjusts its inventory valuation based on shrinkage and management's
estimates of net realizable value, taking into consideration factors such as
inventory aging, future demand for the inventory, and the nature of the
contractual agreements with customers and suppliers, including the ability to
return inventory to them. A change to these assumptions could impact the
valuation of inventory and have a resulting impact on margins.

    INCOME TAX VALUATION ALLOWANCE:

    Celestica records a valuation allowance against deferred income tax assets
when management believes it is more likely than not that some portion or all of
the deferred income tax assets will not be realized. Management considers
factors such as the reversal of deferred income tax liabilities, projected
future taxable income, the character of the income tax asset and tax planning
strategies. A change to these factors could impact the estimated valuation
allowance and income tax expense.

    GOODWILL:

    Celestica performs its annual goodwill impairment tests in the fourth
quarter of each year, and more frequently if events or changes in circumstances
indicate that an impairment loss may have been incurred. Impairment is tested at
the reporting unit level by comparing the reporting unit's carrying amount to
its fair value. The fair values of the reporting units are estimated using a
combination of a market approach and discounted cash flows. The process of
determining fair values is subjective and requires management to exercise
judgment in making assumptions about future results, including revenue and cash
flow projections at the reporting unit level, and discount rates. Celestica
recorded an impairment loss in the fourth quarter of 2002. Future goodwill
impairment tests may result in further impairment charges.

    INTANGIBLE ASSETS:

    Celestica performs its annual impairment tests on long-lived assets in the
fourth quarter of each year, and more frequently if events or changes in
circumstances indicate that an impairment loss may have been incurred. Celestica
estimates the useful lives of intangible assets based on the nature of the
asset, historical experience and the terms of any related supply contracts. The
valuation of intangible assets is based on the amount of future net cash flows
these assets are estimated to generate. Revenue and expense projections are
based on management's estimates, including estimates of current and future
industry conditions. A significant change to these assumptions could impact the
estimated useful lives or valuation of intangible assets resulting in a change
to amortization expense and impairment charges.

    RESTRUCTURING CHARGES:

    Celestica recorded restructuring charges in 2001 and 2002, relating to
facility consolidations and workforce reductions. These charges are recorded
based on detailed plans approved and committed to by management. The
restructuring charges include employee severance and benefit costs, costs
related to leased facilities that will be abandoned or subleased, owned
facilities which are no longer used and will be held for disposition, cost of
leased equipment that will be abandoned, impairment of owned equipment that will
be held for disposition, and impairment of related intangible assets, primarily
intellectual property. The recognition of these charges requires management to
make certain judgments and estimates regarding the nature, timing and amount

                                       29
<Page>
associated with these plans. The estimates of future liability may change,
requiring additional restructuring charges or a reduction of the liabilities
already recorded. At the end of each reporting period, the Company evaluates the
appropriateness of the remaining accrued balances.

RECENT ACQUISITIONS

    A significant portion of Celestica's growth in prior years was generated by
strengthening its customer relationships and increasing the breadth of its
service offerings through asset and business acquisitions. The Company focused
on investing strategically in acquisitions that better positioned the Company
for future outsourcing opportunities. Celestica's most active year for
acquisitions was 2001. The historical pace of Celestica's acquisitions did not
continue in 2002 and may not continue in the future.

    As a result of the continued downturn in the economy, some of the sites
acquired in prior years have been impacted by the Company's latest round of
restructuring. Supply agreements entered into in connection with certain
acquisitions were also affected by order cancellations and reschedulings as
base-business volumes have decreased. See discussion below in "-- Results of
Operations."

    2001 ASSET ACQUISITIONS:

    In February 2001, Celestica acquired certain manufacturing assets in Dublin,
Ireland and Mt. Pleasant, Iowa from Motorola Inc. and signed supply agreements.
In March 2001, Celestica acquired certain assets relating to N.K.
Techno Co. Ltd.'s repair business, which expanded the Company's presence in
Japan, and established a greenfield operation in Shanghai. In May 2001,
Celestica acquired certain assets from Avaya Inc. in Little Rock, Arkansas and
Denver, Colorado, and, in August 2001, acquired certain assets in Saumur,
France. The Company signed a five-year supply agreement with Avaya. In
August 2001, Celestica acquired certain assets in Columbus, Ohio and Oklahoma
City, Oklahoma from Lucent Technologies Inc. and signed a five-year supply
agreement. The aggregate purchase price for these asset acquisitions in 2001 of
$834.1 million was financed with cash.

    2001 BUSINESS COMBINATIONS:

    In January 2001, Celestica acquired Excel Electronics, Inc. through a merger
with Celestica (U.S.) Inc., which enhanced the Company's prototype service
offering in the southern region of the United States. In June 2001, Celestica
acquired Sagem CR s.r.o., in the Czech Republic, from Sagem SA, of France, which
enhanced the Company's presence in central Europe. In August 2001, Celestica
acquired Primetech Electronics Inc. (Primetech), an EMS provider in Canada. The
purchase price for Primetech was financed primarily with the issuance of
3.4 million subordinate voting shares and the issuance of options to purchase
0.3 million subordinate voting shares of the Company.

    In October 2001, Celestica acquired Omni Industries Limited (Omni). Omni is
an EMS provider, headquartered in Singapore, with locations in Singapore,
Malaysia, China, Indonesia and Thailand, and had approximately 9,000 employees
at the date of acquisition. Omni provides printed circuit board assembly and
system assembly services, as well as other related supply chain services
including plastic injection molding and distribution. Omni manufactures products
for industry-leading OEMs in the PC, storage and communications sectors. The
acquisition significantly enhanced Celestica's EMS presence in Asia. The
purchase price for Omni of $865.8 million was financed with the issuance of
9.2 million subordinate voting shares and the issuance of options to purchase
0.3 million subordinate voting shares of the Company, and $479.5 million in
cash.

    The aggregate purchase price for these business combinations in 2001 was
$1,093.3 million, of which $526.3 million was financed with cash.

    2002 ASSET ACQUISITIONS:

    In March 2002, the Company acquired certain assets located in Miyagi and
Yamanashi, Japan from NEC Corporation. The Company signed a five-year supply
agreement to provide a complete range of electronics manufacturing services for
a broad range of NEC's optical backbone and broadband access equipment. In
August 2002, the Company acquired certain assets from Corvis Corporation in the
United States. The Company

                                       30
<Page>
signed a multi-year supply agreement with Corvis, which positioned Celestica as
the exclusive manufacturer of Corvis' terrestrial optical networking products
and sub-sea terminating equipment. The aggregate purchase price for these
acquisitions in 2002 of $111.0 million was financed with cash and allocated to
the net assets acquired, based on their relative fair values at the date of
acquisition.

    Celestica may at any time be engaged in ongoing discussions with respect to
several possible acquisitions of widely-varying sizes, including small single
facility acquisitions, significant multiple facility acquisitions and corporate
acquisitions. Celestica has identified several possible acquisitions that would
enhance its global operations, increase its penetration in several industries
and establish strategic relationships with new customers. There can be no
assurance that any of these discussions will result in a definitive purchase
agreement and, if they do, what the terms or timing of any agreement would be.
Celestica expects to continue any current discussions and actively pursue other
acquisition opportunities.

A.  OPERATING RESULTS

    Celestica's annual and quarterly operating results vary from period to
period as a result of the level and timing of customer orders, fluctuations in
materials and other costs and the relative mix of value-add products and
services. The level and timing of customers' orders will vary due to customers'
attempts to balance their inventory, changes in their manufacturing strategies,
variation in demand for their products and general economic conditions.
Celestica's annual and quarterly operating results are also affected by capacity
utilization, geographic manufacturing mix and other factors, including price
competition, manufacturing effectiveness and efficiency, the degree of
automation used in the assembly process, the ability to manage labour, inventory
and capital assets effectively, the timing of expenditures in anticipation of
forecasted sales levels, the timing of acquisitions and related integration
costs, customer product delivery requirements, shortages of components or labour
and other factors. Weak end-market conditions began to emerge in early to
mid-2001 and have continued to weaken for the communications and information
technology industries. This resulted in customers rescheduling or canceling
orders which negatively impacted Celestica's results of operations.

    The table below sets forth certain operating data expressed as a percentage
of revenue for the years indicated:

<Table>
<Caption>
                                                                 YEAR ENDED DECEMBER 31
                                                       ------------------------------------------
                                                         2000             2001             2002
                                                       --------         --------         --------
<S>                                                    <C>              <C>              <C>
Revenue..............................................   100.0%           100.0%           100.0%
Cost of sales........................................    92.9             92.9             93.3
                                                        -----            -----            -----
Gross profit.........................................     7.1              7.1              6.7
Selling, general and administrative expenses.........     3.3              3.4              3.6
Amortization of goodwill and intangible assets.......     1.0              1.3              1.2
Integration costs related to acquisitions............     0.2              0.2              0.2
Other charges........................................     0.0              2.7              8.2
                                                        -----            -----            -----
Operating income (loss)..............................     2.6             (0.5)            (6.5)
Interest income, net.................................    (0.2)            (0.1)            (0.0)
                                                        -----            -----            -----
Earnings (loss) before income taxes..................     2.8             (0.4)            (6.5)
Income taxes (recovery)..............................     0.7              0.0             (1.1)
                                                        -----            -----            -----
Net earnings (loss)..................................     2.1%            (0.4)%           (5.4)%
                                                        =====            =====            =====
</Table>

    REVENUE

    Revenue decreased 17%, to $8,271.6 million in 2002 from $10,004.4 million in
2001, primarily due to a reduction in base-business volumes as a result of the
prolonged weakened end-market conditions. Excess capacity in the EMS industry
also put pressure on pricing for components and services, thereby reducing
revenue. The visibility of end-market conditions remains limited.

                                       31
<Page>
    Celestica manages its operations on a geographic basis. The three reporting
segments are the Americas, Europe and Asia. Revenue from the Americas operations
decreased 27%, to $4,640.8 million in 2002 from $6,334.6 million in 2001.
Revenue from European operations decreased 40%, to $1,786.5 million in 2002 from
$3,001.3 million in 2001. The Americas and European operations have been hardest
hit by customer cancellations and delays of orders because of the downturn in
end-market demand for their products, as well as the customers' demands for
lower product manufacturing costs. As a result, the Company has initiated
restructuring actions to reduce the manufacturing capacity in these geographies,
which includes downsizing and closure of manufacturing facilities. The
restructuring actions also include transferring programs from higher cost
geographies to lower cost geographies. Revenue from Asian operations increased
113%, to $2,109.7 million in 2002 from $991.1 million in 2001. The increase in
revenue from Asian operations is primarily due to acquisitions and an increase
in base-business volumes. The effect of the 2002 acquisitions and the shifting
of program activities from other geographies are expected to increase revenue in
the Asian operations in 2003.

    Revenue increased 3%, to $10,004.4 million in 2001 from $9,752.1 million in
2000. Acquisition revenue grew by 14%, offset by an 11% decline in base-business
volumes. The acquisition growth was a result of strategic acquisitions in the
communications industry, primarily in the U.S. and Asia. Base-business revenue
declined in 2001 due to the softening of end markets. Revenue from the Americas
operations decreased 3%, to $6,334.6 million in 2001 from $6,542.7 million in
2000, primarily due to continued end-market softening which was partially offset
by acquisitions. Revenue from European operations increased 6%, to
$3,001.3 million in 2001 from $2,823.3 million in 2000, due to the flow through
of the IBM acquisition from 2000, and from the 2001 acquisitions, partially
offset by the general industry downturn. Revenue from Asian operations increased
14%, to $991.1 million in 2001 from $871.6 million in 2000, primarily due to the
Omni acquisition offset in part by the general industry downturn.

    The following represents the end-market industries as a percentage of
revenue for the indicated periods:

<Table>
<Caption>
                                                  YEAR ENDED DECEMBER 31
                                        ------------------------------------------
                                          2000             2001             2002
                                        --------         --------         --------
<S>                                     <C>              <C>              <C>
Communications........................    31%              36%              45%
Servers...............................    33%              31%              26%
Storage and other.....................    14%              18%              22%
Workstations and PCs..................    22%              15%               7%
</Table>

    The following customers represented more than 10% of total revenue for each
of the indicated periods:

<Table>
<Caption>
                                                  YEAR ENDED DECEMBER 31
                                        ------------------------------------------
                                          2000             2001             2002
                                        --------         --------         --------
<S>                                     <C>              <C>              <C>
Sun Microsystems......................    X                X                X
IBM...................................    X                X                X
Lucent Technologies...................                     X                X
</Table>

    Celestica's top five customers represented in the aggregate 66% of total
revenue in 2002, compared to 67% in 2001 and 69% in 2000. The Company is
dependent upon continued revenue from its top customers. There can be no
assurance that revenue from these or any other customers will not increase or
decrease as a percentage of total revenue either individually or as a group. Any
material decrease in revenue from these or other customers could have a material
adverse effect on the Company's results of operations. See notes 17
(concentration of risk) and 19 to the Consolidated Financial Statements.

    GROSS PROFIT

    Gross profit decreased 22%, to $555.8 million in 2002 from $712.5 million in
2001. Gross margin decreased to 6.7% in 2002 from 7.1% in 2001. Gross margins
decreased 0.4% from prior year, primarily due to the significant reduction in
business volumes and industry pricing pressures. The European operations were
most adversely affected as they were operating at lower levels of utilization
and higher fixed costs for the year. The volume reductions tended to impact
higher value-added products, disproportionately, further adversely affecting

                                       32
<Page>
the European margins. In addition, costs for the European operations were higher
than expected due to delays in transferring programs, the slower pace of
restructuring and some process scrap and related inventory issues, in the latter
part of the year. The margin declines in the European operations were offset
partially by improved margins in the Americas and Asian operations. The Americas
improved its operating efficiencies, had higher value-added product mix and
benefited from restructuring actions. Asian margins improved on higher volumes
and utilization rates.

    Gross profit increased 4%, to $712.5 million in 2001 from $688.0 million in
2000. Gross margin was 7.1% in 2001, consistent with 2000. Margins were
maintained due to continued focus on costs and supply chain initiatives, and the
benefits of the 2001 restructuring actions.

    For the foreseeable future, the Company's gross margin is expected to depend
on product mix, production efficiencies, utilization of manufacturing capacity,
geographic manufacturing mix, start-up activity, new product introductions,
pricing within the electronics industry, cost structure at individual sites and
other factors. Over time, gross margins at individual sites and for the Company
as a whole are expected to fluctuate. Also, the availability of labour and raw
materials, which are subject to lead time and other constraints, could possibly
limit the Company's revenue growth.

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

    Selling, general and administrative (SG&A) expenses decreased 13%, to
$298.5 million (3.6% of revenue) in 2002 from $341.4 million (3.4% of revenue)
in 2001. SG&A as a percentage of revenue increased as certain elements of
expenses were fixed over this period. The decrease in SG&A, on an absolute
basis, reflects the benefits from the Company's restructuring programs and a
reduction in discretionary spending, which more than offset the increase in
expenses due to operations acquired in the latter part of 2001 and in 2002.

    SG&A increased 5%, to $341.4 million (3.4% of revenue) in 2001 from
$326.1 million (3.3% of revenue) in 2000. The increase in expenses was primarily
due to operations acquired during 2000 and 2001.

    Research and development costs increased to $18.2 million (0.2% of revenue)
in 2002, compared to $17.1 million (0.2% of revenue) in 2001 and $19.5 million
(0.2% of revenue) in 2000.

    AMORTIZATION OF GOODWILL AND INTANGIBLE ASSETS

    Amortization of goodwill and intangible assets decreased 23%, to
$95.9 million in 2002 from $125.0 million in 2001. Effective January 1, 2002,
the Company fully adopted the new accounting standards for goodwill and
discontinued amortization of all goodwill effective that date. Amortization of
goodwill for 2001 was $39.2 million. See "-- Recent Accounting Developments."
The decrease in amortization is the result of this change in accounting for
goodwill, offset in part by the amortization of intangible assets arising from
the 2001 and 2002 acquisitions. See note 2(q)(ii) to the Consolidated Financial
Statements for the impact of the change in policy on net earnings (loss) and per
share calculations.

    Amortization of goodwill and intangible assets increased 41%, to
$125.0 million in 2001 from $88.9 million in 2000. The increase is attributable
to the goodwill and intangible assets arising from the 2000 and 2001
acquisitions.

    INTEGRATION COSTS RELATED TO ACQUISITIONS

    Integration costs related to acquisitions represent one-time costs incurred
within 12 months of the acquisition date, such as the costs of implementing
compatible information technology systems in newly acquired operations,
establishing new processes related to marketing and distribution processes to
accommodate new customers, and salaries of personnel directly involved with
integration activities. All of the integration costs incurred related to newly
acquired facilities, and not to the Company's existing operations.

    Integration costs were $21.1 million in 2002, compared to $22.8 million in
2001 and $16.1 million in 2000. The integration costs incurred in 2002 primarily
relate to the Lucent, NEC Japan and Omni acquisitions.

    Integration costs vary from period to period due to the timing of
acquisitions and related integration activities.

                                       33
<Page>
    OTHER CHARGES

    In 2002, Celestica incurred $677.8 million in other charges, compared to
$273.1 million in 2001.

<Table>
<Caption>
                                                                     YEAR ENDED
                                                                     DECEMBER 31
                                                              -------------------------
                                                                2001             2002
                                                              --------         --------
                                                                    (in millions)
<S>                                                           <C>              <C>
2001 restructuring..........................................   $237.0           $  1.9
2002 restructuring..........................................    --               383.5
2002 goodwill impairment....................................    --               203.7
Other impairment............................................     36.1             81.7
Deferred financing costs and debt redemption fees...........    --                 9.6
Gain on sale of surplus land................................    --                (2.6)
                                                               ------           ------
                                                               $273.1           $677.8
                                                               ======           ======
</Table>

    Further details of the other charges are included in note 13 to the
Consolidated Financial Statements.

    As of December 31, 2002, the Company had announced two restructuring plans
in response to the economic climate. These actions, which included reducing the
workforce, consolidating facilities and changing the strategic focus of the
number and geography of sites, were largely intended to align the Company's
capacity and infrastructure to anticipated customer demand, as well as to
rationalize its footprint worldwide. The 2001 restructuring plan amounted to
$237.0 million. The 2002 restructuring plan amounted to $383.5 million. Cash
outlays are funded from cash on hand. In January 2003, the Company announced a
restructuring to further reduce its manufacturing capacity. See "-- Recent
Developments."

    The Company has and expects to continue to benefit from the restructuring
measures taken in 2001 and 2002 through reduced operating costs. The Company has
completed the major components of the 2001 restructuring plan, except for
certain long-term lease and other contractual obligations. The Company expects
to complete the major components of the 2002 restructuring plan by the end of
2003, except for certain long-term lease and other contractual obligations. The
Company continues to evaluate its cost structure relative to its revenue levels
and has announced that it will take additional restructuring charges in 2003.
See "-- Recent Developments."

    In the fourth quarter of 2002, the Company recorded a non-cash charge
against goodwill of $203.7 million, in connection with its annual impairment
assessments of goodwill. An independent third-party valuation confirmed the fair
value of the reporting units and the impairment assessment. In the fourth
quarter of 2002, the Company also recorded a non-cash charge of $81.7 million,
primarily against intangible assets. In 2001, the Company recorded a non-cash
charge of $36.1 million, primarily against goodwill and intangible assets. See
note 7 to the Consolidated Financial Statements.

    The Company may continue to experience goodwill and intangible asset
impairment charges in the future as a result of adverse changes in the
electronics industry, customer demand and other market conditions, which may
have a material adverse effect on the Company's financial condition.

    INTEREST INCOME, NET

    Interest income in 2002 amounted to $17.2 million, compared to
$27.7 million in 2001, and $36.8 million in 2000. Interest income decreased for
2002 compared to 2001, primarily due to lower interest rates on cash balances.
Interest income was offset by interest expense on the Company's Senior
Subordinated Notes and debt facilities, which has decreased from $19.8 million
in 2001 to $16.1 million in 2002, due to the redemption of the Senior
Subordinated Notes in August 2002. Interest expense is expected to decrease for
2003 as a result of the full-year effect of the redemption.

                                       34
<Page>
    INCOME TAXES

    The income tax recovery in 2002 was $91.2 million, reflecting an effective
tax recovery rate of 17%. This is compared to an income tax recovery of
$2.1 million in 2001, reflecting an effective tax recovery rate of 5%.

    The Company's effective tax rate is the result of the mix and volume of
business in lower tax jurisdictions within Europe and Asia. These lower tax
rates include tax holidays and tax incentives that Celestica has negotiated with
the respective tax authorities which expire between 2004 and 2012. The tax
benefit arising from these incentives is approximately $24.9 million, or $0.11
diluted per share for 2002 and $9.6 million, or $0.04 diluted per share for
2001. The Company expects the current tax rate of 17% to continue for the
foreseeable future based on the anticipated nature and conduct of its business
and the tax laws, administrative practices and judicial decisions now in effect
in the countries in which the Company has assets or conducts business, all of
which are subject to change or differing interpretation, possibly with
retroactive effects.

    The net deferred income tax asset as at December 31, 2002 of $274.3 million
arises from available income tax losses and future income tax deductions. The
Company's ability to use these income tax losses and future income tax
deductions is dependent upon the operations of the Company in the tax
jurisdictions in which such losses or deductions arose. Management records a
valuation allowance against deferred income tax assets when management believes
it is more likely than not that some portion or all of the deferred income tax
assets will not be realized. Based on the reversal of deferred income tax
liabilities, projected future taxable income, the character of the income tax
asset and tax planning strategies, management has determined that a valuation
allowance of $76.6 million is required in respect of its deferred income tax
assets as at December 31, 2002. No valuation allowance was required for the
deferred income tax assets as at December 31, 2001. In order to fully utilize
the net deferred income tax assets of $274.3 million, the Company will need to
generate future taxable income of approximately $741.0 million. Based on the
Company's current projection of taxable income for the periods in which the
deferred income tax assets are deductible, it is more likely than not that the
Company will realize the benefit of the net deferred income tax assets as at
December 31, 2002.

UNAUDITED QUARTERLY FINANCIAL HIGHLIGHTS

<Table>
<Caption>
                                                            2001                                        2002
                                          -----------------------------------------   -----------------------------------------
                                           FIRST      SECOND     THIRD      FOURTH     FIRST      SECOND     THIRD      FOURTH
                                          QUARTER    QUARTER    QUARTER    QUARTER    QUARTER    QUARTER    QUARTER    QUARTER
                                          --------   --------   --------   --------   --------   --------   --------   --------
                                                                 (in millions, except per share amounts)
<S>                                       <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Revenue.................................  $2,692.6   $2,660.7   $2,203.0   $2,448.2   $2,151.5   $2,249.2   $1,958.9   $1,911.9
Cost of Sales...........................  $2,499.3   $2,468.5   $2,053.5   $2,270.7   $1,999.4   $2,087.2   $1,827.6   $1,801.6
Gross Profit %..........................      7.2%       7.2%       6.8%       7.3%       7.1%       7.2%       6.7%       5.8%
Net earnings (loss).....................  $   54.8   $   15.8   $  (38.7)  $  (71.8)  $   39.7   $   40.4   $  (90.6)  $ (434.7)

Weighted average # of shares outstanding
  (in millions)
    -- basic............................     203.6      207.0      218.1      227.1      229.8      230.2      230.1      229.0
    -- diluted..........................     223.1      225.5      218.1      227.1      236.8      236.0      230.1      229.0
Earnings (loss) per share
    -- basic............................  $   0.25   $   0.06   $  (0.20)  $  (0.33)  $   0.15   $   0.16   $  (0.40)  $  (1.90)
    -- diluted..........................  $   0.25   $   0.06   $  (0.20)  $  (0.33)  $   0.15   $   0.15   $  (0.40)  $  (1.90)
</Table>

    See "-- Capital Resources" for information regarding the impact of foreign
currency fluctuations on the Company.

B.  LIQUIDITY AND CAPITAL RESOURCES

    In 2002, operating activities provided Celestica with $982.8 million in
cash, compared to $1,290.5 million in 2001. Cash was generated from earnings and
a reduction in working capital, primarily inventory, due to improved inventory
management, and the collection of accounts receivable. The Company will continue
to focus on improving working capital management. Cash generated from operations
was sufficient to fully fund the Company's investing and financing activities
for 2002.

                                       35
<Page>
    Investing activities for 2002 included capital expenditures of
$151.4 million, and asset acquisitions of $111.0 million, offset in part by
proceeds from the sale of the Company's Columbus, Ohio facility and from the
sale-leaseback of machinery and equipment.

    In 2002, Celestica redeemed the entire $130.0 million of outstanding Senior
Subordinated Notes which were due in 2006 and paid the contractual premium of
5.25%, or $6.9 million, on redemption. The Company also reduced the leverage on
its balance sheet by repurchasing Liquid Yield Option-TM- Notes (LYONs) in the
open market. These LYONs, having a principal amount at maturity of
$222.9 million, were repurchased at an average price of $450.10 per LYON, for a
total of $100.3 million. A gain of $6.7 million, net of taxes of $3.9 million,
was recorded. See further details in note 10 to the Consolidated Financial
Statements. The Company may, from time to time, purchase additional LYONs in the
open market. Subsequent to year-end, the board of directors authorized the
Company to spend up to an additional $100.0 million to repurchase LYONs, at
management's discretion. This is in addition to the amounts authorized in
October 2002, of which $48.0 million remains available for future purchases. The
amount and timing of future purchases cannot be determined at this time.

    In July 2002, Celestica filed a Normal Course Issuer Bid to repurchase up to
9.6 million subordinate voting shares, for cancellation, over a period from
August 1, 2002 to July 30, 2003. The shares will be purchased at the market
price at the time of purchase. The number of shares to be repurchased during any
30-day period may not exceed 2% of the outstanding subordinate voting shares. A
copy of our Notice relating to the Normal Course Issuer Bid may be obtained from
Celestica, without charge, by contacting the Company's Investor Relations
Department at clsir@celestica.com. In 2002, the Company repurchased 2.0 million
subordinate voting shares at a weighted average price of $16.23 per share. All
of these transactions were funded with cash on hand.

    In 2001, operating activities provided Celestica with $1,290.5 million in
cash principally from earnings and a reduction in working capital. The primary
factors contributing to the positive cash flow for the year were the reduction
of inventory due to better inventory management, strong accounts receivable
collections and the sale of $400.0 million in accounts receivable under a
revolving facility, offset by a decrease in accounts payable and accrued
liabilities. Investing activities in 2001 included capital expenditures of
$199.3 million and $1,299.7 million for acquisitions. See "-- Recent
Acquisitions." The Company fully funded the 2001 acquisitions with cash from
operations. The Company's 2001 financing activities included the issuance in May
of 12.0 million subordinate voting shares for gross proceeds of $714.0 million
and the repayment of $56.0 million of debt acquired in connection with the
acquisition of Omni.

CAPITAL RESOURCES

    During the year, Celestica amended its credit facilities. At December 31,
2002, the Company had two credit facilities: a $500.0 million four-year
revolving term credit facility and a $350.0 million revolving term credit
facility which expire in 2005 and 2004, respectively. The Company elected to
cancel its third credit facility which was originally entered into in
July 1998. The credit facilities permit Celestica and certain designated
subsidiaries to borrow funds directly for general corporate purposes (including
acquisitions) at floating rates. Under the credit facilities: Celestica is
required to maintain certain financial ratios; its ability and that of certain
of its subsidiaries to grant security interests, dispose of assets, change the
nature of its business or enter into business combinations, is restricted; and,
a change in control is an event of default. No borrowings were outstanding under
the revolving credit facilities at December 31, 2002.

    Celestica and certain subsidiaries have uncommitted bank facilities which
total $47.1 million that are available for operating requirements.

    Celestica believes that cash flow from operating activities, together with
cash on hand and borrowings available under its credit facilities, will be
sufficient to fund currently anticipated working capital, planned capital
spending and debt service requirements for the next 12 months. The Company
expects capital spending for 2003 to be in the range of 1.5% to 2.0% of revenue.
At December 31, 2002, Celestica had committed $30.3 million in capital
expenditures. In addition, Celestica regularly reviews acquisition
opportunities, and therefore, may require additional debt or equity financing.

    The Company has an arrangement to sell up to $400.0 million in accounts
receivable under a revolving facility which is available until September 2004.
As of year-end, the Company generated cash from the sale of

                                       36
<Page>
$320.5 million in accounts receivable. The terms of the arrangement provide that
the purchaser may elect not to purchase receivables if Celestica's credit rating
falls below a specified threshold. Celestica's credit rating is significantly
above that threshold.

    Celestica prices the majority of its products in U.S. dollars, and the
majority of its material costs are also denominated in U.S. dollars. However, a
significant portion of its non-material costs (including payroll, facilities
costs, and costs of locally sourced supplies and inventory) are denominated in
various currencies. As a result, Celestica may experience transaction and
translation gains or losses because of currency fluctuations. The Company has an
exchange risk management policy in place to control its hedging programs and
does not enter into speculative trades. At December 31, 2002, Celestica had
forward foreign exchange contracts covering various currencies in an aggregate
notional amount of $669.1 million with expiry dates up to March 2004, except for
one contract for $10.6 million that expires in January 2006. The fair value of
these contracts at December 31, 2002, was an unrealized gain of $18.9 million.
Celestica's current hedging activity is designed to reduce the variability of
its foreign currency costs and generally involves entering into contracts to
trade U.S. dollars for Canadian dollars, British pounds sterling, Mexican pesos,
euros, Thai baht, Singapore dollars, Brazilian reais, Japanese yen and Czech
koruna at future dates. In general, these contracts extend for periods of less
than 19 months. Celestica may, from time to time, enter into additional hedging
transactions to minimize its exposure to foreign currency and interest rate
risks. There can be no assurance that such hedging transactions, if entered
into, will be successful. See note 2(n) to the Consolidated Financial
Statements.

    As at December 31, 2002, the Company has contractual obligations that
require future payments as follows:

<Table>
<Caption>
                                          TOTAL       2003       2004       2005       2006       2007     THEREAFTER
                                         --------   --------   --------   --------   --------   --------   ----------
                                                                        (in millions)
<S>                                      <C>        <C>        <C>        <C>        <C>        <C>        <C>
Long-term debt.........................   $  6.9     $  2.7     $  2.5     $  1.5     $  0.1     $  0.1      $--
Operating leases.......................    338.3      106.5       59.5       38.9       23.0       18.9        91.5
</Table>

    As at December 31, 2002, the Company has convertible instruments, the LYONs,
with an outstanding principal amount at maturity of $1,590.6 million payable
August 1, 2020. Holders of the instruments have the option to require Celestica
to repurchase their LYONs on August 2, 2005, at a price of $572.82 per LYON, or
a total of $911.1 million. The Company may elect to settle its repurchase
obligation in cash or shares, or any combination thereof. See further details in
note 10 to the Consolidated Financial Statements.

    Under the terms of an existing real estate lease which expires in 2004,
Celestica has the right to acquire the real estate at a purchase price equal to
the lease balance which currently is approximately $37.3 million. In the event
that the lease is not renewed, subject to certain conditions, Celestica may
choose to market and complete the sale of the real estate on behalf of the
lessor. If the highest offer received is less than the lease balance, Celestica
would pay the lessor the lease balance less the gross sale proceeds, subject to
a maximum of $31.5 million. In the event that no acceptable offers are received,
Celestica would pay the lessor $31.5 million and return the property to the
lessor. Alternatively, Celestica may choose to acquire the real estate at the
expiration for a price equal to the then current lease balance. The future lease
payments under this lease are included in the total operating lease commitments.

    As at December 31, 2002, the Company has commitments that expire as follows:

<Table>
<Caption>
                                          TOTAL       2003       2004       2005       2006       2007     THEREAFTER
                                         --------   --------   --------   --------   --------   --------   ----------
                                                                        (in millions)
<S>                                      <C>        <C>        <C>        <C>        <C>        <C>        <C>
Foreign currency contracts.............   $669.1     $621.5     $ 39.6     $  5.3     $  2.7     $--         $--
Letters of credit, letters of guarantee
  and surety and performance bonds.....     61.2       37.6        1.0       16.9      --           3.9         1.8
</Table>

    The Company has also provided routine indemnifications, whose terms range in
duration and often are not explicitly defined. These guarantees may include
indemnifications against adverse effects due to changes in tax laws and patent
infringements by third parties. The maximum amounts from these indemnifications
cannot be reasonably estimated. In some cases, the Company has recourse against
other parties to mitigate its risk of loss

                                       37
<Page>
from these guarantees. Historically, the Company has not made significant
payments relating to these indemnifications.

    The Company expenses management related fees charged by its parent company.
Management believes that the fees charged are reasonable in relation to the
services provided. See note 15 to the Consolidated Financial Statements.

RECENT DEVELOPMENTS

    In January 2003, the Company made the following announcements:

    In response to the continued limited visibility in end markets, the Company
plans to further reduce its manufacturing capacity. The reduction in capacity
will result in a pre-tax restructuring charge of between $50.0 million and
$70.0 million, to be recorded during 2003, of which approximately 80% will be
cash costs.

    The Company has, from time to time, purchased LYONs on the open market. The
Company has been authorized by the board of directors to spend up to an
additional $100.0 million to repurchase LYONs, at management's discretion. This
is in addition to the amounts authorized in October 2002, of which
$48.0 million remains available for future purchases.

RECENT ACCOUNTING DEVELOPMENTS

    BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS:

    In September 2001, the CICA issued Handbook Sections 1581, "Business
Combinations" and 3062, "Goodwill and Other Intangible Assets." The FASB issued
similar standards in July 2001. See notes 2(q)(ii) and 22(k) to the Consolidated
Financial Statements.

    STOCK-BASED COMPENSATION AND OTHER STOCK-BASED PAYMENTS:

    Effective January 1, 2002, the Company adopted the new CICA Handbook
Section 3870. See note 2(q)(iii) to the Consolidated Financial Statements.

    FOREIGN CURRENCY TRANSLATION AND HEDGING RELATIONSHIPS:

    In January 2002, the CICA issued Accounting Guideline AcG-13. See note 2(r)
to the Consolidated Financial Statements.

    IMPAIRMENT OF LONG-LIVED ASSETS:

    In August 2001, FASB approved SFAS No. 143, "Accounting for Asset Retirement
Obligations" and in October 2001, FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." In December 2002, the CICA issued
standards similar to SFAS No. 144. See notes 22(k) and 2(r) to the Consolidated
Financial Statements.

    COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES:

    In July 2002, FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities," effective for exit or disposal activities
that are initiated after December 31, 2002. See note 22(k) to the Consolidated
Financial Statements.

    GUARANTEES:

    In November 2002, FASB issued FIN 45, "Guarantor's Accounting and Disclosure
Requirements." In December 2002, the CICA approved AcG-14 which harmonizes
Canadian GAAP to the disclosure requirements of FIN 45. See notes 22(k)
and 2(r) to the Consolidated Financial Statements.

    CONSOLIDATION OF VARIABLE INTEREST ENTITIES:

    In January 2003, FASB issued FIN 46, "Consolidation of Variable Interest
Entities." See note 22(k) to the Consolidated Financial Statements.

                                       38
<Page>
C.  RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

    Certain information concerning research and development and intellectual
property is set forth in "-- Operating Results -- Selling, general and
administrative expenses" and in Item 4, "Information of the Company -- Business
Overview -- Celestica's Business -- Technology and Research and Development."

D.  TREND INFORMATION

    During the past two years, economic growth slowed and, in some regions of
the world, the economy contracted. The demand for technology products fell
significantly and Celestica's customers experienced commensurately reduced
demand for their products. In turn, Celestica experienced reduced demand for the
manufacturing services that we provide. In 2003, the economic environment
continues to be uncertain, and Celestica continues to experience limited
visibility in end-market demand. Given the difficult economic environment,
Celestica has been focused on re-aligning capacity to match current levels of
product demand, generating increased levels of cash flow, and improving
operating efficiencies. We intend to continue these activities in 2003. There
continues to be a significant number of outsourcing opportunities and Celestica
is well positioned to participate further in the trend towards increased
outsourcing by OEMs. If, however, economic conditions were to deteriorate
significantly beyond current expectations, Celestica would likely continue
reducing capacity to match reduced levels of demand.

ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.  DIRECTORS AND SENIOR MANAGEMENT

    Each director of Celestica is elected by the shareholders to serve until the
next annual meeting or until a successor is elected or appointed. Executive
officers of Celestica are appointed annually and serve at the discretion of the
board of directors. The following table sets forth certain information regarding
the directors and senior officers of Celestica.

<Table>
<Caption>
NAME                                     AGE                        POSITION WITH CELESTICA
- ----                                   --------   ------------------------------------------------------------
<S>                                    <C>        <C>
Eugene V. Polistuk...................     56      Chairman of the Board, Chief Executive Officer, and Director
Robert L. Crandall...................     67      Director
William A. Etherington...............     61      Director
Richard S. Love......................     65      Director
Roger L. Martin......................     46      Director
Anthony R. Melman....................     55      Director
Michio Naruto........................     67      Director
Gerald W. Schwartz...................     61      Director
Charles W. Szuluk....................     60      Nominee to Board of Directors
Don Tapscott.........................     55      Director
J. Marvin M(a)Gee....................     50      President and Chief Operating Officer
Anthony P. Puppi.....................     45      Executive Vice President, Chief Financial Officer and
                                                    General Manager, Global Services
R. Thomas Tropea.....................     50      Vice Chair, Global Customer Units and Worldwide Marketing
                                                  and Business Development
Stephen W. Delaney...................     43      President, Americas
N.K. Quek............................     55      President, Asia
Peter J. Bar.........................     45      Vice President and Corporate Controller
Arthur P. Cimento....................     45      Senior Vice President, Corporate Strategies
Elizabeth L. DelBianco...............     43      Vice President, General Counsel, and Secretary
</Table>

                                       39
<Page>

<Table>
<Caption>
NAME                                     AGE                        POSITION WITH CELESTICA
- ----                                   --------   ------------------------------------------------------------
<S>                                    <C>        <C>
Iain S. Kennedy......................     41      Group Executive, Global Supply Chain and Information
                                                  Technology
Donald S. McCreesh...................     54      Senior Vice President, Human Resources
Paul Nicoletti.......................     35      Vice President and Corporate Treasurer
Daniel P. Shea.......................     46      Group Executive and Chief Technology Officer
Rahul Suri...........................     38      Senior Vice President, Corporate Development
F. Graham Thouret....................     48      Senior Vice President, Finance
</Table>

    The following is a brief biography of each of Celestica's directors and
senior officers:

    EUGENE V. POLISTUK is the founder, Chairman of the Board of Directors and
Chief Executive Officer of Celestica. He has been the Chief Executive Officer of
Celestica since its establishment in 1994, and was Celestica's President until
February 2001. Since 1986, Mr. Polistuk has been instrumental in charting
Celestica's transformation and executing the company's successful evolution from
its early history as an operating unit with IBM, to a standalone public company
and leader in the electronics manufacturing services industry. Previously,
Mr. Polistuk spent 25 years with IBM Canada, where, over the course of his
career, he managed all key functional areas of the business. In 1994, he was
presented with the "2T5 Meritorious Service Medal" in recognition of his
meritorious service in and for the profession, by his peers in the University of
Toronto Engineering Alumni Association. And more recently, in 2002,
Mr. Polistuk was inducted by the University of Toronto into its Engineering Hall
of Distinction for his contributions to engineering and society. Mr. Polistuk
holds a Bachelor of Applied Science degree in Electrical Engineering from the
University of Toronto and a Doctor of Engineering (Hon.) from Ryerson
University.

    ROBERT L. CRANDALL is the retired Chairman of the Board and Chief Executive
Officer of AMR Corporation/ American Airlines Inc. Mr. Crandall has been a
director of Celestica since July 1998 and was appointed Lead Director in
December 2002. He is also a director of Anixter International Inc., the
Halliburton Company and i2 Technologies Inc. He also serves on the International
Advisory Board of American International Group, Inc. Mr. Crandall holds a
Bachelor of Science degree from the University of Rhode Island and a Master of
Business Administration degree from the Wharton School of the University of
Pennsylvania.

    WILLIAM A. ETHERINGTON is a corporate director serving on the boards of
Celestica Inc. (since October 2001), Canadian Imperial Bank of Commerce,
Dofasco Inc., MDS Inc. and AT&T Canada. He is the former Senior Vice President
and Group Executive, Sales and Distribution, IBM Corporation and Chairman,
President and Chief Executive Officer of IBM World Trade Corporation. After
joining IBM Canada in 1964, Mr. Etherington ran successively larger portions of
the company's business in Canada, Latin America, Europe and from the corporate
office in Armonk, New York. He retired from IBM after a 37-year career.
Mr. Etherington holds a Bachelor of Science degree in Electrical Engineering and
a Doctor of Laws (Hon.) from the University of Western Ontario.

    RICHARD S. LOVE is a former Vice President of Hewlett-Packard and a former
General Manager of the Computer Order Fulfillment and Manufacturing Group for
Hewlett-Packard's Computer Systems Organization. Mr. Love has been a director of
Celestica since July 1998. From 1962 until 1997, he held positions of increasing
responsibility with Hewlett-Packard, becoming Vice President in 1992. He is a
former director of HMT Technology Corporation (electronics manufacturing) and
the Information Technology Industry Council. Mr. Love holds a Bachelor of
Science degree in Business Administration and Technology from Oregon State
University and a Master of Business Administration degree from Fairleigh
Dickinson University.

    ROGER L. MARTIN is Dean and Professor of Strategy at the Joseph L. Rotman
School of Management at the University of Toronto and has been a director of
Celestica since July 1998. Mr. Martin was formerly a director of Monitor
Company, a Cambridge, Massachusetts based consulting firm, and is Chair of the
Ontario Task Force on Competitiveness, Productivity, and Economic Progress.
Mr. Martin also serves as a director on the board of The Thomson Corporation,
serves on the advisory boards of Butterfield & Robinson and Social Capital
Partners, is a founder of E-magine and serves as a trustee of The Hospital for
Sick Children. Mr. Martin holds an AB degree (cum laude) from Harvard College
and a Master of Business Administration degree from the Harvard University
Graduate School of Business Administration.

                                       40
<Page>
    ANTHONY R. MELMAN is Vice President of Onex and has been a director of
Celestica since 1996. Dr. Melman joined Onex in 1984. He serves on the boards of
various Onex subsidiaries. From 1977 to 1984, Dr. Melman was Senior Vice
President of Canadian Imperial Bank of Commerce, in charge of worldwide merchant
banking, project financing, acquisitions and other specialized financing
activities. Prior to emigrating to Canada in 1977, he had extensive merchant
banking experience in South Africa and the U.K. Dr. Melman is also a director of
The Baycrest Centre Foundation, The Baycrest Centre for Geriatric Care, the
University of Toronto Asset Management Corporation, and a member of the Board of
Governors of Mount Sinai Hospital. He is also Chair of Fundraising for the
Pediatric Oncology Group of Ontario (POGO). Dr. Melman holds a Bachelor of
Science degree in Chemical Engineering from the University of The Witwatersrand,
a Master of Business Administration (gold medalist) from University of Cape Town
and a Ph.D. in Finance from the University of The Witwatersrand.

    MICHIO NARUTO had been Chairman of the Board of Fujitsu Services (formerly
ICL) since 2002. He has been special representative of Fujitsu since June 2000
and was Vice Chairman of Fujitsu until April 2000. Mr. Naruto is currently
Chairman of Toyota InfoTechnology Center, a subsidiary of Toyota Motor
Corporation. He has been a director of Celestica since October 2001. Mr. Naruto
joined Fujitsu Limited in February 1962. In 1981, when the company entered into
the technology agreement with ICL, he held the position of General Manager,
Business Administration of International Operations. He was appointed to the
board of Fujitsu Limited in 1985, in charge of International Operations. Later
his responsibility in Fujitsu covered the ICL Business Group; Legal and Industry
Relations; and, External Affairs and Export Control. In his current capacity, he
attends various international conferences as special representative of Fujitsu
and also takes a role as chairman of Fujitsu Research Institute. Mr. Naruto
holds a Bachelor of Laws degree from the University of Tokyo.

    GERALD W. SCHWARTZ is the Chairman of the Board, President and Chief
Executive Officer of Onex Corporation and has been a director of Celestica since
July 1998. Prior to founding Onex in 1983, Mr. Schwartz was a co-founder (in
1977) of what is now CanWest Global Communications Corp. He is a director of
Onex, The Bank of Nova Scotia, Phoenix Entertainment Corp. and Vincor
International Inc., and Chairman of Loews Cineplex Entertainment Corp.
Mr. Schwartz is also Vice Chairman and member of the Executive Committee of
Mount Sinai Hospital, and is a director, governor or trustee of a number of
other organizations, including Junior Achievement of Toronto, Canadian Council
of Christians and Jews, The Board of Associates of the Harvard Business School
and The Simon Wiesenthal Center. He holds a Bachelor of Commerce degree and a
Bachelor of Laws degree from the University of Manitoba, a Master of Business
Administration degree from the Harvard University Graduate School of Business
Administration, and a Doctor of Laws (Hon.) from St. Francis Xavier University.

    CHARLES W. SZULUK, formerly an officer of The Ford Motor Company, was
President of Visteon Automotive Systems, and a Group Vice President. From 1988
until 1999, he held positions of increasing responsibility with Ford, including
General Manager, Electronics Division, and Vice President, Process Leadership
and Information Systems. He retired from Ford in 1999. Prior to joining Ford, he
spent 24 years with IBM Corporation in a variety of management and executive
management positions. Mr. Szuluk holds a Bachelor of Science degree in Chemical
Engineering from the University of Massachusetts and attended Union College of
New York in Advanced Graduate Studies.

    DON TAPSCOTT is an internationally respected authority, consultant and
speaker on business strategy and organizational transformation. He is the author
of several widely read books on the application of technology in business.
Mr. Tapscott is President of New Paradigm Learning Corporation -- a business
strategy and education company he founded in 1992, and an adjunct Professor of
Management at the University of Toronto's Joseph L. Rotman School of Management.
He is also a founding member of the Business and Economic Roundtable on
Addiction and Mental Health, and a fellow of the World Economic Forum.
Mr. Tapscott has been a director of Celestica since September 1998. He holds a
Bachelor of Science degree in Psychology and Statistics, and a Master of
Education degree, specializing in Research Methodology, as well as a Doctor of
Laws (Hon.) from the University of Alberta.

    J. MARVIN M(A)GEE has been the President and Chief Operating Officer of
Celestica since February 2001. Prior to that, he held the position of Executive
Vice President, Worldwide Operations since October 1999. He joined the Company
in January 1997, as Senior Vice President, Canadian Operations. Mr. M(a)Gee
currently has

                                       41
<Page>
responsibility for global manufacturing operations. Before joining Celestica,
Mr. M(a)Gee spent 18 years with IBM Canada where he held a number of executive
positions in manufacturing and development, with assignments in Canada and the
United States. Mr. M(a)Gee holds a Bachelor of Science degree in Mechanical
Engineering from the University of New Brunswick and a Master of Business
Administration degree from McMaster University.

    ANTHONY P. PUPPI has been the Chief Financial Officer of Celestica since its
establishment and was a director of Celestica from October 1996 to April 2002.
He was appointed Executive Vice President in October 1999 and General Manager,
Global Services in January 2001. Mr. Puppi is responsible for Celestica's global
financial activities, as well as a number of global services businesses,
including design, repair, power systems, and plastics. From 1980 to 1992, he
held positions of increasing financial management responsibility with IBM
Canada. Mr. Puppi holds a Bachelor of Business Administration degree in Finance
and a Master of Business Administration degree from York University in Ontario.

    R. THOMAS TROPEA has been Vice Chair, Global Customer Units and Worldwide
Marketing and Business Development of Celestica since February 2001. Prior to
that, he was the Executive Vice President, Worldwide Marketing and Business
Development since October 1999, and was Senior Vice President of Marketing and
Business Development from August 1998 to October 1999. Mr. Tropea has
responsibility for global marketing and business development. He joined
Celestica after an extensive career with Northern Telecom and has over 18 years
of experience in the telecommunications industry in North America and Europe,
working in critical areas such as sales, finance, business development, investor
relations, and manufacturing operations. Mr. Tropea holds a Master of Business
Administration degree from the University of Toronto and a Bachelor of Commerce
degree from Carleton University.

    STEPHEN W. DELANEY has been the President, Americas of Celestica since
September 2002. He is responsible for Celestica's operations in North and South
America. Prior to that, Mr. Delaney was Senior Vice President, U.S. East
Operations since January 2002, and was Senior Vice President, U.S. Central
Operations from May 2001 to January 2002. Before joining Celestica, Mr. Delaney
was the vice president and general manager of Interior and Exterior Systems
Business at Visteon, where he was responsible for a division with 25 plants and
25,000 employees spanning North and South America, Europe, and Asia. Prior to
joining Visteon in 1997, as vice president of Supply, Mr. Delaney held executive
and senior management roles in the operations of AlliedSignal's Electronic
Systems business, Ford's Electronics Division, and IBM's Telecommunications
division. Mr. Delaney holds a Masters degree in Business Administration from
Duke University in North Carolina and a Bachelor of Science degree in Industrial
Engineering from Iowa State University.

    N. K. QUEK has been the President, Asia of Celestica since September 2002.
He is responsible for Celestica's operations in China, Hong Kong, Indonesia,
Japan, Malaysia, Singapore, and Thailand. Prior to that, Mr. Quek was Senior
Vice President, Asia Operations. Before joining Celestica in 1999, he was the
Senior Vice President of Asia Operations for IMS. Mr. Quek has over 25 years
direct high-tech experience and, over the course of his career, has held
positions at Intel, Seagate, National Semi-conductor, GE, SCI Systems and
Siemens in operations, repair services, process engineering, quality assurance,
and power. Mr. Quek holds a Bachelor degree in Management Studies from the
Management Institute of Singapore.

    PETER J. BAR has been Vice President and Corporate Controller of Celestica
since February 1999. He joined Celestica in March 1998, as Vice President,
Finance -- Power Systems. Prior to joining Celestica, Mr. Bar was the Director
of Finance for the Personal Systems Group of IBM Canada. During his 14-year
career in the information technology industry, he has served in several senior
management positions for both IBM Canada, and IBM's headquarters in Armonk,
New York. Mr. Bar holds a Bachelor of Commerce degree from the University of
Toronto and a Chartered Accountants designation.

    ARTHUR P. CIMENTO joined Celestica in September 1999 as Senior Vice
President, Corporate Strategies. Prior to joining Celestica, he was at
McKinsey & Co., a leading international management consulting firm, with a
client portfolio focused on electronics operations. Mr. Cimento joined McKinsey
in 1988, was elected a Principal in 1993, and held leadership positions in
McKinsey's Operations and Electronics practices. Before joining McKinsey,
Mr. Cimento held management positions in several engineering services firms. He
is a director of the San Francisco Chamber of Commerce. Mr. Cimento holds both a
Bachelor of Science and a Master of Science degree in Mechanical Engineering
from the Massachusetts Institute of Technology.

                                       42
<Page>
    ELIZABETH L. DELBIANCO joined Celestica Inc. in February 1998, as Vice
President, General Counsel, and Corporate Secretary. She is responsible for the
legal affairs of Celestica on a global basis, including all aspects of
regulatory compliance and corporate governance. Ms. DelBianco came to Celestica
following a 13-year career as a senior corporate legal advisor in the
telecommunications industry. Ms. DelBianco holds a Bachelor of Arts degree from
the University of Toronto, a Bachelor of Laws degree from Queen's University,
and a Master of Business Administration degree from the University of Western
Ontario. She is admitted to practice in Ontario and New York.

    IAIN S. KENNEDY has been a Senior Vice President of Celestica since 1996. He
currently is responsible for Celestica's global supply chain management (SCM)
and information technology (IT) organizations. As such, Mr. Kennedy is
responsible for maintaining industry-leading SCM and IT performance, while
continuing to deploy a competitive operational strategy across all functions and
regions of the Company's sophisticated global manufacturing network. Previously,
he was responsible for the integration of new acquisitions as well as
South American operations from October 2000 until November 2002. Prior to that
he led Celestica's Mergers and Acquisitions team from 1996 through
September 2000. Mr. Kennedy joined IBM Canada in 1984, and, over the course of
his career, has held a number of senior management positions in key areas of the
business, including supply chain management, manufacturing operations, business
development, and information technology as chief information officer from 1996
to 1998. Mr. Kennedy holds a Bachelor of Science degree in Computer Science from
the University of Western Ontario and a Master of Business Administration (Ivey
Scholar) degree from the Richard Ivey School of Business, University of Western
Ontario. In 1998, he was the recipient of Canada's Top 40 Under 40-TM- award in
recognition of attaining a significant level of success before the age of 40.

    DONALD S. MCCREESH joined Celestica in August 1999 as Senior Vice President,
Human Resources. Prior to joining Celestica, he was the Executive Vice President
of Human Resources at the Canadian Imperial Bank of Commerce (CIBC), one of
North America's leading financial institutions. In 1988 he joined Northern
Telecom, a global leader in telephony, data, wireless and wireline solutions for
the Internet. There he held a number of senior human resource management
positions. In 1993, he was named Senior Vice President, Human Resources, where
he oversaw all global human resource operations for Nortel. Mr. McCreesh holds
both a Bachelor of Psychology and a Master of Business Administration degree
from McMaster University.

    PAUL NICOLETTI has been Vice President and Corporate Treasurer since
September 2002. He is responsible for all corporate finance and treasury-related
matters, in addition to global tax and investor relations. Previously, he was
Vice President, Global Financial Operations since February 2001, where he led
the regional financial organizations on a global basis. Prior to that, since
August 1999, he was Vice President, Finance and was responsible for all
financial aspects of Celestica's Canadian and Mexico EMS operations.
Mr. Nicoletti joined IBM in 1989, and, over the course of his career, has held a
number of senior financial roles in business development, planning, accounting,
pricing, and financial strategies. He was responsible for leading all financial
strategies and due diligence relating to the divestiture of Celestica from IBM.
Mr. Nicoletti holds a Bachelor of Arts degree from the University of Western
Ontario and a Masters of Business Administration degree from York University.

    DANIEL P. SHEA has been a Senior Vice President of Celestica since
October 1996, and has been the company's Chief Technology Officer since
March 1998. In his current role as Group Executive and Chief Technology Officer,
Mr. Shea is responsible for all activities including sales, business
development, operations, and profit and loss associated with his global
accounts, as well as all aspects of the Company's technology development.
Mr. Shea joined IBM Canada in 1980, and, over the course of his career, has held
a number of engineering management roles including quality, reliability,
procurement, development and power systems. Mr. Shea holds a Bachelor of Applied
Science degree in Electrical Engineering from the University of Toronto.

    RAHUL SURI has been a Senior Vice President of Celestica since July 2000. In
his current role as Senior Vice President, Corporate Development, he is
responsible for global mergers and acquisitions, as well as for pursuing,
developing and implementing strategic corporate development opportunities with
new and existing customers and partners. Mr. Suri has more than 13 years of
mergers and acquisitions and corporate development experience. Prior to joining
Celestica, he held a range of senior positions in the mergers and acquisitions
field, including managing director of the M&A group at BMO Nesbitt Burns
Investment Banking, and Partner at

                                       43
<Page>
Davies Ward Phillips & Vineberg, a leading M&A law firm. Mr. Suri was also a
visiting professor at Queen's University Law School, Ontario for three years,
where he taught advanced corporate law and mergers and acquisitions. In 1992, he
served as policy advisor to the chairman and the executive director of the
Ontario Securities Commission on policy and legal matters. Mr. Suri has a Master
of Arts degree in law from Cambridge University, England. He is also a qualified
barrister and solicitor in the Province of Ontario.

    F. GRAHAM THOURET has been a Senior Vice President of Celestica since
September 2002. He is currently responsible for the Company's global finance
organization. Prior to that, Mr. Thouret was Vice President and Corporate
Treasurer of Celestica since October 1997. Before joining Celestica, he served
as vice president and treasurer of Dominion Textile Inc., a public company with
international manufacturing and marketing operations. Mr. Thouret has also held
senior management positions in the oil and gas industry (Gulf Canada) and
investment banking (Burns Fry). Mr. Thouret holds a Bachelor of Engineering
(Honours) degree from McGill University and a Master of Science degree in
Management from the Massachusetts Institute of Technology.

    There are no family relationships among any of the foregoing persons, and
there are no arrangements or understandings with any person pursuant to which
any of our directors or members of senior management were selected.

B.  COMPENSATION

AGGREGATE COMPENSATION OF DIRECTORS AND OFFICERS

    Directors who are not officers or employees of Celestica or Onex receive
compensation for their services as directors. These directors receive an annual
retainer fee of $25,000 and a fee of $2,500 for each meeting of the Board of
Directors attended and each meeting attended of a committee of the Board of
Directors of which the Director is a member. Meetings of directors are expected
to occur at least quarterly. In lieu of receiving such retainer and attendance
fees in cash, these directors may elect, at the time they are first elected or
appointed to Celestica's Board of Directors, to receive their fees in
subordinate voting shares. Directors who joined the Board of Directors at or
about the time of Celestica's initial public offering receive an annual retainer
and per meeting fee of 2,860 and 286 subordinate voting shares respectively.
Under the Directors' Compensation Plan adopted in July 2001, the number of
shares to be paid to other eligible directors in lieu of cash is calculated, in
the case of meeting fees, by dividing the cash fee that would otherwise be
payable by the closing price of subordinate voting shares on the NYSE on the
date of the meeting, and, in the case of annual retainer fees, by dividing the
cash amount that would otherwise be payable quarterly by the closing price of
subordinate voting shares on the NYSE on the last day of the quarter. Each
director has the right to elect to defer payment of his fees. Grants of
subordinate voting shares for director compensation may not exceed an aggregate
of 500,000 subordinate voting shares. The aggregate compensation paid in 2002 by
Celestica to our directors in their capacity as directors was $60,000 and the
right to receive, in the aggregate for 2002, 19,286 subordinate voting shares
(an aggregate of 77,830 subordinate voting shares from the initial public
offering through 2002). The delivery of these shares was deferred until the
respective directors cease to be directors of Celestica. Mr. Crandall, in his
capacity as Chairman of the Executive Committee, also receives an annual grant
of 10,000 Performance Units convertible into subordinate voting shares upon his
retirement from the Board of Directors.

    In 2002, eligible directors were issued options to acquire 10,000
subordinate voting shares pursuant to the Long-Term Incentive Plan, at an
exercise price of US$32.40.

                                       44
<Page>
    As of February 28, 2003, senior officers and directors as a group held
options to purchase a total of the following numbers of subordinate voting
shares at the purchase price per share indicated below:

<Table>
<Caption>
  NUMBER OF
 SUBORDINATE        PURCHASE PRICE
VOTING SHARES         PER SHARE
- -------------       --------------
<S>                 <C>
   210,000            $   0.925
   596,737            $   5.00
   483,690            $   8.75
    69,700            $   7.50
   293,880            C$ 18.90
    28,600            C$ 20.625
    80,000            C$ 31.85
    70,000            $  22.97
   486,000            C$ 57.845
    60,000            $  39.03
   100,000            C$ 60.00
   251,000            C$ 86.50
    59,000            $  56.1875
    25,000            C$ 73.50
   100,000            $  50.00
   480,200            C$ 66.06
   149,000            $  41.89
     5,000            $  40.06
    40,000            C$ 34.50
    40,000            $  23.41
    40,000            C$ 72.60
    40,000            $  48.69
    40,000            C$ 66.78
    40,000            $  44.23
    40,000            $  35.95
    50,000            $  13.10
   145,000            $  18.66
   482,000            C$ 29.11
     3,000            C$ 23.29
    10,000            $  32.40
</Table>

    These options expire at various dates from November 4, 2005 through
December 18, 2012. See "-- Share Ownership -- Share Purchase and Option Plans"
below. See note 11 to the Consolidated Financial Statements in Item 18
for further information about options.

REMUNERATION OF NAMED EXECUTIVE OFFICERS

    The following table sets forth the compensation of the Chief Executive
Officer of Celestica and the four other most highly compensated executive
officers of Celestica during the year ended December 31, 2002 (collectively, the
"Named Executive Officers") for services rendered in all capacities during our
two most recently completed financial years.

                                       45
<Page>
                           SUMMARY COMPENSATION TABLE

<Table>
<Caption>
                                                                                LONG-TERM
                                              ANNUAL COMPENSATION(1)       COMPENSATION AWARDS
                                          ------------------------------   -------------------
                                                                            SECURITIES UNDER        ALL OTHER
NAME AND PRINCIPAL POSITION                 YEAR      SALARY     BONUS     OPTIONS GRANTED(2)    COMPENSATION(3)
- ---------------------------               --------   --------   --------   -------------------   ---------------
                                                       ($)        ($)              (#)                 ($)
<S>                                       <C>        <C>        <C>        <C>                   <C>
Eugene V. Polistuk......................    2002     700,000         --          150,000             645,161
Chairman of the Board and Chief             2001     700,000         --          150,000             225,962
  Executive Officer

J. Marvin M(a)Gee.......................    2002     525,000         --          110,000              31,589
President and Chief Operating Officer       2001     516,250         --          135,000              61,947

Anthony P. Puppi........................    2002     400,000         --           60,000             117,608
Executive Vice President, Chief             2001     400,000         --           59,000              55,565
  Financial Officer and General Manager,
  Global Services

R. Thomas Tropea........................    2002     400,000         --           45,000              11,500
Vice Chair, Global Customer Units and       2001     400,000         --           59,000              10,200
  Worldwide Marketing and Business
  Development

Stephen W. Delaney......................    2002     333,750         --           75,000(4)            7,000
President, Americas                         2001     204,694(5) 150,000(6)       140,000(7)          154,500(8)
</Table>

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

(1) Excludes perquisites and other personal benefits because such compensation
    did not exceed 10% of the total annual salary and bonus for any of the Named
    Executive Officers.

(2) See table under "Options Granted During Year Ended December 31, 2002 to
    Named Executive Officers."

(3) Represents amounts set aside to provide benefits under Celestica's pension
    plans (see " -- Pension Plans").

(4) Includes 25,000 options granted to Mr. Delaney on October 1, 2002 when he
    assumed responsibility for the Americas.

(5) Mr. Delaney joined Celestica in May 2001. The amount specified represents
    Mr. Delaney's salary from his date of hire to the end of the year.

(6) Represents the amount Celestica agreed to pay to Mr. Delaney at his date of
    hire as a bonus for the year ended December 31, 2001.

(7) Includes 100,000 options granted to Mr. Delaney upon joining Celestica.

(8) Includes $150,000 paid to Mr. Delaney upon joining Celestica.

    OPTIONS GRANTED DURING YEAR ENDED DECEMBER 31, 2002 TO NAMED EXECUTIVE
     OFFICERS

    The following table sets out options to purchase subordinate voting shares
granted by the Company to the Named Executive Officers during the year ended
December 31, 2002.

<Table>
<Caption>
                        SUBORDINATE                                           MARKET VALUE OF
                       VOTING SHARES   % OF TOTAL OPTIONS                    SUBORDINATE VOTING
                       UNDER OPTIONS       GRANTED TO                          SHARES ON THE
NAME                    GRANTED(1)     EMPLOYEES IN 2002    EXERCISE PRICE     DATE OF GRANT       EXPIRATION DATE
- ----                   -------------   ------------------   --------------   ------------------   -----------------
                            (#)                               ($/share)          ($/share)
<S>                    <C>             <C>                  <C>              <C>                  <C>
Eugene V. Polistuk...     150,000             3.9%               C$29.11            C$29.11        December 3, 2012
J. Marvin M(a)Gee....     110,000             2.8%               C$29.11            C$29.11        December 3, 2012
Anthony P. Puppi.....      60,000             1.5%               C$29.11            C$29.11        December 3, 2012
R. Thomas Tropea.....      45,000             1.2%            U.S.$18.66         U.S.$18.66        December 3, 2012
Stephen W. Delaney...      25,000             0.6%            U.S.$13.10         U.S.$13.10         October 1, 2012
                           50,000             1.3%            U.S.$18.66         U.S.$18.66        December 3, 2012
</Table>

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

(1) Options vest in four equal annual installments.

                                       46
<Page>
    OPTIONS EXERCISED DURING MOST RECENTLY COMPLETED FINANCIAL YEAR AND VALUE OF
     OPTIONS AT DECEMBER 31, 2002 FOR NAMED EXECUTIVE OFFICERS

    The following table sets out certain information with respect to options to
purchase subordinate voting shares that were exercised by Named Executive
Officers during the year ended December 31, 2002 and with respect to subordinate
voting shares under option to the Named Executive Officers as at December 31,
2002.

<Table>
<Caption>
                                                                                                       VALUE OF UNEXERCISED
                                                                  UNEXERCISED OPTIONS AT              IN-THE-MONEY OPTIONS AT
                          SUBORDINATE VOTING    AGGREGATE            DECEMBER 31, 2002                 DECEMBER 31, 2002(2)
                           SHARES ACQUIRED        VALUE      ---------------------------------   ---------------------------------
NAME                         ON EXERCISE       REALIZED(1)   EXERCISABLE(3)   UNEXERCISABLE(3)   EXERCISABLE(3)   UNEXERCISABLE(3)
- ----                      ------------------   -----------   --------------   ----------------   --------------   ----------------
<S>                       <C>                  <C>           <C>              <C>                <C>              <C>
Eugene V. Polistuk.....        --                  --            598,333           347,500         $2,738,230          --
J. Marvin M(a)Gee......        --                  --            252,382           248,750         $  962,551          --
Anthony P. Puppi.......         14,869           $139,769        193,446           139,250         $  483,210          --
R. Thomas Tropea.......        --                  --            271,302           170,888         $  998,053         $249,513
Stephen W. Delaney.....        --                  --             35,000           180,000            --              $ 25,000
</Table>

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

(1) Based on the closing price of the underlying shares on The New York Stock
    Exchange on the date of exercise of the options.

(2) Based on the closing price of the subordinate voting shares on The New York
    Stock Exchange on December 31, 2002 of $14.10.

(3) Options granted under the ESPO Plans and the Long-Term Incentive Plan.
    Exercisable options include options that vested January 1, 2003.

PENSION PLANS

    Messrs. Polistuk, Puppi and M(a)Gee each participate in Celestica's
non-contributory pension plan (the "Canadian Pension Plan"). The Canadian
Pension Plan has a defined benefit and a defined contribution portion and
provides for a maximum of 30 years' service and retirement eligibility at the
earlier of 30 years' service or age 55. They also participate in an unregistered
supplementary pension plan (the "Supplementary Plan") that provides benefits
equal to the difference between the benefits determined in accordance with the
formula set out in the Canadian Pension Plan and Canada Customs and Revenue
Agency maximum pension benefits.

    Mr. M(a)Gee participates only in the defined contribution portion of the
Canadian Pension Plan. The defined contribution portion of the Canadian Pension
Plan allows employees to choose how Celestica contributions are invested on
their behalf within a range of investment options provided by third party fund
managers. Celestica's contributions to this plan on behalf of an employee range
from 3% of earnings to a maximum of 6.75% of earnings based on the number of
years of service. Retirement benefits depend upon the performance of the
investment options chosen. Celestica currently contributes 6% of earnings
annually on behalf of Mr. MaGee.

    Messrs. Polistuk and Puppi participate only in the defined benefit portion
of the Canadian Pension Plan. The benefit provided under this plan is equal to
the benefit entitlement accrued under the relevant IBM plan prior to
October 22, 1996, the date Celestica was divested from IBM, plus the benefits
earned under the Canadian Pension Plan since that date. The terms of the
Canadian Pension Plan, which were accepted by certain employees when they
transferred to Celestica, mirrored those of the IBM pension plan in place at the
time of divestiture. The Plan is of a modified career average design with
benefits based on a three-year earnings average to December 31 of a designated
base year (the "Base Year"). In 2002, the Base Year was updated to December 31,
2001 and may be updated from time to time until December 31, 2009. The formula
for calculating benefits for the period after October 22, 1996 is the greater of
1.2% of earnings (salary and bonus) or 0.9% of earnings up to the yearly maximum
pensionable earnings ("YMPE") level, plus 1.45% of earnings above the YMPE. The
defined benefit portion of the Canadian Pension Plan also provides for
supplementary early retirement benefits from the date of early retirement to age
65.

    The following table sets forth the estimated aggregate annual benefits
payable under the defined benefit portion of the Canadian Pension Plan and the
Supplementary Plan based on average earnings and years of service.

                                       47
<Page>
                       CANADIAN PENSION PLAN TABLE(1)(2)

<Table>
<Caption>
                               YEARS OF SERVICE
                   -----------------------------------------
EARNINGS AVERAGE      20         25         30         35
- ----------------   --------   --------   --------   --------
<S>                <C>        <C>        <C>        <C>
   $  400,000      $113,000   $142,000   $170,000   $170,000
   $  600,000      $171,000   $214,000   $257,000   $257,000
   $  800,000      $229,000   $287,000   $344,000   $344,000
   $1,000,000      $287,000   $359,000   $431,000   $431,000
   $1,200,000      $345,000   $432,000   $518,000   $518,000
   $1,400,000      $403,000   $504,000   $605,000   $605,000
   $1,600,000      $461,000   $577,000   $692,000   $692,000
   $1,800,000      $519,000   $649,000   $779,000   $779,000
</Table>

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

(1) This table assumes total of retirement age and years of service is greater
    than or equal to 80.

(2) All amounts are shown converted into U.S. dollars from Canadian dollars at
    an exchange rate of US$1.00 = C$1.4880.

    As at December 31, 2002, Messrs. Polistuk and Puppi had completed 34 and
23 years of service, respectively.

    During the year ended December 31, 2002, Celestica accrued an aggregate of
$749,574 to provide pension benefits for Messrs. Polistuk, Puppi and M(a)Gee
pursuant to the Canadian Pension Plan. No other amounts were set aside or
accrued by Celestica during the year ended December 31, 2002 for the purpose of
providing pension, retirement or similar benefits for Messrs. Polistuk, Puppi
and M(a)Gee pursuant to any other plans.

    Messrs. Tropea and Delaney participate in the "U.S. Plan." The U.S. Plan
qualifies as a deferred salary arrangement under section 401 of the Internal
Revenue Code (United States). Under the U.S. Plan, participating employees may
defer a portion of their pre-tax earnings not to exceed 20% of their total
compensation. Celestica may make contributions for the benefit of eligible
employees.

    During the year ended December 31, 2002, Celestica contributed $18,500 to
the U.S. Plan for the benefit of Messrs. Tropea and Delaney. Except as described
above, no other amounts were set aside or accrued by Celestica during the year
ended December 31, 2002 for the purpose of providing pension, retirement or
similar benefits for Messrs. Tropea and Delaney.

EMPLOYMENT AGREEMENTS

    Messrs. Polistuk and Puppi each entered into an employment agreement with
Celestica as of October 22, 1996. Mr. Tropea entered into an employment
agreement with Celestica as of June 30, 1998. Each agreement provides for the
executive's base salary and for benefits in accordance with Celestica's
established benefit plans for employees from time to time. Each agreement
provides for the executive to receive an amount equivalent to 36 months' salary
if Celestica terminates the executive's employment, other than for cause,
subject to reduction if the executive earns replacement earnings during such
period from other sources.

INDEMNIFICATION AGREEMENTS

    Celestica and certain of our subsidiaries have entered into indemnification
agreements with certain of the directors and officers of Celestica and our
subsidiaries. These agreements generally provide that Celestica or the
subsidiary of Celestica which is a party to the agreement, as applicable, will
indemnify the director or officer in question (including his or her heirs and
legal representatives) against all costs, charges and expenses incurred by him
or her in respect of any civil, criminal or administrative action or proceeding
to which he or she is made a party by reason of being or having been a director
or officer of such corporation or a subsidiary thereof, provided that (a) he or
she has acted honestly and in good faith with a view to the best interests of
the corporation, and (b) in the case of a criminal or administrative proceeding
that is enforced by a monetary penalty, he or she had reasonable grounds for
believing that his or her conduct was lawful.

                                       48
<Page>
C.  BOARD PRACTICES

    Members of the Board of Directors are elected until the next annual meeting
or until their successors are elected or appointed.

    Except for the right to receive deferred compensation (see Item 6(B),
"Compensation"), no director is entitled to benefits from Celestica when they
cease to serve as a director.

BOARD COMMITTEES

    The Board of Directors has established four standing committees, each with a
specific mandate. The Executive Committee includes a majority of independent
directors. The Audit Committee, Compensation Committee, Nominating and Corporate
Governance Committee are each composed of independent directors.

    EXECUTIVE COMMITTEE

    Subject to the limitations set out in subsection 127(3) of the Business
Corporations Act (Ontario), the Board of Directors has delegated to the
Executive Committee the powers to consider and approve certain matters relating
to the management of Celestica subject to any regulations or restrictions that
may from time to time be made or imposed upon the Executive Committee by the
Board of Directors. The members of the Executive Committee are Mr. Crandall,
Mr. Melman and Mr. Polistuk, the majority of whom are independent.

    AUDIT COMMITTEE

    The Audit Committee consists of Mr. Crandall, Mr. Etherington, Mr. Love,
Mr. Martin and Mr. Tapscott, all of whom are independent directors. The Audit
Committee has a well-defined mandate which, among other things, sets out its
relationship with, and expectations of, the external auditors, including the
establishment of the independence of the external auditors and approval of any
non-audit mandates of the external auditor; the engagement, evaluation,
remuneration and termination of the external auditor; its relationship with, and
expectations of, the internal auditor function and its oversight of internal
control; and the disclosure of financial and related information. The Audit
Committee has direct communication channels with the internal and external
auditors to discuss and review specific issues and has the authority to retain
such independent advisors as it may consider appropriate. The Audit Committee
annually reviews and approves the mandate and plan of the internal audit
department. The Audit Committee's duties include the responsibility for
reviewing financial statements with management and the auditors, monitoring the
integrity of Celestica's management information systems and internal control
procedures, and reviewing the adequacy of Celestica's processes for identifying
and managing risk.

                                       49
<Page>
    COMPENSATION COMMITTEE

    The Compensation Committee consists of Mr. Crandall, Mr. Etherington,
Mr. Love, Mr. Melman and Mr. Tapscott, all of whom are independent directors. It
is the responsibility of the Compensation Committee to define and communicate
compensation policy and principles that reflect and support the Company's
strategic direction, business goals and desired culture. The mandate of the
Compensation Committee includes the following: review and recommend to the Board
of Directors the Company's compensation strategy, including plan design,
performance targets and program administration; recommend to the Board of
Directors the compensation of the Chief Executive Officer based on the Board of
Directors' assessment of the annual performance of the Chief Executive Officer;
review and recommend to the Board of Directors the compensation of the Named
Executive Officers and other senior managers whose compensation is subject to
review by the Board of Directors; review the Company's succession plans for key
executive positions; and review and approve material changes to the Company's
organizational structure and human resource policies.

    NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

    The Nominating and Corporate Governance Committee consists of Mr. Crandall,
Mr. Etherington, Mr. Love, Mr. Melman and Mr. Tapscott, all of whom are
independent directors. The Nominating and Corporate Governance Committee
recommends to the Board the criteria for selecting candidates for nomination to
the Board and the individuals to be nominated for election by the shareholders.
The Committee's mandate includes making recommendations to the Board relating to
the Company's approach to corporate governance, developing the Company's
corporate governance guidelines, assessing the performance of the Chief
Executive Officer relative to corporate goals and objectives established by the
Committee, and assessing the effectiveness of the Board of Directors and its
committees.

D.  EMPLOYEES

    Celestica has over 40,000 permanent and temporary (contract) employees
worldwide as of December 31, 2002. The following table sets forth information
concerning our employees by geographic location:

<Table>
<Caption>
                                                                   NUMBER OF EMPLOYEES
                                                              ------------------------------
DATE                                                          AMERICAS    EUROPE      ASIA
- ----                                                          --------   --------   --------
<S>                                                           <C>        <C>        <C>
December 31, 2000...........................................   16,000     6,000       7,000
December 31, 2001...........................................   17,500     7,500      15,000
December 31, 2002...........................................   14,500     6,000      19,500
</Table>

    During the year ended December 31, 2002, approximately 10,000 temporary
(contract) employees were engaged by Celestica worldwide. During the year ended
December 31, 2002, approximately 4,600 employees, including temporary (contract)
employees, were terminated as a result of restructuring actions announced during
the year. See note 13 to the Consolidated Financial Statements in Item 18
for further information on the restructuring.

    Certain information concerning employees is set forth in Item 4,
"Information on the Company -- Business Overview -- Human Resources."

                                       50
<Page>
E.  SHARE OWNERSHIP

    The following table sets forth certain information concerning the direct and
beneficial ownership of shares of Celestica at February 28, 2003 by each
director who holds shares and each of the Named Executive Officers and all
directors and executive officers of Celestica as a group. Unless otherwise
noted, the address of each of the shareholders named below is Celestica's
principal executive office. In this table, multiple voting shares are referred
to as "MVS", subordinate voting shares are referred to as "SVS", and Celestica's
Liquid Yield Option-TM- Notes due 2020 are referred to as "LYONs."

<Table>
<Caption>
                                                                                            PERCENTAGE OF        PERCENTAGE
                                                                              PERCENTAGE         ALL             OF VOTING
NAME OF BENEFICIAL OWNER(1)                          VOTING SHARES             OF CLASS     EQUITY SHARES          POWER
- ---------------------------                 -------------------------------   ----------   ----------------   ----------------
<S>                                         <C>                    <C>        <C>          <C>                <C>
Eugene V. Polistuk(2).....................               720,892   SVS           *                *                  *
Robert L. Crandall(3).....................               110,000   SVS           *                *                  *
                                                          15,130   LYONs (4)     *                *                  *
William E. Etherington(5).................                16,250   SVS           *                *                  *
Richard S. Love(6)........................               105,000   SVS           *                *                  *
Roger L. Martin(7)........................                73,000   SVS           *                *                  *
Anthony R. Melman(8)(9)...................               450,000   SVS           *                *                  *
Gerald W. Schwartz(8)(10).................            39,065,950   MVS          100.0%               17.1%               83.8%
                                                       3,671,982   SVS            1.9%                1.6%           *
Don Tapscott(11)..........................                93,000   SVS           *                *                  *
J. Marvin M(a)Gee.........................               308,632   SVS           *                *                  *
Anthony P. Puppi..........................               293,667   SVS           *                *                  *
R. Thomas Tropea..........................               351,302   SVS           *                *                  *
Stephen W. Delaney........................                61,657   SVS           *                *                  *
All directors and executive officers as a
  group
  (22 persons)(2)(3)(5)(6)(7)(8)(9)(10)(11)(12)....           39,065,950 MVS    100.0%               17.1%               83.8%
                                                       7,280,453   SVS            3.8%                3.2%           *
  Total percentage of all equity shares
    and total percentage of voting
    power.................................                                                           20.3%               84.4%
</Table>

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

*   Less than 1%.

(1) As used in this table, "beneficial ownership" means sole or shared power to
    vote or direct the voting of the security, or the sole or shared investment
    power with respect to a security (I.E., the power to dispose, or direct a
    disposition, of a security). A person is deemed at any date to have
    "beneficial ownership" of any security that such person has a right to
    acquire within 60 days of such date. Certain shares subject to options
    granted pursuant to management investment plans of Onex are included as
    owned beneficially by named individuals, although the exercise of these
    options is subject to Onex meeting certain financial targets. More than one
    person may be deemed to have beneficial ownership of the same securities.

(2) Includes 598,333 subordinate voting shares subject to exercisable options.

(3) Includes 100,000 subordinate voting shares subject to exercisable options.

(4) Each LYON is convertible into 5.6748 subordinate voting shares at the option
    of the holder.

(5) Includes 6,250 subordinate voting shares subject to exercisable options.

(6) Includes 100,000 subordinate voting shares subject to exercisable options.

(7) Includes 73,000 subordinate voting shares subject to exercisable options.

(8) The address of such shareholders is: c/o Onex Corporation, 161 Bay Street,
    P.O. Box 700, Toronto, Ontario, Canada M5J 2S1.

(9) Includes 274,588 subordinate voting shares owned by Onex which are subject
    to options granted to Mr. Melman pursuant to certain management investment
    plans of Onex.

(10) Includes 188,744 subordinate voting shares owned by a company controlled by
    Mr. Schwartz and all of the shares of Celestica beneficially owned by Onex,
    of which 1,077,500 subordinate voting shares are subject to options granted
    to Mr. Schwartz pursuant to certain management incentive plans of Onex.
    Mr. Schwartz, a director of Celestica, is the Chairman of the Board,
    President and Chief Executive Officer of Onex, and controls Onex through his
    ownership of shares, with a majority of the voting rights attaching to all
    shares of Onex. Accordingly, Mr. Schwartz may be deemed to be the beneficial
    owner of shares of Celestica beneficially owned by Onex.

                                       51
<Page>
(11) Includes 93,000 subordinate voting shares subject to exercisable options.

(12) Includes 425,200 subordinate voting shares held by Towers Share Plan
    Services, in trust for Celestica Employee Nominee Corporation as agent for
    and on behalf of individual Celestica executives, pursuant to the provisions
    of Celestica employee benefit plans, and 666,437 subordinate voting shares
    which are subject to options.

    MVS and SVS have different voting rights. See Item 10, "Additional
Information -- Memorandum and Articles of Incorporation."

SHARE PURCHASE AND OPTION PLANS

    We have issued subordinate voting shares and have granted options to acquire
subordinate voting shares for the benefit of certain of our employees and
executives pursuant to various employee share purchase and option plans in
effect prior to our initial public offering (the "ESPO Plans"). No further
options or subordinate voting shares (other than pursuant to outstanding
options) may be issued under these ESPO Plans.

    Pursuant to the ESPO Plans, employees and executives of Celestica were
offered the opportunity to purchase subordinate voting shares and, in connection
with such purchase, receive options to acquire an additional number of
subordinate voting shares based on the number of subordinate voting shares
acquired by them under the ESPO Plans (on average, approximately 1.435 options
for each subordinate voting share acquired under the ESPO Plans). In each case,
the exercise price for the options is equal to the price per share paid for the
corresponding subordinate voting shares acquired under the ESPO Plans.

    Upon the completion of Celestica's initial public offering, certain options
became exercisable. The balance of the options issued under the ESPO Plans vest
over a period of five years beginning December 31, 1998. All options granted
under the ESPO Plans were fully vested as of December 31, 2002. All subordinate
voting shares acquired by employees under the ESPO Plans are held either by the
employee, or by Towers Perrin Share Plan Services in trust for Celestica
Employee Nominee Corporation as agent for and on behalf of such employees.

    As at February 28, 2003, approximately 4,500 persons held options to acquire
an aggregate of approximately 25,536,000 subordinate voting shares. Most of
these options were issued pursuant to the ESPO and LTIP Plans. The following
table sets forth information with respect to options outstanding as at
February 28, 2003.

                              OUTSTANDING OPTIONS

<Table>
<Caption>
                                                  NUMBER OF
                                                 SUBORDINATE
                                                VOTING SHARES
BENEFICIAL HOLDERS                              UNDER OPTION     EXERCISE PRICE      YEAR OF ISSUANCE      DATE OF EXPIRY
- ------------------                              -------------   -----------------   ------------------   ------------------
<S>                                             <C>             <C>                 <C>                  <C>
Executive Officers (15 persons in total)......      210,000     $0.925              June 13, 1996        June 13, 2006
                                                    596,737     $5.00               During 1997          April 8, 2007
                                                    387,390     $7.50-$8.75         During 1997 and      October 22, 1997
                                                                                    1998                 to July 3, 2008
                                                    472,480     C$18.90-$22.97      During 1999          January 1, 2009 to
                                                                                                         September 20, 2009
                                                    546,000     $39.03/C$57.845     December 7, 1999     December 7, 2009
                                                    105,000     $40.06-C$60.00      During 2000          February 1, 2010
                                                                                                         to May 26, 2010
                                                    310,000     $56.1875/C$86.50    December 5, 2000     December 5, 2010
                                                     25,000     C$73.50             March 1, 2001        March 1, 2011
                                                    100,000     $50.00              April 20, 2001       April 20, 2011
                                                    629,200     $41.89/C$66.06      December 4, 2001     December 4, 2011
                                                    680,000     $13.10-C$29.11      During 2002          October 1, 2012 to
                                                                                                         December 18, 2012
Directors who are not Executive Officers......      166,000     $8.75               During 1998          July 7, 2008
                                                     80,000     $23.41/C$34.50      July 7, 1999         July 7, 2009
                                                     80,000     $48.69/C$72.60      July 7, 2000         July 7, 2010
                                                     80,000     $44.23/C$66.78      July 7, 2001         July 7, 2011
                                                     40,000     $35.95              October 22, 2001     October 22, 2011
                                                     10,000     $32.40              April 21, 2002       April 21, 2012
</Table>

                                       52
<Page>

<Table>
<Caption>
                                                  NUMBER OF
                                                 SUBORDINATE
                                                VOTING SHARES
BENEFICIAL HOLDERS                              UNDER OPTION     EXERCISE PRICE      YEAR OF ISSUANCE      DATE OF EXPIRY
- ------------------                              -------------   -----------------   ------------------   ------------------
<S>                                             <C>             <C>                 <C>                  <C>
All other Celestica Employees (other than IMS
  and Primetech) (more than 4,000 persons in
  total)......................................    3,108,372     $5.00               During 1997          April 8, 2007(1)
                                                    621,985     $7.50-C$14.05       During 1998          April 29, 2008 to
                                                                                                         November 9, 2008
                                                    726,945     $13.69-C$21.45      January 1, 1999 to   January 1, 2009 to
                                                                                    March 17, 1999       March 17, 2009
                                                  2,162,075     $39.03/C$57.845     December 7, 1999     December 7, 2009
                                                    577,705     $13.65-C$53.75      During 1999          January 1, 2009 to
                                                                                                         December 31, 2009
                                                  1,040,416     $40.06-C$123.65     During 2000          January 1, 2010 to
                                                                                                         December 31, 2010
                                                  2,332,290     $56.1875/C$86.50    December 5, 2000     December 5, 2010
                                                  1,223,292     $49.00-C$108.45     During 2001          January 1, 2011 to
                                                                                                         December 31, 2011
                                                  5,286,348     $41.89/C$66.06      December 4, 2001     December 4, 2011
                                                    451,976     $13.10-C$70.81      During 2002          January 1, 2012 to
                                                                                                         December 31, 2012
                                                  2,713,228     $18.66/C$29.11      December 3, 2002     December 3, 2012
                                                     48,150     $11.76-C$18.12      January 1, 2003 to   January 1, 2013 to
                                                                                    February 28, 2003    February 28, 2013
IMS Employees(2)(3)...........................      509,434     $0.925-$13.31       December 30, 1998    June 13, 2006 to
                                                                                                         December 18, 2008
Primetech Employees(4)........................       31,793     C$47.73             June 29, 1998        June 29, 2003
                                                     58,821     C$65.91             July 14, 1999        July 14, 2004
                                                     93,500     C$97.73-C$111.36    February 15, 2000    February 15, 2005
                                                                                    to June 15, 2000     to June 15, 2005
                                                     31,735     C$45.45-C$67.05     January 10, 2001     January 10, 2006
                                                                                    to March 16, 2001    to March 16, 2006
</Table>

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

(1) Except for 157,035 options which expire on November 4, 2005.

