10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark one)
[x]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 2, 2011

or

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                 .

Commission File Number 0-21272

Sanmina-SCI Corporation

(Exact name of registrant as specified in its charter)

Delaware	77-0228183
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)
2700 N. First St., San Jose, CA	95134
(Address of principal executive offices)	(Zip Code)

(408) 964-3500

(Registrant's telephone number, including area code)

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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [x]    No []

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [x]	Accelerated filer [ ]	Non-accelerated filer [  ]	Smaller reporting company [  ]
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes []    No [x]

As of July 28, 2011, there were 80,657,540 shares outstanding of the issuer's common stock, $0.01 par value per share.

SANMINA-SCI CORPORATION

INDEX

		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Interim Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	28
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors Affecting Operating Results	30
Item 6.	Exhibits	42
Signatures		43

2

SANMINA-SCI CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	As of
	July 2, 2011		October 2, 2010
	(Unaudited)
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	582,816	$	592,812
Accounts receivable, net of allowances of $16,204 and $16,752, respectively	1,042,092		1,018,612
Inventories	885,502		844,347
Prepaid expenses and other current assets	125,205		134,238
Total current assets	2,635,615		2,590,009
Property, plant and equipment, net	562,766		570,258
Other	118,247		141,529
Total assets	$	3,316,628	$	3,301,796
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	958,075	$	923,038
Accrued liabilities	134,483		140,371
Accrued payroll and related benefits	125,636		122,934
Short-term debt	60,400		65,000
Total current liabilities	1,278,594		1,251,343
Long-term liabilities:
Long-term debt	1,151,883		1,240,666
Other	136,851		148,186
Total long-term liabilities	1,288,734		1,388,852
Commitments and contingencies (Note 6)
Stockholders' equity	749,300		661,601
Total liabilities and stockholders' equity	$	3,316,628	$	3,301,796

See accompanying notes.

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SANMINA-SCI CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended						Nine Months Ended
	July 2, 2011			July 3, 2010			July 2, 2011			July 3, 2010
	(Unaudited)
	(In thousands, except per share data)
Net sales	$	1,674,200		$	1,625,170		$	4,905,709		$	4,630,923
Cost of sales	1,542,599			1,501,055			4,529,230			4,279,644
Gross profit	131,601			124,115			376,479			351,279
Operating expenses:
Selling, general and administrative	67,043			65,392			187,726			191,364
Research and development	5,797			3,057			14,877			9,407
Amortization of intangible assets	958			926			2,875			3,163
Restructuring and integration costs	6,336			6,196			15,885			13,405
Asset impairment	—			600			85			1,100
Gain on sales of long-lived assets, net	(1,440		)	(13,796		)	(3,465		)	(13,796		)
Total operating expenses	78,694			62,375			217,983			204,643
Operating income	52,907			61,740			158,496			146,636
Interest income	356			558			1,490			1,536
Interest expense	(24,843		)	(27,119		)	(77,773		)	(80,476		)
Other income (expense), net	(14,767		)	(2,046		)	(11,489		)	37,729
Interest and other, net	(39,254		)	(28,607		)	(87,772		)	(41,211		)
Income before income taxes	13,653			33,133			70,724			105,425
Provision for income taxes	4,248			11,570			19,895			14,389
Net income	$	9,405		$	21,563		$	50,829		$	91,036
Net income per share:
Basic	$	0.12		$	0.27		$	0.63		$	1.15
Diluted	$	0.11		$	0.26		$	0.61		$	1.10
Weighted average shares used in computing per share amounts:
Basic	80,579			79,544			80,223			79,040
Diluted	83,141			83,693			83,275			82,404

See accompanying notes.

4

SANMINA-SCI CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended
	July 2, 2011			July 3, 2010
	(Unaudited)
	(In thousands)
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income	$	50,829		$	91,036
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	75,368			64,565
Stock-based compensation expense	14,894			12,371
Provision (benefit) for doubtful accounts, product returns and other net sales adjustments	(65		)	3,633
Deferred income taxes	(1,254		)	994
Asset impairment	85			1,100
Loss on extinguishment of debt	16,098			1,197
Gain on sale of assets and business	(3,465		)	(17,506		)
Other, net	165			650
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(19,949		)	(242,264		)
Inventories	(39,238		)	(74,221		)
Prepaid expenses and other assets	4,145			4,749
Accounts payable	42,109			119,338
Accrued liabilities and other long-term liabilities	16,139			(10,078		)
Cash provided by (used in) operating activities	155,861			(44,436		)
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(82,800		)	(44,139		)
Proceeds from sales of property, plant and equipment	23,753			30,809
Cash paid in connection with business combinations	(14,656		)	(14,676		)
Cash used in investing activities	(73,703		)	(28,006		)
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Change in restricted cash	11,567			1,110
Proceeds from (repayments of) short-term borrowings	(4,600		)	50,600
Repayments of long-term debt	(590,623		)	(219,867		)
Proceeds from issuance of long-term debt, net of issuance costs	489,030			—
Net proceeds from stock issuances	4,225			2,515
Cash used in financing activities	(90,401		)	(165,642		)
Effect of exchange rate changes	(1,753		)	3,502
Decrease in cash and cash equivalents	(9,996		)	(234,582		)
Cash and cash equivalents at beginning of period	592,812			899,151
Cash and cash equivalents at end of period	$	582,816		$	664,569
Cash paid during the period for:
Interest	$	63,257		$	54,544
Income taxes, net of refunds	$	7,860		$	31,786

See accompanying notes.

5

SANMINA-SCI CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

The accompanying condensed consolidated financial statements of Sanmina-SCI Corporation (the “Company”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) have been omitted pursuant to those rules or regulations. The interim condensed consolidated financial statements are unaudited, but reflect all normal recurring and non-recurring adjustments that are, in the opinion of management, necessary for a fair presentation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended October 2, 2010, included in the Company's 2010 Annual Report on Form 10-K.

The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Results of operations for the nine months ended July 2, 2011 are not necessarily indicative of the results that may be expected for the full fiscal year.

The Company operates on a 52 or 53 week year ending on the Saturday nearest September 30. Fiscal 2011 and 2010 are each 52-week years. All references to years relate to fiscal years unless otherwise noted.

Note 2. Inventories

Components of inventories were as follows:

	As of
	July 2, 2011		October 2, 2010
	(In thousands)
Raw materials	$	632,475	$	599,773
Work-in-process	114,927		126,270
Finished goods	138,100		118,304
Total	$	885,502	$	844,347

Note 3. Fair Value

Fair Value Option for Long-term Debt

The Company has elected not to record its long-term debt instruments at fair value, but has measured them at fair value for disclosure purposes. As of July 2, 2011, the carrying amount and estimated fair value of the Company's long-term debt instruments were $1,157.4 million and $1,147.8 million, respectively. Fair value was estimated based on either the most recent traded price, a quoted price or other market sources (Level 2 inputs).

Assets/Liabilities Measured at Fair Value on a Recurring Basis

The Company's primary financial assets and financial liabilities are as follows:

• Money market funds 

• Time deposits

• Foreign currency forward contracts

• Interest rate swaps

Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements and Disclosures, defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market

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participants at the measurement date. When determining fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and also considers assumptions that market participants would use when pricing an asset or liability.

Inputs to valuation techniques used to measure fair value are prioritized into three broad levels (fair value hierarchy), as follows:

Level 1: Observable inputs that reflect quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs that reflect quoted prices, other than quoted prices included in Level 1, that are observable for the assets or liabilities, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in less active markets; or inputs that are derived principally from or corroborated by observable market data by correlation.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the measurement of the fair value of assets or liabilities.

There were no transfers between levels in the fair value hierarchy during any period presented herein. The following table presents information as of July 2, 2011 with respect to assets and liabilities measured at fair value on a recurring basis:

	Money market funds		Time deposits		Derivatives designated as hedging instruments under ASC 815: Foreign Currency Forward Contracts and Interest Rate Swaps			Derivatives not designated as hedging instruments under ASC 815: Foreign Currency Forward Contracts			Total
	Level 1		Level 1		Level 2			Level 2
	(In thousands)
Balance Sheet Classification:
Cash and cash equivalents	$	435	$	22,640	$	—		$	—		$	23,075
Prepaid expenses and other current assets	—		—		11			1,548			1,559
Accrued liabilities (1)	—		—		(92		)	(4,405		)	(4,497		)
Other long-term liabilities (1)	—		—		(38,391		)	—			(38,391		)
Total	$	435	$	22,640	$	(38,472	)	$	(2,857	)	$	(18,254	)

(1) Liabilities, or credit balances, are presented as negative amounts.

The following table presents information as of October 2, 2010 with respect to assets and liabilities measured at fair value on a recurring basis:

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	Money market funds		Time deposits		Derivatives designated as hedging instruments under ASC 815: Foreign Currency Forward Contracts and Interest Rate Swaps			Derivatives not designated as hedging instruments under ASC 815: Foreign Currency Forward Contracts			Total
	Level 1		Level 1		Level 2			Level 2
	(In thousands)
Balance Sheet Classification:
Cash and cash equivalents	$	791	$	99,110	$	—		$	—		$	99,901
Prepaid expenses and other current assets	—		—		10			8,282			8,292
Accrued liabilities (1)	—		—		(42		)	(10,475		)	(10,517		)
Other long-term liabilities (1)	—		—		(40,296		)	—			(40,296		)
Total	$	791	$	99,110	$	(40,328	)	$	(2,193	)	$	57,380

(1) Liabilities, or credit balances, are presented as negative amounts.

The Company sponsors deferred compensation plans for eligible employees and non-employee members of its Board of Directors that allow participants to defer payment of part or all of their compensation. The Company's results of operations are not significantly affected by these plans since changes in the fair value of the assets substantially offset changes in the fair value of the liabilities. As such, assets and liabilities associated with these plans have not been included in the above tables. Assets and liabilities associated with these plans of approximately $12.0 million as of July 2, 2011 and $10.8 million as of October 2, 2010 are recorded as other non-current assets and other long-term liabilities in the condensed consolidated balance sheet.

The Company values derivatives using observable Level 2 market expectations at the measurement date and standard valuation techniques to convert future amounts to a single present value amount assuming that participants are motivated, but not compelled, to transact. The Company seeks high quality counterparties for all financing arrangements. For interest rate swaps, Level 2 inputs include short-term LIBOR rates, futures contracts on LIBOR between two and four years, longer term swap rates at commonly quoted intervals, and credit default swap rates for the Company and relevant counterparties. For currency contracts, Level 2 inputs include foreign currency spot and forward rates and interest rates at commonly quoted intervals. Mid-market pricing is used as a practical expedient for fair value measurements. ASC Topic 820 requires the fair value measurement of an asset or liability to reflect the nonperformance risk of the entity and the counterparty. Therefore, the counterparty's creditworthiness when in an asset position and the Company's creditworthiness when in a liability position have been considered in the fair value measurement of derivative instruments. The effect of nonperformance risk on the fair value of derivative instruments was not material as of July 2, 2011 and October 2, 2010.

Non-Financial Assets Measured at Fair Value on a Nonrecurring Basis

The Company's assets held-for-sale consist of land and buildings that are measured at fair value on a nonrecurring basis since these assets are subject to fair value adjustments only when the carrying amount of such assets exceeds the fair value of such assets or such assets have been previously impaired and the fair value exceeds the carrying amount by less than the amount of the impairment that has been recognized. Level 2 inputs consist of independent third party valuations based on market comparables. The carrying value of the Company's assets held-for-sale was $47.0 million as of July 2, 2011 and is included in prepaid expenses and other current assets in the condensed consolidated balance sheet.

Note 4. Derivative Financial Instruments

The Company is exposed to certain risks related to its ongoing business operations. The primary risks managed by using derivative instruments are interest rate risk and foreign exchange rate risk.

Interest Rate Risk

Interest rate swaps are entered into on occasion to manage interest rate risk associated with borrowings under the Company's long-term debt arrangements.

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Cash Flow Hedges

The Company has $257.4 million of floating rate notes outstanding as of July 2, 2011 and has entered into interest rate swap agreements with two independent swap counterparties to hedge its interest rate exposure. The swap agreements, with an aggregate notional amount of $257 million and expiration dates of June 15, 2014, effectively convert the variable interest rate obligation to a fixed interest rate obligation and are accounted for as cash flow hedges under ASC Topic 815, Derivatives and Hedging. Under the terms of the swap agreements, the Company pays the independent swap counterparties a fixed rate and the swap counterparties pay the Company an interest rate equal to the three-month LIBOR. These swap agreements effectively fix the interest rate at 8.344% through maturity.

Fair Value Hedge

The Company has $500 million of fixed-rate senior notes outstanding as of July 2, 2011 and has entered into an interest rate swap to hedge its exposure to interest rates related to these notes. The swap agreement, with a notional amount of $500 million and an expiration date of May 15, 2019, was entered into contemporaneously with the 2019 Notes and effectively converts these notes from fixed-rate debt to variable-rate debt. Pursuant to the interest rate swap, the Company pays the swap counterparty a variable rate equal to the three-month LIBOR plus a spread and receives a fixed rate of 7.0% from the swap counterparty. In accordance with ASC 815, the interest rate swap is accounted for as a fair value hedge but is exempt from periodic assessment of hedge effectiveness. Therefore, the change in the fair value of the 2019 Notes resulting from changes in interest rates is assumed to be equal and opposite to the change in the fair value of the interest rate swap. As of July 2, 2011, the fair value of the interest rate swap, based on observable market data (Level 2), was $5.5 million and is included in other long-term liabilities on the Company's condensed consolidated balance sheet.

Foreign Exchange Rate Risk

Forward contracts on various foreign currencies are used to manage foreign currency risk associated with forecasted foreign currency transactions and certain monetary assets and liabilities denominated in foreign currencies. The Company's primary foreign currency cash flows are in certain Asian and European countries, Israel and Mexico.

The Company had the following outstanding foreign currency forward contracts that were entered into to hedge foreign currency exposures:

	As of
	July 2, 2011	October 2, 2010
Derivatives Designated as Accounting Hedges:
Notional amount (in thousands)	$121,386	$80,370
Number of contracts	44	26
Derivatives Not Designated as Accounting Hedges:
Notional amount (in thousands)	$356,947	$290,688
Number of contracts	29	26

The Company enters into short-term foreign currency forward contracts to hedge currency exposures associated with certain monetary assets and liabilities denominated in foreign currencies. These contracts have maturities of up to two months and are not designated as accounting hedges under ASC 815. Accordingly, these contracts are marked-to-market at the end of each period with unrealized gains and losses recorded in other income (expense), net, in the condensed consolidated statements of income. For the three and nine months ended July 2, 2011, the Company recorded losses of $1.7 million and gains of $1.7 million, respectively, associated with these forward contracts. For the three and nine months ended July 3, 2010, the Company recorded gains of $14.0 million and $27.3 million, respectively, associated with these forward contracts. Gains and losses on forward contracts substantially offset gains and losses on the underlying hedged items for all periods presented herein.

The Company also utilizes foreign currency forward contracts to hedge certain operational (“cash flow”) exposures resulting from changes in foreign currency exchange rates. Such exposures generally result from 1) forecasted sales denominated in currencies other than those used to pay for materials and labor and 2) anticipated capital expenditures denominated in a currency other than the functional currency of the entity making the expenditures. These contracts are up to twelve months in duration and are accounted for as cash flow hedges under ASC 815.

For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income (AOCI), an equity account, and

9

reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on derivative instruments representing hedge ineffectiveness are recognized in current earnings and were not material for any period presented herein. As of July 2, 2011, AOCI related to foreign currency forward contracts was not material and AOCI related to interest rate swaps was a loss of $31.5 million, of which $13.0 million is expected to be amortized to interest expense over the next 12 months.

The following table presents the effect of cash flow hedging relationships on the Company's condensed consolidated statement of income for the three and nine months ended July 2, 2011 and July 3, 2010, respectively:

Derivative Type and Income Statement Location	Amount of Gain/(Loss) Recognized in OCI on Derivative (Effective Portion)											Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
	Three Months Ended						Nine Months Ended					Three Months Ended						Nine Months Ended
	July 2, 2011			July 3, 2010			July 2, 2011			July 3, 2010		July 2, 2011			July 3, 2010			July 2, 2011			July 3, 2010
	(In thousands)
Interest rate swaps - Interest expense	$	(4,658	)	$	(8,106	)	$	(2,721	)	(11,567	)	$	(3,393	)	$	(3,416	)	$	(10,208	)	$	(10,001	)
Foreign currency forward contracts - Cost of sales	605			(867		)	1,541			(196	)	594			(861		)	1,504			(78		)
Total	$	(4,053	)	$	(8,973	)	$	(1,180	)	(11,763	)	$	(2,799	)	$	(4,277	)	$	(8,704	)	$	(10,079	)

Note 5. Debt

Long-term debt consisted of the following:

	As of
	July 2, 2011			October 2, 2010
	(In thousands)
6.75% Senior Subordinated Notes due 2013 (“6.75% Notes”)	—			380,000
$300 Million Senior Floating Rate Notes due 2014 (“2014 Notes”)	257,410			257,410
8.125% Senior Subordinated Notes due 2016 (“2016 Notes”)	400,000			600,000
$500 Million Senior Notes due 2019 (“2019 Notes”)	500,000			—
Fair value adjustment (1)	(5,527		)	3,256
Total long-term debt	$	1,151,883		$	1,240,666

(1) Represents fair value hedge accounting balance related to interest rate swaps. See Note 4 for discussion of interest rate swap entered into during the current period.

On May 10, 2011, the Company issued $500.0 million aggregate principal amount of senior notes due 2019 (the "2019 Notes"). The 2019 Notes will mature on May 15, 2019 and bear interest at an annual rate of 7%, payable semi-annually in arrears. In connection with issuance of the 2019 Notes, the Company incurred debt issuance costs of $11.0 million. These costs are included in other non-current assets on the condensed consolidated balance sheet and are being amortized to interest expense over the term of the 2019 Notes using the effective interest method.

The 2019 Notes are senior unsecured obligations of the Company and are fully and unconditionally guaranteed on a senior, unsecured basis by substantially all of the Company's domestic subsidiaries. The Company may redeem all or any portion of the 2019 Notes at any time prior to May 15, 2014, at par plus accrued and unpaid interest plus a make-whole premium. The Company may redeem all or any portion of the 2019 Notes beginning on or after May 15, 2014, at redemption prices ranging from 100% - 105.25% of the principal amount of the 2019 Notes, plus accrued and unpaid interest. Following a change of control, as defined, each holder of the 2019 Notes shall have the right to require the Company to repurchase all or any portion of such holder's 2019 Notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest.

The indenture for the 2019 Notes includes certain covenants that place limitations on, among other things: debt, restricted payments, liens, asset sales, the Company's ability to create or permit restrictions on distributions from the Company's restricted subsidiaries, transactions with affiliates and consolidating or merging with other companies. The restrictive covenants are subject to a number of important exceptions and qualifications set forth in the indenture.

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The indenture provides for customary events of default, including payment defaults, breaches of covenants, certain payment defaults at final maturity or acceleration of other indebtedness, failure to pay certain judgments, certain events of bankruptcy, insolvency and reorganization involving the Company or certain of its subsidiaries and certain instances in which a guarantee ceases to be in full force and effect. If any event of default occurs and is continuing, subject to certain exceptions, the trustee or the holders of at least 25% in aggregate principal amount of the then outstanding 2019 Notes may declare all the 2019 to be due and payable immediately, together with any accrued and unpaid interest. In the event of default resulting from certain events of bankruptcy, insolvency or reorganization involving the Company or certain of its subsidiaries, the 2019 Notes will be due and payable immediately without any declaration or other act on the part of the trustee or the holders of the 2019 Notes.

As discussed in Note 4, the Company entered into an interest rate swap to hedge its exposure to changes in the fair value of the 2019 Notes resulting from changes in interest rates. As of July 2, 2011, the fair value hedge accounting adjustment related to the 2019 Notes was $5.5 million and has been recorded as a reduction to long-term debt.

On May 10, 2011, in conjunction with a tender offer, the Company repurchased $279.3 million in aggregate principal amount of its 2013 Notes and $200.0 million in aggregate principal amount of its 2016 Notes. The aggregate purchase price for the notes was $488.7 million, consisting of $280.1 million for the 2013 Notes and $208.6 million for the 2016 Notes. The repurchases were funded in part by the issuance of the 2019 Notes discussed above. On June 10, 2011, the remaining outstanding 2013 Notes of $100.7 million in aggregate principal amount were repurchased at par.

In accordance with ASC Topic 470, Debt, the Company determined that all debt redeemed in connection with these transactions has been extinguished. Therefore, the Company recognized a loss on extinguishment of $16.1 million, consisting of redemption premiums of $9.4 million, third party costs of $1.3 million and a net write-off of unamortized debt costs of $5.4 million.

Short-term debt

During 2010, one of the Company's subsidiaries in China entered into a $50 million unsecured working capital loan facility that contains certain negative covenants that, upon default, permit the bank to deny any further advances or extension of credit or to terminate the loan agreement. Additionally, one of the Company's subsidiaries in India entered into a $35 million working capital loan facility that contains no covenants.

Information with respect to short-term debt facilities is as follows:

	As of July 2, 2011
	China Working Capital Loan Facility	India Working Capital Loan Facility
Amount outstanding (in millions)	$30.0	$30.4
Facility expiration date	April 2012	June 2012
Interest rate	3-month LIBOR plus spread	LIBOR plus spread

Note 6. Commitments and Contingencies

Litigation and other contingencies. From time to time, the Company is a party to litigation, claims and other contingencies, including environmental and employee matters and examinations and investigations by governmental agencies, which arise in the ordinary course of business. The Company records a contingent liability when it is probable that a loss has been incurred and the amount of loss is reasonably estimable in accordance with ASC Topic 450, Contingencies or other applicable accounting standards. As of July 2, 2011 and October 2, 2010, the Company had reserves of $20.0 million and $22.3 million, respectively, for these matters, which the Company believes are adequate. Such reserves are included in accrued liabilities and other long-term liabilities on the condensed consolidated balance sheet.

Warranty Reserve.  The following table presents information with respect to the warranty reserve, which is included in accrued liabilities in the condensed consolidated balance sheets:

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	As of
	July 2, 2011			July 3, 2010
	(In thousands)
Beginning balance — end of prior year	$	17,752		$	15,716
Additions to accrual	7,401			12,734
Utilization of accrual	(8,652		)	(8,994		)
Ending balance — current quarter	$	16,501		$	19,456

Operating Leases. The Company leases certain of its land, facilities and equipment under non-cancelable operating leases expiring at various dates through 2040. The Company is responsible for utilities, maintenance, insurance and property taxes under these leases. Future minimum lease payments, net of sublease income, under operating leases are as follows:

	(In thousands)
Current	$	25,231
Year 2	18,352
Year 3	11,502
Year 4	8,099
Year 5	7,734
Thereafter	36,741
Total	$	107,659

Note 7. Restructuring

Costs associated with restructuring activities are accounted for in accordance with ASC Topic 420, Exit or Disposal Cost Obligations, or ASC Topic 712, Compensation - Nonretirement Postemployment Benefits, as applicable. Pursuant to ASC 712, restructuring costs related to employee severance are recorded when probable and estimable. For restructuring costs other than employee severance accounted under ASC 712, a liability is recognized in accordance with ASC 420 only when incurred.

During 2011, the Company changed its management structure and expects to incur employee severance and benefits costs of $2.2 million in cash and stock compensation expense. As of July 2, 2011, $0.8 million of cash remains payable and is expected to be paid by May 5, 2013.

Restructuring Plans — 2010 and prior

The Company initiated a restructuring plan in 2010 as a result of a business combination. Pursuant to this plan, the Company expects to incur costs up to $15.0 million to consolidate certain facilities and eliminate redundant employees, of which $9.8 million has been incurred to date. The amount of costs ultimately incurred will depend on the Company's ability to recover ongoing lease costs for vacant facilities by subleasing such facilities to third parties.

Due to completion of all actions under restructuring plans initiated prior to 2011 and immateriality of the remaining accrual balance related to such plans, these plans have been combined for disclosure purposes. The Company expects to incur restructuring costs in future periods associated primarily with vacant facilities until such time as those facilities have been sold or leased to third parties.

Below is a summary of restructuring costs associated with facility closures and other consolidation efforts that were implemented prior to 2011:

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	Employee Termination Severance and Related Benefits			Leases and Facilities Shutdown and Consolidation Costs			Total
	(In thousands)
Balance at October 2, 2010	$	5,430		$	1,102		$	6,532
Charges to operations	970			3,498			4,468
Charges utilized	(2,596		)	(2,054		)	(4,650		)
Balance at January 1, 2011	3,804			2,546			6,350
Charges to operations	359			3,844			4,203
Charges utilized	(1,396		)	(4,821		)	(6,217		)
Balance at April 2, 2011	2,767			1,569			4,336
Charges to operations	544			3,621			4,165
Charges utilized	(1,153		)	(4,271		)	(5,424		)
Balance at July 2, 2011	$	2,158		$	919		$	3,077

Costs incurred with respect to facilities consist primarily of 1) costs to maintain vacant facilities that are owned until such facilities can be sold and 2) the portion of the Company's lease payments that have not been recovered due to the absence of sublease income for vacant leased properties. The Company expects to pay the majority of accrued restructuring costs by September 2012.

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Note 8. Earnings Per Share

Basic and diluted amounts per share are calculated by dividing net income or loss by the weighted average number of shares of common stock outstanding during the period, as follows:

	Three Months Ended				Nine Months Ended
	July 2, 2011		July 3, 2010		July 2, 2011		July 3, 2010
	(In thousands, except per share data)
Numerator:
Net income	$	9,405	$	21,563	$	50,829	$	91,036
Denominator:
Weighted average number of shares
—basic	80,579		79,544		80,223		79,040
—diluted	83,141		83,693		83,275		82,404
Net income per share:
—basic	$	0.12	$	0.27	$	0.63	$	1.15
—diluted	$	0.11	$	0.26	$	0.61	$	1.10

The following table presents weighted-average dilutive securities that were excluded from the above calculation because their inclusion would have had an anti-dilutive effect:

	Three Months Ended		Nine Months Ended
	July 2, 2011	July 3, 2010	July 2, 2011	July 3, 2010
	(In thousands)
Employee stock options	7,149	3,939	6,229	6,072
Restricted stock awards and units	472	15	238	24
Total anti-dilutive shares	7,621	3,954	6,467	6,096

Securities are anti-dilutive because 1) the exercise price is higher than the Company's stock price or 2) the application of the treasury stock method resulted in an anti-dilutive effect.

Note 9. Comprehensive Income

Other comprehensive income, net of tax as applicable, was as follows:

	Three Months Ended						Nine Months Ended
	July 2, 2011			July 3, 2010			July 2, 2011			July 3, 2010
	(In thousands)
Net income	$	9,405		$	21,563		$	50,829		$	91,036
Other comprehensive income:
Foreign currency translation adjustments	1,915			615			10,268			1,684
Unrealized holding gains (losses) on derivative financial instruments	(1,254		)	(4,695		)	7,524			(1,684		)
Minimum pension liability	(14		)	(462		)	(41		)	(735		)
Comprehensive income	$	10,052		$	17,021		$	68,580		$	90,301

The net unrealized gain (loss) on derivative financial instruments is primarily attributable to changes in the fair market value of the Company's liability under its interest rate swaps that are accounted for as cash flow hedges. The fair market value

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of these swaps changes primarily as a result of changes in interest rates.

Accumulated other comprehensive income, net of tax as applicable, consisted of the following:

	As of
	July 2, 2011			October 2, 2010
	(In thousands)
Foreign currency translation adjustments	$	115,112		$	104,844
Unrealized holding losses on derivative financial instruments	(31,438		)	(38,962		)
Unrecognized net actuarial loss and unrecognized transition cost related to pension plans	(11,706		)	(11,665		)
Total	$	71,968		$	54,217

Note 10. Business Segment, Geographic and Customer Information

ASC Topic 280, Segment Reporting, establishes standards for reporting information about operating segments, products and services, geographic areas of operations and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company operates in one reportable segment, Electronic Manufacturing Services.

Information by geographic segment, determined based on the country in which a product is manufactured, was as follows:

	Three Months Ended				Nine Months Ended
	July 2, 2011		July 3, 2010		July 2, 2011		July 3, 2010
	(In thousands)
Net sales
Domestic	$	312,245	$	350,497	$	899,769	$	997,594
Mexico	301,919		310,824		952,742		933,466
China	448,527		464,099		1,319,075		1,326,354
Other international	611,509		499,750		1,734,123		1,373,509
Total	$	1,674,200	$	1,625,170	$	4,905,709	$	4,630,923
Number of customers representing more than 10% of net sales	1		2		1		1

Operating income
Domestic	$	(2,711	)	$	(26,872	)	$	(14,210	)	$	(77,626	)
International	55,618			88,612			172,706			224,262
Total	$	52,907		$	61,740		$	158,496		$	146,636

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Note 11. Stock-Based Compensation

Stock compensation expense by function and type of instrument was as follows:

	Three Months Ended					Nine Months Ended
	July 2, 2011		July 3, 2010			July 2, 2011		July 3, 2010
	(In thousands)
Cost of sales	$	1,773	$	487		$	3,825	$	4,593
Selling, general and administrative	4,208		2,215			9,998		7,910
Research and development	75		(335		)	157		(132		)
Restructuring	914		—			914		—
Total	$	6,970	$	2,367		$	14,894	$	12,371

	Three Months Ended					Nine Months Ended
	July 2, 2011		July 3, 2010			July 2, 2011		July 3, 2010
	(In thousands)
Stock options	$	5,497	$	3,488		$	10,908	$	10,180
Restricted stock units	1,473		(1,121		)	3,986		2,191
Total	$	6,970	$	2,367		$	14,894	$	12,371

As of July 2, 2011, an aggregate of 15.9 million shares were authorized for future issuance and 3.0 million shares of common stock were available for grant under the Company's stock plans, which include stock options and restricted stock awards and units.

Stock Options

Assumptions used to estimate the fair value of stock options granted were as follows:

	Three Months Ended				Nine Months Ended
	July 2, 2011		July 3, 2010		July 2, 2011		July 3, 2010
Volatility	90.6	%	81.2	%	85.0	%	81.3	%
Risk-free interest rate	1.6	%	2.4	%	1.7	%	2.4	%
Dividend yield	—	%	—	%	—	%	—	%
Expected life of options (years)	4.0		5.0		4.7		5.0

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Stock option activity was as follows:

	Number of Shares		Weighted- Average Exercise Price ($)	Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value of In-The-Money Options ($)
	(In thousands)				(In thousands)
Outstanding, October 2, 2010	11,078		14.39	7.44	35,417
Granted	788		11.23
Exercised/Cancelled/Forfeited/Expired	(388	)	19.17
Outstanding, January 1, 2011	11,478		14.01	7.38	35,587
Granted	861		15.90
Exercised/Cancelled/Forfeited/Expired	(743	)	12.95
Outstanding, April 2, 2011	11,596		14.22	7.32	28,698
Granted	90		10.14
Exercised/Cancelled/Forfeited/Expired	(658	)	19.89
Outstanding, July 2, 2011	11,028		13.85	7.12	21,190
Vested and expected to vest, July 2, 2011	10,068		14.34	6.97	18,756
Exercisable, July 2, 2011	6,546		17.36	6.11	9,817

The weighted-average grant date fair value of stock options granted during the three and nine months ended July 2, 2011 was $6.56 and $8.87, respectively. The weighted-average grant date fair value of stock options granted during the three and nine months ended July 3, 2010 was $11.06 and $6.53, respectively. The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value of in-the-money options that would have been received by the option holders had all option holders exercised their options at the Company's closing stock price on the date indicated.

As of July 2, 2011, unrecognized compensation expense related to stock options was $23.3 million, and is expected to be recognized over a weighted average period of 3.6 years.

Restricted Stock Units

The Company grants restricted stock units to executive officers, directors and certain management employees. These units vest over periods ranging from one to four years and are automatically exchanged for shares of common stock at the vesting date. Compensation expense associated with these units is recognized ratably over the vesting period.

As of July 2, 2011, unrecognized compensation expense related to restricted stock units was $15.5 million, and is expected to be recognized over a weighted average period of 2.4 years.

Activity with respect to the Company's non-vested restricted stock units was as follows:

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	Number of Shares		Weighted- Average Grant Date Fair Value ($)	Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value ($)
	(In thousands)				(In thousands)
Outstanding, October 2, 2010	938		9.78	2.12	10,200
Granted	784		11.23
Vested/Cancelled	(38	)	13.30
Outstanding, January 1, 2011	1,684		10.41	2.13	18,744
Granted	445		15.91
Vested/Cancelled	(44	)	17.77
Outstanding, April 2, 2011	2,085		11.43	2.04	21,901
Granted	25		10.56
Vested/Cancelled	(280	)	10.40
Outstanding, July 2, 2011	1,830		11.57	1.82	17,040
Expected to vest, July 2, 2011	1,236		11.90	1.82	11,510

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including any statements regarding trends in future revenues or results of operations, gross margin or operating margin, expenses, earnings or losses from operations, synergies or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning developments, performance or industry ranking; any statements regarding future economic conditions or performance; any statements regarding pending investigations, claims or disputes; any statements regarding the financial impact of customer bankruptcies; any statements regarding timing of closing of, future cash outlays for and benefits of acquisitions; any statements concerning the adequacy of our liquidity; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Generally, the words “anticipate,” “believe,” “plan,” “expect,” “future,” “intend,” “may,” “will,” “should,” “estimate,” “predict,” “potential,” “continue” and similar expressions identify forward-looking statements. Our forward-looking statements are based on current expectations, forecasts and assumptions and are subject to the risks and uncertainties contained in or incorporated from Part II, Item 1A of this report. As a result, actual results could vary materially from those suggested by the forward-looking statements. We undertake no obligation to publicly disclose any revisions to these forward-looking statements to reflect events or circumstances occurring subsequent to filing this report with the Securities and Exchange Commission.

Overview

We are a leading independent global provider of customized, integrated electronics manufacturing services, or EMS. Our revenue is generated from sales of our services primarily to original equipment manufacturers, or OEMs, in the communications; industrial, defense and medical; enterprise computing and storage; and multimedia markets.

Our strategy is to leverage our comprehensive service offering, vertically integrated manufacturing services, advanced technologies and global capabilities to further penetrate diverse end markets that we believe offer significant growth opportunities and have complex products that require higher value-added services. We believe this strategy differentiates us from our competitors and will drive more sustainable revenue growth and provide opportunities for us to ultimately achieve operating margins that exceed industry standards.

There are many challenges to successfully executing our strategy. For example, we compete with a number of companies in each of our key end markets. These include companies that are much larger than we are and smaller companies that focus on a particular niche. Although we believe we are well-positioned in each of our key end markets and are continuing to differentiate ourselves from our competitors, competition remains intense. Additionally, growing and leveraging our components manufacturing services to drive vertical integration and improve our operating margins continues to be challenging due to excess capacity and operational inefficiencies. Lastly, revenue from defense and aerospace and optical customers has decreased throughout 2011 and is expected to decrease further in our upcoming quarter. This creates pressure on our operating margins since our defense and aerospace business is typically one of our higher-margin businesses and a high level of infrastructure exists for optical products. We continue to address these challenges on both a short-term and long-term basis.

In late 2008, the business environment became challenging due to adverse global economic conditions. These conditions slowed global economic growth and resulted in recessions in many countries, including the U.S., Europe and certain countries in Asia. These conditions materially and adversely impacted our financial condition and results of operations for 2009. Global economic conditions improved throughout 2010, resulting in a substantial increase in our business volume. Our revenue increased on a quarterly basis throughout 2010. Although revenue was down sequentially in each of the first two quarters of 2011, revenue levels increased in the third quarter of 2011 and were up 5.9% for the nine months ended July 2, 2011 compared to the same period in 2010. Additionally, the third quarter of 2011 was our seventh consecutive profitable quarter, resulting primarily from increased business volume, continuing improvements in our components business, and the realization of benefits from our previous restructuring actions. Although our results of operations have not been impacted significantly by the recent natural disaster and related nuclear plant situation in Japan, there can be no assurance that future periods will not be significantly impacted. Our quarterly results of operations tend to fluctuate and may not be indicative of results to be expected for any future periods.

A relatively small number of customers have historically generated a significant portion of our net sales. Sales to our ten largest customers represented 50.2% and 49.2% of our net sales for the three and nine months ended July 2, 2011, respectively.

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Sales to our ten largest customers represented 50.0% and 50.3% of our net sales for the three and nine months ended July 3, 2010, respectively. Additionally, one customer represented more than 10% of our net sales during the three months ended July 2, 2011, two customers represented more than 10% of our net sales during the three months ended July 3, 2010, and one customer represented more than 10% of our net sales for the nine months ended July 2, 2011 and July 3, 2010.

We perform a significant portion of our manufacturing in international locations. Sales derived from products manufactured in international operations during the three months ended July 2, 2011 and July 3, 2010 were 81.3% and 78.4%, respectively, of our total net sales. During the nine months ended July 2, 2011 and July 3, 2010, 81.7% and 78.5%, respectively, of our total net sales were derived from non-U.S. operations. This stems from a desire on the part of many of our customers to source production in lower cost locations such as Asia and Latin America. We expect this trend to continue.

Historically, we have had substantial recurring sales from existing customers. We typically enter into supply agreements with our major OEM customers. These agreements generally have terms ranging from three to five years and cover the manufacture of a range of products. These agreements generally do not obligate the customer to purchase minimum quantities of products. In some circumstances, our supply agreements with customers provide for cost reductions during the term of the agreement such that revenue and margin attributable to these contracts may reduce over their terms.

Critical Accounting Policies and Estimates

Management's discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. We review the accounting policies used in reporting our financial results on a regular basis. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate the process used to develop estimates for certain reserves and contingent liabilities, including those related to product returns, accounts receivable, inventories, investments, intangible assets, income taxes, warranty obligations, environmental matters, restructuring, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that we believe are reasonable for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our actual results may differ materially from these estimates.

For a complete description of our critical accounting policies and estimates, refer to our 2010 Annual Report on Form 10-K filed with the Securities and Exchange Commission on November 24, 2010.

Results of Operations

Key operating results

	Three Months Ended				Nine Months Ended
	July 2, 2011		July 3, 2010		July 2, 2011		July 3, 2010
	(In thousands)
Net sales	$	1,674,200	$	1,625,170	$	4,905,709	$	4,630,923
Gross profit	$	131,601	$	124,115	$	376,479	$	351,279
Operating income	$	52,907	$	61,740	$	158,496	$	146,636
Net income	$	9,405	$	21,563	$	50,829	$	91,036

Net income includes restructuring and integration costs of $6.3 million and $6.2 million for the three months ended July 2, 2011 and July 3, 2010, respectively, and $15.9 million and $13.4 million for the nine months ended July 2, 2011 and July 3, 2010, respectively. Net income for the three and nine months ended July 2, 2011 includes a loss on extinguishment of debt of $16.1 million. Net income for the nine months ended July 3, 2010 includes other income of $35.6 million in connection with a legal settlement.

Net Sales

Net sales increased from $1.6 billion in the third quarter of 2010 to $1.7 billion in the third quarter of 2011, an increase of 3.0%. Net sales increased from $4.6 billion for the nine months ended July 3, 2010 to $4.9 billion for the nine months ended July 2, 2011, an increase of 5.9%. Sales by end market were as follows (dollars in thousands):

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	Three Months Ended									Nine Months Ended
	July 2, 2011		July 3, 2010		Increase/(Decrease)					July 2, 2011		July 3, 2010		Increase/(Decrease)
Communications	$	804,080	$	682,941	$	121,139		17.7	%	$	2,342,270	$	1,712,875	$	629,395		36.7	%
Industrial, defense and medical	401,011		401,074		(63		)	—	%	1,210,225		1,198,495		11,730			1.0	%
Enterprise computing and storage	235,113		254,983		(19,870		)	(7.8	)%	671,327		842,391		(171,064		)	(20.3	)%
Multimedia	233,996		286,172		(52,176		)	(18.2	)%	681,887		877,162		(195,275		)	(22.3	)%
Total	$	1,674,200	$	1,625,170	$	49,030		3.0	%	$	4,905,709	$	4,630,923	$	274,786		5.9	%

The increase in our communications end market is primarily attributable to increased demand from existing customers, both for established programs and new program wins for new technologies introduced by our customers. Despite a significant decrease in demand from defense customers, sales in our industrial defense and medical end market have been relatively flat due to stronger demand from industrial and medical customers. Sales to customers in our enterprise computing and storage end market decreased as a result of certain customer programs going end-of-life, the effect of which was not completely offset by new programs. Sales to customers in our multimedia market decreased primarily as a result of reduced demand from one program.

Gross Margin

Gross margin increased from 7.6% for the three months ended July 3, 2010 to 7.9% for the three months ended July 2, 2011, and from 7.6% for the nine months ended July 3, 2010 to 7.7% for the nine months ended July 2, 2011. The increase for both the three and nine months ended July 2, 2011 was primarily the result of profit contribution from increased business volume and improved performance in components manufacturing services.

We expect gross margins to continue to fluctuate based on overall production and shipment volumes and changes in the mix of products demanded by our major customers. Fluctuations in our gross margins may also be caused by a number of other factors, some of which are outside of our control, including (a) greater competition in the EMS industry and pricing pressures from OEMs due to greater focus on cost reduction; (b) provisions for excess and obsolete inventory that we are not able to charge back to a customer or sales of inventories previously written down; (c) changes in operational efficiencies; (d) pricing pressure on electronic components resulting from economic conditions in the electronics industry; and (e) our ability to transition manufacturing and assembly operations to lower cost regions in an efficient manner.

Operating Expenses

Selling, general and administrative

Selling, general and administrative expenses increased from $65.4 million, or 4.0% of net sales, in the third quarter of 2010 to $67.0 million, or 4.0% of net sales, in the third quarter of 2011. For the nine month period, selling, general and administrative expenses decreased from $191.4 million, or 4.1% of net sales, in 2010 to $187.7 million, or 3.8% of net sales, in 2011. The increase for the three months ended July 2, 2011 was primarily due to increased personnel costs resulting from increased headcount, partially offset by lower bad debt and acquisition related costs. The decrease for the nine months ended July 2, 2011 was primarily due to reduced incentive compensation and bad debt expense, partially offset by higher personnel costs resulting from increased headcount.

Research and Development

Research and development expenses increased from $3.1 million, or 0.2% of net sales, in the third quarter of 2010 to $5.8 million, or 0.3% of net sales, in the third quarter of 2011. Research and development expenses increased from $9.4 million, or 0.2% of net sales, for the nine months ended July 3, 2010 to $14.9 million, or 0.3% of net sales, for the nine months ended July 2, 2011. The increase for both the three and nine month periods was primarily attributable to investments in new projects in multiple business units.

Restructuring

Costs associated with restructuring activities are accounted for in accordance with ASC Topic 420, Exit or Disposal Cost Obligations, or ASC Topic 712, Compensation - Nonretirement Postemployment Benefits, as applicable. Pursuant to ASC Topic 712, restructuring costs related to employee severance are recorded when probable and estimable. For restructuring costs other

21

than employee severance accounted for under ASC Topic 712, a liability is recognized in accordance with ASC Topic 420 only when incurred.

During 2011, we changed our management structure and expect to incur employee severance and benefits costs of $2.2 million in cash and stock compensation expense. As of July 2, 2011, $0.8 million of cash remains payable and is expected to be paid by May 5, 2013.

Restructuring Plans — 2010 and prior

We initiated a restructuring plan in 2010 as a result of a business combination. Pursuant to this plan, we expect to incur costs up to $15.0 million to consolidate certain facilities and eliminate redundant employees, of which $9.8 million has been incurred to date. The amount of costs ultimately incurred will depend on our ability to recover ongoing lease costs for vacant facilities by subleasing such facilities to third parties.

Due to completion of all actions under restructuring plans initiated prior to 2011 and immateriality of the remaining accrual balance related to such plans, these plans have been combined for disclosure purposes. We expect to incur restructuring costs in future periods associated primarily with vacant facilities until such time as those facilities have been sold or leased to third parties.

Below is a summary of restructuring costs associated with facility closures and other consolidation efforts that were initiated prior to 2011:

	Employee Termination Severance and Related Benefits			Leases and Facilities Shutdown and Consolidation Costs			Total
	(In thousands)
Balance at October 2, 2010	$	5,430		$	1,102		$	6,532
Charges to operations	970			3,498			4,468
Charges utilized	(2,596		)	(2,054		)	(4,650		)
Balance at January 1, 2011	3,804			2,546			6,350
Charges to operations	359			3,844			4,203
Charges utilized	(1,396		)	(4,821		)	(6,217		)
Balance at April 2, 2011	2,767			1,569			4,336
Charges to operations	544			3,621			4,165
Charges utilized	(1,153		)	(4,271		)	(5,424		)
Balance at July 2, 2011	$	2,158		$	919		$	3,077

Costs incurred with respect to facilities consist primarily of 1) costs to maintain vacant facilities that are owned until such facilities can be sold and 2) the portion of our lease payments that have not been recovered due to the absence of sublease income for vacant leased properties. We expect to pay the majority of accrued restructuring costs by September 2012.