(2) Represents options outstanding under certain stock option plans that were
    assumed by Celestica on December 30, 1998.

(3) The original exercise price for these options was based on the NASDAQ market
    price of IMS common stock at the date of issuance.

(4) Represents options outstanding under certain stock option plans that were
    assumed by Celestica on August 3, 2001.

    Our compensation philosophy is predicated on the belief that broadly-based
employee participation in share ownership is critical to maintain a common
entrepreneurial culture and motivation throughout our operational units, and
across functional and geographic boundaries. Accordingly, prior to the
completion of our initial public offering, we established the Long-Term
Incentive Plan and the Employee Share Ownership Plan.

LONG-TERM INCENTIVE PLAN

    Under the Long-Term Incentive Plan (the "Plan"), the board of directors of
Celestica may in its discretion grant from time to time stock options,
performance shares, performance share units and stock appreciation rights
("SARs") to directors, permanent employees and consultants ("eligible
participants") of Celestica, our subsidiaries and other companies or
partnerships in which Celestica has a significant investment
("affiliated entities").

    Under the Plan, up to 29,000,000 subordinate voting shares of Celestica may
be issued from treasury. The number of subordinate voting shares which may be
issued from treasury under the Plan to directors is limited to 2,000,000. In
addition, Celestica may satisfy obligations under the Plan by acquiring
subordinate voting shares in the market. The Plan limits the number of
subordinate voting shares which may be reserved for issuance to insiders or any
one participant pursuant to options or rights granted pursuant to the Plan,
together with subordinate voting shares reserved for issuance under any other
employee-related plan of Celestica or options for services granted by Celestica,
to 10% and 5%, respectively, of the aggregate issued and outstanding subordinate
voting shares and multiple voting shares of Celestica.

                                       53
<Page>
    The exercise price for any stock option issued under the Plan will not be
less than the market price of the subordinate voting shares on the day preceding
the date of grant, except that options to acquire subordinate voting shares were
issued to directors and an officer substantially concurrently with the
completion of the initial public offering with an exercise price equal to the
initial public offering price ($8.75). Options issued under the Plan may be
exercised during a period determined under the Plan, which may not exceed ten
years. The Plan also provides that, unless otherwise determined by the board of
directors, options will terminate within specified time periods following the
termination of employment of an eligible participant with Celestica or our
affiliated entities. The exercise of options may be subject to vesting
conditions, including specific time schedules for vesting and performance-based
conditions such as share price and financial results. The grant to, or exercise
of options by, an eligible participant may also be subject to certain share
ownership requirements.

    Under the Plan, eligible participants may be granted SARs, a right to
receive a cash amount equal to the difference between the market price of the
subordinate voting shares at the time of the grant and the market price of such
shares at the time of exercise of the SAR. Such amounts may also be payable by
the issuance of subordinate voting shares. SARs may be granted under the Plan on
a one-for-one or other basis in tandem with option grants, in which case it may
be a term of the option and the SAR that the exercise of one results in the
cancellation of the other. The exercise of SARs may also be subject to
conditions similar to those which may be imposed on the exercise of stock
options.

    Upon the issuance of performance units, eligible participants will be
entitled to receive grants of subordinate voting shares, with such shares to be
issued at the then market price of subordinate voting shares. The issue of such
shares may be subject to vesting requirements similar to those described above
with respect to the exercisability of options and SARs, including such time or
performance-based conditions as may be determined by the board of directors in
its discretion. The number of subordinate voting shares which may be issued from
the treasury of Celestica under the performance unit program is limited to
2,000,000 and the number of subordinate voting shares which may be issued
pursuant to the performance unit program to any one person shall not exceed 1%
of the aggregate issued and outstanding subordinate voting shares and multiple
voting shares of Celestica.

    The interests of any participant under the Plan or in any option, rights or
performance unit shall not be transferable by him or her except to a spouse or a
personal holding company or family trust controlled by the participant, the
shareholders or beneficiaries of which, as the case may be, are any combination
of the participant, the participant's spouse, the participant's minor children
and the participant's minor grandchildren, subject to applicable stock exchange
rules.

    The Plan, or the terms of any option, SAR or performance unit granted
thereunder, can be amended by the board of directors, subject to obtaining any
required regulatory approvals and participant and shareholder approval where so
required. Participation in the Plan by eligible participants is not a condition
of employment of an eligible participant. Celestica may appoint a trustee or
administrator to perform certain functions under the Plan and the board of
directors may delegate its rights and duties under the Plan to a committee of
the board of directors or one or more specified officers.

EMPLOYEE SHARE OWNERSHIP PLAN

    The purpose of the Employee Share Ownership Plan ("ESOP") is to enable
eligible employees and directors ("Eligible Participants") of Celestica to
acquire subordinate voting shares, so as to encourage continued employee
interest in the operation, growth and development of Celestica, as well as to
provide an additional investment opportunity to employees and directors. The
ESOP enables Eligible Participants to acquire subordinate voting shares from
shares acquired by an administrator in the market. Under the ESOP, an Eligible
Participant who is an employee may elect to contribute an amount by deduction
from each regular payroll, representing no more than 10% of his or her
compensation. A participant who is a director may elect to designate all or a
portion of his or her cash retainer fees, meeting fees, committee or similar
fees as a contribution under the ESOP. Celestica will contribute 25% of the
amount of the contributions of employees, up to a maximum total for each
contribution of 1% of the employee's compensation for the relevant payroll
period. Unless otherwise determined by Celestica, no Celestica contribution
shall be made for contributions by directors. The ESOP provides for vesting
conditions relating to shares acquired under the ESOP using Celestica

                                       54
<Page>
contributions. Under the ESOP, following each payroll period, an administrator
acquires in the market subordinate voting shares for the purposes of satisfying
purchases by Eligible Participants under the ESOP, using funds contributed by
employees and Celestica. The ESOP also provides that participation in the Plan
by Eligible Participants is not a condition of employment of an Eligible
Participant.

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.  MAJOR SHAREHOLDERS

    The following table sets forth certain information concerning the direct and
beneficial ownership of the shares of Celestica at February 28, 2003 by each
person known to Celestica to own beneficially, directly or indirectly, 5% or
more of the subordinate voting shares or the multiple voting shares. In this
table, multiple voting shares are referred to as "MVS" and subordinate voting
shares are referred to as "SVS."

<Table>
<Caption>
                                                                              PERCENTAGE      PERCENTAGE OF ALL    PERCENTAGE OF
NAME OF BENEFICIAL OWNER(1)   TYPE OF OWNERSHIP      NUMBER OF SHARES          OF CLASS         EQUITY SHARES       VOTING POWER
- ---------------------------  -------------------   ---------------------   ----------------   -----------------   ----------------
<S>                          <C>                   <C>          <C>        <C>                <C>                 <C>
Onex Corporation(2)(3)...    Direct and Indirect   39,065,950   MVS                  100.0%         17.1%                    83.8%
                                                    3,483,238   SVS                    1.8%          1.5%                *

Gerald W. Schwartz(2)(4)...  Direct and Indirect   39,065,950   MVS                  100.0%         17.1%                    83.8%
Toronto, Ontario...                                 3,671,982   SVS                    1.9%          1.6%                *

  Total percentage of all equity shares and total percentage of voting
    power...............................................................                            20.3%                    84.4%
</Table>

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

*   Less than 1%.

(1) As used in this table, "beneficial ownership" means sole or shared power to
    vote or direct the voting of the security, or the sole or shared investment
    power with respect to a security (I.E., the power to dispose, or direct a
    disposition, of a security). A person is deemed at any date to have
    "beneficial ownership" of any security that such person has a right to
    acquire within 60 days of such date. More than one person may be deemed to
    have beneficial ownership of the same securities.

(2) The address of such shareholders is: c/o Onex Corporation, 161 Bay Street,
    P.O. Box 700, Toronto, Ontario, Canada M5J 2S1.

(3) Includes 11,635,958 multiple voting shares held by wholly-owned subsidiaries
    of Onex, 1,540,734 subordinate voting shares held in trust for Celestica
    Employee Nominee Corporation as agent for and on behalf of certain
    executives and employees of Celestica pursuant to certain of Celestica's
    employee share purchase and option plans, 33,754 subordinate voting shares
    representing an undivided interest of approximately 10.2% in 330,872
    subordinate voting shares, and 280,376 subordinate voting shares directly or
    indirectly held by certain officers of Onex which Onex has the right to
    vote.

    Of these shares, 9,214,320 subordinate voting shares may be delivered, at
    the issuer's option, upon the exercise or redemption, or at maturity or
    acceleration, of exchangeable debentures due 2025 issued by certain
    subsidiaries of Onex and 1,757,467 subordinate voting shares may be
    delivered, at the option of Onex or certain persons related to Onex, to
    satisfy the obligations of such persons under equity forward agreements. If
    a debenture is exercised or an equity forward agreement is settled and the
    issuer of the debenture or, in the case of an equity forward agreement, Onex
    does not elect to satisfy its obligations in cash rather than delivering
    subordinate voting shares, if the issuer or Onex, as the case may be, does
    not hold a sufficient number of subordinate voting shares to satisfy its
    obligations, the requisite number of multiple voting shares held by such
    person will immediately be converted into subordinate voting shares, which
    will be delivered to satisfy such obligations.

    The shares Onex owns and the shares Onex has the right to vote represent in
    the aggregate 84% of the voting power of all Celestica shares. If the issuer
    of the exchangeable debentures or the party to the equity forward
    agreements, as the case may be, elects to deliver solely subordinate voting
    shares and no cash upon the exchange or redemption, or at maturity or
    acceleration, of the debentures or the settlement of the equity forward
    agreement, as the case may be, the number of shares owned by Onex, together
    with those shares Onex has the right to vote, would, if such delivery had
    occurred on February 28, 2003, represent in the aggregate 78% of the voting
    interest in our company.

(4) Includes 188,744 subordinate voting shares owned by a company controlled by
    Mr. Schwartz and all of the shares of Celestica beneficially owned by Onex,
    or in respect of which Onex exercises control or direction, of which
    1,077,500 subordinate voting shares are subject to options granted to
    Mr. Schwartz pursuant to certain management incentive plans of Onex.
    Mr. Schwartz is a director of Celestica and the Chairman of the Board,
    President and Chief Executive Officer of Onex, and controls Onex through his
    ownership of shares with a majority of the voting rights attaching to all
    shares of Onex. Accordingly, Mr. Schwartz may be deemed to be the beneficial
    owner of the Celestica shares owned by Onex.

                                       55
<Page>
HOLDERS

    On February 28, 2003, there were approximately 1,777 holders of record of
subordinate voting shares, of which approximately 410 holders, holding
approximately 46% of the outstanding subordinate voting shares, were resident in
the United States.

    On February 28, 2003, there was one holder of record of the Liquid Yield
Option-TM- Notes due 2020; the holder of record was in the United States.

B.  RELATED PARTY TRANSACTIONS

INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS

    Celestica and Onex are parties to an agreement under which Onex has agreed
to provide certain strategic planning, financial and support services to
Celestica of such nature as Celestica may reasonably request from time to time
having regard to Onex's experience, expertise and personnel or the personnel of
its subsidiaries, as the case may be. Celestica has agreed to pay Onex certain
fees under the agreement equal to $2.0 million per year adjusted for changes in
the Canadian consumer price index. The agreement also provides that if Celestica
uses Onex management personnel to provide investment banking or financial advice
in connection with any acquisition, Onex will be entitled to receive fees
consistent in the determination of the board of directors of Celestica with fees
typically paid for financial advice in such circumstances to investment bankers
or other expert advisors at arm's-length to Celestica. The agreement has a term
of five years, commencing July 7, 1998, with automatic renewal for successive
one-year periods thereafter, subject to termination on 12 months' prior written
notice at any time after the initial five-year term by the directors of
Celestica who are independent of Celestica and Onex, and provided that in any
event the agreement, and the rights of Onex to receive fees (other than accrued
and unpaid fees), will terminate 30 days after the first day upon which Onex
ceases to hold at least one multiple voting share. During 2002, Celestica paid
to Onex management fees of approximately $2.2 million.

INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS

    As at February 28, 2003, Celestica had guaranteed $4,128,012 aggregate
indebtedness of certain officers and employees of Celestica incurred in
connection with the purchase of subordinate voting shares. The following table
sets forth details of such guarantees by Celestica of indebtedness of the
directors and officers of Celestica.

       INDEBTEDNESS OF SENIOR OFFICERS UNDER SECURITIES PURCHASE PROGRAMS

<Table>
<Caption>
                                                                LARGEST AMOUNT               AMOUNT
                                                              OUTSTANDING DURING        OUTSTANDING AS AT
NAME AND PRINCIPAL POSITION                                         2002(1)          FEBRUARY 28, 2003(1)(2)
- ---------------------------                                   -------------------   -------------------------
<S>                                                           <C>                   <C>
J. Marvin M(a)Gee...........................................     $     166,618            $     166,618
President and Chief Operating Officer

R. Thomas Tropea............................................     $     436,828            $     436,828
Vice Chair, Global Customer Units and Worldwide Marketing
  and Business Development

Daniel P. Shea..............................................     $     301,299            $     301,299
Group Executive and Chief Technology Officer

Rahul Suri..................................................     $   1,026,254            $   1,026,254
Senior Vice President, Corporate Development
</Table>

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

(1) All amounts shown are converted into U.S. dollars from Canadian dollars at
    an exchange rate of U.S.$1.00 = C$1.4880.

(2) All guaranteed amounts incur interest at a rate equal to certain commercial
    banks' prime lending rates. The security for each of the guaranteed amounts
    is the purchased subordinate voting shares.

                                       56
<Page>
    No securities were purchased by any director or officer during 2002 with the
financial assistance of Celestica. No director, officer or employee was indebted
to Celestica other than in connection with securities purchase programs during
the year ended December 31, 2002.

C.  INTERESTS OF EXPERTS AND COUNSEL

    Not applicable.

ITEM 8.  FINANCIAL INFORMATION

A.  CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

    See Item 18, "Financial Statements."

LITIGATION

    We are not a party to any legal proceedings which, if decided adversely,
could reasonably be expected to have a material adverse effect on the results of
operations, business, prospects or financial condition of Celestica.

DIVIDEND POLICY

    We have not declared or paid any dividends to our shareholders. We will
retain earnings for general corporate purposes to promote future growth; as
such, the board of directors does not anticipate paying any dividends for the
foreseeable future. Celestica's board of directors will review this policy from
time to time, having regard to our financial condition, financing requirements
and other relevant factors.

B.  SIGNIFICANT CHANGES

    See note 23 to the Consolidated Financial Statements in Item 18
for information on significant changes.

ITEM 9.  THE OFFER AND LISTING

A.  OFFER AND LISTING DETAILS

MARKET INFORMATION

    The subordinate voting shares are listed on The New York Stock Exchange (the
"NYSE") and The Toronto Stock Exchange (the "TSX"). The market price range and
trading volume of the subordinate voting shares on the NYSE and the TSX for the
periods indicated are set forth in the following tables, which have been
restated to reflect the effect of the 1999 two-for-one stock split on a
retroactive basis. In the following tables, subordinate voting shares are
defined as "SVS."

    THE ANNUAL HIGH AND LOW MARKET PRICES FOR THE FIVE MOST RECENT FISCAL YEARS

<Table>
<Caption>
                                                                            NYSE
                                                              --------------------------------
                                                                HIGH       LOW       VOLUME
                                                              --------   -------   -----------
                                                               (Price per SVS)
<S>                                                           <C>        <C>       <C>
Year ended December 31, 1998 (from June 30, 1998)(1)........   $13.75    $ 5.19     22,165,800
Year ended December 31, 1999................................    57.00     12.06    115,803,800
Year ended December 31, 2000................................    87.00     35.50    314,486,100
Year ended December 31, 2001................................    76.40     20.69    602,213,700
Year ended December 31, 2002................................    47.08      9.89    544,914,800
</Table>

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

(1) The SVS began trading on June 30, 1998.

                                       57
<Page>

<Table>
<Caption>
                                                                            TSX
                                                              --------------------------------
                                                                HIGH       LOW       VOLUME
                                                              --------   -------   -----------
                                                               (Price per SVS)
<S>                                                           <C>        <C>       <C>
Year ended December 31, 1998 (from June 30, 1998)(1)........  C$ 21.13   C$ 8.00    33,833,130
Year ended December 31, 1999................................     82.75     18.40   142,584,064
Year ended December 31, 2000................................    128.25     51.05   202,303,300
Year ended December 31, 2001................................    114.00     32.42   323,130,318
Year ended December 31, 2002................................     75.05     15.78   328,786,676
</Table>

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

(1) The SVS began trading on June 30, 1998.

    THE HIGH AND LOW MARKET PRICES FOR EACH FULL FISCAL QUARTER FOR THE TWO MOST
     RECENT FISCAL YEARS

<Table>
<Caption>
                                                                            NYSE
                                                              --------------------------------
                                                                HIGH       LOW       VOLUME
                                                              --------   -------   -----------
                                                               (Price per SVS)
<S>                                                           <C>        <C>       <C>
Year ended December 31, 2001
  First quarter.............................................   $76.40    $25.80    143,622,000
  Second quarter............................................    63.25     24.00    166,006,300
  Third quarter.............................................    50.94     20.69    148,784,400
  Fourth quarter............................................    48.40     25.41    143,801,000

Year ended December 31, 2002
  First quarter.............................................   $47.08    $31.50    141,144,200
  Second quarter............................................    36.98     21.14    127,727,400
  Third quarter.............................................    26.70     12.95    153,867,600
  Fourth quarter............................................    19.28      9.89    122,175,600
</Table>

<Table>
<Caption>
                                                                            TSX
                                                              --------------------------------
                                                                HIGH       LOW       VOLUME
                                                              --------   -------   -----------
                                                               (Price per SVS)
<S>                                                           <C>        <C>       <C>
Year ended December 31, 2001
  First quarter.............................................  C$114.00   C$40.75    85,670,137
  Second quarter............................................     97.50     37.55    81,722,757
  Third quarter.............................................     78.10     32.42    65,423,337
  Fourth quarter............................................     76.50     40.12    90,314,087

Year ended December 31, 2002
  First quarter.............................................  C$ 75.05   C$49.85    74,912,318
  Second quarter............................................     58.98     32.00    67,102,498
  Third quarter.............................................     41.45     20.60    92,428,385
  Fourth quarter............................................     29.99     15.78    94,343,475
</Table>

    THE HIGH AND LOW MARKET PRICES FOR EACH MONTH FOR THE MOST RECENT
     SIX MONTHS

<Table>
<Caption>
                                                                            NYSE
                                                              --------------------------------
                                                                HIGH       LOW       VOLUME
                                                              --------   -------   -----------
                                                               (Price per SVS)
<S>                                                           <C>        <C>       <C>
October 2002................................................   $15.08    $ 9.89     57,744,300
November 2002...............................................    18.75     13.07     37,332,900
December 2002...............................................    19.28     13.38     27,098,400
January 2003................................................    17.52     11.26     44,389,300
February 2003...............................................    12.40     10.31     27,387,400
March 2003..................................................    13.67     11.24     23,280,100
</Table>

                                       58
<Page>

<Table>
<Caption>
                                                                            TSX
                                                              --------------------------------
                                                                HIGH       LOW       VOLUME
                                                              --------   -------   -----------
                                                               (Price per SVS)
<S>                                                           <C>        <C>       <C>
October 2002................................................  C$23.50    C$15.78    40,853,685
November 2002...............................................    29.45      20.51    30,695,160
December 2002...............................................    29.99      20.80    22,794,630
January 2003................................................    27.24      17.25    41,242,030
February 2003...............................................    18.73      15.77    28,779,217
March 2003..................................................    20.23      16.52    27,584,270
</Table>

    Celestica's Liquid Yield Option-TM- Notes due 2020, or LYONs, are listed on
the NYSE. Liquid Yield Option-TM- Notes is a trademark of Merrill
Lynch & Co., Inc. The market price range of the LYONs on the NYSE for the
periods indicated are set forth in the following tables.

    THE ANNUAL HIGH AND LOW MARKET PRICES FOR THE LYONS FOR THE THREE MOST
     RECENT FISCAL YEARS

<Table>
<Caption>
                                                                     NYSE
                                                              -------------------
                                                                HIGH       LOW
                                                              --------   --------
<S>                                                           <C>        <C>
Year ended December 31, 2000 (from August 1, 2000)(1).......   $55.83     $40.05
Year ended December 31, 2001................................    53.74      34.56
Year ended December 31, 2002................................    46.00      33.00
</Table>

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

(1) The LYONs began trading on August 1, 2000.

    THE HIGH AND LOW MARKET PRICES FOR THE LYONS FOR EACH FULL FISCAL QUARTER
     FOR THE TWO MOST RECENT FISCAL YEARS

<Table>
<Caption>
                                                                     NYSE
                                                              -------------------
                                                                HIGH       LOW
                                                              --------   --------
<S>                                                           <C>        <C>
Year ended December 31, 2001
  First quarter.............................................   $53.74     $35.48
  Second quarter............................................    48.82      34.56
  Third quarter.............................................    44.24      35.82
  Fourth quarter............................................    44.72      36.51

Year ended December 31, 2002
  First quarter.............................................   $41.00     $35.25
  Second quarter............................................    46.00      34.00
  Third quarter.............................................    40.50      33.00
  Fourth quarter............................................    44.50      39.25
</Table>

    THE HIGH AND LOW MARKET PRICES FOR THE LYONS FOR EACH MONTH FOR THE MOST
     RECENT SIX MONTHS

<Table>
<Caption>
                                                                     NYSE
                                                              -------------------
                                                                HIGH       LOW
                                                              --------   --------
<S>                                                           <C>        <C>
October 2002................................................   $40.50     $40.50
November 2002...............................................    42.00      39.25
December 2002...............................................    44.50      42.13
January 2003................................................    44.00      42.25
February 2003...............................................    48.25      42.25
March 2003..................................................    48.63      48.00
</Table>

B.  PLAN OF DISTRIBUTION

    Not applicable.

                                       59
<Page>
C.  MARKETS

    The subordinate voting shares are listed on the NYSE and the TSX.

    Celestica's LYONs are listed on the NYSE. In Canada, the LYONs are offered
on a private placement basis through Merrill Lynch & Co., Inc. and its
affiliates.

D.  SELLING SHAREHOLDERS

    Not applicable.

E.  DILUTION

    Not applicable.

F.  EXPENSE OF THE ISSUE

    Not applicable.

ITEM 10.  ADDITIONAL INFORMATION

A.  SHARE CAPITAL

    Not applicable.

B.  MEMORANDUM AND ARTICLES OF INCORPORATION

    ANNUAL AND SPECIAL MEETINGS OF SHAREHOLDERS

    The Business Corporations Act (Ontario), or the OBCA, requires Celestica to
call an annual shareholders' meeting not later than 15 months after holding the
last preceding annual meeting and permits Celestica to call a special
shareholders' meeting at any time. In addition, in accordance with the OBCA, the
holders of not less than 5% of Celestica's shares carrying the right to vote at
a meeting sought to be held may requisition our directors to call a special
shareholders' meeting for the purposes stated in the requisition. Celestica is
required to mail a notice of meeting and management information circular to
registered shareholders not less than 21 days and not more than 50 days prior to
the date of any annual or special shareholders' meeting. These materials also
are filed with Canadian securities regulatory authorities and the SEC. Our
by-laws provide that a quorum of two shareholders in person or represented by
proxy holding or representing by proxy not less than 35% of Celestica's issued
shares carrying the right to vote at the meeting is required to transact
business at a shareholders' meeting. Shareholders, and their duly appointed
proxies and corporate representatives, as well as our auditors, are entitled to
be admitted to our annual and special shareholders' meetings.

    ARTICLES OF INCORPORATION

    Celestica's articles of incorporation do not place any restrictions on
Celestica's objects and purposes.

    CERTAIN POWERS OF DIRECTORS

    The OBCA requires that every director who is a party to a material contract
or transaction or a proposed material contract or transaction with a company, or
who is a director or officer of, or has a material interest in, any person who
is a party to a material contract or transaction or a proposed material contract
or transaction with the company, shall disclose in writing to the company or
request to have entered in the minutes of the meetings of directors the nature
and extent of his or her interest, and shall refrain from voting in respect of
the material contract or transaction or proposed material contract or
transaction unless the contract or transaction is:

    (a) an arrangement by way of security for money lent to or obligations
       undertaken by the director for the benefit of the corporation or an
       affiliate;

                                       60
<Page>
    (b) one relating primarily to his or her remuneration as a director,
       officer, employee or agent of the corporation or an affiliate;

    (c) one for indemnity of or insurance for directors as contemplated under
       the OBCA; or

    (d) one with an affiliate.

    However, a director who is prohibited by the OBCA from voting on a material
contract or proposed material contract may be counted in determining whether a
quorum is present for the purpose of the resolution, if the director disclosed
his or her interest in accordance with the OBCA and the contract or transaction
was reasonable and fair to the corporation at the time it was approved.

    Celestica's by-laws provide that the directors shall from time to time
determine by resolution the remuneration to be paid to the directors, which
shall be in addition to the salary paid to any officer or employee of Celestica
who is also a director. The directors may also by resolution award special
remuneration to any director in undertaking any special services on Celestica's
behalf other than the normal work ordinarily required of a director of
Celestica. The by-laws provide that confirmation of any such resolution by
Celestica's shareholders is not required.

    The by-laws provide that the directors may:

    (a) borrow money upon the credit of Celestica;

    (b) limit or increase the amount to be borrowed;

    (c) issue, reissue, sell or pledge bonds, debentures, notes or other
       securities or debt obligations of Celestica;

    (d) issue, sell or pledge such bonds, debentures, notes or other securities
       or debt obligations for such sums and at such prices as may be deemed
       expedient; and

    (e) mortgage, hypothecate, charge, pledge or otherwise create a security
       interest in all or any currently owned or subsequently acquired real and
       personal, movable and immovable, property of Celestica, and Celestica's
       undertaking and rights to secure any such bonds, debentures, notes or
       other securities or debt obligations, or to secure any of Celestica's
       present or future borrowing, liability or obligation.

    The directors may, by resolution, amend or repeal any by-laws that regulate
the business or affairs of Celestica. The OBCA requires the directors to submit
any such amendment or repeal to Celestica's shareholders at the next meeting of
shareholders, and the shareholders may confirm, reject or amend the amendment or
repeal.

    ELIGIBILITY TO SERVE AS A DIRECTOR

    The by-laws provide that every director shall be an individual 18 or more
years of age, and that no one who is of unsound mind and has been so found by a
court in Canada or elsewhere or who has the status of a bankrupt shall be a
director. There is no provision of the articles of incorporation or by-laws
imposing a requirement for retirement or non-retirement of directors under an
age limit requirement. The OBCA requires that a majority of the directors of
Celestica be resident Canadians.

    The OBCA provides that unless the articles of a corporation otherwise
provide, a director of a corporation is not required to hold shares issued by
the corporation. There is no provision in the articles of incorporation imposing
a requirement that a director hold any shares issued by Celestica.

    The rights and preferences attaching to our subordinate voting shares and
multiple voting shares are described in the section entitled "Description of
Capital Stock" of our registration statement on Form F-3 (Reg. No. 333-69278),
filed with the SEC on September 12, 2001. The rights and preferences attaching
to our LYONs are described in the section entitled "Description of LYONs" of our
Rule 424(b) prospectus, filed with the SEC on July 26, 2000, as part of our
registration statement on Form F-3 (Reg. No. 333-12338), filed with the SEC on
July 24, 2000. Those sections are hereby incorporated by reference into this
Annual Report.

                                       61
<Page>
    Additional information concerning the rights and limitations of shareholders
found in Celestica's articles of incorporation is hereby incorporated by
reference to our registration statement on Form F-4 (Reg. No. 333-9636).

C.  MATERIAL CONTRACTS

    The following table summarizes each material contract, other than contracts
entered into in the ordinary course of business, to which Celestica or any
member of Celestica's group is a party, for the two years immediately preceding
the publication of this Annual Report:

<Table>
<Caption>
                                                                                                         APPROXIMATE
DATE                            PARTIES                TYPE               TERMS AND CONDITIONS          CONSIDERATION
- ----                    ------------------------  --------------   -----------------------------------  -------------
<S>                     <C>                       <C>              <C>                                  <C>
February 19, 2001,      Celestica Corporation     Asset Purchase   Celestica Corporation acquired       $200 million
amended May 4, 2001     and Avaya, Inc.           Agreement        certain assets from Avaya in
                                                                   Denver, Colorado and Little Rock,
                                                                   Arkansas

May 31, 2001            Celestica and Primetech   Arrangement      Celestica acquired all of the        $179 million
                        Electronics Inc.          Agreement        shares of Primetech
                                                                   Electronics Inc.

June 15, 2001           Celestica and Omni        Merger           Celestica acquired all of the        $865 million
                        Industries Limited        Agreement        shares of Omni Industries Limited

July 24, 2001           Celestica Corporation     Asset Purchase   Celestica Corporation acquired       $570 million
                        and Lucent                Agreements       certain assets from Lucent in
                        Technologies Inc.                          Columbus, Ohio and Oklahoma City,
                                                                   Oklahoma

March 31, 2002          Celestica and NEC         Stock Purchase   Celestica acquired all the business  $105 million
                        Corporation               Agreement        operations of NEC Miyagi and NEC
                                                                   Yamanashi
</Table>

D.  EXCHANGE CONTROLS

    Canada has no system of exchange controls. There are no Canadian
restrictions on the repatriation of capital or earnings of a Canadian public
company to non-resident investors. There are no laws of Canada or exchange
restrictions affecting the remittance of dividends, interest, royalties or
similar payments to non-resident holders of Celestica's securities, except as
described under Item 10(E), "-- Taxation," below.

E.  TAXATION

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

    The following is a summary of the material Canadian federal income tax
considerations generally applicable to a person (a "U.S. Holder") who acquires
subordinate voting shares and who, for purposes of the Income Tax Act (Canada)
(the "Canadian Tax Act") and the Canada-United States Income Tax Convention
(1980) (the "Tax Treaty"), at all relevant times is resident in the
United States and is neither resident nor deemed to be resident in Canada, deals
at arm's length and is not affiliated with the Company, holds such subordinate
voting shares as capital property, and does not use or hold, and is not deemed
to use or hold, the subordinate voting shares in carrying on business in Canada.
Special rules, which are not discussed in this summary, may apply to a
U.S. Holder that is a financial institution (as defined in the Canadian
Tax Act), or is an insurer that carries on an insurance business in Canada and
elsewhere.

    This summary is based on the current provisions of the Tax Treaty, the
Canadian Tax Act and the regulations thereunder, all specific proposals to amend
the Canadian Tax Act or the regulations publicly announced by the Minister of
Finance (Canada) prior to February 28, 2003, and Celestica's understanding of
the current published administrative practices of the Canada Customs and Revenue
Agency.

    This summary is not exhaustive of all possible Canadian federal income tax
considerations and, except as mentioned above, does not take into account or
anticipate any changes in law, whether by legislative, administrative or
judicial decision or action, nor does it take into account the tax legislation
or considerations of any province or territory of Canada or any jurisdiction
other than Canada, which may differ significantly from the considerations
described in this summary.

                                       62
<Page>
    THIS SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE, NOR
SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY PARTICULAR HOLDER, AND
NO REPRESENTATION WITH RESPECT TO THE CANADIAN FEDERAL INCOME TAX CONSEQUENCES
TO ANY PARTICULAR HOLDER IS MADE. CONSEQUENTLY, U.S. HOLDERS OF SUBORDINATE
VOTING SHARES SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE INCOME
TAX CONSEQUENCES TO THEM HAVING REGARD TO THEIR PARTICULAR CIRCUMSTANCES.

    All amounts relevant in computing a U.S. Holder's liability under the
Canadian Tax Act are to be computed in Canadian dollars.

    TAXATION OF DIVIDENDS

    By virtue of the Canadian Tax Act and the Tax Treaty, dividends (including
stock dividends) on subordinate voting shares paid or credited or deemed to be
paid or credited to a U.S. Holder who is the beneficial owner of such dividend
will be subject to Canadian non-resident withholding tax at the rate of 15% of
the gross amount of such dividends. Under the Tax Treaty, the rate of
withholding tax on dividends is reduced to 5% if that U.S. Holder is a company
that beneficially owns at least 10% of the voting stock of Celestica. Moreover,
under the Tax Treaty, dividends paid to certain religious, scientific, literary,
educational or charitable organizations and certain pension organizations that
are resident in, and generally exempt from tax in, the U.S., generally are
exempt from Canadian non-resident withholding tax. Provided that certain
administrative procedures are observed by such an organization, Celestica would
not be required to withhold such tax from dividends paid or credited to such
organization.

    DISPOSITION OF SUBORDINATE VOTING SHARES

    A U.S. Holder will not be subject to tax under the Canadian Tax Act in
respect of any capital gain realized on the disposition or deemed disposition of
subordinate voting shares unless the subordinate voting shares constitute or are
deemed to constitute "taxable Canadian property" (as defined in the Canadian
Tax Act) (other than treaty-protected property, as defined in the Canadian
Tax Act) at the time of such disposition. Shares of a corporation resident in
Canada that are listed on a prescribed stock exchange for purposes of the
Canadian Tax Act will be "taxable Canadian property" under the Canadian Tax Act
if, at any time during the five-year period immediately preceding the
disposition or deemed disposition of the share, the non-resident, persons with
whom the non-resident did not deal at arm's length, or the non-resident together
with such persons owned 25% or more of the issued shares of any class or series
of shares of the corporation that issued the shares. Provided they are listed on
a prescribed stock exchange for purposes of the Canadian Tax Act, subordinate
voting shares acquired by a U.S. Holder generally will not be taxable Canadian
property to a U.S. Holder unless the foregoing 25% ownership threshold applies
to the U.S. Holder with respect to Celestica. Even if the subordinate voting
shares are taxable Canadian property to a U.S. Holder, they generally will be
treaty-protected property if the value of such shares at the time of disposition
is not derived principally from real property situated in Canada. Consequently,
any gain realized by the U.S. Holder upon the disposition of the subordinate
voting shares generally will be exempt from tax under the Canadian Tax Act.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

    The following discussion describes the material United States federal income
tax consequences to United States Holders (as defined below) of subordinate
voting shares. A United States Holder is a citizen or resident of the
United States, a corporation or partnership or limited liability company created
or organized in or under the laws of the United States or of any political
subdivision thereof, an estate, the income of which is includible in gross
income for U.S. federal income tax purposes regardless of its source, or a
trust, if either (i) a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more
U.S. persons have the authority to control all substantial decisions of the
trust, or (ii) the trust has made an election under applicable U.S. Treasury
regulations to be treated as a United States person. This summary is for general
information purposes only. It does not purport to be a comprehensive description
of all of the tax considerations that may be relevant to your decision to
purchase, hold or dispose of subordinate voting shares. This summary considers
only United States Holders who will own subordinate voting shares as capital
assets within the meaning of Section 1221 of the Internal Revenue Code of 1986,
as amended (the "Internal Revenue Code"). In this context, the term "capital
assets" means, in general, assets held for investment by a

                                       63
<Page>
taxpayer. Material aspects of U.S. federal income tax relevant to
non-United States Holders are also discussed below.

    This discussion is based on current provisions of the Internal Revenue Code,
current and proposed Treasury regulations promulgated thereunder and
administrative and judicial decisions as of February 28, 2003, all of which are
subject to change, possibly on a retroactive basis. This discussion does not
address all aspects of U.S. federal income taxation that may be relevant to any
particular United States Holder based on the United States Holder's individual
circumstances. In particular, this discussion does not address the potential
application of the alternative minimum tax or U.S. federal income tax
consequences to United States Holders who are subject to special treatment,
including taxpayers who are broker-dealers or insurance companies, taxpayers who
have elected mark-to-market accounting, individual retirement and other
tax-deferred accounts, tax-exempt organizations, financial institutions or
"financial services entities," taxpayers who hold subordinate voting shares as
part of a straddle, "hedge" or "conversion transaction" with other investments,
taxpayers owning directly, indirectly or by attribution at least 10% of the
voting power of our share capital, and taxpayers whose functional currency (as
defined in Section 985 of the Internal Revenue Code) is not the U.S. dollar.

    This discussion does not address any aspect of U.S. federal gift or estate
tax or state, local or non-U.S. tax laws. Additionally, the discussion does not
consider the tax treatment of persons who hold subordinate voting shares through
a partnership or other pass-through entity. For U.S. federal income tax
purposes, income earned through a foreign or domestic partnership or similar
entity is generally attributed to its owners. You are advised to consult your
own tax advisor with respect to the specific tax consequences to you of
purchasing, holding or disposing of the subordinate voting shares.

    TAXATION OF DIVIDENDS PAID ON SUBORDINATE VOTING SHARES

    In the event that Celestica pays a dividend, and subject to the discussion
of the passive foreign investment company (PFIC) rules below, a United States
Holder will be required to include in gross income as ordinary income the amount
of any distribution paid on subordinate voting shares, including any Canadian
taxes withheld from the amount paid, on the date the distribution is received,
to the extent that the distribution is paid out of our current or accumulated
earnings and profits as determined for U.S. federal income tax purposes. In
addition, distributions of the Company's current or accumulated earnings and
profits will be foreign source passive income for U.S. foreign tax credit
purposes and will not qualify for the dividends-received deduction available to
corporations. Distributions in excess of such earnings and profits will be
applied against and will reduce the United States Holder's tax basis in the
subordinate voting shares and, to the extent in excess of such basis, will be
treated as capital gain.

    Distributions of current or accumulated earnings and profits paid in
Canadian dollars to a United States Holder will be includible in the income of
the United States Holder in a dollar amount calculated by reference to the
exchange rate on the date the distribution is received. A United States Holder
who receives a distribution of Canadian dollars and converts the Canadian
dollars into U.S. dollars subsequent to receipt will have foreign exchange gain
or loss based on any appreciation or depreciation in the value of the Canadian
dollar against the U.S. dollar. Such gain or loss will generally be ordinary
income and loss and will generally be U.S. source gain or loss for U.S. foreign
tax credit purposes. United States Holders should consult their own tax advisors
regarding the treatment of a foreign currency gain or loss.

    United States Holders will generally have the option of claiming the amount
of any Canadian income taxes withheld either as a deduction from gross income or
as a dollar-for-dollar credit against their U.S. federal income tax liability,
subject to specified conditions and limitations. Individuals who do not claim
itemized deductions, but instead utilize the standard deduction, may not claim a
deduction for the amount of the Canadian income taxes withheld, but these
individuals generally may still claim a credit against their U.S. federal income
tax liability. The amount of foreign income taxes that may be claimed as a
credit in any year is subject to complex limitations and restrictions, which
must be determined on an individual basis by each shareholder. The total amount
of allowable foreign tax credits in any year cannot exceed the pre-credit
U.S. tax liability for the year attributable to foreign source taxable income. A
United States Holder will be denied a foreign tax credit with respect to
Canadian income tax withheld from dividends received on subordinate voting
shares to the extent that he or she has not held the subordinate voting shares
for at least 16 days of the 30-day period

                                       64
<Page>
beginning on the date which is 15 days before the ex-dividend date or to the
extent that he or she is under an obligation to make related payments with
respect to substantially similar or related property. Instead, a deduction may
be allowed. Any days during which a United States Holder has substantially
diminished his or her risk of loss on his or her subordinate voting shares are
not counted toward meeting the 16-day holding period.

    TAXATION OF DISPOSITION OF SUBORDINATE VOTING SHARES

    Subject to the discussion of the PFIC rules below, upon the sale, exchange
or other disposition of subordinate voting shares, a United States Holder will
recognize capital gain or loss in an amount equal to the difference between his
or her adjusted tax basis in his or her shares and the amount realized on the
disposition. A United States Holder's adjusted tax basis in the subordinate
voting shares will generally be the initial cost, but may be adjusted for
various reasons including the receipt by such United States Holder of a
distribution that was not made up wholly of earning and profits as described
above under the heading "Taxation of Dividends Paid on Subordinate Voting
Shares." A United States Holder that uses the cash method of accounting
calculates the dollar value of the proceeds received on the sale date as of the
date that the sale settles, while a United States Holder who uses the accrual
method of accounting is required to calculate the value of the proceeds of the
sale as of the "trade date," unless he or she has elected to use the settlement
date to determine his or her proceeds of sale. Capital gain from the sale,
exchange or other disposition of shares held more than one year is long-term
capital gain and is eligible for a maximum 20% rate of taxation for
non-corporate taxpayers. Special rules (and generally lower maximum rates) apply
to non-corporate taxpayers in lower tax brackets. Further preferential tax
treatment may be available for non-corporate taxpayers who dispose of
subordinate voting shares held for over five years. Gain or loss recognized by a
United States Holder on a sale, exchange or other disposition of subordinate
voting shares generally will be treated as U.S. source income or loss for
U.S. foreign tax credit purposes. The deductibility of a capital loss recognized
on the sale, exchange or other disposition of subordinate voting shares is
subject to limitations. A United States Holder who receives foreign currency
upon disposition of subordinate voting shares and converts the foreign currency
into U.S. dollars subsequent to receipt will have foreign exchange gain or loss
based on any appreciation or depreciation in the value of the foreign currency
against the U.S. dollar. United States Holders should consult their own tax
advisors regarding the treatment of a foreign currency gain or loss.

    TAX CONSEQUENCES IF WE ARE A PASSIVE FOREIGN INVESTMENT COMPANY

    A non-U.S. corporation will be a PFIC if, in general, either (i) 75% or more
of its gross income in a taxable year, including the pro rata share of the gross
income of any U.S. or foreign company in which it is considered to own 25% or
more of the shares by value, is passive income or (ii) 50% or more of its assets
in a taxable year, averaged over the year and ordinarily determined based on
fair market value and including the pro rata share of the assets of any company
in which it is considered to own 25% or more of the shares by value, are held
for the production of, or produce, passive income. Passive income includes
amounts derived by reason of the temporary investment of funds raised in a
public offering. If we were a PFIC and a United States Holder did not make an
election to treat the company as a "qualified electing fund" and did not make a
mark-to-market election, each as described below, then:

    - excess distributions by Celestica to a United States Holder would be taxed
      in a special way. "Excess distributions" are amounts received by a
      United States Holder with respect to subordinate voting shares in any
      taxable year that exceed 125% of the average distributions received by the
      United States Holder from the company in the shorter of either the three
      previous years or his or her holding period for his or her shares before
      the present taxable year. Excess distributions must be allocated ratably
      to each day that a United States Holder has held subordinate voting
      shares. A United States Holder must include amounts allocated to the
      current taxable year and to any non-PFIC years in his or her gross income
      as ordinary income for that year. A United States Holder must pay tax on
      amounts allocated to each prior taxable PFIC year at the highest rate in
      effect for that year on ordinary income and the tax is subject to an
      interest charge at the rate applicable to deficiencies for income tax;

    - the entire amount of gain that is realized by a United States Holder upon
      the sale or other disposition of shares will also be considered an excess
      distribution and will be subject to tax as described above; and

                                       65
<Page>
    - a United States Holder's tax basis in shares that were acquired from a
      decedent will not receive a step-up to fair market value as of the date of
      the decedent's death but instead will be equal to the decedent's tax
      basis, if lower.

    The special PFIC rules will not apply to a United States Holder if the
United States Holder makes an election to treat the company as a "qualified
electing fund" in the first taxable year in which he or she owns subordinate
voting shares and if we comply with reporting requirements. Instead, a
shareholder of a qualified electing fund is required for each taxable year to
include in income a pro rata share of the ordinary earnings of the qualified
electing fund as ordinary income and a pro rata share of the net capital gain of
the qualified electing fund as long-term capital gain, subject to a separate
election to defer payment of taxes, which deferral is subject to an interest
charge. We have agreed to supply United States Holders with the information
needed to report income and gain pursuant to this election in the event that we
are classified as a PFIC. The election is made on a shareholder-by-shareholder
basis and may be revoked only with the consent of the Internal Revenue Service.
A shareholder makes the election by attaching a completed IRS Form 8621,
including the PFIC annual information statement, to a timely filed U.S. federal
income tax return. Even if an election is not made, a shareholder in a PFIC who
is a United States Holder must file a completed IRS Form 8621 every year.

    A United States Holder who owns PFIC shares that are publicly traded could
elect to mark the shares to market annually, recognizing as ordinary income or
loss each year an amount equal to the difference as of the close of the taxable
year between the fair market value of the PFIC shares and the United States
Holder's adjusted tax basis in the PFIC shares. If the mark-to-market election
were made, then the rules set forth above would not apply for periods covered by
the election. The subordinate voting shares would be treated as publicly traded
for purposes of the mark-to-market election and, therefore, such election would
be made if Celestica were classified as a PFIC. A mark-to-market election is,
however, subject to complex and specific rules and requirements, and
United States Holders are strongly urged to consult their tax advisors
concerning this election if we are classified as a PFIC.

    We believe that we will not be a PFIC for 2003. Based on our current
business plan, we do not expect to become a PFIC in the foreseeable future.
These conclusions rest at least in part on factual issues, including a
determination as to value of assets and projections as to our revenue. We cannot
assure you that our actual revenues, including our revenues for the remainder of
2003, will be as projected or that a determination as to non-PFIC status would
not be challenged by the Internal Revenue Service. Moreover, the tests for
determining PFIC status are applied annually, and it is difficult to make
accurate predictions of future income and assets, which are relevant to the
determination as to whether we will be a PFIC in the future. A United States
Holder who holds subordinate voting shares during a period in which we are a
PFIC will be subject to the PFIC rules, even if we cease to be a PFIC, unless he
or she has made a qualifying electing fund election. If we were determined to be
a PFIC with respect to a year in which we had not thought that we would be so
treated, the information needed to enable United States Holders to make a
qualifying electing fund election would not have been provided. United States
Holders are strongly urged to consult their tax advisors about the PFIC rules,
including the consequences to them of making a mark-to-market or qualifying
electing fund elections with respect to subordinate voting shares in the event
that we are treated as a PFIC.

    TAX CONSEQUENCES FOR NON-UNITED STATES HOLDERS OF SUBORDINATE VOTING SHARES

    Except as described in "Information Reporting and Back-up Withholding"
below, a non-United States Holder of subordinate voting shares will not be
subject to U.S. federal income or withholding tax on the payment of dividends
on, and the proceeds from the disposition of, subordinate voting shares unless:

    - the item is effectively connected with the conduct by the
      non-United States Holder of a trade or business in the United States and,
      in the case of a resident of a country that has an income treaty with the
      United States, such item is attributable to a permanent establishment in
      the United States;

    - the non-United States Holder is an individual who holds the subordinate
      voting shares as a capital asset and is present in the United States for
      183 days or more in the taxable year of the disposition and does not
      qualify for an exemption; or

                                       66
<Page>
    - the non-United States Holder is subject to tax pursuant to the provisions
      of U.S. tax law applicable to U.S. expatriates.

    INFORMATION REPORTING AND BACK-UP WITHHOLDING

    United States Holders generally are subject to information reporting
requirements and back-up withholding at a current rate of 30% (which rate will
be reduced over the next four years in accordance with recently enacted tax
legislation) with respect to dividends paid in the United States and on proceeds
paid from the disposition of shares, unless the United States Holder (i) is a
corporation or comes within certain other exempt categories and demonstrates
this fact when so required, or (ii) provides a correct taxpayer identification
number, certifies that it is not subject to backup withholdings, and otherwise
complies with applicable requirements of the backup withholding rules.

    Non-United States Holders generally are not subject to information reporting
or back-up withholding with respect to dividends paid on or upon the disposition
of shares, provided in some instances that the non-United States Holder provides
a taxpayer identification number, certifies to his foreign status or otherwise
establishes an exemption.

    The amount of any back-up withholding will be allowed as a credit against
U.S. federal income tax liability and may entitle the Holder to a refund,
provided that required information is furnished to the Internal Revenue Service.

F.  DIVIDENDS AND PAYING AGENTS

    Not applicable.

G.  STATEMENT BY EXPERTS

    Not applicable.

H. DOCUMENTS ON DISPLAY

    Any statement in this Annual Report about any of our contracts or other
documents is not necessarily complete. If the contract or document is filed as
an exhibit to this Annual Report, the contract or document is deemed to modify
our description. You must review the exhibits themselves for a complete
description of the contract or document.

    You may review a copy of our filings with the SEC, including exhibits and
schedules filed with this Annual Report, at the SEC's public reference
facilities in Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may also obtain copies of such materials from the
Public Reference Section of the SEC, Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. You may call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. The SEC
maintains a web-site (http://www.sec.gov) that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the SEC. We began to file electronically with the SEC in
November 2000.

    You may read and copy any reports, statements or other information that we
file with the SEC at the addresses indicated above and you may also access some
of them electronically at the web-site set forth above. These SEC filings are
also available to the public from commercial document retrieval services.

    We also file reports, statements and other information with the Canadian
Securities Administrators, or the CSAs, and these can be accessed electronically
at the CSAs' System for Electronic Document Analysis and Retrieval web-site
(http://www.sedar.com.)

I.  SUBSIDIARY INFORMATION

    Not applicable.

                                       67
<Page>
ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

EXCHANGE RATE RISK

    Celestica has entered into foreign currency contracts to hedge foreign
currency risk. These financial instruments include, to varying degrees, elements
of market risk in excess of amounts recognized in the balance sheets. As at
December 31, 2002, Celestica had outstanding foreign exchange contracts to trade
U.S. $282.7 million in exchange for Canadian dollars over a period of 15 months
at a weighted average exchange rate of U.S.$0.64. Celestica also had forward
contracts to trade U.S. $10.6 million in exchange for Canadian dollars over a
period of 37 months at a weighted average exchange rate of U.S. $0.63. In
addition, Celestica had exchange contracts to trade U.S. $36.4 million in
exchange for British pounds sterling over a 13-month period at a weighted
average exchange rate of U.S. $1.45, U.S. $37.1 million in exchange for Mexican
pesos over a period of 12 months at a weighted average rate of exchange of
U.S. $0.10, U.S. $168.7 million in exchange for Euros over a 15-month period at
a weighted average exchange rate of U.S. $0.93, U.S. $27.6 million in exchange
for Singapore dollars over a 12-month period at a weighted average exchange rate
of U.S. $0.57, 64.5 million Brazilian reais in exchange for U.S. dollars over a
1-month period at a weighted average exchange rate of U.S. $0.30,
U.S. $40.7 million in exchange for Japanese yen over a 1-month period at a
weighted average exchange rate of U.S. $0.01, and U.S. $11.9 million in exchange
for Czech koruna over a 12-month period at a weighted average exchange rate of
U.S. $0.03. The table below provides information about Celestica's foreign
currency contracts. The table presents the notional amounts and weighted average
exchange rates by expected (contractual) maturity dates. These notional amounts
generally are used to calculate the contractual payments to be exchanged under
the contracts. At December 31, 2002, these contracts had a fair value unrealized
gain of U.S. $18.9 million.

<Table>
<Caption>
                                                             EXPECTED MATURITY DATE
                                        -----------------------------------------------------------------   FAIR VALUE
                                          2003       2004       2005       2006     THEREAFTER    TOTAL     GAIN (LOSS)
                                        --------   --------   --------   --------   ----------   --------   -----------
<S>                                     <C>        <C>        <C>        <C>        <C>          <C>        <C>
FORWARD EXCHANGE AGREEMENTS
Receive C$/Pay U.S.$
  Contract amount (in millions).......  $261.0      $24.3      $5.3       $2.7        $   --      $293.3       $(2.9)
  Average exchange rate...............  $  0.64     $ 0.63     $0.63      $0.63

Receive THB/Pay U.S.$
  Contract amount (in millions).......  $ 34.3       --        --         --              --      $ 34.3       $(0.4)
  Average exchange rate...............  $  0.02

Receive L/Pay U.S.$
  Contract amount (in millions).......  $ 34.7      $ 1.7      --         --              --      $ 36.4       $ 3.5
  Average exchange rate...............  $  1.45     $ 1.52

Receive Mexican Pesos/Pay U.S.$
  Contract amount (in millions).......  $ 37.1       --        --         --              --      $ 37.1       $(1.5)
  Average exchange rate...............  $  0.10

Receive Euro/Pay U.S.$
  Contract amount (in millions).......  $155.1      $13.6      --         --              --      $168.7       $19.5
  Average exchange rate...............  $  0.93     $ 0.99

Receive Singapore$/Pay U.S.$
  Contract amount (in millions).......  $ 27.6       --        --         --              --      $ 27.6       $ 0.3
  Average exchange rate...............  $  0.57

Sell Reais/Receive U.S.$
  Contract amount (in millions).......  $ 19.1       --        --         --              --      $ 19.1       $ 0.8
  Average exchange rate...............  $  0.30

Receive Yen/Pay U.S.$
  Contract amount (in millions).......  $ 40.7       --        --         --              --      $ 40.7       $(1.1)
  Average exchange rate...............  $  0.01
</Table>

                                       68
<Page>

<Table>
<Caption>
                                                             EXPECTED MATURITY DATE
                                        -----------------------------------------------------------------   FAIR VALUE
                                          2003       2004       2005       2006     THEREAFTER    TOTAL     GAIN (LOSS)
                                        --------   --------   --------   --------   ----------   --------   -----------
<S>                                     <C>        <C>        <C>        <C>        <C>          <C>        <C>
Receive Koruna/Pay U.S.$
  Contract amount (in millions).......  $ 11.9       --        --         --              --      $ 11.9       $ 0.7
  Average exchange rate...............  $  0.03
                                        -------     ------     -----      -----       ------      ------       -----
    Total.............................  $621.5      $39.6      $5.3       $2.7        $   --      $669.1       $18.9
                                        =======     ======     =====      =====       ======      ======       =====
</Table>

INTEREST RATE RISK

    Celestica's existing debt is comprised of capital lease commitments
amounting to $6.9 million, which are not sensitive to changes in interest rates.

CONVERTIBLE DEBT (LYONS)

    As of December 31, 2002, we have convertible instruments, with an
outstanding principal amount at maturity of $1.6 billion, payable August 1,
2020. We were not exposed to interest rate risk on this debt because (i) the
issue price represents a fixed yield to maturity, (ii) the principal payable at
maturity is fixed and (iii) the conversion ratio into subordinate voting shares
of Celestica is fixed.

ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

    Not applicable.

                                    PART II

ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

    None.

ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
  PROCEEDS

    None.

ITEM 15.  CONTROLS AND PROCEDURES

    Based on their evaluation of Celestica's disclosure controls and procedures
as of a date within 90 days of the filing of this Annual Report, the Chief
Executive Officer and Chief Financial Officer have concluded that such controls
and procedures are effective.

    There were no significant changes in Celestica's internal controls or in
other factors that could significantly affect such controls subsequent to the
date of their evaluation.

ITEM 16.  [RESERVED]

                                       69
<Page>
                                    PART III

ITEM 17.  FINANCIAL STATEMENTS

    Not applicable.

ITEM 18.  FINANCIAL STATEMENTS

    The following financial statements have been filed as part of this Annual
Report:

<Table>
<Caption>
                                                                PAGE
                                                              --------
<S>                                                           <C>
Auditors' Report............................................       F-2

Comments by Auditors for U.S. Readers on Canada-U.S.
  Reporting Difference......................................       F-3

Consolidated Balance Sheets as at December 31, 2001 and
  2002......................................................       F-4

Consolidated Statements of Earnings (Loss) for the years
  ended December 31, 2000, 2001 and 2002....................       F-5

Consolidated Statements of Shareholders' Equity for the
  years ended December 31, 2000, 2001 and 2002..............       F-6

Consolidated Statements of Cash Flows for the years ended
  December 31, 2000, 2001 and 2002..........................       F-7

Notes to the Consolidated Financial Statements..............       F-8
</Table>

ITEM 19.  EXHIBITS

    The following exhibits have been filed as part of this Annual Report:

<Table>
<Caption>
EXHIBIT
NUMBER                  DESCRIPTION
- -------                 -----------
<C>                     <S>
         1.             Articles of Incorporation and Bylaws as currently in effect:

         1.1            Certificate and Articles of Incorporation(1)

         1.2            Certificate and Articles of Amendment effective October 22,
                          1996(1)

         1.3            Certificate and Articles of Amendment effective January 24,
                          1997(1)

         1.4            Certificate and Articles of Amendment effective October 8,
                          1997(1)

         1.5            Certificate and Articles of Amendment effective April 29,
                          1998(2)

         1.6            Articles of Amendment effective June 26, 1998(3)

         1.7            Restated Articles of Incorporation effective June 26,
                          1998(3)

         1.8            Restated Articles of Incorporation effective November 20,
                          2001

         1.9            Bylaw No. 1(4)

         1.10           Bylaw No. 2(1)

         2.             Instruments defining rights of holders of equity or debt
                          securities:

         2.1            See Certificate and Articles of Incorporation and amendments
                          thereto identified above.

         2.2            Form of Subordinate Voting Share Certificate(5)

         2.3            Indenture, dated as of August 1, 2000, between
                          Celestica Inc. and The Chase Manhattan Bank, as Trustee
                          (including a form of the Outstanding Notes)(6)

         2.4            Second Amended and Restated Credit Agreement, dated as of
                          December 17, 2002, between Celestica Inc., the
                          subsidiaries of Celestica Inc., specified therein as
                          Designated Subsidiaries, The Bank of Nova Scotia, as
                          Administrative Agent, CIBC World Markets, as Joint Lead
                          Arranger and Syndication Agent, RBC Capital Markets, as
                          Joint Lead Arranger and Co-Documentation Agent, Banc of
                          America Securities LLC, as Joint Lead Arranger and
                          Co-Documentation Agent, and the financial institutions
                          named in Schedule A as lenders
</Table>

                                       70
<Page>

<Table>
<Caption>
EXHIBIT
NUMBER                  DESCRIPTION
- -------                 -----------
<C>                     <S>
         2.5            Amended and Restated Four Year Revolving Term Credit
                          Agreement, dated as of December 17, 2002, among
                          Celestica Inc. and Celestica International Inc., as
                          Borrowers, The Bank of Nova Scotia, as Administrative
                          Agent, and the financial institutions named therein, as
                          Lenders

         3.             Certain Contracts:

         3.1            Management Services Agreement, dated as of July 7, 1998,
                          among Celestica Inc., Celestica North America Inc. and
                          Onex Corporation(5)

         3.2            Asset Purchase Agreement, dated as of February 19, 2001, by
                          and between Avaya Inc. and Celestica Corporation(4)*

         3.3            Amendment No. 1 to the Asset Purchase Agreement, dated as of
                          May 4, 2001, by and between Avaya Inc. and Celestica
                          Corporation(4)

         3.4            Arrangement Agreement, dated as of May 31, 2001, between
                          Celestica Inc. and Primetech Electronics Inc.(7)*

         3.5            Merger Agreement, dated as of June 15, 2001, between Omni
                          Industries Limited and Celestica Inc.(7)*

         3.6            Asset Purchase Agreement, dated as of July 24, 2001, between
                          Lucent Technologies Inc. and Celestica Corporation(7)*

         3.7            Asset Purchase Agreement, dated as of July 24, 2001, between
                          Lucent Technologies Inc. and Celestica Corporation(7)*

         3.8            Stock Purchase Agreement, dated January 28, 2002, between
                          NEC Corporation, NEC Miyagi, Ltd.,
                          NEC Yamanashi, Ltd., 1325091 Ontario Inc., and
                          Celestica Inc.**

         3.9            Employment Agreement, dated as of October 22, 1996, by and
                          between Celestica, Inc. and Eugene V. Polistuk(1)

         3.10           Employment Agreement, dated as of October 22, 1996, by and
                          between Celestica, Inc. and Anthony P. Puppi(1)

         3.11           Employment Agreement, dated as of October 22, 1996, by and
                          between Celestica, Inc. and Daniel P. Shea(1)

         3.12           Employment Agreement, dated as of June 30, 1998, by and
                          between Celestica Inc. and R. Thomas Tropea(8)

         3.13           D2D Employee Share Purchase and Option Plan (1997)(2)

         3.14           Celestica 1997 U.K. Approved Share Option Scheme(1)

         3.15           1998 U.S. Executive Share Purchase and Option Plan(9)

         8.1            Subsidiaries of Registrant

        99.1            Certification required by Section 906 of the
                          Sarbanes-Oxley Act of 2002***
</Table>

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

*   Request for confidential treatment granted. Confidential portions of this
    document have been redacted and filed separately with the Securities and
    Exchange Commission.

**  Confidential treatment requested. Confidential portions of this document
    have been redacted and filed separately with the Securities and Exchange
    Commission.

*** Pursuant to Commission Release No. 33-8212, this certification will be
    treated as "accompanying" this Annual Report on Form 20-F and not "filed" as
    part of such report for purposes of Section 18 of the Exchange Act, or
    otherwise subject to the liability of Section 18 of the Exchange Act, and
    this certification will not be incorporated by reference into any filing
    under the Securities Act, or the Exchange Act, except to the extent that the
    registrant specifically incorporates it by reference.

(1) Incorporated by reference to the Registration Statement on Form F-1 of
    Celestica Inc. filed on April 29, 1998 (Registration No. 333-8700).

(2) Incorporated by reference to Amendment No. 1 to the Registration Statement
    on Form F-1 of Celestica Inc. filed on June 1, 1998 (Registration
    No. 333-8700).

                                       71
<Page>
(3) Incorporated by reference to the Registration Statement on Form F-1 of
    Celestica Inc. filed on February 16, 1999 (Registration No. 333-10030).

(4) Incorporated by reference to the Annual Report on Form 20-F of
    Celestica Inc. filed on May 22, 2001.

(5) Incorporated by reference to Amendment No. 3 to the Registration Statement
    on Form F-1 of Celestica Inc. filed on June 25, 1998 (Registration
    No. 333-8700).

(6) Incorporated by reference to the Current Report on Form 6-K of
    Celestica Inc. for the month of August, 2000.

(7) Incorporated by reference to the Annual Report on Form 20-F of
    Celestica Inc. filed on May 3, 2002.

(8) Incorporated by reference to the Annual Report on Form 20-F of
    Celestica Inc. filed on May 18, 2000.

(9) Incorporated by reference to the Registration Statement on Form S-8 of
    Celestica Inc. filed on October 8, 1998 (Registration No. 333-9500).

                                       72
<Page>
                                   SIGNATURES

    The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.

<Table>
<S>                                                         <C>  <C>
                                                            CELESTICA INC.

                                                            By:  /s/ ELIZABETH L. DELBIANCO
                                                                 --------------------------------------------
                                                                 Name: Elizabeth L. DelBianco
                                                                 Title: Vice President & General Counsel
</Table>

Date: April 21, 2003

                                       73
<Page>
                                 CERTIFICATIONS

I, Eugene V. Polistuk, certify that:

    1.  I have reviewed this annual report on Form 20-F of Celestica Inc.;

    2.  Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

    3.  Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

    4.  The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

        (a) Designed such disclosure controls and procedures to ensure that
    material information relating to the registrant, including its consolidated
    subsidiaries, is made known to us by others within those entities,
    particularly during the period in which this annual report is being
    prepared;

        (b) Evaluated the effectiveness of the registrant's disclosure controls
    and procedures as of a date within 90 days prior to the filing date of this
    annual report (the "Evaluation Date"); and

        (c) Presented in this annual report our conclusions about the
    effectiveness of the disclosure controls and procedures based on our
    evaluation as of the Evaluation Date;

    5.  The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

        (a) All significant deficiencies in the design or operation of internal
    controls which could adversely affect the registrant's ability to record,
    process, summarize and report financial data and have identified for the
    registrant's auditors any material weaknesses in internal controls; and

        (b) Any fraud, whether or not material, that involves management or
    other employees who have a significant role in the registrant's internal
    controls; and

    6.  The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

<Table>
<S>    <C>                                     <C>  <C>
Date:  April 21, 2003                               /s/ EUGENE V. POLISTUK
                                                    -------------------------------------------------------
                                                    Eugene V. Polistuk
                                                    Chairman of the Board and
                                                    Chief Executive Officer
</Table>

                                       74
<Page>
                                 CERTIFICATIONS

I, Anthony P. Puppi, certify that:

    1.  I have reviewed this annual report on Form 20-F of Celestica Inc.;

    2.  Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

    3.  Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

    4.  The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

        (a) Designed such disclosure controls and procedures to ensure that
    material information relating to the registrant, including its consolidated
    subsidiaries, is made known to us by others within those entities,
    particularly during the period in which this annual report is being
    prepared;

        (b) Evaluated the effectiveness of the registrant's disclosure controls
    and procedures as of a date within 90 days prior to the filing date of this
    annual report (the "Evaluation Date"); and

        (c) Presented in this annual report our conclusions about the
    effectiveness of the disclosure controls and procedures based on our
    evaluation as of the Evaluation Date;

    5.  The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

        (a) All significant deficiencies in the design or operation of internal
    controls which could adversely affect the registrant's ability to record,
    process, summarize and report financial data and have identified for the
    registrant's auditors any material weaknesses in internal controls; and

        (b) Any fraud, whether or not material, that involves management or
    other employees who have a significant role in the registrant's internal
    controls; and

    6.  The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

<Table>
<S>    <C>                                     <C>  <C>
Date:  April 21, 2003                               /s/ ANTHONY P. PUPPI
                                                    -------------------------------------------------------
                                                    Anthony P. Puppi
                                                    Executive Vice President, Chief Financial Officer
                                                    and General Manager, Global Services
</Table>

                                       75
<Page>
                      Consolidated Financial Statements of

                                 CELESTICA INC.

                  Years ended December 31, 2000, 2001 and 2002
                         (in millions of U.S. dollars)

                                      F-1
<Page>
                                AUDITORS' REPORT

To the Board of Directors of
Celestica Inc.

    We have audited the consolidated balance sheets of Celestica Inc. as at
December 31, 2001 and 2002 and the consolidated statements of earnings (loss),
shareholders' equity and cash flows for each of the years in the three year
period ended December 31, 2002. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

    We conducted our audits in accordance with Canadian generally accepted
auditing standards and United States generally accepted auditing standards.
Those standards require that we plan and perform an audit to obtain reasonable
assurance whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.

    In our opinion, these consolidated financial statements present fairly, in
all material respects, the financial position of the Company as at December 31,
2001 and 2002 and the results of its operations and its cash flows for each of
the years in the three year period ended December 31, 2002 in accordance with
Canadian generally accepted accounting principles.

<Table>
<S>                                              <C>
Toronto, Canada                                                                    /s/ KPMG LLP
January 21, 2003                                                           Chartered Accountants
</Table>

                                      F-2
<Page>
                    COMMENTS BY AUDITORS FOR U.S. READERS ON
                        CANADA-U.S. REPORTING DIFFERENCE

    In the United States, reporting standards for auditors require the addition
of an explanatory paragraph (following the opinion paragraph) when there is a
change in accounting principles that has a material effect on the comparability
of the Company's financial statements, such as the changes described in
note 2(q) to the financial statements relating to the adoption by the Company of
CICA Handbook Section 1581 -- Business Combinations, CICA Handbook
Section 3062 -- Goodwill and Other Intangible Assets, and CICA Handbook
Section 3870 -- Stock-based Compensation and Other Stock-based Payments. Our
report to the Board of Directors of Celestica Inc. dated January 21, 2003 is
expressed in accordance with Canadian reporting standards which do not require a
reference to such changes in accounting principles in the auditors' report when
the change is properly accounted for and adequately disclosed in the financial
statements.

<Table>
<S>                                              <C>
Toronto, Canada                                                                    /s/ KPMG LLP
January 21, 2003                                                           Chartered Accountants
</Table>

                                      F-3
<Page>
                                 CELESTICA INC.

                          CONSOLIDATED BALANCE SHEETS

                         (IN MILLIONS OF U.S. DOLLARS)

<Table>
<Caption>
                                                                AS AT DECEMBER 31
                                                              ----------------------
                                                                2001          2002
                                                              --------      --------
<S>                                                           <C>           <C>
ASSETS
Current assets:
  Cash and short-term investments...........................  $1,342.8      $1,851.0
  Accounts receivable (note 4)..............................   1,054.1         785.9
  Inventories (note 5)......................................   1,372.7         775.6
  Prepaid and other assets..................................     177.3         115.1
  Deferred income taxes.....................................      49.7          36.9
                                                              --------      --------
                                                               3,996.6       3,564.5

Capital assets (note 6).....................................     915.1         727.8
Goodwill from business combinations (note 7)................   1,128.8         948.0
Intangible assets (note 7)..................................     427.2         211.9
Other assets (note 8).......................................     165.2         354.6
                                                              --------      --------
                                                              $6,632.9      $5,806.8
                                                              ========      ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable..........................................  $1,198.3      $  947.2
  Accrued liabilities.......................................     405.7         475.4
  Income taxes payable......................................      21.0          24.5
  Deferred income taxes.....................................      21.8          21.5
  Current portion of long-term debt (note 9)................      10.0           2.7
                                                              --------      --------
                                                               1,656.8       1,471.3

Long-term debt (note 9).....................................     137.4           4.2
Accrued pension and post-employment benefits (note 16)......      47.3          77.2
Deferred income taxes.......................................      41.5          46.2
Other long-term liabilities.................................       4.3           4.3
                                                              --------      --------
                                                               1,887.3       1,603.2
Shareholders' equity........................................   4,745.6       4,203.6
                                                              --------      --------
                                                              $6,632.9      $5,806.8
                                                              ========      ========
</Table>

Commitments, contingencies and guarantees (note 18)

Canadian and United States accounting policy differences (note 22)

Subsequent events (note 23)

          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                      F-4
<Page>
                                 CELESTICA INC.

                   CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

<Table>
<Caption>
                                                                  YEAR ENDED DECEMBER 31
                                                              -------------------------------
                                                                2000       2001        2002
                                                              --------   ---------   --------
<S>                                                           <C>        <C>         <C>
Revenue.....................................................  $9,752.1   $10,004.4   $8,271.6
Cost of sales...............................................   9,064.1     9,291.9    7,715.8
                                                              --------   ---------   --------
Gross profit................................................     688.0       712.5      555.8
Selling, general and administrative expenses................     326.1       341.4      298.5
Amortization of goodwill and intangible assets (note 7).....      88.9       125.0       95.9
Integration costs related to acquisitions (note 3)..........      16.1        22.8       21.1
Other charges (note 13).....................................     --          273.1      677.8
                                                              --------   ---------   --------
                                                                 431.1       762.3    1,093.3
                                                              --------   ---------   --------
Operating income (loss).....................................     256.9       (49.8)    (537.5)
Interest on long-term debt..................................      17.8        19.8       16.1
Interest income, net........................................     (36.8)      (27.7)     (17.2)
                                                              --------   ---------   --------
Earnings (loss) before income taxes.........................     275.9       (41.9)    (536.4)
                                                              --------   ---------   --------
Income taxes (note 14):
  Current expense...........................................      80.1        25.8       16.6
  Deferred (recovery).......................................     (10.9)      (27.9)    (107.8)
                                                              --------   ---------   --------
                                                                  69.2        (2.1)     (91.2)
                                                              --------   ---------   --------
Net earnings (loss).........................................  $  206.7   $   (39.8)  $ (445.2)
                                                              ========   =========   ========
Basic earnings (loss) per share (note 12)...................  $   1.01   $   (0.26)  $  (1.98)
Diluted earnings (loss) per share (notes 2, 12).............  $   0.98   $   (0.26)  $  (1.98)

Weighted average number of shares outstanding (note 12)
  Basic (in millions).......................................     199.8       213.9      229.8
  Diluted (in millions) (note 2)............................     211.8       213.9      229.8

Net earnings (loss) in accordance with U.S. GAAP
  (note 22).................................................  $  197.4   $   (51.3)  $ (494.9)
Basic earnings (loss) per share, in accordance with
  U.S. GAAP (note 22).......................................  $   0.99   $   (0.24)  $  (2.15)
Diluted earnings (loss) per share, in accordance with
  U.S. GAAP (note 22).......................................  $   0.96   $   (0.24)  $  (2.15)
</Table>

          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                      F-5
<Page>
                                 CELESTICA INC.

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                         (IN MILLIONS OF U.S. DOLLARS)

<Table>
<Caption>
                                                                                                 FOREIGN
                                       CONVERTIBLE                                 RETAINED     CURRENCY         TOTAL
                                          DEBT       CAPITAL STOCK   CONTRIBUTED   EARNINGS    TRANSLATION   SHAREHOLDERS'
                                        (NOTE 10)      (NOTE 11)       SURPLUS     (DEFICIT)   ADJUSTMENT       EQUITY
                                       -----------   -------------   -----------   ---------   -----------   -------------
<S>                                    <C>           <C>             <C>           <C>         <C>           <C>
Balance -- December 31, 1999.........    $--           $1,646.1         -$-         $  16.2       $(4.1)       $1,658.2

Convertible debt issued, net.........      850.4         --             --            --          --              850.4
Convertible debt accretion, net of
  tax................................       10.1         --             --             (5.4)      --                4.7
Shares issued, net...................     --              749.3         --            --          --              749.3
Net earnings for the year............     --             --             --            206.7       --              206.7
                                         -------       --------          ----       -------       -----        --------
Balance -- December 31, 2000.........      860.5        2,395.4         --            217.5        (4.1)        3,469.3

Convertible debt accretion, net of
  tax................................       26.3         --             --            (15.0)      --               11.3
Shares issued, net...................     --            1,303.6         --            --          --            1,303.6
Currency translation.................     --             --             --            --            1.2             1.2
Net loss for the year................     --             --             --            (39.8)      --              (39.8)
                                         -------       --------          ----       -------       -----        --------
Balance -- December 31, 2001.........      886.8        3,699.0         --            162.7        (2.9)        4,745.6

Convertible debt accretion, net of
  tax................................       28.7         --             --            (17.5)      --               11.2
Repurchase of convertible debt
  (note 10)..........................     (110.9)        --             --              6.7       --             (104.2)
Shares issued, net...................     --                8.5         --            --          --                8.5
Repurchase of shares (note 11).......     --              (36.9)          5.8          (1.4)      --              (32.5)
Currency translation.................     --             --             --            --           20.2            20.2
Net loss for the year................     --             --             --           (445.2)      --             (445.2)
                                         -------       --------          ----       -------       -----        --------
Balance -- December 31, 2002.........    $ 804.6       $3,670.6          $5.8       $(294.7)      $17.3        $4,203.6
                                         =======       ========          ====       =======       =====        ========
</Table>

          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                      F-6
<Page>
                                 CELESTICA INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                         (IN MILLIONS OF U.S. DOLLARS)

<Table>
<Caption>
                                                                  YEAR ENDED DECEMBER 31
                                                              -------------------------------
                                                                2000       2001        2002
                                                              --------   ---------   --------
<S>                                                           <C>        <C>         <C>
CASH PROVIDED BY (USED IN):
OPERATIONS:
  Net earnings (loss).......................................  $  206.7   $   (39.8)  $ (445.2)
  Items not affecting cash:
    Depreciation and amortization...........................     212.5       319.5      311.0
    Deferred income taxes...................................     (10.9)      (27.9)    (107.8)
    Restructuring charges (note 13).........................     --           98.6      194.5
    Other charges (note 13).................................     --           36.1      292.1
    Other...................................................      (4.4)        1.7       (6.1)
                                                              --------   ---------   --------
  Cash from earnings........................................     403.9       388.2      238.5
                                                              --------   ---------   --------
  Changes in non-cash working capital items:
    Accounts receivable.....................................    (995.3)      887.2      297.4
    Inventories.............................................    (656.7)      822.5      623.9
    Other assets............................................     (94.7)       45.7       26.1
    Accounts payable and accrued liabilities................   1,230.4      (854.0)    (202.7)
    Income taxes payable....................................      27.3         0.9       (0.4)
                                                              --------   ---------   --------
  Non-cash working capital changes..........................    (489.0)      902.3      744.3
                                                              --------   ---------   --------
Cash provided by (used in) operations.......................     (85.1)    1,290.5      982.8
                                                              --------   ---------   --------
INVESTING:
  Acquisitions, net of cash acquired........................    (634.7)   (1,299.7)    (111.0)
  Purchase of capital assets................................    (282.8)     (199.3)    (151.4)
  Proceeds on sale of capital assets........................     --         --           71.6
  Other.....................................................     (59.5)        1.4       (0.7)
                                                              --------   ---------   --------
Cash used in investing activities...........................    (977.0)   (1,497.6)    (191.5)
                                                              --------   ---------   --------
FINANCING:
  Bank indebtedness.........................................      (8.6)       (2.8)      (1.6)
  Repayments of long-term debt..............................      (2.2)      (56.0)    (146.5)
  Debt redemption fees (note 9).............................     --         --           (6.9)
  Deferred financing costs..................................      (0.1)       (3.9)      (2.6)
  Issuance of convertible debt..............................     862.9      --          --
  Convertible debt issue costs, pre-tax.....................     (19.4)     --          --
  Repurchase of convertible debt (note 10)..................     --         --         (100.3)
  Issuance of share capital.................................     766.6       737.7        7.4
  Share issue costs, pre-tax................................     (26.8)      (10.0)     --
  Repurchase of capital stock (note 11).....................     --         --          (32.5)
  Other.....................................................       2.0         1.1       (0.1)
                                                              --------   ---------   --------
Cash provided by (used in) financing activities.............   1,574.4       666.1     (283.1)
                                                              --------   ---------   --------
Increase in cash............................................     512.3       459.0      508.2
Cash, beginning of year.....................................     371.5       883.8    1,342.8
                                                              --------   ---------   --------
Cash, end of year...........................................  $  883.8   $ 1,342.8   $1,851.0
                                                              ========   =========   ========
</Table>

Cash is comprised of cash and short-term investments.

Supplemental cash flow information (note 21)

          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                      F-7
<Page>
                                 CELESTICA INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

1.  NATURE OF BUSINESS:

    The primary operations of the Company include providing a full range of
    electronics manufacturing services including design, prototyping, assembly,
    testing, product assurance, supply chain management, worldwide distribution
    and after-sales service to its customers primarily in the information
    technology and communications industries. The Company has operations in the
    Americas, Europe and Asia.

    The Company's accounting policies are in accordance with accounting
    principles generally accepted in Canada and, except as outlined in note 22,
    are, in all material respects, in accordance with accounting principles
    generally accepted in the United States (U.S. GAAP).

2.  SIGNIFICANT ACCOUNTING POLICIES:

    (a) PRINCIPLES OF CONSOLIDATION:

       These consolidated financial statements include the accounts of the
       Company and its subsidiaries. The results of subsidiaries acquired during
       the year are consolidated from their respective dates of acquisition. The
       Company's business combinations are accounted for using the purchase
       method. Inter-company transactions and balances are eliminated on
       consolidation.

    (b) USE OF ESTIMATES:

       The preparation of financial statements in conformity with generally
       accepted accounting principles requires management to make estimates and
       assumptions that affect the reported amounts of assets and liabilities
       and disclosures of contingent assets and liabilities at the date of the
       financial statements, and the reported amounts of revenue and expenses
       during the reporting period. Significant estimates are used in
       determining, but not limited to, the allowance for doubtful accounts,
       inventory valuation, income tax valuation allowances, restructuring
       charges, the useful lives and valuation of intangible assets and the fair
       values of reporting units for purposes of goodwill impairment tests.
       Actual results could differ materially from those estimates and
       assumptions.

    (c) REVENUE:

       Revenue is comprised of product sales and service revenue earned from
       engineering, design and repair services. Revenue from product sales is
       recognized upon shipment of the goods. Service revenue is recognized as
       services are performed.

    (d) CASH AND SHORT-TERM INVESTMENTS:

       Cash and short-term investments include cash on account, demand deposits
       and short-term investments with original maturities of less than three
       months.

    (e) ALLOWANCE FOR DOUBTFUL ACCOUNTS:

       The Company evaluates the collectibility of accounts receivable and
       records an allowance for doubtful accounts, which reduces the receivables
       to the amount management reasonably believes will be collected. A
       specific allowance is recorded against customer receivables that are
       considered to be impaired based on the Company's knowledge of the
       financial condition of its customers. In determining the amount of the
       allowance, the following factors are considered: the length of time the
       receivables have been outstanding, customer and industry concentrations,
       current business environment, and historical experience.

    (f) INVENTORIES:

       Inventories are valued on a first-in, first-out basis at the lower of
       cost and replacement cost for production parts, and at the lower of cost
       and net realizable value for work in progress and finished goods. Cost
       includes materials and an application of relevant manufacturing
       value-add. In determining the net realizable value, the Company considers
       factors such as shrinkage, the aging and future demand of the inventory,
       past experience with specific customers, and the ability to redistribute
       inventory to other programs or return inventory to suppliers.

                                      F-8
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

2.  SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
    (g) CAPITAL ASSETS:

       Capital assets are carried at cost and amortized over their estimated
       useful lives on a straight-line basis. Estimated useful lives for the
       principal asset categories are as follows:

<Table>
        <S>                                                           <C>
        Buildings...................................................  25 years
        Buildings/leasehold improvements............................  Up to 25 years or term of lease
        Office equipment............................................  5 years
        Machinery and equipment.....................................  5 years
        Software....................................................  1 to 10 years
</Table>

    (h) GOODWILL FROM BUSINESS COMBINATIONS:

       Prior to July 1, 2001, all goodwill was amortized on a straight-line
       basis over 10 years. Goodwill acquired in business combinations
       subsequent to June 30, 2001, has not been amortized. Effective
       January 1, 2002, the Company discontinued amortization of all existing
       goodwill. These changes are a result of new accounting standards issued
       in 2001 which are summarized in note 2(q)(ii) -- Changes in accounting
       policies.

       Upon adopting these standards on January 1, 2002, the Company is required
       to evaluate goodwill annually or whenever events or changes in
       circumstances indicate that the carrying amount may not be recoverable.
       Impairment is tested at the reporting unit level by comparing the
       reporting unit's carrying amount to its fair value. The fair values of
       the reporting units are estimated using a combination of a market
       approach and discounted cash flows. To the extent a reporting unit's
       carrying amount exceeds its fair value, an impairment of goodwill exists.
       Impairment is measured by comparing the fair value of goodwill,
       determined in a manner similar to a purchase price allocation, to its
       carrying amount. The Company conducted its annual goodwill assessment in
       the fourth quarter of 2002 and recorded an impairment charge. See
       notes 7 -- Goodwill and intangible assets and 13(c) -- Other charges.

       Prior to 2002, the Company assessed the recoverability of goodwill by
       comparing its carrying amount to its projected future net cash flows as
       described under note 2(j) -- Impairment of long-lived assets.

    (i) INTANGIBLE ASSETS:

       Intangible assets are comprised of intellectual property and other
       intangible assets. Intellectual property assets consist primarily of
       certain non-patented intellectual property and process technology, and
       are amortized on a straight-line basis over their estimated useful lives,
       to a maximum of 5 years. Other intangible assets consist primarily of
       customer relationships and contract intangibles, and represent the excess
       of cost over the fair value of tangible assets and intellectual property
       acquired in asset acquisitions. Other intangible assets are amortized on
       a straight-line basis over their estimated useful lives, to a maximum of
       10 years.

    (j) IMPAIRMENT OF LONG-LIVED ASSETS:

       The Company reviews capital and intangible assets for impairment on a
       regular basis or whenever events or changes in circumstances indicate
       that the carrying amount may not be recoverable. Recoverability is
       assessed by comparing the carrying amount to the projected future net
       cash flows the long-lived assets are expected to generate. The Company
       has recorded impairment charges in 2001 and 2002. See
       note 13(d) -- Other charges.

    (k) PENSION AND NON-PENSION, POST-EMPLOYMENT BENEFITS:

       The Company accrues its obligations under employee benefit plans and the
       related costs, net of plan assets. The cost of pensions and other
       post-employment benefits earned by employees is actuarially determined
       using the projected benefit method pro-rated on service, and management's
       best estimate of expected plan investment performance, salary escalation,
       compensation levels at time of retirement, retirement ages of employees
       and expected health care costs. Changes in these assumptions could impact
       future pension expense. For the purpose of calculating the expected
       return on plan assets, assets are valued at fair value. Past service
       costs arising from plan amendments are amortized on a straight-line basis
       over the average remaining service period of employees active at the date
       of amendment. Actuarial gains or losses exceeding 10% of a plan's
       accumulated benefit obligations or the fair market value of the plan
       assets at the beginning of the year are amortized over the average
       remaining service period of active employees. The average remaining
       service period of active employees covered by the pension plans is
       14 years for 2001 and 11 years for 2002. The average remaining service
       period of active employees covered by the other post-employment benefit
       plans is 21 years for 2001 and 23 years for 2002. Curtailment gains or
       losses may arise from significant changes to a plan. Curtailment gains
       are offset against unrecognized losses and any excess gains and all
       curtailment losses are recorded in the period in which the curtailment
       occurs.