Gain on Sales of Long-lived Assets

For the three and nine months ended July 2, 2011, we recorded gains on sales of long-lived assets of $1.4 million and $3.5 million, respectively. For the three and nine months ended July 3, 2010, we recorded gains on sales of long-lived assets of $13.8 million. These gains were primarily related to the sale of certain properties held-for-sale.

Interest Expense

Interest expense decreased to $24.8 million for the three months ended July 2, 2011, from $27.1 million for the three months ended July 3, 2010, and to $77.8 million for the nine months ended July 2, 2011, from $80.5 million for the nine months ended July 3, 2010. The decrease for both periods was primarily attributable to a net reduction of $80 million in our long-term debt and the favorable impact of replacing $580 million of fixed-rate debt with $500 million of lower variable rate debt.

Other Income (Expense), net

The following table presents the major components of other income (expense), net:

22

	Three Months Ended						Nine Months Ended
	July 2, 2011			July 3, 2010			July 2, 2011			July 3, 2010
	(In thousands)
Foreign exchange gains (losses)	$	759		$	(2,353	)	$	3,148		$	(2,170	)
Loss on extinguishment of debt (see Note 5) (1)	(16,098		)	(369		)	(16,098		)	(1,197		)
Litigation settlement	—			—			—			35,556
Other, net	572			676			1,461			5,540
Total other income (expense), net	$	(14,767	)	$	(2,046	)	$	(11,489	)	$	37,729

We reduce our exposure to currency fluctuations through the use of foreign currency hedging instruments; however, hedges are established based on forecasts of foreign currency transactions. To the extent actual amounts differ from forecasted amounts, we will have exposure to currency fluctuations, resulting in foreign exchange gains or losses.

(1) Amount is $2.2 million less than that reported in our earnings release due to a correction identified after the earnings release.

Provision for Income Taxes

We estimate our annual effective tax rate at the end of each quarterly period. Our estimate takes into account the geographic mix of our expected pre-tax income (loss), expected total annual pre-tax income (loss), implementation of tax planning strategies and possible outcomes of audits and other uncertain tax positions. To the extent there are fluctuations in any of these variables during a period, our provision for income taxes may vary.

Our provision for income taxes was an expense of $19.9 million for the nine months ended July 2, 2011, compared to an expense of $14.4 million for the nine months ended July 3, 2010. Despite lower pre-tax income in 2011, our year-to-date tax provision is higher than the amount for the comparable period in 2010 primarily as a result of favorable resolution of an uncertain tax position in 2010.

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Liquidity and Capital Resources

	Nine Months Ended
	July 2, 2011			July 3, 2010
	(In thousands)
Net cash provided by (used in):
Operating activities	$	155,861		$	(44,436	)
Investing activities	(73,703		)	(28,006		)
Financing activities	(90,401		)	(165,642		)
Effect of exchange rate changes on cash and cash equivalents	(1,753		)	3,502
Decrease in cash and cash equivalents	$	(9,996	)	$	(234,582	)

Key liquidity performance measures

	Three Months Ended
	July 2, 2011	April 2, 2011	January 1, 2011	October 2, 2010
Days sales outstanding (1)	54	56	55	52
Inventory turns (2)	7.2	7.0	7.3	7.3
Accounts payable days (3)	54	53	52	55
Cash cycle days (4)	51	55	52	47

(1)    Days sales outstanding (a measure of how quickly we collect our accounts receivable), or DSO, is calculated as the ratio of average accounts receivable, net, to average daily net sales for the quarter.

(2)    Inventory turns (annualized) are calculated as the ratio of four times our cost of sales for the quarter to average inventory.

(3)    Accounts payable days (a measure of how quickly we pay our suppliers) is calculated as the ratio of 365 days divided by accounts payable turns, in which accounts payable turns is calculated as the ratio of four times our cost of sales for the quarter to average accounts payable.

(4)    Cash cycle days is calculated as the ratio of 365 days to inventory turns, plus days sales outstanding minus accounts payable days.

Cash and cash equivalents were $582.8 million at July 2, 2011 and $592.8 million at October 2, 2010. Our cash levels vary during any given quarter depending on the timing of collections from customers and payments to suppliers, borrowings under credit facilities and other factors. Our working capital was $1.4 billion as of July 2, 2011 and $1.3 billion as of October 2, 2010.

Net cash provided by (used in) operating activities was $155.9 million and $(44.4) million for the nine months ended July 2, 2011 and July 3, 2010, respectively. For the nine months ended July 2, 2011, cash flows from operating activities consist of: 1) net inflows of $152.7 million from net income adjusted to exclude non-cash items such as depreciation and amortization, stock-based compensation expense, etc., and 2) net inflows of $3.2 million from changes in net operating assets, which are comprised of accounts receivable, inventories, prepaid expenses and other assets, accounts payable, and accrued liabilities and other long-term liabilities.

During the nine months ended July 2, 2011, we generated $3.2 million of cash from the reduction of our net operating assets. Accounts payable increased $42.1 million, versus a $39.2 million increase in inventories. This is a result of a decrease in accounts payable days from 55 days at October 2, 2010 to 54 days at July 2, 2011. The decrease resulted primarily from a change in the composition of our accounts payable from suppliers with longer payment terms to suppliers with shorter payment terms. Despite a slight decrease in revenue in the third quarter of 2011 versus the fourth quarter of 2010, accounts receivable increased $19.9 million as a result of a longer collection cycle caused by a change in the composition of our accounts receivable from customers with shorter payment terms to customers with longer payment terms. This change resulted in our

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DSO increasing from 52 days at October 2, 2010 to 54 days at July 2, 2011. The increase in accounts receivable was mitigated by an increase in accrued liabilities and a decrease in prepaid expenses and other assets. Our working capital metrics tend to fluctuate from quarter-to-quarter based on factors such as the linearity of our shipments and purchases, customer and supplier mix, and the negotiation of payment terms with customers and suppliers. These fluctuations can significantly affect our cash flows from operating activities.

Net cash used in investing activities was $73.7 million and $28.0 million for the nine months ended July 2, 2011 and July 3, 2010, respectively. During the nine months ended July 2, 2011, we used $82.8 million of cash for capital expenditures, received proceeds of $23.8 million from asset sales, and used $14.7 million of cash in connection with a previous business combination. During the nine months ended July 3, 2010, we used $44.1 million of cash for capital expenditures, received proceeds of $30.8 million from asset sales, and made business acquisition related payments of $14.7 million.

Net cash used in financing activities was $90.4 million and $165.6 million for the nine months ended July 2, 2011 and July 3, 2010, respectively. During the nine months ended July 2, 2011, we issued $500.0 million of long-term debt and received net proceeds of $489.0 million. Additionally, we repurchased $580.0 million of long-term debt for a purchase price of $589.4 million, plus third party costs of $1.3 million. During the nine months ended July 3, 2010, we repaid $219.9 million of our long-term debt, including $24.1 million acquired through an acquisition, and borrowed $50.6 million under two short-term debt facilities.

Other Liquidity Matters.

During the current quarter, we significantly improved our long-term debt profile. We issued $500 million of debt with a maturity date of 2019 and used the proceeds, together with existing cash, to redeem $380 million of debt due in 2013 and $200 million of debt in 2016. As a result, our next long-term debt maturity is in 2014 and the average life of our long-term debt was extended to 5.7 years. Additionally, our interest rate profile improved significantly as our new debt of $500 million has been converted to variable-rate debt through an interest rate swap and the debt we redeemed had fixed rates of 6.75% and 8.125%.

Our debt agreements currently contain a number of restrictive covenants, including prohibitions on incurring additional debt, making investments and other restricted payments, paying dividends and redeeming or repurchasing capital stock and debt, subject to certain exceptions. We were in compliance with these covenants as of July 2, 2011. Our debt agreements do not contain any financial maintenance covenants that are currently applicable to us. We may be required to seek waivers or amendments to certain covenants for our debt instruments if we are unable to comply with the requirements of the covenants in the future. We may not be able to obtain such waivers or amendments on terms acceptable to us or at all, and, in such case, these covenants could materially adversely impact our ability to conduct our business or carry out our restructuring plans.

Our next long-term debt maturity is in 2014. We may, however, consider early redemptions of our debt in future periods, possibly using proceeds from additional debt or equity financings. In addition to our existing covenant requirements, future debt financing may require us to comply with financial ratios and covenants. Equity financing, if required, may result in dilution to existing stockholders.

During 2010, one of our subsidiaries in China entered into a $50 million unsecured working capital loan facility. Borrowings under the facility bear interest at a rate equal to the three month LIBOR plus a spread. The loan facility expires in April 2012 and contains certain negative covenants that, upon default, permit the bank to deny any further advances or extension of credit or to terminate the loan agreement. As of July 2, 2011, $30 million had been borrowed under this facility and was outstanding and we were in compliance with all covenants.

Also during 2010, one of our subsidiaries in India entered into a $35 million working capital loan facility that contains no covenants and expires on June 30, 2012. Borrowings under the facility bear interest at a rate equal to LIBOR plus a spread. As of July 2, 2011, $30.4 million had been borrowed under this facility and was outstanding.

As of July 2, 2011, we have a liability of $53.8 million for uncertain tax positions. Our estimate of our liability for uncertain tax positions is based on a number of subjective assessments, including the likelihood of a tax obligation being assessed, the amount of taxes (including interest and penalties), that would ultimately be payable, and our ability to settle any such obligations on favorable terms. Therefore, the amount of future cash flows associated with uncertain tax positions may be significantly higher or lower than our recorded liability.

In connection with our acquisition of BreconRidge Corporation, we paid $15.5 million of purchase consideration in 2011 and expect to pay $2.0 million of purchase consideration in November 2011.

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We have entered into, and continue to enter into, various transactions that periodically require collateral. These obligations have historically arisen from customs, import/export, VAT, utility services, debt financing, foreign exchange contracts and interest rate swaps. We have collateralized, and may from time to time collateralize, such obligations as a result of counterparty requirements or for economic reasons. As of July 2, 2011, we had collateral of $16.5 million in the form of cash against certain of our collateralized obligations. Cash used for collateral reduces our cash available for other purposes.

Our liquidity needs are largely dependent on changes in our working capital, including inventory requirements, the extension of trade credit by our suppliers, the degree of alignment of payment terms from our suppliers to payment terms granted to our customers, and restrictions on our ability to move cash between subsidiaries and repatriate cash to the U.S., investments in facilities and equipment, repayments of obligations under outstanding indebtedness and repurchases of our outstanding debt. Our primary sources of liquidity include 1) cash of $582.8 million; 2) our $235 million credit facility, of which we were eligible to borrow $165.0 million as of July 2, 2011 based on the levels of eligible accounts receivable and inventories at that date; 3) short-term borrowing facilities of $85.0 million, of which $24.6 million was available as of July 2, 2011; and 4) cash generated from operations.

We believe our existing cash resources and other sources of liquidity, together with cash generated from operations, will be sufficient to meet our working capital requirements for the next 12 months. Should our working capital requirements increase significantly over the next 12 months or we experience increases in delinquent or uncollectible accounts receivable, our cash provided by operations would be adversely impacted.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

Our primary exposure to market risk for changes in interest rates relates to certain of our outstanding debt obligations. Currently, we do not use derivative financial instruments in our investment portfolio. As of July 2, 2011, we had no short-term investments.

As of July 2, 2011, we had $1.2 billion of long-term debt, of which $400.0 million bears interest at a fixed rate, $257.4 million of variable rate debt has been converted to fixed rate through the use of interest rate swaps and $500.0 million of fixed rate debt has been converted to variable rate debt through the use of an interest rate swap. Accordingly, our exposure to interest rates is limited to variable rate long-term debt of $500.0 million and $60.4 million of variable-rate short-term borrowings outstanding as of July 2, 2011. The effect of an immediate 10% change in interest rates would not have a significant impact on our results of operations.

Foreign Currency Exchange Risk

We transact business in foreign countries. Our foreign exchange policy requires that we take certain steps to limit our foreign exchange exposures related to certain assets and liabilities and forecasted cash flows. However, our policy does not require us to hedge all foreign exchange exposures. Further, foreign currency hedges are based on forecasted transactions, the amount of which may differ from that actually incurred. As a result, we experience foreign exchange gains and losses in our results of operations.

Our primary foreign currency cash flows are in certain Asian and European countries, Israel and Mexico. We enter into short-term foreign currency forward contracts to hedge currency exposures associated with certain monetary assets and liabilities denominated in foreign currencies. These contracts typically have maturities of up to two months and are not designated as part of a hedging relationship in accordance with ASC 815. All outstanding foreign currency forward contracts are marked-to-market at the end of the period with unrealized gains and losses included in other income (expense), net, in the condensed consolidated statements of income. As of July 2, 2011, we had outstanding foreign currency forward contracts to exchange various foreign currencies for U.S. dollars in the aggregate notional amount of $356.9 million.

We also utilize foreign currency forward contracts to hedge certain operational (“cash flow”) exposures resulting from changes in foreign currency exchange rates. Such exposures result from 1) forecasted sales denominated in currencies other than those used to pay for materials and labor and 2) anticipated capital expenditures denominated in a currency other than the functional currency of the entity making the expenditures. In addition, the Company also hedges capital expenditures related to certain plant expansions in Asia. These contracts are up to twelve months in duration and are accounted for as cash flow hedges under ASC 815. The effective portion of changes in the fair value of the contracts is recorded in stockholders' equity as a separate component of accumulated other comprehensive income and is recognized in the condensed consolidated statement of income when the hedged item affects earnings. We had forward contracts related to cash flow hedges in various foreign currencies in the aggregate notional amount of $121.4 million as of July 2, 2011. The net impact of an immediate 10% change in exchange rates would not be material to our condensed consolidated financial statements, provided we accurately forecast our foreign currency exposure. If such forecasts are materially inaccurate, we could incur significant gains or losses.

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Item 4. Controls and Procedures

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended July 2, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures will prevent all error and all fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that their objectives are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits of disclosure controls and procedures must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of disclosure controls and procedures can provide absolute assurance that all disclosure control issues and instances of fraud, if any, within the Company have been detected. Nonetheless, our Chief Executive Officer and Chief Financial Officer have concluded that, as of July 2, 2011, (1) our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives, and (2) our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding its required disclosure.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Please refer to Item 1 of Part II to our Quarterly Report on Form 10-Q for the quarter ended January 1, 2011.

See also Note 6 of Notes to Condensed Consolidated Financial Statements.

From time to time, we may be involved in other routine legal proceedings, as well as demands, claims and threatened litigation, that arise in the normal course of our business. The ultimate outcome of any litigation is uncertain and unfavorable outcomes could have a negative impact on our results of operations and financial condition. Regardless of outcome, litigation can have an adverse impact on us as a result of incurrence of defense costs, diversion of management resources and other factors. We record liabilities for legal proceedings when a loss becomes probable and the amount of loss can be reasonably estimated.

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Item 1A. Risk Factors Affecting Operating Results

We may experience component shortages or price increases, which could cause us to delay shipments to customers and reduce our sales and net income; the natural disaster in Japan could also reduce our sales and profitability.

We are dependent on certain suppliers, including limited and sole source suppliers, to provide key components we incorporate into our products. We have experienced, and may experience in the future, delays in component deliveries, which in turn could cause delays in product shipments to customers, result in reduced revenue from and have an adverse effect on our relationship with the affected customer, and our reputation generally as a reliable service provider. In addition, component shortages, whether anticipated or not, can increase our cost of goods sold and therefore decrease our gross margin since we may be required to pay higher prices for components in short supply and redesign or reconfigure products to accommodate substitute components. Additionally, we may purchase components in advance of our requirements for those components as a result of a threatened or anticipated shortage. In this event, we may incur additional inventory carrying costs and have a heightened risk of exposure to inventory obsolescence, the cost of either of which may not be recoverable from our customers. Such costs would reduce our margins and net income. Finally, if key components become scarce, we may be required to look to second tier vendors or to procure components through brokers. Such components may be of lesser quality than those otherwise available and could cause us to incur costs to qualify such components or to replace them if they prove to be defective. In some cases, suppliers seek to obtain credit insurance for our or our subsidiaries' payment obligations as a condition to continuing to do business with us. Should such insurance not be available, our ability to continue to procure components and deliver manufactured products to our customers could be adversely impacted.

While we have not to date been significantly impacted by the March 2011 earthquake and tsunami in Japan, many of our customers are headquartered there and some of the components sourced for our customers' products are manufactured in Japan. As a result, our customers based in Japan may order reduced amounts of product from us resulting from interruptions in their own businesses and diminished demand from Japanese consumers and we may find it difficult to procure components that are currently sourced from Japanese suppliers, either of which would adversely impact our business. Such tightening of supply could prevent us from building products that require Japanese sourced components or increase our expenses as we are forced to find alternative sources of supply. Should such reduction of demand and tightening supply conditions arise and then continue over an extended period of time, our revenue, margins and net income could be reduced, perhaps significantly.

Adverse market conditions in the electronics industry could reduce our future sales and earnings per share.

 We cannot accurately predict future levels of demand for our customers' electronics products. Consequently, our past operating results, earnings and cash flows may not be indicative of our future operating results, earnings and cash flows. During the past two years, adverse worldwide economic conditions led to challenging conditions in the electronics industry. A number of factors, including lower asset values, price instability, geopolitical issues, the availability and cost of credit, high unemployment and concerns about the stability and solvency of financial institutions, financial markets, businesses, and sovereign nations slowed global economic growth and resulted in recessions in many countries, including in the United States, Europe and certain countries in Asia. The conditions resulted in our customers delaying purchases or placing purchase orders for lower volumes of products than previously experienced or anticipated.

While these conditions have abated somewhat during the past year, there is still risk of an economic downturn, which could result in our customers or potential customers reducing or delaying orders, the insolvency of key suppliers, which could result in production delays, shorter payment terms from suppliers due to reduced availability of credit default insurance in the market, the inability of customers to obtain credit, and the insolvency of one or more customers. Any of these effects could impact our ability to effectively manage inventory levels and collect receivables, increase our need for cash, and decrease our net revenue and profitability.

Many of the industries to which we provide products have previously experienced significant financial difficulty, with some of the participants filing for bankruptcy. Such significant financial difficulty, if experienced by one or more of our customers, may negatively affect our business due to the decreased demand of these financially distressed customers, the lengthening of customer payment terms, the potential inability of these companies to make full payment on amounts owed to us, or any of these factors. Customer bankruptcies also entail the risk of potential recovery by the bankruptcy estate of amounts previously paid to us that are deemed a preference under bankruptcy law. We do not carry insurance against the risk of customer default on their payment obligations to us.

We may be unable to obtain sufficient financing to reduce our debt levels or maintain or expand our operations,

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which may cause our stock price to fall and reduce the business our customers and vendors do with us.

Our liquidity needs are largely dependent on changes in working capital, including inventory requirements, the extension of trade credit by our suppliers, the degree of alignment of payment terms from our suppliers to payment terms granted to our customers, investments in facilities and equipment, acquisitions, repayments of obligations under outstanding indebtedness and repurchases of our outstanding debt. In connection with the management of our liquidity needs, we entered into a five-year $135 million asset-backed credit facility in November 2008, which we later increased to $235 million, under which we could borrow $165 million as of July 2, 2011. We also have $85 million in foreign short-term financing facilities under which $24.6 million remained available to be borrowed as of July 2, 2011. Our next long-term debt maturity is in 2014. In the event we need additional capital, whether for working capital, debt repayment or otherwise, there can be no assurance that debt or equity capital will be available on acceptable terms or at all. New financing arrangements, if available, could result in us issuing additional equity securities, which could cause dilution to existing stockholders. If additional or continued financing, including the continued extension of trade credit by our suppliers, is not available when required, our ability to repay, reduce or refinance our debt, maintain or increase our rates of production and expand our manufacturing capacity, as well as our overall liquidity, will be harmed, which could cause our stock price to fall and reduce our customers' and vendors' willingness to do business with us.

Our credit arrangements contain covenants which may adversely impact our business and the failure to comply with such covenants could cause our outstanding debt to become immediately payable.

Our debt agreements do not contain financial covenants currently applicable to us, but do include a number of negative covenants, including restrictions on incurring additional debt, making investments and other restricted payments, acquiring new businesses, paying dividends and redeeming or repurchasing capital stock and debt, subject to certain exceptions. These covenants could constrain our ability to grow our business through acquisition or engage in other transactions which the covenants would otherwise restrict, including refinancing our existing debt. In addition, such agreements include affirmative covenants requiring, among other things, that we file quarterly and annual financial statements with the SEC. If we are not able to comply with all of these covenants, for any reason, some or all of our outstanding debt as well as all amounts payable under our interest rate swaps on such debt, (if any) could become immediately due and payable and the incurrence of additional debt under our asset-backed credit facility would not be allowed.

Our early redemptions of debt and repurchases of stock have reduced our working capital and liquidity; debt refinancing can entail higher interest expense, which would lower our net income; interest payments on variable rate debt can increase, which would lower our net income.

During 2010 and in the first nine months of fiscal 2011, we redeemed $195.7 million and $580 million of our long-term debt, respectively. Although redemptions of debt improve our operating results by reducing our interest expense, these redemptions have reduced our liquidity. If we should repurchase or redeem additional debt or equity, our working capital and liquidity would be further reduced. In addition, should we undertake to refinance any of our outstanding long-term debt, the next maturity of which is 2014, there can be no assurance that the terms of such refinancing, particularly the interest rate, would be favorable to us. Should we be forced to replace lower interest rate debt with higher interest rate debt, our net income would be reduced. In addition, an aggregate of $500 million of our long-term debt and $60.4 million in short-term borrowings bear interest at a variable rate based upon LIBOR. Should LIBOR increase substantially in the future, our interest payments on this debt would also increase, lowering our net income. Additionally, at present there is uncertainty whether the United States government will increase its debt ceiling and avoid defaulting on its debt obligations. If the United States defaults on its obligations or if its credit rating declines, interest rates may rise which would increase our interest costs and reduce our net income.

We could experience credit problems with our customers, which would reduce our future revenues and net income.

While we seek to mitigate the impact of collection problems with our customers on our financial results by evaluating their creditworthiness on an ongoing basis and by maintaining an allowance for doubtful accounts that is assessed for adequacy quarterly, economic conditions have in the past caused certain of our customers to extend or default on their payments, declare bankruptcy or both. Should customer defaults increase substantially or exceed the level of our allowance, our revenue, net income and cash position would be reduced, perhaps significantly.

We are subject to intense competition in the EMS industry which could cause us to lose sales and therefore hurt our financial performance.