                                      F-9
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

2.  SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
       Pension assets are recorded as Other assets while pension liabilities are
       recorded as Accrued pension and post-employment benefits.

    (l) DEFERRED FINANCING COSTS:

       Costs relating to long-term debt are deferred in other assets and
       amortized over the term of the related debt or debt facilities.

    (m) INCOME TAXES:

       The Company uses the asset and liability method of accounting for income
       taxes. Deferred income tax assets and liabilities are recognized for
       future income tax consequences attributable to differences between the
       financial statement carrying amounts of existing assets and liabilities,
       and their respective tax bases. A valuation allowance is recorded to
       reduce deferred income tax assets to an amount that, in the opinion of
       management, is more likely than not to be realized. The effect of changes
       in tax rates is recognized in the period in which the rate change occurs.

    (n) FOREIGN CURRENCY TRANSLATION AND HEDGING:

       The functional currency of the majority of the Company's subsidiaries is
       the United States dollar. For such subsidiaries, monetary assets and
       liabilities denominated in foreign currencies are translated into
       U.S. dollars at the year-end rate of exchange. Non-monetary assets and
       liabilities denominated in foreign currencies are translated at historic
       rates, and revenue and expenses are translated at average exchange rates
       prevailing during the month of the transaction. Exchange gains or losses
       are reflected in the consolidated statements of earnings (loss).

       The accounts of the Company's self-sustaining foreign operations for
       which the functional currency is other than the U.S. dollar, are
       translated into U.S. dollars using the current rate method. Assets and
       liabilities are translated at the year-end exchange rate, and revenue and
       expenses are translated at average exchange rates prevailing during the
       month of the transaction. Gains and losses arising from the translation
       of financial statements of foreign operations are deferred in the
       "foreign currency translation adjustment" account included as a separate
       component of shareholders' equity.

       The Company enters into forward exchange contracts to hedge the cash flow
       risk associated with firm purchase commitments and forecasted
       transactions in foreign currencies and foreign-currency denominated
       balances. The Company does not enter into derivatives for speculative
       purposes.

       The Company formally documents all relationships between hedging
       instruments and hedged items, as well as its risk management objective
       and strategy for undertaking various hedge transactions. This process
       includes linking all derivatives to specific assets and liabilities on
       the balance sheet or to specific firm commitments or forecasted
       transactions. The Company also formally assesses, both at the hedge's
       inception and at the end of each quarter, whether the derivatives that
       are used in hedged transactions are highly effective in offsetting
       changes in cash flows of hedged items.

       Gains and losses on hedges of firm commitments are included in the cost
       of the hedged transaction when they occur. Gains and losses on hedges of
       forecasted transactions are recognized in earnings in the same period and
       the same line item as the underlying hedged transaction. Foreign exchange
       translation gains and losses on forward contracts used to hedge
       foreign-currency denominated amounts are accrued on the balance sheet as
       current assets or current liabilities and are recognized currently in the
       income statement, offsetting the respective translation gains or losses
       on the foreign-currency denominated amounts. The forward premium or
       discount is amortized over the term of the forward contract. Gains and
       losses on hedged forecasted transactions are recognized in earnings
       immediately when the hedge is no longer effective or the forecasted
       transactions are no longer expected.

    (o) RESEARCH AND DEVELOPMENT:

       The Company incurs costs relating to research and development activities
       which are expensed as incurred unless development costs meet certain
       criteria for capitalization. Total research and development costs
       recorded in selling, general and administrative expenses for 2002 were
       $18.2 (2001 -- $17.1; 2000 -- $19.5). No amounts have been capitalized.

    (p) RESTRUCTURING CHARGES:

       The Company records restructuring charges relating to employee
       terminations, contractual lease obligations and other exit costs, based
       on detailed plans approved and committed to by management. The
       recognition of these charges requires management to make certain
       judgments regarding the nature, timing and amount associated with the
       planned restructuring activities, including

                                      F-10
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

2.  SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
       estimating sublease income and the net recovery of equipment to be
       disposed of. At the end of each reporting period, the Company evaluates
       the appropriateness of the remaining accrued balances.

    (q) CHANGES IN ACCOUNTING POLICIES:

        (i) Earnings per share:

        Effective 2001, the Company retroactively applied the new Canadian
        Institute of Chartered Accountants (CICA) Handbook Section 3500,
        "Earnings per share," which requires the use of the treasury stock
        method for calculating diluted earnings per share. The diluted earnings
        per share calculation includes employee stock options and the conversion
        of convertible debt instruments, if dilutive. The new standard is
        consistent with U.S. GAAP. Previously reported diluted earnings per
        share have been restated to reflect this change. See
        note 12 -- Earnings (loss) per share and weighted average shares
        outstanding.

        (ii) Business combinations, goodwill and other intangible assets:

        In September 2001, the CICA issued Handbook Sections 1581, "Business
        Combinations" and 3062, "Goodwill and Other Intangible Assets." The new
        standards mandate the purchase method of accounting for business
        combinations and require that goodwill no longer be amortized, but
        instead be tested for impairment at least annually. The standards also
        specify criteria that intangible assets must meet to be recognized and
        reported apart from goodwill. The standards require that the value of
        the shares issued in a business combination be measured using the
        average share price for a reasonable period before and after the date
        the terms of the acquisition are agreed to and announced. Previously,
        the consummation date was used to value the shares issued in a business
        combination. The new standards are substantially consistent with
        U.S. GAAP.

        Effective July 1, 2001, goodwill acquired in business combinations
        completed after June 30, 2001, has not been amortized. In addition, the
        new criteria for recognition of intangible assets apart from goodwill
        and the valuation of the shares issued in a business combination have
        been applied to business combinations completed after June 30, 2001.

        The Company has fully adopted these new standards as of January 1, 2002,
        and discontinued amortization of all existing goodwill. The Company also
        evaluated existing intangible assets, including estimates of remaining
        lives, and has reclassified $9.1 from intellectual property to goodwill,
        as of January 1, 2002, to conform with the new criteria.

        Section 3062 requires the completion of a transitional goodwill
        impairment evaluation within six months of adoption. Impairment is
        identified by comparing the carrying amounts of the Company's reporting
        units with their fair values. To the extent a reporting unit's carrying
        amount exceeds its fair value, the impairment of goodwill must be
        recorded by December 31, 2002. The impairment of goodwill is measured by
        comparing the fair value of goodwill, determined in a manner similar to
        a purchase price allocation, to its carrying amount. Any transitional
        impairment would have been recognized as an effect of a change in
        accounting principle and would have been charged to opening retained
        earnings as of January 1, 2002. The Company completed the transitional
        goodwill impairment assessment, and determined that no impairment
        existed as of the date of adoption.

        Effective January 1, 2002, the Company had unamortized goodwill of
        $1,137.9 which is no longer amortized. This change in accounting policy
        was not applied retroactively and the amounts presented for prior years
        have not been restated for this change. The following table shows the
        impact of this change as if the policy had been applied retroactively to
        2001 and 2000:

<Table>
<Caption>
                                                                              YEAR ENDED DECEMBER 31
                                                                          ------------------------------
                                                                            2000       2001       2002
                                                                          --------   --------   --------
            <S>                                                           <C>        <C>        <C>
            Net earnings (loss) as reported.............................   $206.7     $(39.8)   $(445.2)
            Add back: goodwill amortization.............................     39.1       39.2      --
                                                                           ------     ------    -------
            Net earnings (loss) before goodwill amortization............   $245.8     $ (0.6)   $(445.2)
                                                                           ======     ======    =======
            Basic earnings (loss) per share:
              As reported...............................................   $ 1.01     $(0.26)   $ (1.98)
              Before goodwill amortization..............................   $ 1.20     $(0.07)   $ (1.98)

            Diluted earnings (loss) per share:
              As reported...............................................   $ 0.98     $(0.26)   $ (1.98)
              Before goodwill amortization..............................   $ 1.16     $(0.07)   $ (1.98)
</Table>

                                      F-11
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

2.  SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
       (iii) Stock-based compensation and other stock-based payments:

        Effective January 1, 2002, the Company adopted the new CICA Handbook
        Section 3870, which requires that a fair value based method of
        accounting be applied to all stock-based payments to non-employees and
        to direct awards of stock to employees. However, the new standard
        permits the Company to continue its existing policy of recording no
        compensation cost on the grant of stock options to employees with the
        addition of pro forma information. The standard requires the disclosure
        of pro forma net earnings and earnings per share information as if the
        Company had accounted for employee stock options under the fair value
        method. The Company has applied the pro forma disclosure provisions of
        the new standard to awards granted on or after January 1, 2002. The
        pro forma effect of awards granted prior to January 1, 2002, has not
        been included.

        The fair value of the options issued by the Company during 2002 was
        determined using the Black-Scholes option pricing model. The Company
        used the following weighted average assumptions: risk-free rate of
        5.14%; dividend yield of 0%; a volatility factor of the expected market
        price of the Company's shares of 70%; and, an expected option life of
        5 years. The weighted-average grant date fair value of options issued
        during the year was $12.02 per share. For purposes of pro forma
        disclosures, the estimated fair value of the options is amortized to
        income over the vesting period, on a straight-line basis. For the year
        ended December 31, 2002, the Company's pro forma net loss is $447.4,
        pro forma basic loss per share is $1.99 and pro forma diluted loss per
        share is $1.99. See note 11(c) for a description of the stock option
        plans.

    (r) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:

        (i) Foreign currency translation and hedging relationships:

        Effective January 1, 2002, the CICA amended Section 1650 to eliminate
        the deferral and amortization of foreign currency translation gains and
        losses on long-lived monetary items, with retroactive restatement of
        prior periods. The Company was not impacted by this change. The CICA
        issued Accounting Guideline AcG-13 which establishes criteria for hedge
        accounting effective for the Company's 2004 fiscal year. The Company has
        reviewed the requirements of AcG-13 and has determined that all of its
        current hedges will continue to qualify for hedge accounting when the
        guideline becomes effective.

        (ii) Impairment or disposal of long-lived assets:

        In December 2002, the CICA issued Handbook Section 3063, "Impairment or
        Disposal of Long-Lived Assets" and revised Section 3475, "Disposal of
        Long-Lived Assets and Discontinued Operations." These sections supersede
        the write-down and disposal provisions of Section 3061, "Property, Plant
        and Equipment" and Section 3475, "Discontinued Operations." The new
        standards are consistent with U.S. GAAP. Section 3063 establishes
        standards for recognizing, measuring and disclosing impairment of
        long-lived assets held-for-use. An impairment is recognized when the
        carrying amount of an asset to be held and used, exceeds the projected
        future net cash flows expected from its use and disposal, and is
        measured as the amount by which the carrying amount of the asset exceeds
        its fair value. Section 3475 provides specific criteria for and requires
        separate classification for assets held-for-sale and for these assets to
        be measured at the lower of their carrying amounts or fair value, less
        costs to sell. Section 3475 also broadens the definition of discontinued
        operations to include all distinguishable components of an entity that
        will be eliminated from operations. Section 3063 is effective for the
        Company's 2004 fiscal year, however, early application is permitted.
        Revised Section 3475 is applicable to disposal activities committed to
        by the Company after May 1, 2003, however, early application is
        permitted. The Company expects that the adoption of these standards will
        have no material impact on its financial position, results of operations
        or cash flows.

       (iii) Guarantees:

        In December 2002, the CICA approved Accounting Guideline AcG-14 which
        requires certain disclosures of obligations under guarantees, effective
        for the Company's first quarter of 2003. The guideline is generally
        consistent with the disclosure requirements for guarantees under
        U.S. GAAP. The guideline does not apply to product warranties or the
        measurement requirements under U.S. GAAP. The Company has disclosed its
        guarantees under U.S. GAAP in note 22(k). The Company expects that the
        adoption of this guideline will have no material impact on its financial
        position, results of operations or cash flows.

                                      F-12
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

3.  ACQUISITIONS:

    2001 ACQUISITIONS:

    (a) ASSET ACQUISITIONS:

       In February 2001, the Company acquired certain assets located in Dublin,
       Ireland and Mt. Pleasant, Iowa from Motorola Inc. In March 2001, the
       Company acquired certain assets of a repair facility in Japan from N.K.
       Techno Co. Ltd. In May 2001, the Company acquired certain assets in
       Little Rock, Arkansas and Denver, Colorado from Avaya Inc., and in
       August 2001, acquired certain assets in Saumur, France. In August 2001,
       the Company acquired certain assets in Columbus, Ohio and Oklahoma City,
       Oklahoma from Lucent Technologies Inc. The total purchase price for these
       acquisitions of $834.1 was financed with cash and was allocated to the
       net assets acquired, including intangible assets of $195.7, based on
       their relative fair values at the date of acquisition.

    (b) BUSINESS COMBINATIONS:

       Omni:

       In October 2001, the Company acquired Omni Industries Limited (Omni), an
       EMS provider headquartered in Singapore. This acquisition significantly
       enhanced the Company's presence in Asia. The purchase price of $865.8 was
       financed with the issuance of 9.2 million subordinate voting shares and
       the issuance of options to purchase 0.3 million subordinate voting shares
       of the Company, and $479.5 in cash. The goodwill recorded for Omni is not
       tax deductible.

       Other business combinations:

       In January 2001, the Company acquired Excel Electronics, Inc. through a
       merger with Celestica (US) Inc., a subsidiary of the Company. In
       June 2001, the Company acquired Sagem CR s.r.o., in the Czech Republic,
       from Sagem SA, of France. In August 2001, the Company acquired Primetech
       Electronics Inc. (Primetech), an EMS provider in Canada. The purchase
       price of Primetech was financed primarily with the issuance of
       3.4 million subordinate voting shares and the issuance of options to
       purchase 0.3 million subordinate voting shares of the Company.

       The value of the shares issued in the Primetech and Omni acquisitions was
       determined based on the average market price of the shares for a
       reasonable period before, and after the date the terms of the
       acquisitions were agreed to and announced.

       In 2002, the Company completed the valuations of certain assets relating
       to its 2001 business combinations, resulting in changes to the fair-value
       allocations of the purchase prices. Details of the final net assets
       acquired in these business combinations, at fair value, are as follows:

<Table>
<Caption>
                                                                                 OTHER BUSINESS
                                                                        OMNI      COMBINATIONS
                                                                      --------   --------------
        <S>                                                           <C>        <C>
        Current assets..............................................  $ 260.7        $ 63.2
        Capital assets..............................................     91.8          46.3
        Other long-term assets......................................      4.1           0.1
        Goodwill....................................................    777.5         136.2
        Intellectual property.......................................     34.5          10.0
        Liabilities assumed.........................................   (302.8)        (28.3)
                                                                      -------        ------
        Net assets acquired.........................................  $ 865.8        $227.5
                                                                      =======        ======
        Financed by:
        Cash........................................................  $ 479.5        $ 46.8
        Issuance of shares and options..............................    386.3         180.7
                                                                      -------        ------
                                                                      $ 865.8        $227.5
                                                                      =======        ======
</Table>

    2002 ACQUISITIONS:

    (c) ASSET ACQUISITIONS:

       In March 2002, the Company acquired certain assets located in Miyagi and
       Yamanashi, Japan from NEC Corporation. In August 2002, the Company
       acquired certain assets from Corvis Corporation in the United States. The
       aggregate purchase price for these acquisitions of $111.0 was financed
       with cash and allocated to the net assets acquired, including intangible
       assets of $49.4,

                                      F-13
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

3.  ACQUISITIONS: (CONTINUED)
       based on their relative fair values at the date of acquisition. The
       weighted-average useful life of these intangible assets is approximately
       six years.

       Integration costs related to acquisitions:

       The Company incurred costs of $21.1 in 2002 (2001 -- $22.8;
       2000 -- $16.1) relating to the establishment of business processes,
       infrastructure and information systems for acquired operations. None of
       the integration costs incurred related to existing operations.

       The Company's 2002 restructuring actions have impacted some of the sites
       acquired in prior years. These actions have included workforce reductions
       and facility consolidations and closures. See note 13(b) -- Other
       charges.

4.  ACCOUNTS RECEIVABLE:

    Accounts receivable are net of an allowance for doubtful accounts of $62.4
    at December 31, 2002 (2001 -- $74.6).

5.  INVENTORIES:

<Table>
<Caption>
                                                                      2001           2002
                                                                  ------------   ------------
    <S>                                                           <C>            <C>
    Raw materials...............................................    $  903.6       $  479.8
    Work in progress............................................       220.6          101.0
    Finished goods..............................................       248.5          194.8
                                                                    --------       --------
                                                                    $1,372.7       $  775.6
                                                                    ========       ========
</Table>

6.  CAPITAL ASSETS:

<Table>
<Caption>
                                                                                     2001
                                                                  ------------------------------------------
                                                                                 ACCUMULATED      NET BOOK
                                                                      COST       AMORTIZATION      VALUE
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    Land........................................................    $   53.3        $--            $ 53.3
    Buildings...................................................       258.8          17.4          241.4
    Buildings/leasehold improvements............................        66.0          24.8           41.2
    Office equipment............................................        86.8          40.2           46.6
    Machinery and equipment.....................................       727.2         291.2          436.0
    Software....................................................       136.6          40.0           96.6
                                                                    --------        ------         ------
                                                                    $1,328.7        $413.6         $915.1
                                                                    ========        ======         ======
</Table>

<Table>
<Caption>
                                                                                     2002
                                                                  ------------------------------------------
                                                                                 ACCUMULATED      NET BOOK
                                                                      COST       AMORTIZATION      VALUE
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    Land........................................................    $   66.0        $--            $ 66.0
    Buildings...................................................       192.3          24.6          167.7
    Buildings/leasehold improvements............................        64.4          33.8           30.6
    Office equipment............................................       102.1          55.3           46.8
    Machinery and equipment.....................................       618.2         319.2          299.0
    Software....................................................       202.9          85.2          117.7
                                                                    --------        ------         ------
                                                                    $1,245.9        $518.1         $727.8
                                                                    ========        ======         ======
</Table>

    The above amounts include $17.1 (2001 -- $13.3) of assets under capital
    lease and accumulated amortization of $4.0 (2001 -- $6.8) related thereto.

    Depreciation and rental expense for the year ended December 31, 2002 was
    $212.4 (2001 -- $192.8; 2000 -- $121.9) and $117.3 (2001 -- $79.8;
    2000 -- $46.7), respectively.

                                      F-14
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

7.  GOODWILL FROM BUSINESS COMBINATIONS AND INTANGIBLE ASSETS:

    GOODWILL FROM BUSINESS COMBINATIONS:

    The following table details the changes in goodwill by reporting segment for
    the year ended December 31, 2002:

<Table>
<Caption>
                                                        DECEMBER 31,    RECLASS    POST CLOSING   IMPAIRMENT    DECEMBER 31,
                                                            2001          (A)          (B)            (C)           2002
                                                        -------------   --------   ------------   -----------   -------------
    <S>                                                 <C>             <C>        <C>            <C>           <C>
    Americas..........................................    $  243.2       $ 1.8        $(2.1)        $(127.2)       $115.7
    Europe............................................        68.3         6.2          2.0           (76.5)       --
    Asia..............................................       817.3         1.1         13.9          --             832.3
                                                          --------       -----        -----         -------        ------
                                                          $1,128.8       $ 9.1        $13.8         $(203.7)       $948.0
                                                          ========       =====        =====         =======        ======
    ---------------
</Table>

    (a) The Company reclassed $9.1 from intellectual property to goodwill as of
       January 1, 2002, to conform with the new goodwill standards. See
       note 2(q)(ii).

    (b) The Company completed the valuations of certain assets relating to its
       2001 business combinations. This resulted in changes to the fair-value
       allocation of the purchase price, and thus goodwill.

    (c) During the fourth quarter of 2002, the Company performed its annual
       goodwill impairment test in accordance with the new goodwill standards,
       Section 3062. See note 2(q)(ii). Prolonged declines in the information
       technology and communications end markets contributed to an impairment of
       goodwill in the fourth quarter as estimated fair values of the reporting
       units fell below their respective carrying values. The Company obtained
       independent valuations to support the fair values of its reporting units.
       The fair values of the reporting units were estimated using a combination
       of a market approach and discounted cash flows. Revenue and expense
       projections used in determining the fair value of the reporting units
       were based on management's estimates, including estimates of current and
       future industry conditions. Cash flows were discounted using a weighted
       average cost of capital. The Company recorded a goodwill impairment of
       $203.7. See note 13(c) -- Other charges.

    INTANGIBLE ASSETS:

<Table>
<Caption>
                                                                                     2001
                                                                  ------------------------------------------
                                                                                 ACCUMULATED      NET BOOK
                                                                      COST       AMORTIZATION      VALUE
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    Intellectual property.......................................     $388.6         $143.9         $244.7
    Other intangible assets.....................................      209.3           26.8          182.5
                                                                     ------         ------         ------
                                                                     $597.9         $170.7         $427.2
                                                                     ======         ======         ======
</Table>

<Table>
<Caption>
                                                                                     2002
                                                                  ------------------------------------------
                                                                                 ACCUMULATED      NET BOOK
                                                                      COST       AMORTIZATION      VALUE
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    Intellectual property.......................................     $194.5         $118.9         $ 75.6
    Other intangible assets.....................................      177.8           41.5          136.3
                                                                     ------         ------         ------
                                                                     $372.3         $160.4         $211.9
                                                                     ======         ======         ======
</Table>

                                      F-15
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

7.  GOODWILL FROM BUSINESS COMBINATIONS AND INTANGIBLE ASSETS: (CONTINUED)
    The following table details the changes in intangible assets for the year
    ended December 31, 2002:

<Table>
<Caption>
                                                                                   ACQUISITIONS/
                                         DECEMBER 31,                   RECLASS    POST CLOSING    IMPAIRMENT    DECEMBER 31,
                                             2001        AMORTIZATION     (A)           (B)            (C)           2002
                                         -------------   ------------   --------   -------------   -----------   -------------
    <S>                                  <C>             <C>            <C>        <C>             <C>           <C>
    Intellectual property..............     $244.7          $(72.0)      $(9.1)        $ 8.5         $ (96.5)       $ 75.6
    Other intangible assets............      182.5           (23.9)       --            25.4           (47.7)        136.3
                                            ------          ------       -----         -----         -------        ------
                                            $427.2          $(95.9)      $(9.1)        $33.9         $(144.2)       $211.9
                                            ======          ======       =====         =====         =======        ======
    ---------------
</Table>

    (a) The Company reclassed $9.1 from intellectual property to goodwill as of
       January 1, 2002, to conform with the new goodwill standards. See
       note 2(q)(ii).

    (b) Intangible assets increased during the year due to acquisitions, offset
       partially by post closing adjustments.

    (c) In the fourth quarter of 2002, the Company recorded an impairment charge
       totaling $144.2 to write-down intellectual property and other intangible
       assets, primarily in the Americas and European segments. The Company
       recorded $75.2 as restructuring charges primarily for intellectual
       property impaired due to the closure or consolidation of the related
       manufacturing facilities. An additional charge of $69.0 was recorded as
       "Other charges -- other impairment" to write-down certain intellectual
       property, and customer relationships and contracts that were impaired, in
       connection with the regular recoverability review of intangible assets.
       The impairment was measured as the excess of the carrying amount over the
       projected future net cash flows that these assets were expected to
       generate. See notes 13(b) and (d) -- Other charges.

    Amortization expense is as follows:

<Table>
<Caption>
                                                                            YEAR ENDED DECEMBER 31
                                                                  ------------------------------------------
                                                                      2000           2001           2002
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    Amortization of goodwill....................................     $39.1          $ 39.2         $--
    Amortization of intellectual property.......................      39.1            68.8          72.0
    Amortization of other intangible assets.....................      10.7            17.0          23.9
                                                                     -----          ------         -----
                                                                     $88.9          $125.0         $95.9
                                                                     =====          ======         =====
</Table>

    Effective January 1, 2002, the Company discontinued amortization of all
    goodwill. See note 2(q)(ii) -- Changes in accounting policies.

    The Company estimates its future amortization expense as follows, based on
    existing intangible asset balances:

<Table>
    <S>                                                           <C>
    2003........................................................   $46.8
    2004........................................................    43.0
    2005........................................................    35.1
    2006........................................................    27.0
    2007........................................................    16.3
    Thereafter..................................................    43.7
</Table>

8.  OTHER ASSETS:

<Table>
<Caption>
                                                                      2001           2002
                                                                  ------------   ------------
    <S>                                                           <C>            <C>
    Deferred pension (note 16)..................................     $ 28.4         $ 31.2
    Deferred income taxes.......................................      116.4          305.1
    Commodity taxes recoverable.................................       10.7           10.9
    Other.......................................................        9.7            7.4
                                                                     ------         ------
                                                                     $165.2         $354.6
                                                                     ======         ======
</Table>

    Amortization of deferred financing costs for the year ended December 31,
    2002, was $2.7 (2001 -- $1.7; 2000 -- $1.7).

                                      F-16
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

9.  LONG-TERM DEBT:

<Table>
<Caption>
                                                                      2001           2002
                                                                  ------------   ------------
    <S>                                                           <C>            <C>
    Global, unsecured, revolving credit facility due 2003 (a)...     $--            $--
    Unsecured, revolving credit facility due 2004 (b)...........     --             --
    Unsecured, revolving credit facility due 2005 (c)...........     --             --
    Senior Subordinated Notes due 2006 (d)......................      130.0         --
    Other (e)...................................................       17.4           6.9
                                                                     ------         -----
                                                                      147.4           6.9
    Less current portion........................................       10.0           2.7
                                                                     ------         -----
                                                                     $137.4         $ 4.2
                                                                     ======         =====
    ---------------
</Table>

    (a) Concurrently with the initial public offering on July 7, 1998, the
       Company entered into a global, unsecured, revolving credit facility
       providing up to $250.0 of borrowings. The credit facility permitted the
       Company and certain designated subsidiaries to borrow funds for general
       corporate purposes (including acquisitions). Borrowings under the
       facility bear interest at LIBOR plus a margin and are repayable in
       July 2003. There were no borrowings on this facility during 2001 or 2002.
       Commitment fees in 2002 were $0.6. The Company elected to cancel this
       facility in December 2002.

    (b) In December 2002, the Company extended its second unsecured, revolving
       credit facility from April 2004 to December 2004. Concurrent with this
       extension, the Company increased the facility from $250.0 to $350.0. The
       facility includes a $25.0 swing-line facility that provides for
       short-term borrowings up to a maximum of seven days. The credit facility
       permits the Company and certain designated subsidiaries to borrow funds
       for general corporate purposes (including acquisitions). Borrowings under
       the facility bear interest at LIBOR plus a margin except that borrowings
       under the swing-line facility bear interest at a base rate. There were no
       borrowings on this facility during 2001 or 2002. Commitment fees in 2002
       were $2.6.

    (c) In July 2001, the Company entered into an unsecured, revolving credit
       facility providing up to $500.0 of borrowings including a $75.0
       swing-line facility that provides for short-term borrowings up to a
       maximum of seven days. The credit facility permits the Company and
       certain designated subsidiaries to borrow funds for general corporate
       purposes (including acquisitions). The revolving facility is repayable in
       July 2005. Borrowings under the facility bear interest at LIBOR plus a
       margin except that borrowings under the swing-line facility bear interest
       at a base rate. There were no borrowings on this facility in 2001 or
       2002. Commitment fees in 2002 were $1.5.

    (d) In August 2002, the Company redeemed the entire $130.0 of outstanding
       10.5% Senior Subordinated Notes at a premium of 5.25%. See note 13(e).

    (e) Other long-term debt includes secured loan facilities of one of the
       Company's subsidiaries of which $13.0 was outstanding at December 31,
       2001, and capital lease obligations. All secured loans were repaid during
       2002. The weighted average interest rate on these facilities in 2001 was
       4.4%. The loans were denominated in Singapore Dollars and repayable
       through quarterly payments. There were no commitment fees for 2001 or
       2002. The balance as at December 31, 2002, relates to capital lease
       obligations.

    As at December 31, 2002, principal repayments due within each of the next
    five years on all long-term debt are as follows:

<Table>
    <S>                                                           <C>
    2003........................................................    $2.7
    2004........................................................     2.5
    2005........................................................     1.5
    2006........................................................     0.1
    2007........................................................     0.1
</Table>

    The unsecured, revolving credit facilities have restrictive covenants
    relating to debt incurrence and sale of assets and also contain financial
    covenants, that require the Company to maintain certain financial ratios. A
    change of control is an event of default.

10. CONVERTIBLE DEBT:

    In August 2000, Celestica issued Liquid Yield Option-TM- Notes (LYONs) with
    a principal amount at maturity of $1,813.6, payable August 1, 2020. The
    Company received gross proceeds of $862.9 and incurred $12.5 in underwriting
    commissions, net of tax of $6.9. No interest is payable on the LYONs and the
    issue price of the LYONs represents a yield to maturity of 3.75%. The LYONs
    are subordinated in right of payment to all existing and future senior
    indebtedness of the Company.

                                      F-17
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

10. CONVERTIBLE DEBT: (CONTINUED)
    The LYONs are convertible at any time at the option of the holder, unless
    previously redeemed or repurchased, into 5.6748 subordinate voting shares
    for each one thousand dollars principal amount at maturity. Holders may
    require the Company to repurchase all or a portion of their LYONs on
    August 2, 2005, August 1, 2010, and August 1, 2015, and the Company may
    redeem the LYONs at any time on or after August 1, 2005 (and, under certain
    circumstances, before that date). The Company is required to offer to
    repurchase the LYONs if there is a change in control or a delisting event.
    Generally, the redemption or repurchase price is equal to the accreted value
    of the LYONs. The Company may elect to pay the principal amount at maturity
    of the LYONs or the repurchase price that is payable in certain
    circumstances, in cash or subordinate voting shares, or any combination
    thereof.

    Pursuant to Canadian generally accepted accounting principles, the LYONs are
    recorded as an equity instrument and bifurcated into a principal equity
    component (representing the present value of the notes) and an option
    component (representing the value of the conversion features of the notes).
    The principal equity component is accreted over the 20-year term through
    periodic charges to retained earnings.

    During 2002, the Company paid $100.3 to repurchase LYONs with a principal
    amount at maturity of $222.9. The Company recognized a gain on the
    repurchase of these LYONs. The gain of $6.7, net of tax of $3.9, is recorded
    in retained earnings and apportioned between the principal equity and option
    components, based on their relative fair values compared to their carrying
    values. Consistent with the treatment of the periodic accretion charges, the
    gain on the principal equity component has been included in the calculation
    of basic and diluted earnings (loss) per share. See note 12.

11. CAPITAL STOCK:

    (a) AUTHORIZED:

       An unlimited number of subordinate voting shares, which entitle the
       holder to one vote per share, and an unlimited number of multiple voting
       shares, which entitle the holder to twenty-five votes per share. Except
       as otherwise required by law, the subordinate voting shares and multiple
       voting shares vote together as a single class on all matters submitted to
       a vote of shareholders, including the election of directors. The holders
       of the subordinate voting shares and multiple voting shares are entitled
       to share ratably, as a single class, in any dividends declared subject to
       any preferential rights of any outstanding preferred shares in respect of
       the payment of dividends. Each multiple voting share is convertible at
       any time at the option of the holder thereof into one subordinate voting
       share. The Company is also authorized to issue an unlimited number of
       preferred shares, issuable in series.

    (b) ISSUED AND OUTSTANDING:

<Table>
<Caption>
                                                                                                    TOTAL
                                                                                                 SUBORDINATE
                                                                                                 AND MULTIPLE
                                                               SUBORDINATE        MULTIPLE      VOTING SHARES      SHARES TO
        NUMBER OF SHARES (IN MILLIONS)                        VOTING SHARES    VOTING SHARES     OUTSTANDING       BE ISSUED
        ------------------------------                        --------------   --------------   --------------   -------------
        <S>                                                   <C>              <C>              <C>              <C>
        Balance December 31, 2000...........................      164.3             39.1            203.4             0.4
        Equity offering (i).................................       12.0           --                 12.0           --
        Other share issuances (ii)..........................        1.1           --                  1.1           --
        Issued as consideration for acquisitions (iii)......       13.2           --                 13.2             0.1
                                                                  -----             ----            -----            ----
        Balance December 31, 2001...........................      190.6             39.1            229.7             0.5
        Repurchase of shares (iv)...........................       (2.0)          --                 (2.0)          --
        Other share issuances (v)...........................        0.9           --                  0.9           --
                                                                  -----             ----            -----            ----
        Balance December 31, 2002...........................      189.5             39.1            228.6             0.5
                                                                  =====             ====            =====            ====
</Table>

                                      F-18
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

11. CAPITAL STOCK: (CONTINUED)

<Table>
<Caption>
                                                               SUBORDINATE        MULTIPLE        SHARES TO         TOTAL
        AMOUNT                                                VOTING SHARES    VOTING SHARES      BE ISSUED        AMOUNT
        ------                                                --------------   --------------   -------------   -------------
        <S>                                                   <C>              <C>              <C>             <C>
        Balance December 31, 2000...........................     $2,254.9          $138.8           $ 1.7         $2,395.4
        Equity offering, net of issue costs (i).............        707.4          --              --                707.4
        Other share issuances (ii)..........................         29.2          --              --                 29.2
        Issued as consideration for acquisitions (iii)......        562.8          --                 4.2            567.0
                                                                 --------          ------           -----         --------
        Balance December 31, 2001...........................      3,554.3           138.8             5.9          3,699.0
        Repurchase of shares (iv)...........................        (36.9)         --              --                (36.9)
        Other share issuances (v)...........................          8.5          --              --                  8.5
                                                                 --------          ------           -----         --------
        Balance December 31, 2002...........................     $3,525.9          $138.8           $ 5.9         $3,670.6
                                                                 ========          ======           =====         ========
</Table>

        2001 CAPITAL TRANSACTIONS:

        (i) In May 2001, the Company issued 12.0 million subordinate voting
            shares for gross cash proceeds of $714.0 and incurred $6.6 in share
            issuance costs, net of tax of $3.4.

        (ii) During 2001, the Company issued 1.1 million subordinate voting
             shares as a result of the exercise of employee stock options for
             $23.7 and recorded a tax benefit of $5.5.

       (iii) In 2001, the Company issued 12.7 million subordinate voting shares,
             as consideration for acquisitions, for an ascribed value of $558.5
             and reserved 0.6 million shares at an ascribed value of $8.5.
             During 2001, the Company issued 0.5 million of reserved shares at
             an ascribed value of $4.3. As at December 31, 2001, 0.5 million
             subordinate voting shares remain reserved for issuance at an
             ascribed value of $5.9.

        2002 CAPITAL TRANSACTIONS:

        (iv) In July 2002, the Company filed a Normal Course Issuer Bid to
             repurchase over the next 12 months, at its discretion, up to 5% of
             the total outstanding shares, or 9.6 million subordinate voting
             shares, for cancellation. During 2002, the Company repurchased
             2.0 million subordinate voting shares at a weighted average price
             of $16.23 per share.

        (v) During 2002, the Company issued 0.9 million subordinate voting
            shares, primarily as a result of the exercise of employee stock
            options, for $7.4 and recorded a tax benefit of $1.1.

    (c) STOCK OPTION PLANS:

        (i) Long-Term Incentive Plan (LTIP):

        The Company established the LTIP prior to its initial public offering.
        Under this plan, the Company may grant stock options, performance
        shares, performance share units and stock appreciation rights to
        directors, permanent employees and consultants ("eligible participants")
        of the Company, its subsidiaries and other companies or partnerships in
        which the Company has a significant investment. Under the LTIP, up to
        29.0 million subordinate voting shares may be issued from treasury.
        Options are granted at prices equal to the market value of the day prior
        to the date of the grant and are exercisable during a period not to
        exceed ten years from such date.

        (ii) Employee Share Purchase and Option Plans (ESPO):

        The Company has ESPO plans that were available to certain of its
        employees and executives. As a result of the establishment of the LTIP,
        no further options may be issued under the ESPO plans. Pursuant to the
        ESPO plans, employees and executives of the Company were offered the
        opportunity to purchase, at prices equal to market value, subordinate
        voting shares and, in connection with such purchase, receive options to
        acquire an additional number of subordinate voting shares based on the
        number of subordinate voting shares acquired by them under the ESPO
        plans. The exercise price for the options is equal to the price per
        share paid for the corresponding subordinate voting shares acquired
        under the ESPO plans.

                                      F-19
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

11. CAPITAL STOCK: (CONTINUED)
       Stock option transactions were as follows:

<Table>
<Caption>
                                                                                 WEIGHTED AVERAGE
        NUMBER OF OPTIONS (IN MILLIONS)                                SHARES     EXERCISE PRICE
        -------------------------------                               --------   ----------------
        <S>                                                           <C>        <C>
        Outstanding at December 31, 1999............................    14.6          $14.84
        Granted.....................................................     4.2          $55.40
        Exercised...................................................    (1.4)         $ 6.85
        Cancelled...................................................    (0.2)         $ 7.33
                                                                        ----
        Outstanding at December 31, 2000............................    17.2          $25.16
        Granted/assumed.............................................     8.5          $42.54
        Exercised...................................................    (1.6)         $14.89
        Cancelled...................................................    (0.2)         $23.36
                                                                        ----
        Outstanding at December 31, 2001............................    23.9          $31.67
        Granted.....................................................     3.9          $19.93
        Exercised...................................................    (0.9)         $ 7.42
        Cancelled...................................................    (0.8)         $41.49
                                                                        ----
        Outstanding at December 31, 2002............................    26.1          $30.51
                                                                        ====
        Shares reserved for issuance upon exercise of stock options
          or awards (in millions)...................................    33.9
                                                                        ====
</Table>

       The following options were outstanding as at December 31, 2002:

<Table>
<Caption>
                                  RANGE OF        OUTSTANDING    WEIGHTED AVERAGE    EXERCISABLE    WEIGHTED AVERAGE   REMAINING
        PLAN                   EXERCISE PRICES      OPTIONS       EXERCISE PRICE       OPTIONS       EXERCISE PRICE       LIFE
        ----                   ---------------   -------------   ----------------   -------------   ----------------   ----------
                                                 (in millions)                      (in millions)                       (years)
        <S>                    <C>               <C>             <C>                <C>             <C>                <C>
        ESPO.................  $5.00 - $ 7.50          4.6            $ 5.34             4.6             $ 5.34             5
        LTIP.................  $8.75 - $13.69          1.6            $12.09             1.2             $12.02             6
                               $13.10 - $25.75         3.6            $18.58           --               --                 10
                               $24.18 - $24.18         0.8            $24.18             0.6             $24.18             7
                               $24.91 - $54.15         1.4            $41.16             0.4             $41.16             9
                               $32.22 - $44.38         0.3            $37.91           --               --                 10
                               $39.03 - $39.03         2.8            $39.03             2.1             $39.03             7
                               $41.89 - $41.89         6.1            $41.89             1.5             $41.89             9
                               $55.40 - $56.19         3.9            $55.96             2.0             $55.96             8
        Other................  $0.93 - $13.31          0.8            $ 5.50             0.8             $ 5.50             4
        Other................  $29.73 - $72.84         0.2            $46.28             0.2             $46.28             4
                                                      ----                              ----
                                                      26.1                              13.4
                                                      ====                              ====
</Table>

                                      F-20
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

12. EARNINGS (LOSS) PER SHARE AND WEIGHTED AVERAGE SHARES OUTSTANDING:

    The following table sets forth the calculation of basic and diluted earnings
    (loss) per share:

<Table>
<Caption>
                                                                            YEAR ENDED DECEMBER 31
                                                                  ------------------------------------------
                                                                      2000           2001           2002
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    Numerator:
      Net earnings (loss).......................................     $206.7         $(39.8)       $(445.2)
      Convertible debt accretion, net of tax....................       (5.4)         (15.0)         (17.5)
      Gain on repurchase of convertible debt, net of tax(1).....     --             --                8.3
                                                                     ------         ------        -------
      Earnings (loss) available to common shareholders..........     $201.3         $(54.8)       $(454.4)

    Denominator:
      Weighted average shares -- basic (in millions)............      199.8          213.9          229.8
      Effect of dilutive securities (in millions):
        Employee stock options(2)...............................        7.8         --             --
        Convertible debt........................................        4.2         --             --
                                                                     ------         ------        -------
      Weighted average shares -- diluted (in millions)(3).......      211.8          213.9          229.8

    Earnings (loss) per share:
      Basic.....................................................     $ 1.01         $(0.26)       $ (1.98)
      Diluted...................................................     $ 0.98         $(0.26)       $ (1.98)
    ---------------
</Table>

    (1) For 2002, the gain on the principal equity component of the convertible
       debt repurchase of $8.3 is included in the calculation of basic and
       diluted loss per share. See note 10.

    (2) For 2000, excludes the effect of 3.3 million "out of the money" options
       as they are anti-dilutive.

    (3) For 2001 and 2002, excludes the effect of all options and convertible
       debt as they are anti-dilutive due to the loss.

13. OTHER CHARGES:

<Table>
<Caption>
                                                                            YEAR ENDED DECEMBER 31
                                                                  ------------------------------------------
                                                                      2000           2001           2002
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    2001 restructuring (a)......................................     $--            $237.0         $  1.9
    2002 restructuring (b)......................................     --             --              383.5
    2002 goodwill impairment (c)................................     --             --              203.7
    Other impairment (d)........................................     --               36.1           81.7
    Deferred financing costs and debt redemption fees (e).......     --             --                9.6
    Gain on sale of surplus land................................     --             --               (2.6)
                                                                     ------         ------         ------
                                                                     $--            $273.1         $677.8
                                                                     ======         ======         ======
</Table>

    (a) 2001 RESTRUCTURING:

       The Company recorded a pre-tax restructuring charge of $237.0 in 2001, in
       response to slowing end markets. The Company's restructuring plan focused
       on facility consolidations and a workforce reduction. The following table
       details the components of the 2001 restructuring charge and the
       adjustments in 2002, as the Company executed its plan:

<Table>
<Caption>
                                                                                YEAR ENDED DECEMBER 31
                                                                      ------------------------------------------
                                                                          2000           2001           2002
                                                                      ------------   ------------   ------------
        <S>                                                           <C>            <C>            <C>
        Employee termination costs..................................     $--            $ 90.7         $(4.1)
        Lease and other contractual obligations.....................     --               35.3          11.4
        Facility exit costs and other...............................     --               12.4          (2.7)
        Asset impairment (non-cash).................................     --               98.6          (2.7)
                                                                         ------         ------         -----
                                                                         $--            $237.0         $ 1.9
                                                                         ======         ======         =====
</Table>

                                      F-21
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

13. OTHER CHARGES: (CONTINUED)
       The following table details the activity through the accrued
       restructuring liability:

<Table>
<Caption>
                                                                                   LEASE
                                                                   EMPLOYEE      AND OTHER       FACILITY
                                                                 TERMINATION    CONTRACTUAL     EXIT COSTS
                                                                    COSTS       OBLIGATIONS     AND OTHER        TOTAL
                                                                 ------------   ------------   ------------   ------------
        <S>                                                      <C>            <C>            <C>            <C>
        Balance at January 1, 2002.............................     $ 39.5         $ 33.7         $ 9.5          $ 82.7
        Cash payments..........................................      (35.4)         (13.0)         (6.8)          (55.2)
        Adjustments............................................       (4.1)          11.4          (2.7)            4.6
                                                                    ------         ------         -----          ------
        Balance at December 31, 2002...........................     $--            $ 32.1         $--            $ 32.1
                                                                    ======         ======         =====          ======
</Table>

       Employee terminations were made across all geographic regions of the
       Company with the majority pertaining to manufacturing and plant
       employees. A total of 11,925 employees have been terminated relating to
       the 2001 restructuring plan. The adjustment to lease and other
       contractual obligations relates primarily to changes in estimates and
       revised timing of expected sublease recoveries.

       The non-cash charges for asset impairment reflected the write-down of
       certain long-lived assets across all geographic regions that have become
       impaired as a result of the rationalization of facilities. The asset
       impairments relate to goodwill and intangible assets, machinery and
       equipment, buildings and improvements. The assets were written down to
       their recoverable amounts using estimated cash flows.

       The Company has completed the major components of the 2001 restructuring
       plan, except for certain long-term lease and other contractual
       obligations.

    (b) 2002 RESTRUCTURING:

       In response to the prolonged difficult end-market conditions, the Company
       announced a new restructuring plan for the consolidation of facilities
       and a workforce reduction. The Company recorded a pre-tax restructuring
       charge of $383.5. The following table details the components of the 2002
       restructuring charge:

<Table>
<Caption>
                                                                              YEAR ENDED DECEMBER 31
                                                                      ---------------------------------------
                                                                         2000          2001          2002
                                                                      -----------   -----------   -----------
        <S>                                                           <C>           <C>           <C>
        Employee termination costs..................................    $--           $--           $128.8
        Lease and other contractual obligations.....................     --            --             51.7
        Facility exit costs and other...............................     --            --              8.5
        Asset impairment (non-cash).................................     --            --            194.5
                                                                        ------        ------        ------
                                                                        $--           $--           $383.5
                                                                        ======        ======        ======
</Table>

       The following table details the activity through the accrued
       restructuring liability:

<Table>
<Caption>
                                                                                     LEASE
                                                                     EMPLOYEE      AND OTHER     FACILITY
                                                                    TERMINATION   CONTRACTUAL   EXIT COSTS
                                                                       COSTS      OBLIGATIONS    AND OTHER       TOTAL
                                                                    -----------   -----------   -----------   -----------
        <S>                                                         <C>           <C>           <C>           <C>
        Balance at January 1, 2002................................    $--            $--           $--          $--
        Provision.................................................     128.8          51.7           8.5         189.0
        Cash payments.............................................     (41.7)         (1.7)         (0.7)        (44.1)
                                                                      ------         -----         -----        ------
        Balance at December 31, 2002..............................    $ 87.1         $50.0         $ 7.8        $144.9
                                                                      ======         =====         =====        ======
</Table>

       Employee terminations were made primarily in the Americas with the
       majority pertaining to manufacturing and plant employees. A total of
       5,900 employees have been identified to be terminated, of which 2,410
       employees were terminated during 2002. The remaining termination costs
       are expected to be paid out during 2003.

                                      F-22
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

13. OTHER CHARGES: (CONTINUED)
       The non-cash charges for 2002 for asset impairment reflect the write-down
       of certain long-lived assets primarily in the Americas that have become
       impaired as a result of the rationalization of facilities. The asset
       impairments relate to intangible assets, machinery and equipment,
       buildings and improvements. The assets were written down to their
       recoverable amounts using estimated cash flows.

       The Company expects to complete the major components of the 2002
       restructuring plan by the end of 2003, except for certain long-term lease
       and other contractual obligations.

    (c) 2002 GOODWILL IMPAIRMENT:

       In 2002, the Company recorded a non-cash charge against goodwill of
       $203.7, in connection with its annual impairment assessment as described
       in notes 2(h) and 7.

    (d) OTHER IMPAIRMENT:

       In 2002, the Company recorded a non-cash charge of $81.7, in connection
       with its annual impairment assessment of long-lived assets, comprised
       primarily of a write-down of intangible assets.

       In 2001, the Company recorded a non-cash charge of $36.1, in connection
       with its annual impairment assessment of long-lived assets comprised
       primarily of a write-down of goodwill and intangible assets.

    (e) DEFERRED FINANCING COSTS AND DEBT REDEMPTION FEES:

       In 2002, the Company paid a premium associated with the redemption of the
       Senior Subordinated Notes and expensed related deferred financing costs.
       See note 9(d).

14. INCOME TAXES:

<Table>
<Caption>
                                                                            YEAR ENDED DECEMBER 31
                                                                  ------------------------------------------
                                                                      2000           2001           2002
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    Earnings (loss) before income tax:
      Canadian operations.......................................     $179.4         $ 34.7        $(190.1)
      Foreign operations........................................       96.5          (76.6)        (346.3)
                                                                     ------         ------        -------
                                                                     $275.9         $(41.9)       $(536.4)
                                                                     ======         ======        =======
    Current income tax expense (recovery):
      Canadian operations.......................................     $ 51.2         $ 17.2        $  (4.6)
      Foreign operations........................................       28.9            8.6           21.2
                                                                     ------         ------        -------
                                                                     $ 80.1         $ 25.8        $  16.6
                                                                     ======         ======        =======
    Deferred income tax expense (recovery):
      Canadian operations.......................................     $ 33.0         $ (5.4)       $ (15.2)
      Foreign operations........................................      (43.9)         (22.5)         (92.6)
                                                                     ------         ------        -------
                                                                     $(10.9)        $(27.9)       $(107.8)
                                                                     ======         ======        =======
</Table>

                                      F-23
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

14. INCOME TAXES: (CONTINUED)
    The overall income tax provision differs from the provision computed at the
    statutory rate as follows:

<Table>
<Caption>
                                                                            YEAR ENDED DECEMBER 31
                                                                  ------------------------------------------
                                                                      2000           2001           2002
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    Combined Canadian federal and provincial income tax rate....       44.0%          42.1%          38.6%
                                                                     ------         ------        -------
    Income taxes (recovery) based on earnings (loss) before
      income taxes at statutory rates...........................     $121.4         $(17.7)       $(207.1)

    Increase (decrease) resulting from:
      Manufacturing and processing deduction....................      (17.7)          (5.0)           5.8
      Foreign income taxed at lower rates.......................      (43.9)          (2.9)         (19.2)
      Amortization and write-down of non-deductible goodwill and
        intangible assets.......................................        8.9           15.4           44.2
      Other, including large corporations tax...................        0.5            8.1            8.5
      Change in valuation allowance.............................     --             --               76.6
                                                                     ------         ------        -------
    Income tax expense (recovery)...............................     $ 69.2         $ (2.1)       $ (91.2)
                                                                     ======         ======        =======
</Table>

    Deferred income taxes are recognized for future income tax consequences
    attributable to differences between the financial statement carrying amounts
    of existing assets and liabilities, and their tax bases. Deferred income tax
    assets and liabilities are comprised of the following as at December 31,
    2001 and 2002:

<Table>
<Caption>
                                                                     2001          2002
                                                                  -----------   -----------
    <S>                                                           <C>           <C>
    Deferred income tax assets:
      Income tax effect of operating losses carried forward.....    $ 51.9        $162.9
      Accounting provisions not currently deductible............      34.4          43.9
      Capital, intangible and other assets......................      17.0         143.9
      Share issue and convertible debt issue costs..............      17.2           9.5
      Restructuring accruals....................................      29.1          53.2
      Other.....................................................       4.5           5.2
                                                                    ------        ------
                                                                     154.1         418.6
      Valuation allowance.......................................     --            (76.6)
                                                                    ------        ------
    Total deferred income tax assets............................     154.1         342.0
                                                                    ------        ------
    Deferred income tax liabilities:
      Capital, intangible and other assets......................     (37.7)        (54.2)
      Deferred pension asset....................................      (9.1)        (10.0)
      Other.....................................................      (4.5)         (3.5)
                                                                    ------        ------
    Total deferred income tax liabilities.......................     (51.3)        (67.7)
                                                                    ------        ------
    Deferred income tax asset, net..............................    $102.8        $274.3
                                                                    ======        ======
</Table>

    The net deferred income tax asset arises from available income tax losses
    and future income tax deductions. The Company's ability to use these income
    tax losses and future income tax deductions is dependent upon the operations
    of the Company in the tax jurisdictions in which such losses or deductions
    arose. The Company records a valuation allowance against deferred income tax
    assets when management believes it is more likely than not that some portion
    or all of the deferred income tax assets will not be realized. Based on the
    reversal of deferred income tax liabilities, projected future taxable
    income, the character of the income tax asset and tax planning strategies,
    the Company has determined that a valuation allowance of $76.6 is required
    in respect of its deferred income tax assets as at December 31, 2002. No
    valuation allowance was required for the deferred income tax assets as at
    December 31, 2001. In order to fully utilize the net deferred income tax
    assets of $274.3, the Company will need to generate future taxable income of
    approximately $741.0. Based on the Company's current projection of taxable
    income for the periods in which the deferred income tax assets are
    deductible, it is more likely than not that the Company will realize the
    benefit of the net deferred income tax assets as at December 31, 2002.

                                      F-24
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

14. INCOME TAXES: (CONTINUED)
    Celestica intends to indefinitely re-invest income from all of its foreign
    subsidiaries. The aggregate amount of undistributed
    earnings of Celestica's foreign subsidiaries for which no deferred income
    tax liability has been recorded is approximately $283.4 as at December 31,
    2002.

    Celestica has been granted tax incentives, including tax holidays, for its
    Czech Republic, China, Malaysia, Thailand and Singapore subsidiaries. The
    tax benefit arising from these incentives is approximately $24.9, or $0.11
    diluted per share for 2002, $9.6, or $0.04 diluted per share for 2001, and
    $15.8, or $0.07 diluted per share for 2000. These tax incentives expire
    between 2004 and 2012, and are subject to certain conditions with which the
    Company expects to comply.

    As at December 31, 2002, the Company had operating losses of $589.9; a
    portion of the income tax benefits of these losses has been recognized on
    the financial statements. A summary of the operating loss carryforwards by
    year of expiry is as follows:

<Table>
<Caption>
    YEAR OF EXPIRY                                                 AMOUNT
    --------------                                                --------
    <S>                                                           <C>
    2005........................................................   $  0.1
    2006........................................................      1.7
    2007........................................................    131.6
    2008........................................................      3.2
    2009........................................................      7.4
    2010-2022...................................................    176.5
    Indefinite..................................................    269.4
                                                                   ------
                                                                   $589.9
                                                                   ======
</Table>

15. RELATED PARTY TRANSACTIONS:

    In 2002, the Company expensed management related fees of $2.2 (2001 -- $2.1;
    2000 -- $2.1) and capitalized acquisition related fees of $Nil
    (2001 -- $Nil; 2000 -- $0.5) charged by its parent company. Management
    believes that the fees charged were reasonable in relation to the services
    provided.

16. PENSION AND NON-PENSION POST-EMPLOYMENT BENEFIT PLANS:

    The Company provides pension and non-pension post-employment benefit plans
    for its employees. Pension benefits include traditional pension plans, as
    well as supplemental pension plans. Certain employees participate in defined
    benefit plans; all other employees participate in defined contribution
    plans. Maximum pension retirement benefits for employees participating in
    defined benefit plans are based upon the employees' best three consecutive
    years' pensionable earnings. Non-pension post-employment benefits are
    available to retired and terminated employees. The benefits include
    termination benefits, medical, surgical, hospitalization coverage,
    supplemental health, dental and group life insurance.

    The Company's pension funding policy is to contribute amounts sufficient to
    meet minimum local statutory funding requirements that are based on
    actuarial calculations. The Company may make additional discretionary
    contributions based on actuarial assessments. The most recent statutory
    pension actuarial valuations were completed as at March and April 2000. In
    2002, actuarial reviews of all defined benefit plans were completed.
    Contributions made by the Company to support ongoing plan obligations have
    been included in the deferred asset or liability accounts on the
    consolidated balance sheet. Contributions to pension fund assets are
    invested primarily in fixed income and equity securities and assets are
    valued at market value.

    The Company's non-pension post-employment benefits are currently unfunded.
    The most recent actuarial valuation for non-pension, post-employment
    benefits was completed in January 2002. The Company accrues the expected
    costs of providing non-pension, post-employment benefits during the periods
    in which the employees render service.

                                      F-25
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

16. PENSION AND NON-PENSION POST-EMPLOYMENT BENEFIT PLANS: (CONTINUED)
    The following table provides a summary of the estimated financial position
    of the Company's pension and non-pension post-employment benefit plans:

<Table>
<Caption>
                                                                        PENSION PLANS            OTHER BENEFIT PLANS
                                                                   YEAR ENDED DECEMBER 31      YEAR ENDED DECEMBER 31
                                                                  -------------------------   -------------------------
                                                                     2001          2002          2001          2002
                                                                  -----------   -----------   -----------   -----------
    <S>                                                           <C>           <C>           <C>           <C>
    Plan assets, beginning of year..............................    $188.6        $174.5        $--           $--
      Employer contributions....................................      10.1          13.5           3.8           6.1
      Actual return on assets...................................     (13.1)        (21.9)        --            --
      Voluntary employee contributions..........................       2.1           4.6         --              0.1
      Effect of acquisitions....................................     --              4.8         --            --
      Benefits paid.............................................      (5.2)        (10.5)         (3.8)         (6.2)
    Foreign currency exchange rate changes......................      (8.0)          9.9         --            --
                                                                    ------        ------        ------        ------
    Plan assets, end of year....................................    $174.5        $174.9        $--           $--
                                                                    ======        ======        ======        ======
</Table>

<Table>
<Caption>
                                                                        PENSION PLANS            OTHER BENEFIT PLANS
                                                                   YEAR ENDED DECEMBER 31      YEAR ENDED DECEMBER 31
                                                                  -------------------------   -------------------------
                                                                     2001          2002          2001          2002
                                                                  -----------   -----------   -----------   -----------
    <S>                                                           <C>           <C>           <C>           <C>
    Accrued benefit obligations (ABO), beginning of year........    $170.3        $179.1        $ 47.7        $ 56.4
      Reclassification of supplemental plan.....................     --              4.9         --             (4.9)
      Service cost..............................................       8.6           7.2           7.6           9.7
      Interest cost.............................................      11.3          12.5           2.0           2.5
      Voluntary employee contributions..........................       2.1           4.6         --              0.1
      Actuarial (gains) / losses................................      (1.9)         14.0           3.2           8.2
      Plan amendments...........................................       1.9         --            --             (0.3)
      Effect of acquisitions....................................     --             22.8           1.1           0.9
      Effect of curtailments....................................     --              1.3         --             (1.1)
      Benefits paid.............................................      (5.2)        (10.5)         (3.8)         (6.2)
      Foreign currency exchange rate changes....................      (8.0)         14.6          (1.4)          0.1
                                                                    ------        ------        ------        ------
    Accrued benefit obligations, end of year....................    $179.1        $250.5        $ 56.4        $ 65.4
                                                                    ======        ======        ======        ======
    Deficit of plan assets over accrued benefit obligations.....    $ (4.6)       $(75.6)       $(56.4)       $(65.4)
    Unrecognized actuarial losses...............................      33.0          87.3           9.1           7.7
                                                                    ------        ------        ------        ------
    Deferred (accrued) pension cost.............................    $ 28.4        $ 11.7        $(47.3)       $(57.7)
                                                                    ======        ======        ======        ======
</Table>

    The following table reconciles the deferred (accrued) pension balances to
    that reported as of December 31, 2002:

<Table>
<Caption>
                                                                                    OTHER
                                                                    PENSION        BENEFIT
                                                                     PLANS          PLANS          TOTAL
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    Accrued pension and post-employment benefits................     $(19.5)        $(57.7)        $(77.2)
    Deferred pension assets (note 8)............................       31.2         --               31.2
                                                                     ------         ------         ------
                                                                     $ 11.7         $(57.7)        $(46.0)
                                                                     ======         ======         ======
</Table>

                                      F-26
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

16. PENSION AND NON-PENSION POST-EMPLOYMENT BENEFIT PLANS: (CONTINUED)

<Table>
<Caption>
                                                  PENSION PLANS                             OTHER BENEFIT PLANS
                                              YEAR ENDED DECEMBER 31                       YEAR ENDED DECEMBER 31
                                    ------------------------------------------   ------------------------------------------
                                        2000           2001           2002           2000           2001           2002
                                    ------------   ------------   ------------   ------------   ------------   ------------
    <S>                             <C>            <C>            <C>            <C>            <C>            <C>
    Net plan expense:
      Service cost................     $  7.5         $  8.6         $  7.2         $  1.5         $  7.6         $  9.7
      Interest cost...............       10.6           11.3           12.5            1.5            2.0            2.5
      Expected return on assets...      (13.9)         (14.0)         (13.7)        --             --             --
      Net amortization of
        actuarial
        (gains)/losses............       (0.2)          (0.1)           1.6            0.3            0.8            0.5
                                       ------         ------         ------         ------         ------         ------
                                          4.0            5.8            7.6            3.3           10.4           12.7

    Defined contribution pension
      plan expense................       12.8           18.9           21.9         --             --             --
    Curtailment loss..............     --             --                2.9         --             --                1.7
                                       ------         ------         ------         ------         ------         ------
    Total.........................     $ 16.8         $ 24.7         $ 32.4         $  3.3         $ 10.4         $ 14.4
                                       ======         ======         ======         ======         ======         ======
</Table>

<Table>
<Caption>
                                                  PENSION PLANS                             OTHER BENEFIT PLANS
                                              YEAR ENDED DECEMBER 31                       YEAR ENDED DECEMBER 31
                                    ------------------------------------------   ------------------------------------------
                                        2000           2001           2002           2000           2001           2002
                                    ------------   ------------   ------------   ------------   ------------   ------------
    <S>                             <C>            <C>            <C>            <C>            <C>            <C>
    Actuarial assumptions
      (percentages):
    Weighted average discount rate
      for projected benefit
      obligations.................       6.5            6.2            5.5            7.5            7.3            6.9
    Weighted average rate of
      compensation increase.......       4.0            4.5            4.0            4.5            4.5            5.0
    Weighted average expected
      long-term rate of return on
      plan assets.................       7.4            7.5            7.3          --             --             --
    Healthcare cost trend rate....     --             --             --               5.0            6.4           10.5
</Table>

<Table>
<Caption>
                                                                      OTHER BENEFIT PLANS
                                                                    YEAR ENDED DECEMBER 31
                                                                  ---------------------------
                                                                      2001           2002
                                                                  ------------   ------------
    <S>                                                           <C>            <C>
    Sensitivity re: healthcare trend rate for non-pension,
      post-employment benefits:
    1% Increase
      Effect on ABO.............................................     $ 5.1          $ 5.3
      Effect on service cost and interest cost..................       0.9            1.2

    1% Decrease
      Effect on ABO.............................................      (4.0)          (4.2)
      Effect on service cost and interest cost..................      (0.7)          (1.0)
</Table>

    In 2002, the Company assumed net pension liabilities relating to an
    acquisition in Japan from NEC Corporation. Regulatory funding restrictions
    preclude the Company from fully funding the plan. The plan has an
    accumulated benefit obligation of $31.3 in excess of its plan assets of
    $6.8. At the time of closing the acquisition, the Company received amounts
    to cover the unfunded liabilities.

    The Company has a pension plan with an accumulated benefit obligation of
    $123.2 that is in excess of plan assets of $83.7.

    The Company has a supplemental retirement plan that has an accumulated
    benefit obligation of $8.7 and no plan assets. In 2002, the plan was
    reclassified from other benefit plans to pension plans.

    In 2002, the Company incurred net curtailment losses due to the
    rationalization of facilities. These losses are included as restructuring
    charges in note 13(b).

                                      F-27
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

17. FINANCIAL INSTRUMENTS:

    FAIR VALUES:

    The following methods and assumptions were used to estimate the fair value
    of each class of financial instruments:

    (a) The carrying amounts of cash, short-term investments, accounts
       receivable, accounts payable and accrued liabilities approximate fair
       value due to the short-term nature of these instruments.

    (b) In 2001, the fair value of the Company's Senior Subordinated Notes was
       estimated based on the current trading value, where available, or with
       reference to similarly traded instruments with similar terms.

    (c) The fair values of foreign currency contract obligations are estimated
       based on the current trading value, as quoted by brokers active in these
       markets.

    The carrying amounts and fair values of the Company's financial instruments,
    where there are differences at December 31, 2001, and 2002, are as follows:

<Table>
<Caption>
                                                                      DECEMBER 31, 2001             DECEMBER 31, 2002
                                                                 ---------------------------   ---------------------------
                                                                   CARRYING         FAIR         CARRYING         FAIR
                                                                    AMOUNT         VALUE          AMOUNT         VALUE
                                                                 ------------   ------------   ------------   ------------
    <S>                                                          <C>            <C>            <C>            <C>
    Senior Subordinated Notes and other long-term debt.........     $143.0         $149.5         $  6.9         $  6.9
    Foreign currency contracts -- asset (liability)............     --               (7.4)        --               18.9
</Table>

    DERIVATIVES AND HEDGING ACTIVITIES:

    The Company has entered into foreign currency contracts to hedge foreign
    currency risk relating to cash flow and cash position exposures. The
    Company's forward exchange contracts do not subject the Company to risk from
    exchange rate movements because gains and losses on such contracts offset
    losses and gains on exposures being hedged. The counterparties to the
    contracts are multinational commercial banks, and therefore, the credit risk
    of counterparty non-performance is low. As at December 31, 2002, the Company
    had forward foreign exchange contracts to trade $282.7 in U.S. dollars in
    exchange for Canadian dollars over a period of 15 months at a weighted
    average exchange rate of U.S. $0.64. The Company also had forward contracts
    to trade $10.6 in exchange for Canadian dollars over a period of 37 months
    at a weighted average exchange rate of U.S. $0.63. In addition, the Company
    had exchange contracts to trade $168.7 in exchange for euros over a period
    of 15 months at a weighted average exchange rate of U.S. $0.93, $36.4 in
    exchange for British pounds sterling over a period of 13 months at a
    weighted average exchange rate of U.S. $1.45, $37.1 in exchange for Mexican
    pesos over a period of 12 months at a weighted average exchange rate of
    U.S. $0.10, $27.6 in exchange for Singapore dollars over a period of
    12 months at a weighted average exchange rate of U.S. $0.57, 64.5 Brazilian
    reais in exchange for U.S. dollars over a period of 1 month at a weighted
    average exchange rate of U.S. $0.30, $40.7 in exchange for Japanese yen over
    a period of 1 month at a weighted average exchange rate of U.S. $0.01, and
    $11.9 in exchange for Czech koruna over a period of 12 months at a weighted
    average exchange rate of U.S. $0.03. At December 31, 2002, these contracts
    had a fair-value asset of $18.9 (2001 -- liability of $7.4).

    CONCENTRATION OF RISK:

    Financial instruments that potentially subject the Company to concentrations
    of credit risk are primarily inventory repurchase obligations of customers,
    accounts receivable and cash equivalents. The Company performs ongoing
    credit evaluations of its customers' financial conditions. In certain
    instances, the Company obtains letters of credit from its customers. The
    Company considers its concentrations of credit risk in determining its
    estimates of reserves for potential credit losses. The Company maintains
    cash and cash equivalents in high quality short-term investments or on
    deposit with major financial institutions.

18. COMMITMENTS, CONTINGENCIES AND GUARANTEES:

    The Company has operating leases that require future payments as follows:

<Table>
<Caption>
                                                                  OPERATING
                                                                   LEASES
                                                                  ---------
    <S>                                                           <C>
    2003........................................................   $106.5
    2004........................................................     59.5
    2005........................................................     38.9
    2006........................................................     23.0
    2007........................................................     18.9
    Thereafter..................................................     91.5
</Table>

                                      F-28
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

18. COMMITMENTS, CONTINGENCIES AND GUARANTEES: (CONTINUED)
    Contingent liabilities in the form of letters of credit, letters of
    guarantee, and surety and performance bonds, are provided to various third
    parties. These guarantees cover various payments including customs and
    excise taxes, utility commitments and certain bank guarantees. At
    December 31, 2002, these liabilities, including guarantees of employee share
    purchase loans, amounted to $61.2 (2001 --  $24.1).

    In addition to the above guarantees, the Company has also provided routine
    indemnifications, whose terms range in duration and often are not explicitly
    defined. These guarantees may include indemnifications against adverse
    effects due to changes in tax laws and patent infringements by third
    parties. The maximum amounts from these indemnifications cannot be
    reasonably estimated. In some cases, the Company has recourse against other
    parties to mitigate its risk of loss from these guarantees. Historically,
    the Company has not made significant payments relating to these
    indemnifications.

    Under the terms of an existing real estate lease, which expires in 2004,
    Celestica has the right to acquire the real estate at a purchase price equal
    to the lease balance, which currently is approximately $37.3. In the event
    that the lease is not renewed, subject to certain conditions, Celestica may
    choose to market and complete the sale of the real estate on behalf of the
    lessor. If the highest offer received is less than the lease balance,
    Celestica would pay the lessor the lease balance less the gross sale
    proceeds, subject to a maximum of $31.5. In the event that no acceptable
    offers are received, Celestica would pay the lessor $31.5 and return the
    property to the lessor. Alternatively, Celestica may choose to acquire the
    real estate at the expiration for a price equal to the then current lease
    balance. The future lease payments under this lease are included in the
    total operating lease commitments.

    In the normal course of operations the Company may be subject to litigation
    and claims from customers, suppliers and former employees. Management
    believes that adequate provisions have been recorded in the accounts where
    required. Although it is not possible to estimate the extent of potential
    costs, if any, management believes that the ultimate resolution of such
    contingencies would not have a material adverse effect on the financial
    position of the Company.

19. SIGNIFICANT CUSTOMERS:

    During 2002, three customers individually comprised 17%, 16% and 15% of
    total revenue across all geographic segments. At December 31, 2002, one
    customer represented 28% of total accounts receivable.

    During 2001, three customers individually comprised 23%, 21% and 11% of
    total revenue across all geographic segments. At December 31, 2001, two
    customers represented 14% and 26% of total accounts receivable.

    During 2000, two customers individually comprised 25% and 21% of total
    revenue across all geographic segments. At December 31, 2000, two customers
    represented 21% and 26% of total accounts receivable.

20. SEGMENTED INFORMATION:

    The Company's operations fall into one dominant industry segment, the
    electronics manufacturing services industry. The Company manages its
    operations, and accordingly determines its operating segments, on a
    geographic basis. The performance of geographic operating segments is
    monitored based on EBIAT (earnings before interest, income taxes,
    amortization of goodwill and intangible assets, integration costs related to
    acquisitions and other charges). Inter-segment transactions are reflected at
    market value.

    The following is a breakdown by reporting segment:

<Table>
<Caption>
                                                                            YEAR ENDED DECEMBER 31
                                                                  ------------------------------------------
                                                                      2000           2001           2002
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    REVENUE
    Americas....................................................    $6,542.7      $ 6,334.6       $4,640.8
    Europe......................................................     2,823.3        3,001.3        1,786.5
    Asia........................................................       871.6          991.1        2,109.7
    Elimination of inter-segment revenue........................      (485.5)        (322.6)        (265.4)
                                                                    --------      ---------       --------
                                                                    $9,752.1      $10,004.4       $8,271.6
                                                                    ========      =========       ========
</Table>

                                      F-29
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

20. SEGMENTED INFORMATION: (CONTINUED)

<Table>
<Caption>
                                                                            YEAR ENDED DECEMBER 31
                                                                  ------------------------------------------
    EBIAT                                                             2000           2001           2002
    -----                                                         ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    Americas....................................................     $200.1        $ 192.9        $ 157.7
    Europe......................................................      121.1          128.5          (11.5)
    Asia........................................................       40.7           49.7          111.1
                                                                     ------        -------        -------
                                                                      361.9          371.1          257.3
    Interest, net...............................................       19.0            7.9            1.1
    Amortization of goodwill and intangible assets..............      (88.9)        (125.0)         (95.9)
    Integration costs related to acquisitions...................      (16.1)         (22.8)         (21.1)
    Other charges...............................................     --             (273.1)        (677.8)
                                                                     ------        -------        -------
    Earnings (loss) before income taxes.........................     $275.9        $ (41.9)       $(536.4)
                                                                     ======        =======        =======
</Table>

<Table>
<Caption>
                                                                            YEAR ENDED DECEMBER 31
                                                                  ------------------------------------------
                                                                      2000           2001           2002
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    CAPITAL EXPENDITURES
    Americas....................................................     $154.0         $107.9         $ 90.0
    Europe......................................................       86.9           55.4           28.0
    Asia........................................................       41.9           36.0           33.4
                                                                     ------         ------         ------
                                                                     $282.8         $199.3         $151.4
                                                                     ======         ======         ======
</Table>

<Table>
<Caption>
                                                                       AS AT DECEMBER 31
                                                                  ---------------------------
                                                                      2001           2002
                                                                  ------------   ------------
    <S>                                                           <C>            <C>
    TOTAL ASSETS
    Americas....................................................    $3,408.2       $2,894.1
    Europe......................................................     1,626.3        1,047.6
    Asia........................................................     1,598.4        1,865.1
                                                                    --------       --------
                                                                    $6,632.9       $5,806.8
                                                                    ========       ========
    CAPITAL ASSETS
    Americas....................................................    $  468.0       $  281.1
    Europe......................................................       279.1          231.9
    Asia........................................................       168.0          214.8
                                                                    --------       --------
                                                                    $  915.1       $  727.8
                                                                    ========       ========
</Table>

    The following table details the Company's external revenue allocated by
    manufacturing location among foreign countries exceeding 10%:

<Table>
<Caption>
                                                                            YEAR ENDED DECEMBER 31
                                                                  ------------------------------------------
                                                                      2000           2001           2002
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    REVENUE
    Canada......................................................      28%            20%            15%
    United States...............................................      30%            35%            37%
    Italy.......................................................      10%            13%            13%
    United Kingdom..............................................      17%            11%          --
</Table>

                                      F-30
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

21. SUPPLEMENTAL CASH FLOW INFORMATION:

<Table>
<Caption>
                                                                            YEAR ENDED DECEMBER 31
                                                                  ------------------------------------------
                                                                      2000           2001           2002
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    Paid during the year:
      Interest..................................................     $15.9          $ 20.7         $22.0
      Taxes.....................................................     $55.0          $ 89.0         $25.5

    Non-cash financing activities:
      Convertible debt accretion, net of tax....................     $ 5.4          $ 15.0         $17.5
      Shares issued for acquisitions............................     $--            $567.0         $--
</Table>

22. CANADIAN AND UNITED STATES ACCOUNTING POLICY DIFFERENCES:

    The consolidated financial statements of the Company have been prepared in
    accordance with generally accepted accounting principles (GAAP) as applied
    in Canada. The significant differences between Canadian and U.S. GAAP, and
    their effect on the consolidated financial statements of the Company are
    described below:

    CONSOLIDATED STATEMENTS OF EARNINGS (LOSS):

    The following table reconciles net earnings (loss) as reported in the
    accompanying consolidated statements of earnings (loss) to net earnings
    (loss) that would have been reported had the consolidated financial
    statements been prepared in accordance with U.S. GAAP:

<Table>
<Caption>
                                                                            YEAR ENDED DECEMBER 31
                                                                  ------------------------------------------
                                                                      2000           2001           2002
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    Net earnings (loss) in accordance with Canadian GAAP........     $206.7         $(39.8)       $(445.2)
    Compensation expense (a)....................................       (2.5)          (3.2)          (3.8)
    Interest expense on convertible debt, net of tax (b)........       (6.8)         (17.7)         (27.8)
    Gain on repurchase of convertible debt, net of tax (b)......     --             --                8.4
    Other charges, net of tax (c)...............................     --               (2.7)         (26.5)
    Gain on foreign exchange contract, net of tax (d)...........     --               12.1         --
                                                                     ------         ------        -------
    Net earnings (loss) in accordance with U.S. GAAP............     $197.4         $(51.3)       $(494.9)

    Other comprehensive income (loss):
    Cumulative effect of a change in accounting policy, net of
      tax (e)...................................................     --                5.6         --
    Net gain (loss) on derivatives designated as hedges, net of
      tax (e)...................................................     --              (11.7)          21.8
    Minimum pension liability, net of tax (f)...................     --              (14.9)         (23.6)
    Foreign currency translation adjustment.....................     --                1.2           20.2
                                                                     ------         ------        -------
    Comprehensive income (loss) in accordance with U.S. GAAP....     $197.4         $(71.1)       $(476.5)
                                                                     ======         ======        =======
</Table>

    The following table details the computation of U.S. GAAP basic and diluted
    earnings (loss) per share:

<Table>
<Caption>
                                                                            YEAR ENDED DECEMBER 31
                                                                  ------------------------------------------
                                                                      2000           2001           2002
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    Earnings (loss) available to shareholders -- basic..........     $197.4         $(51.3)       $(494.9)
    Add back: Interest expense on convertible debt, net of tax
      (if dilutive).............................................        6.8         --             --
                                                                     ------         ------        -------
    Earnings (loss) available to shareholders -- diluted........     $204.2         $(51.3)       $(494.9)
                                                                     ======         ======        =======
    Weighted average shares -- basic (in millions)..............      199.8          213.9          229.8
    Weighted average shares -- diluted (in millions)(1).........      211.8          213.9          229.8

    Basic earnings (loss) per share.............................     $ 0.99         $(0.24)       $ (2.15)
    Diluted earnings (loss) per share...........................     $ 0.96         $(0.24)       $ (2.15)
</Table>

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

    (1) For 2001 and 2002, excludes the effect of options and convertible debt
       as they are anti-dilutive due to the loss.

                                      F-31
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

22. CANADIAN AND UNITED STATES ACCOUNTING POLICY DIFFERENCES: (CONTINUED)
    The cumulative effect of these adjustments on shareholders' equity of the
    Company is as follows:

<Table>
<Caption>
                                                                              AS AT DECEMBER 31
                                                                  ------------------------------------------
                                                                      2000           2001           2002
                                                                  ------------   ------------   ------------
    <S>                                                           <C>            <C>            <C>
    Shareholders' equity in accordance with Canadian GAAP.......    $3,469.3       $4,745.6       $4,203.6
    Compensation expense (a)....................................       (10.6)         (13.8)         (17.6)
    Capital stock (a)...........................................         8.6           11.8           15.6
    Interest expense on convertible debt, net of tax (b)........        (6.8)         (24.5)         (52.3)
    Convertible debt (b)........................................      (860.5)        (886.8)        (804.6)
    Convertible debt accretion, net of tax (b)..................         5.4           20.4           37.9
    Gain on repurchase of convertible debt for Canadian GAAP
      (b).......................................................      --             --               (6.7)
    Gain on repurchase of convertible debt for U.S. GAAP (b)....      --             --                8.4
    Other charges (c)...........................................      --               (2.7)         (29.2)
    Gain on foreign exchange contract, net of tax (d)...........      --               12.1           12.1
    Net gain (loss) on cash flow hedges (e).....................      --               (6.1)          15.7
    Minimum pension liability, net of tax (f)...................      --              (14.9)         (38.5)
                                                                    --------       --------       --------
    Shareholders' equity in accordance with U.S. GAAP...........    $2,605.4       $3,841.1       $3,344.4
                                                                    ========       ========       ========
    ---------------
</Table>

    (a) In 1998, the Company amended the vesting provisions of 6.2 million
       employee stock options issued in 1997 and 1998. Under the previous
       vesting provisions, such options vested based on the achievement of
       earnings targets. A portion of these options now vest over a specified
       time period and the balance vested on completion of the initial public
       offering in 1998. Under U.S. GAAP, this amendment required a new
       measurement date for purposes of accounting for compensation expense,
       resulting in a charge equal to the aggregate difference between the fair
       value of the underlying subordinate voting shares at the date of the
       amendment and the exercise price for such options. As a result, under
       U.S. GAAP the Company has recorded an aggregate $15.6 non-cash stock
       compensation charge reflected in earnings and capital stock over the
       vesting period as follows: 1998 -- $4.2; 1999 -- $1.9; 2000 -- $2.5;
       2001 -- $3.2; 2002 -- $3.8. No similar charge is required to be recorded
       by the Company under Canadian GAAP.

    (b) Under Canadian GAAP, the Company recorded the convertible debt as an
       equity instrument and recorded accretion charges to retained earnings.
       Under U.S. GAAP, the convertible debt was recorded as a long-term
       liability and, accordingly, the Company recorded the accretion charges
       and amortization of debt issue costs to interest expense of $27.8, net of
       tax of $13.9 (2001 -- $17.7, net of tax of $9.5; 2000 -- $6.8, net of tax
       of $3.8).

       In 2002, the Company reported a gain on the repurchase of a portion of
       convertible debt. Under Canadian GAAP, the gain is recorded to retained
       earnings. Under U.S. GAAP, the Company records the gain through income of
       $8.4, net of $4.2 in taxes.

    (c) In 2002, the Company recorded impairment charges to write-down certain
       assets, primarily intangible assets, which was measured using
       undiscounted cash flows. U.S. GAAP requires the use of discounted cash
       flows, resulting in an additional charge of $26.5, net of tax of $2.0
       (2001 -- $2.7).

    (d) In 2001, the Company entered into a forward exchange contract to hedge
       the cash portion of the purchase price for the Omni acquisition. The
       transaction does not qualify for hedge accounting treatment under SFAS
       No. 133 which specifically precludes hedges of forecasted business
       combinations. As a result, the gain on the exchange contract of $15.7,
       less tax of $3.6, is recognized in income for U.S. GAAP. For Canadian
       GAAP, the gain on the contract was included in the cost of the
       acquisition, resulting in a goodwill value that is $15.7 lower for
       Canadian GAAP than U.S. GAAP.

    (e) The Financial Accounting Standards Board (FASB) has issued SFAS
       No. 133, "Accounting for Derivative Instruments and Hedging Activities"
       and SFAS No. 138 which amends SFAS No. 133. SFAS No. 133 establishes
       methods of accounting for derivative financial instruments and hedging
       activities related to those instruments, as well as other hedging
       activities. The standard requires that all derivatives be recorded on the
       balance sheet at fair value. The Company has implemented SFAS No. 133
       effective for 2001 for purposes of the U.S. GAAP reconciliation. The
       Company enters into forward exchange contracts to hedge certain
       forecasted cash flows. The contracts are for periods consistent with the
       forecasted transactions. All relationships between hedging instruments
       and hedged items, as well as risk management objectives and strategies,
       are documented. Changes in the spot value of the foreign currency
       contracts that are designated, effective and qualify as cash flow hedges
       of forecasted transactions are reported in accumulated other
       comprehensive income and are reclassified into the same component of
       earnings and in the same period as the hedged transaction is recognized.
       Accordingly, on January 1, 2001, the Company recorded an asset in the
       amount of $7.5 (less $1.9 in taxes) and a corresponding credit to other
       comprehensive income as a cumulative effect, type adjustment to reflect
       the initial

                                      F-32
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

22. CANADIAN AND UNITED STATES ACCOUNTING POLICY DIFFERENCES: (CONTINUED)
       mark-to-market on the foreign currency contracts pursuant to U.S. GAAP.
       At December 31, 2001, the Company recorded a liability of $7.4 and a
       corresponding gross adjustment of $14.9 (less $3.2 in taxes) to other
       comprehensive income and earnings. At December 31, 2002, the Company has
       recorded an asset of $18.9 (less $3.2 in taxes) and a corresponding gain
       of $26.3 (less $4.5 in taxes) to other comprehensive income and earnings.
       It is expected that $18.8 of net gains reported in accumulated other
       comprehensive income will be reclassified into earnings during 2003.
       Under Canadian GAAP, the derivative instruments are not marked to market
       and the related, off-balance sheet gains and losses are recognized in
       earnings in the same period as the hedged transactions.

    (f) Under U.S. GAAP, the Company is required to record an additional minimum
       pension liability for three of its plans to reflect the excess of the
       accumulated benefit obligations over the fair value of the plan assets.
       Other comprehensive income has been charged with $23.6, net of tax of
       $12.0 (2001 -- one plan for $14.9, net of tax of $6.4). No such
       adjustments are required under Canadian GAAP.

    OTHER DISCLOSURES REQUIRED UNDER U.S. GAAP:

    (g) Stock-based compensation:

       Under U.S. GAAP, the Company measures compensation costs related to stock
       options granted to employees using the intrinsic value method as
       prescribed by APB Opinion No. 25, "Accounting for Stock Issued to
       Employees" as permitted by SFAS No. 123. However, SFAS No. 123 does
       require the disclosure of pro forma net earnings (loss) and earnings
       (loss) per share information as if the Company had accounted for its
       employee stock options under the fair-value method prescribed by SFAS
       No. 123. The estimated fair value of the options is amortized to income
       over the vesting period, on a straight-line basis, and was determined
       using the Black-Scholes option pricing model with the following weighted
       average assumptions:

<Table>
<Caption>
                                                                                YEAR ENDED DECEMBER 31
                                                                      ------------------------------------------
                                                                          2000           2001           2002
                                                                      ------------   ------------   ------------
        <S>                                                           <C>            <C>            <C>
        Risk-free rate..............................................       5.4%           5.4%           5.1%
        Dividend yield..............................................       0.0%           0.0%           0.0%
        Volatility factor of the expected market price of the
          Company's shares..........................................      70.0%          70.0%          70.0%
        Expected option life (in years).............................        7.5            7.5            5.0
        Weighted-average grant date fair values of options issued...     $40.49         $34.31         $12.02
</Table>

       The pro forma disclosure for U.S. GAAP is as follows:

<Table>
<Caption>
                                                                                YEAR ENDED DECEMBER 31
                                                                      ------------------------------------------
                                                                          2000           2001           2002
                                                                      ------------   ------------   ------------
        <S>                                                           <C>            <C>            <C>
        Net earnings (loss) in accordance with U.S. GAAP, as
          reported..................................................     $197.4         $(51.3)       $(494.9)
        Deduct: Stock-based compensation costs using fair-value
          method, net of tax........................................      (21.2)         (45.8)         (87.7)
                                                                         ------         ------        -------
        Pro forma net earnings (loss) in accordance with
          U.S. GAAP.................................................     $176.2         $(97.1)       $(582.6)
                                                                         ======         ======        =======
        Earnings (loss) per share:
          Basic -- as reported......................................     $ 0.99         $(0.24)       $ (2.15)
          Basic -- pro forma........................................     $ 0.88         $(0.45)       $ (2.54)
          Diluted -- as reported....................................     $ 0.96         $(0.24)       $ (2.15)
          Diluted -- pro forma......................................     $ 0.86         $(0.45)       $ (2.54)
</Table>

                                      F-33
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

22. CANADIAN AND UNITED STATES ACCOUNTING POLICY DIFFERENCES: (CONTINUED)
    (h) Accumulated other comprehensive loss:

<Table>
<Caption>
                                                                                YEAR ENDED DECEMBER 31
                                                                      ------------------------------------------
                                                                          2000           2001           2002
                                                                      ------------   ------------   ------------
        <S>                                                           <C>            <C>            <C>
        Opening balance of accumulated net gain on cash flow
          hedges....................................................     $--            $--            $ (6.1)
        Cumulative effect of a change in accounting policy, net of
          tax (e)...................................................     --                5.6         --
        Net gain (loss) on derivatives designated as hedges (e).....     --              (11.7)          21.8
                                                                         -----          ------         ------
        Closing balance.............................................     --               (6.1)          15.7

        Opening balance of foreign currency translation account.....      (4.1)           (4.1)          (2.9)
        Foreign currency translation gain...........................     --                1.2           20.2
                                                                         -----          ------         ------
        Closing balance.............................................      (4.1)           (2.9)          17.3

        Opening balance of minimum pension liability................     --             --              (14.9)
        Minimum pension liability, net of tax (f)...................     --              (14.9)         (23.6)
                                                                         -----          ------         ------
        Closing balance.............................................     --              (14.9)         (38.5)
                                                                         -----          ------         ------
        Accumulated other comprehensive loss........................     $(4.1)         $(23.9)        $ (5.5)
                                                                         =====          ======         ======
</Table>

    (i) Under U.S. GAAP, the subtotal "cash from earnings" would be excluded
       from the consolidated statements of cash flows.