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The EMS industry is highly competitive and the industry has been experiencing a surplus of manufacturing capacity, particularly in light of the slowdowns in the U.S. and certain international economies. Our competitors include major global EMS providers such as Celestica, Inc., Flextronics International Ltd., Hon Hai (Foxconn) and Jabil Circuit, Inc., as well as other EMS companies that have a regional, product, service or industry specific focus. Some of those companies have greater manufacturing and financial resources than we do. We also face competition from current and potential OEM customers who may elect to manufacture their own products internally rather than outsourcing to EMS providers.

We may not be able to offer prices as low as some of our competitors because those competitors may have lower operating costs as a result of their geographic location, greater economies of scale or the services they provide or because these competitors are willing to provide EMS services at prices we are unable or unwilling to offer. There can be no assurance that we will not lose business in the future in response to such competitive pricing or other inducements which may be offered by our competitors, which would decrease our sales and net income.

Our operating results are subject to significant uncertainties, which make predictability of our future sales and net income difficult.

Our operating results are subject to significant uncertainties, including:

• conditions in the economy as a whole and in the electronics industry;

• fluctuations in components prices and component shortages caused by high demand, natural disaster or otherwise, which could cause us to be unable to meet customer delivery schedules, increase our costs and potentially decrease our profitability;

• timing of new product development by our customers which creates demand for our services;

• levels of demand in the end markets served by our customers;

• our ability to replace declining sales from end of life programs with new business wins;

• timing of orders from customers and the accuracy of their forecasts;

• inventory levels of customers, which if high relative to their normal sales volume, could cause them to reduce their orders to us;

• timing of expenditures in anticipation of increased sales, customer product delivery requirements and shortages of components or labor;

• mix of products ordered by and shipped to major customers, as high volume and low complexity manufacturing services typically have lower gross margins than more complex and lower volume services;

• degree to which we are able to utilize our available manufacturing capacity;

• our ability to maintain desired plant operating efficiencies, including achieving acceptable yields, effectively planning production and managing our inventory and fixed assets to avoid high carrying costs and excess working capital;

• our ability to effectively plan production and manage our inventory and fixed assets;

• customer insolvencies resulting in bad debt or inventory exposures that are in excess of our reserves;

• our ability to efficiently move manufacturing activities to lower cost regions without adversely affecting customer relationships while controlling costs related to the closure of facilities and employee severance;

• pricing and other competitive pressures;

• fluctuations in the values of our assets, including real property and assets held for sale, which could result in charges to income;

• volatility of foreign currency exchange rates;

• changes in our tax provision due to our estimates of pre-tax income in the jurisdictions in which we operate; and

• political and economic developments in countries in which we have operations. .

A portion of our operating expenses is relatively fixed in nature and planned expenditures are based in part on anticipated orders, which are difficult to predict. If we do not receive anticipated orders as expected, our profitability will decline. Moreover, our ability to reduce our costs as a result of current or future restructuring efforts may be limited because consolidation of operations can be a costly and lengthy process to complete.

Our strategy to pursue higher margin business depends in part on the success of our components business, which if not successful, could cause our future gross margins and operating results to be lower.

Our components business, which includes printed circuit boards, mechanical systems, optical components and cable manufacturing, is a key part of our strategy to grow our future margins and profitability by expanding our vertical

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integration capabilities. In order to grow this portion of our business profitably, we must continue to make substantial investments in the development of our components capabilities, research and development activities, test and tooling equipment and skilled personnel. Given the relatively higher fixed cost structure of this business, our success is greatly dependent upon obtaining sufficient orders for our components manufacturing services which is difficult to predict. The success of our components business also depends on our ability to achieve commercially viable production yields and to manufacture components in commercial quantities to the specifications and quality standards required by customers. In particular, our customers require that all new components used in their products be qualified in advance which can be costly both in terms of time and cost and may not result in the customers' acceptance of our components. Any of these factors could cause components revenue or margins to be less than expected, which would have an overall adverse effect on our revenues and profitability.

If demand for our higher-end, higher margin manufacturing services does not increase, our future gross margins and operating results may be lower than expected.

We typically earn lower gross margins when we provide less complex EMS services. We experience continued pressure from OEMs to reduce prices, and competition remains intense. Pricing pressure is typically more intense for less complex, lower margin EMS services. This price competition has affected, and could continue to adversely affect, our gross margins. If demand for our higher-end, higher margin manufacturing services does not increase in the future, our gross margins and operating results in future periods may be lower than expected.

We generally do not obtain long-term volume purchase commitments from customers and, therefore, cancellations, reductions in production quantities and delays in production by our customers could reduce our sales and net income.

We generally do not obtain firm, long-term purchase commitments from our customers and our bookings may generally be cancelled prior to the scheduled shipment date. Customers may cancel their orders, reduce production quantities or delay production for a number of reasons, including significant decreases in demand for their products and services. Although the customer is generally liable for finished goods and work-in-process at the time of cancellation, we may be unable or, for other business reasons, choose not to enforce our contractual rights. Cancellations, reductions or delays of orders by customers would:

• reduce our sales and net income by decreasing the volumes of products that we manufacture for our customers;

• delay or eliminate recovery of our expenditures for inventory purchased in preparation for customer orders; and

• lower our asset utilization, which would result in lower gross margins and lower net income.

In addition, customers sometimes require that we transfer the manufacturing of their products from one facility to another to achieve cost reductions and other objectives. These transfers have resulted in increased costs to us due to facility downtime or less than optimal utilization of our manufacturing capacity. These transfers also have required us to close or reduce operations at certain facilities, particularly those in high cost locations such as the United States, Canada and Western Europe, and as a result we have incurred significant costs for the closure of facilities, employee severance and related matters. We also have encountered occasional delays and complications related to the transition of manufacturing programs to new locations. We may be required to relocate our manufacturing operations in the future and, accordingly, we may incur additional costs that decrease our net income.

Energy price increases may negatively impact our results of operations.

Certain of the components that we use in our manufacturing activities are petroleum-based. In addition, we, along with our suppliers and customers, rely on various energy sources (including oil) in our transportation activities. While significant uncertainty currently exists about the future levels of energy prices, significant long-term increases are possible. Increased energy prices could cause an increase to our raw material costs and transportation costs. In addition, increased transportation costs of certain of our suppliers could be passed along to us. We may not be able to increase our product prices enough to offset these increased costs. In addition, any increase in our product prices may reduce our future customer orders and profitability.

Adverse changes in the key end markets we target could harm our business by reducing our sales.

We provide EMS services to companies that sell products in the communications, industrial, defense, medical,

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enterprise computing and storage and multimedia markets. Adverse changes in any of these markets could reduce demand for our customers' products and make these customers more sensitive to the cost of our EMS services, either of which could reduce our sales, gross margins and net income. Factors affecting any of our customers' industries in general, or our customers in particular, have led to reductions in net sales in certain end markets, and such factors could seriously harm our business in the future. These factors include:

• short product life cycles leading to continuing new requirements and specifications for our customers products, the failure of which to meet could cause us to lose business;

• failure of our customers' products to gain widespread commercial acceptance which could decrease the volume of orders customers place with us;

• recessionary periods in our customers' markets which decrease orders from affected customers; and

• in the case of our defense business, reduced government spending levels resulting from budgetary pressures and constraints or political uncertainty regarding future budgets.

We rely on a relatively small number of customers for a substantial portion of our sales, and declines in sales to these customers would reduce our net sales and net income.

One customer represented more than 10% of our net sales and sales to our ten largest customers represented 49.2% of our net sales during the first nine months of 2011. We expect to continue to depend upon a relatively small number of customers for a significant percentage of our sales. Consolidation among our customers may further concentrate our business in a limited number of customers and expose us to increased risks related to dependence on a small number of customers. In addition, a significant reduction in sales to any of our large customers or significant pricing and margin pressures exerted by such a customer would adversely affect our operating results. In the past, some of our large customers have significantly reduced or delayed the volume of manufacturing services ordered from us as a result of changes demand for their product, consolidations or divestitures or for other reasons. In particular, certain of our customers have from time to time entered into manufacturing divestiture transactions with other EMS companies, and such transactions could reduce our revenues with these customers. We cannot assure you that present or future large customers will not terminate their manufacturing arrangements with us or significantly change, reduce or delay the amount of manufacturing services ordered from us, any of which would reduce our net sales and net income.

We are subject to risks arising from our international operations.

We conduct our international operations primarily in Asia, Latin America, Canada and Europe, and we continue to consider additional opportunities to make foreign acquisitions and construct new foreign facilities. We generated 81.7% of our net sales from non-U.S. operations for the nine months ended July 2, 2011 and a significant portion of our manufacturing material was provided by international suppliers during this period. As a result of our international operations, we are affected by economic and political conditions in foreign countries, including:

• the imposition of government controls;

• compliance with U.S. and foreign laws concerning trade and employment practices;

• difficulties in obtaining or complying with export license requirements;        

• trade restrictions;

• changes in tariffs;

• labor unrest, including strikes, and difficulties in staffing;

• inflexible employee contracts in the event of business downturns;

• coordinating communications among and managing international operations;

• fluctuations in currency exchange rates;

• currency controls;

• increases in duty and/or income tax rates;

• adverse rulings in regards to tax audits;

• excess costs associated with reducing employment or shutting down facilities;

• misappropriation of intellectual property; and

• constraints on our ability to maintain or increase prices. 

Our operations in certain foreign locations receive favorable income tax treatment in the form of tax holidays or other incentives. In the event that such tax holidays or other incentives are not extended, are repealed, or we no longer qualify for such programs, our taxes may increase, which would reduce our net income.

Additionally, a significant portion of our worldwide cash reserves are generated by, and therefore held in, foreign

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jurisdictions. Certain of such jurisdictions restrict the amount of cash that can be transferred to the U.S or impose taxes and penalties on such transfers of cash. To the extent we have excess cash in foreign locations that could be used in, or is needed by, our U.S. operations, we may incur significant taxes to repatriate these funds.

We operate in countries that have experienced labor unrest and political instability, including China, India, Thailand and other countries in Southeast Asia and we have experienced work stoppages and similar disruptions in certain foreign jurisdictions, including India. To the extent such developments prevent us from adequately staffing our plants and manufacturing and shipping products in those jurisdictions, our margins and net income could be reduced and our reputation as a reliable supplier could be negatively impacted.

Our results can be adversely affected by rising labor costs.

There is uncertainty with respect to rising labor costs, in particular within the lower-cost regions in which we operate. Recently, in China, labor disputes and strikes based partly on wages have slowed or stopped production at certain manufacturers. In some cases, employers have responded by significantly increasing the wages of workers at such plants. Any increase in labor costs that we are required to make in order to retain qualified personnel and are unable to recover in our pricing to our customers could adversely impact our operating results.

To respond to competitive pressures and customer requirements, we may further expand internationally in lower cost locations, particularly in Asia, Eastern Europe and Latin America. As we pursue these expansions, we may be required to make additional capital expenditures. In addition, the cost structure in certain countries that are now considered to be favorable may increase as economies develop or as such countries join multinational economic communities or organizations, causing local wages to rise. As a result, we may need to continue to seek new locations with lower costs and the employee and infrastructure base to support electronics manufacturing. We cannot assure you that we will realize the anticipated strategic benefits of our international operations or that our international operations will contribute positively to our operating results.

As a result of our components ordering policies, and customer-requested ship dates, we may incur carrying costs or not be compensated for components, work-in-process or finished goods, which would decrease our margins and net income.

In order to satisfy customer orders, we are frequently required to order components and other parts in advance of customer payment, particularly for long lead-time items. Furthermore, we may be required to keep additional components, work-in-process and finished goods in inventory in order to meet customer delivery dates. While our supply agreements with our customers generally allocate most of the liability for payment for such items to the customers, we may nonetheless incur additional carrying costs or not ultimately be compensated for these items should the customer default upon its obligations. To the extent we incur any such costs, our gross margins and net income would be reduced.

Our business could be adversely affected by any delays, or increased costs, resulting from issues that our common carriers are dealing with in transporting our materials, our products, or both.

We rely on a variety of common carriers to transport our materials from our suppliers to us, and to transport our products from us to our customers. Problems suffered by any of these common carriers, whether due to a natural disaster, labor problem, increased energy prices or some other issue, could result in shipping delays, increased costs, or some other supply chain disruption, and could therefore have a material adverse effect on our operations.

If we manufacture or design defective products, or if our manufacturing processes do not comply with applicable statutory and regulatory requirements, we could be subject to damages and fines and lose customers.

We manufacture products to our customers' specifications, and in some cases our manufacturing processes and facilities may need to comply with applicable statutory and regulatory requirements. For example, many of the medical devices that we manufacture, as well as the facilities and manufacturing processes that we use to produce them, are regulated by the United States Food and Drug Administration. In addition, our customers' products and the manufacturing processes that we use to produce them often are highly complex. As a result, products that we design or manufacture may at times contain design or manufacturing defects, and our manufacturing processes may be subject to errors or may not be in compliance with applicable statutory and regulatory requirements. Defects in the products we design or manufacture may result in product recalls, warranty claims by customers, including liability for repair costs, delayed shipments to customers or reduced or cancelled customer orders. If these defects or deficiencies are significant,

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our business reputation may also be damaged. The failure of the products that we design or manufacture or of our manufacturing processes and facilities to comply with applicable statutory and regulatory requirements may subject us to legal fines or penalties and, in some cases, require us to shut down or incur considerable expense to correct a manufacturing program or facility. In addition, these defects may result in product liability claims against us. The magnitude of such claims may increase as we expand our medical, automotive, and aerospace and defense manufacturing services because defects in medical devices, automotive components and aerospace and defense systems could seriously harm users of these products. Even if our customers are responsible for defects in the design of a product, we could nonetheless be named in a product liability suit over such defects and could be required to expend significant resources defending ourselves.

We also design products on a contract basis or jointly with our customers. The design services that we provide can expose us to different or greater potential liabilities than those we face when providing our regular manufacturing services. For example, we have increased exposure to potential product liability claims resulting from injuries caused by defects in products we design, as well as potential claims that products we design infringe third-party intellectual property rights. Such claims could subject us to significant liability for damages and, regardless of their merits, could be time-consuming and expensive to resolve. Any such costs and damages could be significant and would reduce our net income.

Our key personnel are critical to the continued growth of our business and we cannot assure you that they will remain with us.

Our success depends upon the continued service of our key personnel. Generally, these employees are not bound by employment or non-competition agreements. We cannot assure you that we will retain our key employees, particularly our highly skilled operations managers and engineers involved in the manufacture of existing products and development of new products and processes. The competition for these employees is intense. In addition, if one or more of our key employees were to join a competitor or otherwise compete directly or indirectly with us or otherwise become unavailable to us, we could lose customers and our sales and gross margins could decrease.

If we are unable to maintain our technological and manufacturing process expertise, our business could be adversely affected.

Improvements to and refinements of our manufacturing processes are necessary to manufacture next generation products for our customers in a cost-efficient manner. As a result, we are continually evaluating the cost-effectiveness and feasibility of new manufacturing processes. In some cases, we will be required to make capital expenditures and incur engineering expense in order to qualify and validate any such new process. Such expenses would reduce our net income. In addition, any delay in the deployment of such new process, or problems commencing volume production using a new process could also reduce our margins and net income and harm our reputation with our customers.

Unanticipated changes in our tax rates or exposure to additional income tax liabilities could increase our taxes and decrease our net income.

We are subject to income, sales, value-added and other taxes in the United States and various foreign jurisdictions. Significant judgment is required in determining our worldwide provision for taxes and, in the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Our effective tax rates could be adversely affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws and other factors. Our tax determinations are regularly subject to audit by tax authorities and developments in those audits could adversely affect our tax provisions, including through assessment of back taxes, interest and penalties. Although we believe that our tax estimates are reasonable, the final determination of tax audits or tax disputes may be different from what is reflected in our historical tax provisions which could lead to an increase in our taxes payable and a decrease in our net income.

Our international sales are subject to laws relating to trade, export controls and foreign corrupt practices, the violation of which could adversely affect our operations.

We are required to comply with all applicable domestic and foreign export control laws, including the International Traffic in Arms Regulations (“ITAR”) and the Export Administration Regulations (“EAR”). Some items manufactured by us are controlled for export by the United States Department of Commerce's Bureau of Industry and Security under the EAR. In addition, we are subject to the Foreign Corrupt Practices Act and international counterparts that bar bribes or unreasonable gifts for foreign governments and officials. Violation of any of these laws or regulations

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could result in significant sanctions, including large monetary penalties and suspension or debarment from participation in future government contracts, which could reduce our future revenue and net income.

We are subject to a number of U.S. governmental procurement rules and regulations, the failure to comply with which could result in damages or reduction of future revenue.

We are subject to a number of laws and regulations relating to the award, administration and performance of U.S. government contracts and subcontracts. Such laws and regulations govern, among other things, price negotiations, cost accounting standards and other aspects of performance under government contracts. These rules are complex and our performance under them is subject to audit by the Defense Contract Audit Agency and other government regulators. If an audit or investigation reveals a failure to comply with regulations or other improper activities, we may be subject to civil or criminal penalties and administrative sanctions by either the government or the prime customer, including termination of the contract, payment of fines and suspension or debarment from doing further business with the U.S. government. Any of these actions would increase our expenses, reduce our revenue and damage our reputation as a reliable government supplier.

We can experience losses due to foreign exchange rate fluctuations, which would reduce our net income.

Because we manufacture and sell a substantial portion of our products abroad, our operating costs are subject to fluctuations in foreign currency exchange rates. If the U.S. dollar weakens against the foreign currencies in which we denominate certain of our trade accounts payable, fixed purchase obligations and other expenses, the U.S. dollar equivalent of such expenses would increase. We use financial instruments, primarily short-term foreign currency forward contracts, to hedge certain forecasted foreign currency commitments arising from trade accounts receivable, trade accounts payable and fixed purchase obligations. Our foreign currency hedging activities depend largely upon the accuracy of our forecasts of future sales, expenses, capital expenditures and monetary assets and liabilities. As such, our foreign currency forward contracts may exceed or not cover our full exposure to exchange rate fluctuations. If these hedging activities are not successful, we may experience significant unexpected expenses from fluctuations in exchange rates. Although we believe our foreign exchange hedging policies are reasonable and prudent under the circumstances, we can provide no assurances that we will not experience losses arising from currency fluctuations in the future, which could be significant.

Consolidation in the electronics industry may adversely affect our business by increasing competition or customer buying power and increasing prices we pay for components.

Consolidation in the electronics industry among our customers, our suppliers and/or our competitors may increase as companies combine to achieve further economies of scale and other synergies. Consolidation in the electronics industry could result in an increasing number of very large electronics companies offering products in multiple sectors of the electronics industry. The significant purchasing and market power of these large companies could increase competitive pressures on us. In addition, if one of our customers is acquired by another company that does not rely on us to provide EMS services either because it has its own production facilities or relies on another provider of similar services, we may lose that customer's business. In addition, consolidation in the electronics industry may also result in excess manufacturing capacity among EMS companies, which could drive our profitability down. Similarly, consolidation among our suppliers could result in a sole or limited source for certain components used in our customers' products. Any such consolidation could cause us to be required to pay increased prices for such components, which would reduce our gross margin and profitability.

Restructuring of our operations could require us to take an accounting charge which would reduce our net income.

We have incurred significant expenses related to restructuring of our operations in the past. For example, we have moved, and may continue to move, our operations from higher-cost to lower-cost locations to meet customer requirements. We have incurred costs related to workforce reductions, work stoppages and labor unrest resulting from the closure of our facilities in higher cost locations. In addition, we have incurred unanticipated costs related to the transfer of operations to lower-cost locations, including costs related to integrating new facilities, managing operations in dispersed locations and realigning our business processes. We also have incurred costs to restructure operations that have been acquired in order to integrate them into our Company. We expect to be required to record additional charges related to restructuring activities in the future, but cannot predict the timing or amount of such charges. Any such charges would reduce our net income.

Our failure to comply with applicable environmental laws could adversely affect our business by causing us to pay

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significant amounts for clean up of hazardous materials or for damages or fines.

We are subject to various federal, state, local and foreign environmental laws and regulations, including those governing the use, storage, discharge and disposal of hazardous substances and wastes in the ordinary course of our manufacturing operations. We also are subject to laws and regulations governing the recyclability of products, the materials that may be included in products, and the obligations of a manufacturer to dispose of these products after end users have finished using them. If we violate environmental laws or if we occupy or occupied in the past a site at which a predecessor company caused contamination, we may be held liable for damages and the costs of remedial actions. We cannot assure you that we will not violate environmental laws and regulations in the future as a result of human error, equipment failure or other causes. Although we estimate and regularly reassess our potential liability with respect to violations or alleged violations and accrue for such liability, we cannot assure you that our accruals will be sufficient to cover the actual costs we incur as a result of these violations or alleged violations or that no violations will not occur for which a reserve has not been established. Any increase in existing reserves or establishment of new reserves for environmental liability would reduce our net income. Our failure to comply with applicable environmental laws and regulations could also limit our ability to expand facilities or could require us to acquire costly equipment or to incur other significant expenses to comply with these laws and regulations.

Asbestos containing materials, or ACM, are present at several of our manufacturing facilities. Although the ACM is being managed and controls have been put in place pursuant to ACM operations and maintenance plans, the presence of ACM could give rise to remediation obligations and other liabilities. No governmental or third-party claims relating to ACM have been brought at this time.

Our plants generally operate under environmental permits issued by governmental authorities. For the most part, these permits must be renewed periodically and are subject to revocation in the event of violations of environmental laws. Although we have not experienced any material revocations to date, any such revocation could require us to cease or limit production at one or more of our facilities, thereby having an adverse impact on our results of operations.

Primarily as a result of certain of our acquisitions, we have incurred liabilities associated with environmental contamination. These liabilities include ongoing investigation and remediation activities at a number of sites, including our facilities located in Irvine, California; Owego, New York; Derry, New Hampshire; Fort Lauderdale, Florida and Phoenix, Arizona. We have been named in a lawsuit alleging operations at our former facility in Santa Ana, California contributed to groundwater contamination. There can be no assurance that any other similar third-party or governmental claims will not arise and will not result in material liability to us. In addition, there are some sites, including our acquired facility in Gunzenhausen, Germany, that are known to have groundwater contamination caused by a third-party, and that third-party has provided indemnity to us for the liability. 

We have also been named as a potentially responsible party at one contaminated disposal site, operated by another party at the Casmalia Resources site in Southern California, as a result of the past disposal of hazardous waste by companies we have acquired or by our corporate predecessors. Although liabilities for such historical disposal activities have not materially affected our financial condition to date, we cannot assure you that past disposal activities will not result in liability that will materially affect us in the future, nor can we provide assurance that we do not have environmental exposures of which we are unaware and which could adversely affect our operating results.

Over the years, environmental laws have become, and in the future may continue to become, more stringent, imposing greater compliance costs and increasing risks and penalties associated with violations. We operate in several environmentally sensitive locations and are subject to potentially conflicting and changing regulatory agendas of political, business and environmental groups. Changes in or restrictions on discharge limits, emissions levels, permitting requirements and material storage or handling could require a higher than anticipated level of operating expenses and capital investment or, depending on the severity of the impact of the foregoing factors, costly plant relocation.

In addition, the electronics industry became subject to the European Union's RoHS (Restriction of Hazardous Substances) and WEEE (Waste from Electrical and Electronic Equipment) directives which took effect beginning in 2005. Parallel initiatives have been adopted in other jurisdictions, including several states in the United States and the People's Republic of China. RoHS prohibits the use of lead, mercury and certain other specified substances in electronics products and WEEE requires industry OEMs to assume responsibility for the collection, recycling and management of waste electronic products and components. Although we believe we have implemented procedures to make our manufacturing process RoHS compliant, non-compliance could result in significant costs and/or penalties. In the case of WEEE, the compliance responsibility rests primarily with OEMs rather than with EMS companies. However, OEMs may turn to EMS companies for assistance in meeting their WEEE obligations, which could increase our costs.

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Failure to comply with employment and related laws could result in the payment of significant damages, which would reduce our net income; employee theft or fraud could result in loss.

We are subject to a variety of domestic and foreign employment laws, including those related to safety, discrimination, whistle-blowing, classification of employees, wages and severance payments. Such laws are subject to change as a result of judicial decisions or otherwise and there can be no assurance that we will not be found to have violated any such laws in the future. Such violations could lead to the assessment of significant fines against us by federal, state or foreign regulatory authorities or to the award of damages claims (including severance payments) against us in judicial proceedings by employees, any of which would reduce our net income. Certain of our employees have access to or signature authority with respect to bank accounts or other company assets, which could expose us to fraud or theft by such employees. In cases of fraud or theft by any such employee, we would incur losses, which may not be recoverable from the employee and which may not be fully covered by insurance.

We may not be successful in implementing and integrating strategic transactions or in divesting non-strategic assets, which could cause our financial results to fail to meet our forecasts.

From time to time, we may undertake strategic transactions that give us the opportunity to access new customers and new end-customer markets, to obtain new manufacturing and service capabilities and technologies, to enter new geographic manufacturing locations, to lower our manufacturing costs and improve the margins on our product mix, and to further develop existing customer relationships. Strategic transactions involve many difficulties and uncertainties, including the following:

• integrating acquired operations and businesses;

• regulatory approvals or other conditions to closing that delay the completing of strategic transactions beyond the time anticipated;

• allocating management resources;

• scaling up production and coordinating management of operations at new sites;

• separating operations or support infrastructure for entities divested;

• managing and integrating operations in geographically dispersed locations;

• maintaining customer, supplier or other favorable business relationships of acquired operations and terminating unfavorable relationships;

• integrating the acquired company's systems into our management information systems;

• satisfying unforeseen liabilities of acquired businesses, including environmental liabilities, which could require the expenditure of material amounts of cash;

• operating in the geographic market or industry sector of the business acquired in which we may have little or no experience;

• improving and expanding our management information systems to accommodate expanded operations; and

• losing key employees of acquired operations.

Any of these factors could prevent us from realizing the anticipated benefits of a strategic transaction, and our failure to realize these benefits could reduce our sales below and increase our costs above our forecasts. Acquisitions may also be dilutive to our earnings per share if our projections and assumptions about the acquired business' future operating results prove to be inaccurate. As a result, although our goal is to improve our business and maximize stockholder value, any transactions that we complete may ultimately fail to increase our sales and net income and stock price.

If we are unable to protect our intellectual property or infringe, or are alleged to infringe, upon intellectual property of others, we could lose sales or be required to pay significant amounts in costs or damages.

We rely on a combination of copyright, patent, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property rights. We cannot be certain that the steps we have taken will prevent unauthorized use of our intellectual property. Any failure to protect our intellectual property rights would diminish or eliminate the competitive advantages that we derive from our proprietary technology. We rely in part upon patents to protect our intellectual property position. However, a number of our patents covering certain aspects of our manufacturing processes or products have expired or will expire in the near future. Such expirations reduce our ability to assert claims against competitors or others who use or sell similar technology.

We may become involved in litigation in the future to protect our intellectual property or because others may

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allege that we infringe on their intellectual property. These claims and any resulting lawsuits could subject us to significant liability for damages and invalidate our proprietary rights. In addition, these lawsuits, regardless of their merits, likely would be time consuming and expensive to resolve and would divert management's time and attention. Any potential intellectual property litigation alleging our infringement of a third-party's intellectual property also could force us or our customers to:

• stop producing products that use the challenged intellectual property;

• obtain from the owner of the infringed intellectual property, at our expense, a license to sell the relevant technology at an additional cost, which license may not be available on reasonable terms, or at all; or

• redesign those products or services that use the infringed technology.

Any costs we incur from having to take any of these actions could be substantial and would reduce our net income.

We may not have sufficient insurance coverage for certain of the risks and liabilities we assume in connection with the products and services we provide to our customers, which could leave us responsible for certain costs and damages incurred by our customers.

We carry various forms of business and liability insurance in amounts we believe are reasonable and customary for similarly situated companies in our industry. However, we do not have insurance coverage for all of the risks and liabilities we assume in connection with the products and services we provide to our customers, such as potential warranty, product liability, intellectual property infringement and product recall claims. As a result, such liability claims may not be covered under our insurance policies. Should we sustain a significant uncovered loss, our net income would be reduced.

Changes in financial accounting standards or policies have affected, and in the future may affect, our reported financial condition or results of operations. Additionally, changes in securities laws and regulations have increased, and are likely to continue to increase, our operating costs.

We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States, or U.S. GAAP. Our preparation of financial statements in accordance with U.S. GAAP requires that we make estimates and assumptions that affect the recorded amounts of assets and liabilities, disclosure of those assets and liabilities at the date of the financial statements and the recorded amounts of expenses during the reporting period. A change in the facts and circumstances surrounding those estimates could result in a change to our estimates and could impact our future operating results.

In addition, these principles are subject to interpretation by the Financial Accounting Standards Board (FASB), the SEC and various bodies formed to interpret and create accounting policies. A change in those policies can have a significant effect on our reported results and may affect our reporting of transactions which are completed before a change is announced. Accounting policies affecting many other aspects of our business, including rules relating to revenue recognition, off-balance sheet transactions, stock-based compensation, restructurings, acquisition accounting, asset disposals and asset retirement obligations, leases, intangible assets, derivative and other financial instruments and in-process research and development charges, have recently been revised or are under review. Changes to those rules or the questioning of how we interpret or implement those rules may have a material adverse effect on our reported financial results or on the way we conduct business. For example, a preliminary timetable by which U.S. companies would adopt International Financial Reporting Standards has been promulgated by the SEC. Although at a very early stage of consideration by regulatory agencies, adoption of such standards could substantially change our reporting practices in a number of areas, including revenue recognition and recording of assets and liabilities.

Finally, corporate governance, public disclosure and compliance practices continue to evolve based upon continuing legislative action, SEC rulemaking and stockholder advisory group policies. As a result, the number of rules and regulations applicable to us may increase, which would also increase our legal and financial compliance costs and the amount of time management must devote to compliance activities. In turn, these developments could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee, and qualified executive officers in light of an increase in actual or perceived liability for serving in such positions.

Outages, computer viruses, break-ins and similar events could disrupt our operations.

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We rely on information technology networks and systems, some of which are owned and operated by third parties, to process, transmit and store electronic information. In particular, we depend on our information technology infrastructure for a variety of functions, including worldwide financial reporting, inventory management, procurement, invoicing and email communications. Any of these systems may be susceptible to outages due to fire, floods, power loss, telecommunications failures, terrorist attacks and similar events. Despite the implementation of network security measures, our systems and those of third parties on which we rely may also be vulnerable to computer viruses, break-ins and similar disruptions. If we or our vendors are unable to prevent such outages and breaches, our operations could be disrupted.

We are subject to risks associated with natural disasters and global events.

We conduct a significant portion of our activities including manufacturing, administration and information technology management in areas that have experienced natural disasters, such as major earthquakes, hurricanes, and tsunamis. Our insurance coverage with respect to damages to our facilities or our customers' products caused by natural disasters is limited and is subject to deductibles and coverage limits. Such coverage may not be adequate or continue to be available at commercially reasonable rates and terms. In the event of a major earthquake or other disaster affecting one or more of our facilities, our operations and management information systems, which control our worldwide procurement, inventory management, shipping and billing activities, could be significantly disrupted. Such events could also delay or prevent product manufacturing and shipment for the time required to transfer production or repair, rebuild or replace the affected manufacturing facilities. This time frame could be lengthy and result in significant expenses for repair and related costs. While we have in place disaster recovery plans, there can be no assurance that such plans will be sufficient to allow our operations to continue in the event of every natural or man-made disaster, pandemic or other extraordinary event. Any extended inability to continue our operations at unaffected facilities following such an event would reduce our revenue and potentially damage our reputation as a reliable supplier.

Our profitability could be adversely impacted by climate change initiatives.

Concern over climate change has led to state, federal and international legislative and regulatory initiatives aimed at reducing carbon dioxide and other greenhouse gas emissions. While we don't expect existing or currently proposed initiatives to directly impact our business operations, these measures could lead to an increase in the cost of energy used in the manufacture of our products as a result of restrictions placed upon power generators and distributors. We can't currently estimate the impact of any such indirect costs. However, should our operating costs in fact rise as a result of any current, proposed or future greenhouse gas initiatives, and we are not able to pass such costs to our customers, our profitability would be reduced.

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Item 6. Exhibits

Exhibit Number	Description
4.1 (1)	Indenture, dated as of May 10, 2011, among Sanmina-SCI Corporation, certain subsidiaries of Sanmina-SCI Corporation, as a guarantors, and U.S. Bank National Association, as trustee.
4.2 (1)	Form of Note for Sanmina-SCI Corporation's 7% Senior Notes due 2019.
4.3 (1)	Third Supplemental Indenture, dated as of May 10, 2011, by and between Sanmina- SCI Corporation and U.S. Bank National Association, as trustee.
10.38	Agreement and Release between the Company and Hari Pillai dated May 5, 2011 (filed herewith).
10.39	Purchase Agreement among the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities, Inc., Goldman Sachs & Co. and Morgan Stanley & Co. Incorporated dated April 26, 2011 (filed herewith).
31.1	Certification of the Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	Certification of the Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1 (2)	Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2 (2)	Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101.INS (3)	XBRL Instance Document
101.SCH (3)	XBRL Taxonomy Extension Schema Document
101.CAL (3)	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF (3)	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB (3)	XBRL Taxonomy Extension Label Linkbase Document
101.PRE (3)	XBRL Taxonomy Extension Presentation Linkbase Document

________________________

(1)     Incorporated by reference to the same number exhibit of the Registrant's Current Report on Form 8-K filed on May 10, 2011.

(2) This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

(3) To be filed within 30 days after the earlier of the due date or filing date of this Form 10-Q, as permitted by Section II(B)(4) of Securities and Exchange Commission Release No. 34-59324 effective April 13, 2009.

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SIGNATURES

Pursuant to the Requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		SANMINA-SCI CORPORATION
		(Registrant)
		By:	/s/ JURE SOLA
			Jure Sola
			Chief Executive Officer (Principal Executive Officer)
Date:	August 1, 2011
		By:	/s/ ROBERT K. EULAU
			Robert K. Eulau
			Executive Vice President and
			Chief Financial Officer (Principal Financial Officer)
Date:	August 1, 2011

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EXHIBIT INDEX

Exhibit Number	Description
4.1 (1)	Indenture, dated as of May 10, 2011, among Sanmina-SCI Corporation, certain subsidiaries of Sanmina-SCI Corporation, as a guarantors, and U.S. Bank National Association, as trustee.
4.2 (1)	Form of Note for Sanmina-SCI Corporation's 7% Senior Notes due 2019.
4.3 (1)	Third Supplemental Indenture, dated as of May 10, 2011, by and between Sanmina- SCI Corporation and U.S. Bank National Association, as trustee.
10.38	Agreement and Release between the Company and Hari Pillai dated May 5, 2011 (filed herewith).
10.39	Purchase Agreement among the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities, Inc., Goldman Sachs & Co. and Morgan Stanley & Co. Incorporated dated April 26, 2011 (filed herewith).
31.1	Certification of the Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	Certification of the Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1 (2)	Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2 (2)	Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101.INS (3)	XBRL Instance Document
101.SCH (3)	XBRL Taxonomy Extension Schema Document
101.CAL (3)	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF (3)	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB (3)	XBRL Taxonomy Extension Label Linkbase Document
101.PRE (3)	XBRL Taxonomy Extension Presentation Linkbase Document

________________________

(1) Incorporated by reference to the same number exhibit of the Registrant's Current Report on Form 8-K filed on May 10, 2011.

(2) This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

(3) To be filed within 30 days after the earlier of the due date or filing date of this Form 10-Q, as permitted by Section II(B)(4) of Securities and Exchange Commission Release No. 34-59324 effective April 13, 2009.

44

EX-10.38

EXHIBIT 10.38

AGREEMENT AND RELEASE

This Agreement and Release ("Agreement") is made by and between Sanmina-SCI Corporation, for itself and on behalf of all its subsidiaries and affiliates, hereinafter referred to as the “Company,” and Hari Pillai, hereinafter referred to as “Employee” and is dated as of May 5, 2011 (the “Effective Date”).

WHEREAS, Employee has been employed by the Company for over 16 years; and

WHEREAS, the Company and Employee have mutually agreed to voluntarily terminate their employment relationship in the future and to provide for certain payment of benefits and releases of claims;

NOW THEREFORE, in consideration of the mutual promises made herein, the Company and Employee (collectively referred to as the “Parties”) hereby agree as follows:

Termination of Employment and Severance Benefits.

(a) Employee's employment with the Company shall terminate voluntarily at close of business on May 5, 2013 (the “Termination Date”), subject to early termination as provided in subsection (f) below.

(b) As of the Effective Date, Employee's position shall be changed from “President and Chief Operating Officer” to “Advisor to the Chief Executive Officer.” In that capacity, Employee shall perform such duties as are assigned to him by the Company, including, but not limited to, the duties set forth on Exhibit A hereto.

(c) Within 10 days of the Effective Date, the Company shall pay Employee a lump-sum payment of $300,000 plus payment of all of Employee's accrued, but unused vacation. During Employee's remaining term of employment with the Company, Employee shall be paid a salary of $335,000 per annum per the Company's normal payroll processes. Subject to subsections (f) and (g) below, Employee shall be entitled to receive a lump-sum payment of $100,000 following the Termination Date.

(d) The stock options and restricted stock units granted to Employee by the Company and listed on Exhibit B hereto shall continue to vest and remain exercisable in accordance with their terms, but only to the extent set forth in the column entitled “Maximum Number of Additional Shares that may vest” on Exhibit B (the “Continuing Equity Grants”). Other than the Continuing Equity Grants, all outstanding stock options and restricted stock units granted to Employee by the Company shall terminate and be canceled as of the date of this Agreement. For the avoidance of doubt, the stock options and restricted stock units being canceled hereby are listed on Exhibit C hereto (the “Terminated Equity Grants”). Notwithstanding the foregoing, in the event (i) the Company terminates Employee's employment prior to the Termination Date (other than as a result of Employee's breach of this Agreement) or (ii) a successor-in-interest of the Company fails to assume all of the obligations of the Company under this Agreement, the Continuing Equity Grants shall immediately vest to the maximum extent provided in Exhibit B hereto.

(e) Employee shall notify the Company in writing promptly of his intent to accept any offer of full-time employment or consulting. Subject to subsection (f) below, if Employee accepts another offer of full-time employment prior to the Termination Date, the Company shall continue to make the payments specified in subsection (c) above and the vesting of the Continuing Equity Grants shall continue as set forth in subsection (d) above.

(f) Employee's employment with the Company shall terminate, the Company shall not make any additional payments under subsection (c) and vesting of the Continuing Equity Grants shall cease on the date Employee becomes employed by or consults with, on a full or part-time basis (i) any of the following six companies or their affiliates: (1) Flextronics International Ltd., (2) Celestica, Inc., (3) Jabil Circuit, Inc., (4) Foxconn (Hon Hai); (5) Benchmark Electronics, Inc. or (6) Plexus Corp. or (ii) any customer of the Company, whether existing at the time of this Agreement or thereafter, whose trailing twelve months' payments to the Company are $100 million or more, unless, prior to the commencement of such employment or consulting, the General Counsel of the Company waives this provision in writing.

(g) If payable, the $100,000 lump-sum payment referred to in subsection (c) above shall be made within ten

business days of Employee's execution of the release attached hereto as Exhibit D, which release shall be executed by Employee within five business days of the Termination Date.

(h) Through the Termination Date, Employee shall remain eligible to participate in the Company's health insurance plan.

(i) Employee shall be deemed to have undergone a separation from service for purposes of the Sanmina-SCI Corporation Deferred Compensation Plan as of the Effective Date.

(j) All payments made by the Company under this Agreement shall be subject to applicable withholding obligations of the Company, including without limitation, obligations to withhold for federal, state and local income and employment taxes. The dollar amount of the group premiums paid by the Company for health insurance benefits prior to the Termination Date shall be included in the Employee's reported gross income for such period.

(k) At the request of the Company, Employee shall execute any additional documents necessary to effectuate his change of status and resignation, including documents needed to effect his resignation or removal from positions he may hold with the Company's subsidiaries.

(l) Prior to the Termination Date, Employee shall comply with all Company policies, including, but not limited to, the Insider Trading Policy. Employee understands he will be designated as a “Designated Insider” under such policy for a period of six months from the Effective Date.

(m) Within 15 days of the Effective Date, the Company shall transfer the phone number for Employee's employer-provided mobile phone to the service provider designated by Employee, but will not be responsible for payment of any ongoing monthly fees for mobile phone service.

No Other Benefits; Termination of Change in Control Benefit Agreement.

(a)    Other than set forth above, Employee shall not be entitled to participate in any Company employee benefit plans or programs following the Effective Date. By way of example and not limitation:

(i)    Employee shall not accrue or be entitled to any vacation or holiday pay that has not accrued and become payable as of the Effective Date;

(i) The Company shall not pay any further premiums on the Employee's special executive life insurance policy. Employee shall be responsible to pay future premiums on such policy. If necessary, the Company shall take all actions required in order to transfer ownership of such policy to Employee;

(iii)    Employee shall not be eligible to participate in the Sanmina-SCI Corporation Deferred Compensation Plan or the 401(k) plan; and

(iv)    Employee shall not be entitled to participate in or receive a bonus during his remaining period of employment.

(b)    The Parties agree that the Change in Control Benefit Agreement between Employee and the Company dated February 22, 2010 is hereby terminated and of no further force or effect.

3. Employer Property/Non Disclosure of Confidential Business Information. Employee shall continue to maintain the confidentiality of all confidential and proprietary information of the Company and shall continue to comply with the terms and conditions of the Proprietary Information and Inventions Agreement dated June 10, 1994 and the Sanmina Corporation Proprietary Information Agreement dated April 1, 1995. On the Termination Date, Employee shall immediately return all the Company property, and confidential and proprietary information that is in his possession.

4. Mutual non-disparagement. Neither Employee nor the Company shall make any disparaging, negative or untrue statements about the other, including, without limitation, statements about the Company, its products, officers, directors, employees or business affairs.

5. Payment of Salary. Employee acknowledges and represents that the Company has paid all salary, bonus, wages,

equity and any and all other benefits due to Employee as of the Effective Date of this Agreement (other than payment of salary accrued through the Effective Date payable by the Company in arrears).

6. General Release of Claims. Employee, on behalf of Employee, Employee's heirs, executors, administrators, representatives, successors and assigns knowingly and voluntarily releases and forever discharges the Company, including its parent corporation, affiliates, subsidiaries, divisions, predecessors, insurers, successors and assigns, and their current and former employees, attorneys, officers, directors and agents thereof, both individually and in their business capacities, and their employee benefit plans and programs and their administrators and fiduciaries (collectively, the “Released Parties”), to the full extent permitted by law, of and from any and all claims, known and unknown, asserted and unasserted, which Employee has or may have against the Released Parties as of the date of execution of this Agreement including, but not limited to, any alleged violation of:

(a)    Title VII of the Civil Rights Act of 1964;

(b)    The Civil Rights Act of 1991;

(c)    Sections 1981 through 1988 of Title 42 of the United States Code, as amended;

(d)    The Employee Retirement Income Security Act of 1974 (“ERISA”) (except for any vested benefits under any tax qualified benefit plan);

(e)    The Immigration Reform and Control Act;

(f)    The Americans with Disabilities Act of 1990;

(g)    The Age Discrimination in Employment Act of 1967 (“ADEA”);

(h)    The Workers Adjustment and Retraining Notification Act;

(i)    The Occupational Safety and Health Act;

(j)    The Sarbanes-Oxley Act of 2002;

(k)    The Fair Credit Reporting Act;

(l)    The Family and Medical Leave Act;

(m)    The Equal Pay Act;

(n)    California Family Rights Act - Cal. Gov't Code § 12945.2 et seq.;

(o)    California Fair Employment and Housing Act - Cal. Gov't Code § 12900 et seq.;

(p)    California Unruh Civil Rights Act - Cal. Civ. Code § 51 et seq.;

(q)    California Sexual Orientation Bias Law - Cal. Lab. Code § 1101 et seq.;

(r)    California Confidentiality of Medical Information - Cal. Civ. Code § 56 et seq.;

(s)    California Parental Leave Law - Cal. Lab. Code § 230.7 et seq.;

(t)    California Wage Payment Act;    

(u)    California Equal Pay Law - Cal. Lab. Code § 1197.5 et seq.;

(v)    California Whistleblower Protection Law - Cal. Lab. Code § 1102-5(a) to (c);

(w)    The California Occupational Safety and Health Act, as amended, California Labor Code § 6300 et seq., and any applicable regulations thereunder;

(x)    California Consumer Reports: Discrimination Law - Cal. Civ. Code § 1786.10 et seq.;

(y)    Those other provisions of the California Labor Code that lawfully may be released;

(z)    Any other federal, state or local civil or human rights law or any other federal, state or local law, regulation or ordinance;

(aa)    Any public policy, contract, tort or common law; or

(ab)    Any basis for recovering costs, fees or other expenses including attorneys' fees incurred in these matters.