    (j) Warranty liability:

       The Company records a liability for future warranty costs based on
       management's best estimate of probable claims under its product
       warranties. The accrual is based on the terms of the warranty, which vary
       by customer and product, and historical experience. The Company regularly
       evaluates the appropriateness of the remaining accrual.

       The following table details the changes in the warranty liability:

<Table>
        <S>                                                           <C>
        Balance at January 1, 2002..................................   $18.1
        Accrual in excess of claims incurred........................     5.6
                                                                       -----
        Balance at December 31, 2002................................   $23.7
                                                                       =====
</Table>

    (k) New United States accounting pronouncements:

       In July 2001, the FASB issued SFAS No. 141, "Business Combinations," and
       SFAS No. 142, "Goodwill and Intangible Assets" which the Company fully
       adopted effective January 1, 2002. These statements are substantially
       consistent with CICA Sections 1581 and 3062 (refer to note 2(q)) except
       that, under U.S. GAAP, any transitional impairment charge would have been
       recognized in earnings as a cumulative effect of a change in accounting
       principle. Under Canadian GAAP, the cumulative adjustment would have been
       recognized in opening retained earnings. There was no impact to the
       Company as no transitional impairment charges were recognized.

       In August 2001, SFAS No. 143, "Accounting for Asset Retirement
       Obligations" was approved and requires that the fair value of an asset
       retirement obligation be recorded as a liability, at fair value, in the
       period in which the Company incurs the obligation. SFAS No. 143 is
       effective for the Company's fiscal year commencing January 1, 2003. The
       Company expects the adoption of this standard will have no material
       impact on its financial position, results of operations or cash flows.

       In October 2001, FASB issued SFAS No. 144, "Accounting for the Impairment
       or Disposal of Long-Lived Assets," which retains the fundamental
       provisions of SFAS No. 121 for recognizing and measuring impairment
       losses of long-lived assets other than goodwill. SFAS No. 144 also
       broadens the definition of discontinued operations to include all
       distinguishable components of an entity that will be eliminated from
       ongoing operations. The Company prospectively adopted SFAS No. 144
       effective January 1, 2002.

       In May 2002, FASB issued SFAS No. 145, "Rescission of FASB Nos. 4, 44 and
       64, Amendment of FASB No. 13 and Technical Corrections." SFAS No. 145
       requires that certain gains and losses from extinguishment of debt no
       longer qualify as extraordinary. The Company has early adopted SFAS
       No. 145 commencing January 1, 2002.

                                      F-34
<Page>
                                 CELESTICA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

            (IN MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)

22. CANADIAN AND UNITED STATES ACCOUNTING POLICY DIFFERENCES: (CONTINUED)
       In July 2002, FASB issued SFAS No. 146, "Accounting for Costs Associated
       with Exit or Disposal Activities." SFAS No. 146 recognizes the liability
       for an exit or disposal activity only when the costs are incurred and can
       be measured at fair value. Currently, a commitment to an exit or disposal
       plan is sufficient to record the majority of the costs. SFAS No. 146 is
       effective for exit or disposal activities initiated after December 31,
       2002. The Company expects the adoption of this standard will not have a
       material impact on its existing restructuring plans as these plans were
       initiated under an exit plan that meets the criteria of Emerging Issues
       Task Force No. 94-3.

       In November 2002, FASB issued Interpretation No. 45, "Guarantor's
       Accounting and Disclosure Requirements for Guarantees, Including Indirect
       Guarantees of Indebtedness of Others" (FIN 45), which requires certain
       disclosures of obligations under guarantees. The disclosure requirements
       of FIN 45 are effective for the Company's year ended December 31, 2002.
       Effective for 2003, FIN 45 also requires the recognition of a liability
       by a guarantor at the inception of certain guarantees entered into or
       modified after December 31, 2002, based on the fair value of the
       guarantee. The Company has adopted the disclosure requirements in its
       2002 consolidated financial statements. See notes 18 and 22(j). The
       Company has not determined the impact of the measurement requirements of
       FIN 45.

       In January 2003, FASB issued Interpretation No. 46, "Consolidation of
       Variable Interest Entities" (FIN 46). The consolidation provisions of FIN
       46 are effective for all newly created entities created after
       January 31, 2003, and are applicable to existing entities as of the
       Company's third quarter beginning July 1, 2003. It is possible that the
       Company's variable interests in the real estate assets subject to the
       lease arrangement disclosed in note 18 will be subject to the
       consolidation provisions of FIN 46. The Company has not determined the
       impact, however, any difference between the asset and liability on
       initial measurement would be accounted for as a cumulative effect of
       change in accounting policy in the 2003 statement of earnings. Refer to
       note 18.

23. SUBSEQUENT EVENTS:

    In January 2003, the Company made the following announcements:

    In response to the continued limited visibility in end markets, the Company
    plans to further reduce its manufacturing capacity. The reduction in
    capacity will result in a pre-tax restructuring charge of between $50.0 and
    $70.0, to be recorded during 2003.

    The Company has, from time to time, purchased LYONs on the open market. The
    Company has been authorized by the board of directors to spend up to an
    additional $100.0 to repurchase LYONs, at management's discretion. This is
    in addition to the amounts authorized in October 2002, of which $48.0
    remains available for future purchases.

24. COMPARATIVE INFORMATION:

    The Company has reclassified certain prior year information to conform to
    the current year's presentation.

                                      F-35
<PAGE>

<TABLE>
<CAPTION>
                                      Exhibit Index
Exhibit
Number      Description
- ---------   -----------------------------------------------------------------
<S>          <C>
1.          Articles of Incorporation and Bylaws as currently in effect:

1.1         Certificate and Articles of Incorporation(1)

1.2         Certificate and Articles of Amendment effective October 22, 1996(1)

1.3         Certificate and Articles of Amendment effective January 24, 1997(1)

1.4         Certificate and Articles of Amendment effective October 8, 1997(1)

1.5         Certificate and Articles of Amendment effective April 29, 1998(2)

1.6         Articles of Amendment effective June 26, 1998(3)

1.7         Restated Articles of Incorporation effective June 26, 1998(3)

1.8         Restated Articles of Incorporation effective November 20, 2001

1.9         Bylaw No. 1(4)

1.10        Bylaw No. 2(1)

2.          Instruments defining rights of holders of equity or debt securities:

2.1         See Certificate and Articles of Incorporation and amendments
            thereto identified above.

2.2         Form of Subordinate Voting Share Certificate(5)

2.3         Indenture, dated as of August 1, 2000, between Celestica Inc. and
            The Chase Manhattan Bank, as Trustee (including a form of the
            Outstanding Notes)(6)

2.4         Second Amended and Restated Credit Agreement, dated as of December
            17, 2002, between Celestica Inc., the subsidiaries of Celestica
            Inc., specified therein as Designated Subsidiaries, The Bank of Nova
            Scotia, as Administrative Agent, The Bank of Nova Scotia, as
            Canadian Facility Agent, CIBC World Markets, as Joint Lead Arranger
            and Syndication Agent, RBC Capital Markets, as Joint Lead Arranger
            and Co-Documentation Agent, Bank of America Securities LLC, as Joint
            Lead Arranger and Co-Documentation Agent, and the financial
            institutions named in Schedule A as lenders

2.5         Amended and Restated Four Year Revolving Term Credit Agreement,
            dated as of December 17, 2002, among Celestica Inc. and Celestica
            International Inc., as Borrowers, The Bank of Nova Scotia, as
            Administrative Agent, and the financial institutions named therein,
            as Lenders

3.          Certain Contracts:

3.1         Management Services Agreement, dated as of July 7, 1998, among
            Celestica Inc., Celestica North America Inc. and Onex Corporation(5)

3.2         Asset Purchase Agreement, dated as of February 19, 2001, by and
            between Avaya Inc. and Celestica Corporation(4)*

3.3         Amendment No. 1 to the Asset Purchase Agreement, dated as of May 4,
            2001, by and between Avaya Inc. and Celestica Corporation(4)
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
Exhibit
Number      Description
- ---------   -----------------------------------------------------------------
<S>          <C>
3.4         Arrangement Agreement, dated as of May 31, 2001, between Celestica
            Inc. and Primetech Electronics Inc.(7)*

3.5         Merger Agreement, dated as of June 15, 2001, between Omni Industries
            Limited and Celestica Inc.(7)*

3.6         Asset Purchase Agreement, dated as of July 24, 2001, between Lucent
            Technologies Inc. and Celestica Corporation(7)*

3.7         Asset Purchase Agreement, dated as of July 24, 2001, between Lucent
            Technologies Inc. and Celestica Corporation(7)*

3.8         Asset Purchase Agreement, dated January 8, 2002, between NEC
            Corporation, NEC Miyagi, Ltd., NEC Yamanashi, Ltd., 1325091 Ontario
            Inc., and Celestica Inc.**

3.9         Employment Agreement, dated as of October 22, 1996, by and between
            Celestica, Inc. and Eugene V. Polistuk(1)

3.10        Employment Agreement, dated as of October 22, 1996, by and between
            Celestica, Inc. and Anthony P. Puppi(1)

3.11        Employment Agreement, dated as of October 22, 1996, by and between
            Celestica, Inc. and Daniel P. Shea(1)

3.12        Employment Agreement, dated as of June 30, 1998, by and between
            Celestica Inc. and R. Thomas Tropea(8)

3.13        D2D Employee Share Purchase and Option Plan (1997)(2)

3.14        Celestica 1997 U.K. Approved Share Option Scheme(1)

3.15        1998 U.S. Executive Share Purchase and Option Plan(9)

8.1         Subsidiaries of Registrant

99.1        Certification required by Section 906 of the Sarbanes-Oxley
            Act of 2002***
</TABLE>
- -----------
*        Request for confidential treatment granted. Confidential portions of
         this document have been redacted and filed separately with the
         Securities and Exchange Commission.

**       Confidential treatment requested. Confidential portions of this
         document have been redacted and filed separately with the Securities
         and Exchange Commission.

***      Pursuant to Commission Release No. 33-8212, this certification will
         be treated as "accompanying" this Annual Report on Form 20-F and not
         "filed" as part of such report for purposes of Section 18 of the
         Exchange Act, or otherwise subject to the liability of Section 18 of
         the Exchange Act, and this certification will not be incorporated by
         reference into any filing under the Securities Act, or the Exchange
         Act, except to the extent that the registrant specifically incorporates
         it by reference.

(1)      Incorporated by reference to the Registration Statement on Form F-1 of
         Celestica Inc. filed on April 29, 1998 (Registration No. 333-8700).

(2)      Incorporated by reference to Amendment No. 1 to the Registration
         Statement on Form F-1 of Celestica Inc. filed on June 1, 1998
         (Registration No. 333-8700).

(3)      Incorporated by reference to the Registration Statement on Form F-1 of
         Celestica Inc. filed on February 16, 1999 (Registration No. 333-10030).

(4)      Incorporated by reference to the Annual Report on Form 20-F of
         Celestica Inc. filed on May 22, 2001.

(5)      Incorporated by reference to Amendment No. 3 to the Registration
         Statement on Form F-1 of Celestica Inc. filed on June 25, 1998
         (Registration No. 333-8700).
<PAGE>

(6)      Incorporated by reference to the Current Report on Form 6-K of
         Celestica Inc. for the month of August, 2000.

(7)      Incorporated by reference to the Annual Report on Form 20-F of
         Celestica Inc. filed on May 3, 2002.

(8)      Incorporated by reference to the Annual Report on Form 20-F of
         Celestica Inc. filed on May 18, 2000.

(9)      Incorporated by reference to the Registration Statement on Form S-8 of
         Celestica Inc. filed on October 8, 1998 (Registration No. 333-9500).

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.8
<SEQUENCE>3
<FILENAME>a2106757zex-1_8.txt
<DESCRIPTION>EXHIBIT 1.8
<TEXT>
<PAGE>


                                                                     EXHIBIT 1.8


      For Ministry Use                            Ontario Corporation Number
A l'usage exclusif du ministere                Numero de la societe en Ontario

                                                          1201522

[LOGO] Ministry of                       Ministere des Services
       Consumer and                      aux consommateurs
Ontario Business Services                et aux entreprises
C E R T I F I C A T E                    C E R T I F I C A T
This is to certify that these articles   Ceci certifie que les presents status
are effective on                         entrent en vigueur le

             N O V E M B E R   2 0   N O V E M B R E, 2 0 0 1
- -------------------------------------------------------------------------------
                            /s/ ILLEGIBLE
                       Director / Directrice
         Business Corporations Act / Loi sur les societes par actions
- -------------------------------------------------------------------------------
<Table>
<Caption>
<S>                <C>                                                                                                    <C>
Form 5                                                   RESTATED ARTICLES OF INCORPORATION
Business                                                  STATUTS CONSTITUTIFS MIS A JOUR
Corporations
Act                1. The name of the corporation is:              Denomination sociale de la societe :
                      ------------------------------------------------------------------------------------------------------
Formule 5             C E L E S T I C A   I N C .
Loi sur les           ------------------------------------------------------------------------------------------------------
societes par          ------------------------------------------------------------------------------------------------------
actions               ------------------------------------------------------------------------------------------------------
                      ------------------------------------------------------------------------------------------------------

                   2. Date of incorporation / amalgamation:        Date de la constitution ou de la fusion :
                                                                     27/SEP/1996
                   ----------------------------------------------------------------------------------------------------------------
                                                       (Day, Month, Year)/(jour, mois, annee)

                   3. The address of the registered office is:     Adresse du siege social :
                   12 Concorde Place, 7th Floor
                   ----------------------------------------------------------------------------------------------------------------
                                (Street and No. or R.R. No. and, if multi-office building, give Room No.)
                        (Rue et numero ou numero de la R.R. et, s'il s'agit d'un edifice a bureaux, numero du bureau)

                   Toronto, Ontario                                                                                     M 3 C 3 R 8
                   ----------------------------------------------------------------------------------------------------------------
                  (Name of Municipality or Post Office)/(Nom de la municipalite ou du bureau de poste)   (Postal Code)/(Code postal)

                   4. Number (or minimum and maximum number) of    Nombre (ou nombres minimal et maximal)
                      directors is:                                d'administrateurs :

                   A minimum of 3 directors and a maximum of 20 directors.

                   5. The director(s) is/are:                      Administrateur(s) :

                                                                                                                          Resident
                                                              Address for Service, giving Street and No. (or R.R. No.),   Canadian
                   First name, initials and surname           Municipality and Postal Code                                State
                   Prenom, initiales et nom de famille        Domicile elu, y compris la rue et le numero (ou le numero   Yes or No
                                                              de la R.R.), le nom de la municipalite et le code postal    Resident
                                                                                                                          canadien
                                                                                                                          Oui/Non
                   ----------------------------------------------------------------------------------------------------------------

                   Robert L. Crandall                         5243 Park Lane                                              No
                                                              Dallas, Texas, U.S.A. 75220

                   Mark L. Hilson                             12 Kingsway Crescent                                        Yes
Document                                                      Toronto, Ontario M8X 2R1
prepared by
Davies Ward        Anthony R. Melman                          11 Dewbourne Avenue                                         Yes
Phillips &                                                    Toronto, Ontario M5P 1Z3
Vineberg LLP
Toronto, Ontario,  Eugene V. Polistuk                         11 Klaimen Court                                            Yes
Canada                                                        Aurora, Ontario L4G 6M1

SoftDocs-R- 3.11
Wordprocessor
Interface

SoftDocs is a
registered trade
mark of StyleUs
Corporation,
Toronto, Canada.
OBCA Form 5 1/1999
</Table>


<Page>


                                                                            1A

<Table>
<Caption>
<S>                <C>                                                                                                    <C>
                   5. CONTINUED

Form 5
Business
Corporations
Act                Richard S. Love                            28100 - Story Hill Lane                                     No
                                                              Los Altos Hills, California, U.S.A. 94022
Formule 5
Loi sur les        Roger L. Martin                            57 Highland Avenue                                          Yes
societes par                                                  Toronto, Ontario M4W 2A2
actions
                   Anthony P. Puppi                           433 Stephanie Boulevard                                     Yes
                                                              Woodbridge, Ontario L4L 1A6

                   Gerald W. Schwartz                         37 Cluny Drive                                              Yes
                                                              Toronto, Ontario M4W 2P9

                   Don Tapscott                               65 Highland Avenue                                          Yes
                                                              Toronto, Ontario M4W 2A2

                   William Etherington                        912-38 Avenue Road                                          Yes
                                                              Toronto, Ontario M5R 2G2

                   Michio Naruto                              3-8, Kamisaginomiya 2-Chome                                 No
                                                              Tokyo, Japan 165-0031



Document
prepared by
Davies Ward
Phillips &
Vineberg LLP
Toronto, Ontario,
Canada

SoftDocs-R- 3.11
Wordprocessor
Interface

SoftDocs is a
registered trade
mark of StyleUs
Corporation,
Toronto, Canada.
OBCA Form 5 1/1999
</Table>


<Page>


                                                                             2

<Table>
<Caption>
<S>                <C>                                                                                                    <C>
                   6. Restrictions, if any, on business the   Limites, s'il y a lieu, imposees aux activites
Form 5                corporation may carry on or on powers   commerciales ou aux pouvoirs de la societe :
Business              the corporation may exercise.
Corporations
Act                None

Formule 5
Loi sur les
societes par
actions





                   7. The classes and any maximum number of   Categories et nombre maximal, s'il y a lieu, d'actions
                      shares that the corporation is          que la societe est autorisee a emettre :
                      authorized to issue:

                   (i)    an unlimited number of shares of a class designated as subordinate voting shares
                          ("Subordinate Voting Shares");

                   (ii)   an unlimited number of shares of a class designated as multiple voting shares
                          ("Multiple Voting Shares"); and

                   (iii)  an unlimited number of Preferred Shares, issuable in series.



Document
prepared by
Davies Ward
Phillips &
Vineberg LLP
Toronto, Ontario,
Canada

SoftDocs-R- 3.11
Wordprocessor
Interface

SoftDocs is a
registered trade
mark of StyleUs
Corporation,
Toronto, Canada.
OBCA Form 5 1/1999
</Table>


<Page>


                                                                             3

<Table>
<Caption>
<S>                <C>                                                                                                    <C>
                   8. Rights, privileges, restrictions and    Droits, privileges, restrictions et conditions, s'il y a
                      conditions (if any) attaching to each   lieu, rattaches a chaque categorie d'actions et pouvoirs
Form 5                class of shares and directors           des administrateurs relatifs a chaque categorie d'actions
Business              authority with respect to any class     qui peut etre emise en serie :
Corporations          of shares which may be issued in
Act                   series:

Formule 5
Loi sur les        7.1    RIGHTS ATTACHING TO SUBORDINATE VOTING SHARES AND MULTIPLE VOTING SHARES
societes par
actions                   The Multiple Voting Shares and the Subordinate Voting Shares of the Corporation shall carry
                   and have attached thereto the following rights, privileges, restrictions and conditions:

                   (a)    DIVIDENDS. Subject to the prior rights of the holders of Preferred Shares, the holders of
                          Subordinate Voting Shares and Multiple Voting Shares shall be entitled to receive dividends,
                          and the Corporation shall pay dividends on the Subordinate Voting Shares and the Multiple
                          Voting Shares, as and when declared by the board of directors of the Corporation (the
                          "Board"), in such amount and in such form as the Board may from time to time determine. Except
                          as hereinafter provided with respect to dividends consisting of Subordinate Voting Shares and
                          Multiple Voting Shares, all dividends that the Board may declare from time to time on the
                          Subordinate Voting Shares and the Multiple Voting Shares shall be declared and paid in an
                          equal amount per share on all Subordinate Voting Shares and Multiple Voting shares then
                          outstanding. Dividends consisting of Subordinate Voting Shares and Multiple Voting Shares
                          shall be declared by the Board and shall be paid by the Corporation only as follows: (i)
                          dividends consisting of Subordinate Voting Shares shall only be declared and paid to holders
                          of Subordinate Voting Shares and dividends consisting of Multiple Voting Shares shall only be
                          declared and paid to holders of Multiple Voting Shares; and (ii) the number of Multiple Voting
                          Shares declared and paid as a dividend with respect to each outstanding Multiple Voting Share
                          shall be equal to the number of Subordinate Voting Shares declared and paid as a dividend with
                          respect to each outstanding Subordinate Voting Share.

                   (b)    VOTING RIGHTS. The holders of Subordinate Voting Shares and Multiple Voting Shares shall be
                          entitled to receive notice of and to attend all meetings of shareholders of the Corporation
                          and to vote together at all such meetings, except meetings at which only the holders of one
                          class or series of shares are entitled to vote separately as a class or series, as the case
                          may be. At any meeting at which the holders of Subordinate Voting Shares and the holders of
                          Multiple Voting Shares are entitled to vote together, the Subordinate Voting Shares shall
                          carry one vote per share and the Multiple Voting Shares shall carry 25 votes per share. The
                          holders of Multiple Voting Shares shall be entitled to one vote per share held at any meeting
                          of holders of Multiple Voting Shares at which they are entitled to vote separately as a class.
                          The holders of Subordinate Voting Shares shall be entitled to one vote per share at any
                          meeting of holders of Subordinate Voting Shares at which they are entitled to vote separately
                          as a class.

                   (c)    CONVERSION OF MULTIPLE VOTING SHARES

                          (i)    Each Multiple Voting Share shall be convertible at any time at the option of the holder
                                 thereof into one Subordinate Voting Share.

                          (ii)   Multiple Voting Shares will be converted autmatically into Subordinate Voting Shares
Document                         upon any transfer thereof, except (A) a transfer to Onex Corporation ("Onex") or any
prepared by                      affiliate of Onex or (B) a transfer of 100% of the outstanding Multiple Voting Shares
Davies Ward                      to a purchaser who has offered to purchase all of the outstanding Subordinate Voting
Phillips &                       Shares for a per share consideration identical to, and otherwise on the same terms
Vineberg LLP                     as, that offered for the Multiple Voting Shares, provided that the
Toronto, Ontario,
Canada

SoftDocs-R- 3.11
Wordprocessor
Interface

SoftDocs is a
registered trade
mark of StyleUs
Corporation,
Toronto, Canada.
OBCA Form 5 1/1999
</Table>


<Page>


                                                                            3A

<Table>
<Caption>
<S>                <C>                                                                                                    <C>
                   8. CONTINUED

Form 5                           Multiple Voting Shares held by such purchaser thereafter shall be subject to the provisions of
Business                         provisions of this subparagraph (c) as if all references to Onex in this subparagraph
Corporations                     (c) were references to such purchaser.
Act

Formule 5                 (iii)  If any holder of Multiple Voting Shares ceases to be an affiliate of Onex, the Multiple
Loi sur les                      Voting Shares held by such holder shall convert automatically into Subordinate Voting
societes par                     Shares on a one-for-one basis.
actions
                          (iv)   If Onex and its affiliates, collectively, cease to have the right, in all cases, to
                                 exercise the votes attached to, or to direct the voting of, any of the Multiple Voting
                                 Shares held by Onex and its affiliates, such Multiple Voting Shares shall convert
                                 automatically into Subordinate Voting Shares on a one-for-one basis.

                          (v)    If at any time the number of outstanding Multiple Voting Shares shall represent less
                                 than 5% of the aggregate number of the outstanding Multiple Voting Shares and
                                 Subordinate Voting Shares, all of the outstanding Multiple Voting Shares shall
                                 automatically be converted at such time into Subordinate Voting Shares on one-for-one
                                 basis.

                          (vi)   For the purposes of this subparagraph (c), (A) "Onex" includes any successor
                                 corporation resulting from an amalgamation, merger, arrangement, sale of all or
                                 substantially all of the assets, or other business combination or reorganization
                                 involving Onex, provided that such successor corporation beneficially owns directly or
                                 indirectly all Multiple Voting Shares beneficially owned directly or indirectly by Onex
                                 immediately prior to such transaction, and is controlled by the same person or persons
                                 as controlled Onex prior to the cosummation of such transaction; (B) a corporation
                                 shall be deemed to be a subsidiary of another corporation if, but only if, (1) it is
                                 controlled by that other, or that other and one or more corporations each of which is
                                 controlled by that other, or two or more corporations each of which is controlled by
                                 that other, or (2) it is a subsidiary of a corporation that is that other's
                                 subsidiary; (C) "affiliate" means a subsidiary of Onex or a corporation controlled
                                 by the same person or company that controls Onex; (D) "control" means beneficial
                                 ownership of, or control or direction over, securities carrying more than 50% of the
                                 votes that may be cast to elect directors if those votes, if cast, could elect more
                                 than 50% of the directors; and (E) a person is deemed to beneficially own any
                                 security which is beneficially owned by a corporation controlled by such person.

                          (d)    MODIFICATION, SUB-DIVISION AND CONSOLIDATION. Any modification to the provisions
                                 attaching to either the Subordinate Voting Shares or the Multiple Voting Shares shall
                                 require the separate affirmative vote of two-thirds of the votes cast by the holders
                                 of Subordinate Voting Shares and Multiple Voting Shares, respectively, voting as a
                                 separate class. The Corporation may not subdivide or consolidate the Subordinate
                                 Voting Shares or the Multiple Voting Shares without at the same time proportionately
                                 subdividing or consolidating the shares of the other class.

Document                  (e)    RIGHTS ON DISSOLUTION. In the event of the liquidation, dissolution or winding-up of
prepared by                      the Corporation, whether voluntary or involuntary, or any other distribution of the
Davies Ward                      assets of the Corporation among its shareholders for the purpose of winding up its
Phillips &                       affairs, subject to the prior rights of the holders of Preferred Shares, the holders
Vineberg LLP                     of the Subordinate Voting Shares and Multiple Voting Shares then outstanding shall be
Toronto, Ontario,                entitled to receive the remaining property and assets of the Corporation rateably
Canada                           according to the number of shares of both class of shares held by each holder.

SoftDocs-R- 3.11
Wordprocessor
Interface

SoftDocs is a
registered trade
mark of StyleUs
Corporation,
Toronto, Canada.
OBCA Form 5 1/1999
</Table>


<Page>


                                                                            3B

<Table>
<Caption>
<S>                <C>                                                                                                    <C>
                   8. CONTINUED

Form 5             7.2    PREFERRED SHARES
Business
Corporations              The Preferred Shares shall be attached thereto, as a class, the following rights,
Act                privileges, restrictions and conditions:

Formule 5          (a)    ISSUABLE IN SERIES. The Board may issue the Preferred Shares at any time or from time to
Loi sur les               time in one or more series.
societes par
actions            (b)    BOARD TO FIX TERMS OF EACH SERIES. Before the issuance of shares of any such series, the
                          Board shall (i) fix the number of shares in such series, (ii) determine, subject to the
                          provisions attaching to the Preferred Shares as a class, the designation of, and the
                          rights, privileges, restrictions and conditions attaching to, the Preferred Shares of such
                          series (including, without limiting the generality of the foregoing, the rate or amount of
                          dividends or the method of calculating dividends, the dates of payment thereof, the price
                          and terms and conditions of any purchase for cancellation, retraction or redemption rights,
                          voting rights (subject to section 8 hereof), any conversion or exchange rights and any
                          sinking fund, or other provisions) and (iii) send to the Director under the BUSINESS
                          CORPORATIONS ACT (Ontario), as the same may be amended, re-enacted or replaced from time to
                          time (the "Act"), articles of amendment in the prescribed form setting out such number,
                          designation, rights, privileges, restrictions and conditions.

                   (c)    RANKING. The Preferred Shares of each series shall rank as to dividends (to the extent, if
                          any, that cumulative dividends are provided for in the provisions attaching thereto as a
                          series) and capital on a parity with the Preferred Shares of every other series. The
                          Preferred Shares of each series shall rank as to dividends and capital senior to the
                          Subordinate Voting Shares and the Multiple Voting Shares.

                   (d)    RIGHTS ON DISSOLUTION. In the event of the liquidation, dissolution or winding-up of the
                          Corporation, whether voluntary or involuntary, or any other distribution of the assets of
                          the Corporation among its shareholders for the purpose of winding up its affairs, the
                          holders of the Preferred Shares of each series shall be entitled to receive from the assets
                          of the Corporation in respect of each such share held a sum equal to the amount in the
                          stated capital account for such series divided by the number of shares in such series then
                          outstanding, together with any accrued (in the case of cumulative dividends) or declared (in
                          the case of non-cumulative dividends) and unpaid dividends thereon, before any amount shall
                          be paid or any assets of the Corporation shall be distributed to the holders of Subordinate
                          Voting Shares or Multiple Voting Shares. Upon the receipt of such sum by the holders of the
                          Preferred Shares of each series, such holders shall not be entitled to share in the
                          distribution of the remaining assets of the Corporation and their Preferred Shares shall be
                          cancelled.




Document
prepared by
Davies Ward
Phillips &
Vineberg LLP
Toronto, Ontario,
Canada

SoftDocs-R- 3.11
Wordprocessor
Interface

SoftDocs is a
registered trade
mark of StyleUs
Corporation,
Toronto, Canada.
OBCA Form 5 1/1999
</Table>


<Page>


                                                                             4

<Table>
<Caption>
<S>                <C>                                                                                                    <C>
                   9. The issue, transfer or ownership of     L'emission, le transfert ou la propriete d'actions
                      shares is/is not restricted and the     est/n'est pas restreint. Les restrictions, s'il y a
Form 5                restrictions (if any) are as            lieu, sont les suivantes :
Business              follows:
Corporations
Act                The Corporation shall not create any class or series of shares, or issue any shares of any class or
                   series (other than Subordinate Voting Shares) having the right to vote generally on all matters
Formule 5          that may be submitted to a vote of shareholders (except matters for which applicable law requires
Loi sur les        the approval of holders of another class or series of shares voting separately as a class or
societes par       series) without the separate affirmative vote of two-thirds of the votes cast by the holders of
actions            Subordinate Voting Shares and Multiple Voting Shares, respectively, voting as separate classes.



                   10. Other provisions, if any:              Autres dispositions, s'il y a lieu :

                          The board of directors of the Corporation may, without authorization of the shareholders of
                   the Corporation, from time to time, in such amounts and on such terms as it deems expedient:

                   (a)    borrow money upon the credit of the Corporation;

                   (b)    issue, reissue, sell or pledge debt obligations of the Corporation;

                   (c)    give a guarantee on behalf of the Corporation to secure performance of an obligation of any
                          person; and

                   (d)    charge, mortgage, hypothecate, pledge or otherwise create a security interest in all or any
                          of the currently owned or subsequently acquired real and personal, movable and immovable,
                          property of the Corporation, including book debts, rights, powers, franchises and
                          undertaking, to secure any obligation of the Corporation.

                          The board of directors may from time to time by resolution delegate to a committee of
                   directors or to one or more of the directors or officers of the Corporation all or any of the powers
Document           hereby conferred upon the board to such extent and in such manner as the board shall determine at
prepared by        the time of each such delegation. Nothing in this section shall limit or restrict the borrowing of
Davies Ward        money by the Corporation on bills of exchange or promissory notes made, drawn, accepted or endorsed
Phillips &         by or on behalf of the Corporation.
Vineberg LLP
Toronto, Ontario,
Canada

SoftDocs-R- 3.11
Wordprocessor
Interface

SoftDocs is a
registered trade
mark of StyleUs
Corporation,
Toronto, Canada.
OBCA Form 5 1/1999
</Table>


<Page>


                                                                             5

<Table>
<Caption>
<S>                <C>                                                                                                    <C>


Form 5
Business
Corporations
Act

Formule 5
Loi sur les
societes par
actions


                   11. These restated articles of             Les presents statuts constitutifs mis a jour enoncent
                       incorporation correctly set out the    correctement les dispositions corresondantes des statuts
                       corresponding provisions of the        constitutifs telles qu'elles sont modifiees et
                       articles of incorporation as amended   remplacent les statuts constitutifs et les
                       and supersede the original articles    modifications qui y ont ete apportees.
                       of incorporation and all the
                       amendments thereto.

                   These articles are signed in duplicate.    Les presents statuts sont signes en double exemplaire.


                                                                                    CELESTICA INC.
                                                              ---------------------------------------------------------
                                                                               (Name of Corporation)
                                                                       (Denomination sociale de la societe)
Document
prepared by
Davies Ward                                                   By/Par : /s/ Elizabeth L. DelBianco
Phillips &                                                             ------------------------------------------------
Vineberg LLP                                                           (Signature)              (Description of Office)
Toronto, Ontario,                                                      (Signature)                     (Fonction)
Canada
                                                                       Elizabeth L. DelBianco, Secretary
SoftDocs-R- 3.11
Wordprocessor
Interface

SoftDocs is a
registered trade
mark of StyleUs
Corporation,
Toronto, Canada.
OBCA Form 5 1/1999
</Table>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.4
<SEQUENCE>4
<FILENAME>a2106757zex-2_4.txt
<DESCRIPTION>EXHIBIT 2.4
<TEXT>
<PAGE>

                                                                  Exhibit 2.4


                           SECOND AMENDED AND RESTATED

                         REVOLVING TERM CREDIT AGREEMENT

                CELESTICA INC. AND THE SUBSIDIARIES SPECIFIED AS

                         DESIGNATED SUBSIDIARIES HEREIN,

                                  AS BORROWERS

                                     - AND -

                               CIBC WORLD MARKETS,

                  AS JOINT LEAD ARRANGER AND SYNDICATION AGENT

                                     - AND -

                              RBC CAPITAL MARKETS,

                AS JOINT LEAD ARRANGER AND CO-DOCUMENTATION AGENT

                                     - AND -

                         BANK OF AMERICA SECURITIES LLC,

                AS JOINT LEAD ARRANGER AND CO-DOCUMENTATION AGENT

                                     - AND -

                            THE BANK OF NOVA SCOTIA,

                             AS ADMINISTRATIVE AGENT

                                     - AND -

                 THE FINANCIAL INSTITUTIONS NAMED IN SCHEDULE A,

                                   AS LENDERS

                             UP TO U.S.$ 500,000,000

                         REVOLVING TERM CREDIT FACILITY

                          MADE AS OF DECEMBER 17, 2002


<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                             <C>
ARTICLE 1

         INTERPRETATION..........................................................................................3
         1.1      Definitions....................................................................................3
         1.2      Headings......................................................................................25
         1.3      Use of Defined Terms..........................................................................25
         1.4      Extended Meanings.............................................................................25
         1.5      Cross References..............................................................................25
         1.6      Reference to Agents or Lenders................................................................25
         1.7      Accounting Terms..............................................................................26
         1.8      Consolidated Financial Statements and Consolidated Accounts...................................26
         1.9      Non-Banking Days..............................................................................26
         1.10     References to Time of Day.....................................................................26
         1.11     Severability..................................................................................26
         1.12     Currency......................................................................................27
         1.13     References to Statutes........................................................................27
         1.14     References to Agreements......................................................................27
         1.15     Consents and Approvals........................................................................27
         1.16     Schedules.....................................................................................27

ARTICLE 2

         THE FACILITY...........................................................................................29
         2.1      Establishment of the Facility.................................................................29
         2.2      Purpose, Nature and Term of the Facility......................................................29
         2.3      Availability of Advances......................................................................29
         2.4      Lenders' Obligations..........................................................................31
         2.5      Repayment of Advances by Former Designated Subsidiaries.......................................31
         2.6      Repayment of Facility.........................................................................31
         2.7      Payments/Cancellation or Reduction............................................................32
         2.8      Final Maturity Date; Extension of Conversion Date.............................................33
         2.9      Interest on Prime Rate Advances...............................................................36
         2.10     Interest on Base Rate Canada Advances.........................................................36
         2.11     [Intentionally Deleted].......................................................................37
         2.12     LIBOR Advances................................................................................37
         2.13     Method and Place of Payment...................................................................38
         2.14     Fees..........................................................................................39
         2.15     Conversion Options............................................................................39
         2.16     Execution of Notices..........................................................................40
         2.17     Evidence of Indebtedness......................................................................40
         2.18     Interest on Unpaid Costs and Expenses.........................................................40
         2.19     Criminal Rate of Interest.....................................................................41
         2.20     Compliance with the Interest Act (Canada).....................................................41
         2.21     Nominal Rate of Interest......................................................................41
         2.22     Swing Line Facility...........................................................................41
</TABLE>

                                      -i-

<PAGE>

                               TABLE OF CONTENTS
                                  (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                             <C>
         2.23     Increase In Aggregate Commitment Amount To U.S.$ 500,000,000..................................44

ARTICLE 3

          LETTERS OF CREDIT.....................................................................................45
         3.1      Issuance Request..............................................................................45
         3.2      Issuances.....................................................................................45
         3.3      Other Lenders' Participation..................................................................46
         3.4      Reimbursement.................................................................................47
         3.5      Deemed Disbursements..........................................................................48
         3.6      Nature of Reimbursement Obligations...........................................................48
         3.7      Indemnity for Costs...........................................................................49
         3.8      Fees..........................................................................................49
         3.9      Issuing Bank..................................................................................50

ARTICLE 4

         BANKERS' ACCEPTANCES AND ACCEPTANCE NOTES..............................................................51
         4.1      Funding of Bankers' Acceptances...............................................................51
         4.2      Acceptance Fees...............................................................................51
         4.3      Safekeeping of Drafts.........................................................................52
         4.4      Term and Interest Periods.....................................................................52
         4.5      Payment on Maturity...........................................................................52
         4.6      Waiver of Days of Grace.......................................................................52
         4.7      Special Provisions Relating to Acceptance Notes...............................................53
         4.8      No Market.....................................................................................53

ARTICLE 5

         CHANGE OF CIRCUMSTANCES AND INDEMNIFICATION............................................................54
         5.1      [Intentionally Deleted].......................................................................54
         5.2      [Intentionally Deleted].......................................................................54
         5.3      Lender Representation.........................................................................54
         5.4      [Intentionally Deleted].......................................................................54
         5.5      Increased Costs...............................................................................54
         5.6      Illegality....................................................................................55
         5.7      Mitigation....................................................................................56
         5.8      Taxes.........................................................................................57
         5.9      Tax Refund....................................................................................59

ARTICLE 6

         CONDITIONS PRECEDENT...................................................................................60
         6.1      Conditions for Closing........................................................................60
         6.2      Conditions for First Drawdown.................................................................61
         6.3      Conditions for Subsequent Drawdowns...........................................................61
</TABLE>


                                      -ii-



<PAGE>

                              TABLE OF CONTENTS
                                  (CONTINUED)
<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                             <C>
ARTICLE 7

         PROVISIONS RELATING TO SUBSIDIARIES....................................................................63
         7.1      Designated Subsidiaries.......................................................................63
         7.2      Intentionally Deleted.........................................................................65
         7.3      Material Restricted Subsidiaries to Provide Guarantees........................................65
         7.4      Unrestricted Subsidiaries.....................................................................65

ARTICLE 8

         REPRESENTATIONS AND WARRANTIES.........................................................................67
         8.1      Representations and Warranties................................................................67
         8.2      Survival of Representations and Warranties....................................................71
         8.3      Deemed Repetition of Representations and Warranties...........................................72

ARTICLE 9

         COVENANTS..............................................................................................73
         9.1      Affirmative Covenants.........................................................................73
         9.2      Negative Covenants............................................................................78
         9.3      Financial Covenants...........................................................................80

ARTICLE 10

         DEFAULT AND ACCELERATION...............................................................................82
         10.1     Events of Default.............................................................................82
         10.2     Acceleration..................................................................................85
         10.3     Remedies with Respect to Bankers' Acceptance Advances and Letters of Credit...................85
         10.4     Remedies Cumulative and Waivers...............................................................86
         10.5     Suspension of Lenders' Obligations............................................................86
         10.6     Application of Payments After an Event of Default.............................................86

ARTICLE 11

         THE ADMINISTRATIVE AGENT AND ADMINISTRATION OF THE FACILITY............................................88
         11.1     Authorization of Action.......................................................................88
         11.2     Procedure for Making Advances.................................................................88
         11.3     Remittance of Payments........................................................................89
         11.4     Redistribution of Payment.....................................................................90
         11.5     Duties and Obligations........................................................................91
         11.6     Prompt Notice to the Lenders..................................................................92
         11.7     Agent's Authority.............................................................................92
         11.8     Lender's Independent Credit Decision..........................................................92
         11.9     Indemnification...............................................................................93
         11.10    Successor Agent...............................................................................93
         11.11    Taking and Enforcement of Remedies............................................................94
         11.12    Reliance Upon Lenders.........................................................................95
</TABLE>

                                      -iii-

<PAGE>

                               TABLE OF CONTENTS
                                  (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                             <C>
         11.13    Reliance upon Administrative Agent............................................................95
         11.14    Replacement of Cancelled Commitments..........................................................95
         11.15    Disclosure of Information.....................................................................96
         11.16    Adjustments of Rateable Portions..............................................................97

ARTICLE 12

         COSTS, EXPENSES AND INDEMNIFICATION....................................................................99
         12.1     Costs and Expenses............................................................................99
         12.2     Indemnification by the Borrowers..............................................................99
         12.3     Funds.........................................................................................99
         12.4     General Indemnity............................................................................100
         12.5     Environmental Claims.........................................................................101

ARTICLE 13

         GENERAL...............................................................................................103
         13.1     Term.........................................................................................103
         13.2     Survival.....................................................................................103
         13.3     Benefit of the Agreement.....................................................................103
         13.4     Notices......................................................................................103
         13.5     Amendment and Waiver.........................................................................104
         13.6     Governing Law................................................................................105
         13.7     Further Assurances...........................................................................105
         13.8     Enforcement and Waiver by the Lenders........................................................105
         13.9     Execution in Counterparts....................................................................105
         13.10    Assignment by the Borrowers..................................................................105
         13.11    Assignments and Transfers by a Lender........................................................105
         13.12    Certain Requirements in Respect of Merger, Etc...............................................108
         13.13    Set-Off......................................................................................110
         13.14    Time of the Essence..........................................................................110
         13.15    Advertisements...............................................................................110

SCHEDULE A - LENDERS

SCHEDULE B - LENDERS' COMMITMENTS

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

SCHEDULE D - QUARTERLY CERTIFICATE ON COVENANTS

SCHEDULE E - CONVERSION NOTE

SCHEDULE F - CANADIAN DESIGNATED SUBSIDIARY AGREEMENT

</TABLE>

                                      -iv-

<PAGE>

                               TABLE OF CONTENTS
                                  (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                             <C>



SCHEDULE G - DRAWDOWN NOTICE AND NOTICE OF SWING LINE
             BORROWING

SCHEDULE H - GUARANTEES

SCHEDULE I - ROLLOVER NOTICE

SCHEDULE J - TRANSFER NOTICE

SCHEDULE K - ISSUANCE REQUEST

SCHEDULE L - ACCEPTANCE NOTE

SCHEDULE M - CONSENT LENDER NOTICE

SCHEDULE N - MANDATORY COST CALCULATION

SCHEDULE O - OPINIONS OF COUNSEL

SCHEDULE P - EXTENSION REQUEST

SCHEDULE Q - PERMITTED ENCUMBRANCE CERTIFICATE
</TABLE>

                                      -v-


<PAGE>

           SECOND AMENDED AND RESTATED REVOLVING TERM CREDIT AGREEMENT

                  MADE as of the 17th day of December, 2002.

         B E T W E E N:

                  CELESTICA INC.,

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

                                                              OF THE FIRST PART,

                                     - and -

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

                                     - and -

                  CIBC WORLD MARKETS,
                  as Joint Lead Arranger and Syndication Agent,

                                                              OF THE THIRD PART,

                                     - and -

                  RBC CAPITAL MARKETS,
                  as Joint Lead Arranger and Co-Documentation Agent,

                                                             OF THE FOURTH PART,

                  BANK OF AMERICA SECURITIES LLC,
                  as Joint Lead Arranger and Co-Documentation Agent,

                                                              OF THE FIFTH PART,

                                     - and -

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

                                                              OF THE SIXTH PART,

                                     - and -


<PAGE>

                                      -2-

                  THE FINANCIAL INSTITUTIONS NAMED IN SCHEDULE
                  A, as Lenders,

                                                            OF THE SEVENTH PART.


WHEREAS Celestica Inc., the Subsidiaries of Celestica Inc. designated therein as
Designated Subsidiaries, The Bank of Nova Scotia as the Administrative Agent,
the Canadian Facility Agent, the U.S. Facility Agent and the U.K. Facility Agent
and the financial institutions named therein as the Lenders are parties to an
Amended and Restated Revolving Term Credit Agreement dated as of June 8, 2001
(the "EXISTING CREDIT AGREEMENT") which amended and restated a Credit Agreement
among Celestica Inc., the Subsidiaries of Celestica Inc. designated therein as
Designated Subsidiaries, The Bank of Nova Scotia as the Administrative Agent,
the Canadian Facility Agent, the U.S. Facility Agent and the U.K. Facility Agent
and the financial institutions named therein as the Lenders dated as of April
22, 1999;

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

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

<PAGE>

                                      -3-

                                   ARTICLE 1
                                 INTERPRETATION

1.1      DEFINITIONS

         In this Agreement:

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

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

"ACQUIRING LENDERS" has the meaning specified in Section 2.8(b)(iii);

"ACQUISITION DATE" has the meaning specified in Section 2.8(b)(iii);

"ADDITIONAL COMPENSATION" has the meaning specified in Section 5.5;

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

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

"AFFECTED LENDER" has the meaning specified in Section 5.7(b);

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

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

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

"ALTERNATE LENDERS" has the meaning specified in Section 2.8(b)(iv);

<PAGE>

                                      -4-

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

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

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

"APPROVING LENDERS" has the meaning specified in Section 2.8(b);

"ARM'S LENGTH" has the meaning ascribed thereto under the INCOME TAX ACT
(Canada) in effect as of the date hereof;

"ASSENTING LENDER" has the meaning specified in Section 5.7(b);

"AVAILABLE SWING LINE COMMITMENT" means the monetary amount which is the
Commitment of the Swing Line Lender as may be increased or decreased from time
to time pursuant to Section 2.22(l);

"BANKERS' ACCEPTANCE" means a draft or other bill of exchange in Canadian
Dollars including, without limitation, a depository bill subject to the
DEPOSITORY BILLS AND NOTES ACT (Canada), drawn by Celestica or a Canadian
Designated Subsidiary and accepted by a Lender in accordance with Article 4;

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

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

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

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

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

<PAGE>

                                      -5-

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

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

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

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

"BUSINESS" means the business of:

     (a)  conducting a broad range of electronics manufacturing services,
          including the manufacturing, assembly and testing of printed circuit
          boards, printed circuit board assembly, backplanes, electro-mechanical
          sub-assembly, memory modules, photonics, opto-electronic assembly,
          full system assembly, product testing, quality assurance, failure
          analysis and other related manufacturing services;

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

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

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

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

"CANADIAN BA RATE" means, for a particular term, the discount rate per annum,
calculated on the basis of a year of 365 days, equal to the arithmetic average
of the rates per annum for Canadian Dollar Bankers' Acceptances having such
term:

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

<PAGE>

                                      -6-

     (b)  for the Non-Schedule I Reference Lenders in respect of the Bankers'
          Acceptances or Acceptance Notes to be accepted by the Non-Schedule I
          Lenders, as are quoted by such Non-Schedule I Reference Lenders as of
          10:00 a.m. (Toronto, Canada time) on the first day of such term,
          provided that the arithmetic average of such quoted rates shall in no
          event exceed the sum of the highest of the rates that appear on the
          display page designated as the CDOR page (or any replacement page) by
          Reuters Money Market Service (or its successor) for the Schedule I
          Reference Lenders as of 10:00 a.m. (Toronto, Canada time) on the first
          day of such term plus ten basis points, each as determined by the
          Administrative Agent.

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

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

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

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

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

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

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

"CERCLA" means the United States COMPREHENSIVE ENVIRONMENTAL RESPONSE,
COMPENSATION AND LIABILITY ACT OF 1980;

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

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

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

<PAGE>

                                      -7-

"CLOSING" means the consummation of the transactions contemplated herein,
including, without limitation, the satisfaction of the conditions precedent set
out in Section 6.1 and the Facility becoming available to the Borrowers subject
to the terms of this Agreement;

"CLOSING DATE" means December 17, 2002;

"CODE" means the United States INTERNAL REVENUE CODE OF 1986;

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

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

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

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

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

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

"CONVERSION DATE" means December 15, 2003 or such later date to which the
Conversion Date has been extended pursuant to the provisions of Section 2.8;

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

"CORPORATE REORGANIZATION" has the meaning specified in Section 13.12;

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

<PAGE>

                                      -8-

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

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

"DESIGNATED SUBSIDIARY AGREEMENT" means an agreement substantially in the form
set out in Schedule F;

"DISBURSEMENT" has the meaning specified in Section 3.4;

"DISBURSEMENT DATE" has the meaning specified in Section 3.4;

"DISSENTING LENDERS" has the meaning specified in Section 2.8(b);

"DRAWDOWN" means a drawdown of an Advance;

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

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

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

     (a)  Net Income for such period;

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

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

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

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

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

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

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


<PAGE>

                                      -9-

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

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

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

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

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

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

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

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


<PAGE>

                                      -10-

"ERISA" means the United States EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974;

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

"EVENT OF DEFAULT" means any of the events described in Section 10.1;

"EXISTING CREDIT AGREEMENT" has the meaning specified in the first recital
hereto;

"EXEMPTED JURISDICTION" has the meaning specified in Section 13.12;

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

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

"FACILITY" means the revolving term credit facility in an aggregate principal
amount of U.S.$ 350,000,000 to be made available to the Borrowers as set forth
in Article 2 as same may be increased and/or extended subject to the terms set
forth herein;

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

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

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

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

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

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


<PAGE>

                                      -11-

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

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

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

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

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

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

          (i)  the outstanding monetary Obligations at such time;

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

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

          (iv) the aggregate net marked-to-market liability under all Hedging
               Obligations;

          (v)  any Acquired Indebtedness outstanding at such time;

          (vi) the outstanding amounts under any Permitted Securitization
               Transactions; and

          (vii) the aggregate amounts outstanding under synthetic leases to
               which Celestica and its Restricted Subsidiaries are parties being
               the aggregate original cost of the assets subject to all such
               leases less all payments made on account of principal under all
               such leases on or prior to the date on which such amounts are
               determined;

plus


<PAGE>

                                      -12-

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

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

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

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

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

"INDEBTEDNESS" of any Person means, without duplication:

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

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

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

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

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


<PAGE>

                                      -13-

          such indebtedness shall have been assumed by such Person or is limited
          in recourse;

     (f)  all Contingent Liabilities of such Person; and

     (g)  any Acquired Indebtedness.

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

"INDEMNIFIED PERSON" has the meaning specified in Section 5.8(b);

"INDEMNIFYING PARTY" has the meaning specified in Section 12.4(c);

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

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

"INTEREST PAYMENT DATE" shall have the meaning set out in Section 2.9;

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

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

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

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


<PAGE>

                                      -14-

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

"ISSUING BANK" means a Lender which issues a Letter of Credit pursuant to
Article 3;

"JOINT LEAD ARRANGERS" means CIBC World Markets, RBC Capital Markets and Bank of
America Securities LLC;

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

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

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

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

"LETTER OF CREDIT AVAILABILITY" means U.S.$ 50,000,000;

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

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

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

     (c)  if a rate cannot be determined under either of paragraphs (a) and (b)
          above, the rate determined by the Administrative Agent for a
          particular Interest Period to be the arithmetic average of the rates
          per annum at which deposits in United States Dollars in immediately
          available funds are offered by prime London banks to the LIBOR Offices
          in the London interbank market for a period equal to or


<PAGE>

                                      -15-

          comparable to the Interest Period and an amount comparable to the
          Advance at or about 10:00 a.m. (London, England time) on the
          applicable Rate Fixing Day.

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

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

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

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

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

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

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

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

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

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

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


<PAGE>

                                      -16-

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

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

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

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

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

"NON-SCHEDULE I LENDERS" means Lenders which are not Canadian chartered banks
that are listed on Schedule I to the BANK ACT (Canada);

"NON-SCHEDULE I REFERENCE LENDERS" means, where there are two or fewer Lenders
which are not Canadian chartered banks that are listed on Schedule I to the BANK
ACT (Canada), all such Lenders, and where there are more than two such Lenders,
two of such Lenders chosen by the Administrative Agent and identified by written
notice to Celestica and where there is one such Lender, that Lender;

"NOTICE OF AMOUNT" has the meaning specified in Section 5.5;

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

"NOTIFICATION DATE" has the meaning specified in Section 12.5(c);


<PAGE>

                                      -17-

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

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

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

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

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

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

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

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

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

"OUTSTANDING AMOUNT" has the meaning specified in Section 2.3;

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

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

"PENSION PLAN" means:


<PAGE>

                                      -18-

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

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

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

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

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

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


<PAGE>

                                      -19-

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

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

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

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

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

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

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

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


<PAGE>

                                      -20-

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

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

     (n)  Liens granted by Celestica Corp. pursuant to and in accordance with
          the Synthetic Lease provided that neither Celestica nor any other
          Subsidiary other than Celestica, Celestica Corp. or Celestica
          International has any liability in respect of such indebtedness;

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

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

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

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

     (s)  Liens granted by Celestica International in favour of Celestica in
          connection with a Loan Agreement made as of November 4, 1996, as
          amended, between Celestica International (under its former name
          Celestica, Inc.) and 1201541 Ontario Inc. (a predecessor in interest
          to Celestica);

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

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

          (i)  trade accounts receivable of or owing to Celestica or any
               Restricted Subsidiary (and/or contractual rights relating
               thereto) having an aggregate book value on the date the relevant
               Securitization Transaction is completed that does not exceed the
               sum of (A) 30% of the aggregate book value of the trade accounts
               receivable of or owing to Celestica and its Restricted
               Subsidiaries determined on a consolidated


<PAGE>

                                      -21-

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

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

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

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

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


<PAGE>

                                      -22-

"POUNDS STERLING" and "(Pound)" means the lawful currency of the United Kingdom;

"PREDECESSOR CORPORATION" has the meaning described thereto in Section 13.12;

"PREDECESSOR GUARANTEE" has the meaning described thereto in Section 13.12;

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

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

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

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

"REIMBURSEMENT OBLIGATION" has the meaning specified in Section 3.4;

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

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

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

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

"SCHEDULE I LENDERS" means Lenders which are Canadian chartered banks that are
listed on Schedule I to the BANK ACT (Canada);

"SCHEDULE I REFERENCE LENDERS" means, where there are three or fewer Lenders
which are Canadian chartered banks that are listed on Schedule I to the BANK ACT
(Canada), all such Lenders, and where there are more than three such Lenders,
three of such Lenders chosen by the Administrative Agent and identified by
written notice to Celestica; provided that if the Administrative Agent is also a
Lender, the Administrative Agent shall be one of the Lenders comprising the
Schedule I Reference Lenders;


<PAGE>

                                      -23-

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

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

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

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

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

"SUBSTITUTE LENDERS" has the meaning specified in Section 11.14;

"SUCCESSOR AGENT" has the meaning specified in Section 11.10;

"SUCCESSOR CORPORATION" has the meaning specified in Section13.12(a);

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

"SWING LINE LENDER" means Canadian Imperial Bank of Commerce or such other
Lender as may have agreed to act as a Swing Line Lender and to which Canadian
Imperial Bank of Commerce and Celestica may have agreed to acting as a Swing
Line Lender from time to time.

"SYNTHETIC LEASE" means the Master Lease and Open-end Mortgage dated as of
February 12, 1998 made between Celestica Corp. (under its former name, Celestica
Colorado, Inc.) and BMO Leasing (U.S.) Inc., as same may be amended, restated,
supplemented, extended or replaced from


<PAGE>

                                      -24-

time to time, including, without limitation, the amendment dated December 31,
1998 pursuant to which Celestica Corp. (under its former name Celestica (USA),
Inc.) assumed the liabilities of Celestica Colorado, Inc. under such Master
Lease and Open-end Mortgage;

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

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

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

     (a)  capital stock;

     (b)  preferred stock;

     (c)  paid-in capital;

     (d)  retained earnings; and

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

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

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

     (g)  goodwill and other intangibles; and

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

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


<PAGE>

                                      -25-

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

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

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

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

1.2      HEADINGS

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

1.3      USE OF DEFINED TERMS

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

1.4      EXTENDED MEANINGS

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

1.5      CROSS REFERENCES

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

1.6      REFERENCE TO AGENTS OR LENDERS

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


<PAGE>

                                      -26-

1.7      ACCOUNTING TERMS

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

1.8      CONSOLIDATED FINANCIAL STATEMENTS AND CONSOLIDATED ACCOUNTS

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

1.9      NON-BANKING DAYS

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

1.10     REFERENCES TO TIME OF DAY

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

1.11     SEVERABILITY

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


<PAGE>

                                      -27-

1.12     CURRENCY

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

1.13     REFERENCES TO STATUTES

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

1.14     REFERENCES TO AGREEMENTS

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

1.15     CONSENTS AND APPROVALS

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

1.16     SCHEDULES

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

       Schedule A       -     Lenders
       Schedule B       -     Lenders' Commitments
       Schedule C       -     Applicable Margin, Facility Fee, Utilization Fee
                              and LC Fee
       Schedule D       -     Quarterly Certificate on Covenants
       Schedule E       -     Conversion Notice
       Schedule F       -     Designated Subsidiary Agreement
       Schedule G       -     Drawdown Notice and Notice of Swing Line Borrowing
       Schedule H       -     Guarantees
       Schedule I       -     Rollover Notice
       Schedule J       -     Transfer Notice
       Schedule K       -     Issuance Request
       Schedule L       -     Acceptance Note
       Schedule M       -     Consent Lender Notice
       Schedule N       -     Mandatory Cost Calculation

<PAGE>

                                      -28-

       Schedule O       -     Opinions of Counsel
       Schedule P       -     Extension Request
       Schedule Q       -     Permitted Encumbrance Certificate



<PAGE>

                                      -29-


                                   ARTICLE 2
                                  THE FACILITY

2.1      ESTABLISHMENT OF THE FACILITY

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

2.2      PURPOSE, NATURE AND TERM OF THE FACILITY

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

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

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

2.3      AVAILABILITY OF ADVANCES

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

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

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

          (iii) to Celestica or any Designated Subsidiary, Drawdowns from
               Lenders, each in a minimum amount of U.S.$ 5,000,000 and integral
               multiples of


<PAGE>

                                      -30-

               U.S.$ 100,000 in excess thereof, in United States  Dollars by way
               of Base Rate Canada Advances;

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

          (v)  to Celestica, Letters of Credit from the Issuing Bank on behalf
               of the Lenders in, at the option of Celestica, Canadian Dollars,
               United States Dollars or any Freely Tradeable European Currency,
               in accordance with Article 3.

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

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

     (d)  If a Borrower wishes to make a Drawdown under the Facility for the
          purpose of financing a Take-over Bid, such Borrower shall deliver to
          the Administrative Agent a written notice (a "TAKE-OVER BID NOTICE")
          thereof at least ten (10) Banking Days prior to the day on which it
          gives to the Administrative Agent a Drawdown Notice requesting such
          Drawdown. Such Take-over Bid Notice shall include the details of such
          Take-over Bid. As soon as possible, but in any event


<PAGE>

                                      -31-

          within five (5) Banking Days of the giving of the Take-over Bid
          Notice, each Lender shall, acting reasonably and in good faith,
          determine whether or not it wishes to fund its Main Facility Rateable
          Portion of such Drawdown. Notwithstanding any other provisions hereof,
          if any Lender determines that it does not wish to fund its Main
          Facility Rateable Portion of such Drawdown, such Lender shall not be
          required to fund its Main Facility Rateable Portion of such Drawdown
          and the Drawdown shall be reduced accordingly.

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

2.4      LENDERS' OBLIGATIONS

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

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

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

2.5      REPAYMENT OF ADVANCES BY FORMER DESIGNATED SUBSIDIARIES

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

2.6      REPAYMENT OF FACILITY

     (a)  In the event that, at any time, the Outstanding Amount exceeds the
          maximum amount allowed pursuant to Section 2.3 due to changes in
          exchange rates, then Celestica shall forthwith repay to the
          Administrative Agent or cause another Borrower to forthwith repay to
          the Administrative Agent that portion of the Outstanding Amount which
          is in excess of the maximum amount allowed pursuant to Section 2.3;
          provided, however, that unless the Outstanding Amount exceeds One
          Hundred and Five Per Cent (105%) of the aggregate Commitments under
          the Facility, there shall be no such obligation to make a repayment
          hereunder until the next following Interest Payment Date, Drawdown
          Date, date of Rollover or date of Conversion (whichever is the first
          to occur following receipt of written notice of determination of such
          Outstanding Amount by the


<PAGE>

                                      -32-


          Administrative Agent to Celestica) and provided further that if such
          repayment would result in the repayment of a Bankers' Acceptance
          Advance prior to its maturity date or the repayment of an Acceptance
          Note or a LIBOR Advance prior to the last day of its Interest Period,
          Celestica may, or may cause another Borrower to, at its option and in
          lieu of repayment of such Advances, deposit with the Administrative
          Agent cash collateral in an amount equal to the required repayment
          amount to be held by the Administrative Agent for distribution to the
          Lenders as repayment of a Bankers' Acceptance Advance on its maturity
          date (or the last day of its then current Interest Period in the case
          of an Acceptance Note) or repayment of an Acceptance Note or a LIBOR
          Advance on the last day of its then current Interest Period, as the
          case may be.

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

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

2.7      PAYMENTS/CANCELLATION OR REDUCTION

Celestica may at any time, including, without limitation, during the period
between the Conversion Date and the Final Maturity Date, upon giving at least
three (3) Banking Days' prior notice to the Administrative Agent, repay, or
cause another Borrower to repay and, in each case, cancel, any drawn portion of
the Facility or cancel in full or, from time to time, in part, any undrawn
portion of the Facility; provided, however, that:

     (a)  if any such repayment relates to Bankers' Acceptances, Acceptance
          Notes or Letters of Credit, which have not matured, the Borrower to
          which such Advance


<PAGE>

                                      -33-

          was made shall, at such time, deposit in a cash collateral account
          opened and maintained by the Administrative Agent such amount as may
          be required to yield an amount equal to the aggregate undiscounted
          Face Amount of such instruments on the maturity dates thereof;

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

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

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

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

2.8      FINAL MATURITY DATE; EXTENSION OF CONVERSION DATE

     (a)  FINAL MATURITY DATE. Subject to Section 2.7, this Section 2.8, Section
          10.2 and Section 10.5, the Facility shall be available until the Final
          Maturity Date. Notwithstanding the termination of availability of the
          Facility, until all of the Obligations (other than contingent
          indemnity obligations) of the Borrowers shall have been fully and
          indefeasibly paid and satisfied and all financing arrangements among
          the Borrowers and the Lenders with respect to the Obligations shall
          have been cancelled or terminated, all of the rights and remedies
          under this Agreement and the other Loan Documents shall survive.

     (b)  EXTENSION OF CONVERSION DATE. Not more than 90 days nor less than 60
          days before the then effective Conversion Date, Celestica may request,
          by delivery of an Extension Request (which shall include the consent
          of all Guarantors) to the Administrative Agent, that the Conversion
          Date be extended for an additional period of 364 days. Within 5 days
          after receipt of such Extension Request, the Administrative Agent
          shall notify each Lender of the Extension Request by Celestica and
          provide each Lender with a copy of such Extension Request. Within 25
          days after Celestica has delivered such Extension Request, each Lender
          shall give the Administrative Agent notice in writing of its decision
          to agree to so extend or to deny the requested extension (and the
          failure to provide such notice shall be deemed to be a decision to
          deny the requested extension). Within 5 days following the aforesaid
          25 day period, the Administrative Agent shall give written notice to
          Celestica and the Lenders advising as to those Lenders who have agreed
          to the requested extension (for purposes of this Section 2.8, the
          "APPROVING LENDERS") and those Lenders who have not agreed to or who
          have been deemed


<PAGE>

                                      -34-

          to have not agreed to the requested extension (for purposes of this
          Section 2.8, the "DISSENTING LENDERS").

          (i)  If all Lenders approve the requested extension, the Facility
               shall be extended for a further 364 days and the Conversion Date
               shall be the date that is 364 days from the date that had been
               the Conversion Date.

          (ii) If Lenders having Commitments equal to at least 66 2/3% but
               less than 100% of the Commitments approve the requested extension
               then an Approving Lender, at its option, may acquire all or any
               portion of the rights and obligations of the Dissenting Lenders
               under the Facility by giving written notice to the Administrative
               Agent of the portion of the rights and obligations of the
               Dissenting Lenders which such Approving Lender is prepared to
               acquire. Such notice shall be given within 10 days following
               receipt of the notice from the Administrative Agent advising as
               to the Approving Lenders and the Dissenting Lenders pursuant to
               Section 2.8(b). If more than one Approving Lender gives notice to
               the Administrative Agent that it wishes to acquire all or a
               portion of the rights and obligations of the Dissenting Lenders
               under the Facility, then each Approving Lender shall, subject to
               Section 2.8(b)((iii) be entitled to acquire its pro rata share of
               the rights and obligations of the Dissenting Lenders under the
               Facility. For the purpose of this Section 2.8(b)(ii), the
               Approving Lenders' pro rata shares shall be determined based on
               the Commitments (before acquisition under this Section
               2.8(b)(ii)) of each of the Approving Lenders wishing to acquire a
               portion of the rights and obligations of the Dissenting Lenders
               under the Facility. The Administrative Agent shall give written
               notice to Celestica within five days following the expiry of the
               time for Approving Lenders to give notice of acquisition pursuant
               to this Section 2.8(b)(ii), of the Commitments of the Dissenting
               Lenders so acquired.

          (iii) If one or more of the Approving Lenders (for purposes of this
               Section 2.8(b)(iii), the "ACQUIRING LENDERS") has given notice to
               the Administrative Agent that it wishes to acquire all or a
               portion of the rights and obligations of the Dissenting Lenders
               under the Facility pursuant to Section 2.8(b)(ii), then,
               concurrently with the notice given to Celestica pursuant to
               Section 2.8(b)(ii), the Administrative Agent shall give notice to
               each of the Acquiring Lenders setting out the Commitments of and
               the amount of the outstanding Advances made by the Dissenting
               Lenders to be acquired by each of the Acquiring Lenders in
               accordance with Section 2.8(b)(ii) and of the date (for purposes
               of this Section 2.8(b)(iii), the "ACQUISITION DATE") on which the
               acquisition shall be effective. The Acquisition Date shall be the
               tenth day following the date of the notice given pursuant to this
               Section 2.8(b)(iii). At or before 11:00 a.m. (Toronto, Canada
               time) on the Acquisition Date, each Acquiring Lender shall
               deposit with or transfer to the Administrative Agent for the
               account


<PAGE>

                                      -35-

               of the Dissenting Lenders an amount equal to the amount of the
               outstanding credit to be acquired by it pursuant to this Section
               2.8(b)(iii). Upon receipt of such amounts, the Administrative
               Agent shall (i) disburse such amounts to each of the Dissenting
               Lenders in accordance with their respective entitlement thereto
               against delivery of forms of Transfer Notice executed by each of
               the Dissenting Lenders; and (ii) make appropriate entries in the
               books of account regarding the Facility. The provisions of
               Section 13.11(b), (c) and (d) shall apply mutatis mutandis to any
               acquisition pursuant to this Section 2.8(b)(iii). Each
               acquisition of the outstanding Advances of a Dissenting Lender by
               an Acquiring Lender shall be subject to the prior consent of
               Celestica, which consent shall not be unreasonably withheld or
               delayed, provided that it shall not be unreasonable for Celestica
               to withhold its consent if such acquisition gives rise to a claim
               for increased costs pursuant to Article 5 or any obligation on
               the part of an Obligor to deduct or withhold any Taxes from or in
               respect of any sum payable under this Agreement, in excess of
               what would have been the case without such acquisition, but it
               shall be unreasonable for Celestica to withhold its consent if
               such Acquiring Lender waives the rights to any benefits under
               Section 5.7 in respect of the Advances purchased by it pursuant
               to this clause (iii).

          (iv) If Lenders having Commitments equal to at least 66 2/3% but less
               than 100% of the Commitments approve the requested extension and
               if the Acquiring Lenders have not acquired all of the rights and
               obligations of the Dissenting Lenders pursuant to Section
               2.8(b)(iii), then Celestica may, at its option, either (A) locate
               one or more other financial institutions (for purposes of this
               Section 2.8(b)(iv), "ALTERNATE LENDERS"), satisfactory to the
               Administrative Agent acting reasonably, to become Lenders and to
               acquire all or a pro rata share of the rights and obligations of
               the Dissenting Lenders under the Facility which have not been
               acquired by the Acquiring Lenders or (B) repay to the
               Administrative Agent on behalf of such Dissenting Lenders all of
               the outstanding Advances which have been advanced by such
               Dissenting Lenders and all accrued and unpaid interest and fees
               thereon without any repayment to any other Lenders. For the
               purpose of this Section 2.8(b)(iv), the Alternate Lenders' pro
               rata shares shall be determined based on the Commitments of each
               of the Alternate Lenders wishing to acquire a portion of the
               rights and obligations of the Dissenting Lenders under the
               Facility. If all of the rights and obligations of the Dissenting
               Lenders have not been acquired by Acquiring Lenders or Alternate
               Lenders or both or if all of the credit outstanding hereunder
               which has been extended by such Dissenting Lenders and all
               accrued and unpaid interest and fees thereon have not been repaid
               as aforesaid on or before the then current Conversion Date, there
               shall be no extension of the then current Conversion Date and
               Section 2.8(b)(v) shall apply. If (A) all of the rights and
               obligations of the Dissenting Lenders have been acquired by
               Acquiring Lenders and/or Alternate Lenders and/or (B) if all of
               the


<PAGE>

                                      -36-

               Advances outstanding hereunder which have been advanced by such
               Dissenting Lenders and all accrued and unpaid interest and fees
               thereon have been repaid as aforesaid on or before the then
               current Conversion Date, the Facility shall be extended for a
               further 364 days and the Conversion Date shall be the date that
               is 364 days from the date that had been the Conversion Date.

          (v)  If Lenders having Commitments of less than 66 2/3% of the
               Commitments under the Facility approve the requested extension,
               the amount of the Facility shall be permanently reduced on the
               Conversion Date to the aggregate of the Advances outstanding on
               the Conversion Date under the Facility, there shall be no further
               extension of the Conversion Date and the Final Maturity Date
               shall be the date which is one year from the then effective
               Conversion Date, provided that the Facility shall, as at the then
               effective Conversion Date, cease to be revolving in nature.

A Dissenting Lender shall remain committed to make Advances under the Facility
until the earlier of the date on which the Obligations owing to it are assigned
or repaid as aforesaid and the Final Maturity Date as determined in accordance
with Section 2.8(b)(v).

2.9      INTEREST ON PRIME RATE ADVANCES

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

2.10     INTEREST ON BASE RATE CANADA ADVANCES

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


<PAGE>

                                      -37-

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

2.11     [INTENTIONALLY DELETED]

2.12     LIBOR ADVANCES

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

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

     (c)  Interest on any LIBOR Advance shall be calculated at a rate per annum
          equal to the LIBO Rate plus the Applicable Margin, plus any applicable
          Mandatory Cost then in effect, shall accrue from day to day and shall
          be calculated on the basis of the actual number of days elapsed
          (including the first day of each Interest Period but excluding the
          last day thereof) and divided by 360 or by 365 where market practice
          so requires. Interest on any LIBOR Advance shall be payable to the
          Administrative Agent in United States Dollars in arrears on the last
          day of the Interest Period relating thereto; provided, however, that
          if the Interest Period is for a term of more than three months,
          interest shall be payable on the last Banking


<PAGE>

                                      -38-


          Day of the first three-month period and on the last Banking Day of
          each three-month period thereafter, as well as on the last day of the
          Interest Period.

     (d)  [INTENTIONALLY DELETED]

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

     (f)  [INTENTIONALLY DELETED]

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

2.13     METHOD AND PLACE OF PAYMENT

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

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

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

     (d)  Notwithstanding Section 2.12(c), in the event that a Borrower is
          required to pay Additional Compensation to a Lender, such Borrower
          may prepay all or any portion of the Advances made by such Lender
          to such Borrower, without any obligation to prepay any portion of
          the Advances made by other Lenders to whom the Borrower is not
          required to pay Additional Compensation; provided, however,

<PAGE>

                                      -39-

          that any prepayment of a Bankers' Acceptance Advance or LIBOR
          Advance shall be subject to the provisions of Section 12.2.

2.14     FEES

     (a)  During the period commencing on the date hereof and ending on the
          Final Maturity Date (the "RELEVANT PERIOD"), Celestica on behalf of
          itself and the other Borrowers shall pay to the Administrative Agent
          for the account of the Lenders a fee (the "FACILITY FEE") calculated
          at the rate per annum set forth in Schedule C on the aggregate
          Commitments (after giving effect to any cancellation and reduction
          pursuant to Sections 2.7 and 2.8) hereunder during the relevant period
          from day to day which fee shall be payable quarterly in arrears.

     (b)  During the relevant period, Celestica on behalf of itself and the
          other Borrowers shall pay to the Administrative Agent for the account
          of the Lenders a fee (the "UTILIZATION FEE") calculated at the rate
          per annum set forth in Schedule C on the aggregate principal amount of
          all outstanding Advances hereunder for each day during the relevant
          period on which the aggregate principal amount of all outstanding
          Advances exceed 33.333% of the aggregate Commitments (after giving
          effect to any increase, cancellation or reduction pursuant to Sections
          2.3, 2.7, 2.8 and 2.23) hereunder, which fee shall be payable
          quarterly in arrears.

2.15     CONVERSION OPTIONS

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

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

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

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


<PAGE>

                                      -40-

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

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

2.16     EXECUTION OF NOTICES

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

2.17     EVIDENCE OF INDEBTEDNESS

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

2.18     INTEREST ON UNPAID COSTS AND EXPENSES

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


<PAGE>

                                      -41-

2.19     CRIMINAL RATE OF INTEREST

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

2.20     COMPLIANCE WITH THE INTEREST ACT (CANADA)

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

2.21     NOMINAL RATE OF INTEREST

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

2.22     SWING LINE FACILITY

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

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

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

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

     (c)  AMOUNT OF EACH SWING LINE ADVANCE. Each Swing Line Advance in Canadian
          Dollars and each Swing Line Advance in United States Dollars shall be
          in an


<PAGE>

                                      -42-

          aggregate principal amount of Cdn.$ 1,000,000 or U.S.$ 1,000,000, as
          the case may be, or any integral multiple thereof.

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

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

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

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

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

     (i)  REFUNDING UNPAID SWING LINE ADVANCES. If any Swing Line Advance is
          converted, pursuant to subsection (h), to another form of Advance, the
          Swing


<PAGE>

                                      -43-

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

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

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


<PAGE>

                                      -44-

2.23     INCREASE IN AGGREGATE COMMITMENT AMOUNT TO U.S.$ 500,000,000

     (a)  Notwithstanding any other provision of this Agreement, each of the
          parties hereto agree that Celestica may, from time to time and at any
          time, give notice to the Administrative Agent that one or more
          financial institutions (each an "ADDITIONAL LENDER") have agreed to
          make commitments (each an "ADDITIONAL COMMITMENT") hereunder
          (provided, however, that Celestica shall not be entitled to give such
          notice at any time at which the aggregate Commitments is equal to
          U.S.$ 500,000,000 (or such lesser amount as may be available following
          a cancellation in part of the Facility pursuant to Section 2.7)). Upon
          receipt of such written notice, each party hereto hereby irrevocably
          authorizes the Administrative Agent to:

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

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

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

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

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

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


<PAGE>

                                      -45-


                                   ARTICLE 3
                                LETTERS OF CREDIT

3.1      ISSUANCE REQUEST

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

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

     (b)  be stated to expire on a date (its "STATED EXPIRY DATE") not later
          than the earlier of two years from its date of issuance and the Final
          Maturity Date; and

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

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

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

Celestica may request Letters of Credit to be denominated in Canadian Dollars,
in United States Dollars, in Pounds Sterling or in such Freely Tradeable
European Currency (other than Pounds Sterling) as the Issuing Bank, in its sole
and absolute discretion, may agree. The provisions of Section 6.1 (with the
exception of 6.1(h)) shall apply to Letters of Credit issued contemporaneously
on the first Drawdown Date and, thereafter, Section 6.2 (with the exception of
Section 6.2(a)) shall apply at the time of issuance of any Letter of Credit as
if such issuance were a Drawdown.

3.2      ISSUANCES

On the terms and subject to the conditions of this Agreement, the Issuing Bank
shall issue Letters of Credit in accordance with the Issuance Requests made
therefor. The Issuing Bank will make


<PAGE>

                                      -46-

available the original of each Letter of Credit which it issues in accordance
with the Issuance Request therefor to the beneficiary thereof. The Issuing Bank
shall notify the Administrative Agent of each issuance of or amendment to any
Letter of Credit on the day upon which such issuance or amendment occurs and
will promptly provide each of the Administrative Agent and the Lenders with a
copy of such Letter of Credit or amendment thereof.

3.3      OTHER LENDERS' PARTICIPATION

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


<PAGE>

                                      -47-

Main Facility Rateable Portion of all payments received by the Issuing Bank from
Celestica in reimbursement of drawings honoured by the Issuing Bank under such
Letter of Credit when such payments are received.

3.4      REIMBURSEMENT

The Issuing Bank will notify Celestica and the Administrative Agent promptly
following the presentment for payment of any drawing under a Letter of Credit
which notice shall include the date (a "DISBURSEMENT DATE") such payment shall
be made. Subject to the terms and provisions of such Letter of Credit, the
Issuing Bank shall make such payment to the beneficiary (or its designee) of
such Letter of Credit (each, a "DISBURSEMENT"). Unless Celestica has made
alternative arrangements with the Issuing Bank with respect to payment to the
Administrative Agent of an amount sufficient to permit the Issuing Bank to
discharge its obligations under the Letter of Credit together with that amount
equal to any and all charges and expenses which the Issuing Bank may pay or
incur in respect to such Letter of Credit, at or prior to 12:00 noon, Toronto,
Canada time on the Disbursement Date, Celestica will reimburse the Issuing Bank
for all amounts disbursed under the Letter of Credit together with that amount
equal to any and all charges and expenses which the Issuing Bank may pay or
incur in respect of such drawing under such Letter of Credit, failing which any
such payment so payable shall be deemed to be (i) a Drawdown of a Prime Rate
Advance if payment under such Letter of Credit was made in Canadian Dollars;
(ii) a Drawdown of a Base Rate Canada Advance if payment under such Letter of
Credit was made in United States Dollars; or (iii) a Drawdown of a Base Rate
Canada Advance in the Equivalent Amount in United States Dollars on the date of
such disbursement of the aggregate of the amount so disbursed and all such
charges and expenses if payment under such Letter of Credit was made in a Freely
Tradeable European Currency; provided that the provisions of Section 6.2
regarding conditions for subsequent Drawdowns and the provisions of Section 11.2
relieving Lenders of the obligation to make further Advances shall not apply to
such Advances. In the event that any amount so payable by the Issuing Bank
exceeds the amount available to be drawn down by Celestica under the Facility,
then forthwith upon receipt of such notice, Celestica shall provide to the
Issuing Bank an amount equal to such excess amount. Celestica's obligation (a
"REIMBURSEMENT OBLIGATION") to reimburse the Issuing Bank with respect to each
Disbursement, and each Lender's obligation to make participation payments in
each drawing which has not been reimbursed by Celestica, shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim, or defence to payment which Celestica may have or have had against
any Lender or any beneficiary of a Letter of Credit, including any defence based
upon the occurrence of any Default, any draft, demand or certificate or other
document presented under a Letter of Credit proving to be forged, fraudulent,
invalid or insufficient, the failure of any Disbursement to conform to the terms
of the applicable Letter of Credit (if, in the Issuing Bank's good faith
opinion, such Disbursement is determined to be appropriate) or any
non-application or misapplication by the beneficiary of the proceeds of such
Disbursement, or the legality, validity, form, regularity, or enforceability of
such Letter of Credit; provided, however, that nothing herein shall adversely
affect the right of Celestica to commence any proceeding against the Issuing
Bank for any wrongful Disbursement made by the Issuing Bank under a Letter of
Credit as a result of gross negligence or wilful misconduct on the part of the
Issuing Bank.


<PAGE>

                                      -48-

3.5      DEEMED DISBURSEMENTS

Upon the declaration by the Administrative Agent that all Advances are
immediately due and payable or are due and payable on demand pursuant to Section
10.2 or the occurrence of the Final Maturity Date, an amount equal to any
portion of an outstanding and undrawn Letter of Credit shall, at the election of
the Issuing Bank acting on instructions from the Majority Lenders, and without
demand upon or notice to Celestica, be deemed to have been paid or disbursed by
the Issuing Bank under such Letter of Credit (notwithstanding that such amount
may not in fact have been so paid or disbursed), and, upon notification by the
Issuing Bank to the Administrative Agent and Celestica of its obligations under
this Section, Celestica shall be immediately obligated to reimburse the Issuing
Bank for the amount deemed to have been so paid or disbursed by the Issuing
Bank. Any amounts so received by the Issuing Bank from Celestica pursuant to
this Section shall be held as collateral security for the repayment of
Celestica's obligations in connection with the Letters of Credit issued by the
Issuing Bank. At any time when such Letters of Credit shall terminate pursuant
to Section 3.1(c)(i) or be reduced pursuant to Section 3.1(c)(ii) the
obligations of Celestica under this Section shall be reduced accordingly
(subject, however, to reinstatement in the event any payment in respect of such
Letters of Credit is recovered in any manner from the Issuing Bank), and the
Issuing Bank will return to Celestica the amount, if any, by which (i) the
amount deposited by Celestica with the Issuing Bank; exceeds (ii) the amount
applied by the Issuing Bank to any Reimbursement Obligation of Celestica less
the amount of all Reimbursement Obligations of Celestica.

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

3.6      NATURE OF REIMBURSEMENT OBLIGATIONS

Celestica shall assume all risks of the acts, omissions, or misuse of any Letter
of Credit it has requested by the beneficiary thereof. Neither the Issuing Bank
nor any Lender (except to the extent of its own gross negligence or wilful
misconduct) shall be responsible for:

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

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

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


<PAGE>

                                      -49-

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

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

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

3.7      INDEMNITY FOR COSTS

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

3.8      FEES

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

     (b)  At the time of issuance of a Letter of Credit and, if applicable, on
          the date one year from the date of issuance of each Letter of Credit
          which has a term longer than one year, Celestica shall pay to the
          Administrative Agent for the accounts of the Lenders, an annual fee in
          an amount equal to the product of (i) the maximum amount payable under
          the Letter of Credit, (ii) the LC Fee, and (iii) a fraction, the
          numerator of which is the number of days in the term of the Letter of
          Credit to elapse in that calendar year from the date of issuance and
          the denominator of which is 365 (or 366 in the case of a leap year).

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

     (d)  In the event that the currency in which a Letter of Credit is
          expressed to be drawn is a currency other than United States Dollars
          or Canadian Dollars, for the


<PAGE>

                                      -50-

          purposes of assessing the fees payable under this Section 3.8, the
          maximum amount payable under the Letter of Credit shall be deemed to
          be the Equivalent Amount in United States Dollars of such other
          currency on the date on which such fee is to be assessed.

3.9      ISSUING BANK

The Issuing Bank shall be Scotiabank or such other Lender as Celestica may
designate and such Lender may agree from time to time.



<PAGE>

                                      -51-


                                   ARTICLE 4

                    BANKERS' ACCEPTANCES AND ACCEPTANCE NOTES


4.1      FUNDING OF BANKERS' ACCEPTANCES

If the Administrative Agent receives from Celestica or a Canadian Designated
Subsidiary a Drawdown Notice or a Rollover Notice or a Conversion Notice
requesting an Advance or a Rollover or a Conversion into a Bankers' Acceptance
Advance, the Administrative Agent shall notify each of the Lenders, prior to
11:30 a.m. (Toronto, Canada time) on the first Banking Day prior to the date of
such Advance, of such request and each Lender's Main Facility Rateable Portion
of such Advance except that, if the Face Amount of a draft which would otherwise
be accepted by a Lender would not be Cdn.$ 100,000, or an integral multiple
thereof, such Face Amount shall be increased or reduced by the Administrative
Agent in its sole and unfettered discretion to the nearest integral multiple of
Cdn.$ 100,000. Each Lender shall, not later than 11:30 a.m. (Toronto, Canada
time) on the date of each Advance by way of Bankers' Acceptance under the
Facility (whether in respect of a Drawdown or pursuant to a Rollover or
Conversion), accept drafts of such Borrower who has delivered such Drawdown
Notice, Rollover Notice or Conversion Notice which are presented to it for
acceptance and which have an aggregate face amount equal to such Lender's Main
Facility Rateable Portion of the total Advance being made by way of Bankers'
Acceptances on such date. With respect to each Drawdown of or Rollover of or
Conversion into Bankers' Acceptances, each Lender shall not be required to
accept any draft which has a face amount which is not an integral multiple of
Cdn.$ 100,000. Subject to this Section and Section 2.3, each Lender shall
purchase its Main Facility Rateable Portion of any Bankers' Acceptances.
Concurrently with the acceptance of drafts of such Borrower as aforesaid, each
Lender shall make available to the Administrative Agent its Main Facility
Rateable Portion of the Notional BA Proceeds with respect to such Advance. The
Administrative Agent shall, upon fulfilment by such Borrower of the conditions
set out in Section 6.1 or Section 6.2, as applicable, make such Notional BA
Proceeds available to such Borrower on the date of such Advance by crediting the
Designated Account of such Borrower.

4.2      ACCEPTANCE FEES

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


<PAGE>

                                      -52-

4.3      SAFEKEEPING OF DRAFTS

The Lenders agree that, in respect of the safekeeping of executed drafts of
Celestica or any Canadian Designated Subsidiary which are delivered to them for
acceptance hereunder, they shall exercise the same degree of care which the
Lenders give to their own property, provided that the Lenders shall not deemed
to be insurers thereof.

4.4      TERM AND INTEREST PERIODS

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

4.5      PAYMENT ON MATURITY

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

4.6      WAIVER OF DAYS OF GRACE

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


<PAGE>

                                      -53-

4.7      SPECIAL PROVISIONS RELATING TO ACCEPTANCE NOTES

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

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

4.8      NO MARKET

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


<PAGE>

                                      -54-

                                   ARTICLE 5
                             CHANGE OF CIRCUMSTANCES
                               AND INDEMNIFICATION

5.1      [INTENTIONALLY DELETED]

5.2      [INTENTIONALLY DELETED]

5.3      LENDER REPRESENTATION

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

5.4      [INTENTIONALLY DELETED]

5.5      INCREASED COSTS

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

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

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


<PAGE>

                                      -55-

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

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

5.6      ILLEGALITY

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


<PAGE>

                                      -56-

affecting any of the obligations of such Lender or the Borrowers hereunder, such
Lender shall declare its obligations under only that portion so terminated.

5.7      MITIGATION

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

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

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

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

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

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

     (b)  If any Lender seeks Additional Compensation pursuant to Section 5.5
          hereof (the "AFFECTED LENDER"), then the relevant Borrowers may
          indicate to the Administrative Agent in writing that they desire to
          (i) replace the Affected Lender with one or more of the other Lenders,
          and/or (ii) amend a Drawdown Notice or Notice of Swing Line Borrowing
          to reduce the amount sought to be borrowed to reflect the reduced
          amount hereunder, and the Administrative Agent shall then forthwith
          give notice to the other Lenders that any Lender or Lenders may, in
          the


<PAGE>

                                      -57-

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

5.8      TAXES

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

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

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


<PAGE>

                                      -58-

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

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

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

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

     (c)  If an Obligor fails to pay any Taxes required to be paid by it
          pursuant to this Section 5.8 when due to the appropriate taxing
          authority or fails to remit to the Administrative Agent, for the
          account of the respective Lenders, for the account


<PAGE>

                                      -59-

          of the Administrative Agent or for the Administrative Agent's own
          account, as applicable, the required receipts or other documentary
          evidence required by Section 5.8(a)(ii), the Obligor shall indemnify
          the Lenders or the Administrative Agent, as applicable, for any
          incremental Taxes, interest or penalties that may become payable by
          any Lender or the Administrative Agent as a result of any such
          failure. For purposes of this Section 5.8, a distribution by the
          Administrative Agent or any Lender to or for the account of any Lender
          shall be deemed a payment by the Obligor.

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

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

5.9      TAX REFUND

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

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


<PAGE>

                                      -60-

                                   ARTICLE 6
                              CONDITIONS PRECEDENT

6.1      CONDITIONS FOR CLOSING

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

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

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

          (i)  a certified copy of its Organic Documents,

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

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

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

     (c)  there shall have been no Material Adverse Change since September 30,
          2002;

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

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

     (f)  Celestica shall have executed and delivered to the Administrative
          Agent a confirmation of its Guarantee of the monetary Obligations of
          each Borrower (other than Celestica);

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

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


<PAGE>

                                      -61-


          Restricted Subsidiaries shall have delivered to the Administrative
          Agent a Permitted Encumbrance Certificate if any of the undertaking,
          property or assets of such Restricted Subsidiary is subject to any
          Liens;

     (i)  the Borrowers shall have paid all fees and expenses relating to the
          Facility provided for in this Agreement as set out in Section 2.14;
          and

     (j)  all amounts owing by the Borrowers to the Lenders and the Agents under
          the Senior Unsecured Credit Agreement shall have been fully repaid and
          such Senior Unsecured Credit Facility shall have been terminated and
          cancelled and shall cease to be of any further force and effect.

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

6.2      CONDITIONS FOR FIRST DRAWDOWN

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

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

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

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

6.3      CONDITIONS FOR SUBSEQUENT DRAWDOWNS

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

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

     (b)  the representations and warranties set forth in Section 8.1 shall be,
          MUTATIS MUTANDIS, true and correct in all material respects on and as
          of the Drawdown


<PAGE>

                                      -62-

          Date, both before and after giving effect to the Drawdown of such
          Advance and to the application of proceeds therefrom on the Drawdown
          Date;

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

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



<PAGE>

                                      -63-

                                   ARTICLE 7
                       PROVISIONS RELATING TO SUBSIDIARIES

7.1      DESIGNATED SUBSIDIARIES

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

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

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

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

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

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

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

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

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

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

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


<PAGE>

                                      -64-

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

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

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

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

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

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

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

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

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

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

     (d)  Celestica may, from time to time and at any time hereafter, terminate
          the designation of a Designated Subsidiary as such by the delivery of
          written notice to


<PAGE>

                                      -65-

          the Administrative Agent and the Relevant Facility Agent and from and
          after the day which is five (5) Banking Days after receipt of such
          notice, the subject Subsidiary shall no longer be a Designated
          Subsidiary and shall have no further right or ability to obtain
          further Advances under the Facility.

7.2      INTENTIONALLY DELETED

7.3      MATERIAL RESTRICTED SUBSIDIARIES TO PROVIDE GUARANTEES

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

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

7.4      UNRESTRICTED SUBSIDIARIES

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

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

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

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

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

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

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


<PAGE>

                                      -66-

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

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


<PAGE>

                                      -67-

                                   ARTICLE 8
                         REPRESENTATIONS AND WARRANTIES

8.1      REPRESENTATIONS AND WARRANTIES

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

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

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

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

          (i)  contravene its Organic Documents;

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

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

     (d)  GOVERNMENT APPROVAL, REGULATION, ETC. No authorization or approval or
          other action by, and no consent from, notice to or filing with, any
          Official Body or other Person is required for the due execution,
          delivery or performance by any Obligor of any Loan Document to which
          it is a party or in order to render any such Loan Document legal,
          valid, binding or enforceable against such Obligor.

     (e)  FINANCIAL STATEMENTS. The consolidated unaudited financial statements
          of Celestica and its Subsidiaries as at September 30, 2002 fairly
          present the financial


<PAGE>

                                      -68-

          condition of Celestica and its Subsidiaries as at such date and the
          results of their operations for the fiscal quarter and nine month
          period then ended, in accordance with GAAP consistently applied. Since
          September 30, 2002 (or, for the purposes of Sections 6.2 and 6.3, if
          the Conversion Date has been extended pursuant to Section 2.8, the
          date of the quarterly or annual financial statements delivered most
          recently prior to the date of the most recent of such extensions
          pursuant to Section 9.1(a)), there has been no Material Adverse
          Change;

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

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

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

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

          (ii) have no contingent liabilities in connection with any Release or
               likely Release of Hazardous Materials and have not Released or
               caused or permitted the Release of Hazardous Materials, and have
               no knowledge of Releases by others, at, on or under any property
               now or previously owned, operated or leased by Celestica and its
               Material Restricted Subsidiaries


<PAGE>

                                      -69-

               that, with respect to any of the foregoing, singly or in the
               aggregate, would reasonably be likely to have a Material Adverse
               Effect;

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

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

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

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

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

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

          (ix) is not listed or proposed for listing on the National Priorities
               List pursuant to CERCLA, on the CERCLIS or on any similar state
               list of sites or Persons requiring investigation or clean up
               where the liability imposition and allocation regime provided for
               in the applicable state Environmental Law is similar to CERCLA,
               including, without limitation, the ability of governments and
               other parties to recover costs from other responsible or


<PAGE>

                                      -70-

               potentially responsible persons, except for any such listing or
               proposed listing which would not reasonably be likely to have a
               Material Adverse Effect.

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

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

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

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

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


<PAGE>

                                      -71-

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

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

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

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

8.2      SURVIVAL OF REPRESENTATIONS AND WARRANTIES

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


<PAGE>

                                      -72-

8.3      DEEMED REPETITION OF REPRESENTATIONS AND WARRANTIES

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


<PAGE>

                                      -73-


                                    ARTICLE 9
                                    COVENANTS

9.1      AFFIRMATIVE COVENANTS

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

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

          (i)  within 60 days after the end of each of its fiscal quarters in
               each fiscal year, commencing with the fiscal quarter ending
               December 31, 2002, the unaudited financial statements of
               Celestica on a consolidated basis, each consisting of a balance
               sheet, statement of income and statement (in the form customarily
               prepared by Celestica for internal reporting purposes) of changes
               in financial position as at the end of such fiscal quarter and
               for the period commencing with the end of the previous fiscal
               quarter and ending with the end of such fiscal quarter, together
               with the figures for the year-to-date and setting forth, in each
               case, in comparative form to the figures for the corresponding
               fiscal quarter of the previous fiscal year;

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

          (iii) within 60 days after the end of each fiscal quarter of Celestica
               in each fiscal year, commencing with the fiscal quarter ending
               December 31, 2002, an Officer's Certificate of Celestica
               substantially in the form of Schedule D stating that:

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


<PAGE>

                                      -74-

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

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

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

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

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

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

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


<PAGE>

                                      -75-

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

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

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

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

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

     (h)  INSURANCE. Each of Celestica and the Restricted Subsidiaries will, and
          will cause each of its Subsidiaries (except for Unrestricted
          Subsidiaries) to, maintain or cause to be maintained insurance with
          responsible insurance companies with respect to its properties and
          business against such casualties and contingencies, of such types, and
          in such amounts as is customary in the case for similar businesses
          operating in similar geographic locations. Notwithstanding the
          foregoing, Celestica and each of the Restricted Subsidiaries shall be
          permitted to self-insure only where self-insurance is usual and
          customary for the type of risk, and for


<PAGE>

                                      -76-

          companies in substantially the same line of business and operating in
          the same geographic location as Celestica or the Restricted
          Subsidiary, as applicable, and where customary and usual reserves or
          provisions are taken in respect of such self-insurance by Celestica or
          the Restricted Subsidiary, as applicable. Upon request of the
          Administrative Agent, Celestica will furnish to the Administrative
          Agent for distribution to the Lenders at reasonable intervals a
          certificate of an Authorized Officer of Celestica setting forth the
          nature and extent of all insurance maintained by Celestica and the
          Restricted Subsidiaries in accordance with this Section which
          certificate shall specify the risks for which Celestica or any
          Restricted Subsidiary have self-insured and the amount of the
          provisions or reserves, if any, held or made in respect of such
          self-insurance.

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

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

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

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


<PAGE>

                                      -77-

          the event that the rating of Celestica shall have been placed under
          review by an Approved Credit Rating Agency.

     (m)  MATERIAL RESTRICTED SUBSIDIARY GUARANTEES.

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

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

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

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

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

          (iii) The Borrowers and Guarantors shall, and the Borrowers shall
               cause each of its Subsidiaries to, take all such steps and do
               such things as may be


<PAGE>

                                      -78-

               necessary, in the opinion of the Administrative Agent, to ensure
               the continuous enforceability of each Guarantee granted by each
               Borrower and each Material Restricted Subsidiary.

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

9.2      NEGATIVE COVENANTS

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

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

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

          (i)  sales made in compliance with Section 13.12; or

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

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

          (iv) sale/leaseback transactions of:

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

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

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


<PAGE>

                                      -79-

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

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

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

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

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

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


<PAGE>

                                      -80-

          such Restricted Subsidiary (other than other Borrowers, Restricted
          Subsidiaries or Unrestricted Subsidiaries) unless,

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

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

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

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

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

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

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

9.3      FINANCIAL COVENANTS

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


<PAGE>

                                      -81-

     (b)  MINIMUM EBITDA:INTEREST EXPENSE RATIO. Celestica shall maintain an
          EBITDA:Interest Expense ratio, calculated on a rolling four quarter
          basis of at least 3.5:1.0.

     (c)  MAXIMUM GROSS FUNDED DEBT:EBITDA RATIO. Celestica shall maintain a
          Gross Funded Debt:EBITDA ratio calculated on a rolling four quarter
          basis of not more than 3.25:1.0. The numerator of such ratio will be
          reduced by 0.25 for each of the first three full calendar quarters
          following the final date on which the Facility ceases to be revolving
          in nature pursuant to Section 2.8(b)(v) hereof, so that such ratio
          will be 3.0:1.0 for the first such quarter, 2.75:1.0 for the second
          such quarter and 2.5:1.0 for the third such quarter and will remain at
          2.5:1.0 for the last such quarter ending on the Final Maturity Date.

     (d)  CALCULATION OF FINANCIAL RATIOS. For the purposes of Sections 9.3(a),
          (b) and (c), all of the calculations shall be made on a consolidated
          basis in accordance with the provisions of Sections 1.7 and 1.8.


<PAGE>

                                      -82-


                                   ARTICLE 10
                            DEFAULT AND ACCELERATION

10.1     EVENTS OF DEFAULT

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

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

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

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

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


<PAGE>

                                      -83-

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

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

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

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

     (g)  any Borrower or any Restricted Subsidiary shall:

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

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

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


<PAGE>

                                      -84-

               Restricted Subsidiary during such 60-day period to preserve,
               protect and defend their rights under the Loan Documents;

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

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

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

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

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

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


<PAGE>

                                      -85-

               obligation to such Pension Plan which, in either case, would
               reasonably be likely to have a Material Adverse Effect; or

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

10.2     ACCELERATION

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

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

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

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

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

10.3     REMEDIES WITH RESPECT TO BANKERS' ACCEPTANCE ADVANCES AND LETTERS OF
         CREDIT

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


<PAGE>

                                      -86-

principal amount of all outstanding Acceptance Notes and (ii) on behalf of the
Issuing Bank, an amount equal to the undrawn Face Amount of any Letters of
Credit issued and outstanding under the Letter of Credit Facility.

10.4     REMEDIES CUMULATIVE AND WAIVERS

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

10.5     SUSPENSION OF LENDERS' OBLIGATIONS

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

10.6     APPLICATION OF PAYMENTS AFTER AN EVENT OF DEFAULT

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

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

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


<PAGE>

                                      -87-

     (c)  to amounts due hereunder as fees;

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

     (e)  to amounts due hereunder as interest; and

     (f)  to amounts due hereunder as principal.



<PAGE>

                                      -88-

                                   ARTICLE 11
                          THE ADMINISTRATIVE AGENT AND
                         ADMINISTRATION OF THE FACILITY

11.1     AUTHORIZATION OF ACTION

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

11.2     PROCEDURE FOR MAKING ADVANCES

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

     (b)  Unless the Administrative Agent has been notified by a Lender on the
          Banking Day prior to the Drawdown Date requested by a Borrower that
          such Lender will not make available to the Administrative Agent its
          Main Facility Rateable Portion of such Advance, the Administrative
          Agent may assume that such Lender has made such portion of the Advance
          available to the Administrative Agent on the Drawdown Date in
          accordance with the provisions hereof and the Administrative Agent
          may, in reliance upon such assumption, make available to the Borrower
          on


<PAGE>

                                      -89-

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

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

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

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

11.3     REMITTANCE OF PAYMENTS

Forthwith after receipt of any repayment of principal or payment of interest or
fees pursuant to any provision of this Agreement, the Administrative Agent which
has received such repayment or payment shall remit to each Lender its Main
Facility Rateable Portion thereof; provided, however, that the Administrative
Agent shall be entitled to set off against and deduct from any


<PAGE>

                                      -90-

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

11.4     REDISTRIBUTION OF PAYMENT

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

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

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

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


<PAGE>

                                      -91-

               actually paid to the Recovering Lender by the Administrative
               Agent pursuant to this Section 11.4(b)(ii).

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

11.5     DUTIES AND OBLIGATIONS

     (a)  None of the Agents nor any of their respective directors, officers,
          agents or employees (and, for purposes hereof, each of the Agents
          shall be deemed to be contracting for and on behalf of such Persons)
          shall be liable for any action taken or omitted to be taken by it or
          them under or in connection with this Agreement except for its or
          their own gross negligence or wilful misconduct. Without limiting the
          generality of the foregoing, each Agent:

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

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

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

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

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


<PAGE>

                                      -92-

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

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

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

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

11.6     PROMPT NOTICE TO THE LENDERS

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

11.7     AGENT'S AUTHORITY

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

11.8     LENDER'S INDEPENDENT CREDIT DECISION

It is understood and agreed by each Lender that it has itself been, and will
continue to be, solely responsible for making its own independent appraisal of
and investigations into the financial condition, creditworthiness, condition,
affairs, status and nature of the Borrowers and its Subsidiaries. Accordingly,
each Lender confirms with the Agents that it has not relied, and will not
hereafter rely, on the Agents (i) to check or enquire on its behalf into the
adequacy, accuracy


<PAGE>

                                      -93-

or completeness of any information provided by the Borrowers or any other Person
under or in connection with this Agreement, the other Loan Documents or the
transactions herein or therein contemplated (whether or not such information has
been or is hereafter distributed to such Lender by an Agent), or (ii) to assess
or keep under review on its behalf the financial condition, creditworthiness,
condition, affairs, status or nature of the Borrowers or any Subsidiary. Each
Lender acknowledges that a copy of this Agreement has been made available to it
for review and each Lender acknowledges that it is satisfied with the form and
substance of this Agreement.

11.9     INDEMNIFICATION

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

11.10    SUCCESSOR AGENT

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


<PAGE>

                                      -94-

11.11    TAKING AND ENFORCEMENT OF REMEDIES

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

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

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

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


<PAGE>

                                      -95-

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

11.12    RELIANCE UPON LENDERS

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

11.13    RELIANCE UPON ADMINISTRATIVE AGENT

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

11.14    REPLACEMENT OF CANCELLED COMMITMENTS

If, at any time prior to the Final Maturity Date, the Commitment of any Lender
or Lenders is cancelled, or any Lender fails to perform its obligations
hereunder, the Administrative Agent may, and at the request of the Borrowers,
provided that no Default or Event of Default has occurred and is continuing,
shall use its reasonable efforts to locate one or more other Persons
("SUBSTITUTE LENDERS") satisfactory to the Borrowers (who may be an existing
Lender) to


<PAGE>

                                      -96-

become a Lender and to assume all or a portion of the Commitment so cancelled,
provided that the Administrative Agent shall not be under any obligation to
assume such cancelled Commitment itself if the Administrative Agent is unable to
locate any Substitute Lenders. Upon locating one or more Substitute Lenders, the
Administrative Agent (on behalf of each of the parties hereto other than the
Borrowers, the Guarantors and the Lender or Lenders whose Commitment has been
cancelled), the Borrowers, the Guarantors and the Substitute Lenders shall make
any appropriate amendments to this Agreement which are required to incorporate
such Substitute Lender or Lenders hereunder. If any Substitute Lender is not an
existing Lender, then Celestica shall pay to the Administrative Agent an
administration fee of U.S.$ 3,500.

11.15    DISCLOSURE OF INFORMATION

     (a)  The Borrowers agree that, if Celestica has given its prior written
          consent to a Person being an assignee or transferee hereunder, then
          the Administrative Agent or any Lender may provide any such assignee
          or transferee or proposed assignee or transferee pursuant to Section
          13.11 with any information it has concerning the financial condition
          of the Borrowers and their Subsidiaries other than information
          delivered by the Borrowers to the Administrative Agent and/or the
          Lenders on a confidential basis which is not in the public domain;
          provided that, for greater certainty, nothing in this Section 11.15(a)
          shall prevent the Administrative Agent or any Lender from disclosing
          the terms of this Agreement on a confidential basis to any proposed
          assignee or transferee of any Lender; and provided further that
          consent of the Borrowers shall not be required if an Event of Default
          has occurred and is continuing.

     (b)  Subject to Section 11.15(a), the Administrative Agent and each of the
          Lenders acknowledges the confidential nature of the financial,
          operational and other information and data provided and to be provided
          to it by the Borrowers pursuant hereto that is not at the time it is
          so provided or (other than through a breach of this Agreement)
          thereafter in the public domain and agrees to use reasonable efforts
          to prevent the disclosure of such information; provided, however,
          that:

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


<PAGE>

                                      -97-

               such information which, in the reasonable opinion of the Lenders'
               Counsel, it is legally required to disclose and will exercise
               reasonable efforts to obtain reliable assurances that
               confidential treatment will be accorded such information;

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

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

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

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

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

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

11.16    ADJUSTMENTS OF RATEABLE PORTIONS

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


<PAGE>

                                      -99-

          a Consent Designated Subsidiary in the same portion as the Main
          Facility Rateable Portion of each Lender.

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



<PAGE>

                                      -99-


                                   ARTICLE 12
                       COSTS, EXPENSES AND INDEMNIFICATION

12.1     COSTS AND EXPENSES

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

12.2     INDEMNIFICATION BY THE BORROWERS

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

12.3     FUNDS

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


<PAGE>

                                      -100-

12.4     GENERAL INDEMNITY

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

     (b)  LIMITATIONS TO INDEMNITY. The foregoing obligations of indemnification
          shall not apply to (i) any Losses suffered by the Indemnitees or any
          of them or to any Claim asserted against the Indemnitees or any of
          them to the extent such Loss or Claim has resulted from the gross
          negligence or wilful misconduct of the Indemnitees or any of them; and
          (ii) any Losses with respect to Taxes for which an Indemnitee may
          claim an indemnity from an Obligor pursuant to Section 5.8(b) of this
          Agreement.

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

     (d)  DEFENCE AND SETTLEMENT. The Indemnifying Party shall have the right,
          but not the obligation, to assume the defence of any Claim in any
          jurisdiction with legal counsel of reputable standing in order to
          protect the rights and interest of the Indemnitees. In such respect,
          (i) the Indemnifying Party shall require the consent of the
          Indemnitees to the choice of legal counsel in connection with the
          Claim, which consent shall not be unreasonably withheld or delayed;
          and (ii) without prejudice to the rights of the Indemnitees to retain
          counsel and participate in the defence of the Claim, the Indemnifying
          Party and the Indemnitees shall make all reasonable efforts to
          co-ordinate their course of action in connection with the defence of
          such Claim. The related costs and expenses sustained in such respect


<PAGE>

                                      -101-

          by the Indemnitees shall be at the expense of the Indemnifying Party,
          provided that the Indemnifying Party shall only be liable for the
          costs and expenses of one firm of separate counsel in addition to the
          cost of any local counsel that may be required. If the Indemnifying
          Party fails to assume defence of the Claim, the Indemnitees will (upon
          further notice to the Borrowers) have the right to undertake, at the
          expense of the Indemnifying Party, the defence, compromise or
          settlement of the Claim on behalf and for the account and risk of the
          Indemnifying Party, subject to the right of the Indemnifying Party to
          assume the defence of the Claim at any time prior to settlement,
          compromise or final determination thereof.

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

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

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

12.5     ENVIRONMENTAL CLAIMS

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


<PAGE>

                                      -102-

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

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

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

     (d)  DEFENCE AND SETTLEMENT. The provisions of Section 12.4(d) shall apply
          to any Claims under this Section 12.5.



<PAGE>

                                      -103-

                                   ARTICLE 13
                                     GENERAL

13.1     TERM

The Facility shall expire on the Final Maturity Date.

13.2     SURVIVAL

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

13.3     BENEFIT OF THE AGREEMENT

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

13.4     NOTICES

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

          (i)  If to the Borrowers:

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

               Attention:       Vice President and Treasurer

               Telecopier:      416-448-2280

               with a copy to:

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

               Attention:       Vice President and General Counsel

               Telecopier:      416-448-2817


<PAGE>

                                      -104-

          (ii) If to the Administrative Agent:

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

               M5H 1H1

               Attention:       Managing Director

               Telecopier:      416-866-3329

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

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

13.5     AMENDMENT AND WAIVER

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


<PAGE>

                                      -105-

13.6     GOVERNING LAW

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

13.7     FURTHER ASSURANCES

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

13.8     ENFORCEMENT AND WAIVER BY THE LENDERS

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

13.9     EXECUTION IN COUNTERPARTS

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

13.10    ASSIGNMENT BY THE BORROWERS

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

13.11    ASSIGNMENTS AND TRANSFERS BY A LENDER

     (a)  With the prior written consent of the Administrative Agent and
          Celestica, such consent not to be unreasonably withheld or delayed,
          any Lender may, at any time, assign all or any of its rights and
          benefits hereunder or transfer in accordance with


<PAGE>

                                      -106-

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

     (b)  If any Lender assigns all or any of its rights and benefits hereunder
          in accordance with Section l3.11(a), then, unless and until the
          assignee has agreed with the Administrative Agent and the other
          Lenders (in a Transfer Notice or otherwise) that it shall be under the
          same obligations towards each of them as it would have been under if
          it had been an original party hereto as a Lender, none of the
          Administrative Agent or any of the other Lenders or the Borrowers
          shall be obliged to recognize such assignee as having the rights
          against each of them which it would have had if it had been such a
          party hereto.

     (c)  If any Lender wishes to assign all or any of its rights, benefits
          and/or obligations hereunder as contemplated in Section l3.11(a), then
          such transfer may be effected upon:

          (i)  receipt of the written consent of the Administrative Agent and
               Celestica as referred to in Section 13.11(a) delivered to the
               relevant assignee by the Administrative Agent unless an Event of
               Default has occurred and is continuing in which case consent of
               Celestica shall not be required;

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

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


<PAGE>

                                      -107-

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

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

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

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

     (d)  Each of the parties hereto confirms that:

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

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

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

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

     (f)  No transfer pursuant to this Section 13.11 shall, unless the
          Administrative Agent otherwise decides in its absolute discretion and
          notifies the parties to such transfer accordingly, be effective if the
          date for effectiveness of such transfer on the day


<PAGE>

                                      -108-

          on which the Administrative Agent receives the applicable Transfer
          Notice is on, or less than five Banking Days before, the day for the
          payment of any interest or fee hereunder.

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

13.12    CERTAIN REQUIREMENTS IN RESPECT OF MERGER, ETC.

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

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

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


<PAGE>

                                      -109-

          Successor Corporation to pay the same and (iii) the agreement of the
          Successor Corporation to observe and perform all the covenants and
          obligations of the Predecessor Corporation under each Loan Document to
          which the Predecessor Corporation was a party and to be bound by all
          the terms of each such Loan Document so far as they relate to the
          Predecessor Corporation which instruments, if any, shall be in form
          reasonably satisfactory to the Administrative Agent;

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

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

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

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

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

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

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

Sections 13.12(a), (b) and (g) shall not apply to (i) the respective liquidation
or dissolution of Celestica Ireland B.V. and Celestica Denmark A/S or (ii) the
merger of Celestica Japan EMS K.K. with and into Celestica Japan K.K.

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

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


<PAGE>

                                      -110-

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

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

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

13.13    SET-OFF

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

13.14    TIME OF THE ESSENCE

Time shall be of the essence in this Agreement.

13.15    ADVERTISEMENTS

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


<PAGE>

                                      -111-


IN WITNESS WHEREOF the parties hereto have executed this Agreement.

                                       CELESTICA INC.


                                       By: /s/ PAUL NICOLETTI
                                           -------------------------------------
                                           Name:  Paul Nicoletti
                                           Title: Vice President & Corporate
                                                  Treasurer




                              DESIGNATED SUBSIDIARY

                                       CELESTICA INTERNATIONAL INC.


                                       By: /s/ PAUL NICOLETTI
                                           -------------------------------------
                                           Name:  Paul Nicoletti
                                           Title: Vice President & Corporate
                                                  Treasurer




<PAGE>

                                     -112-



                                       CIBC WORLD MARKETS, AS JOINT LEAD
                                       ARRANGER AND SYNDICATION AGENT

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


                                       By: /s/ STEVE NISHIMURA
                                           -------------------------------------
                                           Name:  Steve Nishimura
                                           Title: Executive Director


                                       RBC CAPITAL MARKETS, AS JOINT LEAD
                                       ARRANGER AND CO-DOCUMENTATION AGENT


                                       By: /s/ NOEL V. CURRAN
                                           -------------------------------------
                                           Name:  Noel V. Curran
                                           Title: Managing Director


                                       By: /s/ SANDRA LOKOFF
                                           -------------------------------------
                                           Name:  Sandra Lokoff
                                           Title: Director


                                       BANK OF AMERICA SECURITIES LLC, AS
                                       JOINT LEAD ARRANGER AND CO-DOCUMENTATION
                                       AGENT


                                       By: /s/ OSCAR CRANZ
                                           -------------------------------------
                                           Name:  Oscar Cranz
                                           Title: Principal



<PAGE>

                                     -113-


                                        THE BANK OF NOVA SCOTIA,
                                        AS ADMINISTRATIVE AGENT


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


<PAGE>

                SIGNATURE PAGE FOR CANADIAN IMPERIAL BANK OF COMMERCE, AS LENDER


                                       CANADIAN IMPERIAL BANK OF COMMERCE


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


                                       By: /s/ STEVE NISHIMURA
                                           -------------------------------------
                                           Name:  Steve Nishimura
                                           Title: Executive Director


<PAGE>


               SIGNATURE PAGE FOR BANK OF AMERICA, N.A., CANADA BRANCH AS LENDER



                                       BANK OF AMERICA, N.A., CANADA BRANCH


                                       By: /s/ MEDINA SALES DE ANDRADE
                                           -------------------------------------
                                           Name:  Medina Sales de Andrade
                                           Title: Assistant Vice President



<PAGE>


                              SIGNATURE PAGE FOR ROYAL BANK OF CANADA, AS LENDER



                                       ROYAL BANK OF CANADA


                                       By: /s/ NOEL V. CURRAN
                                           -------------------------------------
                                           Name:  Noel V. Curran
                                           Title: Vice President


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



<PAGE>


                         SIGNATURE PAGE FOR EXPORT DEVELOPMENT CANADA, AS LENDER


                                       EXPORT DEVELOPMENT CANADA


                                       By: /s/ CARL BURLOCK
                                           -------------------------------------
                                           Name:  Carl Burlock
                                           Title: Senior Financial Services
                                                  Manager


                                       By: /s/ NORMAN LOW
                                           -------------------------------------
                                           Name:  Norman Low
                                           Title: Group Vice President


<PAGE>


                           SIGNATURE PAGE FOR THE BANK OF NOVA SCOTIA, AS LENDER



                                       THE BANK OF NOVA SCOTIA

                                       By: /s/ STEVE TORRENS
                                           -------------------------------------
                                           Name:    Steve Torrens
                                           Title:   Managing Director -
                                                    Communications &
                                                    Technology


                                       By: /s/ DEREK ORANGE
                                           -------------------------------------
                                           Name:    Derek Orange
                                           Title:   Associate Director -
                                                    Communications &
                                                    Technology


<PAGE>

                                  SIGNATURE PAGE FOR BANK OF MONTREAL, AS LENDER



                                       BANK OF MONTREAL


                                       By: /s/ SEAN P. GALLAWAY
                                           -------------------------------------
                                           Name:   Sean P. Gallaway
                                           Title:  Vice President


<PAGE>


                 SIGNATURE PAGE FOR BANK OF TOKYO-MITSUBISHI (CANADA), AS LENDER


                                       BANK OF TOKYO-MITSUBISHI (CANADA)


                                       By: /s/ TED VANDERLAAN
                                           -------------------------------------
                                           Name:    Ted Vanderlaan
                                           Title:   Vice President


<PAGE>


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


                                       DEUTSCHE BANK AG, CANADA BRANCH


                                       By: /s/ ROBERT A. JOHNSTON
                                           -------------------------------------
                                           Name:    Robert A. Johnston
                                           Title:   Vice President


                                       By: /s/ MARIA GORZEN
                                           -------------------------------------
                                           Name:    Maria Gorzen
                                           Title:   Vice President


<PAGE>


                       SIGNATURE PAGE FOR KEY CORPORATE CAPITAL, INC., AS LENDER



                                       KEY CORPORATE CAPITAL, INC.

                                       By: /s/ VIJAYA N. KULKARNI
                                           -------------------------------------
                                           Name:    Vijaya N. Kulkarni
                                           Title:   Assistant Vice President



                                       By: /s/ MICHAEL J. JACKSON
                                           -------------------------------------
                                           Name:    Michael J. Jackson
                                           Title:   Senior Vice President



<PAGE>


                           SIGNATURE PAGE FOR NATIONAL BANK OF CANADA, AS LENDER



                                       NATIONAL BANK OF CANADA


                                       By: /s/ ED SUSTAR
                                           -------------------------------------
                                           Name:    Ed Sustar
                                           Title:   Vice President


                                       By: /s/ BRIAN SMITH
                                           -------------------------------------
                                           Name:    Brian Smith
                                           Title:   Managing Director


<PAGE>


                                       SIGNATURE PAGE FOR CITIBANK N.A., CANADA
                                       BRANCH, AS LENDER



                                       CITIBANK N.A., CANADA BRANCH


                                       By: /s/ ROD SMITH
                                           -------------------------------------
                                           Name:    Rod Smith
                                           Title:   Managing Director


                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:


<Page>


                                 SCHEDULE C

         APPLICABLE MARGIN, FACILITY FEE, UTILIZATION FEE AND LC FEE

<Table>
<Caption>

- ----------------------------------------------------------------------------------------------------------------------------------
                                               LEVEL I                  LEVEL II    LEVEL III   LEVEL IV(1)  LEVEL V    LEVEL VI
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                   <C>         <C>          <C>         <C>        <C>
Senior Debt Rating(2)             > BBB+/Baa1                           BBB/Baa2    BBB-/Baa3    BB+Ba1      BB/Ba2     < BB/Ba2
(Standard & Poor's or Moody's)
- ----------------------------------------------------------------------------------------------------------------------------------
Utilization Fee(3)                             25.0 bps                 25.0 bps     25.0 bps    25.0 bps    25.0 bps    25.0 bps
- ----------------------------------------------------------------------------------------------------------------------------------
LIBOR / BA Applicable Margin(4)(5)             75.0 bps                 85.0 bps     95.0 bps    125.0 bps   132.5 bps   160.0 bps
/LC Fee
- ----------------------------------------------------------------------------------------------------------------------------------
Prime / Base Rate Canada Applicable             0.0 bps                  0.0 bps      0.0 bps    25.0 bps    32.5 bps    60.0 bps
Margin
- ----------------------------------------------------------------------------------------------------------------------------------
Facility Fee(6)                                 12.5 bps                 15.0 bps     17.5 bps   25.0 bps    30.0 bps     40.0 bps
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>

NOTES:

1.    Level IV will apply at closing.

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

3.    Utilization Fee is payable on the aggregate Commitments (after giving
      effect to any cancellation, reduction, or increase pursuant to Sections
      2.7, 2.8, and 2.23).

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

5.    "Applicable Margin" (for a LIBOR Advance, Banker's Acceptance Advance,
      a Prime Rate Advance or a Base Rate Canada Advance or for the LC Fee)
      shall increase by 35.0 bps on the date that the Facility ceases to be
      revolving in nature pursuant to Section 2.8(b)(v).

6.    Facility Fee is payable regardless of usage on the aggregate
      Commitments (after giving effect to any cancellation, reduction, or
      increase pursuant to Sections 2.7 and 2.8) regardless of usage.


<Page>


                                   SCHEDULE N

                        CALCULATION OF THE MANDATORY COST


1.       GENERAL

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

2.       FOR A LENDER LENDING FROM THE U.K.

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

                for a Loan in Sterling:

                AB + C(B-E) = E x 0.01 per cent. per annum
                ----------------------
                      100-(a + C)

                for any other Loan:

                E x 0.01 per cent. per annum
                --------
                  300

                where on the day of application of the formula:

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

                B    is LIBOR for that Term;

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

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

                E    is calculated by the Administrative Agent as being the
                     average of the rates of charge supplied by the Lenders to
                     the Administrative Agent under paragraph (d) below and
                     expressed in pounds per L1 million.

<Page>


         b.     For the purposes of this paragraph 2:

                i.   ELIGIBLE LIABILITIES and SPECIAL DEPOSIT have the meanings
                     given to them at the time of application of the formula by
                     the Bank of England;

                ii.  FEES RULES means the then current rules on periodic fees in
                     the Supervision Manual of the FSA Handbook; and

                iii. TARIFF base has the meaning given to it in the fees rules.

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

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

         d.     i.   Each Lender must supply to the Administrative Agent the
                     rate of charge payable by that Lender to the Financial
                     Services Authority under the fees rules (calculated by
                     that Lender as being the average of the rates of charge
                     applicable to that Lender but, for this purpose, applying
                     any applicable discount and ignoring any minimum fee
                     required under the fees rules) and expressed in pounds per
                     L1 million of the tariff base of that Lender.

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

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

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

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


                                      2

<Page>


3.       FOR A LENDER LENDING FROM A LENDING OFFICE IN A PARTICIPATING MEMBER
         STATE.

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

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

4.       CHANGES

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

         a.     any change in law or regulation; or

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

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


                                      3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.5
<SEQUENCE>5
<FILENAME>a2106757zex-2_5.txt
<DESCRIPTION>EXHIBIT 2.5
<TEXT>
<Page>

                                                                  EXHIBIT 2.5





                              AMENDED AND RESTATED
                    FOUR YEAR REVOLVING TERM CREDIT AGREEMENT



                CELESTICA INC. AND CELESTICA INTERNATIONAL INC.,
                                  AS BORROWERS

                                     - AND -

                            THE BANK OF NOVA SCOTIA,
                             AS ADMINISTRATIVE AGENT

                                     - AND -

                 THE FINANCIAL INSTITUTIONS NAMED IN SCHEDULE A,
                                   AS LENDERS







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

                          MADE AS OF DECEMBER 17, 2002







                          OSLER, HOSKIN & HARCOURT LLP
                       P.O. BOX 50, 1 FIRST CANADIAN PLACE
                                TORONTO, ONTARIO




<Page>
<TABLE>
<Caption>


                                TABLE OF CONTENTS

                                                                                                              PAGE
<S>                                                                                                           <C>
ARTICLE 1
         INTERPRETATION..........................................................................................2
         1.1      Definitions....................................................................................2
         1.2      Headings......................................................................................20
         1.3      Use of Defined Terms..........................................................................20
         1.4      Extended Meanings.............................................................................20
         1.5      Cross References..............................................................................20
         1.6      Reference to Agent or Lenders.................................................................20
         1.7      Accounting Terms..............................................................................21
         1.8      Consolidated Financial Statements and Consolidated Accounts...................................21
         1.9      Non-Banking Days..............................................................................21
         1.10     References to Time of Day.....................................................................21
         1.11     Severability..................................................................................21
         1.12     Currency......................................................................................22
         1.13     References to Statutes........................................................................22
         1.14     References to Agreements......................................................................22
         1.15     Consents and Approvals........................................................................22
         1.16     Schedules.....................................................................................22

ARTICLE 2
         THE FACILITY...........................................................................................23
         2.1      Establishment of the Facility.................................................................23
         2.2      Purpose, Nature and Term of the Facility......................................................23
         2.3      Availability of Advances......................................................................23
         2.4      Lenders' Obligations..........................................................................24
         2.5      Repayment of Facility.........................................................................24
         2.6      Payments/Cancellation or Reduction............................................................25
         2.7      Extension of Maturity Date....................................................................25
         2.8      Interest on Base Rate Canada Advances.........................................................28
         2.9      LIBOR Advances................................................................................28
         2.10     Method and Place of Payment...................................................................30
         2.11     Fees..........................................................................................30
         2.12     Conversion Options............................................................................30
         2.13     Execution of Notices..........................................................................31
         2.14     Evidence of Indebtedness......................................................................31
         2.15     Interest on Unpaid Costs and Expenses.........................................................31
         2.16     Criminal Rate of Interest.....................................................................31
         2.17     Compliance with the Interest Act (Canada).....................................................31
         2.18     Nominal Rate of Interest......................................................................32
         2.19     Swing Line Facility...........................................................................32
         2.20     Increase In Aggregate Commitment Amount To U.S.$750,000,000...................................34

</Table>

                                                         -i-
<Page>
<Table>
<Caption>

                                TABLE OF CONTENTS
                                   (CONTINUED)
                                                                                                              PAGE
<S>                                                                                                           <C>
ARTICLE 3
         CHANGE OF CIRCUMSTANCES AND INDEMNIFICATION............................................................36
         3.1      Lender Representation.........................................................................36
         3.2      Increased Costs...............................................................................36
         3.3      Illegality....................................................................................37
         3.4      Mitigation....................................................................................37
         3.5      Taxes.........................................................................................39
         3.6      Tax Refund....................................................................................41
ARTICLE 4
         CONDITIONS PRECEDENT TO DRAWDOWN.......................................................................42
         4.1      Conditions for Closing........................................................................42
         4.2      Conditions for First Drawdown.................................................................43
         4.3      Conditions for Subsequent Drawdowns...........................................................43
ARTICLE 5
         PROVISIONS RELATING TO SUBSIDIARIES....................................................................44
         5.1      Material Restricted Subsidiaries to Provide Guarantees........................................44
         5.2      Unrestricted Subsidiaries.....................................................................44
ARTICLE 6
         REPRESENTATIONS AND WARRANTIES.........................................................................46
         6.1      Representations and Warranties................................................................46
         6.2      Survival of Representations and Warranties....................................................50
         6.3      Deemed Repetition of Representations and Warranties...........................................50

ARTICLE 7
         COVENANTS..............................................................................................51
         7.1      Affirmative Covenants.........................................................................51
         7.2      Negative Covenants............................................................................56
         7.3      Financial Covenants...........................................................................58
ARTICLE 8
         DEFAULT AND ACCELERATION...............................................................................60
         8.1      Events of Default.............................................................................60
         8.2      Acceleration..................................................................................63
         8.3      Remedies Cumulative and Waivers...............................................................63
         8.4      Suspension of Lenders' Obligations............................................................64
         8.5      Application of Payments After an Event of Default.............................................64
ARTICLE 9
         THE ADMINISTRATIVE AGENT AND ADMINISTRATION OF THE FACILITY............................................65
         9.1      Authorization of Action.......................................................................65
         9.2      Procedure for Making Advances.................................................................65
         9.3      Remittance of Payments........................................................................66
         9.4      Redistribution of Payment.....................................................................67
         9.5      Duties and Obligations........................................................................68
</Table>


                                                        -ii-
<Page>
<Table>
<Caption>
                                TABLE OF CONTENTS
                                   (CONTINUED)
                                                                                                             PAGE
<S>                                                                                                          <C>
         9.6      Prompt Notice to the Lenders..................................................................69
         9.7      Administrative Agent's Authority..............................................................69
         9.8      Lender's Independent Credit Decision..........................................................69
         9.9      Indemnification...............................................................................70
         9.10     Successor Agent...............................................................................70
         9.11     Taking and Enforcement of Remedies............................................................70
         9.12     Reliance Upon Lenders.........................................................................72
         9.13     Reliance upon Administrative Agent............................................................72
         9.14     Replacement of Cancelled Commitments..........................................................72
         9.15     Disclosure of Information.....................................................................73
         9.16     Adjustments of Rateable Portions..............................................................74
ARTICLE 10
         COSTS, EXPENSES AND INDEMNIFICATION....................................................................75
         10.1     Costs and Expenses............................................................................75
         10.2     Indemnification by the Borrowers..............................................................75
         10.3     Funds.........................................................................................75
         10.4     General Indemnity.............................................................................76
         10.5     Environmental Claims..........................................................................77
ARTICLE 11
         GENERAL................................................................................................79
         11.1     Term..........................................................................................79
         11.2     Survival......................................................................................79
         11.3     Benefit of the Agreement......................................................................79
         11.4     Notices.......................................................................................79
         11.5     Amendment and Waiver..........................................................................80
         11.6     Governing Law.................................................................................81
         11.7     Further Assurances............................................................................81
         11.8     Enforcement and Waiver by the Lenders.........................................................81
         11.9     Execution in Counterparts.....................................................................81
         11.10    Assignment by the Borrowers...................................................................81
         11.11    Assignments and Transfers by a Lender.........................................................81
         11.12    Certain Requirements in Respect of Merger, Etc................................................84
         11.13    Location of Lenders...........................................................................86
         11.14    Set-Off.......................................................................................86
         11.15    Time of the Essence...........................................................................86
         11.16    Advertisements................................................................................86
</Table>

                                                        -iii-
<Page>
<Table>
<Caption>

                                TABLE OF CONTENTS

                                                                                                             PAGE
<S>                                                                                                          <C>
Schedules:

           Schedule A            -     Lenders
           Schedule B            -     Lenders' Commitments
           Schedule C            -     Applicable Margin and Facility Fee
           Schedule D            -     Quarterly Certificate on Covenants
           Schedule E            -     Conversion Notice
           Schedule F            -     Drawdown Notice and Notice of Swing Line Borrowing
           Schedule G            -     Guarantees
           Schedule H            -     Rollover Notice
           Schedule I            -     Transfer Notice
           Schedule J            -     Mandatory Cost Calculation
           Schedule K            -     Opinions of Counsel
           Schedule L            -     Extension Request
           Schedule M            -     Permitted Encumbrance Certificate
</Table>



<Page>


                              AMENDED AND RESTATED
                    FOUR YEAR REVOLVING TERM CREDIT AGREEMENT

           MADE as of the 17th day of December, 2002.

       B E T W E E N:

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

                                                              OF THE FIRST PART,

                                     - and -

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

                                                             OF THE SECOND PART,

                                     - and -

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

                                                              OF THE THIRD PART,

                                     - and -

           THE FINANCIAL INSTITUTIONS NAMED IN SCHEDULE
           A, as Lenders,

                                                             OF THE FOURTH PART.

WHEREAS Celestica Inc., Celestica International Inc., The Bank of Nova Scotia as
the Administrative Agent, and the financial institutions named therein as the
Lenders are parties to a Four Year Revolving Term Credit Agreement dated as of
July 31, 2001 (the "EXISTING CREDIT AGREEMENT")

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

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

<Page>
                                       -2-


                                    ARTICLE 1
                                 INTERPRETATION

1.1      DEFINITIONS

         In this Agreement:

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

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

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

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

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

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

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

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

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

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

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

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

"APPROVED CREDIT RATING AGENCY" means any one of Standard & Poor's Ratings
Services (a division of The McGraw-Hill Companies, Inc.) ("STANDARD & POOR'S"),
Moody's Investors


<PAGE>
                                      -3-


Service, Inc. ("MOODY'S") and any other similar agency agreed
to by Celestica and the Administrative Agent;

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

"ARM'S LENGTH" has the meaning ascribed thereto under the INCOME TAX ACT
(Canada) in effect as of the date hereof;

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

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

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

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

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

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

"BORROWERS" means Celestica and Celestica International from time to time and
their respective permitted successors and assigns and "BORROWER" means any of
them;

"BUSINESS" means the business of:

     (a)   conducting a broad range of electronics manufacturing services,
           including the manufacturing, assembly and testing of printed circuit
           boards, printed circuit board assembly, backplanes,
           electro-mechanical sub-assembly, memory modules, photonics,
           opto-electronic assembly, full system assembly, product testing,
           quality assurance, failure analysis, and other related manufacturing
           services;

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

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

<PAGE>
                                      -4-



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

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

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

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

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

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

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

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

"CERCLA" means the United States COMPREHENSIVE ENVIRONMENTAL RESPONSE,
COMPENSATION AND LIABILITY ACT OF 1980;

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

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

"CLOSING" means the consummation of the transactions contemplated herein,
including, without limitation, the satisfaction of the conditions precedent set
out in Section 4.1 and the Facility becoming available to the Borrowers subject
to the terms of this Agreement;

"CLOSING DATE" means December 17, 2002;

"CODE" means the United States INTERNAL REVENUE CODE OF 1986;

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

<PAGE>
                                      -5-


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

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

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

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

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

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

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

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

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

"DRAWDOWN" means a drawdown of an Advance;

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

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

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

     (a)   Net Income for such period;

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

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

<PAGE>
                                      -6-


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

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

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

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

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

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

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

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

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

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

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

<PAGE>
                                      -7-


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

"ERISA" means the United States EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974;

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

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

"EXISTING CREDIT AGREEMENT" has the meaning specified in the first recital
hereto;

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

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

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

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

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

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

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

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

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

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

<PAGE>
                                      -8-


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

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

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

           (i)    the outstanding monetary Obligations at such time;

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

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

           (iv)   the aggregate net marked-to-market liability under all Hedging
                  Obligations;

           (v)    any Acquired Indebtedness outstanding at such time;

           (vi)   the outstanding amounts under any Permitted Securitization
                  Transactions; and

           (vii)  the aggregate amounts outstanding under synthetic leases to
                  which Celestica and its Restricted Subsidiaries are parties
                  being the aggregate original cost of the assets subject to all
                  such leases less all payments made on account of principal
                  under all such leases on or prior to the date on which such
                  amounts are determined;

plus

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

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

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

<PAGE>
                                      -9-


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

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

"INDEBTEDNESS" of any Person means, without duplication:

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

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

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

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

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

     (f)   all Contingent Liabilities of such Person; and

     (g)   any Acquired Indebtedness.

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

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


<PAGE>
                                      -10-


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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>
                                      -11-


           States Dollars) at or about 10:00 a.m. (London, England time) on the
           applicable Rate Fixing Day; or

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

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

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

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

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

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

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

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

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


<PAGE>
                                      -12-


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

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

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

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

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

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

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

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

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

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

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


<PAGE>
                                      -13-


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

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

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

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

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

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

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

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

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

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

"PENSION PLAN" means:

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

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


<PAGE>
                                      -14-


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

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

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

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

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

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


<PAGE>
                                      -15-


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

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

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

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

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

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

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

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

     (n)   Liens granted by Celestica Corp. pursuant to and in accordance with
           the Synthetic Lease provided that neither Celestica nor any other
           Subsidiary other than Celestica, Celestica Corp. or Celestica
           International has any liability in respect of such indebtedness;

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

     (p)   Liens granted to secure Acquired Indebtedness, to the extent that (i)
           such Liens exist at the time such person or the assets subject to
           such Lien are acquired by


<PAGE>
                                      -16-


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

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

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

     (s)   Liens granted by Celestica International in favour of Celestica in
           connection with a Loan Agreement made as of November 4, 1996, as
           amended, between Celestica International (under its form name
           Celestica, Inc.) and 1201541 Ontario Inc. (a predecessor in interest
           to Celestica).

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

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

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

     (ii)  inventory of Celestica or any Restricted Subsidiary (and/or
           contractual rights relating thereto) having an aggregate book value
           on the date the relevant Securitization Transaction is completed that
           does not exceed the sum of (A) 30% of the aggregate book value of the
           inventory of Celestica and its Restricted Subsidiaries determined on
           a consolidated basis, before giving effect to prior Securitization
           Transactions of inventory that has not been incorporated into product
           sold to a third party, on or prior to the date on which the relevant

<PAGE>
                                      -17-


           Securitization Transaction is completed, and (B), as long as there
           are no Advances outstanding under this Agreement and no advances
           (other than letters of credit) under any other credit agreement under
           which Celestica or any Restricted Subsidiary is a borrower
           (excluding, for greater certainty, overdraft facilities and Acquired
           Indebtedness), 50% of the amount by which (1) the aggregate book
           value of the trade accounts receivable of or owing to Celestica and
           its Restricted Subsidiaries that are otherwise available for
           Securitization Transactions of trade accounts receivable under (i)
           above, exceeds (2) the aggregate book value of all trade accounts
           receivable that have been subject to prior Securitization
           Transactions effected by Celestica and its Restricted Subsidiaries;

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

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

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

"POUNDS STERLING" and "(Pound)" means the lawful currency of the United Kingdom;

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

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

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

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

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

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


<PAGE>
                                      -18-


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

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

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

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

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

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

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

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

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

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

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

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


<PAGE>
                                      -19-


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

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

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

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

     (a)   capital stock;

     (b)   preferred stock;

     (c)   paid-in capital;

     (d)   retained earnings; and

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

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

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

     (g)   goodwill and other intangibles; and

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

"TAXES" includes all present and future income, corporation, capital gains,
capital and value-added and goods and services taxes and all stamp, franchise
and other taxes and levies, imposts, deductions, duties, charges and
withholdings whatsoever together with interest thereon and

<PAGE>
                                      -20-


penalties with respect thereto, if any, and charges, fees and other amounts made
on or in respect thereof;

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

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

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

"UNRESTRICTED SUBSIDIARY" means a Subsidiary of Celestica designated by
Celestica as such in accordance with Section 5.2 of this Agreement and any
Subsidiary of an Unrestricted Subsidiary.

1.2      HEADINGS

The division of this Agreement into Articles and Sections and the insertion of
an index and headings are for convenience of reference only and shall not affect
the construction or interpretation hereof. The terms "THIS AGREEMENT", "HEREOF",
"HEREUNDER" and similar expressions refer to this Agreement and not to any
particular Article, Section, paragraph or other portion hereof and include any
agreement supplemental hereto. Save as expressly provided herein, references
herein to Articles and Sections are to Articles and Sections of this Agreement.

1.3      USE OF DEFINED TERMS

Unless otherwise defined or the context otherwise requires, terms for which
meanings are provided in this Agreement shall have such meanings when used in
each Drawdown Notice, Conversion Notice, Rollover Notice, Loan Document, notice
and other communication delivered from time to time in connection with this
Agreement or any other Loan Document.

1.4      EXTENDED MEANINGS

Words importing the singular number only shall include the plural and VICE
VERSA, and words importing any gender shall include all genders.

1.5      CROSS REFERENCES

Unless otherwise specified, references in this Agreement and in each other Loan
Document to any Article or Section are references to such Article or Section of
this Agreement or such other Loan Document, as the case may be, and unless
otherwise specified referenced in the Article, Section or definition to any
Clause are references to such Clause of such Article, Section or definition.

1.6      REFERENCE TO AGENT OR LENDERS

Any reference in this Agreement to the Administrative Agent or a Lender shall be
construed so as to include its permitted successors, transferees or assigns
hereunder in accordance with their respective interests.


<PAGE>
                                      -21-


1.7      ACCOUNTING TERMS

Unless otherwise specified, all accounting terms used herein or in any other
Loan Document shall be interpreted, all accounting determinations and
computations hereunder or thereunder shall be made, and all financial statements
required to be delivered hereunder or thereunder shall be prepared in accordance
with GAAP and all financial data submitted pursuant to this Agreement shall be
prepared in accordance with such principles, consistently applied; provided
that, if Celestica notifies the Administrative Agent that it wishes to amend any
covenant in Section 7.3 to eliminate the effect of any change in GAAP or any
change in the application of accounting policies on the operation of such
covenant (or the Administrative Agent notifies Celestica that the Majority
Lenders wish to amend Section 7.3 for such purpose), Celestica's compliance with
such covenant shall be determined on the basis of GAAP or accounting policies in
effect immediately before the relevant change in GAAP or change in accounting
policies became effective, until either such notices are withdrawn or such
covenant is amended in a manner satisfactory to Celestica, the Administrative
Agent and the Majority Lenders.

1.8      CONSOLIDATED FINANCIAL STATEMENTS AND CONSOLIDATED ACCOUNTS

Notwithstanding Section 1.7, wherever in this Agreement reference is made to a
consolidated financial statement of Celestica or to a determination to be made
on a consolidated basis, such reference shall be deemed to be to a consolidated
financial statement or consolidated basis, determined in accordance with GAAP,
which consolidates only the financial statements or accounts of Celestica and
its Subsidiaries, excluding all Unrestricted Subsidiaries, with investments by
Celestica or any Restricted Subsidiary in Unrestricted Subsidiaries accounted
for using equity accounting. At any time that Celestica and all Restricted
Subsidiaries have no Unrestricted Subsidiaries, all references to consolidated
financial statements herein shall be deemed to be references to the fully
consolidated financial statements of Celestica.

1.9      NON-BANKING DAYS

Except as otherwise specified herein, whenever any payment to be made hereunder
shall be stated to be due or any action to be taken hereunder shall be stated to
be required to be taken on a day other than a Banking Day, such payment shall be
made or such action shall be taken on the next succeeding Banking Day and, in
the case of the payment of any monetary amount, the extension of time shall be
included for the purposes of computation of interest or fees thereon.

1.10     REFERENCES TO TIME OF DAY

Except as otherwise specified herein, a time of day shall be construed as a
reference to Toronto, Canada time.

1.11     SEVERABILITY

In the event that one or more of the provisions contained in this Agreement
shall be invalid, illegal or unenforceable in any respect under any Applicable
Law, the validity, legality or enforceability of the remaining provisions hereof
shall not be affected or impaired thereby.


<PAGE>
                                      -22-


1.12     CURRENCY

All monetary amounts in this Agreement refer to United States Dollars unless
otherwise specified.

1.13     REFERENCES TO STATUTES

Except as otherwise provided herein, any reference in this Agreement to a
statute shall be construed to be a reference to such statute as the same may
have been, or may from time to time be, amended, reformed or otherwise modified
or re-enacted from time to time.

1.14     REFERENCES TO AGREEMENTS

Except as otherwise provided herein, any reference herein to this Agreement, any
other Loan Document or any other agreement or document shall be construed to be
a reference to this Agreement, such Loan Document or such other agreement or
document, as the case may be, as the same may have been, or may from time to
time be, amended, restated, extended, supplemented or replaced.

1.15     CONSENTS AND APPROVALS

Whenever the consent in writing or approval in writing of a party hereto is
required in a particular circumstance, unless otherwise expressly provided for
therein, such consent or approval shall not be unreasonably withheld or delayed
by such party.

1.16     SCHEDULES

The following are the Schedules attached hereto and incorporated by reference
and deemed to be part hereof:

           Schedule A    -   Lenders
           Schedule B    -   Lenders' Commitments
           Schedule C    -   Applicable Margin and Facility Fee
           Schedule D    -   Quarterly Certificate on Covenants
           Schedule E    -   Conversion Notice
           Schedule F    -   Drawdown Notice and Notice of Swing Line Borrowing
           Schedule G    -   Guarantees
           Schedule H    -   Rollover Notice
           Schedule I    -   Transfer Notice
           Schedule J    -   Mandatory Cost Calculation
           Schedule K    -   Opinions of Counsel
           Schedule L    -   Extension Request
           Schedule M    -   Permitted Encumbrance Certificate

<PAGE>
                                      -23-


                                    ARTICLE 2
                                  THE FACILITY

2.1      ESTABLISHMENT OF THE FACILITY

Upon the terms and subject to the conditions hereof, each of the Lenders hereby
severally agrees to make its Global Rateable Portion of the Facility available
to the Borrowers as specified in Sections 2.2, 2.3 and 2.19.

2.2      PURPOSE, NATURE AND TERM OF THE FACILITY

         (a)   The Facility is being made available to the Borrowers by the
               Lenders for the business and operations of the Borrowers and
               their respective Restricted Subsidiaries, including, without
               limitation and for greater certainty, to finance acquisitions of
               companies which, after the acquisition thereof, will become
               Restricted Subsidiaries or assets which, after the acquisition
               thereof, will be owned by Celestica or a Restricted Subsidiary,
               the repayment of existing indebtedness and for commercial paper
               support.

         (b)   Advances under the Facility shall not be used by any Borrower to
               finance the acquisition of, investment in, loan to or to provide
               working capital to an Unrestricted Subsidiary.

         (c)   Subject to the terms and conditions of this Agreement (including,
               without limitation, Section 2.7) the Facility shall be a
               revolving credit facility and the Borrowers may borrow, repay and
               reborrow under the Facility as they see fit. The Facility shall
               terminate, subject to Section 2.7, on the Maturity Date.

2.3      AVAILABILITY OF ADVANCES

         (a)   The Facility shall be available for Drawdowns by the Borrowers,
               at the option of the Borrowers, as follows:

               (i)   to Celestica or Celestica International, Drawdowns from
                     Lenders, each in a minimum amount of U.S. $5,000,000 and
                     integral multiples of U.S. $100,000 in excess thereof, in
                     United States Dollars by way of Base Rate Canada Advances;
                     and

               (ii)  to Celestica or Celestica International, Drawdowns from
                     Lenders, each in a minimum amount of U.S. $5,000,000 and
                     integral multiples of U.S. $100,000 in excess thereof, in
                     United States Dollars by way of LIBOR Advances.

         (b)   Each Drawdown of an Advance pursuant to Section 2.3(a)(i) or (ii)
               shall be made by irrevocable Drawdown Notice, which Drawdown
               Notice shall be given by Celestica or Celestica International to
               the Administrative Agent, not later than (y) 10:00 a.m. Toronto,
               Canada time on the Banking Day prior to the relevant Drawdown
               Date in the case of Base Rate Canada Advances, and (z) 10:00 a.m.
               London, England time and 10:00 a.m. New York, New York time on
               the third

<PAGE>
                                      -24-


               Banking Day prior to the relevant Drawdown Date in the case of a
               LIBOR Advance in United States Dollars.

         (c)   A Borrower may not make a Drawdown under the Facility if, as a
               result of such Drawdown, the sum of (i) the aggregate principal
               amount of all LIBOR Advances in United States Dollars outstanding
               under the Facility, plus (ii) the aggregate principal amount of
               all Base Rate Canada Advances outstanding under the Facility
               (collectively, the "OUTSTANDING AMOUNT") would exceed the
               aggregate of all Commitments of the Lenders at such time (or such
               lesser amount as may be available following a cancellation in
               part of the Facility pursuant to Section 2.6).

         (d)   If a Borrower wishes to make a Drawdown under the Facility for
               the purpose of financing a Take-over Bid, such Borrower shall
               deliver to the Administrative Agent a written notice (a
               "TAKE-OVER BID NOTICE") thereof at least ten (10) Banking Days
               prior to the day on which it gives to the Administrative Agent a
               Drawdown Notice requesting such Drawdown. Such Take-over Bid
               Notice shall include the details of such Take-over Bid. As soon
               as possible, but in any event within five (5) Banking Days of the
               giving of the Take-over Bid Notice, each Lender shall, acting
               reasonably and in good faith, determine whether or not it wishes
               to fund its Main Facility Rateable Portion of such Drawdown.
               Notwithstanding any other provisions hereof, if any Lender
               determines that it does not wish to fund its Main Facility
               Rateable Portion of such Drawdown, such Lender shall not be
               required to fund its Main Facility Rateable Portion of such
               Drawdown and the Drawdown shall be reduced accordingly.

         (e)   This Section 2.3 shall not apply to Swing Line Advances.

2.4      LENDERS' OBLIGATIONS

         (a)   The obligations of the Lenders hereunder are several and not
               joint.

         (b)   Save as otherwise specifically provided herein, each Lender shall
               participate in each Advance (other than, for certainty, any Swing
               Line Advance) referred to in the applicable provisions of Section
               2.3 in accordance with its Main Facility Rateable Portion.

The failure of any Lender to make available its share of any Advance required to
be made by it under this Agreement shall not relieve any other Lender of its
obligation to make available its share of any Advance required to be made under
this Agreement.

2.5      REPAYMENT OF FACILITY

         (a)   Provided that the Facility is not prepaid or accelerated in
               accordance with Article 8, each Borrower shall repay the
               principal amount of all Advances made to it outstanding under the
               Facility, together with accrued and unpaid interest thereon,
               subject to Section 2.6 and Section 2.7, on the Maturity Date to
               the Administrative Agent.


<PAGE>
                                      -25-


         (b)   All repayments of the Facility by the Borrowers shall be in a
               minimum amount equal to the minimum amount of a Drawdown of each
               type of Advance set out in Section 2.3 and amounts in excess
               thereof in integral multiples of U.S. $100,000, except in the
               event of a Rollover of an Advance into a lesser amount than the
               Advance then outstanding or a repayment pursuant to paragraph (a)
               of this Section 2.5 which may be in any amount.

2.6      PAYMENTS/CANCELLATION OR REDUCTION

Celestica may at any time, upon giving at least three (3) Banking Days' prior
notice to the Administrative Agent, repay, or cause another Borrower to repay
and, in each case, cancel, any drawn portion of the Facility or cancel in full
or, from time to time, in part, any undrawn portion of the Facility; provided,
however, that:

         (a)   in the event that any such repayment relates to a LIBOR Advance
               other than on the scheduled last day of the applicable Interest
               Period, the Borrower to which such Advance was made shall
               contemporaneously pay to the Administrative Agent all applicable
               breakage costs, being any loss or expense incurred by the Lenders
               by reason of the resulting liquidation or re-employment of
               deposits of funds;

         (b)   any such reduction shall be in a minimum amount of U.S.
               $5,000,000 and cancellations in excess thereof shall be in
               increments of U.S. $100,000;

         (c)   any cancellation shall reduce the Commitment of each Lender on a
               PRO RATA basis having regard to the Commitment of each Lender;
               and

         (d)   any such cancellation shall permanently reduce the Facility and
               may not be reinstated.

2.7      EXTENSION OF MATURITY DATE

         (a)   MATURITY DATE. Subject to Section 2.6, this Section 2.7, Section
               8.2 and Section 8.5, the Facility shall be available until the
               Maturity Date. Notwithstanding the termination of availability of
               the Facility, until all of the Obligations (other than contingent
               indemnity obligations) of the Borrowers shall have been fully and
               indefeasibly paid and satisfied and all financing arrangements
               among the Borrowers and the Lenders with respect to the
               Obligations shall have been cancelled or terminated, all of the
               rights and remedies under this Agreement and the other Loan
               Documents shall survive.

         (b)   EXTENSION OF MATURITY DATE. Not more than 90 days nor less than
               60 days before the Maturity Date, Celestica may request, by
               delivery of an Extension Request (which shall include the consent
               of all Guarantors) to the Administrative Agent, that the Maturity
               Date be extended for an additional period of one year. Within 5
               days after receipt of such Extension Request, the Administrative
               Agent shall notify each Lender of the Extension Request by
               Celestica and provide each Lender with a copy of such Extension
               Request. Within 25 days after Celestica

<PAGE>
                                      -26-


               has delivered such Extension Request, each Lender shall give the
               Administrative Agent notice in writing of its decision to agree
               to so extend or to deny the requested extension (and the failure
               to provide such notice shall be deemed to be a decision to deny
               the requested extension). Within 5 days following the aforesaid
               25 day period, the Administrative Agent shall give written notice
               to Celestica and the Lenders advising as to those Lenders who
               have agreed to the requested extension (for purposes of this
               Section 2.7, the "APPROVING LENDERS") and those Lenders who have
               not agreed to or who have been deemed to have not agreed to the
               requested extension (for purposes of this Section 2.7, the
               "DISSENTING LENDERS").

               (i)   If all Lenders approve the requested extension, the
                     Facility shall be extended for a further one year and the
                     Facility shall be available until and each Borrower shall
                     repay all Advances and other amounts in accordance with
                     Section 2.5 on the Final Maturity Date.

               (ii)  If Lenders having Commitments equal to at least 66-2/3%
                     but less than 100% of the Commitments approve the
                     requested extension then an Approving Lender, at its
                     option, may acquire all or any portion of the rights and
                     obligations of the Dissenting Lenders under the Facility
                     by giving written notice to the Administrative Agent of
                     the portion of the rights and obligations of the
                     Dissenting Lenders which such Approving Lender is
                     prepared to acquire. Such notice shall be given within
                     10 days following receipt of the notice from the
                     Administrative Agent advising as to the Approving
                     Lenders and the Dissenting Lenders pursuant to Section
                     2.7(b). If more than one Approving Lender gives notice
                     to the Administrative Agent that it wishes to acquire
                     all or a portion of the rights and obligations of the
                     Dissenting Lenders under the Facility, then each
                     Approving Lender shall, subject to Section 2.7(b)((iii)
                     be entitled to acquire its pro rata share of the rights
                     and obligations of the Dissenting Lenders under the
                     Facility. For the purpose of this Section 2.7(b)(ii),
                     the Approving Lenders' pro rata shares shall be
                     determined based on the Commitments (before acquisition
                     under this Section 2.7(b)(ii)) of each of the Approving
                     Lenders wishing to acquire a portion of the rights and
                     obligations of the Dissenting Lenders under the
                     Facility. The Administrative Agent shall give written
                     notice to Celestica within five days following the
                     expiry of the time for Approving Lenders to give notice
                     of acquisition pursuant to this Section 2.7(b)(ii), of
                     the Commitments of the Dissenting Lenders so acquired.

               (iii) If one or more of the Approving Lenders (for purposes of
                     this Section 2.7(b)(iii), the "ACQUIRING LENDERS") has
                     given notice to the Administrative Agent that it wishes to
                     acquire all or a portion of the rights and obligations of
                     the Dissenting Lenders under the Facility pursuant to
                     Section 2.7(b)(ii), then, concurrently with the notice
                     given to Celestica pursuant to Section 2.7(b)(ii), the
                     Administrative Agent shall give notice to each of the
                     Acquiring Lenders setting out the Commitments of and the
                     amount of the outstanding Advances made by the Dissenting
                     Lenders to

<PAGE>
                                      -27-


                     be acquired by each of the Acquiring Lenders in accordance
                     with Section 2.7(b)(ii) and of the date (for purposes of
                     this Section 2.7(b)(iii), the "ACQUISITION DATE") on which
                     the acquisition shall be effective. The Acquisition Date
                     shall be the tenth day following the date of the notice
                     given pursuant to this Section 2.7(b)(iii). At or before
                     11:00 a.m. (Toronto, Canada time) on the Acquisition Date,
                     each Acquiring Lender shall deposit with or transfer to the
                     Administrative Agent for the account of the Dissenting
                     Lenders an amount equal to the amount of the outstanding
                     credit to be acquired by it pursuant to this Section
                     2.7(b)(iii). Upon receipt of such amounts, the
                     Administrative Agent shall (i) disburse such amounts to
                     each of the Dissenting Lenders in accordance with their
                     respective entitlement thereto against delivery of forms of
                     Transfer Notice executed by each of the Dissenting Lenders;
                     and (ii) make appropriate entries in the books of account
                     regarding the Facility. The provisions of Section 11.11(b),
                     (c) and (d) shall apply MUTATIS MUTANDIS to any acquisition
                     pursuant to this Section 2.7(b)(iii). Each acquisition of
                     the outstanding Advances of a Dissenting Lender by an
                     Acquiring Lender shall be subject to the prior consent of
                     Celestica, which consent shall not be unreasonably withheld
                     or delayed, provided that it shall not be unreasonable for
                     Celestica to withhold its consent if such acquisition gives
                     rise to a claim for increased costs pursuant to Article 3
                     or any obligation on the part of an Obligor to deduct or
                     withhold any Taxes from or in respect of any sum payable
                     under this Agreement, in excess of what would have been the
                     case without such acquisition, but it shall be unreasonable
                     for Celestica to withhold its consent if such Acquiring
                     Lender waives the rights to any benefits under Section 3.5
                     in respect of the Advances purchased by it pursuant to this
                     clause (iii).

               (iv)  If Lenders having Commitments equal to at least 66-2/3%
                     but less than 100% of the Commitments approve the
                     requested extension and if the Acquiring Lenders have
                     not acquired all of the rights and obligations of the
                     Dissenting Lenders pursuant to Section 2.7(b)(iii), then
                     Celestica may, at its option, either (A) locate one or
                     more other financial institutions (for purposes of this
                     Section 2.7(b)(iv), "ALTERNATE LENDERS"), satisfactory
                     to the Administrative Agent acting reasonably, to become
                     Lenders and to acquire all or a pro rata share of the
                     rights and obligations of the Dissenting Lenders under
                     the Facility which have not been acquired by the
                     Acquiring Lenders or (B) repay to the Administrative
                     Agent on behalf of such Dissenting Lenders all of the
                     outstanding Advances which have been advanced by such
                     Dissenting Lenders and all accrued and unpaid interest
                     and fees thereon without any repayment to any other
                     Lenders. For the purpose of this Section 2.7(b)(iv), the
                     Alternate Lenders' pro rata shares shall be determined
                     based on the Commitments of each of the Alternate
                     Lenders wishing to acquire a portion of the rights and
                     obligations of the Dissenting Lenders under the
                     Facility. If all of the rights and obligations of the
                     Dissenting Lenders have not been acquired by Acquiring
                     Lenders or Alternate Lenders or both or if all of the
                     credit outstanding hereunder

<PAGE>
                                      -28-


                     which has been extended by such Dissenting Lenders and all
                     accrued and unpaid interest and fees thereon have not been
                     repaid as aforesaid on or before the Maturity Date, there
                     shall be no extension of the Maturity Date and Section
                     2.7(b)(v) shall apply. If (A) all of the rights and
                     obligations of the Dissenting Lenders have been acquired by
                     Acquiring Lenders and/or Alternate Lenders and/or (B) if
                     all of the Advances outstanding hereunder which have been
                     advanced by such Dissenting Lenders and all accrued and
                     unpaid interest and fees thereon have been repaid as
                     aforesaid on or before the Maturity Date, the Facility
                     shall be extended for a further one year and this Facility
                     shall be available until and each Borrower shall repay all
                     Advances and other amounts in accordance with Section
                     2.5(b) on the Final Maturity Date.

               (v)   If Lenders having Commitments of less than 66-2/3% of the
                     Commitments under the Facility approve the requested
                     extension then the Facility shall be available until, and
                     each Borrower shall repay all Advances and other amounts in
                     accordance with Section 2.5 on the Maturity Date.

A Dissenting Lender shall remain committed to make Advances under the Facility
until the earlier of the date on which the Obligations owing to it are assigned
or repaid as aforesaid and the Maturity Date.

2.8      INTEREST ON BASE RATE CANADA ADVANCES

Interest on each Base Rate Canada Advance shall accrue at a rate per annum equal
to the Base Rate Canada in effect from time to time during the period of time
that the Base Rate Canada Advance is outstanding plus the Applicable Margin.
Such interest shall be payable to the Administrative Agent at its Toronto Office
in United States Dollars quarterly in arrears on the last Banking Day of each of
March, June, September and December (each hereinafter referred to as an
"INTEREST PAYMENT DATE") in each year for the period from and including the
Drawdown Date for such Advance (or, if applicable, the date on which such
Advance was converted into a Base Rate Canada Advance) or the preceding Interest
Payment Date for such Base Rate Canada Advance, as the case may be, to and
including the day preceding such Interest Payment Date and shall be calculated
on the principal amount of the Base Rate Canada Advance from time to time
outstanding during such period and on the basis of the actual number of days
elapsed and the number of days deemed to be included in a year by the definition
of the rate used to set Base Rate Canada. Changes in the Base Rate Canada shall
cause an automatic and immediate adjustment of the interest rate payable on Base
Rate Canada Advances without the necessity of any notice to the Borrowers.

2.9      LIBOR ADVANCES

         (a)   LIBOR Advances shall be available for Drawdown, Conversion or
               Rollover in United States Dollars in minimum principal amounts of
               U.S. $5,000,000 and integral multiples of U.S. $100,000 in excess
               thereof. Each Drawdown Notice shall specify the applicable
               Interest Period for the LIBOR Advance. The duration of each such
               Interest Period shall be for a period of approximately one, two,
               three or six months, as the Borrower requesting such Drawdown,
               Conversion or

<PAGE>
                                      -29-


               Rollover may select in the applicable Drawdown Notice, Conversion
               Notice or Rollover Notice. No LIBOR Advance may have an Interest
               Period ending after the Maturity Date. If any Interest Period
               would end on a day which is not a Banking Day, such Interest
               Period shall be extended to the next succeeding Banking Day
               unless such next succeeding Banking Day falls in the next
               calendar month, in which case such Interest Period shall be
               shortened to end on the immediately preceding Banking Day.

         (b)   If a Lender determines that deposits of the necessary amount for
               the applicable Interest Period are not available in the London
               interbank market or if for any other reason the Administrative
               Agent, acting reasonably, is unable to determine the applicable
               LIBO Rate, then the relevant LIBOR Advance will not be made, and
               the Administrative Agent will discuss with such Borrower the
               particular circumstances and implications of such event. In the
               event that such determination is made by the Administrative Agent
               in the case of a proposed Rollover of an existing LIBOR Advance
               or a proposed Conversion of a Base Rate Canada Advance into a
               LIBOR Advance, the proposed LIBOR Advance will automatically be
               deemed to be a Base Rate Canada Advance.

         (c)   Interest on any LIBOR Advance shall be calculated at a rate per
               annum equal to the LIBO Rate plus the Applicable Margin, plus any
               applicable Mandatory Cost then in effect, shall accrue from day
               to day and shall be calculated on the basis of the actual number
               of days elapsed (including the first day of each Interest Period
               but excluding the last day thereof) and divided by 360 or by 365
               where market practice so requires. Interest on any LIBOR Advance
               shall be payable to the Administrative Agent in United States
               Dollars in arrears on the last day of the Interest Period
               relating thereto; provided, however, that if the Interest Period
               is for a term of more than three months, interest shall be
               payable on the last Banking Day of the first three-month period
               and on the last Banking Day of each three-month period
               thereafter, as well as on the last day of the Interest Period.

         (d)   If a LIBOR Advance to a Borrower is neither repaid on the last
               day of an Interest Period nor converted into another type of
               Advance on such date pursuant to Section 2.12, and if the
               Administrative Agent has not received a Rollover Notice or a
               Conversion Notice specifying the term of the next Interest Period
               for such LIBOR Advance at or before 10:00 a.m. (local time in
               Toronto, Canada) on the third Banking Day prior to the last day
               of the then current Interest Period, then the outstanding LIBOR
               Advance shall be deemed to be converted, by way of Conversion on
               the last day of the then current Interest Period, into a Base
               Rate Canada Advance.

         (e)   Except as otherwise provided herein, LIBOR Advances shall not be
               repaid, prepaid or converted into another type of Advance except
               on the last day of any Interest Period relating thereto.


<PAGE>
                                      -30-


2.10     METHOD AND PLACE OF PAYMENT

         (a)   Each payment to be made by a Borrower under this Agreement shall
               be made without deduction, set-off or counterclaim.

         (b)   All payments of principal, interest and fees hereunder shall be
               made for value at or before 12:00 noon (Toronto, Canada time) on
               the day such amount is due by deposit or transfer thereof to the
               account of the Administrative Agent maintained at its Toronto
               Office. Payments received after such time shall be deemed to have
               been made on the next following Banking Day.

         (c)   Subject to Section 9.16, each Lender shall be entitled to its
               Main Facility Rateable Portion of each repayment or prepayment of
               principal of a Base Rate Canada Advance (other than a Swing Line
               Advance) or a LIBOR Advance.

         (d)   Notwithstanding Section 2.9(c), in the event that a Borrower is
               required to pay Additional Compensation to a Lender, such
               Borrower may prepay all or any portion of the Advances made by
               such Lender to such Borrower, without any obligation to prepay
               any portion of the Advances made by other Lenders to whom the
               Borrower is not required to pay Additional Compensation;
               provided, however, that any prepayment of a LIBOR Advance shall
               be subject to the provisions of Section 10.2.

2.11     FEES

         (a)   During the period commencing on the date hereof and ending on the
               Maturity Date (the "RELEVANT PERIOD"), Celestica on behalf of
               itself and Celestica International shall pay to the
               Administrative Agent for the account of the Lenders a fee (the
               "FACILITY FEE") calculated at the rate per annum set forth in
               Schedule C on the aggregate Commitments (after giving effect to
               any increase, cancellation or reduction pursuant to Sections 2.6,
               2.7 and 2.20) hereunder during the relevant period from day to
               day which fee shall be payable quarterly in arrears.

         (b)   Celestica shall pay to the Administrative Agent for its own
               account the fees specified in the letter dated June 26, 2001
               addressed by the Administrative Agent to Celestica.

2.12     CONVERSION OPTIONS

Subject to the provisions of this Agreement, provided that no Event of Default
has occurred and is continuing, a Borrower may convert any type of Advance
outstanding under the Facility as follows:

         (a)   a Base Rate Canada Advance or a portion thereof into a LIBOR
               Advance by giving the Administrative Agent a Conversion Notice no
               later than 10:00 a.m. three (3) Banking Days prior to the date of
               the proposed Conversion;

         (b)   a LIBOR Advance or a portion thereof into a Base Rate Canada
               Advance on the last day of the Interest Period of the relevant
               LIBOR Advance by giving the

<PAGE>
                                      -31-



               Administrative Agent a Conversion Notice no later than 10:00 a.m.
               one (1) Banking Day prior to the date of the proposed Conversion.

2.13     EXECUTION OF NOTICES

All Drawdown Notices, Conversion Notices, Rollover Notices and notices of
repayment or cancellation and, unless otherwise provided herein, all other
notices, requests, demands or other communications to be given to the
Administrative Agent by a Borrower hereunder shall be executed by any one
officer or director of the Borrower making each such Drawdown Notice, Conversion
Notice, Rollover Notice or notice of repayment or cancellation.

2.14     EVIDENCE OF INDEBTEDNESS

The Administrative Agent shall open and maintain in accordance with its usual
practice books of account evidencing all Advances and all other amounts owing by
the Borrowers to the Administrative Agent and the Lenders hereunder, details of
every Drawdown Date in respect of each Advance and all amounts from time to time
owing or paid by a Borrower to the Administrative Agent for its own account or
for the account of the Lenders hereunder, the amounts of principal, interest and
fees payable from time to time hereunder and the unused portion of each Lenders'
Commitment available to be drawn down by the Borrowers. The information entered
in the foregoing accounts shall constitute, in the absence of manifest error,
PRIMA FACIE evidence of the obligations of the Borrowers to the Administrative
Agent and the Lenders hereunder, the date the Lenders made each Advance
available to the Borrowers and the amounts the Borrowers have paid from time to
time on account of the principal of and interest on the Advances.

2.15     INTEREST ON UNPAID COSTS AND EXPENSES

Unless the payment of interest is otherwise specifically provided for herein,
where a Borrower fails to pay any amount required to be paid by a Borrower
hereunder when due, having received notice that such amount is due, such
Borrower shall pay interest to the Administrative Agent on such unpaid amount,
including overdue interest from the time such amount is due until paid at an
annual rate equal to the sum of (i) 2%, plus (ii) the Base Rate Canada. Such
interest shall be determined daily, compounded quarterly in arrears on each
Interest Payment Date in each year and payable on demand.

2.16     CRIMINAL RATE OF INTEREST

Notwithstanding the foregoing provisions of this Article 2, the Borrowers shall
in no event be obliged to make any payments of interest or other amounts payable
to the Lenders hereunder in excess of an amount or rate which would be
prohibited by law or would result in the receipt by the Lenders of interest at a
criminal rate (as such terms are construed under the CRIMINAL CODE (Canada)).

2.17     COMPLIANCE WITH THE INTEREST ACT (CANADA)

For the purposes of this Agreement, whenever any interest is calculated on the
basis of a period of time other than a calendar year, the annual rate of
interest to which each rate of interest determined pursuant to such calculation
is equivalent for the purposes of the INTEREST ACT

<PAGE>
                                      -32-


(Canada) is such rate as so determined multiplied by the actual number of days
in the calendar year in which the same is to be ascertained and divided by the
number of days used in the basis of such determination.

2.18     NOMINAL RATE OF INTEREST

The parties acknowledge and agree that all calculations of interest under the
Loan Documents are to be made on the basis of the nominal interest rate
described herein and not on the basis of effective yearly rates or on any other
basis which gives effect to the principle of deemed reinvestment of interest.
The parties acknowledge that there is a material difference between the stated
nominal interest rates and the effective yearly rates of interest and that they
are capable of making the calculations required to determine such effective
yearly rates of interest.

2.19     SWING LINE FACILITY

         (a)   SWING LINE ADVANCES. Subject to subsections (b) and (k), the
               Swing Line Lender hereby agrees, on the terms and conditions set
               forth in this Agreement, to make Swing Line Advances in United
               States Dollars to Celestica or Celestica International from time
               to time from the date hereof to the Maturity Date.

         (b)   LIMITATION ON SWING LINE ADVANCES. No Swing Line Advance shall be
               made by the Swing Line Lender if:

               (i)   the sum of (A) the amount of such Swing Line Advance and
                     (B) the aggregate principal amount of all Swing Line
                     Advances outstanding on such day exceeds the Available
                     Swing Line Commitment; or

               (ii)  immediately after such Swing Line Advance is made, the
                     aggregate outstanding principal amount of all Advances
                     exceeds the aggregate Commitments.

         (c)   AMOUNT OF EACH SWING LINE ADVANCE. Each Swing Line Advance shall
               be in an aggregate principal amount of U.S. $1,000,000 or any
               integral multiple thereof.

         (d)   INTEREST RATES. Each Swing Line Advance shall bear interest on
               the outstanding principal amount thereof, for each day from the
               date such Swing Line Advance is made until it becomes due, at a
               rate per annum equal to, the Base Rate Canada plus the Applicable
               Margin.

         (e)   PROCEDURE FOR REQUESTING SWING LINE ADVANCES. The relevant
               Borrower shall give to the Administrative Agent telephonic notice
               no later than 10:00 a.m. (local time) on the date of each Swing
               Line Advance specifying (i) the date of such Swing Line Advance,
               which shall be a Banking Day in Toronto, Canada; and (ii) the
               amount of such Swing Line Advance. Such telephonic notice shall
               be followed by delivery by the relevant Borrower by no later than
               3:00 p.m. local time on the same day of a Notice of Swing Line
               Borrowing. Promptly after receiving such Notice of Swing Line
               Borrowing, the Administrative Agent shall notify the relevant
               Swing Line Lender of the contents thereof and such Notice of
               Swing Line Borrowing shall not thereafter be revocable by such
               Borrower.