Notwithstanding the foregoing, the Parties agree that this general release does not apply to any claims Employee may have for worker's compensation benefits, unemployment insurance or indemnification as provided by the Company's Certificate of Incorporation and Bylaws, each as amended, the Indemnification Agreement (as defined in Section 10 below), state law as well as any other claims that cannot lawfully be released.

If any claim is not subject to release, to the extent permitted by law, Employee waives any right or ability to be a class or collective action representative or to otherwise participate in any putative or certified class, collective or multi-party action or proceeding based on such a claim in which the Company or any of the other Released Parties identified in this Agreement is a party.

7. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that he is waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and release is knowing and voluntary. Employee acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Employee was already entitled. Employee further acknowledges that he has been advised by this writing that (a) he should consult with an attorney prior to executing this Agreement; (b) Employee has twenty-one (21) days within which to consider this Agreement from the date Employee received the Agreement; (c) he has seven (7) days following the execution of this Agreement by the parties to revoke the Agreement; (d) in the event Employee wishes to revoke the Agreement, he must submit such revocation in writing and deliver to David Pulatie, Executive Vice President, Global Human Resources within seven (7) days following his signing of the Agreement; and (e) this Agreement shall not be effective until the revocation period has expired.

8. Waiver of California Civil Code Section 1542. To effect a full and complete general release as described above, Employee expressly waives and relinquishes all rights and benefits of section 1542 of the Civil Code of the State of California, and does so understanding and acknowledging the significance and consequence of specifically waiving section 1542. Section 1542 of the Civil Code of the State of California states as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Thus, notwithstanding the provisions of section 1542, and to implement a full and complete release and discharge of the Released Parties, Employee expressly acknowledges this Agreement is intended to include in its effect, without limitation, all claims Employee does not know or suspect to exist in Employee's favor at the time of executing this Agreement, and that this Agreement contemplates the extinguishment of any such claims. Employee warrants Employee has read this Agreement, including this waiver of California Civil Code section 1542, and that Employee has consulted with or had the opportunity to consult with counsel of Employee's choosing about this Agreement and specifically about the waiver of section 1542, and that Employee understands this Agreement and the section 1542 waiver, and so Employee freely and knowingly enters into this Agreement. Employee further acknowledges that Employee later may discover facts different from or in addition to those Employee now knows or believes to be true regarding the matters released or described in this Agreement, and even so Employee agrees that the releases and agreements contained in this Agreement shall remain effective in all respects notwithstanding any later discovery of any different or additional facts. Employee expressly assumes any and all risk of any mistake in connection with the true facts involved in the matters, disputes or controversies released or described in this Agreement or with regard to any facts now unknown to Employee relating thereto.

9. No Pending or Future Lawsuits. Employee represents that he has no lawsuits, claims, or actions pending in his name, or on behalf of any other person or entity, against the Company or any other person or entity referred to herein. Employee also represents that he does not intend to bring any claims on his own behalf or on behalf of any other person or entity against the Company or any other person or entity referred to herein.

10. Employee Indemnification. The Company and Employee acknowledge the existence of that certain indemnification

agreement between the Company and Employee dated June 19, 2009 (the “Indemnification Agreement”), which agreement shall continue in full force and effect after the date hereof.

11. Breach of Agreement. If Employee materially breaches any provision of this Agreement, including taking any legal action to terminate or otherwise avoid this Agreement, the Company shall discontinue any payments due under this Agreement. In addition, if either party materially breaches this Agreement, including taking any legal action to terminate or otherwise avoid this Agreement, the other party may take any equitable action that it deems necessary to enforce its rights under this Agreement. The prevailing party in any such action shall be entitled to payment of its reasonable costs and expenses (including reasonable attorneys' fees).

12. Solicitation. Through the Termination Date and for a period of one (1) year thereafter, Employee shall not, directly or indirectly, or by action in concert with others, influence, induce or seek to influence or induce any person who (a) is employed by or engaged as an agent or independent contractor with the Company or (b) is a customer of or supplier to the Company to terminate or adversely modify his, her or its relationship with the Company without the consent of Company's Executive Vice President Global Human Resources.

13. No Admission of Liability. The Parties understand and acknowledge that this Agreement constitutes a compromise and settlement of disputed claims. No action taken by the Parties hereto, or either of them, either previously or in connection with this Agreement shall be deemed or construed to be (a) an admission of the truth or falsity of any claims heretofore made or (b) an acknowledgment or admission by either party of any fault or liability whatsoever to the other party or to any third party.

14. Governing Law. This Agreement is made and entered into in the State of California, and shall in all respects be interpreted, enforced and governed under California law.

15. Final and Binding Arbitration. Subject to Section 11 above, the Company and Employee agree that any dispute, controversy or claim between the parties arising out of or relating to this Agreement, or any breach or asserted breach thereof, shall be determined and settled by arbitration in San Jose, California. Such arbitration shall be conducted under the Commercial Arbitration Rules of the American Arbitration Association, which are incorporated herein by reference. The parties shall share the cost of the arbitrator's fees equally. The prevailing party, as that term is defined in California Code of Civil Procedure § 1032, in such arbitration shall be entitled to its reasonable costs and expenses (including reasonable attorneys' fees) in such arbitration as part of the award. Judgment on the award may be entered in any court having jurisdiction thereof, and the parties specifically reserve all rights to appeal such judgment as if it were rendered in a court-of-law.

16. Authority. The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement and Employee represents and warrants that he has the capacity to act on his own behalf and on behalf of all who might claim through him to bind them to the terms and conditions of this Agreement. Each Party warrants and represents that there are no liens or claims of lien or assignments in law or equity or otherwise against any of the claims or causes of action released herein.

17. No Representations. Each party represents that it has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement. Neither party has relied upon any representations or statements made by the other party hereto which are not specifically set forth in this Agreement.

18. Assignment. Employee's rights and obligations under this Agreement shall not be assignable by Employee. The Company's rights and obligations under this Agreement shall be assignable by the Company.

19. Successors. This Agreement shall be binding upon and inure to the benefit of, and shall be enforceable by, Employee and the Company, their respective heirs, executors, administrators and assigns. In the event the Company is merged, consolidated, liquidated by a parent corporation, or otherwise combined into one or more corporations, the provisions of this Agreement shall be binding upon and inure to the benefit of the parent corporation or the corporation resulting from such merger or to which the assets shall be sold or transferred, which corporation from and after the date of such merger, consolidation, sale or transfer shall be deemed to be the Company for purposes of this Agreement.

20. Headings. The headings of sections herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

21. Severability. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision.

22. Entire Agreement. This Agreement represents the entire agreement and understanding between the Company and

Employee concern-ing Employee's separation from the Company, and supersedes and replaces any and all prior agreements and understandings concerning Employee's relationship with the Company and his compensation by the Company, but excluding the Confidentiality Agreement and the Indemnification Agreement.

23. No Oral Modification. This Agreement may only be amended in writing signed by Employee and the Company's Executive Vice President Global Human Resources.

24. Notices. Notices shall be given under this Agreement by facsimile or overnight courier and shall be deemed received upon confirmation of delivery to the following addresses: (a) if to the Company, Sanmina-SCI Corporation, 2700 North First Street, San Jose, CA 95134, facsimile: (408) 964-3888; and (b) if to Employee, at the address on file with the Company as Employee may change with written notice to the Company from time to time.

25. Publicity. Employee acknowledges that the Company is required to disclose, and shall disclose, the material terms of this Agreement to the Securities and Exchange Commission and that a copy of this Agreement shall be filed with the Commission.

26. Effective Date. This Agreement is effective on the eighth (8th) day after it has been signed by both Parties.

27. Counterparts. This Agreement may be executed in counter-parts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

28. Voluntary Execution of Agreement. This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto, with the full intent of releasing all claims. The Parties acknowledge that:

(a)        They have read this Agreement;    

(b)    They have been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of their own choice or that they have voluntarily declined to seek such counsel;

(c)    They understand the terms and consequences of this Agreement and of the releases it contains;

(d)    They are fully aware of the legal and binding effect of this Agreement.

IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

SANMINA-SCI CORPORATION

Dated: May 5, 2011             By: /s/ David Pulatie

David Pulatie

Executive Vice President, Global Human Resources

Dated: May 5, 2011                 /s/ Hari Pillai

Hari Pillai

EXHIBIT A

EMPLOYEE DUTIES

Employee shall provide assistance and support to management relating to those customer relationships and contracts of which he has knowledge.  He will also assist management in connection with investigations (whether governmental or internal) and disputes, if any, including, but not limited to, assisting with litigation.  Such litigation assistance may entail appearing at depositions, pre-trial meetings and conferences and trial, if applicable. Employee shall use his best efforts in providing such assistance, including cooperating with in-house and external counsel to the Company and shall in all cases provide only truthful information that does not omit any material facts needed to be disclosed in order to make such information not misleading.

Employee shall perform such other transition projects as shall be directed by the Chief Executive Officer of the Company.

If requested, Employee shall provide such reports or other documentary evidence of his work for the Company.

EXHIBIT B

CONTINUING EQUITY GRANTS

Type of Grant	Grant Number	Grant Date	Exercise Price	Maximum Additional Number of Shares that may vest
Stock Options	175,736	11/17/2008	$2.94	27,777
	NO167872	8/17/2009	$4.45	34,444
	NO168071	11/15/2010	$11.23	33,333
	173,997	11/15/2007	$11.88	58,333*
Restricted Stock Units	RS168099	11/15/2010	N/A	25,000
	RS167939	11/16/2009	N/A	5,000
* 58,333 shares are vested and outstanding as of the Effective Date.

EXHIBIT C

TERMINATED EQUITY GRANTS

Type of Grant	Grant Number	Grant Date	Exercise Price	Number of Shares Granted
Stock Options	16,085	7/31/2002	$24.42	2,917
	16,086	7/31/2002	$24.42	22,083
	162,948	10/10/2003	$62.88	33,333
	167,334	10/27/2004	$44.58	25,000
	172,430	10/24/2005	$22.44	19,651
	172,431	10/24/2005	$22.44	5,349
	X01182	9/12/2003	$53.10	550
	X01183	9/12/2003	$53.10	9,659
	X01184	9/12/2003	$53.10	2,203
	X01185	9/12/2003	$53.10	3,995
	X01186	9/12/2003	$53.10	8,288
	X01187	9/12/2003	$53.10	462
	XC1182	9/12/2003	$61.62	707
	XC1183	9/12/2003	$61.62	12,418
	XC1184	9/12/2003	$61.62	4,308
	XC1185	9/12/2003	$61.62	3,661
	XC1186	9/12/2003	$61.62	10,656
	XC1187	9/12/2003	$61.62	594
Restricted Stock Units	RS167939	11/16/2009	N/A	95,000*

* Portion of grant not considered a Continuing Equity Grant as set forth in Exhibit B above. EXHIBIT D

FORM OF RELEASE TO BE SIGNED ON TERMINATION DATE

This release (“Release”) is made pursuant to Section 1(g) of that certain Agreement and Release between Sanmina-SCI Corporation (the “Company”) and the undersigned dated May 5, 2011 (“Agreement and Release”). Capitalized terms not defined herein shall have the same meanings contained in the Agreement and Release.

1. Employee, on behalf of Employee, Employee's heirs, executors, administrators, representatives, successors and assigns knowingly and voluntarily releases and forever discharges the Company, including its parent corporation, affiliates, subsidiaries,

divisions, predecessors, insurers, successors and assigns, and their current and former employees, attorneys, officers, directors and agents thereof, both individually and in their business capacities, and their employee benefit plans and programs and their administrators and fiduciaries (collectively, the “Released Parties”), to the full extent permitted by law, of and from any and all claims, known and unknown, asserted and unasserted, which Employee has or may have against the Released Parties as of the date of execution of this Release including, but not limited to, any alleged violation of:

(a)    Title VII of the Civil Rights Act of 1964;

(b)    The Civil Rights Act of 1991;

(c)    Sections 1981 through 1988 of Title 42 of the United States Code, as amended;

(d)    The Employee Retirement Income Security Act of 1974 (“ERISA”) (except for any vested benefits under any tax qualified benefit plan);

(e)    The Immigration Reform and Control Act;

(f)    The Americans with Disabilities Act of 1990;

(g)    The Age Discrimination in Employment Act of 1967 (“ADEA”);

(h)    The Workers Adjustment and Retraining Notification Act;

(i)    The Occupational Safety and Health Act;

(j)    The Sarbanes-Oxley Act of 2002;

(k)    The Fair Credit Reporting Act;

(l)    The Family and Medical Leave Act;

(m)    The Equal Pay Act;

(n)    California Family Rights Act - Cal. Gov't Code § 12945.2 et seq.;

(o)    California Fair Employment and Housing Act - Cal. Gov't Code § 12900 et seq.;

(p)    California Unruh Civil Rights Act - Cal. Civ. Code § 51 et seq.;

(q)    California Sexual Orientation Bias Law - Cal. Lab. Code § 1101 et seq.;

(r)    California Confidentiality of Medical Information - Cal. Civ. Code § 56 et seq.;

(s)    California Parental Leave Law - Cal. Lab. Code § 230.7 et seq.;

(t)    California Wage Payment Act;

(u)    California Equal Pay Law - Cal. Lab. Code § 1197.5 et seq.;

(v)    California Whistleblower Protection Law - Cal. Lab. Code § 1102-5(a) to (c);

(w)    The California Occupational Safety and Health Act, as amended, California Labor Code § 6300 et seq., and any applicable regulations thereunder;

(x)    California Consumer Reports: Discrimination Law - Cal. Civ. Code § 1786.10 et seq.;

(y)    Those other provisions of the California Labor Code that lawfully may be released;

(z)    Any other federal, state or local civil or human rights law or any other federal, state or local law,

regulation or ordinance;

(aa)    Any public policy, contract, tort or common law; or

(bb)    Any basis for recovering costs, fees or other expenses including attorneys' fees incurred in these matters.

Notwithstanding the foregoing, the Parties agree that this general release does not apply to any claims Employee may have for worker's compensation benefits, unemployment insurance or indemnification as provided by the Company's Certificate of Incorporation and Bylaws, each as amended, the Indemnification Agreement (as defined in Section 10 of the Agreement and Release), state law as well as any other claims that cannot lawfully be released.

If any claim is not subject to release, to the extent permitted by law, Employee waives any right or ability to be a class or collective action representative or to otherwise participate in any putative or certified class, collective or multi-party action or proceeding based on such a claim in which the Company or any of the other Released Parties identified in this Release is a party.

2. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that he is waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and release is knowing and voluntary. Employee acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Employee was already entitled. Employee further acknowledges that he has been advised by this writing that (a) he should consult with an attorney prior to executing this Release; (b) Employee has twenty-one (21) days within which to consider this Release from the date Employee received the Release; (c) he has seven (7) days following the execution of this Release by the parties to revoke the Release; (d) in the event Employee wishes to revoke the Release, he must submit such revocation in writing and deliver to David Pulatie, Executive Vice President, Global Human Resources within seven (7) days following his signing of the Release; and (e) this Release shall not be effective until the revocation period has expired.

3. Waiver of California Civil Code Section 1542. To effect a full and complete general release as described above, Employee expressly waives and relinquishes all rights and benefits of section 1542 of the Civil Code of the State of California, and does so understanding and acknowledging the significance and consequence of specifically waiving section 1542. Section 1542 of the Civil Code of the State of California states as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Thus, notwithstanding the provisions of section 1542, and to implement a full and complete release and discharge of the Released Parties, Employee expressly acknowledges this Release is intended to include in its effect, without limitation, all claims Employee does not know or suspect to exist in Employee's favor at the time of executing this Release, and that this Release contemplates the extinguishment of any such claims. Employee warrants Employee has read this Release, including this waiver of California Civil Code section 1542, and that Employee has consulted with or had the opportunity to consult with counsel of Employee's choosing about this Release and specifically about the waiver of section 1542, and that Employee understands this Release and the section 1542 waiver, and so Employee freely and knowingly enters into this Release. Employee further acknowledges that Employee later may discover facts different from or in addition to those Employee now knows or believes to be true regarding the matters released or described in this Release, and even so Employee agrees that the releases and agreements contained in this Release shall remain effective in all respects notwithstanding any later discovery of any different or additional facts. Employee expressly assumes any and all risk of any mistake in connection with the true facts involved in the matters, disputes or controversies released or described in this Release or with regard to any facts now unknown to Employee relating thereto.

4. No Pending or Future Lawsuits. Employee represents that he has no lawsuits, claims, or actions pending in his name, or on behalf of any other person or entity, against the Company or any other person or entity referred to herein. Employee also represents that he does not intend to bring any claims on his own behalf or on behalf of any other person or entity against the Company or any other person or entity referred to herein.

SANMINA-SCI CORPORATION

Dated: __________, 2013     By ________________________________________

David Pulatie

Executive Vice President, Global Human Resources

Dated: __________, 2013             ___________________________________________

Hari Pillai

EX-10.39

EXHIBIT 10.39

Sanmina-SCI Corporation

$500,000,000 7% Senior Notes due 2019

Purchase Agreement

April 26, 2011

Merrill Lynch, Pierce, Fenner & Smith Incorporated

Deutsche Bank Securities Inc.

Goldman, Sachs & Co.

Morgan Stanley & Co. Incorporated

As Representatives of the Initial Purchasers

c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated

One Bryant Park

New York, New York 10036

Ladies and Gentlemen:

Sanmina-SCI Corporation, a corporation organized under the laws of Delaware (the “Company”), proposes to issue and sell to the several parties named in Schedule A hereto (the “Initial Purchasers”), for whom you (the “Representatives”) are acting as representatives, $500,000,000 aggregate principal amount of its 7% Senior Notes due 2019 (the “Notes”). The Notes will be guaranteed (collectively, the “Guarantees”) by each of the subsidiary guarantors named in Schedule B hereto (the “Notes Guarantors”). The Notes and the Guarantees are collectively referred to herein as the “Securities.” The Notes and the Guarantees are to be issued under an indenture (the “Indenture”) to be dated as of the Closing Date (as defined in Section 4 hereof), among the Company, the Notes Guarantors and U.S. Bank National Association, as trustee (the “Trustee”). To the extent there are no additional parties listed on Schedule A other than you, the term Representatives as used herein shall mean you as the Initial Purchasers, and the terms Representatives and Initial Purchasers shall mean either the singular or plural as the context requires. The use of the neuter in this Agreement shall include the feminine and masculine wherever appropriate.

The sale of the Securities to the Initial Purchasers will be made without registration of the Securities under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Act”) in reliance upon exemptions from the registration requirements of the Act.

The Company has prepared and delivered to each of the Initial Purchasers copies of a Preliminary Offering Memorandum, dated April 26, 2011 (the “Preliminary Memorandum”), and has prepared and delivered to each of the Initial Purchasers copies of a Pricing Supplement, dated April 26, 2011, in the form attached hereto as Schedule C (the “Pricing Supplement”), describing the terms of the Securities, each for use by such Initial Purchaser in connection with its solicitation of offers to purchase the Securities. The Preliminary Memorandum and the Pricing Supplement are herein referred to as the “Disclosure Package.” Promptly after this Agreement is executed and delivered, the Company will prepare and deliver to each of the Initial Purchasers a final offering memorandum dated the date hereof (the “Final Memorandum”).

All references herein to the terms “Disclosure Package” and “Final Memorandum” shall be deemed to mean and include all information filed under the Securities Exchange Act of 1934 (as amended, the “Exchange Act,” which term, as used herein, includes the rules and regulations of the U.S. Securities and Exchange Commission (the “Commission”) promulgated thereunder) prior to the Applicable Time (as defined below) and incorporated by reference in the Disclosure Package (including the Preliminary Memorandum) or the Final Memorandum (as the case may be), and all references herein to the terms “amend,” “amendment” or “supplement” with respect to the Final Memorandum shall be deemed to mean and include all information filed under the Exchange Act after 5:30 P.M., New York City time, on April 26, 2011 or such other time as agreed by the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated (such date and time, the “Applicable Time”) and incorporated by reference in the Final Memorandum.

1.Representations and Warranties. The Company and each Notes Guarantor, jointly and severally,

represent and warrant to, and agree with, each of the Initial Purchasers as of the date hereof that:

(a)Neither the Disclosure Package, as of the Applicable Time, nor the Final Memorandum, as of its date or (as amended or supplemented in accordance with Section 5(c), as applicable) as of the Closing Date, contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation, warranty and agreement shall not apply to statements in or omissions from the Disclosure Package, the Final Memorandum or any amendment or supplement thereto made in reliance upon and in conformity with information furnished to the Company in writing by the Representatives expressly for use in the Disclosure Package, the Final Memorandum or amendment or supplement thereto, as the case may be. The Disclosure Package contains, and the Final Memorandum will contain, all the information specified in, and meeting the requirements of, Rule 144A.

The Company has not prepared, made, used, authorized, approved or distributed and will not prepare, make, use, authorize, approve or distribute any written communication that constitutes an offer to sell or solicitation of an offer to buy the Securities other than (i) the Disclosure Package, (ii) the Final Memorandum and (iii) any electronic road show or other written communications listed on Schedule D. Each such communication by the Company or its agents and representatives pursuant to clause (iii) of the preceding sentence (the “Supplemental Offering Materials”), when taken together with the Disclosure Package, did not as of the Applicable Time, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation, warranty and agreement shall not apply to statements in or omissions from each such Supplemental Offering Materials made in reliance upon and in conformity with information furnished to the Company in writing by the Representatives expressly for use in any Supplemental Offering Materials.