<PAGE>
                                      -33-


         (f)   FUNDING OF SWING LINE ADVANCES. On the date of each Swing Line
               Advance, the Swing Line Lender shall make available such Swing
               Line Advance no later than 12:00 noon, Toronto, Canada time.

         (g)   OPTIONAL PREPAYMENT OF SWING LINE ADVANCES. Any Borrower may
               prepay its Swing Line Advance in whole at any time or from time
               to time in part in a minimum principal amount of U.S. $1,000,000,
               as the case may be, or any integral multiple thereof, by giving
               notice of such prepayment to the Administrative Agent not later
               than 10:00 a.m. Toronto, Canada time on the date of prepayment
               and paying the principal amount to be prepaid (together with
               interest accrued thereon to the date of prepayment) to the
               Administrative Agent for the account of the Swing Line Lender.

         (h)   MATURITY OF SWING LINE ADVANCES. Any Swing Line Advance
               outstanding on the seventh day after such Swing Line Advance, if
               not repaid by such Borrower on such seventh day, shall convert to
               a Base Rate Canada Advance. If, prior to the seventh day after
               such Swing Line Advance was made, the Administrative Agent
               declares the Advances to be immediately due and payable or the
               Commitments automatically terminate, each as set out in Section
               8.2, such Swing Line Advance shall be due and payable on the date
               of such declaration by the Administrative Agent or automatic
               termination.

         (i)   REFUNDING UNPAID SWING LINE ADVANCES. If any Swing Line Advance
               is converted, pursuant to subsection (h), to another form of
               Advance, the Swing Line Lender shall forthwith notify the
               Administrative Agent and the Administrative Agent shall, by
               notice to the Lenders (including the Swing Line Lender in its
               capacity as Lender), require the Lenders to pay to the
               Administrative Agent, for the account of the Swing Line Lender,
               their Main Facility Rateable Portion of the aggregate amount of
               such other form of Advance. Such other form of Advance shall
               constitute, a Base Rate Canada Advance, provided that if the
               Lenders are prevented from making such Advances by provisions of
               applicable bankruptcy laws or otherwise, the amount so paid by
               each Lender shall constitute a purchase by it of a participation
               in the unpaid principal amount of such converted Swing Line
               Advances. Any such notice to the Lenders shall specify the date
               on which such payments are to be made by them. No later than
               12:00 noon Toronto, Canada time on the date so specified each
               Lender shall pay the amount so notified to it in immediately
               available funds to the Administrative Agent for the account of
               the Swing Line Lender. Each Lender's obligations to make payments
               for the account of the Swing Line Lender under this subsection
               shall be absolute and unconditional and shall not be affected by
               any circumstance provided that no Lender shall be obligated to
               make any payment to the Administrative Agent under this Section
               with respect to a Swing Line Advance made by the Swing Line
               Lender at a time when the Swing Line Lender had received written
               notice from Celestica or the Administrative Agent that a Default
               had occurred and was continuing.

         (j)   INCREASING OR DECREASING AVAILABLE SWING LINE COMMITMENT. At any
               time and from time to time, Celestica may, by written notice to
               the Administrative

<PAGE>
                                      -34-


               Agent, increase or decrease the Available Swing Line Commitment,
               provided that the Available Swing Line Commitment shall at no
               time exceed U.S. $75,000,000 less the amount, if any, that the
               Commitment of the Swing Line Lender has been reduced pursuant to
               Section 2.6 or be less than zero.

         (k)   TAKE-OVER BIDS. If a Borrower wishes to make a Drawdown of a
               Swing Line Advance for the purpose of financing a Take-over Bid,
               such Borrower shall deliver to the Swing Line Lender a Take-over
               Bid Notice at least ten (10) Banking Days prior to the day on
               which it gives to the Swing Line Lender a telephonic notice or
               Notice of Swing Line Borrowing requesting such Drawdown. Such
               Take-over Bid Notice shall include the details of such Take-over
               Bid. As soon as possible, but in any event within five (5)
               Banking Days of the giving of the Take-over Bid Notice, the Swing
               Line Lender shall, acting reasonably and in good faith, determine
               whether or not it wishes to fund such Swing Line Advance.
               Notwithstanding any other provisions hereof, if the Swing Line
               Lender determines that it does not wish to fund such Swing Line
               Advance, the Swing Line Lender shall not be required to fund such
               Swing Line Advance.

2.20     INCREASE IN AGGREGATE COMMITMENT AMOUNT TO U.S.$750,000,000

         (a)   Notwithstanding any other provision of this Agreement, each of
               the parties hereto agree that Celestica may, from time to time
               and at any time, give notice to the Administrative Agent that one
               or more financial institutions (each an "ADDITIONAL LENDER") have
               agreed to make commitments (each an "ADDITIONAL COMMITMENT")
               hereunder (provided, however, that Celestica shall not be
               entitled to give such notice at any time at which the aggregate
               Commitments is equal to U.S. $750,000,000 (or such lesser amount
               as may be available following a cancellation in part of the
               Facility pursuant to Section 2.6)). Upon receipt of such written
               notice, each party hereto hereby irrevocably authorizes the
               Administrative Agent to:

               (i)   insert the name of the Additional Lender that will become a
                     Lender on Schedule A;

               (ii)  amend Schedule B to reflect the Additional Commitment of
                     the Additional Lender;

               (iii) affix signature pages of the Additional Lender to this
                     Agreement; and

               (iv)  if Advances (other than Swing Line Advances) are
                     outstanding at the time such notice is given, then the
                     Additional Lender shall make available to the
                     Administrative Agent an amount equal to its Main Facility
                     Rateable Portion (calculated as if the Additional
                     Commitment were a Commitment) of such Advances and the
                     Administrative Agent shall make available to each Lender
                     that Lender's Main Facility Rateable Portion (calculated
                     without reference to the Additional Commitment) of such
                     amount,


<PAGE>
                                      -35-


                     whereupon each of the Borrowers, the Administrative Agent,
                     each Lender and the Additional Lender shall acquire the
                     same rights and assume the same obligations between
                     themselves as they would have acquired and assumed had such
                     Additional Lender been original parties hereto as Lenders.

         (b)   Each of the parties hereto agrees that it will promptly execute
               and deliver all such documents, including, without limitation,
               all such additional conveyances, transfers and consents and other
               assurances, and do all such other acts and things as may from
               time to time be desirable in order to better evidence or give
               effect to this Section 2.20.


<PAGE>
                                      -36-


                                    ARTICLE 3
                             CHANGE OF CIRCUMSTANCES
                               AND INDEMNIFICATION

3.1      LENDER REPRESENTATION

Each Lender represents to each of Celestica and Celestica International and the
Administrative Agent that it is resident in Canada for the purposes of the
INCOME TAX ACT (Canada) and that it is beneficially entitled to the principal,
interest and fees payable to it under the Loan Documents. The foregoing
representation shall be true and correct and shall be deemed to be given by each
Lender on each day that a payment of interest, principal or fees is to be made
to it pursuant to a Loan Document.

3.2      INCREASED COSTS

In the event of (i) any Applicable Law coming into force after the date hereof,
(ii) any change in any Applicable Law, or in the interpretation or application
thereof by any court or by any governmental, regulatory, other authority or
central bank charged with the administration thereof, or (iii) compliance by any
Lender with any direction, request or requirement (whether or not having the
force of law but, if not having the force of law, one with which a responsible
bank acting reasonably would comply) of any government, monetary authority,
central bank or comparable agency (each such event being hereinafter referred to
as a "CHANGE IN LAW") which now or hereafter:

         (a)   subjects a Lender to any Tax or changes the basis of taxation, or
               increases any existing Tax (in each case, except for the coming
               into force of any Tax or change in the basis of taxation in
               respect of or the change in the rate of Tax charged on net income
               as a whole, on franchises or capital applicable to the relevant
               jurisdictions of the Lender), on payments of principal, interest
               or other amounts payable by the Borrowers to such Lender under
               any Loan Document or on or by reference to the amount of any
               Advances made or to be made by any Lender hereunder or on or by
               reference to the Commitment of any Lender, or

         (b)   imposes, modifies or deems applicable any reserve, deposit, ratio
               or similar requirements or otherwise imposes any cost on any
               Lender in funding or maintaining all or any of the Advances or
               its Commitment; or

         (c)   has the effect of increasing the amount of overall capital
               required to be maintained by a Lender, taking into account the
               existence of such Lender's participation in any Advance or any of
               its obligations under any Loan Document (including, without
               limitation, all or any part of its Commitment),

               and the result of any of the foregoing is to increase the cost to
               a Lender, reduce the income receivable by it or reduce the
               effective return on the capital of such Lender in respect of any
               Advances and/or its Commitment to an extent which such Lender
               believes to be material (after consultation with Celestica), the
               Lender shall give notice thereof to the Administrative Agent and
               the Administrative Agent shall give notice thereof to the
               Borrowers (herein called a "NOTICE OF

<PAGE>
                                      -37-


               AMOUNT") stating the event by reason of which it believes it is
               entitled to Additional Compensation, such cost and/or such
               reduction in such return (or such proportion of such reduction as
               is, in the reasonable and BONA FIDE opinion of such Lender,
               attributable to its obligations hereunder), the amount of such
               Additional Compensation (as hereinafter defined) incurred by such
               Lender and supplying reasonable supporting evidence (including,
               in the event of change of Applicable Law, a photocopy of the
               Applicable Law evidencing such change together with a certificate
               of a duly authorized officer of the Lender setting forth the
               Additional Compensation and the basis for calculation of such
               Additional Compensation and an opinion in writing of such
               Lender's counsel confirming such change); provided that the
               Lender shall not be required to disclose any information required
               to be kept confidential by Applicable Law (in which case the
               requirement of such confidentiality shall be supported by an
               opinion of such Lender's Counsel) within ten (10) Banking Days of
               the date of receipt of any Notice of Amount, the amount set out
               therein (in this Article 3 referred to as "ADDITIONAL
               COMPENSATION") shall be paid to the Lender by Celestica and
               Celestica International. In the event such Lender subsequently
               recovers all or part of the Additional Compensation paid by the
               Borrowers, it shall repay an equal amount to such Borrowers.

3.3      ILLEGALITY

If, with respect to any Lender, the implementation of any existing provision of
Applicable Law or the adoption of any Applicable Law, or any change therein or
in the interpretation or application thereof by any court or by any statutory
board or commission now or hereafter makes it unlawful for such Lender to make,
fund or maintain all or any portion of an outstanding Advance, to maintain all
or any part of its Commitment hereunder or to give effect to its obligations in
respect of all or any portion of an outstanding Advance, such Lender may, by
written notice thereof to the Borrowers and the other Lenders through the
Administrative Agent (supported, at the request and expense of the Borrowers, by
an opinion of such Lender's counsel), declare the obligations of such Lender
under this Agreement to be terminated whereupon the same shall forthwith
terminate, and the Borrowers to whom such Lender has made Advances shall repay
within the time required by such law (or as promptly as practicable if already
unlawful or at the end of such longer period, if any, as such Lender in its BONA
FIDE opinion may agree) the principal of the Advances made by such Lender. If
any such change shall affect only that portion of such Lender's obligations
under this Agreement that is, in the BONA FIDE opinion of such Lender, severable
from the remainder of this Agreement so that the remainder of this Agreement may
be continued in full force and effect without otherwise affecting any of the
obligations of such Lender or the Borrowers hereunder, such Lender shall declare
its obligations under only that portion so terminated.

3.4      MITIGATION

         (a)   If, in respect of any Lender, circumstances arise which would
               result, upon the giving of notice, in:

               (i)   Additional Compensation being paid by a Borrower to a
                     Lender under Section 3.2; or


<PAGE>
                                      -38-


               (ii)  a reduction of all or any of an Advance by such Lender or
                     the Lender's Commitment pursuant to Section 3.3; or

               (iii) the prepayment of the portion of the Advances outstanding
                     to it pursuant to Section 3.3; or

               (iv)  the payment of any amount by an Obligor under Section 3.5;

               then such Lender, promptly upon becoming aware of the same and
               the possible results thereof, shall notify the Administrative
               Agent thereof and the Administrative Agent shall notify the
               Borrowers thereof and, in consultation with the Borrowers shall
               take such steps, if any, as such Lender in its BONA FIDE opinion
               considers appropriate to mitigate the effects of such
               circumstances. Without limiting the generality of the foregoing,
               if it is commercially reasonable, such Lender shall make
               reasonable efforts to limit the incidence of any such Additional
               Compensation and seek recovery for the account of the Borrowers
               upon the Borrower's request and at the Borrower's expense;
               provided that such Lender in its reasonable determination suffers
               no appreciable economic, legal, regulatory or other disadvantage.
               In all events, the Lenders shall promptly co-operate with the
               Borrowers to the extent possible, to rearrange the affected
               availment to one that may not be affected by such change, but
               failure to effect a change in availment shall not relieve the
               relevant Borrower of its obligation to pay the Additional
               Compensation. Notwithstanding the foregoing provisions, a Lender
               shall only be entitled to rely upon the provisions of Section 3.2
               if and for so long as it is not treating the Borrowers in any
               materially different or in any less favourable manner than is
               applicable to any other customers of any Lender, where such other
               customers are bound by similar provisions to the foregoing
               provisions of Section 3.2.

         (b)   If any Lender seeks Additional Compensation pursuant to Section
               3.2 hereof (the "AFFECTED LENDER"), then the relevant Borrowers
               may indicate to the Administrative Agent in writing that they
               desire to (i) replace the Affected Lender with one or more of the
               other Lenders, and/or (ii) amend a Drawdown Notice or Notice of
               Swing Line Borrowing to reduce the amount sought to be borrowed
               to reflect the reduced amount hereunder, and the Administrative
               Agent shall then forthwith give notice to the other Lenders that
               any Lender or Lenders may, in the aggregate, advance all or part
               of the Affected Lender's Main Facility Rateable Portion of such
               Advance and, in the aggregate, assume all or part of the Affected
               Lender's Commitment and obligations hereunder and acquire all or
               part of the rights of the Affected Lender and assume all or part
               of the obligations of the Affected Lender under each of the other
               Loan Documents (but in no event shall any other Lender or the
               Administrative Agent be obliged to do so). If a Lender shall so
               agree in writing (herein collectively called the "ASSENTING
               LENDERS" and individually called an "ASSENTING LENDER") with
               respect to such advance, acquisition and assumption, the Main
               Facility Rateable Portion of such Advance of each Assenting
               Lender (other than a Swing Line Advance) and the Commitment and
               the obligations of such Assenting Lender under this Agreement and
               the rights and obligations of such Assenting Lender under each of
               the other

<PAGE>
                                      -39-


               Loan Documents shall be increased accordingly on a date mutually
               acceptable to such Assenting Lender and the Borrowers. On such
               date, the Assenting Lender shall advance to the relevant
               Borrowers the relevant portion of the Affected Lender's Main
               Facility Rateable Portion of the outstanding Advances (other than
               Swing Line Advances) and the relevant Borrowers shall prepay to
               the Affected Lender the Advances of the Affected Lender then
               outstanding, together with all interest accrued thereon and all
               other amounts owing to the Affected Lender hereunder, and, upon
               such advance and prepayment, the Affected Lender shall cease to
               be a "LENDER" for purposes of this Agreement and shall no longer
               have any obligations hereunder. Upon the assumption of the
               Affected Lender's Commitment as aforesaid by an Assenting Lender,
               Schedule B hereto shall be deemed to be amended to increase the
               Commitment of such Assenting Lender by the amount of such
               assumption and to reduce the Commitment of the Affected Lender by
               a like amount. If no Assenting Lender is found, then in such
               event, the relevant Borrower is entitled to repay the Affected
               Lender and reduce its obligations hereunder by such amount so
               repaid.

3.5      TAXES

         (a)   All payments by any Obligor under this Agreement or the
               Guarantees shall be made free and clear of and without deduction
               or withholding for any and all Taxes, unless required by law. If
               an Obligor shall be required by law, rule, regulation or the
               interpretation thereof by the relevant governmental authority to
               deduct or withhold any such Taxes from or in respect of any sum
               payable under this Agreement,

               (i)   the sum payable shall be increased by such additional
                     amount as may be necessary so that after making all
                     required deductions or withholdings (including deductions
                     or withholdings applicable to additional amounts paid under
                     this Section 3.5), the Lenders or the Administrative Agent,
                     as applicable, receive a net amount equal to the full
                     amount they would have received if no deduction or
                     withholding had been made;

               (ii)  the Obligor shall make such required deductions or
                     withholdings;

               (iii) the Obligor shall pay the full amount deducted or withheld
                     to the relevant taxation or other authority in accordance
                     with Applicable Law; and

               (iv)  such Obligor shall deliver to the relevant Lender or
                     Administrative Agent, as applicable, as soon as practicable
                     after it has made such payment to the applicable authority
                     (x) a copy of such receipt as is issued by such authority
                     evidencing the deduction or withholding of all amounts
                     required to be deducted or withheld from the sum payable
                     hereunder or (y) if such a receipt is not available from
                     such authority, notice of the payment of such amount
                     deducted or withheld;

                     provided that the obligations of an Obligor to pay
                     additional amounts pursuant to hereto shall not apply with
                     respect to Taxes ("EXCLUDED

<PAGE>
                                      -40-


                     TAXES") arising by virtue of a Lender or the Administrative
                     Agent, as applicable, having a connection with the
                     jurisdiction that imposes the Taxes other than merely by
                     the execution of this Agreement, receipt of payments under
                     this Agreement, the holding and disposition of Advances,
                     the performance of its obligations or the enforcement of
                     its rights under this Agreement.

         (b)   Without prejudice to the foregoing provisions of this Section
               3.5, if the Administrative Agent or any Lender (in this Section
               3.5, an "INDEMNIFIED PERSON") is required at any time (whether
               before or after any Obligor has discharged all of its other
               obligations hereunder) to make any payment on account of any Tax
               which an Obligor is required to withhold in accordance with
               Section 3.5(a) hereof or for which an Obligor is otherwise
               required to indemnify a Lender or the Administrative Agent
               pursuant to Sections 3.5(a), (c) or (d) hereof, or if any
               liability in respect of any such payment is asserted, imposed,
               levied or assessed against such Indemnified Person, the Obligor
               in respect of which such sum was received or receivable shall,
               within 30 days of written demand of the Administrative Agent or
               Lender, promptly indemnify such Indemnified Person against such
               payment or liability, together with interest, penalties and
               expenses payable or incurred in connection therewith including,
               without limitation, any Tax imposed by any jurisdiction on or in
               relation to any amounts paid to or for the account of such
               Indemnified Person pursuant to this Section 3.5. An Indemnified
               Person intending to make a claim pursuant to this Section 3.5
               shall notify the Obligor of the event in respect of which it
               believes it is entitled to make such claim and supply reasonable
               supporting evidence including a copy of the relevant portion of
               any written assessment, provided that any such Indemnified Person
               shall not be required to disclose any information required to be
               kept confidential by regulation or contract (in which case the
               basis of such confidentiality, at the request and expense of the
               Borrowers, shall be supported by an opinion of counsel of
               reputable standing).

         (c)   If an Obligor fails to pay any Taxes required to be paid by it
               pursuant to this Section 3.5 when due to the appropriate taxing
               authority or fails to remit to the Administrative Agent, for the
               account of the respective Lenders, for the account of any other
               Agent or for the Administrative Agent's own account, as
               applicable, the required receipts or other documentary evidence
               required by Section 3.5(a)(ii), the Obligor shall indemnify the
               Lenders or Agent, as applicable, for any incremental Taxes,
               interest or penalties that may become payable by any Lender or
               the Administrative Agent as a result of any such failure. For
               purposes of this Section 3.5, a distribution by the
               Administrative Agent or any Lender to or for the account of any
               Lender shall be deemed a payment by the Obligor.

         (d)   Each Obligor will indemnify the Lenders and Agents for the full
               amount of Taxes imposed by any jurisdiction and paid by such
               Lender or Agent, as applicable with respect to any amounts
               payable pursuant to this Section 3.5, and any liability arising
               therefrom or with respect thereto, whether or not such Taxes were
               correctly or legally asserted. This indemnification shall be made
               within 30 days from the date such Lender or Agent, as applicable
               makes written demand therefor

<PAGE>
                                      -41-


               which demand shall identify the nature and amount of Taxes for
               which indemnification is being sought and shall include a copy of
               the relevant portion of any written assessment from the relevant
               taxing authority demanding payment of such Taxes.

         (e)   Without prejudice to the survival of any other agreement
               contained herein, the agreements and obligations contained in
               this Section 3.5 shall survive the payment in full of principal,
               interest, fees and any other amounts payable hereunder and the
               termination of this Agreement and the Guarantees.

3.6      TAX REFUND

         (a)   If, following the imposition of any Tax on any payment by any
               Obligor in consequence of which such Obligor pays an additional
               amount under Section 3.5(a), any Lender receives or is granted a
               refund of any Tax actually paid by it which in such Lender's sole
               opinion (acting in good faith) is attributable to such additional
               amount paid by such Obligor and is both identifiable and
               quantifiable by it without requiring such Lender or its
               professional advisers to expend a material amount of time or
               incur a material cost in so identifying or quantifying (any of
               the foregoing, to the extent so identifiable and quantifiable,
               being referred to as a "REFUND"), such Lender shall, to the
               extent that it can do so without prejudice to the retention of
               the relevant refund and subject to such Obligor's obligation to
               repay promptly on demand by the Lender the amount to such Lender
               if the relevant refund is subsequently disallowed or cancelled,
               reimburse such Obligor promptly after receipt of such refund by
               such Lender with such amount as such Lender shall in its sole
               opinion but in good faith have concluded to be the amount or
               value of the relevant refund.

         (b)   Nothing contained in this Agreement shall interfere with the
               right of any Lender to arrange its Tax and other affairs in
               whatever manner it thinks fit. No Lender shall be required to
               disclose any confidential information relating to the
               organization of its affairs.


<PAGE>
                                      -42-


                                    ARTICLE 4
                        CONDITIONS PRECEDENT TO DRAWDOWN

4.1      CONDITIONS FOR CLOSING

The following conditions shall be satisfied by the Borrowers on or prior to
Closing:

         (a)   each Obligor shall have duly authorized, executed and delivered
               to the Administrative Agent each of the Loan Documents to which
               it is a party and each such Loan Document shall constitute a
               legal, valid and binding obligation of such Obligor, enforceable
               against such Obligor in accordance with its terms;

         (b)   each Obligor shall have delivered to the Administrative Agent:

               (i)   a certified copy of its Organic Documents,

               (ii)  a certified copy of the resolutions authorizing it to enter
                     into, execute and deliver the Loan Documents to which it is
                     a party and to perform its obligations thereunder;

               (iii) a certificate as to the incumbency of its officers signing
                     the Loan Documents to which it is a party; and

               (iv)  a certificate of status, good standing or like certificate
                     with respect to such Obligor issued by the appropriate
                     government officials of the jurisdiction of its
                     incorporation;

         (c)   there shall have been no Material Adverse Change since September
               30, 2002;

         (d)   no Default or Event of Default shall have occurred and be
               continuing;

         (e)   each Material Restricted Subsidiary shall have executed and
               delivered to the Administrative Agent (i) a confirmation of its
               Guarantee if previously provided in connection with the Existing
               Credit Agreement; or (ii) a Guarantee;

         (f)   Celestica shall have executed and delivered to the Administrative
               Agent a Guarantee of the monetary Obligations of Celestica
               International;

         (g)   opinions of Borrowers' Counsel, and local counsel to each
               Guarantor, substantially in form of Schedule K, shall have been
               delivered to the Administrative Agent;

         (h)   none of the undertaking, property or assets of the Borrowers or
               any of the Restricted Subsidiaries shall be subject to any Liens
               other than (i) Permitted Encumbrances or (ii) Liens with respect
               to which the Administrative Agent shall have received
               satisfactory evidence of the repayment of the underlying
               obligation and fully executed discharges and releases thereof and
               Celestica and each of the Restricted Subsidiaries shall have
               delivered to the Administrative Agent a

<PAGE>
                                      -43-


               Permitted Encumbrance Certificate if any of the undertaking,
               property or assets of such Restricted Subsidiary is subject to
               any Liens; and

         (i)   all amounts owing by the Borrowers to the Lenders and the Agents
               under the Senior Unsecured Credit Agreement shall have been fully
               repaid and such Senior Unsecured Credit Facility shall have been
               terminated and cancelled and shall cease to be of any further
               force and effect.

The conditions set forth in this Section 4.1 are inserted for the sole benefit
of the Lenders and may be waived by the Administrative Agent on behalf of the
Lenders in whole or in part, with or without terms or conditions.

4.2      CONDITIONS FOR FIRST DRAWDOWN

The following conditions shall be satisfied by the Borrowers on or prior to the
first Drawdown Date after the date hereof:

         (a)   the representations and warranties set forth in Section 6.1 shall
               be true and correct in all material respects on and as of the
               Drawdown Date, both before and after giving effect to the
               Drawdown of such Advance and to the application of proceeds
               therefrom on the Drawdown Date;

         (b)   no Default or Event of Default shall have occurred and be
               continuing, nor shall any such event occur as a result of making
               the Advances or the application of proceeds therefrom on the
               Drawdown Date; and

         (c)   any Borrower which intends to make a Drawdown shall have given
               the appropriate Drawdown Notice to the Administrative Agent in
               accordance with the provisions of Section 2.3.

4.3      CONDITIONS FOR SUBSEQUENT DRAWDOWNS

The following conditions shall be satisfied by the Borrower requesting an
Advance at or prior to the time of each Drawdown of an Advance under the
Facility subsequent to the first Drawdown after the date hereof:

         (a)   a Borrower shall have given to the Administrative Agent a
               Drawdown Notice in accordance with the provisions of Section 2.3;

         (b)   the representations and warranties set forth in Section 6.1 shall
               be, MUTATIS MUTANDIS, true and correct in all material respects
               on and as of the Drawdown Date, both before and after giving
               effect to the Drawdown of such Advance and to the application of
               proceeds therefrom on the Drawdown Date; and

         (c)   no Default or Event of Default shall have occurred and be
               continuing, nor shall any such event occur as a result of making
               the Advances or the application of proceeds therefrom on the
               Drawdown Date.


<PAGE>
                                      -44-


                                    ARTICLE 5
                       PROVISIONS RELATING TO SUBSIDIARIES

5.1      MATERIAL RESTRICTED SUBSIDIARIES TO PROVIDE GUARANTEES

         (a)   Each Subsidiary of Celestica which is or becomes a Material
               Restricted Subsidiary shall comply with the requirements of
               Subsection 7.1(m).

         (b)   In the event that a Material Restricted Subsidiary ceases to be a
               Material Restricted Subsidiary as a result of the diminution of
               the value of its assets such that the aggregate value thereof
               does not meet the applicable threshold set out in the definition
               of Material Restricted Subsidiary under this Agreement, Celestica
               may request and the Administrative Agent shall, in its reasonable
               discretion, release the Guarantee executed by such Material
               Restricted Subsidiary.

5.2      UNRESTRICTED SUBSIDIARIES

Celestica may, from time to time and at any time hereafter, designate any
Subsidiary as an Unrestricted Subsidiary so long as:

         (a)   (i) such Subsidiary shall not be a Subsidiary existing as at the
               date of this Agreement; and (ii) such Subsidiary shall never have
               been a Restricted Subsidiary;

         (b)   neither Celestica nor any of its Subsidiaries (other than
               Unrestricted Subsidiaries) shall be liable, contingently or
               otherwise, for any indebtedness or other liability or obligation
               of the Unrestricted Subsidiary, except for guarantees provided by
               the immediate parent of such Unrestricted Subsidiary in respect
               of indebtedness of such Unrestricted Subsidiary, where such
               guarantees are:

               (i)   made solely for the purpose of facilitating a pledge by the
                     guarantor of Shares of such Unrestricted Subsidiary; and

               (ii)  the recourse under such guarantees are limited to such
                     pledged Shares; and

         (c)   neither Celestica nor any of its Restricted Subsidiaries shall
               have applied the proceeds of any Advance under the Facility to
               fund the equity of, or otherwise capitalize the Unrestricted
               Subsidiary.

Provided that an Event of Default has not occurred and is not continuing,
Celestica may from time to time and at any time hereafter, designate an
Unrestricted Subsidiary as a Restricted Subsidiary provided that:

               (i)   immediately upon giving effect to such designation,
                     Celestica shall remain in compliance with all covenants set
                     out in Section 7.3 on a pro-forma (four quarter) basis; and


<PAGE>
                                      -45-


               (ii)  the designation of such Unrestricted Subsidiary as a
                     Restricted Subsidiary would not otherwise result in the
                     occurrence of a Default or an Event of Default.


<PAGE>
                                      -46-


                                    ARTICLE 6
                         REPRESENTATIONS AND WARRANTIES

6.1      REPRESENTATIONS AND WARRANTIES

Each Borrower represents and warrants as follows to the Administrative Agent and
the Lenders and acknowledges and confirms that the Administrative Agent and the
Lenders are relying upon such representations and warranties:

         (a)   ORGANIZATION, ETC. Each Obligor is validly organized and existing
               and in good standing under the laws of the jurisdiction of its
               incorporation, creation or continuance, is duly qualified to do
               business and is qualified as a foreign corporation, company or
               other entity in each jurisdiction where the nature of its
               business requires such qualification, except where the failure to
               be so qualified would not reasonably be likely to have Material
               Adverse Effect, and has full power and authority and holds all
               requisite governmental licences, permits and other approvals to
               enter into and perform its obligations under the Loan Documents
               to which it is a party and except where failure to hold such
               licenses, permits or approvals would not reasonably be likely to
               have a Material Adverse Effect to own or hold under lease its
               property and to conduct its business substantially as currently
               conducted by it.

         (b)   VALIDITY, ETC. Each Obligor has duly executed and delivered each
               Loan Document to which it is a party and each such Loan Document
               constitutes a legal, valid and binding obligation of such Obligor
               enforceable against it in accordance with its terms.

         (c)   DUE AUTHORIZATION, NON-CONTRAVENTION ETC. The execution, delivery
               and performance by each Obligor of each Loan Document to which it
               is a party are within its corporate powers, have been duly
               authorized by all necessary corporate action by it, and do not

               (i)   contravene its Organic Documents;

               (ii)  contravene any Applicable Law or contractual restriction;
                     or

               (iii) result in, or require the creation or imposition of, any
                     Lien on any of its properties.

         (d)   GOVERNMENT APPROVAL, REGULATION, ETC. No authorization or
               approval or other action by, and no consent from, notice to or
               filing with, any Official Body or other Person is required for
               the due execution, delivery or performance by any Obligor of any
               Loan Document to which it is a party or in order to render any
               such Loan Document legal, valid, binding or enforceable against
               such Obligor.

         (e)   FINANCIAL STATEMENTS. The consolidated unaudited financial
               statements of Celestica and its Subsidiaries as at September 30,
               2002 fairly present the financial condition of Celestica and its
               Subsidiaries as at such date and the results of their operations
               for the fiscal quarter and nine month period then ended, in
               accordance

<PAGE>
                                      -47-


               with GAAP consistently applied. Since September 30, 2002 (or, for
               the purposes of Sections 4.2 and 4.3, if the Maturity Date has
               been extended pursuant to Section 2.7, the date of the quarterly
               or annual financial statements delivered most recently prior to
               the date of the most recent of such extensions pursuant to
               Section 7.1(a), there has been no Material Adverse Change;

         (f)   LITIGATION, LABOUR CONTROVERSIES, ETC. There is no pending or, to
               the knowledge of Celestica and the Restricted Subsidiaries,
               threatened litigation, action, proceeding, or labour controversy
               affecting Celestica or any of the Restricted Subsidiaries, or any
               of their respective properties, businesses, assets or revenues,
               which would reasonably be likely to have a Material Adverse
               Effect or purports to affect the legality, validity or
               enforceability of any Loan Document.

         (g)   LICENCES, ETC. AND COMPLIANCE WITH LAWS. All material licences,
               franchises, certificates, consents, rights, approvals,
               authorizations, registrations, orders and permits required under
               Applicable Law (other than Environmental Laws) to enable each of
               the Borrowers and each Restricted Subsidiary to carry on their
               respective businesses as now conducted by them and to own or
               lease their respective properties have been duly obtained and are
               currently subsisting. Each of the Borrowers and each Restricted
               Subsidiary have complied in all material respects with the terms
               and provisions presently required to be complied with by them in
               all such material licences, franchises, certificates, consents,
               rights, approvals, authorizations, registrations, orders and
               permits and with Applicable Law (other than Environmental Laws)
               and are not in violation of any of the respective provisions
               thereof if such non-compliance or violation would reasonably be
               likely to have a Material Adverse Effect.

         (h)   COMPLIANCE WITH ENVIRONMENTAL LAWS. Each of the Borrowers and the
               Subsidiaries and all facilities and property now or formerly
               owned, operated or leased by them:

               (i)   are and have been in compliance with all Environmental
                     Laws, including, without limitation, with respect to the
                     release, spill, leak, pumping, pouring, emptying,
                     injection, escape, leaching, dumping, spraying, burial,
                     abandonment, incineration, seepage, placement, emission,
                     deposit, issuance, discharge, transportation or disposal
                     ("RELEASE") of any Hazardous Material in or over the water,
                     atmosphere or soil other than for non-compliance with
                     Environmental Laws which would not reasonably be likely to
                     have a Material Adverse Effect;

               (ii)  have no contingent liabilities in connection with any
                     Release or likely Release of Hazardous Materials and have
                     not Released or caused or permitted the Release of
                     Hazardous Materials, and have no knowledge of Releases by
                     others, at, on or under any property now or previously
                     owned, operated or leased by Celestica and its Material
                     Restricted Subsidiaries that, with respect to any of the
                     foregoing, singly or in the aggregate, would reasonably be
                     likely to have a Material Adverse Effect;


<PAGE>
                                      -48-


               (iii) have not received notice of and are not aware of any
                     pending or threatened claims, complaints, notices, orders,
                     directions, instructions or requests for information with
                     respect to any alleged violation of or potential liability
                     under any Environmental Law which would reasonably be
                     likely to have a Material Adverse Effect;

               (iv)  have been issued and are in compliance with all permits,
                     certificates, approvals, licences and other authorizations
                     relating to environmental matters and necessary or
                     desirable for the Business other than for any such
                     non-issuances and non-compliances which would not
                     reasonably be likely to have a Material Adverse Effect and
                     each such permit, certificate, approval, licence or other
                     authorization the absence of which would reasonably be
                     likely to have a Material Adverse Effect is in good
                     standing and there are no proceedings pending or, to the
                     knowledge of the Borrowers, threatened to revoke, amend or
                     limit in any material respect any such permit, certificate,
                     approval, licence or other authorization;

               (v)   have no underground storage tanks, active or, to the
                     knowledge of the Borrowers, abandoned, including petroleum
                     storage tanks, on or under any such property that, singly
                     or in the aggregate, would reasonably be likely to have a
                     Material Adverse Effect;

               (vi)  have not directly transported or directly arranged for the
                     transportation of any Hazardous Substances in violation of
                     Environmental Laws or to any location which would
                     reasonably be likely to lead to claims against them for any
                     remedial work, damage to the environment or natural
                     resources or personal injury, including claims under
                     CERCLA, which in any such case would reasonably be likely
                     to have a Material Adverse Effect;

               (vii) have no polychlorinated biphenyls or friable asbestos
                     present at any such property that, singly or in the
                     aggregate, would reasonably be likely to have a Material
                     Adverse Effect;

               (viii) have no conditions which exist at, on or under any such
                     property which, with or without the passage of time, or the
                     giving of notice or both, would give rise to liability
                     under any Environmental Laws which would reasonably be
                     likely to have a Material Adverse Effect; and

               (ix)  is not listed or proposed for listing on the National
                     Priorities List pursuant to CERCLA, on the CERCLIS or on
                     any similar state list of sites or Persons requiring
                     investigation or clean up where the liability imposition
                     and allocation regime provided for in the applicable state
                     Environmental Law is similar to CERCLA, including, without
                     limitation, the ability of governments and other parties to
                     recover costs from other responsible or potentially
                     responsible persons, except for any such listing or
                     proposed listing which would not reasonably be likely to
                     have a Material Adverse Effect.


<PAGE>
                                      -49-


         (i)   ENCUMBRANCES. There are no Liens on any of the assets or
               undertaking of the Borrowers or any Restricted Subsidiary other
               than Permitted Encumbrances.

         (j)   NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of Default
               has occurred and is continuing.

         (k)   ACCURACY OF INFORMATION. All factual information heretofore or
               contemporaneously furnished by or on behalf of Celestica in
               writing to the Administrative Agent for the purposes of or in
               connection with this Agreement is true and accurate in every
               material respect on the date as of which such information is
               dated or certified and as of the date of execution and delivery
               of this Agreement, and such information is not incomplete by
               omitting to state any material fact necessary to make such
               information not misleading.

         (l)   NO ACTION FOR WINDING-UP OR BANKRUPTCY. There has been no
               involuntary action taken against any of the Borrowers or any
               Restricted Subsidiary for any such corporation's winding-up,
               dissolution, liquidation, bankruptcy, receivership,
               administration or similar or analogous events in respect of such
               corporation or all or any material part of its assets or
               revenues.

         (m)   TAXES. Each Borrower and each of its Subsidiaries have duly filed
               on a timely basis all tax returns required to be filed by them
               except where such failure to file would not reasonably be likely
               to have a Material Adverse Effect and have paid all Taxes which
               are due and payable by them, and all assessments and
               re-assessments, and all other Taxes, governmental charges,
               governmental royalties, penalties, interest and fines claimed
               against them, other than those for which liability is being
               contested by them in good faith by appropriate proceedings and
               for which adequate provision has been made where required in
               accordance with GAAP or in respect of which such failure to pay
               would not reasonably be likely to have a Material Adverse Effect,
               and all required instalment payments have been made in respect of
               Taxes payable for the current period for which returns are not
               yet required to be filed except where such failure to pay would
               not reasonably be likely to have a Material Adverse Effect; there
               are no agreements, waivers or other arrangements providing for an
               extension of time with respect of the filing of any tax returns
               by them or the payment of any Taxes except where such agreements,
               waivers or other arrangements would not reasonably be likely to
               have a Material Adverse Effect; there are no actions or
               proceedings to be taken by any taxation authority of any
               jurisdiction to enforce the payment of any Taxes by them other
               than those which are being contested by them in good faith by
               appropriate proceedings and which proceedings have been stayed
               for the duration of such contestation.

         (n)   PENSION PLANS. Except as would not be reasonably likely to have a
               Material Adverse Effect, (i) all Pension Plans are duly
               established, registered, qualified, administered and invested in
               compliance with the terms thereof, any applicable collective
               agreements and Applicable Law; (ii) no events have occurred and
               no action has been taken by any Person which would reasonably be
               likely to result in the termination or partial termination of any
               Pension Plan, whether by declaration

<PAGE>
                                      -50-


               of any Superintendent of Pensions or otherwise; (iii) none of the
               Borrowers have withdrawn any assets held in respect of any
               Pension Plan except as permitted under the terms thereof and
               Applicable Laws; (iv) no Pension Plan has a "SOLVENCY DEFICIENCY"
               or "GOING CONCERN UNFUNDED LIABILITY" as defined in the PENSION
               BENEFITS ACT (Ontario) and the regulations enacted thereunder, as
               amended; (v) all contributions, premiums and other payments
               required to be paid to or in respect of each Pension Plan have
               been paid in a timely fashion in accordance with the terms
               thereof and Applicable Law and no taxes, penalties or fees are
               owing or exigible in respect of any Pension Plan; and (vi) no
               actions, suits, claims, or proceedings are pending or, to the
               knowledge of the Borrower, threatened in respect of any Pension
               Plan or its assets, other than routine claims for benefits. For
               the purposes of this section, "APPLICABLE LAW" shall include any
               federal or provincial pension benefits legislation and the INCOME
               TAX ACT (Canada).

         (o)   REGULATIONS U AND X. No Borrower is engaged in the business of
               extending credit for the purpose of purchasing or carrying margin
               stock. None of the proceeds from the Facility will be used for
               the purpose of purchasing or carrying directly or indirectly
               margin stock or for any other purpose that would constitute this
               transaction a "PURPOSE CREDIT" within the meaning of Regulations
               U and X of the Board of Governors of the Federal Reserves System,
               as any of them may be amended from time to time.

         (p)   INVESTMENT COMPANY ACT. No Obligor is an "investment company"
               within the meaning of the United States INVESTMENT COMPANY ACT OF
               1940.

         (q)   PUBLIC UTILITY HOLDING COMPANY ACT. No Obligor is an "affiliate"
               or a "subsidiary company" of a "public utility company" for a
               "holding company" or an "affiliate" or a "subsidiary company" of
               a "public utility company" as such terms are defined in the
               United States PUBLIC UTILITY HOLDING COMPANY ACT OF 1935.

6.2      SURVIVAL OF REPRESENTATIONS AND WARRANTIES

The representations and warranties set out in this Article 6 and in any Loan
Document shall survive the execution and delivery of this Agreement and the
making of any Advances to the Borrowers, notwithstanding any investigations or
examinations which may be made by the Administrative Agent or any Lender or any
counsel to any of them.

6.3      DEEMED REPETITION OF REPRESENTATIONS AND WARRANTIES

Each of the representations set out in Section 6.1 shall be true and correct in
all material respects and shall be deemed to be given on the occurrence of the
Drawdown, Conversion or Rollover of an Advance, in each case by reference to the
facts and circumstances existing on the date of such Drawdown, Conversion or
Rollover.


<PAGE>
                                      -51-


                                    ARTICLE 7
                                    COVENANTS

7.1      AFFIRMATIVE COVENANTS

Celestica covenants and agrees with each of the Lenders that, unless the
Majority Lenders otherwise consent in writing, so long as any amount payable
hereunder or under the Loan Documents is outstanding or any of the Lenders has
any Commitment hereunder:

         (a)   FINANCIAL REPORTING. Celestica shall deliver to the
               Administrative Agent, with sufficient copies for distribution to
               each of the Administrative Agent and each of the Lenders:

               (i)   within 60 days after the end of each of its fiscal quarters
                     in each fiscal year, commencing with the fiscal quarter
                     ending December 31, 2002, the unaudited financial
                     statements of Celestica on a consolidated basis, each
                     consisting of a balance sheet, statement of income and
                     statement (in the form customarily prepared by Celestica
                     for internal reporting purposes) of changes in financial
                     position as at the end of such fiscal quarter and for the
                     period commencing with the end of the previous fiscal
                     quarter and ending with the end of such fiscal quarter,
                     together with the figures for the year-to-date and setting
                     forth, in each case, in comparative form to the figures for
                     the corresponding fiscal quarter of the previous fiscal
                     year;

               (ii)  within 120 days after the end of each fiscal year of
                     Celestica, the audited consolidated financial statements of
                     Celestica for such year setting forth the corresponding
                     figures for the previous fiscal year in comparative form,
                     together with the report thereon of an independent auditor
                     of recognized national standing, each consisting of a
                     balance sheet, statement of income and statement of changes
                     in financial position;

               (iii) within 60 days after the end of each fiscal quarter of
                     Celestica in each fiscal year, commencing with the fiscal
                     quarter ending December 31, 2002, an Officer's Certificate
                     of Celestica substantially in the form of Schedule D
                     stating that:

                     (A)   Celestica is in compliance with the covenants set
                           forth in this Article 7 and that no Default or Event
                           of Default has occurred and is continuing (or
                           specifying such non-compliance or Default or Event of
                           Default and stating what action, if any, Celestica is
                           taking or is causing to be taken in connection
                           therewith) and providing a calculation of the ratios
                           referred to in Sections 7.3(a), (b) and (c), and a
                           statement as to the amount and calculation of
                           Tangible Net Worth, EBITDA, Interest Expense and
                           Gross Funded Debt, in each case as at the last day of
                           the relevant period; and

                     (B)   Celestica has determined that the unconsolidated
                           assets of all Restricted Subsidiaries which are not
                           Material Restricted

<PAGE>
                                      -52-


                           Subsidiaries do not, or will not, after giving effect
                           to the Guarantees delivered by the Restricted
                           Subsidiaries listed in a schedule thereto, exceed ten
                           per cent (10%) of the unconsolidated assets of the
                           Borrowers and the Restricted Subsidiaries on the date
                           referenced in the most recently delivered set of
                           financial statements delivered pursuant to Section
                           7.1(a)(ii);

               (iv)  in the event that Celestica delivers filings other than the
                     financial statements referred to in clauses (i) to (iii)
                     above to any securities commission, stock exchange or
                     similar regulatory authority, such filings concurrently
                     with the delivery of such filings to the securities
                     commission, stock exchange or similar regulatory authority;
                     and

               (v)   such other information respecting the condition or
                     operations, financial or otherwise, of Celestica or any
                     Subsidiary (other than an Unrestricted Subsidiary) as any
                     Lender through the Administrative Agent may from time to
                     time reasonably request, including without limitation,
                     particulars of Advances advanced or applied by either of
                     the Borrowers to or for the benefit of Celestica Italia
                     S.r.l or by any of Celestica's Restricted Subsidiaries to
                     or for the benefit of Celestica Italia S.r.l.

         (b)   CORPORATE STATUS. Subject to transactions undertaken in
               compliance with Section 11.12, Celestica shall remain a
               corporation duly incorporated and validly subsisting under the
               laws of the Province of Ontario or the federal laws of Canada and
               each of the Restricted Subsidiaries shall remain validly
               organized and existing and in good standing under the laws of its
               jurisdiction of formation or continuance.

         (c)   MAINTENANCE OF BUSINESS AND PROPERTIES. Each of Celestica and
               each Restricted Subsidiary shall, and shall cause each of its
               Subsidiaries (except for Unrestricted Subsidiaries) to, continue
               its business, maintain, preserve, protect and keep its properties
               in good repair, working order and condition, reasonable wear and
               tear excepted, and make necessary and proper repairs, renewals
               and replacements so that its business carried on in connection
               therewith may be properly conducted at all times unless Celestica
               or such Restricted Subsidiary determines in good faith that the
               continued maintenance of any of its properties is no longer
               desirable.

         (d)   NOTICE OF EVENT OF DEFAULT. Celestica shall deliver to the
               Administrative Agent, forthwith upon becoming aware of any
               Default or Event of Default, a certificate of an officer of
               Celestica specifying such Default or Event of Default together
               with a statement of an officer of Celestica setting forth details
               of such Default or Event of Default and the action which has
               been, or is proposed to be, taken with respect thereto.

         (e)   OTHER NOTIFICATIONS. Celestica shall at any time upon request of
               the Administrative Agent, acting reasonably, provide to the
               Administrative Agent an up to date corporate chart showing
               Celestica and all of its Subsidiaries and shall promptly notify
               the Administrative Agent of:


<PAGE>
                                      -53-


               (i)   any change in the name or organization of any of the
                     Borrowers or any Material Restricted Subsidiary and of any
                     change in the location of the registered office or
                     executive office of any of them;

               (ii)  the non-compliance with any Environmental Law or any
                     environmental claim, complaint, notice or order issued to
                     any of the Borrowers, or any of the Subsidiaries, or any
                     other environmental condition or event where such
                     non-compliance, condition or event would reasonably be
                     likely to have a Material Adverse Effect. As soon as
                     practicable thereafter, Celestica shall advise the
                     Administrative Agent as to the actions which the Borrowers
                     or any such Subsidiary intends to take in connection with
                     any such claim, complaint, notice or order; and

               (iii) the institution of any steps by the Borrower or any other
                     Person to terminate any Pension Plan which would reasonably
                     be likely to have a Material Adverse Effect, failure to
                     make a required contribution to any Pension Plan if such
                     failure is sufficient to give rise to a Lien under Section
                     3.02(f) of ERISA, the taking of any action with respect to
                     a Pension Plan which could reasonably be expected to result
                     in the requirement that a Borrower furnish a bond or other
                     security to the PBGC or such Pension Plan, the occurrence
                     of any event with respect to any Pension Plan which would
                     reasonably be likely to have a Material Adverse Effect and
                     copies of all documentation relating thereto.

         (f)   COMPLIANCE WITH LAWS, ETC. Each of Celestica and the Restricted
               Subsidiaries will, and will cause each of its Subsidiaries to,
               comply in all material respects with Applicable Laws, such
               compliance to include (without limitation) its qualification as a
               foreign corporation in all jurisdictions in which such
               qualification is legally required for the conduct of its
               business.

         (g)   PAYMENT OF TAXES. The Borrowers shall, and the Borrowers shall
               cause each of the Subsidiaries to, pay or cause to be paid, when
               due, all Taxes including, property taxes, business taxes, social
               security premiums, assessments and governmental charges or levies
               imposed upon it or upon its income, sales, capital or profit or
               any property belonging to it unless any such Tax, social security
               premiums, assessment, charge or levy is contested by it in good
               faith with adequate provision or reserve, where required by GAAP,
               and to withhold and remit when due all payroll and withholding
               taxes.

         (h)   INSURANCE. Each of Celestica and the Restricted Subsidiaries
               will, and will cause each of its Subsidiaries (except for
               Unrestricted Subsidiaries) to, maintain or cause to be maintained
               insurance with responsible insurance companies with respect to
               its properties and business against such casualties and
               contingencies, of such types, and in such amounts as is customary
               in the case for similar businesses operating in similar
               geographic locations. Notwithstanding the foregoing, Celestica
               and each of the Restricted Subsidiaries shall be permitted to
               self-insure only where self-insurance is usual and customary for
               the type of risk, and for companies in substantially the same
               line of business and operating in the same

<PAGE>
                                      -54-


               geographic location as Celestica or the Restricted Subsidiary, as
               applicable, and where customary and usual reserves or provisions
               are taken in respect of such self-insurance by Celestica or the
               Restricted Subsidiary, as applicable. Upon request of the
               Administrative Agent, Celestica will furnish to the
               Administrative Agent for distribution to the Lenders at
               reasonable intervals a certificate of an Authorized Officer of
               Celestica setting forth the nature and extent of all insurance
               maintained by Celestica and the Restricted Subsidiaries in
               accordance with this Section which certificate shall specify the
               risks for which Celestica or any Restricted Subsidiary have
               self-insured and the amount of the provisions or reserves, if
               any, held or made in respect of such self-insurance.

         (i)   BOOKS AND RECORDS. Celestica and each Restricted Subsidiary will,
               and will cause each of its Subsidiaries to, keep books and
               records which accurately reflect all of its business affairs and
               transactions. Celestica will permit the Administrative Agent and
               each Lender or any of their respective representatives, at
               reasonable times and customary intervals during normal business
               hours, to visit Celestica's offices and to discuss its financial
               matters with Celestica's financial officers. Upon the occurrence
               of and during the continuation of a Default, Celestica and each
               Restricted Subsidiary shall permit the Administrative Agent and
               each Lender or any of their respective representatives at any
               time to visit all of its offices, to discuss its financial
               matters with its officers and its independent chartered
               accountant (and each of Celestica and each Restricted Subsidiary
               hereby authorizes such independent chartered accountant to
               discuss their financial matters with the Administrative Agent and
               each Lender or its representatives whether or not any
               representative of Celestica or the Restricted Subsidiary is
               present) and to examine (and, at the expense of the Borrowers,
               photocopy extracts from) any of its books or corporate records.
               The Borrowers shall pay any fees of such independent chartered
               accountant incurred in connection with the Administrative Agent's
               or any Lender's exercise of its rights pursuant to this Section.

         (j)   CELESTICA INTERNATIONAL TO REMAIN SUBSIDIARY. Celestica
               International (or its Successor Corporation within the meaning of
               Section 11.12) shall remain a directly or indirectly wholly-owned
               Subsidiary of Celestica.

         (k)   PUNCTUAL PAYMENT. Celestica will, and will cause each Obligor to
               duly and punctually pay or cause to be paid all amounts due under
               this Agreement and the other Loan Documents at the dates and
               places, in the currencies and in the manner provided in this
               Agreement and any other Loan Documents.

         (l)   RATINGS MAINTENANCE. Celestica shall maintain a credit rating
               with the Approved Credit Rating Agencies and shall forthwith
               notify the Administrative Agent in the event that any rating by
               an Approved Credit Rating Agency is downgraded or in the event
               that the rating of Celestica shall have been placed under review
               by an Approved Credit Rating Agency.

         (m)   MATERIAL RESTRICTED SUBSIDIARY GUARANTEES.


<PAGE>
                                      -55-


               (i)   Subject to clauses (ii) and (iii), Celestica shall:

                     (A)   within 45 days of the acquisition or incorporation of
                           a Subsidiary which is a Restricted Subsidiary, whose
                           assets total greater than U.S. $150,000,000 on an
                           unconsolidated basis on the date of such acquisition
                           or incorporation; and

                     (B)   upon the designation of a Restricted Subsidiary as a
                           Material Restricted Subsidiary on the Schedule to the
                           Officer's Certificate delivered pursuant to Section
                           7.1(a)(iii) within 45 days of such delivery of the
                           Officer's Certificate making such designation,

                     cause such Material Restricted Subsidiary to (I) authorize,
                     execute and deliver a Guarantee to the Administrative Agent
                     substantially in the form of Schedule G with such changes
                     as the Administrative Agent and the Material Restricted
                     Subsidiary may necessarily require on the advice of their
                     respective counsel to reflect local legal requirements;
                     (II) deliver to the Administrative Agent certified copies
                     of its Organic Documents and a resolution authorizing the
                     Guarantee, a certificate of its officers signing the
                     Guarantee and a certificate of status, good standing or
                     like certificate with respect to it issued by appropriate
                     government officials of its jurisdiction of incorporation;
                     and (III) cause to be delivered an opinion of counsel to
                     the newly acquired or incorporated Material Restricted
                     Subsidiary substantially in the form of Schedule K, with
                     only those changes which are satisfactory to the Lender's
                     Counsel.

               (ii)  In the event that any Material Restricted Subsidiary is not
                     a wholly-owned Subsidiary of Celestica, on the later of (i)
                     the date of execution of a Guarantee or (ii) the date of
                     acquisition by any Person which is not Celestica or a
                     Subsidiary of Celestica of any Share of such Material
                     Restricted Subsidiary, Celestica shall deliver an
                     acknowledgement addressed by such Person to the
                     Administrative Agent acknowledging the Guarantee executed
                     by such Material Restricted Subsidiary and the
                     enforceability thereof against the Material Restricted
                     Subsidiary to the full extent set out in the Guarantee
                     (subject to the same qualifications as set out in the
                     opinion of legal counsel to such Material Restricted
                     Subsidiary with respect to such Guarantee) notwithstanding
                     the ownership of Shares of the Material Restricted
                     Subsidiary by such Person and any agreement between such
                     Person and Celestica or any Subsidiary of Celestica.

               (iii) The Borrowers and Guarantors shall, and the Borrowers shall
                     cause each of its Subsidiaries to, take all such steps and
                     do such things as may be necessary, in the opinion of the
                     Administrative Agent, to ensure the continuous
                     enforceability of each Guarantee granted by each Borrower
                     and each Material Restricted Subsidiary.

         (n)   ACCURACY OF INFORMATION. All factual information hereafter
               furnished by or on behalf of Celestica in writing to the
               Administrative Agent for the purposes of or in

<PAGE>
                                      -56-


               connection with this Agreement shall be true and accurate in
               every material respect on the date as of which such information
               is dated or certified and shall not be incomplete by the omission
               to state any material fact necessary to make such information not
               misleading.

7.2      NEGATIVE COVENANTS

Celestica covenants and agrees with each of the Lenders that, unless the
Majority Lenders otherwise consent in writing, so long as any amount payable
hereunder is outstanding or the Lenders shall have any Commitment hereunder:

         (a)   NO MERGER, AMALGAMATION, ETC. None of the Borrowers or any
               Restricted Subsidiary shall, directly or indirectly, merge,
               amalgamate or enter into any similar or other business
               combination pursuant to statutory authority or otherwise with any
               other Person except upon compliance with Section 11.12.

         (b)   RESTRICTION ON DISPOSITION OF ASSETS. None of the Borrowers or
               any Restricted Subsidiary shall sell, assign, transfer, lease,
               convey or otherwise dispose of any property, assets or
               investments, (in each case a "SALE") other than:

               (i)   sales made in compliance with Section 11.12; or

               (ii)  sales of obsolete equipment in the ordinary course of
                     business; or

               (iii) sales, assignments and transfers pursuant to a Permitted
                     Securitization Transaction; or

               (iv)  sale/leaseback transactions of:

                     (A)   any real property owned by a Borrower or Restricted
                           Subsidiary; and

                     (B)   any property or assets acquired by a Borrower or
                           Restricted Subsidiary, as the case may be, which is
                           completed within six months of the date on which such
                           property or assets were acquired, provided that any
                           Borrowing made to finance such acquisition shall be
                           repaid within two Banking Days of the completion of
                           such sale/leaseback transaction; or

               (v)   sales of Shares of any Unrestricted Subsidiary; or

               (vi)  sales of assets and property, including inventory, in the
                     ordinary course of business; or

               (vii) sales of any fixed assets together with associated
                     intellectual property not otherwise permitted in clauses
                     (i) to (vi) above, subject to an aggregate limit of sales
                     under this clause (vii) in any fiscal year by the Borrowers
                     and Restricted Subsidiaries in an amount equal to 10% of
                     the aggregate net book value of the fixed assets plus 10%
                     of the aggregate net book

<PAGE>
                                      -57-


                     value of intellectual property of Celestica on a
                     consolidated basis (the "DISPOSITION ALLOWANCE") and
                     provided that, in any fiscal year in which the Borrowers
                     and Restricted Subsidiaries do not sell fixed assets and
                     associated intellectual property under this clause (vii)
                     having aggregate net book values totalling the disposition
                     allowance, the Borrowers and Restricted Subsidiaries may
                     carry forward into the following fiscal years the unused
                     disposition allowance, and further provided that none of
                     the Borrowers or Restricted Subsidiaries shall sell any
                     intellectual property under this clause (vii) unless such
                     sale is incidental to a sale of fixed assets; or

              (viii) sales of assets, property or investments from a Borrower
                     or Restricted Subsidiary to another Borrower or Restricted
                     Subsidiary provided that no Borrower or Restricted
                     Subsidiary shall so sell assets, property or investments
                     during the occurrence and continuance of a Default or where
                     such sale, alone or as part of a series of previously or
                     concurrently occurring sales, would reasonably be likely to
                     have a Material Adverse Effect.

         (c)   RESTRICTION ON CERTAIN INTER-COMPANY TRANSACTIONS. Except as
               otherwise permitted by this Section 7.2, none of the Borrowers or
               any Restricted Subsidiary shall enter into any agreement or
               complete any transaction with any other Borrower or any
               Restricted Subsidiary during the occurrence and continuance of a
               Default or where such agreement or transaction, alone or as part
               of a series of previously or concurrently occurring agreements or
               transactions, would reasonably be likely to have a Material
               Adverse Effect.

         (d)   NEGATIVE PLEDGE/PARI PASSU RANKING. None of the Borrowers or any
               of the Restricted Subsidiaries shall create, incur, assume or
               permit to exist any Lien, other than Permitted Encumbrances, on
               any of its property, undertaking or assets now owned or hereafter
               acquired. Each Obligor's monetary Obligations shall rank at least
               pari passu with all other unsecured Indebtedness of such Obligor
               and no Obligor shall, or shall agree with any other Person to,
               pay any other Indebtedness in priority to payment of all monetary
               Obligations as and when due.

         (e)   RESTRICTION ON NON-ARM'S LENGTH TRANSACTIONS. The Borrowers shall
               not, and shall not permit any Restricted Subsidiary to, enter
               into any transaction or agreement with any Person which is not at
               Arm's Length with the Borrowers or such Restricted Subsidiary
               (other than other Borrowers, Restricted Subsidiaries or
               Unrestricted Subsidiaries) unless,

               (i)   such transaction or agreement is in the ordinary course of
                     business and is on terms no less favourable to the
                     Borrowers or such Restricted Subsidiary as would be
                     obtainable in a comparable transaction with a Person which
                     is at Arm's Length with the Borrower or such Restricted
                     Subsidiary, and

               (ii)  such transaction or agreement complies with the terms of
                     Section 7.2(c).


<PAGE>
                                      -58-


         (f)   RESTRICTION ON CHANGE OF BUSINESS. None of the Borrowers or the
               Restricted Subsidiaries shall, either directly or indirectly,
               enter into any business other than the Business without the prior
               written consent of the Majority Lenders.

         (g)   NO CHANGE IN ACCOUNTING TREATMENT OR REPORTING PRACTICES. Subject
               to the provisions of Section 1.7, none of the Borrowers nor any
               Restricted Subsidiary shall make any material change in its
               accounting or reporting or financial reporting practices, except
               as consistent with GAAP or Applicable Law, which changes shall be
               disclosed to the Lenders.

         (h)   RESTRICTIONS ON TRANSACTIONS WITH UNRESTRICTED SUBSIDIARIES. No
               Borrower shall, or shall permit any Restricted Subsidiary to,

               (i)   sell assets or lend monies to any Unrestricted Subsidiary
                     unless such sale is permitted pursuant to Section
                     7.2(b)(vi) and such sale or loan is in the ordinary course
                     of business and is on terms no less favourable to such
                     Borrower or such Restricted Subsidiary as would be
                     obtainable in a comparable transaction with a Person which
                     is at Arm's Length with the Borrower or such Restricted
                     Subsidiary; or

               (ii)  provide financial assistance by means of a guarantee to an
                     Unrestricted Subsidiary unless the financial assistance is
                     in the form of a guarantee granted by the immediate parent
                     of such Unrestricted Subsidiary, where such guarantee is
                     (A) made solely for the purpose of facilitating a pledge by
                     the guarantor of Shares of such Unrestricted Subsidiary;
                     and (B) the recourse thereunder is limited to the Shares of
                     the Unrestricted Subsidiary; and (C) a pledge of the Shares
                     of the Unrestricted Subsidiary.

         (i)   RESTRICTIONS ON TRANSACTIONS WITH CELESTICA ITALIA S.R.L. No
               Borrower shall, or shall permit any Restricted Subsidiary to,

               (i)   invest Advances in, contribute equity to, or otherwise
                     apply Advances for the benefit of Celestica Italia S.r.l.
                     except, subject to Section 7.2(i)(ii), by loaning such
                     Advances to Celestica Italia S.r.l.; and

               (ii)  lend Advances to Celestica Italia S.r.l where the amount of
                     Advances that has been advanced to or for the benefit of
                     Celestica Italia S.r.l. outstanding at such time would
                     exceed U.S.$200,000,000.

7.3      FINANCIAL COVENANTS

         (a)   MINIMUM TANGIBLE NET WORTH. Celestica shall maintain, at all
               times, a minimum Tangible Net Worth in an amount that shall not
               be less than an amount equal to the sum of U.S. $1,750,000,000,
               plus 50% of cumulative annual positive Net Income commencing with
               the fiscal year ending December 31, 2000 and in each subsequent
               fiscal year.


<PAGE>
                                      -59-


         (b)   MINIMUM EBITDA:INTEREST EXPENSE RATIO. Celestica shall maintain
               an EBITDA:Interest Expense ratio, calculated on a rolling four
               quarter basis of at least 3.5:1.0.

         (c)   MAXIMUM GROSS FUNDED DEBT: EBITDA RATIO. Celestica shall maintain
               a Gross Funded Debt: EBITDA ratio calculated on a rolling four
               quarter basis of not more than 3.25:1.0.

         (d)   CALCULATION OF FINANCIAL RATIOS. For the purposes of Sections
               7.3(a), (b) and (c), all of the calculations shall be made on a
               consolidated basis in accordance with the provisions of Sections
               1.7 and 1.8.


<PAGE>
                                      -60-


                                    ARTICLE 8
                            DEFAULT AND ACCELERATION

8.1      EVENTS OF DEFAULT

The occurrence of any one or more of the following events (each such event and
the expiry of the cure period, if any, provided in connection therewith, being
herein referred to as an "EVENT OF DEFAULT") shall constitute a default under
this Agreement:

         (a)   if a Borrower shall default in (i) the payment when due of any
               principal of any Advance; (ii) the payment when due of any
               interest on any Advance (and such default shall continue
               unremedied, in the case of interest, for a period of three (3)
               days); or (iii) the payment when due of any fee or any other
               Obligation (and any of such defaults described in item (iii)
               shall continue unremedied for a period of five (5) days);

         (b)   any representation or warranty made or deemed to be made
               hereunder or in any other Loan Document or any other writing or
               certificate furnished by on behalf of an Obligor to the
               Administrative Agent for the purposes of or in connection with
               this Agreement or any such other Loan Document is or shall be
               incorrect when made in any material respect;

         (c)   any Obligor shall default in the service or performance of any
               agreement, covenant or condition contained herein or in any other
               Loan Document (other than as set forth above) and such failure
               shall remain unremedied for a period of thirty (30) days after
               notice in writing has been given by the Administrative Agent to
               Celestica;

         (d)   if, on, prior to or in connection with any Indebtedness having a
               principal amount, individually or in the aggregate, in excess of
               U.S. $50,000,000 becoming Acquired Indebtedness, (i) a default
               shall have occurred in the payment when due, whether by
               acceleration or otherwise, of any such Acquired Indebtedness, or
               (ii) a default shall occur or shall have occurred in the
               performance or observance of any obligation or condition with
               respect to such Indebtedness or as a result of such Indebtedness
               becoming Acquired Indebtedness, if the effect of such default is
               to accelerate the maturity of such Acquired Indebtedness or such
               default shall continue unremedied and unwaived for any applicable
               grace period of time sufficient to permit the holder or holders
               of such Acquired Indebtedness, or any trustee or agent for such
               holders, to have the right to cause such Acquired Indebtedness to
               become due and payable prior to its expressed maturity; provided
               that where such Acquired Indebtedness has a principal amount
               individually or in the aggregate, of up to and including U.S.
               $100,000,000, a default described in clauses (i) or (ii) shall
               only be an Event of Default under this Agreement if unremedied
               for 60 days from the date such Indebtedness becomes Acquired
               Indebtedness;

         (e)   a default shall occur in the payment when due, whether by
               acceleration or otherwise, of any Indebtedness (other than as set
               forth in (a) and (d) above) of any

<PAGE>
                                      -61-


               Borrower or any Restricted Subsidiary having a principal amount,
               individually or in the aggregate, in excess of U.S.$ 50,000,000,
               or a default shall occur in the performance or observance of any
               obligation or condition with respect to any such Indebtedness if
               the effect of such default is to accelerate the maturity of any
               such Indebtedness or such default shall continue unremedied and
               unwaived for any applicable grace period of time sufficient to
               permit the holder or holders of such Indebtedness, or any trustee
               or agent for such holders, to have the right to cause such
               Indebtedness to become due and payable prior to its expressed
               maturity;

         (f)   any judgment or order for the payment of money in excess of U.S.$
               25,000,000, which is not covered by insurance, shall be rendered
               against any Borrower or any Restricted Subsidiary and either:

               (i)   enforcement proceedings shall have been commenced by any
                     creditor upon such judgment or order; or

               (ii)  there shall be any period of 30 consecutive days during
                     which a stay of enforcement of such judgment or order, by
                     reason of a pending appeal or otherwise, shall not be in
                     effect and such judgment shall not have been paid or
                     otherwise satisfied;

         (g)   any Borrower or any Restricted Subsidiary shall:

               (i)   become (or be deemed by any Applicable Law to be) insolvent
                     or generally fail to pay, or admit in writing its inability
                     or unwillingness to pay its debts as they generally become
                     due;

               (ii)  apply for, consent to, or acquiesce in, the appointment of
                     a trustee, receiver, receiver and manager, liquidator,
                     sequestrator, administrator or other custodian in
                     connection with the insolvency of a Borrower or a
                     Restricted Subsidiary or any property of any thereof except
                     as permitted under Section 11.12, or make a general
                     assignment for the benefit of creditors;

               (iii) in the absence of an application referred to in Section
                     8.1(g)(ii), consent or acquiescence, permit or suffer to
                     exist the appointment of a trustee, receiver, receiver and
                     manager, liquidator, sequestrator, administrator or other
                     custodian for a Borrower or a Restricted Subsidiary or for
                     a substantial part of the property of any of them except as
                     permitted under Section 11.12, and such trustee, receiver,
                     receiver and manager, liquidator, sequestrator,
                     administrator or other custodian shall not be discharged
                     within 60 days, provided that the Borrowers hereby
                     expressly authorize the Administrative Agent and each
                     Lender to appear in any court conducting any relevant
                     proceeding relating to any of them or any Restricted
                     Subsidiary during such 60-day period to preserve, protect
                     and defend their rights under the Loan Documents;


<PAGE>
                                      -62-


               (iv)  permit or suffer to exist the commencement of any
                     bankruptcy, reorganization, debt arrangement,
                     administration or other case or proceeding under any
                     bankruptcy, insolvency or similar law, or any dissolution,
                     winding up, administration or liquidation proceeding, in
                     respect of any Borrower or any Restricted Subsidiary
                     (except as permitted under Section 11.12), and, if any such
                     case or proceeding is not commenced by such Borrower or
                     such Restricted Subsidiary, such case or proceeding shall
                     be consented to or acquiesced in by such Borrower or such
                     Restricted Subsidiary or shall result in the entry of an
                     order for relief or shall remain for 60 days undismissed,
                     provided that each Borrower and each Restricted Subsidiary
                     is hereby deemed to expressly authorize the Administrative
                     Agent and each Lender to appear in any court conducting any
                     such case or proceeding relating to any of them or any
                     Restricted Subsidiary during such 60-day period to
                     preserve, protect and defend their rights under the Loan
                     Documents; or

               (v)   take any corporate action authorizing, or in furtherance
                     of, any of the matters referred to in clauses (ii), (iii)
                     or (iv) above;

         (h)   Onex Corporation shall cease to control Celestica unless the
               shares of Celestica become widely held such that no one Person or
               group of Persons acting jointly or in concert (within the meaning
               of Part XX of the SECURITIES ACT (Ontario)) controls Celestica,
               provided that any Person or group of Persons acting jointly or in
               concert which owns or controls securities of Celestica to which
               are attached more than 20% of the votes that may be cast to elect
               the directors of Celestica shall, in the absence of evidence
               satisfactory to the Administrative Agent, acting reasonably, be
               deemed to control Celestica;

         (i)   any Loan Document shall (except in accordance with its terms), in
               whole or in part, terminate, cease to be effective or cease to be
               the legally valid, binding and enforceable obligation of any
               Obligor that is a party thereto; or any Obligor shall, directly
               or indirectly, contest in any manner such effectiveness,
               validity, binding nature or enforceability of any Loan Document;
               or

         (j)   any Borrower or any governmental authority declares, orders or
               proposes to order a full or partial wind up of any Pension Plan
               which, in either case, would reasonably be likely to have a
               Material Adverse Effect or if any of the following events shall
               occur with respect to a Pension Plan:

               (i)   the institution of any step by a Borrower, any member of
                     its Controlled Group or any other Person to terminate a
                     Pension Plan if, as a result of such termination, the
                     Borrowers or any such member of its Controlled Group would
                     reasonably be likely to be required to make a contribution
                     to such Pension Plan or could reasonably expect to incur a
                     liability or obligation to such Pension Plan which, in
                     either case, would reasonably be likely to have a Material
                     Adverse Effect; or


<PAGE>
                                      -63-


               (ii)  a contribution failure occurs with respect to any Pension
                     Plan sufficient to give rise to a Lien under Section 302(f)
                     of ERISA.

8.2      ACCELERATION

Upon the occurrence of an Event of Default (other than as set forth in Section
8.1(g) or (h)) and at any time thereafter while an Event of Default is
continuing, the Administrative Agent may, in consultation with the Lenders (and,
if so instructed by the Majority Lenders, shall) by written notice to the
Borrowers:

         (a)   declare the Advances made to the Borrowers to be immediately due
               and payable (whereupon the same shall become so payable together
               with accrued interest thereon and any other sums then owed by the
               Borrowers hereunder or under any other Loan Document) or declare
               such Advances to be due and payable on demand of the
               Administrative Agent; and/or

         (b)   if not theretofore terminated, declare that all of the
               Commitments shall be cancelled, whereupon the same shall be
               cancelled and the Commitment of each Lender shall be reduced to
               zero.

If, pursuant to this Section 8.2, the Administrative Agent declares any Advances
made to the Borrowers to be due and payable on demand, then, and at any time
thereafter, the Administrative Agent may (and, if so instructed by the Majority
Lenders, shall) by written notice to the Borrowers call for repayment of such
Advances on such date or dates as it may specify in such notice (whereupon the
same shall become due and payable on such date together with accrued interest
thereon and any other sums then owed by the Borrowers hereunder or under any
other Loan Document and the provisions of Section 8.4 shall apply) or withdraw
its declaration with effect from such date as it may specify in such notice.

Upon the occurrence of an Event of Default set forth in Section 8.1(g) or (h),
the Commitments shall automatically terminate and the outstanding principal
amount of all outstanding Advances (together with accrued interest thereon and
any other sums then owed by the Borrowers hereunder or under any other Loan
Document and the provisions of Section 8.4 shall apply) shall automatically be
and become immediately due and payable, without notice or demand.

8.3      REMEDIES CUMULATIVE AND WAIVERS

It is expressly understood and agreed that the rights and remedies of the
Lenders, the Administrative Agent and each of them hereunder or under any other
Loan Document or other instrument executed pursuant to this Agreement are
cumulative and are in addition to and not in substitution for any rights or
remedies provided by law or by equity; and any single or partial exercise by the
Lenders, the Administrative Agent or any of them of any right or remedy for a
default or breach of any term, covenant, condition or agreement contained in
this Agreement or any other Loan Document shall not be deemed to be a waiver of
or to alter, affect or prejudice any other right or remedy or other rights or
remedies to which the Lenders, the Administrative Agent or any of them may be
lawfully entitled for such default or breach. Any waiver by the Lenders, the
Administrative Agent or any of them of the strict observance, performance or
compliance with any term, covenant, condition or other matter contained herein
or in any other

<PAGE>
                                      -64-


Loan Document and any indulgence granted, either expressly or by course of
conduct, by the Lenders, the Administrative Agent or any of them shall be
effective only in the specific instance and for the purpose for which it was
given and shall be deemed not to be a waiver of any rights and remedies of the
Lenders, the Administrative Agent or any of them under this Agreement or any
other Loan Document as a result of any other default or breach hereunder or
thereunder.

8.4      SUSPENSION OF LENDERS' OBLIGATIONS

Without prejudice to the rights which arise out of this Agreement or by law, the
occurrence of an Event of Default shall, while such Event of Default shall be
continuing, relieve the Lenders of all obligations to make any Advances
hereunder (whether or not any Drawdown Notice in respect of any such Advance
shall have been received by the Administrative Agent prior to the occurrence of
an Event of Default) or to accept or comply with any Drawdown Notice, Conversion
Notice or Rollover Notice.

8.5      APPLICATION OF PAYMENTS AFTER AN EVENT OF DEFAULT

If any Event of Default shall occur and be continuing, all payments made by the
Borrowers hereunder or payments made pursuant to any of the provisions of any of
the Guarantees shall be applied in the following order:

         (a)   to amounts due hereunder as costs and expenses of the
               Administrative Agent;

         (b)   to amounts due hereunder as costs and expenses of the Lenders;

         (c)   to amounts due hereunder as fees;

         (d)   to any other amounts (other than amounts in respect of interest
               or principal) due hereunder;

         (e)   to amounts due hereunder as interest; and

         (f)   to amounts due hereunder as principal.


<PAGE>
                                      -65-


                                    ARTICLE 9
                          THE ADMINISTRATIVE AGENT AND
                         ADMINISTRATION OF THE FACILITY

9.1      AUTHORIZATION OF ACTION

Each Lender hereby irrevocably appoints and authorizes the Administrative Agent
to be its Agent in its name and on its behalf and to exercise such rights or
powers granted to the Administrative Agent under this Agreement and the Loan
Documents to the extent specifically provided herein and therein and on the
terms hereof and thereof, together with such rights, powers and discretions as
are reasonably incidental thereto. As to any matters not expressly provided for
by this Agreement or the Loan Documents, the Administrative Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority Lenders, and such
instructions shall be binding upon all Lenders; provided, however, that no Agent
shall be required to take any action which exposes Agent to liability in such
capacity, which could result in the Administrative Agent incurring any costs and
expenses or which is contrary to this Agreement or Applicable Law.

9.2      PROCEDURE FOR MAKING ADVANCES

         (a)   The Administrative Agent shall make Advances available to the
               relevant Borrowers as required hereunder by debiting the account
               of the Administrative Agent to which the Lenders' Main Facility
               Rateable Portions of such Advances have been credited in
               accordance with Section 9.2(b) (or causing such account to be
               debited) and, in the absence of other arrangements agreed to by
               the Administrative Agent and Celestica in writing, by
               transferring (or causing to be transferred) like funds in
               accordance with the instructions of the Borrower as set forth in
               the Drawdown Notice in respect of each Advance; provided that the
               obligation of the Administrative Agent hereunder shall be limited
               to taking such steps as are commercially reasonable to implement
               such instructions, which steps once taken shall constitute
               conclusive and binding evidence that such funds were advanced
               hereunder in accordance with the provisions relating thereto and
               the Administrative Agent shall not be liable for any damages,
               claims or costs which may be suffered by the Borrower and
               occasioned by the failure of such Advance to reach the designated
               destination, except to the extent such damages, claims or costs
               are the result of the gross negligence or wilful misconduct of
               the Administrative Agent.

         (b)   Unless the Administrative Agent has been notified by a Lender on
               the Banking Day prior to the Drawdown Date requested by a
               Borrower that such Lender will not make available to the
               Administrative Agent its Main Facility Rateable Portion of such
               Advance, the Administrative Agent may assume that such Lender has
               made such portion of the Advance available to the Administrative
               Agent on the Drawdown Date in accordance with the provisions
               hereof and the Administrative Agent may, in reliance upon such
               assumption, make available to the Borrower on such date a
               corresponding amount. If and to the extent such Lender shall not
               have so made its Main Facility Rateable Portion of the Advance
               available to the

<PAGE>
                                      -66-


               Administrative Agent, then such Lender shall pay to the
               Administrative Agent forthwith on demand such Lender's Main
               Facility Rateable Portion of the Advance and all reasonable costs
               and expenses incurred by the Administrative Agent in connection
               therewith together with interest thereon (at the rate payable
               thereunder by the Borrower in respect of such Advance) for each
               day from the date such amount is made available to the Borrower
               until the date such amount is paid to the Administrative Agent;
               provided, however, that notwithstanding such obligation, if such
               Lender fails to so pay, the Borrower covenants and agrees that
               without prejudice to any rights such Borrower may have against
               such Lender, it shall reimburse such amount to the Administrative
               Agent forthwith after demand therefor by the Administrative
               Agent. The amount payable to the Administrative Agent pursuant
               hereto shall be as set forth in a certificate delivered by the
               Administrative Agent to such Lender and such Borrower (which
               certificate shall contain reasonable details of how the amount
               payable is calculated) and shall be conclusive and binding, for
               all purposes, in the absence of manifest error. If such Lender
               makes the payment to the Administrative Agent required herein,
               such Lender shall be considered to have made its Main Facility
               Rateable Portion of the Advance for purposes of this Agreement
               and the Administrative Agent shall make appropriate entries in
               the books of account maintained by the Administrative Agent.

         (c)   The failure of any Lender to make its Main Facility Rateable
               Portion of any Advance shall not relieve any other Lender of its
               obligation, if any, hereunder to make its Main Facility Rateable
               Portion of such Advance on the Drawdown Date, but no Lender shall
               be responsible for the failure of any other Lender to make the
               Main Facility Rateable Portion of the Advance to be made by such
               other Lender on the date of any Advance.

         (d)   Where a Drawdown under the Facility and a repayment of an Advance
               under the Facility are to occur on the same day, the
               Administrative Agent shall not make available to the relevant
               Borrower the amount of the Advance to be drawn down until the
               Administrative Agent is satisfied that it has received
               irrevocable and irreversible payment of the amount to be prepaid
               or repaid. Notwithstanding the foregoing, in the absence of gross
               negligence or wilful misconduct on the part of the Administrative
               Agent, the risk of non-receipt of the amount to be repaid is that
               of the Lenders and not of the Administrative Agent.

         (e)   This Section 9.2 shall not apply to Swing Line Advances.

9.3      REMITTANCE OF PAYMENTS

Forthwith after receipt of any repayment of principal or payment of interest or
fees pursuant to any provision of this Agreement, the Administrative Agent which
has received such repayment or payment shall remit to each Lender its Main
Facility Rateable Portion thereof; provided, however, that the Administrative
Agent shall be entitled to set off against and deduct from any amount payable to
a Lender any outstanding amounts payable by such Lender to the Administrative
Agent pursuant to Section 9.2(b). Forthwith after receipt of any payment of
Facility Fees pursuant to Section 2.11, the Administrative Agent shall remit to
each Lender its

<PAGE>
                                      -67-


Main Facility Rateable Portion of such payment. If the Administrative Agent, on
the assumption that it will receive on any particular date a payment of
principal, interest or fees hereunder, remits such payment to the Lenders and
the Borrowers fail to make such payment, each of the Lenders agrees to repay to
the Administrative Agent forthwith on demand the amount received by it together
with all reasonable costs and expenses incurred by the Administrative Agent in
connection therewith to the extent not reimbursed by the Borrower and interest
thereon at the rate and calculated in the manner applicable to the Advance in
respect of which such payment was made for each day from the date such amount is
remitted to the Lenders, the exact amount of the repayment required to be made
by the Lenders pursuant hereto to be as set forth in a certificate delivered by
the Administrative Agent to each Lender, which certificate shall be conclusive
and binding for all purposes in the absence of manifest error. The
Administrative Agent shall make appropriate entries in the register maintained
by it to reflect the foregoing.

9.4      REDISTRIBUTION OF PAYMENT

         (a)   If any Lender receives or recovers (whether by payment or
               combination of accounts or otherwise) an amount owed to it by a
               Borrower under this Agreement otherwise than through the
               Administrative Agent, then such Lender shall, within two Banking
               Days following such receipt or recovery, notify the
               Administrative Agent (who shall in turn notify the other Lenders)
               of such fact.

         (b)   Subject to the other terms and conditions of this Agreement, if
               at any time the proportion which any Lender (a "RECOVERING
               LENDER") has received or recovered (whether by payment or
               combination of accounts or otherwise) in respect of its portion
               of any payment to be made under this Agreement by a Borrower for
               the account of such Recovering Lender and one or more other
               Lenders is greater (the amount of the excess being herein called
               the "EXCESS AMOUNT") than the proportion thereof received or
               recovered by the Lender or Lenders receiving or recovering the
               smallest proportion thereof, then:

               (i)   the Recovering Lender shall, within two Banking Days
                     following such receipt or recovery, pay to the
                     Administrative Agent an amount equal to the excess amount;
                     and

               (ii)  the Administrative Agent shall treat the amount received by
                     it from the Recovering Lender pursuant to paragraph (i)
                     above as if such amount had been received by it from such
                     Borrower pursuant to its obligations under this Agreement
                     and shall pay the same to the Persons entitled thereto
                     (including such Recovering Lender) PRO RATA to their
                     respective entitlements thereto in which event, for all
                     purposes in connection herewith, the Recovering Lender
                     shall be deemed only to have received or recovered from
                     such Borrower that portion of the excess amount which is
                     actually paid to the Recovering Lender by the
                     Administrative Agent pursuant to this Section 9.4(b)(ii).

         (c)   If a Lender that has paid an excess amount to the Administrative
               Agent in accordance with Section 9.4(b)(i) is required to refund
               the whole (or a portion) of such excess amount to the Borrower,
               then each of the other Lenders shall pay to

<PAGE>
                                      -68-


               the Administrative Agent for the account of that Lender the whole
               (or that proportion) of the amount received by it as a result of
               the distribution in respect of that excess amount made by the
               Administrative Agent pursuant to Section 9.4(b)(ii).

9.5      DUTIES AND OBLIGATIONS

         (a)   Neither the Administrative Agent nor any of its directors,
               officers, agents or employees (and, for purposes hereof, the
               Administrative Agent shall be deemed to be contracting for and on
               behalf of such Persons) shall be liable for any action taken or
               omitted to be taken by it or them under or in connection with
               this Agreement except for its or their own gross negligence or
               wilful misconduct. Without limiting the generality of the
               foregoing, the Administrative Agent:

               (i)   may assume that there has been no assignment or transfer by
                     any means by any Lender of its rights hereunder, unless and
                     until the Administrative Agent has received a duly
                     completed and executed assignment in form satisfactory to
                     it;

               (ii)  may consult with legal counsel (including the Lenders'
                     Counsel), independent public accountants and other experts
                     of reputable standing selected by it and shall not be
                     liable for any action taken or omitted to be taken in good
                     faith by it in accordance with the advice of such counsel,
                     accountants or experts;

               (iii) shall incur no liability under or in respect of this
                     Agreement by acting upon any notice, consent, certificate
                     or other instrument or writing believed by it to be genuine
                     and signed or sent by the proper party or parties or by
                     acting upon any representation or warranty of the Borrowers
                     or any Guarantor made or deemed to be made hereunder;

               (iv)  may assume that no Event of Default has occurred and is
                     continuing unless an appropriate officer charged with the
                     administration of this Agreement has actual notice or
                     knowledge to the contrary;

               (v)   may rely as to any matters of fact which might reasonably
                     be expected to be within the knowledge of any Person upon a
                     certificate signed by or on behalf of such Person; and

               (vi)  shall incur no liability for its failure to distribute to
                     any Lender the financial statements or other information
                     provided to the Administrative Agent by the Borrowers or
                     any Guarantor.

               Further, the Administrative Agent (a) shall not have any duty to
               ascertain or to enquire as to the performance or observance of
               any of the terms, covenants or conditions of this Agreement on
               the part of any of the Borrowers or any Guarantor or to inspect
               the property (including the books and records) of any of the
               Borrowers or any Guarantor and (b) shall not be responsible to
               any Lender for

<PAGE>
                                      -69-


               the due execution, legality, validity, enforceability,
               genuineness, sufficiency or value of this Agreement or any
               instrument or document furnished pursuant hereto.

         (b)   The Administrative Agent makes no warranty or representation to
               any Lender nor shall the Administrative Agent be responsible to
               any Lender for the accuracy or completeness of the data made
               available to any of the Lenders in connection with the
               negotiation of this Agreement, or for any statements, warranties
               or representations (whether written or oral) made in or in
               connection with this Agreement.

         (c)   Except as otherwise provided for herein, the Administrative Agent
               may, but is not obligated to, seek the approval of the Majority
               Lenders to any consents required to be given by the
               Administrative Agent hereunder.

9.6      PROMPT NOTICE TO THE LENDERS

Subject to the provisions of Section 9.5(a)(vi), the Administrative Agent agrees
to provide to the Lenders, copies where appropriate, of all information, notices
and reports required to be given to the Administrative Agent by the Borrowers
and the Guarantors hereunder or pursuant to any other Loan Document, promptly
upon receipt of same, excepting therefrom information and notices relating
solely to the role of the Administrative Agent hereunder.

9.7      ADMINISTRATIVE AGENT'S AUTHORITY

With respect to its Commitment and the Advances made by it as a Lender, the
Administrative Agent shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same as though they were not Agents.
The Administrative Agent may accept deposits from, lend money to, and generally
engage in any kind of business with the Borrowers and the Subsidiaries or any
corporation or other entity owned or controlled by any of them and any Person
which may do business with any of them, all as if the Administrative Agent was
not the Administrative Agent hereunder and without any duties to account
therefor to the Lenders.

9.8      LENDER'S INDEPENDENT CREDIT DECISION

It is understood and agreed by each Lender that it has itself been, and will
continue to be, solely responsible for making its own independent appraisal of
and investigations into the financial condition, creditworthiness, condition,
affairs, status and nature of the Borrowers and its Subsidiaries. Accordingly,
each Lender confirms with the Administrative Agent that it has not relied, and
will not hereafter rely, on the Administrative Agent (i) to check or enquire on
its behalf into the adequacy, accuracy or completeness of any information
provided by the Borrowers or any other Person under or in connection with this
Agreement, the other Loan Documents or the transactions herein or therein
contemplated (whether or not such information has been or is hereafter
distributed to such Lender by the Administrative Agent), or (ii) to assess or
keep under review on its behalf the financial condition, creditworthiness,
condition, affairs, status or nature of the Borrowers or any Subsidiary. Each
Lender acknowledges that a copy of this Agreement has been made available to it
for review and each Lender acknowledges that it is satisfied with the form and
substance of this Agreement.


<PAGE>
                                      -70-


9.9      INDEMNIFICATION

Each Lender hereby agrees to indemnify the Administrative Agent (to the extent
not reimbursed by the Borrowers) in its Global Rateable Portion, from and
against any and all liabilities, obligations, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent (in its capacity as agent for the Lenders) in any way
relating to or arising out of this Agreement or any other Loan Documents or any
action taken or admitted by the Administrative Agent under or in respect of this
Agreement or any other Loan Documents; provided that no Lender shall be liable
for any portion of such liabilities, obligations, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or wilful misconduct. Without limiting
the generality of the foregoing, each Lender agrees to reimburse the
Administrative Agent promptly upon demand in the proportion specified herein in
respect of any out-of-pocket expenses (including counsel fees) incurred by the
Administrative Agent in connection with the preservation of any rights of Agents
or the Lenders under, or the enforcement of, or legal advice in respect of the
rights or responsibilities under, this Agreement or any other Loan Documents, to
the extent that the Administrative Agent is not reimbursed for such expenses by
the Borrowers.

9.10     SUCCESSOR AGENT

The Administrative Agent may, as hereinafter provided, resign at any time by
giving not less than 30 days' written notice thereof to the Lenders and the
Borrowers. The Administrative Agent may, as hereinafter provided, be removed at
any time on not less than 30 days' written notice thereof by the Majority
Lenders provided that the Majority Lenders have designated a successor who is
prepared to act hereunder and which is acceptable to Celestica, acting
reasonably. Upon any such resignation or removal, the Majority Lenders shall
have the right to appoint a successor agent (the "SUCCESSOR AGENT") which shall
be a Lender and which shall be acceptable to the Borrowers, acting reasonably.
Upon the acceptance of any appointment hereunder by a Successor Agent, such
Successor Agent shall thereupon become Administrative Agent hereunder and shall
succeed to and become vested with all the rights, powers, privileges and duties
of Scotiabank and Scotiabank shall thereupon be discharged from its further
duties and obligations as Administrative Agent under this Agreement. After any
resignation or removal of Scotiabank under this Section 9.10, the provisions of
this Article 9 shall continue to enure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent hereunder.

9.11     TAKING AND ENFORCEMENT OF REMEDIES

         (a)   Each of the Lenders hereby acknowledges that, to the extent
               permitted by Applicable Law, the remedies provided hereunder to
               the Lenders are for the benefit of the Lenders collectively and
               acting together and not severally and further acknowledges that
               its rights hereunder are to be exercised not severally, but
               collectively by the Administrative Agent upon the decision of the
               Lenders regardless of whether declaration or acceleration was
               made pursuant to Section 8.2; accordingly, notwithstanding any of
               the provisions contained herein, each of the Lenders hereby
               covenants and agrees that it shall not be entitled to take any
               action with respect to the Facility, including, without
               limitation, any declaration

<PAGE>
                                      -71-


               or acceleration under Section 8.2, but that any such action shall
               be taken only by the Administrative Agent with the prior written
               consent of the Lenders or the Majority Lenders, as applicable,
               provided that, notwithstanding the foregoing:

               (i)   in the absence of instructions from the Lenders or from the
                     Majority Lenders, as applicable, and where in the sole
                     opinion of the Administrative Agent the exigencies of the
                     situation warrant such action, the Administrative Agent may
                     without notice to or consent of the Lenders take such
                     action on behalf of the Lenders as it deems appropriate or
                     desirable in the interest of the Lenders; and

               (ii)  the commencement of litigation before any court shall be
                     made in the name of each Lender individually unless the
                     laws of the jurisdiction of such court permit such
                     litigation to be commenced in the name of the
                     Administrative Agent on behalf of the Lenders (whether
                     pursuant to a specific power of attorney in favour of the
                     Administrative Agent or otherwise) and the Administrative
                     Agent agrees to commence such litigation in its name;

               each of the Lenders hereby further covenants and agrees that upon
               any such written consent being given by the Lenders or the
               Majority Lenders, as applicable, they shall co-operate fully with
               the Administrative Agent to the extent requested by the
               Administrative Agent in the collective realization including,
               without limitation, the appointment of a receiver and manager to
               act for their collective benefit; and each Lender covenants and
               agrees to do all acts and things and to make, execute and deliver
               all agreements and other instruments, including, without
               limitation, any instruments necessary to effect any
               registrations, so as to fully carry out the intent and purpose of
               this Section 9.11; and each of the Lenders hereby covenants and
               agrees that it has not heretofore and shall not seek, take,
               accept or receive any security for any of the obligations and
               liabilities of the Borrowers or any Guarantor hereunder or under
               any other document, instrument, writing or agreement ancillary
               hereto and shall not enter into any agreement with any of the
               parties hereto or thereto relating in any manner whatsoever to
               the Facility, unless all of the Lenders shall at the same time
               obtain the benefit of any such agreement.

         (b)   Notwithstanding any other provision contained in this Agreement,
               no Lender shall be required to be joined as a party to any
               litigation commenced against the Borrowers or any Guarantor by
               the Administrative Agent or the Majority Lenders hereunder
               (unless otherwise required by any court of competent
               jurisdiction) if it elects not to be so joined in which event any
               such litigation shall not include claims in respect of the rights
               of such Lender against the Borrowers and the Guarantors hereunder
               until such time as such Lender does elect to be so joined;
               provided that if at the time of such subsequent election it is
               not possible or practicable for such Lender to be so joined, then
               such Lender may commence proceedings in its own name in respect
               of its rights against the Borrowers and the Guarantors hereunder.


<PAGE>
                                      -72-


9.12     RELIANCE UPON LENDERS

The Administrative Agent shall be entitled to rely upon any certificate, notice
or other document provided to it by a Lender on behalf of all financial
institutions and Affiliates which together constitute a Lender pursuant to this
Agreement and the Administrative Agent shall be entitled to deal with the
Lenders with respect to the matters under this Agreement which are the
Administrative Agent's responsibilities without any liability whatsoever to the
Lenders for relying upon any certificate, notice or other document provided to
it by such Lender notwithstanding any lack of authority of the Lender to provide
the same or to bind the other financial institutions and Affiliates which
together constitute a Lender.

9.13     RELIANCE UPON ADMINISTRATIVE AGENT

The Borrower and the Guarantors shall be entitled to rely upon any certificate,
notice or other document provided to any of them by the Administrative Agent
pursuant to this Agreement and the Borrowers and the Guarantors shall be
entitled to deal with the Administrative Agent (and, except as otherwise
specifically provided, not to deal with any Lender prior to an Event of Default)
with respect to all matters under this Agreement without any liability
whatsoever to the Lenders for relying upon any certificate, notice or other
document provided to any of them by the Administrative Agent, notwithstanding
any lack of authority of the Administrative Agent to provide the same. Without
limiting the generality of the foregoing, but subject as herein otherwise
specifically provided, none of the Lenders shall have any right to enforce
directly any of the provisions of this Agreement or to communicate with the
Borrowers and the Guarantors except through the Administrative Agent in
accordance with the terms of this Agreement or as otherwise specifically
provided in this Agreement. The provisions of this Article 9 are for the benefit
of the Administrative Agent and the Lenders and, except for the provisions of
Sections 9.2, 9.12, 9.13 and 9.14, may not be relied upon by the Borrowers or
the Guarantors.

9.14     REPLACEMENT OF CANCELLED COMMITMENTS

If, at any time prior to the Maturity Date, the Commitment of any Lender or
Lenders is cancelled, or any Lender fails to perform its obligations hereunder,
the Administrative Agent may, and at the request of the Borrowers, provided that
no Default or Event of Default has occurred and is continuing, shall use its
reasonable efforts to locate one or more other Persons ("SUBSTITUTE LENDERS")
satisfactory to the Borrowers (who may be an existing Lender) to become a Lender
and to assume all or a portion of the Commitment so cancelled, provided that the
Administrative Agent shall not be under any obligation to assume such cancelled
Commitment itself if the Administrative Agent is unable to locate any Substitute
Lenders. Upon locating one or more Substitute Lenders, the Administrative Agent
(on behalf of each of the parties hereto other than the Borrowers, the
Guarantors and the Lender or Lenders whose Commitment has been cancelled), the
Borrowers, the Guarantors and the Substitute Lenders shall make any appropriate
amendments to this Agreement which are required to incorporate such Substitute
Lender or Lenders hereunder. If any Substitute Lender is not an existing Lender,
then Celestica shall pay to the Administrative Agent an administration fee of
U.S. $3,500.


<PAGE>
                                      -73-


9.15     DISCLOSURE OF INFORMATION

         (a)   The Borrowers agree that, if Celestica has given its prior
               written consent to a Person being an assignee or transferee
               hereunder, then the Administrative Agent or any Lender may
               provide any such assignee or transferee or proposed assignee or
               transferee pursuant to Section 11.11 with any information it has
               concerning the financial condition of the Borrowers and their
               Subsidiaries other than information delivered by the Borrowers to
               the Administrative Agent and/or the Lenders on a confidential
               basis which is not in the public domain; provided that, for
               greater certainty, nothing in this Section 9.15(a) shall prevent
               the Administrative Agent or any Lender from disclosing the terms
               of this Agreement on a confidential basis to any proposed
               assignee or transferee of any Lender; and provided further that
               consent of the Borrowers shall not be required if an Event of
               Default has occurred and is continuing.

         (b)   Subject to Section 9.15(a), the Administrative Agent and each of
               the Lenders acknowledges the confidential nature of the
               financial, operational and other information and data provided
               and to be provided to it by the Borrowers pursuant hereto that is
               not at the time it is so provided or (other than through a breach
               of this Agreement) thereafter in the public domain and agrees to
               use reasonable efforts to prevent the disclosure of such
               information; provided, however, that:

               (i)   the Administrative Agent or any Lender may disclose all or
                     any part of such information if, (A) in the sole reasonable
                     opinion (stated in writing) of the Lenders' Counsel, such
                     disclosure is compellable by Applicable Law in connection
                     with any threatened judicial, administrative or
                     governmental proceeding or is required in connection with
                     any actual judicial, administrative or governmental
                     proceeding or (B) such disclosure is compellable by
                     Applicable Law, provided that in any such event the
                     Administrative Agent or the Lender will make reasonable
                     efforts to provide Celestica with prompt written notice of
                     any such compellable disclosure so that Celestica may seek
                     a protective order or other appropriate remedy or relief to
                     prevent such disclosure from being made. The failure to
                     deliver such notice or, where applicable, the giving of
                     such notice, shall not preclude disclosure by the
                     Administrative Agent or the Lender where legally required
                     in the opinion of Lenders' Counsel. In any event, the
                     Administrative Agent or Lender will furnish only that
                     portion of such information which, in the reasonable
                     opinion of the Lenders' Counsel, it is legally required to
                     disclose and will exercise reasonable efforts to obtain
                     reliable assurances that confidential treatment will be
                     accorded such information;

               (ii)  it shall incur no liability in respect of any disclosure of
                     such information to any, or pursuant to the requirements of
                     any, judicial authority, law enforcement agency, tax or
                     regulatory authority which it is required to make in
                     accordance with Applicable Law;


<PAGE>
                                      -74-


               (iii) it shall inform the Borrowers, as soon as is practicable,
                     of any disclosure of such information made by it unless
                     such disclosure is in the ordinary course of its business
                     or such tax or regulatory authority or such judicial
                     authority or law enforcement agency requires the
                     Administrative Agent or such Lender not to inform the
                     Borrowers of the disclosure of such information to it;

               (iv)  the Administrative Agent and each Lender may disclose all
                     or any part of such information on a confidential basis to
                     its auditors or to Lenders' Counsel or other counsel of
                     reputable standing on a confidential basis for the purpose
                     of seeking or obtaining accounting or legal advice;

               (v)   the Administrative Agent and each Lender may disclose such
                     information on a confidential basis to any Subsidiary or
                     Affiliate of the Administrative Agent or Lender if such
                     disclosure is required in connection with the
                     administration of the Facility;

               (vi)  if an Event of Default has occurred and is continuing, the
                     Administrative Agent or any Lender may disclose such
                     information to any other Agent or other Lenders on a
                     confidential basis in connection with any discussions
                     regarding or related to the resolution of such Event of
                     Default; and

               (vii) the Administrative Agent and each Lender may disclose such
                     information with the prior written consent of Celestica.

9.16     ADJUSTMENTS OF RATEABLE PORTIONS

         (a)   In connection with any Drawdown (other than a Drawdown of a Swing
               Line Advance), Conversion or Rollover or any reimbursement or
               repayment of an Obligation, the Administrative Agent shall, in
               its sole and unfettered discretion, have the right (but not the
               obligation) to make adjustments of the amount of such Drawdown,
               Conversion or Rollover advanced or paid by such Lender or the
               amount of such reimbursement or repayment to be received by such
               Lender in order to maintain the balances of the Advances made by
               each Lender in the same portion as the Main Facility Rateable
               Portion of each Lender.

         (b)   Upon the occurrence of an acceleration under Section 8.1(g),
               8.1(h) or 8.2, if, with respect to any Lender, the aggregate of
               all outstanding Advances made by such Lender is less than its
               Global Rateable Portion (after giving effect to any adjustment
               made pursuant to Subsection 9.16(a)) of the aggregate of all
               outstanding Advances, the Administrative Agent may, by written
               notice, require such Lender to pay to the Administrative Agent,
               for the credit of the other Lenders, in such currency or
               currencies as the Administrative Agent may in its discretion
               determine, such amount as may be required so as to bring the
               aggregate of all outstanding Advances made by such Lender equal
               to its Global Rateable Portion of the aggregate of all
               outstanding Advances. The Administrative Agent shall credit the
               funds received from such Lender to any other Lender or Lenders,
               as it may determine in its discretion, so as to render the
               aggregate of the

<PAGE>
                                      -75-


               outstanding Advances made by each Lender equal to the Global
               Rateable Portion of each Lender of all outstanding Advances.


<PAGE>
                                      -76-


                                   ARTICLE 10
                      COSTS, EXPENSES AND INDEMNIFICATION

10.1     COSTS AND EXPENSES

Each Borrower shall pay promptly, upon request by the Administrative Agent
accompanied by reasonable supporting documentation or other evidence, all
reasonable costs and expenses in connection with the due diligence pertaining to
or the preparation, printing, execution and delivery of this Agreement and the
other documents to be delivered hereunder including, without limitation, the
reasonable fees and out-of-pocket expenses of the Lenders' Counsel with respect
thereto. Except for ordinary expenses of the Administrative Agent relating to
the day-to-day administration of this Agreement, each Borrower further agrees to
pay all reasonable out-of-pocket costs and expenses (including reasonable fees
and expenses of counsel, accountants and other experts) in connection with the
syndication of the Facility and the interpretation, preservation or enforcement
of rights of the Administrative Agent and the Lenders under this Agreement and
the Loan Documents including, without limitation, all reasonable costs and
expenses sustained by them as a result of any failure by any of the Borrowers or
Guarantors to perform or observe its obligations contained in any of this
Agreement and the Loan Documents.

10.2     INDEMNIFICATION BY THE BORROWERS

In addition to any liability of each Borrower to any Lender or the
Administrative Agent under any other provision hereof, each Borrower shall
indemnify the Lenders and the Administrative Agent and hold each Lender and the
Administrative Agent harmless against any reasonable costs or expenses incurred
by a Lender or the Administrative Agent as a result of (i) any failure by such
Borrower to fulfil any of its obligations hereunder or under any Loan Document
in the manner provided herein including, without limitation, any cost or expense
incurred by reason of the liquidation or re-employment in whole or in part of
deposits or other funds required by any Lender to fund or maintain any Advance
as a result of the failure of such Borrower to complete a Drawdown or to make
any repayment or other payment on the date required hereunder or specified by it
in any notice given hereunder; or (ii) the failure of such Borrower to pay any
other amount including, without limitation, any interest or fee due hereunder on
its due date; or (iii) the prepayment or repayment by such Borrower of any LIBOR
Advance prior to its date of maturity or the last day of the then current
Interest Period for such Advance.

10.3     FUNDS

Each amount advanced, made available, disbursed or paid hereunder shall be
advanced, made available, disbursed or paid, as the case may be, in immediately
available funds or, after notice from the Administrative Agent, in such other
form of funds as may from time to time be customarily used in the jurisdiction
in which the Advance is advanced, made available, disbursed or paid in the
settlement of banking transactions similar to the banking transactions required
to give effect to the provisions of this Agreement on the day such advance,
disbursement or payment is to be made.


<PAGE>
                                      -77-


10.4     GENERAL INDEMNITY

         (a)   INDEMNITY. Subject to paragraphs (b), (c) and (d) below, the
               Borrowers agree to indemnify and save harmless the Administrative
               Agent, the Lenders, their respective Affiliates involved in the
               syndication or administration of the Facility, their respective
               officers, directors, employees and agents (collectively, the
               "INDEMNITEES" and individually, an "INDEMNITEE") from and against
               any and all liabilities, claims, damages and losses (including
               reasonable legal fees and disbursements of counsel but excluding
               loss of profits and special or consequential damages)
               (collectively, the "LOSSES") as a result of any claims, actions
               or proceedings ("CLAIMS") asserted against the Indemnitees, by a
               Person other than the Indemnitees in connection with the
               agreement of the Lenders to provide the Facility, the Commitments
               of the Lenders and the Advances made by the Lenders including,
               without limitation: (i) the costs of defending and/or
               counterclaiming or claiming over against third parties in respect
               of any Claim; and (ii) subject to the provisions set forth in
               paragraph (d) below, any Losses arising out of a settlement of
               any Claim made by the Indemnitees.

         (b)   LIMITATIONS TO INDEMNITY. The foregoing obligations of
               indemnification shall not apply to (i) any Losses suffered by the
               Indemnitees or any of them or to any Claim asserted against the
               Indemnitees or any of them to the extent such Loss or Claim has
               resulted from the gross negligence or wilful misconduct of the
               Indemnitees or any of them; and (ii) any Losses with respect to
               Taxes for which an Indemnitee may claim an indemnity from an
               Obligor pursuant to Section 3.5(b) of this Agreement.

         (c)   NOTIFICATION. Whenever a Lender or the Administrative Agent shall
               have received notice that a Claim has been commenced or
               threatened, which, if successful, would subject a Borrower (the
               "INDEMNIFYING PARTY") to the indemnity provisions of this Section
               10.4, the Lender or Agent shall as soon as reasonably possible
               notify (to the extent permitted by law) the Indemnifying Party in
               writing of the Claim and of all relevant information the Lender
               or the Administrative Agent possesses relating thereto; provided,
               however, that failure to so notify the Indemnifying Party shall
               not release it from any liability which it may have on account of
               the indemnity set forth in this Section 10.4, except to the
               extent that the Indemnifying Party shall have been materially
               prejudiced by such failure.

         (d)   DEFENCE AND SETTLEMENT. The Indemnifying Party shall have the
               right, but not the obligation, to assume the defence of any Claim
               in any jurisdiction with legal counsel of reputable standing in
               order to protect the rights and interest of the Indemnitees. In
               such respect, (i) the Indemnifying Party shall require the
               consent of the Indemnitees to the choice of legal counsel in
               connection with the Claim, which consent shall not be
               unreasonably withheld or delayed; and (ii) without prejudice to
               the rights of the Indemnitees to retain counsel and participate
               in the defence of the Claim, the Indemnifying Party and the
               Indemnitees shall make all reasonable efforts to co-ordinate
               their course of action in connection with the defence of such
               Claim. The related costs and expenses sustained in such respect


<PAGE>
                                      -78-


               by the Indemnitees shall be at the expense of the Indemnifying
               Party, provided that the Indemnifying Party shall only be liable
               for the costs and expenses of one firm of separate counsel in
               addition to the cost of any local counsel that may be required.
               If the Indemnifying Party fails to assume defence of the Claim,
               the Indemnitees will (upon further notice to the Borrowers) have
               the right to undertake, at the expense of the Indemnifying Party,
               the defence, compromise or settlement of the Claim on behalf and
               for the account and risk of the Indemnifying Party, subject to
               the right of the Indemnifying Party to assume the defence of the
               Claim at any time prior to settlement, compromise or final
               determination thereof.

Notwithstanding the foregoing, in the event the Indemnitee, acting reasonably,
does not agree with the manner or timeliness in which the legal counsel of the
Indemnifying Party is carrying on the defence of the Claim, or, pursuant to the
opinion of a reputable counsel retained by the Indemnitee, there may be one or
more legal defences available different from the one carried on by the legal
counsel of the Indemnifying Party, the Indemnitee shall have the right to assume
its own defence in the Claim by appointing its own legal counsel. The costs and
the expenses sustained by the Indemnitee shall be at the expense of the
Indemnifying Party provided that the Indemnifying Party shall only be liable for
the costs and expenses of one firm of separate counsel, in addition to the costs
of any local counsel that may be required.

The Indemnifying Party shall not be liable for any settlement of any Claim
effected without its written consent (which shall not be unreasonably withheld
or delayed). In addition, the Indemnifying Party will not, without the prior
written consent of the Indemnitee (which consent shall not be unreasonably
withheld or delayed), settle, compromise or consent to the entry of any judgment
in or otherwise seek to terminate any Claim or threatened Claim in respect of
which indemnification or contribution may be sought hereunder.

If an offer for settlement made to any Indemnitee which the Indemnifying Party
has recommended for acceptance is rejected by the Indemnitee and the final
liability of the Indemnitee in respect of such action and all related damages is
greater than such offer, the liability of the Indemnifying Party will only be to
indemnify the Indemnitee up to the amount of such offer.

10.5     ENVIRONMENTAL CLAIMS

         (a)   INDEMNITY. Subject to paragraphs (b), (c) and (d) below, the
               Borrowers agree to indemnify and save harmless the Indemnitees
               from and against any and all Losses as a result of any Claims
               asserted against the Indemnitees by a Person other than the
               Indemnitees with respect to any material presence or Release on,
               into, onto, under or from any property owned, leased or operated
               by any of the Borrowers or any Subsidiary (the "PROPERTY") of any
               Hazardous Material regardless of whether caused by, or within the
               control of, the Borrower or any Subsidiary or which arises out of
               or in connection with any action of, or failure to act by, the
               Borrowers or any Subsidiary or any predecessor or successor
               thereof in contravention of any present or future applicable
               Environmental Laws, whether or not having the force of law,
               including, without limitation: (i) the costs of defending and/or
               counterclaiming or claiming over against third parties in respect
               of any such Claim; and (ii) subject to the provisions set forth
               in paragraph (d)

<PAGE>
                                      -79-


               below, any Losses arising out of a settlement made by the
               Indemnitees of any Claim.

         (b)   LIMITATIONS TO INDEMNITY. The foregoing obligations of
               indemnification shall not apply to any Losses suffered by the
               Indemnitees or any of them or to any Claim asserted against the
               Indemnitees or any of them which relates directly to any action
               or omission taken by any of the Indemnitees while in possession
               or control of the Property which is grossly negligent or
               constitutes wilful misconduct but shall apply to any Claim
               occurring during such period that relates to a continuation of
               conditions previously in existence or of a practise previously
               employed by any Obligor.

         (c)   NOTIFICATION. Whenever an Indemnitee shall have received notice
               that a Claim has been commenced or threatened, which, if
               successful, would subject the Borrowers to the indemnity
               provisions of this Section 10.5, the Indemnitee shall as soon as
               reasonably possible and in any event on or before the expiry of
               the date (the "NOTIFICATION DATE") which is the earlier of (i)
               the tenth Banking Day after the receipt of such notice by the
               Indemnitee, and (ii) such date as will afford sufficient time for
               the Borrowers to prepare and file a timely answer to the Claim,
               notify the Borrowers of the Claim and of all relevant information
               the Indemnitee possesses relating thereto. If the Indemnitee
               shall fail to so notify the Borrowers and provide it with such
               information on or before the Notification Date, the Borrowers
               shall not have any liability hereunder in respect of any Losses
               suffered by the Indemnitee in respect of such Claim to the extent
               such Losses may be reasonably attributable to such failure by the
               Indemnitee.

         (d)   DEFENCE AND SETTLEMENT. The provisions of Section 10.4(d) shall
               apply to any Claims under this Section 10.5.


<PAGE>
                                      -80-


                                    ARTICLE 11
                                     GENERAL

11.1     TERM

The Facility shall expire on the Maturity Date.

11.2     SURVIVAL

All covenants, agreements, representations and warranties made herein or in
certificates delivered in connection herewith by or on behalf of the Borrowers
and each Guarantor shall survive the execution and delivery of this Agreement
and the making of the Drawdowns hereunder and shall continue in full force and
effect so long as there is any obligation of the Borrowers and each Guarantor to
the Administrative Agent, and the Lenders hereunder.

11.3     BENEFIT OF THE AGREEMENT

This Agreement shall enure to the benefit of and be binding upon the successors
and permitted assigns of the Borrowers and the successors and permitted assigns
of the Administrative Agent and the Lenders.

11.4     NOTICES

All notices, requests, demands or other communications to or from the parties
hereto shall be in writing and shall be given by overnight delivery service, by
hand delivery or by telecopy to the addressee as follows:

                     (i)   If to the Borrowers:

                           7th Floor
                           12 Concorde Place
                           Toronto, Ontario, Canada
                           M3C 3R8

                           Attention:    Vice-President and Corporate Treasurer

                           Telecopier:   416-448-2280

                           with a copy to:

                           7th Floor
                           12 Concorde Place
                           Toronto, Ontario, Canada
                           M3C 3R8

                           Attention:    Vice-President and General Counsel

                           Telecopier:   416-448-2817


<PAGE>
                                      -81-


                     (ii)  If to the Administrative Agent (in respect of all
                           matters):

                           The Bank of Nova Scotia
                           Loan Syndications
                           44 King Street West, 17th Floor
                           Toronto, Ontario, Canada
                           M5H 1H1

                           Attention:    Managing Director

                           Telecopier:   416-866-3329

                     (iii) if to a Lender, at the addresses set out in
                           Schedule A or in the relevant Transfer Notice;

or at such other address or to such other individual as the Borrowers may
designate by notice to the Administrative Agent and as the Administrative Agent
or a Lender may designate by notice to the Borrowers and the Lenders or the
Administrative Agent, as the case may be.

11.5     AMENDMENT AND WAIVER

This Agreement and any Loan Documents collateral hereto may be modified or
amended and a waiver of any breach of any term or provision of this Agreement
shall be effective only if the Borrowers, the Administrative Agent and the
Majority Lenders so agree in writing, provided that in all cases the Borrowers
shall be entitled to rely upon the Administrative Agent, without further inquiry
in respect of any amendments or waivers agreed to by the Administrative Agent
and which the Administrative Agent has confirmed have been agreed to by the
Majority Lenders; provided further, however, that no amendment, waiver or
consent, unless in writing and signed by all of the Lenders shall: (i) increase
the Commitment of any Lender or subject any Lender to any additional obligation;
(ii) reduce the principal of, or interest on, the Advances or reduce any fees
hereunder; (iii) postpone any date fixed for any payment of principal of, or
interest on, the Advances or any other amounts payable hereunder; (iv) change
the Global Rateable Portion of any Lender except for adjustments thereto made by
the Administrative Agent in accordance with the terms of this Agreement, or the
aggregate unpaid principal amount of the Advances, or the number of Lenders
which shall be required for the Lenders to take any action hereunder; (v) amend
the definition of Majority Lenders; (vi) amend or release any Guarantee, except
to the extent that a release of a Guarantee may be effected pursuant to a
transaction subject to Section 11.12 or is otherwise authorized pursuant to the
terms of this Agreement and except to the extent that an amendment, as
determined by the Administrative Agent and Lenders' Counsel, each acting
reasonably, does not materially impair the enforceability or unconditionality of
such Guarantee; or (vii) amend this Section 11.5; and provided, further, that no
amendment, waiver or consent, unless in writing and signed by the Administrative
Agent or Swing Line Lender, as applicable, in addition to the Lenders required
herein above to take such action, affects the rights or duties of the
Administrative Agent or Swing Line Lender, as applicable, under this Agreement
or any Advance. A waiver of any breach of any term or provision of this
Agreement shall be limited to the specific breach waived.


<PAGE>
                                      -82-


11.6     GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of
the Province of Ontario and the laws of Canada applicable therein. The
Administrative Agent, Lenders and Borrowers agree that any legal suit, action or
proceeding arising out of this Agreement or any Loan Document may be instituted
in the courts of Ontario, and the Administrative Agent, Lenders and Borrowers
hereby accept and irrevocably submit to the nonexclusive jurisdiction of said
courts and acknowledge their competence and agree to be bound by any judgment
thereof.

11.7     FURTHER ASSURANCES

Each Obligor shall promptly cure any default in its execution and delivery of
this Agreement or in any of the other instruments referred to or contemplated
herein to which it is a party. Each Obligor, at its expense, will promptly
execute and deliver, or cause to be executed and delivered, to the
Administrative Agent, upon request, all such other and further documents,
agreements, certificates and instruments in compliance with, or accomplishment
of the covenants and agreements of such Obligor hereunder or more fully to state
the obligations of such Obligor as set out herein or to make any recording, file
any notice or obtain any consents, all as may be necessary or appropriate in
connection therewith.

11.8     ENFORCEMENT AND WAIVER BY THE LENDERS

Subject to Section 9.11, the Lenders shall have the right at all times to
enforce the provisions of this Agreement and agreements to be delivered pursuant
hereto in strict accordance with the terms hereof and thereof, notwithstanding
any conduct or custom on the part of the Lenders in refraining from so doing at
any time or times. The failure of the Lenders at any time or times to enforce
their rights under such provisions, strictly in accordance with the same, shall
not be construed as having created a custom in any way or manner, modified or
waived the same. All rights and remedies of the Lenders are cumulative and
concurrent and the exercise of one right or remedy shall not be deemed a waiver
or release of any other right or remedy.

11.9     EXECUTION IN COUNTERPARTS

This Agreement may be executed in counterparts, each of which shall be
considered an original and all of which taken together shall constitute a single
agreement.

11.10    ASSIGNMENT BY THE BORROWERS

The rights and obligations of the Borrowers under this Agreement are not
assignable to any other Person, except in accordance with Article 5, without the
prior written consent of all of the Lenders, which consent shall not be
unreasonably withheld.

11.11    ASSIGNMENTS AND TRANSFERS BY A LENDER

         (a)   With the prior written consent of the Administrative Agent and
               Celestica, such consent not to be unreasonably withheld or
               delayed, any Lender may, at any time, assign all or any of its
               rights and benefits hereunder or transfer in accordance with
               Section 11.11(b) all or any of its rights, benefits and
               obligations hereunder; provided that in the event that such
               assignment would give rise to a claim for

<PAGE>
                                      -83-


               increased costs pursuant to Article 3, it shall not be
               unreasonable for Celestica to withhold its consent to such
               assignment. Any assignment or transfer shall be with respect to a
               minimum Commitment of U.S. $25,000,000 and integral multiples of
               U.S. $1,000,000 in excess thereof. A lesser amount may be
               assigned or transferred by any Lender if such amount represents
               the remaining balance of such Lender's Commitment.
               Notwithstanding the foregoing, the consent of the Administrative
               Agent and Celestica is not required in connection with the
               assignment or transfer of all or any of the rights, benefits and
               obligations hereunder (i) to any Subsidiary or Affiliate of a
               Lender or to any other Lender hereunder provided that notice is
               given to the Administrative Agent and Celestica, and provided
               that, in either case, any such assignment or transfer does not
               give rise to a claim for increased costs pursuant to Article 3 or
               any obligation on the part of an Obligor to deduct or withhold
               any Taxes from or in respect of any sum payable hereunder to the
               Administrative Agent or the Lenders, in either case, in excess of
               what would have been the case without such assignment, or such
               assignee waives the rights to any benefits under Section 3.5; or
               (ii) to any financial institution if an Event of Default has
               occurred and is continuing.

         (b)   If any Lender assigns all or any of its rights and benefits
               hereunder in accordance with Section 11.11(a), then, unless and
               until the assignee has agreed with the Administrative Agent and
               the other Lenders (in a Transfer Notice or otherwise) that it
               shall be under the same obligations towards each of them as it
               would have been under if it had been an original party hereto as
               a Lender, none of the Administrative Agent or any of the other
               Lenders or the Borrowers shall be obliged to recognize such
               assignee as having the rights against each of them which it would
               have had if it had been such a party hereto.

         (c)   If any Lender wishes to assign all or any of its rights, benefits
               and/or obligations hereunder as contemplated in Section 11.11(a),
               then such transfer may be effected upon:

               (i)   receipt of the written consent of the Administrative Agent
                     and Celestica as referred to in Section 11.11(a) delivered
                     to the relevant assignee by the Administrative Agent unless
                     an Event of Default has occurred and is continuing in which
                     case consent of Celestica shall not be required;

               (ii)  the delivery to and countersignature by the Lender of a
                     duly completed and duly executed Transfer Notice; and

               (iii) if any Lender wishes to assign any of its rights, benefits
                     and/or obligations hereunder to a financial institution
                     which is not a Lender or a Subsidiary or Affiliate of a
                     Lender, such Lender shall have paid to the Administrative
                     Agent a fee in the amount of U.S. $3,500;

                     in which event, on the later of the effective date, if any,
                     specified in such Transfer Notice and the fifth Banking Day
                     after the date of delivery of such Transfer Notice to the
                     Administrative Agent (unless the Administrative Agent
                     agrees to a shorter period):


<PAGE>
                                      -84-


               (iv)  to the extent that in such Transfer Notice the Lender party
                     thereto seeks to transfer its rights and obligations
                     hereunder, each of the Obligors and such Lender shall be
                     released from further obligations towards one another
                     hereunder and their respective rights against one another
                     shall be cancelled (such rights and obligations being
                     referred to in this Section 11.11(c) as "DISCHARGED RIGHTS
                     AND OBLIGATIONS");

               (v)   each of the Obligors and the assignee party thereto shall
                     assume obligations towards one another and/or acquire
                     rights against one another which differ from such
                     discharged rights and obligations only insofar as such
                     Obligor and such Assignee have assumed and/or acquired the
                     same in place of such Obligor and such Lender; and

               (vi)  the Administrative Agent, such assignee and the other
                     Lenders shall acquire the same rights and assume the same
                     obligations between themselves as they would have acquired
                     and assumed had such assignee been an original party hereto
                     as a Lender with the rights and/or obligations acquired or
                     assumed by it as a result of such transfer.

         (d)   Each of the parties hereto confirms that:

               (i)   the delivery to an assignee of a Transfer Notice signed by
                     a Lender constitutes an irrevocable offer (subject to the
                     conditions of Section 11.11(c)) by each of the parties
                     hereto to accept such transferee (subject to the conditions
                     set out herein) as a Lender party hereto with the rights
                     and obligations so expressed to be transferred;

               (ii)  such offer may be accepted by such assignee by the
                     execution of such Transfer Notice by such assignee and upon
                     fulfilment of the conditions set forth in Section 11.11(c);
                     and

               (iii) the provisions of this Agreement shall apply to the
                     contract between the parties thereto arising as a result of
                     acceptance of such offer.

         (e)   The Administrative Agent shall not be obliged to accept any
               Transfer Notice received by it hereunder and no such Transfer
               Notice may take effect on any day on or after the receipt by the
               Administrative Agent of a Drawdown Notice and prior to the date
               for the making of the proposed Advance.

         (f)   No transfer pursuant to this Section 11.11 shall, unless the
               Administrative Agent otherwise decides in its absolute discretion
               and notifies the parties to such transfer accordingly, be
               effective if the date for effectiveness of such transfer on the
               day on which the Administrative Agent receives the applicable
               Transfer Notice is on, or less than five Banking Days before, the
               day for the payment of any interest or fee hereunder.

         (g)   Any Lender may participate all or any part of its interest
               hereunder, provided that any such participation does not give
               rise to a claim for increased costs pursuant to

<PAGE>
                                      -85-


               Article 3 or any obligation on the part of an Obligor to deduct
               or withhold any Taxes from or in respect of any sum payable
               hereunder to the Administrative Agent or the Lenders, or such
               Lender and participant waive the right to any benefits under
               Section 3.5 and, in such case, notice of such participation has
               been given to the Administrative Agent and Celestica. Such
               participant shall not be entitled to any vote as a Lender. The
               Borrowers shall not be obligated to deal with any participant and
               shall be entitled to deal solely with the Lender and the Lender
               shall not be released from any of its obligations to the
               Borrowers as a result of such participation except to the extent
               that the participant has fulfilled such obligations. Such
               participants shall be bound to the same confidentiality
               provisions with respect to the Facility, the Borrowers and the
               Guarantors as are applicable to the Lenders.

11.12    CERTAIN REQUIREMENTS IN RESPECT OF MERGER, ETC.

No Borrower shall, and the Borrowers shall not permit any Restricted Subsidiary
(in each case, a "PREDECESSOR CORPORATION") to, enter into any transaction
(whether by way of liquidation, dissolution, amalgamation, merger, transfer,
sale or otherwise) whereby all or substantially all of its undertaking, property
and assets would become the property of any other Person or, in the case of any
such amalgamation or merger, of the continuing company resulting therefrom, or
whereby the obligation of the Predecessor Corporation to pay amounts under this
Agreement would become subject to novation or assumed or undertaken by any other
such Person or continuing company (a "CORPORATE REORGANIZATION"), provided that
it may do so (and if the Predecessor Corporation is a Borrower or a Material
Restricted Subsidiary such Person or continuing company shall become a party to
this Agreement or to the Guarantee provided by such Material Restricted
Subsidiary, as the case may be) if:

         (a)   such other Person or continuing company (herein referred to as a
               "SUCCESSOR CORPORATION") is a Borrower or Restricted Subsidiary;

         (b)   where required in the reasonable opinion of Lenders' Counsel, a
               Successor Corporation which is a Borrower or Material Restricted
               Subsidiary shall execute and/or deliver to the Administrative
               Agent an agreement supplemental hereto or to the Guarantee or
               Guarantees executed by a Predecessor Corporation or Predecessor
               Corporations, as the case may be, in form reasonably satisfactory
               to the Administrative Agent and execute and/or deliver such other
               instruments, if any, which to the reasonable satisfaction of the
               Administrative Agent and in the opinion of Lenders' Counsel are
               necessary to evidence (i) the assumption by the Successor
               Corporation of liability under each Loan Document to which the
               Predecessor Corporation is a party for the due and punctual
               payment of all money payable by the Predecessor Corporation
               thereunder, and (ii) the covenant of the Successor Corporation to
               pay the same and (iii) the agreement of the Successor Corporation
               to observe and perform all the covenants and obligations of the
               Predecessor Corporation under each Loan Document to which the
               Predecessor Corporation was a party and to be bound by all the
               terms of each such Loan Document so far as they relate to the
               Predecessor Corporation which instruments, if any, shall be in
               form reasonably satisfactory to the Administrative Agent;


<PAGE>
                                      -86-


         (c)   such transaction would not have a Material Adverse Effect;

         (d)   all Other Taxes payable as a result of such transaction have been
               paid;

         (e)   such transaction will not result in any claim for increased costs
               pursuant to Section 3.2 or result in any Tax being levied on or
               payable by the Administrative Agent or any Lender (except for
               Taxes on the overall net income or capital of the Administrative
               Agent or a Lender provided there is no increase in such Taxes as
               a result of such transaction);

         (f)   such transaction will not cause, or have the result of the
               Administrative Agent, the Lenders or any of them being in default
               under, noncompliance with, or violation of, any Applicable Law;

         (g)   an opinion of Borrowers' counsel substantially in the form and as
               to matters addressed in the opinion of Borrowers' Counsel
               delivered pursuant to Section 4.1 shall have been delivered to
               the Administrative Agent;

         (h)   each of the covenants set forth in Section 7.3 shall be satisfied
               on an actual and PRO FORMA basis after giving effect to such
               transaction; and

         (i)   no Default or Event of Default shall have occurred and be
               continuing or will occur as a result of such transaction.

Sections 11.12(a), (b) and (g) shall not apply to (i) the respective liquidation
or dissolution of Celestica Ireland B.V. and Celestica Denmark A/S or (ii) the
merger of Celestica Japan EMS K.K. with and into Celestica Japan K.K.

This Section 11.12 shall not apply to permit any consolidation, amalgamation or
merger by or of Celestica unless, as the result thereof, the Successor
Corporation is Celestica.

A Successor Corporation shall not be required to comply with Section 11.12(b)
and (g) in respect of a Corporate Reorganization where one or more of the
participants in the subject Corporate Reorganization is a Predecessor
Corporation which is a Borrower or Restricted Subsidiary existing under the laws
of an Exempted Jurisdiction and which, prior to the completion of such Corporate
Reorganization, delivered a Guarantee in accordance with Section 7.1(m)(i) and
the Guarantee delivered by such Predecessor Corporation (the "PREDECESSOR
GUARANTEE") has not been terminated or released. In this paragraph, "EXEMPTED
JURISDICTION" means:

               (i)   the Province of Ontario, unless, following the date hereof,
                     the laws of such Province change in a manner that would
                     adversely affect the enforceability of the Predecessor
                     Guarantee against the Successor Corporation;

               (ii)  Canada, unless following the date hereof, the laws of
                     Canada or the laws of the Province of Canada which govern
                     such Guarantee change in a manner that would adversely
                     affect the enforceability of the Predecessor Guarantee
                     against the Successor Corporation; and


<PAGE>
                                      -87-


               (iii) the State of Delaware, unless, following the date hereof,
                     the laws of such State change in a manner that would
                     adversely affect the enforceability of the Predecessor
                     Guarantee against the Successor Corporation.

11.13    LOCATION OF LENDERS

Unless otherwise agreed between the Administrative Agent and Celestica, each
Lender shall be resident in Canada. In respect of any Lender which assigns or
shares part of its Commitment with an Affiliate or Subsidiary, the provisions of
Article 9 relating to the appointment and authorization of the Administrative
Agent and the indemnification of the Administrative Agent shall apply equally to
each such Affiliate and Subsidiary.

11.14    SET-OFF

If an Event of Default has occurred, the Administrative Agent and Lender shall
have the right to set off against any accounts, credits or balances maintained
by the Obligors with the Administrative Agent or any Lender, any amount due
hereunder.

11.15    TIME OF THE ESSENCE

Time shall be of the essence in this Agreement.

11.16    ADVERTISEMENTS

The Administrative Agent and the Lenders agree that prior to any advertisement
with respect to this transaction, the Administrative Agent shall obtain the
written consent of Celestica as to the form and content of such advertisement,
such consent not to be reasonably withheld and to be provided as soon as
practicable.

<PAGE>
                                      -88-



IN WITNESS WHEREOF the parties hereto have executed this Agreement.

                                        THE BANK OF NOVA SCOTIA,
                                        AS ADMINISTRATIVE AGENT


                                        By: /s/ ROBERT HOSIE
                                           -------------------------------------
                                           Name:  Robert Hosie
                                           Title: Managing Director


                                        CELESTICA INC.


                                        By: /s/ PAUL NICOLETTI
                                           -------------------------------------
                                           Name:   Paul Nicoletti
                                           Title:  Vice President & Corporate
                                                   Treasurer


                                        CELESTICA INTERNATIONAL INC.


                                        By: /s/ PAUL NICOLETTI
                                           -------------------------------------
                                           Name:   Paul Nicoletti
                                           Title:  Vice President & Corporate
                                                   Treasurer


<Page>

                           SIGNATURE PAGE FOR THE BANK OF NOVA SCOTIA, AS LENDER


                                        THE BANK OF NOVA SCOTIA


                                        By: /s/ STEVE TORRENS
                                           -------------------------------------
                                           Name:    Steve Torrens
                                           Title:   Managing Director, Corporate
                                                    Banking - Communications
                                                    & Technology


                                        By: /s/ DEREK ORANGE
                                           -------------------------------------
                                           Name:  Derek Orange
                                           Title: Associate Director, Corporate
                                                  Banking - Communications
                                                  & Technology


<Page>



              SIGNATURE PAGE FOR BANK OF AMERICA, N.A., CANADA BRANCH, AS LENDER


                                        BANK OF AMERICA, N.A., CANADA BRANCH


                                        By: /s/ MEDINA SALES DE ANDRADE
                                           -------------------------------------
                                           Name:   Medina Sales de Andrade
                                           Title:  Assistant Vice President



<Page>



                              SIGNATURE PAGE FOR ROYAL BANK OF CANADA, AS LENDER


                                        ROYAL BANK OF CANADA


                                        By: /s/ NOEL V. CURRAN
                                           -------------------------------------
                                           Name:   Noel V. Curran
                                           Title:  Vice President


                                        By: /s/ SANDRA LOKOFF
                                           -------------------------------------
                                           Name:   Sandra Lokoff
                                           Title:  Senior Manager


<Page>



                SIGNATURE PAGE FOR CANADIAN IMPERIAL BANK OF COMMERCE, AS LENDER


                                        CANADIAN IMPERIAL BANK OF COMMERCE


                                        By: /s/ DAVID WHITE
                                           -------------------------------------
                                           Name:   David White
                                           Title:  Managing Director


                                        By: /s/ STEVE NISHIMURA
                                           -------------------------------------
                                           Name:   Steve Nishimura
                                           Title:  Executive Director



<Page>


                      SIGNATURE PAGE FOR CITIBANK N.A., CANADA BRANCH, AS LENDER


                                        CITIBANK N.A., CANADA BRANCH



                                        By: /s/ RODERICK J. SMITH
                                           -------------------------------------
                                           Name:   Roderick J. Smith
                                           Title:  Managing Director


<Page>


       SIGNATURE PAGE FOR CREDIT SUISSE FIRST BOSTON, TORONTO BRANCH, AS LENDER


                                        CREDIT SUISSE FIRST BOSTON,
                                        TORONTO BRANCH



                                        By: /s/ ALAIN DAOUST
                                           -------------------------------------
                                           Name:   Alain Daoust
                                           Title:  Director



                                        By: /s/ PETER CHAUVIN
                                           -------------------------------------
                                           Name:   Peter Chauvin
                                           Title:  Vice President



<Page>


                   SIGNATURE PAGE FOR DEUTSCHE BANK AG, CANADA BRANCH, AS LENDER


                                        DEUTSCHE BANK AG, CANADA BRANCH


                                        By: /s/ ROBERT A JOHNSTON
                                           -------------------------------------
                                           Name:   Robert A Johnston
                                           Title:  Vice President



                                        By: /s/ MARIA GORZEN
                                           -------------------------------------
                                           Name:   Maria Gorzen
                                           Title:  Vice President



<Page>


                SIGNATURE PAGE FOR THE BANK OF NOVA SCOTIA (ON ITS OWN ACCOUNT),
        AS LENDER IN RESPECT OF THE COMMITMENT OF THE ROYAL BANK OF SCOTLAND PLC


                                        THE BANK OF NOVA SCOTIA (ON ITS OWN
                                        ACCOUNT, AND NOT AS AGENT), AS LENDER IN
                                        RESPECT OF THE COMMITMENT OF THE ROYAL
                                        BANK OF SCOTLAND PLC


                                        By: /s/ STEVE TORRENS
                                           -------------------------------------
                                           Name:   Steve Torrens
                                           Title:  Managing Director


<Page>


                           SIGNATURE PAGE FOR NATIONAL BANK OF CANADA, AS LENDER


                                        NATIONAL BANK OF CANADA


                                        By: /s/ ED SUSTAR
                                           -------------------------------------
                                           Name:   Ed Sustar
                                           Title:  Vice President


                                        By: /s/ BRIAN SMITH
                                           -------------------------------------
                                           Name:   Brian Smith
                                           Title:  Managing Director

<Page>


                                 SCHEDULE C

                      APPLICABLE MARGIN AND FACILITY FEE

INSERT FROM CREDIT AGREEMENT

<Table>
<Caption>

- --------------------------------------------------------------------------------------------------------------------------------
                                               LEVEL I                  LEVEL II    LEVEL III   LEVEL IV(1)  LEVEL V   LEVEL VI
- --------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                   <C>         <C>          <C>         <C>       <C>
Senior Debt Rating(2)             > or = BBB+/Baa 1                     BBB/Baa2    BBB-/Baa3     BB+Ba1      BB/Ba2   < BB/Ba2
(S&P/Moody's)
- --------------------------------------------------------------------------------------------------------------------------------
LIBOR Margin                                   57.5 bps                 67.5 bps     77.5 bps    95.0 bps    120.0 bps   145.0
Applicable Margin(3)
- --------------------------------------------------------------------------------------------------------------------------------
Base Rate Applicable                            0.0 bps                  0.0 bps      0.0 bps     0.0 bps     20.0 bps    45.0
Margin(3)
- --------------------------------------------------------------------------------------------------------------------------------
Facility Fee(4)                                 7.5 bps                 20.0 bps     22.5 bps    30.0 bps     40.0 bps     50.0
- --------------------------------------------------------------------------------------------------------------------------------
</Table>

NOTES:

1.    Level IV will apply at closing.

2.    In the event of a split rating, the higher rating shall apply, unless
      there are two or more gradations between ratings, in which case, the
      rating one level below the higher rating shall apply.

3.    "Applicable Margin" expressed as basis points per annum.

4.    Facility Fee is payable regardless of usage on the aggregate
      Commitments (after giving effect to any cancellation, reduction, or
      increase pursuant to Sections 2.6, 2.7, and 2.20).


<Page>


                                   SCHEDULE J

                        CALCULATION OF THE MANDATORY COST

1.       The Mandatory Cost for a LIBOR Advance for each of its Interest Period
         is the rate determined by the Administrative Agent in accordance with
         the following formulae:

         IN RELATION TO ANY LIBOR ADVANCE:

         F  x 0.01 % per annum = Mandatory Cost
         ---------
            300

         WHERE ON THE DAY OF APPLICATION OF THE FORMULA:

         F        is the charge payable by the Administrative Agent to the
                  Financial Services Authority under paragraph 2.02 or 2.03 (as
                  appropriate) of the Fees Regulations but where for this
                  purpose, the figure in paragraph 2.02b and 2.03b will be
                  deemed to be zero expressed in pounds per L1 million of
                  the fee base of the Administrative Agent

2.       For the purposes of this Schedule "J":

                  i.     "FEE BASE" has the meaning given to it in the
                         Fees Regulations;

                         "FEES REGULATIONS" means any regulations governing the
                         payment of fees for banking supervision.

                 ii.     "RELEVANT PERIOD" in relation to each Interest Period,
                         means:

                         A.     if it is three months or less, that Interest
                                Period; or

                         B.     if it is more than three months, each
                                successive period of three months and any
                                necessary shorter period comprised in that
                                Interest Period.

3.                i.     The formula is applied on the first day of each
                         relevant period comprised in the relevant
                         Interest Period.

                 ii.     Each rate calculated in accordance with the formula is,
                         if necessary, rounded upward to the nearest 1/16th of
                         one percent.

4.       If the Administrative Agent determines that a change in circumstances
         has rendered, or will render, the formula inappropriate, the
         Administrative Agent shall notify Celestica Inc. and Celestica
         International Inc. of the manner in which the Mandatory Cost will
         subsequently be calculated. The manner of calculation so notified by
         the Administrative Agent shall, in the absence of manifest error, be
         binding on all the parties.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.8
<SEQUENCE>6
<FILENAME>a2106757zex-3_8.txt
<DESCRIPTION>EXHIBIT 3.8
<TEXT>
<PAGE>

                                                                   EXHIBIT 3.8

                                            CONFIDENTIAL MATERIALS OMITTED AND
                                          FILED SEPARATELY WITH THE SECURITIES
                                                      AND EXCHANGE COMMISSION.
                                                   ASTERISKS DENOTE OMISSIONS.


                            STOCK PURCHASE AGREEMENT


                                   DATED AS OF
                                JANUARY 8, 2002,


                                     BETWEEN


                                 NEC CORPORATION
                                     - and -
                                NEC MIYAGI, LTD.

                                     - and -
                               NEC YAMANASHI, LTD.

                                     - and -
                              1325091 ONTARIO INC.

                                     - and -
                                 CELESTICA INC.



<PAGE>

                                TABLE OF CONTENTS

                            STOCK PURCHASE AGREEMENT


                                    ARTICLE I
                             PURCHASE & SALE/CLOSING

1.1      Transfer of the Transferred Business.................................1
1.2      Transfer of Stock by Seller..........................................3
1.3      Purchase of the Stock by Buyer; Purchase Price.......................3
1.4      Purchase Price Adjustment............................................4
1.5      Repayment of Intercompany Loan.......................................6
1.6      The Closing..........................................................6

                                   ARTICLE II
                    REPRESENTATIONS AND WARRANTIES OF SELLER

2.1      Organization, Directors, Officers, Related Matters...................7
2.2      Stock................................................................7
2.3      Financial Statements; Dividends; Liabilities.........................8
2.4      Litigation...........................................................9
2.5      Compliance with Law; Permits.........................................9
2.6      Consents and Approvals...............................................9
2.7      Taxes...............................................................10
2.8      Contracts...........................................................10
2.9      Real and Personal Property..........................................10
2.10     Authorization; No Conflicts.........................................12
2.11     Insurance...........................................................12
2.12     Labor Matters.......................................................12
2.13     Environmental.......................................................13
2.14     Absence of Changes..................................................15
2.15     Inventory, Machinery and Equipment..................................15
2.16     No Other Representations or Warranties..............................15

                                   ARTICLE III
                     REPRESENTATIONS AND WARRANTIES OF BUYER

3.1      Organization, Directors, Officers, Related Matters..................16
3.2      Litigation..........................................................16
3.3      Consents and Approvals..............................................16
3.4      Authorization; No Conflicts.........................................17
3.5      Financial Capability................................................17
3.6      Company.............................................................17

                                   ARTICLE IV
                          COVENANTS OF SELLER AND BUYER

4.1      Access of Buyer.....................................................18
<PAGE>

                                      -3-

4.2      Access of Seller....................................................19
4.3      Conduct of Business.................................................19
4.4      Employee Matters....................................................19
4.5      Retention of Books and Records......................................21
4.6      Cooperation in Audits...............................................21
4.7      Registrations, Filings and Consents.................................21
4.8      Taxes...............................................................21
4.9      Environmental Investigation.........................................22
4.10     Changes in PRO FORMA Projected Financial Statements.................25
4.11     Future Business.....................................................25

                                    ARTICLE V
                             CONDITIONS OF PURCHASE

5.1      General Conditions..................................................25
5.2      Conditions to Obligations of Buyer..................................26
5.3      Conditions to Obligations of Seller.................................27

                                   ARTICLE VI
                           TERMINATION OF OBLIGATIONS

6.1      Termination of Agreement............................................28
6.2      Effect of Termination...............................................28

                                   ARTICLE VII
                                 INDEMNIFICATION

7.1      Obligations of Seller...............................................29
7.2      Indemnification Obligations of Buyer................................29
7.3      Survival of Representations and Warranties and Environmental
         Indemnity; Knowledge of Breach......................................30
7.4      Procedures..........................................................30
7.5      Adjustments to Losses...............................................31
7.6      Limitation on Indemnification by Seller.............................32
7.7      Limitation on Indemnification by Buyer..............................32
7.8      Exclusive Remedy....................................................32
7.9      Treatment of Payments...............................................33

                                  ARTICLE VIII
                                  MISCELLANEOUS

8.1      Amendments; Waivers.................................................33
8.2      Schedules; Exhibits; Integration....................................33
8.3      Best Efforts; Further Assurances....................................33
8.4      Governing Law.......................................................34
8.5      No Assignment.......................................................34
8.6      Headings............................................................34
8.7      Counterparts........................................................34
8.8      Public Disclosure...................................................35
<PAGE>

                                      -4-

8.9      No Consequential Damages............................................35
8.10     Parties in Interest.................................................35
8.11     Notices.............................................................35
8.12     Expenses and Attorneys Fees.........................................36
8.13     Governing Language..................................................36
8.14     Dispute Resolution..................................................37
8.15     Parent Guaranty.....................................................37

                                   ARTICLE IX
                                   DEFINITIONS

9.1      Definitions.........................................................38
<PAGE>

                            STOCK PURCHASE AGREEMENT

     This Stock Purchase Agreement is entered into as of January 8, 2002,
between Celestica Inc., an Ontario, Canada corporation ("Parent"), 1325091
Ontario Inc., an Ontario, Canada corporation and a wholly owned subsidiary of
Parent ("Buyer") and NEC Corporation, a Japanese kabushiki kaisha, NEC Miyagi,
Ltd., a Japanese kabushiki kaisha, and NEC Yamanashi, Ltd., a Japanese kabushiki
kaisha (collectively, "Seller").

                                 R E C I T A L S

     WHEREAS, Buyer has created a wholly owned subsidiary as a Japanese
kabushiki kaisha named Celestica EMS Kabushiki Kaisha ("Company");

     WHEREAS, Buyer intends to cause the Company to issue shares of common stock
of Company to the Predecessor Companies and the Predecessor Companies intend to
acquire such shares from Company;

     WHEREAS, Seller intends that, concurrently with the acquisition of such
shares by the Predecessor Companies, the Predecessor Companies will transfer the
Transferred Business to Company in accordance with the Corporate Separation
Procedure of the Japanese Commercial Code;

     WHEREAS, Predecessor Companies desire, after the completion of the
foregoing, to sell, and Buyer desires to buy, the Stock for the consideration
described herein, and to consummate the other transactions described herein; and

     WHEREAS, Parent desires to guarantee all of Buyer's obligations to Seller
hereunder.

                                A G R E E M E N T

     In consideration of the mutual promises contained herein and intending to
be legally bound the parties agree as follows:


                                   ARTICLE I
                             PURCHASE & SALE/CLOSING

     1.1      TRANSFER OF THE TRANSFERRED BUSINESS.

     (a) CREATION OF COMPANY. Promptly after execution of this Agreement, Buyer
shall provide evidence of Company's incorporation and proper registration as a
kabushiki kaisha having two hundred (200) issued and outstanding common shares
and capitalization of ten million (10,000,000) Japanese yen with the Tokyo Legal
Affairs Office of to Seller.

     (b) SECURING OF GOVERNMENT PERMITS AND CONSENTS. Buyer shall take all
actions reasonably required, and Seller shall provide such assistance as shall
reasonably be required by Buyer, in order to obtain the Permits listed in
Schedule 2.5(c).
<PAGE>

                                      -2-

     (c) COMPLIANCE WITH KAISHA BUNKATSU PROCEDURES. Buyer, Seller, and
Predecessor Companies, as appropriate, shall take, and Buyer shall cause Company
to take all actions necessary to be taken on their respective parts in order to
transfer the Transferred Business from Predecessor Companies to Company in
accordance with the NEC Separation Agreement and otherwise to comply with the
requirements of the Corporate Separation Procedure of the Japanese Commercial
Code and other applicable laws in connection with the Kaisha Bunkatsu. Such
actions shall include but not be limited to preparing and finalizing the NEC
Separation Agreement and all related agreements, documents and certificates as
soon as practicable, issuing all necessary notices, and making available
documents in the respective head offices of Predecessor Companies and Company
pursuant to the Corporate Separation Procedure of the Japanese Commercial Code.
Buyer and Seller shall approve and execute the NEC Separation Agreement at least
one month prior to the scheduled Bunkatsu Day.

     (d) BUNKATSU DAY. The Bunkatsu Day shall be on March 1, 2002, provided that
the conditions set forth below in Sections 1.1(e) and (f) have been satisfied or
waived in writing, or on such later business day on or prior to September 1,
2002 as Seller and Buyer may agree.

     (e) DELIVERY OF STOCK TO SELLER. Buyer shall cause Company to issue, sell
and deliver 280,000 common shares of Company to each of the Predecessor
Companies (202,000 shares to NEC Miyagi and 78,000 shares to NEC Yamanashi) on
the Bunkatsu Day provided that Company shall not issue the Stock to the
Predecessor Companies unless the following conditions are met;

          (i) No Action shall have been instituted and remain pending or
threatened on the Bunkatsu Day before any court or governmental entity that
threatens in any way to prevent, enjoin or set aside the transfer of the
Transferred Business by the Predecessor Companies to Company or the acquisition
by the Predecessor Companies of the Company's shares, or the result of which
could prevent or make illegal the consummation of such transfer or acquisition;

          (ii) Each of the covenants and agreements of Seller in this Agreement
to be performed by Seller in connection with the Kaisha Bunkatsu on or prior to
the Bunkatsu Day shall have been duly performed in all material respects; and

          (iii) All actions necessary to be taken by Seller to cause the
Transferred Business to be transferred to Company on the terms and conditions of
the NEC Separation Agreement shall have been completed.

     (f) TRANSFER OF TRANSFERRED BUSINESS. Subject to satisfaction of the
following conditions, the Predecessor Companies shall transfer the Transferred
Business to Company in accordance with the NEC Separation Agreement on the
Bunkatsu Day:

          (i) No Action shall have been instituted and remain pending or
threatened on the Bunkatsu Day before any court or governmental entity that
threatens in any way to prevent, enjoin or set aside the transfer of the
Transferred Business by the Predecessor Companies to Company or the acquisition
by the Predecessor Companies of the Company's
<PAGE>

                                      -3-

shares, or the result of which could prevent or make illegal the consummation
of such transfer or acquisition;

          (ii) Each of the representations and warranties of Buyer set forth in
Section 3.6 of this Agreement shall be true and correct; and

          (iii) Each of the covenants and agreements of Buyer in this Agreement
to be performed by Buyer in connection with the Kaisha Bunkatsu on or prior to
the Bunkatsu Day shall have been duly performed in all material respects; and

          (iv) All actions necessary to be taken by Company to carry out the
transfer of the Transferred Business to Company shall have been completed.

On the Bunkatsu Day, upon transfer of the Transferred Business, the Predecessor
Companies shall promptly file, and Buyer shall cause Company to promptly file
appropriate registrations of alteration with their respective Legal Affairs
Offices (homukyoku). Buyer shall cause the directors of Company who hold such
offices on the date immediately prior to the Bunkatsu Day to resign from their
offices as of the Bunkatsu Day. Buyer shall be responsible for all liabilities
of Company incurred prior to the Bunkatsu Day.

     (g) TRANSFER RESTRICTIONS. Until the Closing Date, neither Seller nor Buyer
may directly or indirectly give, sell, assign, transfer, mortgage, hypothecate,
bequeath, devise or otherwise transfer, or place in trust, create or permit an
Encumbrance to exist on or otherwise encumber or dispose of any Equity
Securities of Company held by such party.

     (h) STOCK BUY BACK. If this Agreement is terminated after the Bunkatsu Day
for any reason, Buyer shall sell and deliver to Seller and Seller shall purchase
from Buyer all of the Equity Securities of Company held beneficially or of
record by Buyer at an aggregate purchase price equal to Buyer's paid in capital
of ten million (10,000,000) Japanese yen. Such purchase price shall be paid in
cash promptly after termination of this Agreement in immediately available funds
to an account designated by Buyer.

     1.2      TRANSFER OF STOCK BY SELLER.

     Subject to the terms and conditions of this Agreement and, in particular,
the completion of the Kaisha Bunkatsu in accordance with the NEC Separation
Agreement and in accordance with Section 1.1 hereof, Seller agrees to sell the
Stock and deliver the Stock to Buyer at the Closing by delivering the
certificates evidencing the Stock to Buyer and properly endorsing the
certificates for transfer to Buyer or its nominee and otherwise in a form
acceptable for transfer on the books of Company.

     1.3      PURCHASE OF THE STOCK BY BUYER; PURCHASE PRICE.

     (a) Subject to the terms and conditions of this Agreement, Buyer agrees to
acquire the Stock from the Predecessor Companies and Buyer agrees to pay an
aggregate amount equal to (i) (Y) 10.718 billion constituting the target net
asset value of Company (the "TARGET NET ASSET VALUE" plus (ii) (Y)10.08 billion
constituting the premium over such target net asset value (the "Premium") less
(iii) the amount of the Company's Unfunded Pension Liabilities as determined in
accordance with Schedule 4.4(b) (the sum of the Target Net Asset Value and the
<PAGE>

                                      -4-

                                            CONFIDENTIAL MATERIALS OMITTED AND
                                          FILED SEPARATELY WITH THE SECURITIES
                                                      AND EXCHANGE COMMISSION.
                                                   ASTERISKS DENOTE OMISSIONS.

Premium less the Unfunded Pension Liabilities being the "Purchase Price"). At
the Closing, the Buyer shall pay to the Seller an amount (the "Initial
Purchase Price") in cash equal to the Purchase Price amount less **** (the
"Deferred Purchase Price"). The Initial Purchase Price shall be paid by wire
transfer of immediately available funds to an account designated by Seller
prior to the Closing. The paid up capital of the Company of (Y)10 million
(less all liabilities incurred by Company prior to the Bunkatsu Date) shall
be deducted from the Company's net asset value in determining the Initial
Purchase Price.

     (b) Within sixty (60) days following the first anniversary of the date
on which the Purchase and Supply Agreement becomes effective (the year marked
by such anniversary being referred to as the "Measurement Year"), the Buyer
shall deliver to the Seller a notice setting forth, in Japanese yen, the
total revenues (the "Received Revenues") recognized by Buyer during the
Measurement Year pursuant to the Purchase and Supply Agreement in respect of
the manufacture of Products (excluding, for greater certainty, "New Products"
as defined therein) set forth in Schedule C to the Purchase and Supply
Agreement. In the event that the Received Revenues are less than or equal to
****, the Seller shall not be entitled to receive any portion of the Deferred
Purchase Price, the Seller's rights thereto shall be forever extinguished and
the Buyer shall be released from any obligations to make such payment or any
portion thereof. In the event that the Received Revenues are equal to or
greater than ****, the Seller shall be entitled to receive and Buyer shall be
required to pay the entire Deferred Purchase Price. In the event that the
Received Revenues are greater than **** but less than ****, the Seller shall
be entitled to receive a portion of the Deferred Purchase Price, determined
in accordance with the following formula, and the Seller's rights to receive
the balance of the Deferred Purchase Price and the Buyer's obligation to pay
the balance of the Deferred Purchase Price shall be forever extinguished,
cancelled and discharged:

     (RECEIVED REVENUES - ***
     Any amount payable to Seller as aforesaid shall be paid in immediately
available funds no later than the ninetieth (90th) day following the end
of the Measurement Year.

     1.4      PURCHASE PRICE ADJUSTMENT.

     (a) CLOSING DATE INITIAL PURCHASE PRICE ADJUSTMENT. Not less than five (5)
days prior to the Closing Date, Seller shall deliver to Buyer (i) an estimated
balance sheet of Company as of the Closing Date (the "Estimated Closing Date
Balance Sheet") prepared in good faith in accordance with GAAP consistently
applied (except to the extent that GAAP permits a deferred accrual of the
Unfunded Pension Liabilities) (including a good faith estimate of the net assets
of Company as of the Closing Date (adjusted to reverse the effect of purchase
accounting rules that require the value of assets to be written up to their fair
market value on the Bunkatsu Day on the determination of the book value of the
Transferred Assets and to include the full amount of the Unfunded Pension
Liabilities determined in accordance with Schedule 4.4(b)) (the "Estimated
Closing Date Net Assets"). The Estimated Closing Date Balance Sheet shall
reflect any dividends or other distributions declared on or prior to the Closing
Date and payable on or after the Closing Date to Seller. The Initial Purchase
Price payable on the Closing Date shall be adjusted yen for yen as follows: (i)
if the Estimated Closing Date Net Assets exceeds Target Net Asset Value less the
Unfunded Pension Liabilities, the Initial Purchase Price payable on the Closing
Date shall be increased by the amount of such excess, or (ii) if the Estimated
Closing
<PAGE>

                                      -5-

Date Net Assets is less than the Target Net Asset Value less the Unfunded
Pension Liabilities, the Initial Purchase Price shall be decreased by
the amount of such deficit.

     (b) POST CLOSING INITIAL PURCHASE PRICE ADJUSTMENT. The Initial Purchase
Price shall be subject to adjustment after the Closing Date according to this
Section 1.4(b).

          (i) As soon as practicable, but in no event later than forty-five (45)
days after the Closing Date, Buyer shall prepare and shall deliver to Seller an
audited balance sheet of the Company as of the Closing Date (the "Final Closing
Date Balance Sheet"), including a calculation of the net assets of Company as of
the Closing Date adjusted to reverse the effect of purchase accounting rules
that require the value of assets to be written up to their fair market value on
the Bunkatsu Day on such calculation and to include the full amount of the
Unfunded Pension Liabilities determined in accordance with Schedule 4.4(b) (the
"Closing Date Net Assets"), together with a report thereon from an
internationally recognized firm of independent certified public accountants
reasonably satisfactory to Seller stating that the Final Closing Date Balance
Sheet fairly presents the value of the net assets of Company as of the Closing
Date prepared in accordance with GAAP applied consistently with the preparation
of the Estimated Closing Date Balance Sheet. In the event that Buyer fails to
timely deliver the Final Closing Date Balance Sheet for any reason whatsoever,
the Estimated Closing Date Balance Sheet shall be deemed to be and shall be
final, binding and conclusive on Buyer and Seller and the Initial Purchase Price
shall no longer be subject to adjustment.

          (ii) Seller shall have a period commencing upon delivery of the Final
Closing Date Balance Sheet to Buyer and expiring thirty (30) business days after
such delivery date to review the Final Closing Date Balance Sheet. Seller and
Seller's independent certified public accountants ("Seller's Accountants") shall
have full access during regular business hours and upon reasonable notice to all
relevant books and records and employees of Company to the extent necessary to
complete their review of the Final Closing Date Balance Sheet. In the event
Seller disputes that the Closing Date Net Assets was determined in accordance
with GAAP consistently applied with the Estimated Closing Date Balance Sheet,
Seller shall, within thirty (30) business days after delivery of the Final
Closing Date Balance Sheet, deliver a notice to Buyer (the "Adjustment Dispute
Notice"), setting forth in reasonable detail the component or components which
are in dispute and the basis of such dispute. If the parties fail to resolve any
such dispute within thirty (30) business days after receipt by Buyer of the
Adjustment Dispute Notice, the parties shall submit the dispute to Deloitte
Touche Tohmatsu (the "Reviewing Accountant") to review the Closing Date Net
Assets set forth on the Final Closing Date Balance Sheet. Each party hereby
represents and warrants that neither party nor any of its Affiliates uses the
Reviewing Accountant as its accountant or has any material relationship
therewith. The parties shall make available to the Reviewing Accountant all work
papers and all other information and material in their possession relating to
the matters in the Adjustment Dispute Notice. The Reviewing Accountant's
authority shall be limited to determining whether the component or components of
Closing Date Net Assets set forth on the Final Closing Date Balance Sheet which
have been so disputed by the Seller were calculated in accordance with GAAP
consistently applied with the Estimated Closing Date Balance Sheet and, if
necessary, determining the adjustments required to such Closing Date Net Assets
to cause it to be calculated in accordance with GAAP consistently applied with
the Estimated Closing Date Balance Sheet. The Reviewing Accountant shall be
instructed by the parties to use its best efforts to deliver to
<PAGE>

                                      -6-

the parties its determination as promptly as practicable after such submission
of the dispute to the Reviewing Accountant. The parties hereby expressly
agree that the determination of the Reviewing Accountant shall be considered
to be an award made in an arbitration proceeding and shall be final and binding
on the parties (absent fraud or manifest bad faith by the Reviewing
Accountant). The Closing Date Net Assets on the Final Closing Date Balance Sheet
as determined by Buyer (if not disputed), or as modified (if at all) by
agreement of Buyer and Seller or by decision of the Reviewing Accountant, shall
be the "Final Closing Date Net Assets". Each party shall bear its own expenses
and the fees and expenses of its own representatives and experts, including its
independent accountants, in connection with the preparation, review, dispute (if
any) and final determination of the Final Closing Date Net Assets. The parties
shall share equally in the costs, expenses and fees of the Reviewing Accountant.

          (iii) Within five (5) days following determination of the Final
Closing Date Net Assets, the Initial Purchase Price shall be adjusted yen for
yen and payment shall become due as follows: (i) if the Final Closing Date Net
Assets exceeds the Estimated Closing Date Net Assets, the Initial Purchase Price
shall be increased by the amount of such excess and Buyer shall pay over such
excess to Seller in accordance with Section 1.4(b)(iv) below, or (ii) if the
Final Closing Date Net Assets is less than the Estimated Closing Date Net
Assets, the Initial Purchase Price shall be decreased by the amount of such
deficit and Seller shall pay over such deficit to Buyer in accordance with
Section 1.4(b)(iv) below.

          (iv) The payment of any adjustment provided for in this Section 1.4(b)
shall be made by wire transfer of immediately available funds. Any such payment
shall also include interest on the amount of such payment, calculated at the
short term prime rate then offered by most Japanese city banks (toshi ginko) as
according to the most recent financial and economic statistics (kinyu keizai
toukei) reported by the Bank of Japan.

     1.5      REPAYMENT OF INTERCOMPANY LOAN.

          At the Closing, Buyer will, concurrently with paying the Initial
Purchase Price, cause the Company to repay in full all amounts due under the
Intercompany Loan, including all accrued interest thereon.

     1.6      THE CLOSING.

     (a) Subject to Section 1.6(b), the Closing shall take place on March 31,
2002, provided that the conditions in Article 5 have been satisfied or waived,
or on such later business day on or prior to September 30, 2002 as Seller and
Buyer may agree.

     (b) In the event the Closing is scheduled to occur on a day in which banks
in Japan are not open for business, (i) at least fifteen (15) days prior to the
Closing Date, Buyer and Seller shall establish a joint account (RENMEI KOUZA) at
Deutsche Bank AG, Tokyo Branch (the "Joint Account Bank") in which funds may be
withdrawn only with the instructions of Buyer, NEC Corporation and the
Predecessor Companies (the "Joint Account"); (ii) on or prior to the first
business day preceding the scheduled Closing Date, Buyer shall deposit the
Initial Purchase Price and the amount required to repay the Intercompany Loan
(collectively, the "Deposit Amount") into the Joint Account to be held in escrow
until the Closing; and (iii) at the Closing,
<PAGE>

                                      -7-

Buyer shall provide Seller with evidence reasonably satisfactory to Seller
that the conditions set forth in clause (ii) above have been satisfied, place an
appropriate corporate seal (GINKO-IN) (or if acceptable to the Joint Account
Bank, an authorized signature) on an irrevocable written instruction to the
Joint Account Bank to transfer on the first business day after the Closing Date
the Deposit Amount in the Joint Account to an account designated by Seller, and
deliver such written instruction to Seller. Buyer shall execute an assignment
(the "Assignment") of its interest in the Joint Account to Seller in form and
substance reasonably acceptable to both parties. Any interest accruing on the
Deposit Amount in the Joint Account shall belong to Buyer. Buyer and Seller
shall execute such documents and provide such information as may be reasonably
requested by the Joint Account Bank in order to establish the Joint Account and
consummate the transactions contemplated by this Section 1.6(b) and
Section 1.6(c).

     (c) In the event that, notwithstanding the fact that Buyer has deposited
the Deposit Amount into the Joint Account pursuant to Section 1.6(b), the
Closing does not take place on the scheduled Closing Date, Seller shall place an
appropriate corporate seal (GINKO-IN) on an irrevocable written instruction to
the Joint Account Bank to transfer on the first business day after the scheduled
Closing Date the funds deposited in the Joint Account to an account designated
by Buyer, and deliver such written instruction to Buyer, on the scheduled
Closing Date. Seller shall execute an assignment of its interest in the Joint
Account to Buyer in form and substance reasonably acceptable to both parties.
Any interest accruing on the amount in the Joint Account shall belong to Buyer.


                                   ARTICLE II
                    REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller represents, warrants and agrees as of the date hereof and as of the
Closing Date (unless otherwise made as of a specific date) as follows:

     2.1      ORGANIZATION, DIRECTORS, OFFICERS, RELATED MATTERS.

     (a) As of the date hereof and the Closing Date, (i) each Seller is a
corporation duly organized and validly existing under the laws of Japan; and
(ii) each Seller has all necessary corporate power and authority to execute,
deliver and perform this Agreement and any related agreements to which it is a
party.

     (b) Company is a corporation duly organized and validly existing under the
laws of Japan. Company has all necessary corporate power and authority to own
its properties and assets and to carry on the Transferred Business as currently
conducted by NEC Yamanashi, and NEC Miyagi. SCHEDULE 2.1 correctly lists the
current directors and executive officers of the Predecessor Companies as of the
date hereof.

     2.2      STOCK.

     At the Closing, Predecessor Companies shall own all of the outstanding
Stock beneficially and of record. Since the Bunkatsu Day, Company has not issued
any Equity Securities to any person. As of the Closing Date, the Stock is owned
free and clear of any Encumbrance. At the Closing, Buyer will acquire title to
and complete ownership of the Stock,
<PAGE>

                                      -8-

free of any Encumbrance. The authorized capital stock of Company as of the
Closing Date consists of 1,120,800 shares of common stock, without par value, of
which 280,200 shares are issued and outstanding. There are no outstanding
Contracts or other rights to subscribe for or purchase, or contracts or other
obligations to issue or grant any rights to acquire, any Equity Securities of
Company, or to restructure or recapitalize Company. There are no outstanding
Contracts of Seller or Company to repurchase, redeem or otherwise acquire any
Equity Securities of Company. All Equity Securities of Company are duly
authorized, validly issued and outstanding and are fully paid and nonassessable.
The share certificates which will be delivered by the Seller to the Buyer at the
Closing shall be the sole, genuine and valid share certificates of the Company
representing Stock.

     2.3      FINANCIAL STATEMENTS; DIVIDENDS; LIABILITIES.

     (a) HISTORICAL FINANCIAL STATEMENTS. Seller has delivered to Buyer
unaudited selected balance sheet data for NEC Yamanashi and NEC Miyagi dated
September 30, 2001 and the selected cost of goods sold data for the six (6)
month period then ended (the "September 30, 2001 Financial Statements"). Except
as set forth in Schedule 2.3(a), such balance sheet and cost of goods sold data
have been prepared in conformity with GAAP applied on a basis consistent with
Seller's past practice (except for changes, if any, required by GAAP and
disclosed therein, and except for the absence of notes and normal recurring
adjustments).

     (b) PRO FORMA PROJECTED FINANCIAL STATEMENTS. Seller has delivered to Buyer
certain unaudited PRO FORMA projected financial data, including selected cost of
goods data for NEC Yamanashi and NEC Miyagi for the six month period ended March
31, 2002 and the fiscal year ended March 31, 2003 relating to the Transferred
Business. The PRO FORMA Projected Financial Statements of the Transferred
Business for the fiscal year ended March 31, 2003 (the "PRO FORMA Projected
Financial Statements") have been prepared in good faith based on assumptions
made in good faith and which are reasonable in the Seller's opinion. The
preparation and content of the Pro Forma Projected Financial Statements have
been reviewed by General Manager, Planning Division, and Optical Networks
Operations Unit of NEC Corporation, for and on behalf of NEC Corporation.

     (c) NO DIVIDENDS. Except as set forth in SCHEDULE 2.3(c), whether or not in
the ordinary course of business, there has not been, occurred or arisen any
declaration setting aside or payment of any dividend or other distribution
(whether in stock, property or any combination thereof) since September 30,
2001, in respect of any of the Equity Securities, NEC Yamanashi or NEC Miyagi
and since the Bunkatsu Day, in respect of Company.

     (d) LIABILITIES. Company does not have any liabilities of the type required
to be reflected as liabilities on a balance sheet prepared in accordance with
GAAP, whether accrued, absolute, contingent or otherwise, except such
liabilities that (i) are reflected or disclosed in the financial statements
referred to in Section 2.3(a) or (b), (ii) were incurred after September 30,
2001 in the ordinary course of business of the Transferred Business by NEC
Yamanashi, NEC Miyagi or Company or are consented to by or approved by Buyer
pursuant to Section 4.3 hereof or are set forth in SCHEDULE 4.3 and reflected in
the Estimated Closing Date Balance Sheet or the Final Closing Date Balance
Sheet. Except as otherwise disclosed herein (including the Schedules hereto) or
the Estimated Closing Date Balance Sheet or Final Closing Date Balance
<PAGE>

                                      -9-

Sheet, the Predecessor Companies do not have, and the Company will not have
on the Closing Date any other liabilities that are material to the Transferred
Business of the Company; provided that this representation and warranty shall
not apply to and there shall be no breach of this representation and warranty to
the extent that any such liability is either disclosed or is not required to be
disclosed or is a breach under the terms of another representation and warranty
in Article II of this Agreement which specifically addresses the subject matter
of such liability (which subject matters include, for illustration purposes, the
following: litigation; compliance with law; Permits; taxes; consents and
approvals; and Contracts).

     2.4      LITIGATION.

     Except as set forth in SCHEDULE 2.4, there are no Actions, judgements,
orders, writs, decrees, injunctions, proceedings or investigations pending or,
to Seller's Knowledge, threatened in writing, against Company or the Predecessor
Companies in respect of the Transferred Business, in, before, or by, any court
or governmental entity.

     2.5      COMPLIANCE WITH LAW; PERMITS.

     (a) Company has conducted its business in compliance in all material
respects with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority.

     (b) As of the Closing Date, Company has all permits, governmental licenses,
registrations and approvals (collectively "Permits") necessary or required by
law or the rules and regulations of any governmental entity having jurisdiction
over Company to carry on the Transferred Business except where the failure to
obtain such Permit or Permits would not impede the operation of the Transferred
Business in any material respect. All of the Permits are in full force and
effect and no notice has been received by either of the Predecessor Companies,
by the Seller or by the Company relating to, and to Seller's Knowledge, no
grounds exist which would give rise to, termination, cancellation, withdrawal or
amendment of any such Permits. Each of the Predecessor Companies and the Company
is in material compliance with the terms and conditions of all such Permits.

     (c) SCHEDULE 2.5(c) lists all Permits necessary or required by law or the
rules and regulations of any governmental entity having jurisdiction over
Company to carry on the Transferred Business except where the failure to obtain
such Permit or Permits would not impede the operation of the Transferred
Business in any material respect.

     2.6      CONSENTS AND APPROVALS.

     As of the date hereof and the Closing Date, except as set forth in SCHEDULE
2.6, the execution, delivery and performance of this Agreement and any related
agreements by Seller, and the transfer of the Transferred Business contemplated
to occur on or prior to the Closing Date pursuant to the NEC Separation
Agreement, will not require any consent, waiver, authorization or approval of,
or the making of any filing with or giving of notice to, any Person except for
any consents, waivers, authorizations or approvals which are not material to the
operation of the Transferred Business.
<PAGE>

                                      -10-


                                            CONFIDENTIAL MATERIALS OMITTED AND
                                          FILED SEPARATELY WITH THE SECURITIES
                                                      AND EXCHANGE COMMISSION.
                                                   ASTERISKS DENOTE OMISSIONS.

     2.7      TAXES.

     Except for that set forth in SCHEDULE 2.7 annexed hereto all tax returns
required to be filed by any Predecessor Company, or the Company have been filed
or will have been filed prior to the Closing Date, and all Taxes shown to be due
and payable on such tax returns have been or will have been paid when required
by law. Such tax returns and documents are materially correct and have been
prepared in accordance with applicable laws, and each of the Predecessor
Companies and the Company, as appropriate, has paid or challenged in each case
on a timely basis, all taxes, including fees and contributions. Each of the
Predecessor Companies and the Company, as appropriate, has withheld all taxes
required to have been withheld and paid in connection with the amounts paid or
owing to any employee, independent contractor, creditor, stockholder or other
third party.