The documents incorporated or deemed to be incorporated by reference in the Offering Memorandum at the time they were or hereafter are filed with the Commission (collectively, the “Incorporated Documents”) complied and will comply in all material respects with the requirements of the Exchange Act. Each such Incorporated Document, when taken together with the Disclosure Package, did not as of the Applicable Time, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(b)Neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial statements included in the Disclosure Package and the Final Memorandum any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, that is material to the Company and its subsidiaries taken as a whole, other than as set forth in the Disclosure Package and the Final Memorandum; and, since the respective dates as of which information is given in the Disclosure Package and the Final Memorandum, there has not been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any material adverse change, or any development that is reasonably likely to result in a material adverse change, in or affecting the business, business prospects, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”), other than as set forth in the Disclosure Package and the Final Memorandum;

(c)The Company and its subsidiaries (i) have good and valid title to all real property owned by them and (ii) hold all personal property owned by them, in each case, free and clear of all adverse claims, liens, encumbrances and defects except such as are described in the Disclosure Package and the Final Memorandum and the documents entered into in connection with that certain Loan, Guaranty and Security Agreement (as amended by Amendment No. 1, dated as of April 6, 2010, and Amendment No. 2, dated as of December 20, 2010, and as supplemented by the Incremental Loan Agreement Joinder, dated as of April 6, 2010, among the Company and certain of the Company's subsidiaries party thereto as borrowers, the subsidiaries party thereto from time to time as guarantors, the financial institutions party thereto from time to time as lenders, and Bank of America, N.A., as agent for such lenders, or otherwise permitted by the Indenture or such as would not result in a Material Adverse Effect; and any real property and buildings held under lease by the Company and its subsidiaries that are material to the Company and its subsidiaries taken as a whole are held by them under valid, subsisting and enforceable leases with such exceptions as do not interfere in any material respect with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries taken as a whole;

(d)The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Disclosure Package and the Final Memorandum,

and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect;

(e)Each subsidiary of the Company has been duly organized, is validly existing as an entity in good standing under the laws of the jurisdiction of its organization, has the power and authority (corporate and other) to own or lease, as the case may be, and to operate its property and to conduct its business as described in the Disclosure Package and the Final Memorandum and is duly qualified as a foreign organization for the transaction of business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. None of the outstanding shares of capital stock of any of the Company's Significant Subsidiaries (as “Significant Subsidiary” is defined in Rule 1-02 of Regulation S-X promulgated under the Act) were issued in violation of preemptive or other similar rights of any securityholder of such subsidiary. Except as otherwise stated in the Disclosure Package and the Final Memorandum and except for subsidiaries that, individually or in the aggregate, would not constitute a Significant Subsidiary, all of the issued shares of capital stock or similar ownership interests of each subsidiary of the Company have been duly authorized and validly issued, are fully paid and non-assessable and (except for directors' qualifying or similar shares) are owned of record directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims except for the liens, encumbrances, equities and claims as described in the Disclosure Package and the Final Memorandum and the documents entered into in connection with the Credit Facility or otherwise as permitted by the Indenture;

(f)The Company has an authorized capitalization as set forth in the Final Memorandum, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable;

(g)The Securities have been duly authorized by the Company and each of the Notes Guarantors, as applicable, and, when authenticated and issued in the manner provided in the Indenture and delivered against payment of the purchase price provided herein, will constitute valid and legally binding obligations of the Company and each Notes Guarantor, entitled to the benefits provided by the Indenture, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles;

(h)The Indenture has been duly authorized by the Company and each Notes Guarantor, and when executed and delivered by the Company, each Notes Guarantor and the Trustee, will constitute a valid and legally binding instrument, enforceable in accordance with its terms subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles;

(i)The Securities and the Indenture will conform in all material respects to the descriptions thereof in the Disclosure Package and the Final Memorandum;

(j)None of the transactions contemplated by this Agreement (including, without limitation, the use of the proceeds from the sale of the Securities) will violate or result in a violation of Section 7 of the Exchange Act, or any regulation promulgated thereunder, including, without limitation, Regulations T, U, and X of the Board of Governors of the Federal Reserve System;

(k)Prior to the date hereof, neither the Company, any Notes Guarantor nor any of their affiliates has taken any action which is designed to or which has constituted or which might have been expected to cause or result in stabilization or manipulation of the price of any security of the Company in connection with the offering of the Securities;

(l)The issue and sale of the Securities and the compliance by the Company and the Notes Guarantors with all of the provisions of the Securities, the Indenture and this Agreement and the consummation of the transactions herein and therein contemplated will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject except for such conflicts, breaches, violations or defaults that, individually or in the aggregate, would not result in a

Material Adverse Effect or that are disclosed in the Disclosure Package and the Final Memorandum; or (ii) result in any violation of (A) the provisions of the certificate or articles of incorporation, by-laws, limited liability company operating agreement, partnership agreement or other charter or organizational documents, as applicable, of the Company or any Notes Guarantor or (B) any applicable statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties, except for such violations in (ii)(B) that, individually or in the aggregate, would not result in a Material Adverse Effect. No consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Securities or the consummation by the Company and each Notes Guarantor of the transactions contemplated by this Agreement and the Indenture, except for such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or blue sky laws in connection with the purchase and distribution of the Securities by the Initial Purchasers;

(m)Neither the Company nor any of its subsidiaries is in violation of its certificate or articles of incorporation, by-laws, limited liability company operating agreement, partnership agreement or other charter or organizational documents, as applicable, or in default in the performance or observance of any material obligation, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except for such defaults as would not, individually or in the aggregate, result in a Material Adverse Effect or as are disclosed in the Disclosure Package and the Final Memorandum; and neither the Company nor any of its subsidiaries is in violation of any applicable statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties, as applicable, except for such violations as would not, individually or in the aggregate, result in a Material Adverse Effect or as are disclosed in the Disclosure Package and the Final Memorandum;

(n)The statements set forth in the Disclosure Package and the Final Memorandum under the caption “Description of the Notes” with respect to the issuance of Securities pursuant to this Agreement, insofar as they purport to constitute a summary of the terms of the Securities, under the caption “Description of Other Indebtedness” with respect to the issuance of Securities pursuant to this Agreement insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate and fair in all material respects;

(o)Although the discussion set forth in the Disclosure Package and the Final Memorandum under the heading “Certain U.S. Federal Income Tax Considerations” with respect to the issuance of Securities pursuant to this Agreement does not purport to discuss all possible United States federal income tax consequences of the purchase, ownership and disposition of the Securities, such discussion constitutes, in all material respects, a fair and accurate summary of the United States federal income tax consequences of the purchase, ownership and disposition of the Securities, based upon current United States federal income tax law;

(p)Other than as set forth in the Disclosure Package and the Final Memorandum, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect; and, to the best of the Company's knowledge, no such proceedings are threatened by governmental authorities or threatened by others which, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect;

(q)The Company is subject to and in compliance in all material respects with the reporting requirements of Section 13 or 15(d) of the Exchange Act;

(r)The Company and each Notes Guarantor is not, and after giving effect to the offering and sale of the Securities and application of the proceeds thereof as described under “Use of Proceeds” in the Disclosure Package and the Final Memorandum, will not be an “investment company”, as such term is defined in the United States Investment Company Act of 1940, as amended (the “Investment Company Act”);

(s)Neither the Company, any Notes Guarantor nor any person acting on their behalf has offered or sold the Securities by means of any general solicitation or general advertising within the meaning of Rule 502(c) under the Act or, with respect to Securities sold outside the United States to non-U.S. persons (as defined in Rule 902 under the Act), by means of any directed selling efforts within the meaning of Rule 902 under the Act and the Company, any affiliate of the Company and any person acting on its or their behalf has complied with and will implement the “offering restriction” within the meaning of such Rule 902; it being understood that the Company and the Notes

Guarantors make no representations or warranties in this clause (s) as to the sale of the Securities to the Initial Purchasers;

(t)Within the six months prior to the date of this Agreement, neither the Company, any Notes Guarantor nor any other person acting on their behalf have offered or sold to any person any Securities, or any securities of the same or a similar class as the Securities, other than Securities offered or sold to the Initial Purchasers hereunder. The Company and the Notes Guarantors will take reasonable precautions designed to ensure that any offer or sale, direct or indirect, in the United States or to any U.S. person (as defined in Rule 902 under the Act) of any Securities or any substantially similar security issued by the Company, within six months subsequent to the date on which the distribution of the Securities has been completed (as notified to the Company by Merrill Lynch, Pierce, Fenner & Smith Incorporated), is made under restrictions and other circumstances reasonably designed not to affect the status of the offer and sale of the Securities in the United States and to U.S. persons contemplated by this Agreement as transactions exempt from the registration provisions of the Act;

(u)KPMG LLP, who have expressed their opinion with respect to the financial statements (which term as used in this Agreement includes the related notes thereto) and supporting schedules included or incorporated by reference in the Disclosure Package and the Final Memorandum, is an independent registered public accounting firm with respect to the Company within the meaning of the Act, the Exchange Act and the Public Company Accounting Oversight Board;

(v)The consolidated financial statements of the Company, (including for purposes of this clause (v), any pro forma financial information) included or incorporated by reference in the Disclosure Package and the Final Memorandum, together with the related schedules and notes, as well as those financial statements, schedules and notes of any other entity included therein (or incorporated by reference), present fairly in all material respects the financial position of the Company and its consolidated subsidiaries, or such other entity, as the case may be, at the dates indicated and the statement of operations, stockholders' equity and cash flows of the Company and its consolidated subsidiaries, or such other entity, as the case may be, for the periods specified. Such financial statements, including any pro forma financial information included therein, have been prepared in conformity with generally accepted accounting principles (“GAAP”), as applied in the United States, applied on a consistent basis throughout the periods involved. The supporting schedules, if any, included or incorporated by reference in the Disclosure Package and the Final Memorandum present fairly in all material respects in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in any Preliminary Memorandum and the Final Memorandum present fairly in all material respects the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included or incorporated by reference in the Disclosure Package and the Final Memorandum;

(w)The Company and each of its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company is in compliance in all material respects with the currently effective and currently applicable provisions of the Sarbanes Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder, including Section 402 related to loans and Sections 302 and 906 related to certifications;

(x)Except as disclosed in the Disclosure Package and the Final Memorandum, or in any document incorporated by reference therein, since the end of the Company's most recent audited fiscal year, there has been (i) no material weakness in the Company's internal control over financial reporting (whether or not remediated) and (ii) no change in the Company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting;

(y)This Agreement has been duly authorized, executed and delivered by the Company and each Notes Guarantor;

(z)The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “Intellectual Property”) necessary to carry on the business now operated by

them, and other than as described in the Disclosure Package and the Final Memorandum, neither the Company nor any of its subsidiaries has received any notice, in writing or otherwise, of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would result in a Material Adverse Effect;

(aa)The Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by them except as would not, singly or in the aggregate, have a Material Adverse Effect. The Company and its subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, result in a Material Adverse Effect. All of the Governmental Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, singly or in the aggregate, result in a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect;

(ab)Except as otherwise stated in the Disclosure Package and the Final Memorandum or as would not, singly or in the aggregate, result in a Material Adverse Effect, (i) neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, or rule of common law or any judicial or administrative interpretation thereof including any judicial or administrative order, consent, decree or judgment, relating to pollution, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), wildlife or the exposure of any individual to Hazardous Materials (as defined below), including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”), (ii) there are no pending or, to the Company's knowledge, threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations or proceedings relating to any Environmental Law against the Company or any of its subsidiaries and (iii) there are no events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its subsidiaries relating to Hazardous Materials or any Environmental Laws;

(ac)In the ordinary course of its business, the Company conducts a periodic review of the effect of Environmental Laws on the business, operations and properties of the Company and its subsidiaries, in the course of which it identifies and evaluates associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties). On the basis of such review, except as disclosed in the Disclosure Package and the Final Memorandum, the Company and the Notes Guarantors have reasonably concluded that such associated costs and liabilities would not, singly or in the aggregate, have a Material Adverse Effect;

(ad)The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements and money laundering statutes and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.

(ae)None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, employee or affiliate of the Company or any of its subsidiaries is currently subject to any sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

(af)To the Company's knowledge, neither the Company nor any of its subsidiaries nor any director, officer, employee or affiliate of the Company or any of its subsidiaries have, directly or indirectly, taken any action which would cause them to be in a violation of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), or, to the Company's knowledge, used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, made, offered or authorized any unlawful payment to foreign or domestic government officials or employees, whether directly or indirectly, or made, offered or authorized any unlawful bribe, rebate, payoff, influence payment, kickback or other similar unlawful payment, whether directly or indirectly, to obtain or retain business or gain an improper business advantage. The Company has established reasonable internal controls and procedures intended to ensure compliance with the FCPA.

(ag)Any certificate signed by an officer of the Company delivered to the Initial Purchasers or to counsel for the Initial Purchasers shall be deemed a representation and warranty by the Company to each Initial Purchaser as to the matters covered thereby.

2.Purchase and Sale. Subject to the terms and conditions herein set forth, the Company and the Notes Guarantors agree to issue and sell to each of the Initial Purchasers, and each of the Initial Purchasers agrees, severally and not jointly, to purchase from the Company, at a purchase price of 98% of the principal amount thereof, plus accrued interest, if any, from May 10, 2011 to the Closing Date hereunder, the principal amount of Securities set forth opposite the name of such Initial Purchaser in Schedule A hereto.

3.Offering by Initial Purchasers. Upon the authorization by Merrill Lynch, Pierce, Fenner & Smith Incorporated of the release of the Securities, the several Initial Purchasers propose to offer the Securities for sale upon the terms and conditions set forth in this Agreement, the Disclosure Package and the Final Memorandum and each Initial Purchaser hereby represents and warrants to, and agrees with the Company and the Notes Guarantors that:

(a)It will offer and sell the Securities only to: (i) persons who it reasonably believes are “qualified institutional buyers” within the meaning of Rule 144A under the Act in transactions meeting the requirements of Rule 144A, or (ii) upon the terms and conditions set forth in Annex A to this Agreement;

(b)It is a “qualified institutional buyer” within the meaning of Rule 144A under the Act and an institutional “Accredited Investor” (as defined under Section 501(a)(1)(2)(3) or (7) of the Act) (an “Institutional Accredited Investor”); and

(c)It will not offer or sell the Securities by any form of general solicitation or general advertising, including but not limited to the methods described in Rule 502(c) under the Act.

4.Delivery and Payment.

(a)The Securities to be purchased by each Initial Purchaser hereunder will be represented by one or more definitive global Securities in book-entry form which will be deposited by or on behalf of the Company and the Notes Guarantors with The Depository Trust Company (“DTC”) or its designated custodian. The Company will deliver the Securities to Merrill Lynch, Pierce, Fenner & Smith Incorporated, for the account of each Initial Purchaser, against payment by or on behalf of such Initial Purchaser of the purchase price therefore by wire transfer, payable to the order of the Company in Federal (same day) funds to the account specified by the Company to Merrill Lynch, Pierce, Fenner & Smith Incorporated, by causing DTC to credit the Securities to the account of Merrill Lynch, Pierce, Fenner & Smith Incorporated at DTC. The Company will cause the certificates representing the Securities to be made available to Merrill Lynch, Pierce, Fenner & Smith Incorporated for checking at least twenty-four hours prior to the Closing Date (as defined below) at the office of DTC or its designated custodian (the “Designated Office”). The time and date of such delivery and payment shall be 10:00 a.m., New York City time, on May 10, 2011 or such other time and date as Merrill Lynch, Pierce, Fenner & Smith Incorporated and the Company may agree upon in writing. Such time and date are herein called the “Closing Date”; and

(b)The documents to be delivered at the Closing Date by or on behalf of the parties hereto pursuant to Section 7 hereof, including the cross-receipt for the Securities and any additional documents requested pursuant to Section 7(k) hereof, will be delivered at such time and date at the offices of Wilson Sonsini Goodrich & Rosati, Professional Corporation, 650 Page Mill Road, Palo Alto, California 94304 (the “Closing Location”), and the Securities will be delivered at the Designated Office, all at the Closing Date. A meeting will be held at the Closing Location at 12:00 p.m., New York City time, on the New York Business Day next preceding the Closing Date, or such other time and date as counsel to the Company and the Representatives shall mutually agree, at which meeting the

final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Section 4, “New York Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close.

5.Agreements. The Company and the Notes Guarantors agree with each of the Initial Purchasers:

(a)To prepare the Final Memorandum in a form reasonably approved by you; to make no amendment or any supplement to the Final Memorandum (or, if applicable, to the Preliminary Memorandum or the Pricing Supplement) prior to the Closing Date which shall be reasonably disapproved by you promptly after reasonable notice thereof; and to furnish you with copies thereof;

(b)Promptly from time to time to take such action as you may reasonably request to qualify the Securities for offering and sale under the securities laws of such jurisdictions as you may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Securities, provided that in connection therewith the Company or any Notes Guarantor shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction or subject itself to taxation in excess of a nominal dollar amount in any such jurisdiction where it is not then so subject;

(c)To furnish the Initial Purchasers with as many copies of the Final Memorandum and each amendment or supplement thereto as reasonably requested by the Initial Purchasers, and any amendment or supplement containing amendments to the financial statements covered by such report(s), and additional written and electronic copies thereof in such quantities as you may from time to time reasonably request, and if, at any time prior to the expiration of nine months after the date of the Final Memorandum and prior to the date on which the distribution of the Securities has been completed (of which the Company shall be notified by Merrill Lynch, Pierce, Fenner & Smith Incorporated), any event shall have occurred as a result of which the Final Memorandum as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Final Memorandum is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Final Memorandum to comply with applicable law, to notify you and upon your reasonable request to prepare and furnish without charge to each Initial Purchaser and to any dealer in securities as many written and electronic copies as you may from time to time reasonably request of an amended Final Memorandum or a supplement to the Final Memorandum which will correct such statement or omission or effect such compliance; and Merrill Lynch, Pierce, Fenner & Smith Incorporated hereby agrees to promptly notify the Company upon the completion of the distribution of the Securities;

(d)During the period beginning from the date hereof and continuing until the date 90 days after the date of the Final Memorandum, not to offer, sell, contract to sell or otherwise dispose of, except as provided hereunder any securities of the Company or any subsidiary that are substantially similar to the Securities without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated. The foregoing sentence shall not apply to (i) the Securities sold hereunder and (ii) the securities issued in exchange for the Securities in accordance with the Indenture.

(e)At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act, for the benefit of holders from time to time of Securities, to furnish at its expense, upon request, to holders of Securities and prospective purchasers of securities information satisfying the requirements of subsection (d)(4)(i) of Rule 144A under the Act to the extent such securities are “restricted securities” within the meaning of Rule 144 under the Act;

(f)To cause the Securities to be eligible for clearance and settlement through DTC.

(g)During the period of two years hereafter, the Company will furnish to the Representatives at One Bryant Park New York, NY 10036, Attention: High Yield Capital Markets, (i) to the extent not available on the Commission's EDGAR filing system, as soon as practicable after the end of each fiscal year, copies of the Annual Report of the Company containing the balance sheet of the Company as of the close of such fiscal year and statements of income, stockholders' equity and cash flows for the year then ended and the opinion thereon of the Company's independent public or certified public accountants; (ii) to the extent not available on the Commission's EDGAR filing system, as soon as practicable after the filing thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report filed by the Company with the Commission, the Financial Industry Regulatory Authority, Inc. (“FINRA”) or any securities exchange; and (iii) to the extent not available on the Commission's EDGAR filing system, as soon as available, copies of any publicly available

report or communication of the Company mailed generally to holders of its capital stock, provided, that, the Company shall not be required to furnish to you information if, in the opinion of counsel to the Company, the provision of such information would amount to a violation of Regulation FD under the Act;

(h)The Company will not, and will not permit any of its affiliates (as defined in Rule 144 under the Act) (“Affiliates”) to, resell any of the Securities which constitute “restricted securities” under Rule 144 that have been acquired by any of them; and

(i)To use the net proceeds received by it from the sale of the Securities pursuant to this Agreement in the manner specified in the Disclosure Package and the Final Memorandum under the caption “Use of Proceeds;” and to not, directly or indirectly, use the proceeds of the sale of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury.

6.Expenses. The Company and the Notes Guarantors covenant and agree with the several Initial Purchasers that the Company and the Notes Guarantors will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company's counsel and accountants in connection with the issue of the Securities and all other expenses in connection with the preparation, printing and filing of the Preliminary Memorandum, the Pricing Supplement and the Final Memorandum and any amendments and supplements thereto or any Supplemental Offering Material and the mailing and delivering of copies thereof to the Initial Purchasers and dealers; (ii) the cost of printing or producing any Agreement among Initial Purchasers, this Agreement, the Indenture, any blue sky memorandum, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) all expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in Section 5(b) hereof, including the fees and disbursements of counsel for the Initial Purchasers in connection with such qualification and in connection with the blue sky memorandum; (iv) any fees charged by securities rating services for rating the Securities; (v) the cost of preparing the Securities; (vi) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities; (vii) half of the cost and expenses relating to any road show undertaken for the marketing of the offering of the Securities, including, without limitation, the cost of any aircraft used in connection with the road show, expenses associated with the use of conference rooms, limousines and the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations, and the travel and lodging expenses incurred on behalf of representatives of the Company and any Notes Guarantor in connection with such road show, provided, that, such expenses shall not include any travel or lodging expenses of the Initial Purchasers or any representative of the Initial Purchasers; and (viii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Sections 8 and 14 hereof, the Initial Purchasers will pay all of their own costs and expenses, including the fees and expenses of their counsel, transfer taxes on resale of any of the Securities by them, and any advertising expenses connected with any offers they may make.

7.Conditions to the Obligations of the Initial Purchasers. The obligations of the Initial Purchasers hereunder shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company and each Notes Guarantor herein are, at and as of the Closing Date, true and correct, the condition that the Company and each Notes Guarantor shall have performed all of their respective obligations hereunder theretofore to be performed, and the following additional conditions:

(a)Weil, Gotshal & Manges LLP, counsel for the Initial Purchasers, shall have furnished to you such opinion and letter, dated the Closing Date, in form and substance satisfactory to you; and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;

(b)Wilson Sonsini Goodrich & Rosati, Professional Corporation, special counsel for the Company and the Notes Guarantors incorporated in Delaware, shall have furnished to you their written opinion, dated the Closing Date, in form and substance satisfactory to you, to the effect set forth in Annex B hereto;

(c)Christian & Small LLP, counsel for the Notes Guarantors incorporated in Alabama, shall have furnished to you their written opinion, dated the Closing Date, in form and substance satisfactory to you, to the effect set forth in Annex C hereto;

(d)Verrill Dana LLP, counsel for the Notes Guarantor incorporated in Massachusetts, shall have furnished to you their written opinion, dated the Closing Date, in form and substance satisfactory to you, to the effect

set forth in Annex C hereto;

(e) (i) Concurrently with the execution of this Agreement, KPMG LLP shall have furnished to you a letter, dated the date hereof, in form and substance satisfactory to you, to the effect set forth in Annex D;

(ii) the Representatives shall have received from KPMG LLP a letter, dated as of the Closing Date, to the effect that they reaffirm the statements made in the letter furnished pursuant to (i) above, except that the specified date referred to shall be a date not more than three business days prior to Closing Date.

(f)Except as otherwise disclosed in the Disclosure Package at the Applicable Time, subsequent to the date as of which information is given in the Disclosure Package, (i) neither the Company nor any of its subsidiaries shall have sustained any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, that is material to the Company and its subsidiaries taken as a whole and (ii) there shall not have been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any material adverse change, or any development that is reasonably likely to result in a material adverse change, in or affecting the business, business prospects, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries taken as a whole the effect of which, in any such case described in clause (i) or (ii), is in the judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the offering or the delivery of the Securities on the terms and in the manner contemplated in this Agreement and in the Disclosure Package and the Final Memorandum;

(g)On or after the date hereof (i) no downgrading shall have occurred in the rating accorded the Company's debt securities by any “nationally recognized statistical rating organization”, as that term is defined by the Commission for purposes of Section 3 under the Exchange Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company's debt securities; provided that, for purposes of this subsection (e), a “nationally recognized statistical rating organization” shall be Standard & Poor's Ratings Services, a division of The McGraw Hill Companies, Inc., and Moody's Investors Service, Inc.