     2.8      CONTRACTS.

     SCHEDULE 2.8 lists each Contract related to the Transferred Business to
which Company will become a party or to which it or any of its properties is
subject or by which any thereof is bound that is deemed a Material Contract
under this Agreement. The following Contracts shall be deemed to be "Material
Contracts": any Contract that (a) obligates Company to pay more than **** in
any fiscal year or entitles Company to receive more than **** in any fiscal
year; (b) financing documents, loan agreements, capital leases or agreements
providing for the guaranty of such obligations of any party other than
Company in each case in excess of **** (c) is between Seller or any Affiliate
of Seller, on the one hand, and Company on the other hand; (d) upon the
consummation of the transactions contemplated by this Agreement requires a
payment arising or becoming due from Company to Seller, any Affiliate of
Seller or any other Person; or (e) involves a term of more than 12 months.
Neither Company nor Seller is in default in any material respect under, or in
violation in any material respect of, any Material Contract. True, correct
and complete copies of all of the Material Contracts have been made available
to Buyer. All such Material Contracts are legal, valid, binding and
enforceable against the Predecessor Companies and will, at the Closing, be
enforceable against the Company and are in full force and effect.

     2.9      REAL AND PERSONAL PROPERTY.

     (a) The Predecessor Companies have, and, effective on or before Closing,
Company will have title to or other right to use, free of Encumbrances, all
items of Real Property, including fees, leaseholds and all other interests in
real property, and such other assets and properties that are required for the
conduct of the Transferred Business, except for (a) Encumbrances that: (i)
secure the Intercompany Loan and will be discharged forthwith upon repayment of
the Intercompany Loan on Closing; (ii) are incidental to the conduct of the
Transferred Business and do not materially adversely detract from the value of
properties, rights or assets used in the conduct of the Transferred Business;
(iii) constitute statutory liens of landlords, carriers, warehousemen,
mechanics, repairman, workmen and materialmen and other liens imposed by law, in
each case in the ordinary course of business; (iv) are liens for taxes,
assessments, water or sewer rents or governmental charges or claims which are
not yet delinquent or can be paid without penalty or are being contested in good
faith and by appropriate proceedings; (v) are covenants, easements, rights of
ways, restrictions, encroachments and other
<PAGE>

                                      -11-

imperfections or defects in title, in each case which do not interfere in
any material respect with the conduct of the Transferred Business as presently
conducted or result in a material diminution in value of such assets; or (vi)
are set forth on SCHEDULE 2.9, (collectively, "Permitted Encumbrances") and (b)
assets and properties not material to or required for the Transferred Business
that were disposed of since September 30, 2001 in the ordinary course of
business.

     (b) The Predecessor Companies have maintained, and up to the Closing will
continue and Seller will cause the Company to continue to maintain, all such
assets in all material respects in accordance with good and prudent maintenance
practices. All buildings, structures, improvements and appurtenances situated on
the Real Property relating to the Transferred Business are in good operating
condition and in a state of good maintenance and repair except for routine
maintenance and repair and ordinary wear and tear, are adequate and suitable for
the purposes for which they are currently being used and, at Closing, the
Company will have adequate rights of ingress and egress for the operation of the
Transferred Business in the ordinary course. None of such buildings, structures,
improvements or appurtenances (or any equipment therein), nor the operation or
maintenance thereof, violates any restrictive covenant or encroaches on any
property owned by others in any material respect. Without limiting the
generality of the foregoing:

          (i) no alteration, repair, improvement or other work has been ordered,
directed or requested in writing to be done or performed to or in respect of the
Real Property or to any of the plumbing, heating, elevating, water, drainage or
electrical systems, fixtures or works by any government agency with authority,
which alteration, repair, improvement or other work has not been completed, and
to Seller's Knowledge, no written notification having been given to it, or to
the Company of any such outstanding work being ordered, directed or requested,
other than those which have been complied with;

          (ii) all accounts for work and services performed and materials placed
or furnished upon or in respect of the Real Property have been fully paid and
satisfied and no person is entitled to claim a lien against the Real Property,
or any part thereof, other than in respect of current accounts in respect of
which the payment due date has not yet passed and Permitted Encumbrances under
Section 2.9(a)(ii);

         (iii) the Real Property is fully serviced, there are no outstanding
levies, charges or fees assessed against the Real Property by any public
authority (including development or improvement levies, charges or fees)
and there is nothing owing in respect of the Real Property to any municipality
or to any other commission or entity owning or operating a public utility for
water, gas, electrical power or energy, steam or hot water, or for the use
thereof, other than current accounts in respect of which the payment due date
has not yet passed and Permitted Encumbrances under Section 2.9(a)(iii); and

          (iv) no part of the Real Property has been taken or expropriated by
any competent authority nor, to Seller's Knowledge, has any notice or proceeding
in respect thereof been given or commenced.

     (c) Except as otherwise disclosed in Schedule 2.9(c), other than the
Yamanashi Property and the Miyagi Property, there are no other real properties
owned , leased, operated or
<PAGE>

                                      -12-

used, now or in the past, by the Predecessor Companies for which liability
would result to the Company or Buyer under Environmental Law and none of the
properties described in Schedule 2.9(c) are or were used in connection with the
Transferred Business.

     2.10     AUTHORIZATION; NO CONFLICTS.

     The execution, delivery and performance of this Agreement and any related
agreements by Seller have been duly and validly authorized as of the date hereof
by all necessary corporate action on the part of Seller. As of the date hereof
and the Closing Date, this Agreement and any related agreements constitute the
legally valid and binding obligation of Seller, enforceable against Seller in
accordance with their respective terms except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or limiting creditors rights generally. Neither the execution
and delivery by Seller of this Agreement or any related agreements nor the
consummation of the transactions contemplated hereby or thereby violate any
provision of the organizational documents of any Seller, or Company or any law,
statute or regulation or any injunction, order or decree of any government
entity or court to which any Seller or Company is subject or any Material
Contract to which any Seller or Company is a party or by which it is bound nor
will they result in a creation of any Encumbrance upon any of the Shares or the
Transferred Assets.

     2.11     INSURANCE.

     SCHEDULE 2.11 lists all insurance policies which will be held by Company on
the Closing Date. All such insurance policies are and will remain until the
Closing Date, in full force and effect and neither any Seller nor the Company is
on or prior to the Closing Date in default under any such policy. Seller has
provided copies of all such insurance policies to Buyer.

     2.12     LABOR MATTERS.

     (a) Except as set forth in SCHEDULE 2.12(a), neither of the Predecessor
Companies is, and Company will not be, a party to any collective bargaining
agreement or any employment agreement or other agreement, plan or arrangement
providing for severance payments to any employee upon termination of employment
or which provide benefits upon a change in control of the Company. As of the
date hereof, there is no organized labor strike pending, or to the Seller's
Knowledge, threatened in writing against any of the Predecessor Companies,
Seller or the Company. There is no work stoppage, slow down or lockout pending
involving the general employee population at any of the facilities of the
Transferred Business or, to the Seller's Knowledge, threatened in writing
involving any one or more of Seller, the Predecessor Companies, the Transferred
Business or the Company.

     (b) Except as set forth in Schedule 2.12(b) there are no claims pending or,
to Seller's Knowledge, threatened relating to the Affected Employees for
compensation for any injury, disability or illness resulting from their
employment.

     (c) Schedule 2.12(c) contains the name, job title, current monthly gross
rate of pay and date and amount of last salary increase of each of the Affected
Employees as at November 30, 2001. All benefits, in cash or in kind, routinely
provided to the Affected Employees as at November 30, 2001 are also described in
Schedule 2.12(c). Except with respect
<PAGE>

                                      -13-

to the number of Affected Employees since November 30, 2001, there has been
no material change to the information contained in Schedule 2.12(c) and the
information contained in Schedule 2.12(c) remains true and correct in all
material respects. The Predecessor Companies have been and, from and after the
Bunkatsu Day, the Company and the Predecessor Companies will be, in full
compliance with all statutory or regulatory requirements with respect to the
Affected Employees. There are no complaints, claims or charges outstanding, or,
to the Seller's Knowledge, anticipated, nor are there any orders, decisions,
judgments or convictions against or in respect of the Predecessor Companies, the
Company or Seller in connection with the Transferred Business or the Affected
Employees under any employment legislation. All required accruals for salaries
and benefits (including pension benefits) have been accurately reflected on the
books and records of the Predecessor Companies and the Company in respect of the
Transferred Business.

     2.13     ENVIRONMENTAL

     (a) Except as disclosed in Schedule 2.13 (a), to Seller's Knowledge, the
Predecessor Companies, Company and the Transferred Business are and at all
relevant times have been in compliance in all material respects with all
applicable laws, statutes, regulations, orders, codes, decrees, rules, rulings,
requirements, Environmental Permits (as defined below) and Special Governmental
Requests (as defined below) of any government, court or governmental authority
in each case relating to pollution, Hazardous Materials (as defined below),
protection of human health or safety or the environment (including, without
limitation, ambient air, surface water, groundwater or land surface) or
protection of worker health or safety (including, without limitation those that
may come into effect from time to time hereafter on or before the tenth
anniversary of the Closing Date) (collectively, "Environmental Laws"),
(including, without limitation all permits, registrations, approvals, consents,
filings or other authorizations whatsoever required under applicable
Environmental Laws ("Environmental Permits") and issued in connection with the
Transferred Business or any asset used in the operation thereof, all of which
issued Permits are listed in Schedule 2.13(a) under the heading "Environmental
Permits"). "Special Governmental Requests" shall mean written administrative
guidance and requests specifically addressed to the Company and guidelines, in
each case, which, if also specifically addressed to other comparable
manufacturing businesses in Japan, are generally followed or reasonably expected
to be generally followed by a reasonably significant number of such businesses.

     (b) Except as disclosed in Schedule 2.13(b), to Seller's Knowledge, none of
the Seller, the Predecessor Companies, Company or any agent of any of them has
received any formal governmental or written third party complaint, notice of
violation, notice of investigation or notice of potential liability or other
notification or request pursuant to Environmental Laws or otherwise with respect
to matters relevant to the protection of the environment, Hazardous Materials,
protection of human (including worker) health or safety or pollution with regard
to the Transferred Business.

     (c) Except as disclosed in Schedule 2.13(c), to Seller's Knowledge, there
are no governmental or administrative actions or requests or judicial
proceedings pending or threatened under any Environmental Laws to which Company,
the Predecessor Companies or (with respect to the Transferred Business) Seller
is named as a party or with respect to Company, the
<PAGE>

                                      -14-

Predecessor Companies or Seller, with respect to the Transferred Business,
nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, under any Environmental Law (pending or
threatened) with respect to Company, the Predecessor Companies or the
Transferred Business. To Seller's Knowledge, no conditions or circumstance exist
and no acts or omissions have occurred at, on, from, either of the Yamanashi
Property or the Miyagi Property or affecting either such Property, the Company,
the Predecessor Companies or the Transferred Business which could reasonably be
expected to result in any material investigation, lawsuit, arbitration or
regulatory suit or action alleging harm, injury or non-compliance with any
Environmental Laws, rules or regulations or requiring any cleanup or other
action with respect to the presence of, release of or liability relating to
Hazardous Materials.

     (d) Except as disclosed in Schedule 2.13(d), to Seller's Knowledge, there
is no past or present action or condition with respect to Company, the
Predecessor Companies, or the Transferred Business that could reasonably form
the basis of a claim that such operations or facilities are not in compliance in
all material respects with applicable Environmental Laws.

     (e) Except as disclosed in Schedule 2.13(e), to the Seller's Knowledge,
there has been no spill of, and there is not present except in compliance with
Environmental Law, any Hazardous Materials at, on, under, in or from either of
the Yamanashi Property or the Miyagi Property. Hazardous Materials means all
contaminants, pollutants, wastes, chemicals and other hazardous materials and
includes all materials and substances controlled or regulated under or by any
Environmental Law or with respect to which any liability may arise or be imposed
under any Environmental Law;

     (f) Except as disclosed in Schedule 2.13(f), to the Seller's Knowledge,
there are and have been no polychlorinated biphyenyls ("PCBs"),
asbestos-containing materials, mercury, lead paint or painted surfaces,
underground or above ground storage tanks or wetlands, at, on, under, in or from
the Yamanashi Property or the Miyagi Property;

     (g) Each of the Seller, the Predecessor Companies and the Company has
provided or made available to Buyer a copy of all documents, reports, studies,
and its data relevant to environmental or occupational health or safety matters
at or in connection with the Company, the Predecessor Companies or the
Transferred Business and have provided a description of all information with
respect to such matters to the extent such are in the possession of the Seller,
the Predecessor Companies or the Company;

     (h) All wastes from the Transferred Business or otherwise generated by the
Predecessor Companies or the Company have been disposed of in accordance with
all Environmental Laws and all documents relating to the disposal of such wastes
currently in place, or in place at any time in the past and which Seller
currently has in its possession including the waste hauler, the disposal site
and the nature of the wastes hauled by and to the same have been provided or
made available to Buyer.
<PAGE>

                                      -15-


     2.14     ABSENCE OF CHANGES

     Except as set forth in Schedule 2.14, since September 30, 2001, the
Predecessor Companies or the Company, as the case may be, have carried on the
Transferred Business in the ordinary course of business consistent with past
practices.

     2.15     INVENTORY, MACHINERY AND EQUIPMENT.

     (a) The September 30, 2001, Financial Statement accurately reflects the
value of the inventory determined in accordance with GAAP used by the
Predecessor Companies in the Transferred Business as of such date and represents
all of the inventory of the Transferred Business on such date.

     (b) At the Closing Date, Company will have no Obsolete Material or Excess
Material (in each case, as defined in the Purchase and Supply Agreement) or
finished goods inventory.

     (c) The Transferred Assets will include all machinery and equipment that is
necessary for the conduct by the Company of the Transferred Business.

     2.16     NO OTHER REPRESENTATIONS OR WARRANTIES.

     Seller has invited Buyer and Parent to perform, and Buyer and Parent have
performed certain due diligence and business investigations with respect to the
Predecessor Companies, with the intention that Buyer and Parent form their own
conclusions regarding the condition and value of the Predecessor Companies,
pursuant to the parties' express intention that the sale of the Stock be without
representation or warranty by Seller, express or implied, except as expressly
set forth herein and in any agreements, certificates, documents or instruments
delivered pursuant hereto. Each of Buyer and Parent has been given such access
to the premises, books, records and officers of Company and NEC Yamanashi and
NEC Miyagi and has had the opportunity to review such other data and other
information with respect to the business and properties of Company and NEC
Yamanashi and NEC Miyagi as each of Buyer and Parent has deemed necessary in its
sole judgment to evaluate the transactions with Seller contemplated by this
Agreement it being understood and agreed that such access and review and the
knowledge resulting therefrom should not be construed to amend, modify or
mitigate any of the representations and warranties contained herein or in any
agreements, certificates, documents or instruments delivered pursuant hereto
which remains in full force and effect in accordance with the terms thereof.
Except for the representations and warranties contained in this Article 2, none
of Seller, any Affiliate of Seller, or any other Person makes or has been
authorized to make any express or implied representation or warranty, and Seller
and its Affiliates hereby disclaim any express or implied representation or
warranty, whether by Seller or any of its Affiliates or any of their respective
officers, directors, employees, agents, stockholders, subsidiaries (direct or
indirect), partners, advisors, or representatives or any other Person, in
connection with the delivery or disclosure to Buyer, Parent or any of their
respective officers, directors, employees, agents, advisors or representatives
or any other Person of any documentation or other information regarding Seller
or Company. Without limiting the generality of the foregoing, except as
otherwise provided in Article 2 of this Agreement, Seller and its Affiliates
have not
<PAGE>

                                      -16-

made, and shall not be deemed to have made, any representations or
warranties (i) in the Confidential Information Memorandum relating to the sale
of Company prepared by Deutsche Banc Alex. Brown on behalf of Seller and
supplied to Buyer prior to the date hereof (the "Confidential Information
Memorandum"), (ii) in any presentation of the business of Company in connection
with the transactions contemplated hereby, whether written or oral, (iii) in any
financial projection or forecast relating to Company, or (iv) in any other
documents or information, whether written or oral, with respect to Company. No
statement contained in the Confidential Information Memorandum, or made in any
such presentation or contained in any such financial projection or forecast or
other documents or information shall be deemed a representation or warranty
hereunder or otherwise unless provided for in Section 2 of this Agreement. With
respect to any such projection or forecast delivered to Buyer, each of Buyer and
Parent acknowledges that (i) there are uncertainties inherent in attempting to
make such projections and forecasts, (ii) it is familiar with such
uncertainties, (iii) it is taking full responsibility for making its own
evaluation of the adequacy and accuracy of all such projections and forecasts so
furnished to it, and (iv) unless otherwise contemplated in this Agreement, it
shall have no claim against Seller with respect thereto.


                                  ARTICLE III
                     REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer represents, warrants and agrees as follows as of the date hereof and
as of the Closing Date:

     3.1      ORGANIZATION, DIRECTORS, OFFICERS, RELATED MATTERS.

     (a) Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the Province of Ontario, Canada. Parent is a
corporation duly organized, validly existing and in good standing under the laws
of the Province of Ontario, Canada. Each of Buyer and Parent has the necessary
corporate power and authority to execute, deliver and perform this Agreement and
any related agreements to which it is a party.

     3.2      LITIGATION.

     There are no Actions, judgments, orders, writs, decrees, injunctions,
proceedings or investigations pending or, to Buyer's knowledge, overtly
threatened in writing, against Buyer or Parent at law, in equity or otherwise,
in, before, or by, any court or governmental agency or authority which could
reasonably be expected to prohibit or to have a material adverse effect on
Buyer's or Parent's ability to perform its obligations under this Agreement or
any related agreements and consummate the transactions contemplated hereby or
thereby.

     3.3      CONSENTS AND APPROVALS.

     Except as set forth in SCHEDULE 3.3, the execution, delivery and
performance of this Agreement and any related agreements by Buyer and Parent,
will not require any consent, waiver, authorization or approval of, or the
making of any filing with or giving of notice to, any Person, except for any
consents waivers, authorizations or approvals which are not material to the
operation of the Transferred Business.
<PAGE>

                                      -17-

     3.4      AUTHORIZATION; NO CONFLICTS.

     The execution, delivery and performance of this Agreement and any related
agreements by Buyer and Parent have been duly and validly authorized by all
necessary corporate action on the part of Buyer and Parent. This Agreement and
any related agreements constitute the legal, valid and binding obligation of
Buyer and Parent, enforceable against such party in accordance with their
respective terms except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors' rights generally. Neither the
execution and delivery by Buyer or Parent of this Agreement or any related
agreements nor consummation of the transactions contemplated hereby or thereby
will violate any material provision of the organizational documents of Buyer or
Parent or any law, statute or regulation or any injunction, order or decree of
any government entity or court to which Buyer or Parent is subject except to the
extent, in each case, that such a violation would not prohibit or materially
impair Buyer's or Parent's ability to perform its obligations under this
Agreement.

     3.5      FINANCIAL CAPABILITY.

     Buyer has access to sufficient funds to purchase the Stock and repay in
full all amounts due under the Intercompany Loan, on the terms and conditions
contained in this Agreement and will have such funds on the Closing Date.

     3.6      COMPANY.

     Buyer represents, warrants and agrees that (unless otherwise made as of a
specific date) as of the date hereof and the Bunkatsu Day:

     (a) Company is a corporation duly organized and validly existing under the
laws of Japan and has all necessary corporate power and authority to own its
properties and assets and to carry on the Transferred Business;

     (b) The authorized capital stock of Company consists of 800 shares of
common stock, without par value, of which 200 shares are issued and outstanding,
all of which are duly authorized and validly issued and are fully paid and
nonassessable; all of such Equity Securities of Company are owned by Buyer free
and clear of any Encumbrance, except as contemplated in this Agreement there are
no outstanding Contracts or other rights to subscribe for or purchase, or
contracts or other obligations to issue or grant any rights to acquire, any
Equity Securities of Company, or to restructure or recapitalize Company and
there are no outstanding Contracts of Company to repurchase, redeem or otherwise
acquire any Equity Securities of Company. At the Bunkatsu Day, if the Kaisha
Bunkatsu becomes effective, Seller will acquire title to and complete ownership
of the Stock, free of any Encumbrance;

     (c) Whether or not in the ordinary course of business, there has not been,
occurred or arisen any declaration setting aside or payment of any dividend or
other distribution (whether in stock, property or any combination thereof) in
respect of any of the Equity Securities of Company;
<PAGE>

                                      -18-

     (d) Company does not have any liabilities of any type whether accrued,
absolute, contingent or otherwise, other than up to 10 million yen of
liabilities arising from or in connection with the actions contemplated to be
taken by Company hereunder and under the NEC Separation Agreement;

     (e) Company has complied in all material respects with the requirements of
all applicable laws, rules, regulations and orders of any governmental authority
having jurisdiction over Company. As of the Bunkatsu Day: (i) Company shall have
obtained all Permits listed in SCHEDULE 2.5(c); (ii) Company shall be in
material compliance with the terms and conditions of all such Permits; and (iii)
all such Permits shall be in full force and effect and no notice shall have been
received by Company relating to, and to Buyer's knowledge, no grounds exist
which would give rise to, termination, cancellation, withdrawal or amendment of
any such Permits; and

     (f) Prior to the Bunkatsu Day, Company shall not have entered into any
agreement other than the NEC Separation Agreement and Company's business shall
have been limited to performing those acts necessary to (i) obtain the Permits
listed in Schedule 2.5(c), and (ii) to perform its obligations under Section 1.1
hereof.

     Buyer agrees and acknowledges that Seller shall rely upon the
representations and warranties provided in this Section 3.6 where necessary to
support for representations and warranties it makes in Article II regarding the
Company which, by their terms, are dependent for their truth and accuracy on the
truth and accuracy of these representations and warranties.


                                   ARTICLE IV
                         COVENANTS OF SELLER AND BUYER

     4.1      ACCESS OF BUYER.

     (a) Until the Closing, Seller shall cause NEC Yamanashi and NEC Miyagi, and
from and after the Bunkatsu Day, Seller shall cause Company to, authorize and
permit Buyer and its representatives (which term shall be deemed to include its
independent accountants, environmental consultants, occupational health and
safety consultants and its counsel) to have reasonable access during normal
business hours, upon reasonable notice and in such manner as will not
unreasonably interfere with the conduct of their respective businesses, to all
of their respective properties (other than NEC Yamanashi's facilities in Otsuki,
Japan), books and records and all other information with respect to the
Transferred Business as Buyer may from time to time reasonably request.

     (b) In the event of the termination of this Agreement, Buyer shall promptly
deliver (without retaining any copies thereof) to Seller, or (at Buyer's option)
certify to Seller that it has destroyed, all documents, workpapers and other
material obtained by Buyer or on its behalf from Seller, Company, NEC Yamanashi
or NEC Miyagi, or from any of their respective advisors, agents, employees or
representatives as a result hereof or in connection with the matters
contemplated by this Agreement, and all documents, workpapers and other
materials prepared by Buyer or its advisors, agents, employees or
representatives in connection with the matters contemplated by this Agreement,
in each case whether so obtained or prepared before or after the execution
hereof. Buyer and Parent shall at all times prior to the Closing Date, and in
the event
<PAGE>

                                      -19-

of termination of this Agreement, cause any information so obtained or
prepared to be kept confidential and will not use, or permit the use of, such
documents, workpapers and other materials in its business or in any other manner
or for any other purpose except as contemplated hereby. All information provided
to, obtained by or prepared by Buyer or Parent and their respective advisors,
agents, employees or representatives shall be held by Buyer and Parent in
accordance with and subject to the terms of the Confidentiality Agreement dated
July 21, 2000, between Parent and NEC Corporation (the "Confidentiality
Agreement").

     4.2      ACCESS OF SELLER.

     (a) Until the Closing, Buyer and Parent shall permit, and until the
Bunkatsu Day cause Company to permit, Seller and its representatives (which term
shall be deemed to include its independent accountants and counsel) to have
reasonable access during normal business hours, upon reasonable notice and in
such manner as will not unreasonably interfere with the conduct of their
respective businesses, to all of their respective properties, as Seller may from
time to time reasonably request.

     (b) In the event of the termination of this Agreement, Seller shall
promptly deliver (without retaining any copies thereof) to Buyer, or (at Buyer's
option) certify to Buyer that it has destroyed, all documents, workpapers and
other material obtained by Seller or on its behalf from Buyer or Parent, or from
any of their respective advisors, agents, employees or representatives as a
result hereof or in connection with the matters contemplated by this Agreement,
and all documents, workpapers and other materials prepared by Seller or its
advisors, agents, employees or representatives in connection with the matters
contemplated by this Agreement, in each case whether so obtained or prepared
before or after the execution hereof. Seller shall at all times prior to the
Closing Date, and in the event of termination of this Agreement, cause any
information so obtained or prepared to be kept confidential and will not use, or
permit the use of, such documents, workpapers and other materials in its
business or in any other manner or for any other purpose except as contemplated
hereby.

     4.3      CONDUCT OF BUSINESS.

     Prior to the Closing and except as (i) otherwise expressly contemplated by
this Agreement, (ii) set forth on SCHEDULE 4.3, or (iii) consented to or
approved by Buyer, Seller covenants and agrees that Seller shall cause Company
(from and after the Bunkatsu Day), NEC Yamanashi and NEC Miyagi to operate their
respective businesses in the ordinary course consistent with past practices.

     4.4      EMPLOYEE MATTERS.

     (a) During the period commencing on the Bunkatsu Day and ending on the
Closing Date, Seller shall cause the Predecessor Companies, at no margin or
other additional cost to Company, to second the Affected Employees to Company.
Prior to the Closing Date, Seller shall use best efforts to obtain written
consent of each of the Affected Employees (two original copies, with one
delivered to Seller and the other delivered to Company) with respect to (i) the
transfer of employment as of the Closing Date from their respective Predecessor
Company to Company and (ii) the terms and conditions of their employment by
Company (the "New
<PAGE>

                                      -20-

Employment Conditions"). Buyer shall reasonably cooperate with
Seller in obtaining such consent from each of the Affected Employee. Seller
shall also use its best efforts to ensure that no Affected Employee will make an
objection under Article 4 of the Law Concerning Succession of Employment
Contracts upon Corporate Separation. The New Employment Conditions shall be
determined by Buyer with Seller's approval, each party acting reasonably prior
to not less than 15 days before the scheduled Closing Date; provided, however,
that (1) the New Employment Conditions for each Transferred Employee shall be
substantially similar in the aggregate to those applicable to such Transferred
Employees in effect on the day immediately preceding the Closing Date,
including, without limitation, those relating to compensation and benefits
(except with respect to Pension Plans provided to Transferred Employees and
health benefits provided by Predecessor Companies and NEC Corporation), and (2)
the terms of the New Employment Conditions shall comply with SCHEDULE 4.4(a). In
the aggregate, the benefits provided by Company under Pension Plans for the
Transferred Employees after Closing will be substantially similar to those
applicable to Transferred Employees in effect on the day immediately preceding
the Closing Date. Buyer agrees to comply with the terms of the New Employment
Conditions for each Transferred Employee on the terms set forth in Schedule
4.4(a). Seller shall take all necessary procedures to transfer the Transferred
Employees to Company on the Closing Date. Buyer shall cause Company not to
terminate the employment of any Transferred Employee on the Closing Date.
Notwithstanding the foregoing, the New Employment Conditions shall be sufficient
to comply with the terms of any applicable law, collective bargaining agreement
or similar labour agreement or arrangement, if any, applicable to any
Transferred Employees. Buyer shall continue the seniority (based on years of
service) of each of the Transferred Employees (as if such employees had been
employed by Company since their individual dates of hire by Seller or its
Affiliates) whose employment is continued by Company and while they remain
employed by Company for the purposes of retirement benefit, pension, vacation,
sick leave and other time off policies. Notwithstanding anything to the contrary
herein, subject however to Section 4.4(c) below, Buyer shall not be obligated to
continue to employ any Transferred Employee after the Closing Date.

     (b) Seller shall be responsible for all obligations and liabilities under
the Pension Plans and other employee benefits currently provided by NEC
Yamanashi and NEC Miyagi to their employees (any of which shall be referred to
as a "Benefit Plan") in respect of (i) each employee or former employee of
Company or of Seller or its Affiliates (including any beneficiary or dependent
thereof), if any, who is not a Transferred Employee and (ii) EPF. Seller shall
ensure that as of the Closing Date, EPF payments will be made in accordance with
terms and conditions applicable thereto with respect to the Transferred
Employees. The allocation of liability between and the respective obligations of
Seller and Buyer with respect to Pension Plans and the bonus payable to
Transferred Employees in June 2002 shall be as set out in Schedule 4.4(b).

     (c) Buyer agrees that for a period of five years after the Closing Date
Buyer shall consult with Seller prior to laying-off or otherwise terminating the
employment of any significant number of employees of Company.
<PAGE>

                                      -21-

    4.5      RETENTION OF BOOKS AND RECORDS.

     After the Closing Date, Buyer shall cause Company to retain all books,
records and other documents pertaining to the Transferred Business or the
Company in existence on the Closing Date and to make the same available after
the Closing Date for inspection and copying by Seller or its agents at Seller's
expense, upon reasonable request and upon reasonable notice, for a period of
three years after the Closing Date (or such longer period as may be required by
the Purchase and Supply Agreement). No such books, records or documents shall be
destroyed by Buyer or Company without first advising Seller in writing and
giving Seller a reasonable opportunity to obtain possession thereof.

     4.6      COOPERATION IN AUDITS.

     After the Closing, Buyer will cause Company to cooperate fully in an audit
by Seller's independent accountants of the financial statements of Company
through periods commencing before but ending on or prior to the Closing Date
Without limiting the foregoing, such cooperation shall include in providing
access to records and personnel and such access to the premises of Company as is
customary in an audit.

     4.7      REGISTRATIONS, FILINGS AND CONSENTS.

     Prior to the Closing, Seller and Buyer shall cooperate and use their
respective best efforts to make all registrations, filings and applications, to
give all notices and to obtain any governmental or other consents (including the
consent of unions to which employees of Company belong), transfers, approvals,
orders, qualifications and waivers necessary or desirable for the consummation
of the transactions contemplated hereby. In the event all such consents,
transfers, approvals, orders, qualifications or waivers are not obtained on or
prior to the Closing, to the extent permitted by applicable law, Seller, Buyer
and Parent shall take all reasonable action necessary in order to provide Buyer
and Company with the benefits of such consents, transfers, approvals, orders,
qualifications and waivers, and so long as Buyer and Company are provided such
benefits in all material respects, the conditions of Section 5.2(c) and 5.3(b)
shall be deemed satisfied.

     4.8      TAXES.

     Except as otherwise provided herein, Buyer shall be responsible for all
sales, use, gross receipts, registration, business and occupation, transfer,
stamp duty, securities transactions, real estate, and similar Taxes (excluding
income Taxes for greater certainty) and notarial fees assessed or payable in
connection with the transfer of the Stock the transfer of the Transferred Assets
from the Predecessor Companies to the Company, the issuance of stock by Company
contemplated hereby and other transactions contemplated hereby, regardless of
whether such taxes become due or payable on or after the Closing Date and shall
be responsible for interest, penalties and additions to Taxes related to such
Taxes; provided, however, that the Buyer and Seller shall be equally responsible
for, and pay in a timely manner for and on behalf of Company, any Real Property
Acquisition Tax (fudosan shutoku zei) and any Regulation Tax (toroku menkyo zei)
imposed on the transfer of real property in the Kaisha Bunkatsu.
<PAGE>

                                      -22-


     4.9      ENVIRONMENTAL INVESTIGATION

     (a) At its sole cost and expense, Buyer will cause an environmental
investigation (the "Investigation") to be conducted by a consultant suggested by
Buyer and satisfactory to Seller, acting reasonably (it being agreed by Seller
that Golder Associates Ltd. and/or any of its Affiliates and/or Taisei
Corporation are satisfactory)(the "Consultant") in, on, under and, to the extent
reasonably practicable, about each of the Yamanashi Property and the Miyagi
Property (the "Properties") with a view to discovering and recording the
environmental condition of the Properties and of other lands to the extent
affected by activities on or in connection with the Properties (including,
without limitation, offsite waste disposal) as well as any violations of or
non-compliance with Environmental Laws relating to either of the Properties or
operations at or connected with the Properties occurring at or before the time
of Closing. The Consultant will execute a confidentiality agreement with respect
to any information received or produced in connection with its engagement
pursuant to this Agreement. The Investigation will commence as soon as possible
with the intention that the Investigation be completed on or before March 15,
2002. The Investigation will include the completion of a Phase I Environmental
Site Assessment process complying with ASTM Standard E1527-97, enhanced to
address asbestos and asbestos containing materials and wetlands issues, with
such changes as are necessary to accommodate the fact that the Properties are
located where they are in Japan, and a Phase II Environmental Site Assessment
designed to address, confirm and delineate all potential environmental
conditions identified in the said Phase I Environmental Site Assessment The
reports to be produced recording matters relevant to the Phase I and Phase II
Environmental Site Assessments (the "Reports") shall, among other things,
determine and set out the location, extent and concentration of each Hazardous
Material on or from each of the Properties. Each of Seller and Company will make
available to the Consultant all environmental information in its possession or
under its control (or which with reasonable efforts could be in the possession
or under the control) of the Seller and any of its Affiliates. Seller and
Seller's Affiliates will co-operate reasonably with Buyer in connection with the
conduct of the Investigation, including, without limitation, making personnel
reasonably available. The information set forth in the Reports will constitute
the Baseline Condition for the Properties. Buyer will provide a copy of the
Reports to the Seller promptly upon them becoming available. Each of Seller and
Buyer agree to keep the Reports confidential except that each party will be
entitled to provide copies of the Reports to its Affiliates and advisors subject
to their agreement to keep the Reports confidential. In addition, Buyer shall
have the right to deliver the Report to those investment dealers, lenders and
others providing financial or other services to or in connection with the Buyer
or any of its Affiliates and, on a basis reasonably preserving confidentiality,
to those included in acquiring or occupying all or part of either of the
Properties and either the Buyer or the Seller may use or provide the Reports as
is required by law, by securities regulatory authorities and exchanges or in
connection with any dispute relating hereto. The confidentiality provisions of
this paragraph shall survive the Closing or any termination of this Agreement.
Seller will be liable for all action required by Environmental Law to remediate
or otherwise prudently deal with any environmental conditions, violations of or
non-compliance with Environmental Law connected to either of the Properties
identified in the said Reports and will retain responsibility for those
conditions, violations and other non-compliances included or referred to in the
Baseline Condition to the extent required by Environmental Law. Seller shall
indemnify, protect and defend Buyer Indemnified Parties against and save and
hold Buyer Indemnified Parties harmless from all Losses incurred or suffered by
Buyer Indemnified Parties as a result of, based upon, in connection with or
arising
<PAGE>

                                      -23-

from (i) the remediation of or prudent dealing with all such environmental
conditions, violations or non-compliances or (ii) Seller's failure to comply
with its obligations under this Section 4.9(a).

     (b) Seller shall and shall cause its employees and agents, to and shall,
where appropriate, cause the Company and the Company's employees and agents to,
authorize and permit Buyer and its representatives (including environmental
consultants, occupational health and safety consultants and its counsel) to have
reasonable access during normal business hours, upon reasonable notice and in
such manner as will not unreasonably interfere with the conduct of the business
of Seller to all of their respective properties and shall provide all
authorizations and other documents reasonably requested by Buyer in connection
with the Investigation. Seller shall have the right to have a representative of
Seller accompany Buyer or its representatives (including environmental
consultants, occupational health and safety consultants and its counsel) while
they are on the Properties. In connection with the Investigation, Buyer shall
provide Seller with a proposed work plan for any proposed physical testing or
drilling on or beneath the Properties and Buyer will use reasonable efforts to
accommodate any reasonable concerns or objections of Seller. Buyer will
indemnify, defend and hold Seller and the Predecessor Companies harmless for,
from and against any and all material claims, damages, costs, liabilities and
losses (including mechanics' liens) solely to the extent caused by or arising
out of the conduct of the Investigation or any entry in connection therewith as
authorized under this Section 4.9 by Buyer or its representatives (including
environmental consultants, occupational health and safety consultants and its
counsel), and if this Agreement is terminated, Buyer will restore and repair any
material damages caused by the Investigation and said entry. The foregoing
indemnification shall survive the Closing or any termination of this Agreement.

     (c) The Seller and Buyer agree that Buyer shall be entitled to prove the
existence of any environmental conditions of or relating to the Properties or of
other lands affected by activities on or in connection with the Properties
(including, without limitation, offsite waste disposal) as well as any
violations of or non-compliance with Environmental Laws relating to either of
the Properties or operations at or connected with the Properties occurring at or
before the time of Closing not otherwise in the Baseline Condition and the
Seller shall be liable for all actions required by Environmental Law to
remediate or otherwise prudently deal with any such environmental conditions,
violations or non-compliances. Seller shall indemnify, protect and defend Buyer
Indemnified Parties against and save and hold Buyer Indemnified Parties harmless
from (i) all Losses incurred or suffered as a result of, based upon, in
connection with or arising from any or all such environmental conditions,
violations or non-compliances to the extent required by Environmental Laws
except to the extent such environmental conditions, violations or
non-compliances result from the acts of Buyer, its Affiliates, or its or their
representatives, employees or agents, including, without limitation, the
Consultant or (ii) Seller's failure to comply with its obligations under this
Section 4.9(c).

     (d) Seller's obligation under Sections 4.9(a) and (c) shall be governed by
the following:

          (i) Buyer shall inform Seller as soon as practicable upon receipt of
any Special Governmental Request, and provide to Seller the right to participate
in all material meetings and hearings, and to receive copies of material
communications with the applicable

<PAGE>

                                      -24-

government, court or governmental authority in connection with the
investigation, fact-finding, formulation, determination and remediation
(including without limitation the type, manner and scope of such remediation) of
any Special Governmental Request or proposed Special Governmental Request.

          (ii) Seller shall indemnify Buyer Indemnified Parties for the cost to
remediate the condition on the Properties giving rise to the alleged Losses as
required by applicable Environmental Laws. Buyer shall select the environmental
consultant or agent (subject to Seller's consent not to be unreasonably
withheld) used for any environmental assessment and remediation work, and Seller
shall have the right, acting reasonably in good faith and on a timely basis (so
as to avoid the possibility of increased liability), to approve the remediation
plan required (including without limitation requiring that the work be completed
in the most cost-effective manner, provided such plan complies with applicable
Environmental Laws), and to monitor the environmental assessment and remediation
work.

          (iii) In the event that any remediation of or prudent dealing with
environmental conditions, violations or non-compliances for which the Seller is
liable under Section 4.9(a) or (c) is not completed prior to Closing, Seller
shall have the right of access to the Properties after the Closing on reasonable
notice and at reasonable times for the purpose of confirming that the subject
environmental conditions, non-compliances or violations were existing on or
before the Closing (where such conditions, violations or non-compliances are not
reflected with the Baseline Condition, it being a agreed that any disagreement
between the parties on that issue will be dealt with in accordance with Section
8.14 hereof) and monitoring any remediation and ancillary work under this
Section 4.9. In such circumstances, representatives of Seller would, if required
by Company, be accompanied by a Company representative and Seller will be
subject to other reasonable conditions in connection with such access relating
to matters such as confidentiality, indemnity and insurance.

          (iv) Buyer and Company shall as soon as reasonably practicable notify
Seller of any circumstances that may give rise to Seller's obligation to
indemnify or remediate in this Section 4.9.

     (e) In addition to the foregoing, Seller shall have the right, but not the
obligation, to elect in writing to remediate or undertake preventative action
("Anticipatory Remediation") with respect to any environmental conditions that
Seller determines may give rise to Seller's obligation to indemnify or remediate
under this Section 4.9 even if such environmental conditions do not then
constitute a violation or non-compliance with Environmental Laws or are not
otherwise required to be remediated or dealt with under Environmental Laws, such
election to be made by notice to Buyer specifying the environmental conditions
to be subjected to Anticipatory Remediation (an "AR Notice"). If Seller so
elects to undertake such Anticipatory Remediation, Seller and Buyer (each acting
reasonably) shall jointly select the environmental consultant and contractors to
be used in connection therewith and create a plan for such Anticipatory
Remediation. In connection with such Anticipatory Remediation work, Seller shall
have the right to access the Properties after the Closing in accordance with
Section 4.9(d) (iii) above except as set out below. Under no circumstances shall
Seller's right to undertake Anticipatory Remediation be construed to expand
Seller's obligations under this Section 4.9, to impose upon Seller the duty to
undertake Anticipatory Remediation, or give rise to liability on
<PAGE>

                                      -25-

the part of Seller for failing, or electing not, to undertake Anticipatory
Remediation; provided that if Seller delivers an AR Notice, Seller shall be
obligated to proceed with the Anticipatory Remediation to completion unless the
Buyer agrees otherwise, such agreement not to be unreasonably withheld.

     (f) Seller's obligations to Buyer Indemnified Parties hereunder shall not
be assigned by Buyer Indemnified Parties (except to other wholly-owned
subsidiaries of Parent and their respective Affiliates, directors, officers,
employees, agents and assigns) and no person other than Buyer, Buyer Indemnified
Parties or their respective permitted assigns shall be entitled to make any
claims against Seller under this Section 4.9.

     4.10     CHANGES IN PRO FORMA PROJECTED FINANCIAL STATEMENTS.

     Seller will notify Buyer immediately of any change that would, in Seller's
judgement, exercised in good faith, require a material change to be made to the
PRO FORMA Projected Financial Statements applying the principles used in the
preparation of the PRO FORMA Projected Financial Statements and will immediately
prepare and, forthwith upon their preparation, provide a copy of such revised
Pro Forma Projected Financial Statements to Buyer. In any event, Seller will, no
later than 10 days before the Closing Date, deliver to Buyer updated Pro Forma
Projected Financial Statements dated not more than 16 days before the Closing
Date.

     4.11     FUTURE BUSINESS.

     On or before the 10th day preceding the Closing Date, Buyer shall deliver
to Seller its good faith estimate of the additional third party revenue that
Buyer believes, based on good faith assumptions which are reasonable in Buyer's
opinion, can be introduced within a specified time frame after the Closing into
the manufacturing facilities to be owned by the Company as a result of the NEC
Separation Agreement.


                                    ARTICLE V
                             CONDITIONS OF PURCHASE

     5.1      GENERAL CONDITIONS.

     The obligations of the parties to effect the Closing shall be subject to
the following conditions unless waived in writing by both parties:

     (a) NO ORDERS; LEGAL PROCEEDINGS. No Action shall have been instituted and
remain pending or threatened on the Closing Date before any court or
governmental entity pertaining to the acquisition by Buyer of the Stock or the
repayment of the Intercompany Loan, or the result of which could prevent or make
illegal the consummation of such acquisition or repayment.

     (b) PHASE II ENVIRONMENTAL SITE ASSESSMENT. The Reports with respect to the
Properties  contemplated  in  Section  4.9(a)  shall  have  been  completed  and
delivered to Buyer and Seller.
<PAGE>

                                      -26-


     5.2      CONDITIONS TO OBLIGATIONS OF BUYER.

     The obligations of Buyer to effect the Closing shall be subject to the
following conditions except to the extent waived in writing by Buyer:

     (a) REPRESENTATIONS AND WARRANTIES AND COVENANTS OF SELLER.

          (i) Each of the representations and warranties of Seller contained in
this Agreement (A) which are qualified by materiality shall be true and (B)
which are not qualified by materiality shall be true in all material respects,
in each case when made and as of the Closing Date, with the same effect as
though such representations and warranties had been made on and as of the
Closing Date (except representations and warranties that are made as of a
specific date need be true or true in all material respects, as the case may be,
only as of such date); and

          (ii) each of the covenants and agreements of Seller and the
Predecessor Companies in this Agreement and the Schedules hereto to be performed
on or prior to the Closing Date (A) which are qualified by materiality, shall
have been duly performed and (B) which are not qualified by materiality, shall
have been duly performed in all material respects.

     (b) CORPORATE SEPARATION (KAISHA BUNKATSU) PROCEEDINGS. Seller shall have
taken all actions required to be taken by it to effect the Kaisha Bunkatsu in
accordance with the Corporate Separation Procedure of the Japanese Commercial
Code and the procedures set forth in the NEC Separation Agreement. The transfer
of the Transferred Business shall be properly registered (bunkatsu toki) with
the Legal Affairs Bureau (homukyoku).

     (c) CONSENTS. Subject to Section 4.7, all required consents, waivers,
authorizations, and approvals of third parties disclosed on Schedule 2.6 shall
have been obtained or deemed obtained or no longer required pursuant to the
Corporate Separation Procedure of the Japanese Commercial Code.

     (d) DELIVERIES. Seller and Company shall have executed and delivered to
Buyer (i) the Purchase and Supply Agreement, (ii) the Shared Services Agreement,
(iii) the Intellectual Property Agreement, (iv) all other related agreements
required to give effect to this transaction, (v) certified copies of all
documents evidencing the due incorporation, organization and authority of the
Seller, the Predecessor Companies and the Company to enter into this Agreement,
the agreements referred to above and all other agreements, documents and
instruments related thereto and to perform their respective obligations
thereunder in accordance with the terms thereof, including, without limitation,
certified copies of articles of incorporation, authorizing resolutions and
certificates of incumbency of the Seller, the Predecessor Companies and the
Company, (vi) copies of all required consents, registrations, approvals and
waivers obtained in connection with the transfer by the Predecessor Companies of
the Transferred Business to the Company and the completion by the Seller and the
Company of the transaction of purchase and sale contemplated hereby (including
without limitation the consents of all Transferred Employees provided in
accordance with Section 4.4(a)), (vii) if requested by Buyer in writing prior to
Closing, the resignations of the current directors of the Company; and (viii) a
legal opinion of counsel to the Seller and the Company substantially in the form
of Exhibit E annexed hereto.
<PAGE>

                                      -27-

     (e) NO MATERIAL CHANGE. There has not been any material adverse change in
the condition (financial or otherwise), assets, liabilities or business of the
Transferred Business; provided that general economic changes and/or changes
affecting generally an industry in which Company operates shall not be deemed to
result in a material adverse change for purposes hereof unless any such change
or changes disproportionately affect the Company or the Transferred Business.

     (f) EMPLOYEE CONSENT. Seller shall have obtained the consent referred to in
Section 4.4(a) from a sufficient number (determined by Seller and Buyer acting
reasonably and in good faith) of the Affected Employees who are listed in
Schedule 2.12(c) and hold a position of manager (kacho) or higher.

     5.3      CONDITIONS TO OBLIGATIONS OF SELLER.

     The obligations of Seller to effect the Closing shall be subject to the
following conditions, except to the extent waived in writing by Seller:

     (a) REPRESENTATIONS AND WARRANTIES AND COVENANTS OF BUYER.

          (i) Each of the representations and warranties of Buyer contained in
this Agreement (A) which are qualified by materiality, shall be true and (B)
which are not qualified by materiality, shall be true in all material respects
when made and as of the Closing Date, with the same effect as though such
representations and warranties had been made on and as of the Closing Date
(except representations and warranties that are made as of a specific date need
be true or true in all material respects, as the case may be, only as of such
date);

          (ii) Each of the covenants and agreements of Buyer in this Agreement
and the Schedules hereto to be performed on or prior to the Closing Date (A)
which are qualified by materiality, shall have been duly performed and (B) which
are not qualified by materiality, shall have been duly performed in all material
respects.

     (b) CONSENTS. Subject to Section 4.7, any required consents, waivers,
authorizations, and approvals of third parties disclosed on Schedule 2.6 and
Schedule 3.3 and shall have been obtained or deemed obtained or no longer
required pursuant to the Corporate Separation Procedure of the Japanese
Commercial Code; and

     (c) DELIVERIES. Buyer, the Parent and Celestica AG (as applicable) shall
have executed and delivered to Seller (i) the Purchase and Supply Agreement,
(ii) the Shared Services Agreement, (iii) Intellectual Property Agreement, (iv)
all other related agreements required to give effect to this transaction, (v)
certified copies of all documents evidencing the due incorporation, organization
and authority of the Buyer and the Parent to enter into this Agreement, the
agreements referred to above and all other agreements, documents and instruments
related thereto and to perform their respective obligations thereunder in
accordance with the terms thereof, including, without limitation, certified
copies of articles of incorporation, by-laws, authorizing resolutions and
certificates of incumbency of the Buyer and the Parent, (vi) copies of all
required consents, registrations, approvals and waivers obtained in connection
with the completion by the Buyer of the transaction of purchase and sale
contemplated hereby and
<PAGE>

                                      -28-

(vii) a legal opinion of counsel to the Buyer and Parent substantially in the
form of Exhibit E annexed hereto.

     (d) CORPORATE SEPARATION (KAISHA BUNKATSU) PROCEDURE. Buyer shall have
taken all action required to be taken by it to effect the Kaisha Bunkatsu in
accordance with the Corporate Procedure of the Japanese Commercial Code and the
procedures set forth in the NEC Separation Agreement. Company shall have issued
shares of its capital stock in accordance with Section 1.1(e) hereof.


                                   ARTICLE VI
                           TERMINATION OF OBLIGATIONS

     6.1      TERMINATION OF AGREEMENT.

     Anything herein to the contrary notwithstanding, this Agreement and the
transactions contemplated by this Agreement shall terminate if the Closing does
not occur on or before the close of business on September 30, 2002 unless
extended by mutual consent in writing of Buyer and Seller and otherwise may be
terminated at any time before the Closing as follows and in no other manner:

     (a) MUTUAL CONSENT. By mutual consent in writing of Buyer and Seller.

     (b) CONDITIONS TO BUYER'S PERFORMANCE NOT MET. By Buyer by written notice
to Seller if any event occurs or condition exists which would render impossible
the satisfaction of one or more conditions to the obligations of Buyer to
consummate the transactions contemplated by this Agreement as set forth in
Section 5.1 or 5.2.

     (c) CONDITIONS TO SELLER'S PERFORMANCE NOT MET. By Seller by written notice
to Buyer if any event occurs or condition exists which would render impossible
the satisfaction of one or more conditions to the obligation of Seller to
consummate the transactions contemplated by this Agreement as set forth in
Section 5.1 or 5.3.

     (d) MATERIAL BREACH. By Buyer or Seller if there has been a material
misrepresentation or other material breach by Buyer, in the case of termination
by Seller, or by Seller, in the case of termination by Buyer, in its
representations, warranties, and covenants set forth herein; PROVIDED, HOWEVER,
that if such breach is susceptible to cure, the breaching party shall have ten
business days after receipt of notice from the other party of its intention to
terminate this Agreement if such breach continues in which to cure such breach.

     6.2      EFFECT OF TERMINATION.

     If this Agreement shall be terminated pursuant to Section 6.1, except as
may otherwise be agreed in writing by the parties, all further obligations of
the parties under this Agreement shall terminate without further liability of
any party to another; provided that the obligations of the parties contained in
Section 1.1(h), Section 4.1(b), Section 4.2(b), the confidentiality provisions
in Section 4.9(a)(Confidentiality), this Section 6.2, and Section 8.12
(Expenses) shall survive any such termination.
<PAGE>

                                      -29-


                                  ARTICLE VII
                                 INDEMNIFICATION

     7.1      OBLIGATIONS OF SELLER.

     Subject to Section 7.3 and 7.6, effective as of the Closing, Seller agrees
to indemnify and hold harmless Buyer, Parent, Company and their respective
Affiliates, directors, officers, employees, agents and assigns (each, a "Buyer
Indemnified Party") from and against any and all losses, liabilities, claims,
damages, judgements, costs and expenses (including reasonable attorney's fees)
actually incurred or suffered (collectively, "Losses") as a result of, or based
upon or arising from:

          (i) the breach or inaccuracy of any of the representations and
warranties made by Seller in Article 2 of this Agreement;

          (ii) any breach of any of the covenants made by Seller in this
Agreement; and

          (iii) liabilities arising out of or in connection with any business
carried on or engaged in by Seller or its Affiliates at any time (whether on,
prior to or after the Closing Date) other than the Transferred Business;

          (iv) liabilities arising out of or in connection with any claims based
on defects in the manufacturing or design of products by Seller or any of its
Affiliates prior to the Closing Date;

provided that Seller shall not be required to indemnify or hold harmless
any Buyer Indemnified Party for any such Losses to the extent the Purchase
Price has been adjusted pursuant to Section 1.4 in connection therewith.

     7.2      INDEMNIFICATION OBLIGATIONS OF BUYER.

     For a period commencing as of the Closing Date and (x) ending upon the
expiration of the period specified in Section 7.3 with respect to 7.2(i) and
Section 7.2(ii) and (y) continuing indefinitely with respect to Section
7.2(iii), Buyer shall indemnify Seller, its Affiliates and their respective
directors, officers, employees, agents and assigns from and against any Losses
as a result of, or based upon or arising from:

          (i) the breach or inaccuracy of any of the representations and
warranties made by Buyer in Article 3 of this Agreement;

          (ii) any breach of any of the covenants made by Buyer in this
Agreement; and

          (iii) the ownership of Company (including without limitation the
operation of the Transferred Business and the payment of liabilities of the
Transferred Business assumed by Company and in respect of which Seller is not
required to indemnify Buyer Indemnified
<PAGE>

                                      -30-


                                            CONFIDENTIAL MATERIALS OMITTED AND
                                          FILED SEPARATELY WITH THE SECURITIES
                                                      AND EXCHANGE COMMISSION.
                                                   ASTERISKS DENOTE OMISSIONS.

Parties pursuant hereto other than by reason of Sections 7.3 or 7.6) from and
after the Closing Date.

     7.3      SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND ENVIRONMENTAL
              INDEMNITY; KNOWLEDGE OF BREACH.

     (a) Notwithstanding any otherwise applicable statute of limitations, the
representations and warranties included in Articles 2 and 3 shall survive the
Closing for a period of **** after the Closing Date except that (i) the
representations and warranties contained in Sections **** shall survive the
Closing and shall remain in full force and effect ****, (ii) the
representations and warranties contained in Section **** shall survive until
**** set forth in the applicable **** or until the **** within the period of
the relevant **** and (iii) the representations and warranties contained in
Sections **** and *** shall survive until the **** of the Closing Date. In
addition, the indemnity contained in Sections **** shall survive the Closing
only until the **** of the Closing Date. If a claim or notice is given under
Article 7 with respect to any representation or warranty or with respect to
the indemnity in Section **** prior to the applicable expiration date, such
representation or warranty and/or indemnity shall continue ****.

     (b) No party hereto shall be deemed to have breached any representation,
warranty, or covenant if (i) such party shall have expressly notified the other
party hereto in writing, of the particulars of the breach of, or, such
representation, warranty or covenant, or such breach is expressly referred to in
any Schedules hereto and (ii) such other party has permitted the Closing to
occur, and, for purposes of this Agreement, is thereby deemed to have waived
such breach or inaccuracy; provided, however, that a disclosure pursuant to this
Section 7.3(b) shall not prejudice the rights of the parties pursuant to Article
6 hereof not to consummate the transactions contemplated by this Agreement.

     7.4      PROCEDURES

     For purposes of this Section 7.4, any party with an indemnification
obligation under this Article 7 or Section 4.9 shall be referred to herein as an
"Indemnifying Party" and any party entitled to indemnification under this
Article 7 shall be referred to as an "Indemnified Party". All claims for
indemnification by any Indemnified Party hereunder shall be asserted and
resolved as set forth in this Section 7.4. In the event that any written claim
or demand for which an Indemnifying Party would be liable to any Indemnified
Party hereunder is asserted against or sought to be collected from any
Indemnified Party by a third party, such Indemnified Party shall promptly, but
in no event more than 15 days following such Indemnified Party's receipt of such
claim or demand, notify the Indemnifying Party of such claim or demand and the
amount or the estimated amount thereof to the extent then feasible (which
estimate shall not be conclusive of the final amount of such claim and demand)
(the "Claim Notice"). The Indemnifying Party shall have 30 days from the
personal delivery or receipt of the Claim Notice (the "Notice Period") to
<PAGE>

                                      -31-

notify the Indemnified Party (a) whether or not the Indemnifying Party
disputes the liability of the Indemnifying Party to the Indemnified Party
hereunder with respect to such claim or demand and (b) whether or not it desires
to defend the Indemnified Party against such claim or demand. All costs and
expenses incurred by the Indemnifying Party in defending such claim or demand
shall be a liability of, and shall be paid by, the Indemnifying Party, subject
to the limitations set forth in Section 7.6 hereof. In the event that the
Indemnifying Party notifies the Indemnified Party within the Notice Period that
it desires to defend the Indemnified Party against such claim or demand and
except as hereinafter provided, the Indemnifying Party shall have the right to
defend the Indemnified Party (i) by appropriate proceedings and (ii) use or
retain counsel in connection with such defense that is reasonably acceptable to
the Indemnified Party. The Indemnified Party shall make available to the
Indemnifying Party all information reasonably available to such Indemnified
Party relating to such claim or demand. In addition, the Indemnified Party and
the Indemnifying Party shall render to each other such assistance as may
reasonably be requested in order to ensure the proper and adequate defense of
any such claim or demand, or to prosecute claims against third parties for
contribution or on other theories of recovery related to such claim or demand.
The party in charge of the defense shall keep the other party fully apprised at
all times as to the status of the defense or any settlement negotiations with
respect thereto. If any Indemnified Party desires to participate in, but not
control, any such defense or settlement it may do so at its sole cost and
expense. In the event that the Indemnifying Party does not elect to defend the
claim, the Indemnified Party shall not settle a claim or demand without the
consent of the Indemnifying Party (which consent will not be unreasonably
withheld). The Indemnifying Party shall not, without the prior written consent
of the Indemnified Party, settle, compromise or offer to settle or compromise
any such claim or demand (i) on a basis which would result in the imposition of
a consent order, injunction or decree which would restrict the future activity
or conduct of the Indemnified Party or any subsidiary or Affiliate thereof
without the written consent of the Indemnified Party (which consent will not be
unreasonably withheld) and (ii) without obtaining (a) a release with respect to
such claim or demand and (b) the dismissal with prejudice of any litigation or
other proceeding with respect to such claim or demand, in each case for the
benefit of and in form and substance reasonably satisfactory to the Indemnified
Party. If the Indemnifying Party elects not to defend the Indemnified Party
against such claim or demand, whether by not giving the Indemnified Party timely
notice as provided above or otherwise, then the amount of any such claim or
demand, or, if the same be contested by the Indemnified Party, then that portion
thereof as to which such defense is unsuccessful (and the reasonable costs and
expenses pertaining to such defense) shall be the liability of the Indemnifying
Party hereunder, subject to the limitations set forth in Section 7.6 hereof. To
the extent the Indemnifying Party shall control or participate in the defense or
settlement of any third party claim or demand, the Indemnified Party will give
to the Indemnifying Party and its counsel access to, during normal business
hours, the relevant business records and other documents, and shall permit them
to consult with the employees and counsel of the Indemnified Party. The
Indemnified Party shall use its commercially reasonable best efforts in the
defense of all such claims.

     7.5      ADJUSTMENTS TO LOSSES.

     The amount of any Loss entitling a party to indemnification under this
Article 7 shall be reduced by (i) the amount of any insurance proceeds actually
recovered by the Indemnified Party for such Loss, net of all costs and expenses
incurred in collecting such
<PAGE>

                                      -32-


                                            CONFIDENTIAL MATERIALS OMITTED AND
                                          FILED SEPARATELY WITH THE SECURITIES
                                                      AND EXCHANGE COMMISSION.
                                                   ASTERISKS DENOTE OMISSIONS.

insurance proceeds (including, without limitation, reasonable attorneys'
fees) and (ii) the net tax benefit realized by the Indemnified Party in
connection with the Loss as a result of any reduction in taxable income
resulting from the deduction of the Loss.

     7.6      LIMITATION ON INDEMNIFICATION BY SELLER.

     In no event shall Seller be liable to any Buyer Indemnified Party for
any indemnity claim under Section 7.1(i) or (ii) (except for claims made for
breaches of the representations and warranties in Sections **** or for
breaches of the covenants and indemnities in Sections **** and **** which in
each case shall not be subject to any threshold) unless and until all such
claims for which indemnification is recoverable hereunder by all Buyer
Indemnified Parties exceed in aggregate **** of the **** (the "Threshold");
at which time Seller shall be liable for all Losses which are the subject of
such claims, including those within the Threshold.

     Notwithstanding anything to the contrary herein, in no event shall
Seller be liable to Buyer Indemnified Parties for any claims made under
Section 7.1(i) or (ii) (except for claims made for breach of the
representations and warranties in Sections **** and the covenants in Sections
**** in an aggregate amount that exceeds **** of the ****. Any increase or
decrease to the **** pursuant to Section **** shall be deemed to have no
effect on the previous sentence.

     7.7      LIMITATION ON INDEMNIFICATION BY BUYER

     In no event shall Buyer be liable to Seller Indemnified Parties for any
indemnity claim under Section 7.2(i) or (ii) (except for claims under
Sections **** unless and until all such claims for which damage are
recoverable hereunder by Seller Indemnified Parties exceed the Threshold at
which time Buyer shall be liable for all Losses which are the subject of such
claims, including those within the Threshold. Notwithstanding anything to the
contrary herein, in no event shall Buyer be liable to Seller Indemnified
Parties for any claims made under Section 7.2(i) or (ii) (except for claims
under Sections **** in an aggregate amount that exceeds **** of the ****.

     7.8      EXCLUSIVE REMEDY.

     This Article 7 and Sections 4.9(a), (b) and (c) shall be the exclusive
remedies of the parties hereto for damages under this Agreement and shall be
deemed to preclude the exercise of any other rights and the pursuit of other
remedies (whether in contract, tort or otherwise) in damages for the breach (or
alleged breach) of any representation, warranty, covenant or agreement contained
herein or made pursuant hereto (excluding the Ancillary Agreements); provided,
however, that these exclusive remedies for damages will not be construed to
preclude a party from bringing an action for specific performance or other
equitable remedy to require the other parties to perform its or their
obligations under this Agreement.
<PAGE>

                                      -33-


     7.9      TREATMENT OF PAYMENTS.

     All payments made pursuant to this Article 7 and Sections 4.9(a) and (c)
shall be treated as adjustments to the purchase price for the Stock.
Notwithstanding anything in this Agreement to the contrary, neither Buyer nor
Parent shall be indemnified or reimbursed for any tax consequences arising from
the receipt or accrual of an indemnity payment hereunder, including, without
limitation, any such consequences arising from adjustments to the basis of any
asset resulting from an adjustment to the Purchase Price, or any additional
Taxes resulting from any such basis adjustment.


                                  ARTICLE VIII
                                  MISCELLANEOUS

     8.1      AMENDMENTS; WAIVERS.

     This Agreement and any schedule or exhibit attached hereto may be amended
only by agreement in writing of all parties. No waiver of any provision nor
consent to any exception to the terms of this Agreement shall be effective
unless in writing and signed by the party to be bound and then only to the
specific purpose, extent and instance so provided.

     8.2      SCHEDULES; EXHIBITS; INTEGRATION.

     Each schedule and exhibit delivered pursuant to the terms of this Agreement
shall be in writing and shall constitute a part of this Agreement, although
schedules need not be attached to each copy of this Agreement. This Agreement,
together with such schedules and exhibits, and the Confidentiality Agreement
constitutes the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements and understandings of the
parties in connection therewith. The inclusion of any matter in any schedule to
this Agreement shall be deemed to be an inclusion for all purposes of this
Agreement, including each representation to which it may relate, but shall
expressly not be deemed to constitute an admission by Seller, or otherwise
imply, that any such matter is material for the purposes of this Agreement.

     8.3      BEST EFFORTS; FURTHER ASSURANCES.

     (a) COMMITMENT TO BEST EFFORTS. Subject to the rights of Seller or Buyer,
as the case may be, under Section 6.1, (i) each party hereto shall use its best
efforts to cause all conditions to its obligations hereunder to be timely
satisfied and to perform and fulfil all obligations on its part to be performed
and fulfilled under this Agreement, to the end that the transactions
contemplated by this Agreement shall be effected substantially in accordance
with its terms as soon as reasonably practicable, (ii) each party shall
cooperate with the other party in such actions and in securing all requisite
consents, and (iii) each party shall promptly execute and deliver such further
documents and take such other actions as may be necessary or appropriate to
consummate or implement the transactions contemplated hereby or to evidence such
events or matters.
<PAGE>

                                      -34-


     (b) LIMITATION. As used in this Agreement, the term "best efforts" shall
not mean efforts which require the performing party to do any act that is
commercially unreasonable under the circumstances, to make any capital
contribution or to expend any funds other than in payment of reasonable
out-of-pocket expenses incurred in satisfying obligations hereunder, including
but not limited to the fees, expenses and disbursements of its accountants,
actuaries, counsel and other professional advisors.

     (c) DISCUSSION WITH THIRD PARTIES. Notwithstanding anything to the contrary
contained herein, Seller may discuss and/or negotiate the sale of all or a
portion of the Stock of Company, the equity of NEC Yamanashi or NEC Miyagi, or
the Transferred Business, on terms similar or different to those contained in
this Agreement with third parties at any time after Seller has lawfully
terminated this Agreement pursuant to Section 6.1(c) or Section 6.1(d).

     8.4      GOVERNING LAW.

     This Agreement shall be governed by, and construed in accordance with, the
laws of Japan, without regard to conflicts of law principles.

     8.5      NO ASSIGNMENT.

     Neither this Agreement nor any rights or obligations under it may be
assigned by either party, by operation of law or otherwise. Notwithstanding the
foregoing, Buyer may assign, delegate or otherwise transfer any or all of its
rights or obligations under this Agreement and each of the related agreements to
any other directly or indirectly wholly owned subsidiary of Celestica Inc.,
provided that (i) Buyer gives to Seller at least five (5) days' prior written
notice thereof, including details of such transfer and financial information of
the transferee; (ii) prior to such transfer, the transferee expressly assumes in
writing all obligations and liabilities of Buyer hereunder and under each of the
related agreements pursuant to an assumption document that is in form and
substance reasonably satisfactory to Seller; (iii) prior to such transfer, Buyer
executes and delivers to Seller an unconditional guarantee of all of the
transferee's obligations under this Agreement and each of the related agreements
in form and substance reasonably satisfactory to Seller; and (iv) such transfer
would not have adverse Tax consequences for Seller or its Affiliates. No such
transfer shall release Buyer from liability for any breach by any transferee.

     8.6      HEADINGS.

     The descriptive headings of the Articles, Sections and subsections of this
Agreement are for convenience only and do not constitute a part of this
Agreement.

     8.7      COUNTERPARTS.

     This Agreement and any amendments hereto may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be considered one and the same instrument.
<PAGE>

                                      -35-

     8.8      PUBLIC DISCLOSURE.

     Each of the parties to this Agreement hereby agrees with the other parties
hereto that, except as may be required to comply with the requirements of
applicable law, no press release or similar public announcement or communication
will be made or caused to be made concerning the execution or performance of
this Agreement unless specifically approved in advance by all parties hereto.

     8.9      NO CONSEQUENTIAL DAMAGES.

     Notwithstanding anything to the contrary elsewhere in this Agreement, no
party (or its Affiliates) shall, in any event, be liable to the other party (or
any other Person) for any punitive, indirect or consequential damages,
including, but not limited to, lost profits, loss of revenue, cost of capital or
loss of business reputation or opportunity relating to the breach or alleged
breach of this Agreement.

     8.10     PARTIES IN INTEREST.

     This Agreement shall be binding upon and inure to the benefit of each
party, and nothing in this Agreement, express or implied, is intended to confer
upon any other Person any rights or remedies of any nature whatsoever under or
by reason of this Agreement except for Sections 7.l and 7.2 (which are intended
to be for the benefit of the Persons provided for therein and may be enforced by
such Persons). Nothing in this Agreement is intended to relieve or discharge the
obligation of any third person to any party to this Agreement.

     8.11     NOTICES.

     Any notice or other communication hereunder must be given in writing and
(a) delivered in person, (b) transmitted by facsimile, (c) mailed by certified
or registered mail, postage prepaid, receipt requested, or (d) delivered by an
international courier service, receipt requested, as follows:

                  IF TO BUYER, ADDRESSED TO:
                  1325091 Ontario Inc.
                  12 Concorde Place, 7th Floor
                  Toronto, Ontario M3C 2R8
                  Attention: Vice President and General Counsel
                  Facsimile: (416) 448-5444
                  WITH A COPY TO:
                  Celestica Inc.
                  12 Concorde Place, 7th Floor
                  Toronto, Ontario M3C 2R8
                  Attention: Senior Vice President, Mergers and Acquisitions
                  Facsimile: (416) 448-5444

                  IF TO PARENT, ADDRESSED TO:
                  Celestica Inc.
                  12 Concorde Place, 7th Floor
<PAGE>

                                      -36-

                  Toronto, Ontario M3C 2R8
                  Attention: Vice President and General Counsel
                  Facsimile: (416) 448-5444

                  WITH A COPY TO:
                  Celestica Inc.
                  12 Concorde Place, 7th Floor
                  Toronto, Ontario M3C 2R8
                  Attention: Senior Vice President, Mergers and Acquisitions
                  Facsimile: (416) 448-5444

                  IF TO SELLER, ADDRESSED TO:
                  Mr. Yoshiaki Ogawa
                  Chief Manager, Optical Network Planning Division,
                  Optical Network Operations Unit, NEC Networks, NEC Corporation
                  1753 Shimonumabe, Nakahara-ku
                  Kawasaki, Kanagawa 211-8666, Japan
                  Facsimile: 044-435-5455
                  WITH A COPY TO:
                  Mr. Kazuiki Watariya
                  Senior Manager, Business Strategy
                  Planning Division, NEC Networks, NEC Corporation
                  7-1, Shiba 5-chome, Minato-ku
                  Tokyo 108-8001, Japan
                  Facsimile: 03-3798-0561
or to such other address or to such other Person as either party shall have
last designated by such notice to the other party. Each such notice or other
communication shall be effective (i) if given by facsimile, when transmitted to
the applicable number so specified in (or pursuant to) this Section 8.11, (ii)
if given by mail, seven days after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid, (iii) if given by
courier, three days after such communication is delivered to the courier
service, addressed as aforesaid, or (iv) if given by any other means, when
actually received at such address.

     8.12     EXPENSES AND ATTORNEYS FEES.

     Seller, Buyer and Parent shall each pay their own expenses incident to the
negotiation, preparation and performance of this Agreement and the transactions
contemplated hereby, including but not limited to the fees, expenses and
disbursements of their respective investment bankers, accountants and counsel.

     8.13     GOVERNING LANGUAGE.

     This Agreement (except for the NEC Separation Agreement and certain
Schedules) is in the English language, which language shall be controlling in
all respects.
<PAGE>

                                      -37-

     8.14     DISPUTE RESOLUTION.

     (a) All disputes that may arise under or in relation to this Agreement
between either party hereto, that cannot be resolved amicably between the
parties within thirty (30) days of written notice of such dispute, shall be
submitted to arbitration in Tokyo, Japan under the Commercial Arbitration Rules
of the Japan Commercial Arbitration Association (the "JCAA").

     (b) The arbitral tribunal for any such arbitration shall be comprised of
three arbitrators. Each of the claimant and respondent shall nominate one
arbitrator (provided that Buyer and Parent shall together only be permitted to
nominate one arbitrator). If either party fails to nominate an arbitrator in
accordance with the Commercial Arbitration Rules of the JCAA, such arbitrator
shall be appointed by the JCAA. The two arbitrators so nominated shall nominate
the third arbitrator. If for any reason an arbitrator resigns, is removed or
otherwise is no longer serving on the arbitral tribunal, his or her replacement
must be nominated in accordance with the Commercial Arbitration Rules of the
JCAA by the party originally nominating him or her. Any failure by a party to
appoint such replacement shall cause the replacement arbitrator to be appointed
by the JCAA.

     (c) Where any remedy at law or damages is inadequate for any particular
dispute, and without prejudice to the power of arbitrators to award any specific
performance or injunctive or similar equitable relief, any legal action for
specific performance or injunctive or similar equitable relief against either
party may be brought in any court of competent jurisdiction by either party.

     (d) Neither the existence of any dispute, controversy or claim nor the fact
that any arbitration is pending thereunder shall relieve any party of its
respective obligations under this Agreement.

     (e) Judgment upon awards or orders for enforcement may be entered by all
courts to which an award is presented.

     (f) The unsuccessful party in an arbitration shall pay and discharge all
costs and expenses (including reasonable attorneys' fees) which are incurred by
the other party in enforcing this Agreement.

     (g) Any arbitration under this Section 8.14 shall be conducted in English.

     8.15     PARENT GUARANTY

     (a) Parent hereby irrevocably and unconditionally agrees to guaranty to
Seller, jointly and severally with Buyer, the performance by Buyer of its
obligations under the terms of this Agreement, including but not limited to the
obligation to pay the Purchase Price and to repay the Intercompany Loan
hereunder. In the event that all or any portion of the obligations is paid or
performed by Buyer, the obligations of Parent hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment is rescinded or recovered directly or
indirectly from Seller as a preference, fraudulent transfer or otherwise, and
any such payment or performance that is rescinded or recovered shall also
constitute obligations.
<PAGE>

                                      -38-

     (b) Seller shall not be required to give any notice to, or make any demand
on, the Buyer or to proceed against the Buyer's assets prior to the performance
by the Parent of its obligations under this Section 8.15. The Parent agrees that
the Parent's obligations under this Section 8.15 will not be discharged except
by complete performance of all obligations set forth in this Agreement.

     (c) Parent hereby agrees, in furtherance of the foregoing and not in
limitation of any other right which the Seller may have against the Parent by
virtue hereof, that upon the failure of Buyer to pay or perform any of the
obligations when and as the same shall become due hereunder, Parent will, upon
demand, pay, perform or cause to be paid or performed all obligations then due
as aforesaid.

     (d) Parent agrees that it will not exercise any rights of indemnification
or subrogation which it may have under or by virtue of any contract or law
against the Buyer, as a result of or in relation to the performance of the
obligations of the Parent hereunder, unless and until the guarantied amounts
have been paid in full and all obligations have been performed in full.

     (e) Parent agrees to pay, or cause to be paid, on demand, and to indemnify
Seller from and against liability for, any and all costs and expenses (including
reasonable fees and disbursements of counsel) incurred or expended by Seller in
connection with the enforcement of or preservation of any rights under this
Section 8.15.

     (f) The rights, powers and remedies given to Seller by this Section 8.15
are cumulative and shall be in addition to and independent of all rights, powers
and remedies given to Seller by virtue of any statute or rule of law. Any
forbearance or failure to exercise, and any delay by Seller in exercising, any
right, power or remedy hereunder shall not impair any such right, power or
remedy or be construed to be a waiver thereof, nor shall it preclude the further
exercise of any such right, power or remedy.


                                   ARTICLE IX
                                   DEFINITIONS

     9.1      DEFINITIONS.

     For all purposes of this Agreement, except as otherwise expressly provided,

     (a) the terms defined in this Article 9 have the meanings assigned to them
in this Article 9 and include the plural as well as the singular;

     (b) all accounting terms not otherwise defined herein have the meanings
assigned under GAAP;

     (c) all references in this Agreement to designated "Articles," "Sections"
and other subdivisions are to the designated Articles, Sections and other
subdivisions of the body of this Agreement;
<PAGE>

                                      -39-

     (d) pronouns of either gender or neuter shall include, as appropriate, the
other pronoun forms;

     (e) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision; and

     (f) the use herein of the word "include" or "including", when following any
general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter.

     As used in this Agreement and the Exhibits, Schedules or certificates
delivered pursuant to this Agreement, the following definitions shall apply.

     "ACTION" means any action, suit or other legal proceeding, whether civil or
criminal, in law or in equity, before any court, arbitrator or governmental
entity.

     "AFFECTED EMPLOYEES" means all the employees of NEC Corporation and the
Predecessor Companies who are employed in connection with the Transferred
Business.

     "AFFILIATE" means a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
a specified Person.

     "AGREEMENT" means this Stock Purchase Agreement as amended or supplemented
together with all exhibits and schedules attached or incorporated by reference.

     "ANCILLARY AGREEMENTS" means collectively, the Intellectual Property
Agreement, the Shared Services Agreement, the Purchase and Supply Agreement and
the NEC Separation Agreement.

     "BUNKATSU DAY" means the day on which the Transferred Assets are
transferred to Company and the Stock is issued to the Predecessor Companies
pursuant to the NEC Separation Agreement.

     "BUSINESS" means the business of the Predecessor Companies until the
consummation of the transactions contemplated by the NEC Separation Agreement,
and, thereafter, the business of Company.

     "CLOSING" means the consummation of the purchase and sale of the Stock, and
the repayment of the Intercompany Loan and all interest accrued thereon, under
this Agreement.

     "CLOSING DATE" means the date of the Closing.

     "COMPANY" has the meaning set forth in the preamble to this Agreement.
<PAGE>

                                      -40-

     "CONTRACT" means any agreement, arrangement, bond, commitment, franchise,
indemnity, indenture, instrument or lease.

     "CORPORATE SEPARATION PROCEDURE OF THE JAPANESE COMMERCIAL CODE" means the
provisions of the Commercial Code of Japan (Section 6-3, Articles 374-16 through
374-31) governing the Corporate Separation Procedure (kaisha bunkatsu).

     "ENCUMBRANCE" means any claim, charge, easement, encumbrance, lease,
covenant, security interest, lien, option, pledge, rights of others, or other
restriction (whether on voting, sale, transfer, disposition or otherwise),
whether imposed by agreement, understanding or law, except for any restrictions
on transfer generally arising under any applicable securities law.

     "EPF" shall mean the NEC employee pension fund (NEC Kousei Nenkin Kikin)
applicable to the Affected Employees, including the first additional pension
(Dai-Ichi Kasan Nenkin), the second additional pension (Dai-Ni Kasan Nenkin) and
the supplemental pension (Fuka Nenkin).

     "EQUITY SECURITIES" means any capital stock or other equity interest or any
securities convertible into or exchangeable for capital stock or any other
rights, warrants or options to acquire any of the foregoing securities.

     "GAAP" means generally accepted accounting principles in Japan, as in
effect from time to time.

     "INTELLECTUAL PROPERTY AGREEMENT" means the intellectual property agreement
in form and substance substantially as set forth in Exhibit B.

     "INTERCOMPANY LOAN" means that certain loan from NEC Corporation to Company
the terms and conditions of which are described in Schedule 9.1(C).

     "KAISHA BUNKATSU" means corporate separation (kaisha bunkatsu) to be
carried out in accordance with the NEC Separation Agreement.

     "KNOWLEDGE" with respect to Seller means the actual knowledge of the
following with respect to the relevant matter: Tsuyoshi Ohtoshi, President, NEC
Miyagi; Osamu Inui, Associate Senior Vice President, NEC Yamanashi; Sakae
Noguchi, Associate Senior Vice President, NEC Miyagi; Akira Saito, Associate
Senior Vice President, NEC Miyagi; Kazuyuki Suzuki, Vice President, General
Administration, NEC Miyagi; Masataka Kobayashi, Associate Senior Vice President,
NEC Yamanashi; Mitsuhiko Osanai, Manager, Planning Control Department, NEC
Miyagi; Kunitomo Matsuoka, General Manager, Planning Division, NEC Networks ,
NEC Corporation; Kazuiki Watariya, Senior Manager, Business Strategy, Planning
Division, NEC Networks, NEC Corporation; Shinobu Obata, Manager, Legal, Planning
Division, NEC Corporation; Kota Takemura, Legal Staff, Legal, Planning Division,
NEC Networks , NEC Corporation; Kenichi Inoue, Senior Manager, Controller and
Finance Division, NEC Networks, NEC Corporation; Takanobu Hashiguchi, Department
Manager, 2nd Department, Controller and Finance Division, NEC Networks, NEC
Corporation; Hiroyuki Mizorogi, Senior Manager, 2nd Department, Controller and
Finance Division, NEC Networks, NEC Corporation; Yoshiaki Ogawa, Chief Manager,
Optical Network Planning Division, Optical Network Operations Unit,
<PAGE>

                                      -41-

NEC Networks, NEC Corporation; Katsuaki Tanaka, Expert Engineer, Optical
Network Planning Division, Optical Network Operations Unit, NEC Networks, NEC
Corporation; Kenichi Sugamuta, Manager, Optical Network Planning Division,
Optical Networks Operations Unit, NEC Networks, NEC Corporation.

     "LOSS" has the meaning set forth in Section 7.1.

     "Miyagi Property" means the real property located at 2 Aza-Raijin Yoshioka,
Taiwa-cho, Kurokawa-gun, Miyagi 981-3681 more particularly described in Schedule
9.1A.

     "NEC SEPARATION AGREEMENT" means the separation agreement to be adopted by
the Predecessor Companies and the Company in form and substance substantially as
set forth in Exhibit A.

     "PENSION PLAN" means any contract, plan, program, fund, policy or
arrangement for pension benefits/retirement benefits for employees or former
employees of a company and the beneficiaries and dependents of any such
employee, regardless of whether it is mandated under local law, private, funded,
unfunded, financed by the purchase of insurance, contributory or
non-contributory.

     "PERMITTED ENCUMBRANCES" has the meaning ascribed thereto in Section 2.9.

     "PERSON" means an association, a corporation, an individual, a partnership,
a trust or any other entity or organization, including a governmental entity.

     "PREDECESSOR COMPANIES" means NEC Miyagi and NEC Yamanashi and "Predecessor
Company" refers to either of the Predecessor Companies.

     "PURCHASE AND SUPPLY AGREEMENT" means the Purchase and Supply Agreement to
be entered into between Buyer and Seller in form and substance substantially as
set forth in Exhibit C.

     "PURCHASE PRICE" has the meaning set forth in Section 1.2, as adjusted
pursuant to Section 1.3.

     "R&D BUSINESS" means the research and development business of NEC Miyagi
that will not be transferred to the Company in connection with the transactions
contemplated by the NEC Separation Agreement.

     "REAL PROPERTY" means the Miyagi Property and the Yamanashi Property.

     "SHARED SERVICES AGREEMENT" means the services agreement to be entered into
between Buyer and Seller in form and substance substantially as set forth in
Exhibit D.

     "STOCK" means the shares of capital stock of Company issued to Seller on or
after the Bunkatsu Day.
<PAGE>

                                      -42-

     "TAX" means any national, local or foreign income, sales, use, excise,
franchise, ad valorem, real and personal property, transfer, gross receipt,
stamp, premium, profits, windfall profits, capital stock, production, business
and occupation, or similar taxes imposed by any taxing authority, any interest
and penalties (civil or criminal), additions to tax, payments in lieu of taxes
or additional amounts related thereto or to the nonpayment thereof.

     "TRANSFERRED ASSETS" means all assets of the Predecessor Companies which
are transferred to the Company as part of the NEC Separation Agreement.

     "TRANSFERRED BUSINESS" means the Business excluding: (i) the R&D Business
and (ii) any assets or liabilities of the Business not contemplated as being
transferred to Company by the NEC Separation Agreement.

     "TRANSFERRED EMPLOYEES" means the Affected Employees who have consented to
the transfer of employment pursuant to Section 4.4 and who will be transferred
to Company as of the Closing Date.

     "UNFUNDED PENSION LIABILITIES" has the meaning set forth in Schedule 4.4(b)
to this Agreement.

     "YAMANASHI PROPERTY" means the real property located at 843, Kobaranishi,
Yamanashi, Yamanashi-ken 405-0006 more particularly described in Schedule 9.1B
(but excluding the real property listed in Table 2.14A of Schedule 2.14, and
including the real property listed in Table 2.14B of Schedule 2.14).


<PAGE>

                                       -43-



     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officers as of the day and year first above
written.


                                     BUYER: 1325091 ONTARIO INC.

                                     By: /s/ Rahul Suri
                                        -------------------------------------
                                        Name:  Rahul Suri
                                        Title: Authorized Signatory


                                     PARENT: CELESTICA INC.

                                      By: /s/ Rahul Suri
                                         ------------------------------------
                                         Name:  Rahul Suri
                                         Title: Senior Vice President,
                                                Mergers and Acquisitions


                                     SELLER:


                                     NEC CORPORATION

                                     By: /s/ Botaro Hirosaki
                                        -------------------------------------
                                        Name:  Botaro Hirosaki
                                        Title: Associate Senior Vice
                                               President and
                                               Executive General Manager,
                                               Optical Network Unit


                                     NEC YAMANASHI, LTD.

                                     By: /s/ Yoshihiko Miyazaki
                                        -------------------------------------
                                        Name:  Yoshihiko Miyazaki
                                        Title: President


                                     NEC MIYAGI, LTD.

                                     By: /s/ Tsuyoshi Ohtoshi
                                        -------------------------------------
                                        Name:  Tsuyoshi Ohtoshi
                                        Title: President
<PAGE>

                                    EXHIBITS

Exhibit A - NEC Separation Agreement
Exhibit B - Intellectual Property Agreement
Exhibit C - Purchase and Supply Agreement
Exhibit D - Shared Services Agreement
Exhibit E - Legal Opinion

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>7
<FILENAME>a2106757zex-99_1.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<Page>
                                                                   EXHIBIT 99.1

      CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT
                TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.

Each of the undersigned hereby certifies, in accordance with 18 U.S.C. 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his
capacity as an officer of Celestica Inc. (the "Company") that the Annual
Report of the Company on Form 20-F for the period ended December 31, 2002
fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 and that the information contained in such
report fairly presents, in all material respects, the financial condition and
results of operations of the Company.

<TABLE>
<S>                                    <C>
April 21, 2003                          /s/ Eugene V. Polistuk
                                       -----------------------------------
                                       Eugene V. Polistuk
                                       Chief Executive Officer

April 21, 2003                          /s/ Anthony P. Puppi
                                       -----------------------------------
                                       Anthony P. Puppi
                                       Chief Financial Officer

</TABLE>

A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to
the Securities and Exchange Commission or its staff upon request.


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