(h)The Representatives shall have received a written certificate executed by the Chairman of the Board, Chief Executive Officer or President of the Company and the Chief Financial Officer or Chief Accounting Officer of the Company, dated as of such Closing Date, to the effect that the signers of such certificate have carefully examined the Disclosure Package, the Final Memorandum and any amendment or supplement thereto, any Supplemental Offering Materials and any amendment or supplement thereto and this Agreement, to the effect set forth in subsections (f) and (g) of this Section 7, and further to the effect that:

(i)for the period from and after the date of this Agreement and prior to such Closing Date, there has not occurred any change or development that has caused or is reasonably likely to result in a Material Adverse Effect;

(ii)the representations, warranties and covenants of the Company set forth in Section 1 of this Agreement are true and correct on and as of the Closing Date with the same force and effect as though expressly made on and as of such Closing Date; and

(iii)    the Company has complied with all the agreements hereunder and satisfied all the conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date;

(i)Each Notes Guarantor shall have furnished or caused to be furnished to you on the Closing Date certificates of officers of the Notes Guarantor satisfactory to you as to the accuracy of the representations and warranties of the Notes Guarantor herein at and as of such Closing Date, as to the performance by the Notes Guarantor of, and its compliance with, all of its obligations hereunder to be performed or complied with at or prior to such Closing Date, as to the matters set forth in subsections (f) and (g) of this Section and as to such other matters as you may reasonably request;

(j)The Representatives shall have received a written certificate executed by the Chief Financial Officer of the Company, dated as of the Closing Date and addressed to the Representatives, in form and substance previously agreed to by the Company and the Representatives;

(k)The Securities and the Indenture shall be executed by the Company or the Notes Guarantors, as the case may be, in substantially the forms previously delivered to you;

(l)At the Closing Date, the Company and the Notes Guarantors shall have furnished counsel for the Company, the Notes Guarantors or the Initial Purchasers, as the case may be, such documents as they reasonably require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties or fulfillment of any of the conditions herein contained.

8.Indemnification and Contribution.

(a)The Company and the Notes Guarantors agree to indemnify and hold harmless each Initial Purchaser, its directors, officers, employees, affiliates and agents, and each person, if any, who controls any Initial Purchaser within the meaning of the Act and the Exchange Actagainst any loss, claim, damage, liability or expense, as incurred, to which such Initial Purchaser or such controlling person may become subject, insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon an untrue statement or alleged untrue statement of a material fact contained in any Supplemental Offering Materials, any Preliminary Memorandum or the Final Memorandum (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and to reimburse each Initial Purchaser, its officers, directors, employees, agents, affiliates and each such controlling person for any and all expenses (including fees and disbursements of counsel chosen by Merrill Lynch, Pierce, Fenner & Smith Incorporated) as such expenses are reasonably incurred by such Initial Purchaser or its officers, directors, employees, agents and affiliates or other such controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the foregoing indemnity agreement shall not apply to any loss, claim, damage, liability or expense to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information furnished in writing to the Company by the Representatives expressly for use in any Supplemental Offering Materials, any Preliminary Memorandum or the Final Memorandum (or any amendment or supplement thereto). The indemnity agreement set forth in this Section 8(a) shall be in addition to any liabilities that the Company and the Notes Guarantors may otherwise have.

(b)Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold harmless the Company, the Notes Guarantors and each of their directors, each of their officers, and each person who controls the Company or the Notes Guarantors within the meaning of the Act and the Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which the Company and the Notes Guarantors, or any such director, officer or controlling person may become subject, insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in any Supplemental Offering Materials, any Preliminary Memorandum or the Final Memorandum (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, and only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Supplemental Offering Materials, any Preliminary Memorandum or the Final Memorandum (or any such amendment or supplement thereto), in reliance upon and in conformity with information furnished in writing to the Company by the Representatives expressly for use therein; and to reimburse the Company and the Notes Guarantors, or any such director, officer or controlling person for any legal and other expense reasonably incurred by the Company and the Notes Guarantors, or any such director, officer or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. The Company hereby acknowledges that the only information that the Representatives have furnished to the Company expressly for use in any Supplemental Offering Materials, any Preliminary Memorandum or the Final Memorandum (or any such amendment or supplement thereto) are the statements set forth under the captions “Plan of Distribution - Commissions and Discounts,” and “Plan of Distribution - Stabilization/Short Positions” in the Preliminary Memorandum and the Final Memorandum. The indemnity agreement set forth in this Section 8(b) shall be in addition to any liabilities that the Initial Purchasers may otherwise have.

(c)Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof; but the failure to so notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any liability, if

applicable, other than the indemnification obligation provided in paragraph (a) or (b) above. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it elects, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party's election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 8 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (other than local counsel), reasonably approved by the indemnifying party (or by Merrill Lynch, Pierce, Fenner & Smith Incorporated in the case of Section 9), representing the indemnified parties who are parties to such action) or (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, in each of which cases the reasonable fees and expenses of counsel shall be at the expense of the indemnifying party.

(d)The indemnifying party under this Section 8 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by Section 8(c) hereof, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is a party and indemnity was or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent (i) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.

9.Contribution. If the indemnification provided for in Section 8 is for any reason unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Notes Guarantors, on the one hand, and the Initial Purchasers, on the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Notes Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in connection with the statements or omissions or inaccuracies in the representations and warranties herein which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Notes Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company and the Notes Guarantors and the total discount received by the Initial Purchasers as set forth herein bear to the aggregate initial offering price of the Securities as set forth on such cover. The relative fault of the Company and the Notes Guarantors, on the one hand, and the Initial Purchasers, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact or any such inaccurate or alleged inaccurate representation or warranty relates to information supplied by the Company and the Notes Guarantors, on the one hand, or the Initial Purchasers, on the

other hand, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 8(c), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The provisions set forth in Section 8(c) with respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this Section 9; provided, however, that no additional notice shall be required with respect to any action for which notice has been given under Section 8(c) for purposes of indemnification.

The Company, the Notes Guarantors and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 9.

Notwithstanding the provisions of this Section 9, no Initial Purchaser shall be required to contribute any amount in excess of the discount received by such Initial Purchaser in connection with the Securities underwritten by it and distributed to the investors. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers' obligations to contribute pursuant to this Section 9 are several, and not joint, in proportion to their respective underwriting commitments as set forth opposite their names in Schedule A. For purposes of this Section 9, each director, officer, employee, affiliate and agent of an Initial Purchaser and each person, if any, who controls an Initial Purchaser within the meaning of the Act and the Exchange Act shall have the same rights to contribution as such Initial Purchaser, and each director of the Company and the Notes Guarantors, each officer of the Company and the Notes Guarantors and each person, if any, who controls the Company and the Notes Guarantors within the meaning of the Act and the Exchange Act shall have the same rights to contribution as the Company and the Notes Guarantors.

10.Default by One or More of the Several Initial Purchasers.

(a)If any one or more Initial Purchasers shall default in its obligation to purchase the Securities which it has agreed to purchase hereunder, you may in your discretion arrange for you or another party or other parties to purchase such Securities on the terms contained herein. If within thirty-six (36) hours after such default by any Initial Purchaser you do not arrange for the purchase of such Securities, then the Company shall be entitled to a further period of thirty-six (36) hours within which to procure another party or other parties satisfactory to you to purchase such Securities on such terms. In the event that, within the respective prescribed periods, you notify the Company that you have so arranged for the purchase of such Securities, or the Company notifies you that it has so arranged for the purchase of such Securities, you or the Company shall have the right to postpone the Closing Date for a period of not more than seven (7) days, in order to effect whatever changes may thereby be made necessary in the Pricing Supplement, or in any other documents or arrangements, and the Company agrees to prepare promptly any amendments to the Pricing Supplement which in your opinion may thereby be made necessary. The term “Initial Purchaser” as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Securities;

(b)If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Initial Purchaser or Initial Purchasers by you and the Company as provided in subsection 10(a) above, the aggregate principal amount of such Securities which remains unpurchased does not exceed one-eleventh (1/11^th) of the aggregate principal amount of all the Securities, then the Company shall have the right to require each non-defaulting Initial Purchaser to purchase the principal amount of Securities which such Initial Purchaser agreed to purchase hereunder and, in addition, to require each non-defaulting Initial Purchaser to purchase its pro rata share (based on the principal amount of Securities which such Initial Purchaser agreed to purchase hereunder) of the Securities of such defaulting Initial Purchaser or Initial Purchasers for which such arrangements have not been made; but nothing herein shall relieve a defaulting Initial Purchaser from liability for its default; and

(c)If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Initial Purchaser or Initial Purchasers by you and the Company as provided in subsection 10(a) above, the aggregate principal amount of Securities which remains unpurchased exceeds one-eleventh (1/11^th) of the aggregate principal amount of all the Securities, or if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Initial Purchasers to purchase Securities of a defaulting Initial Purchaser or Initial Purchasers, then this Agreement shall thereupon terminate, without liability on the part of any non-defaulting Initial Purchaser or the Company, except for the expenses to be borne by the Company and the Initial Purchasers as provided in Section 6

hereof and the indemnity and contribution agreements in Sections 8 and 9 hereof; but nothing herein shall relieve a defaulting Initial Purchaser from liability for its default.

11.Termination of this Agreement. Prior to the Closing Date, this Agreement may be terminated by the Representatives by notice given to the Company if at any time (i) trading or quotation in any of the Company's securities shall have been suspended or limited by the Commission or by the Nasdaq Global Market, Inc., or trading in securities generally on the New York Stock Exchange or the Nasdaq Global Market, Inc. shall have been suspended or limited, or minimum or maximum prices shall have been generally established on any of such stock exchanges by the Commission or FINRA; (ii) a general banking moratorium shall have been declared by federal or New York authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States has occurred; or (iii) there shall have occurred any outbreak or escalation of national or international hostilities or any crisis or calamity, or any change in the United States or international financial markets, or any substantial change in United States' or international financial or economic conditions, as in the judgment of the Representatives is material and adverse and makes it impracticable or inadvisable to proceed with the offering or the delivery of the Securities in the manner and on the terms described in the Disclosure Package or to enforce contracts for the sale of securities.

12.No Advisory or Fiduciary Responsibility. The Company and each Notes Guarantor acknowledge and agree that: (i) the purchase and sale of the Securities pursuant to this Agreement, including the determination of the offering price of the Securities and any related discounts and commissions, is an arm's-length commercial transaction between the Company and the Notes Guarantor, on the one hand, and the several Initial Purchasers, on the other hand, and the Company and the Notes Guarantor is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (ii) in connection with each transaction contemplated hereby and the process leading to such transaction each Initial Purchaser is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary of the Company and the Notes Guarantor or their affiliates, stockholders, creditors or employees or any other party; (iii) no Initial Purchaser has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Company and the Notes Guarantor with respect to any of the transactions contemplated hereby or the process leading thereto (irrespective of whether such Initial Purchaser has advised or is currently advising the Company or the Notes Guarantor on other matters) and no Initial Purchaser has any obligation to the Company or the Notes Guarantor with respect to the offering contemplated hereby except the obligations expressly set forth in this Agreement; (iv) the several Initial Purchasers and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company and the Notes Guarantor and that the several Initial Purchasers have no obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Initial Purchasers have not provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby and the Company and the Notes Guarantor have consulted their own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.

This Agreement supersedes all prior agreements and understandings (whether written or oral) among the Company, the Notes Guarantors and the several Initial Purchasers, or any of them, with respect to the subject matter hereof. The Company and the Notes Guarantors hereby waive and release, to the fullest extent permitted by law, any claims in connection with issue and sale of the Notes that the Company and the Notes Guarantors may have against the several Initial Purchasers with respect to any breach or alleged breach of agency or fiduciary duty.

13.Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other statements of the Company and its officers , the Notes Guarantors and their officers and of the several Initial Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any (A) investigation made by or on behalf of any Initial Purchaser or any of its affiliates, the officers or employees of any Initial Purchaser, or the Company, the officers or employees of the Company, or any person controlling the Company, as the case may be or (B) acceptance of the Securities and payment for them hereunder. The provisions of Sections 8, 9 and 14 hereof shall survive the termination or cancellation of this Agreement.

14.Reimbursement of Expenses. If this Agreement shall be terminated pursuant to Section 10 hereof, the Company and the Notes Guarantors shall not then be under any liability to any Initial Purchaser except as provided in Sections 6, 8 and 9 hereof; but, if for any other reason, including termination pursuant to Section 11 hereof, the Securities are not delivered by or on behalf of the Company and the Notes Guarantors as provided herein, the Company and the Notes Guarantors will reimburse the Initial Purchasers through you for all out-of-pocket expenses approved in writing by you, including fees and disbursements of counsel, reasonably incurred by the Initial Purchasers in making preparations for the purchase, sale and delivery of the Securities, but the Company and the Notes Guarantors shall then be under no further liability to any Initial Purchaser except as provided in Sections 6, 8 and 9 hereof.

15.Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied

and confirmed to the parties hereto as follows:

If to the Representatives:

Merrill Lynch, Pierce, Fenner & Smith Incorporated

One Bryant Park

New York, NY 10036

Facsimile: (917) 267-7085

Attention: High Yield Legal Department

and:

Weil Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

Facsimile: (212) 310-8007

Attention: Corey Chivers, Esq.

If to the Company or any Notes Guarantor:

Sanmina-SCI Corporation

2700 North First Street

San Jose, CA 95134

Facsimile: (408) 964-3636

Attention: Chief Financial Officer

with a copy to:

Wilson Sonsini Goodrich & Rosati, P.C.

650 Page Mill Road

Palo Alto, CA 94304-1050

Facsimile: (650) 493-6811

Attention: Kathleen D. Rothman, Esq.

Any party hereto may change the address for receipt of communications by giving written notice to the others.

16.Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto, including any substitute Initial Purchasers pursuant to Section 10 hereof, and to the benefit of (i) the Company and the Notes Guarantors, their directors, any person who controls the Company or any Notes Guarantor within the meaning of the Act and the Exchange Act and any officer of the Company or any Notes Guarantor, (ii) the Initial Purchasers, the officers, directors, employees. affiliates and agents of the Initial Purchasers, and each person, if any, who controls any Initial Purchaser within the meaning of the Act and the Exchange Act, and (iii) the respective successors and assigns of any of the above, all as and to the extent provided in this Agreement, and no other person shall acquire or have any right under or by virtue of this Agreement. The term “successors and assigns” shall not include a purchaser of any of the Securities from any of the several Initial Purchasers merely because of such purchase.

17.Partial Unenforceability. The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.

18.Timing. Time shall be of the essence of this Agreement.

19.Patriot Act Notice. In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Initial Purchasers are required to obtain, verify and record information that identifies their respective clients, including the Company, which information may include the name and address of their respective clients, as well as other information that will allow the Initial Purchasers to properly identify their respective clients.

20.Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State

of New York applicable to contracts made and to be performed within the State of New York.

21.Counterparts. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument.

22.Headings. The section headings used herein are for convenience only and shall not affect the construction hereof.

23.Amendment and Waiver. This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit.

[Signature Page Follows]

If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Company and the Notes Guarantors the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.

Very truly yours,

SANMINA-SCI CORPORATION

By: /s/ Brian P. Casey

Name:    Brian P. Casey

Title:    Senior Vice President and Treasurer

NotesGuarantors

HADCO CORPORATION

HADCO SANTA CLARA, INC.

SANMINA-SCI SYSTEMS HOLDINGS, INC.

SCI TECHNOLOGY, INC.

All by:    /s/ Robert K. Eulau

Name:    Robert K. Eulau

Title:    Executive Vice President and Chief

        Financial Officer

The foregoing Agreement is hereby confirmed and accepted by the Representatives as of the date first above written.

Merrill Lynch, Pierce, Fenner & Smith Incorporated

Deutsche Bank Securities Inc.

Goldman, Sachs & Co.

Morgan Stanley & Co. Incorporated

Acting as Representatives of the

several Initial Purchasers named in

the attached Schedule A.

By Merrill Lynch, Pierce, Fenner & Smith Incorporated

By: ___/s/ Name of Managing Director_________

Managing Director

SCHEDULE A

Purchaser	Principal Amount of Notes to be Purchased
Merrill Lynch, Pierce, Fenner & Smith Incorporated	$200,000,000
Deutsche Bank Securities Inc.	100,000,000
Goldman, Sachs & Co.	100,000,000
Morgan Stanley & Co. Incorporated	100,000,000
Total	$500,000,000

SCHEDULE B

Notes Guarantors

Guarantor Incorporated in Alabama	Guarantors Incorporated in Delaware
SCI Technology, Inc.	Hadco Santa Clara, Inc. (“Hadco”)
	Sanmina-SCI Systems Holdings, Inc. (“SSCI Holdings”)
Guarantor Incorporated in Massachusetts
Hadco Corporation

SCHEDULE C

PRICING SUPPLEMENTSTRICTLY CONFIDENTIAL

$500,000,000

Sanmina-SCI Corporation

7% Senior Notes due 2019

April 26, 2011

This Pricing Supplement is qualified in its entirety by reference to the Preliminary Offering Memorandum dated April 26, 2011. The information in this Pricing Supplement supplements the Preliminary Offering Memorandum and supersedes the information in the Preliminary Offering Memorandum to the extent inconsistent with the information in the Preliminary Offering Memorandum. Capitalized terms used but not defined in this Pricing Supplement have the respective meanings ascribed to them in the Preliminary Offering Memorandum.

The Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and are being offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and outside the United States to non-U.S. persons in accordance with Regulation S under the Securities Act. The Notes are not transferable except in accordance with the restrictions described under “Notice to Investors” in the Preliminary Offering Memorandum.

Terms Applicable to the 7% Senior Notes due 2019
Issuer:	Sanmina-SCI Corporation (the “Company”)
Aggregate Principal Amount:	$500,000,000
Use of Proceeds:	The Company expects to use the net proceeds of this offering, together with cash on hand, to fund the tender offer for any and all of its outstanding 6¾% Senior Subordinated Notes due 2013 and to fund the tender offer for up to $200.0 million aggregate principal amount of its 8.125% Senior Subordinated Notes due 2016.
Title of Securities:	7% Senior Notes due 2019 (the “Notes”)
Final Maturity Date:	May 15, 2019
Offering Price:	100.000%, plus accrued interest, if any, from May 10, 2011
Coupon:	7%
Interest Payment Dates:	May 15 and November 15, beginning on November 15, 2011
Record Dates:	May 1 and November 1
Optional Redemption:	All or any portion of the Notes may be redeemed, at any time, and from time to time, prior to May 15, 2014, at the option of the Company, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest to, but excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date) plus a make-whole premium.

This Pricing Supplement is qualified in its entirety by reference to the Preliminary Offering Memorandum dated April 26, 2011

	In addition, the Company may redeem all or any portion of the Notes, at once or over time, at any time on or after May 15, 2014, at the following redemption prices (expressed as a percentage of principal amount of the Notes), plus accrued and unpaid interest to, but excluding, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period beginning on May 15 of the years indicated below:
	YearPercentage 2014                     105.250% 2015                     103.500% 2016                     101.750% 2017 and thereafter 100.000%
Initial Purchasers:	Merrill Lynch, Pierce, Fenner & Smith Incorporated Deutsche Bank Securities Inc. Goldman, Sachs & Co. Morgan Stanley & Co. Incorporated
Trade Date:	April 26, 2011
Settlement Date:	May 10, 2011 (T+10 business days)
Denominations:	$2,000 and integral multiples of $1,000 in excess thereof
Distribution:	144A and Regulation S without registration rights
Corporate Credit/Family Ratings:	B+/B1 (S&P/Moody's)
CUSIP and ISIN Numbers:	144A Notes: Reg S Notes: CUSIP: 800907 AQ0 CUSIP: U80024 AE9 ISIN: US800907AQ07 ISIN: USU80024AE92

We expect that delivery of the notes will be made against payment therefor on or about May 10, 2011, which will be the tenth business day following the date of pricing of the notes (such settlement cycle being herein referred to as “T+10”). Under Rule 15c6-1 under the Exchange Act, trades in the secondary market generally are required to settle in three business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the notes on the date of pricing or the next succeeding six business days will be required, by virtue of the fact that the notes initially will settle T+10, to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement. Purchasers of notes who wish to trade notes prior to their date of delivery hereunder should consult their own advisor.

This material is confidential and is for your information only and is not intended to be used by anyone other than you. This information does not purport to be a complete description of these Notes or the offering. Please refer to the Preliminary Offering Memorandum for a complete description.

Any disclaimers or other notices that may appear below are not applicable to this communication and should be disregarded. Such disclaimers or other notices were automatically generated as a result of this communication being sent via Bloomberg email or another communication system.

SCHEDULE D

Supplemental Offering Materials:

Investor Presentation, dated April 26, 2011

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302(A) OF

THE SARBANES - OXLEY ACT OF 2002

I, Jure Sola, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Sanmina-SCI Corporation;

2.    Based on my knowledge, this 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 report;

3.    Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4.    The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5.    The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's Board of Directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date:	August 1, 2011
/s/ JURE SOLA
Jure Sola
Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302(A) OF

THE SARBANES - OXLEY ACT OF 2002

I, Robert K. Eulau, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Sanmina-SCI Corporation;

2.    Based on my knowledge, this 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 report;

3.    Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4.    The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5.    The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's Board of Directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date:	August 1, 2011
/s/ ROBERT K. EULAU
Robert K. Eulau
Chief Financial Officer (Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States of America Code (18 U.S.C. §1350), Jure Sola, Chief Executive Officer of Sanmina-SCI Corporation (the “Company”), hereby certifies that, to the best of his knowledge:

1.    The Company's Quarterly Report on Form 10-Q for the period ended July 2, 2011, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and

2.    The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned has set his hand hereto as of August 1, 2011.

/s/ JURE SOLA

Jure Sola

Chief Executive Officer (Principal Executive Officer)

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Sanmina-SCI Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing).

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States of America Code (18 U.S.C. §1350), Robert K. Eulau, Chief Financial Officer of Sanmina-SCI Corporation (the “Company”), hereby certifies that, to the best of his knowledge:

1.    The Company's Quarterly Report on Form 10-Q for the period ended July 2, 2011, to which this Certification is attached as Exhibit 32.2 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and

2.    The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned has set his hand hereto as of August 1, 2011.

/s/ ROBERT K. EULAU

Robert K. Eulau

Chief Financial Officer (Principal Financial Officer)

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Sanmina-SCI Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing).