{"id":42774,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/services-agreement-celestica-inc-and-onex-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"services-agreement-celestica-inc-and-onex-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/services-agreement-celestica-inc-and-onex-corp.html","title":{"rendered":"Services Agreement – Celestica Inc. and Onex Corp."},"content":{"rendered":"

SERVICES AGREEMENT<\/u><\/strong><\/p>\n<\/p>\n

THIS AGREEMENT<\/strong> is made as of January 1, 2009<\/p>\n<\/p>\n

B E T W E E N:<\/p>\n<\/p>\n

CELESTICA INC<\/strong>.,
\n<\/strong>a corporation existing under the laws of the Province of Ontario
\n(hereinafter referred to as “Celestica”)<\/p>\n<\/p>\n

-and-<\/p>\n

\n

ONEX CORPORATION<\/strong>,
\na corporation existing under the laws of the Province of Ontario
\n(hereinafter referred to as “Onex”)<\/p>\n<\/p>\n<\/p>\n

This Agreement witnesses that in consideration of the respective covenants
\ncontained herein and other good and valuable consideration, the receipt and
\nsufficiency of which are hereby acknowledged, the parties covenant and agree as
\nfollows:<\/p>\n

1. Scope of Services<\/u><\/strong>. Onex hereby agrees to provide
\nto Celestica the services of Mr. Gerald W. Schwartz153 as a director of Celestica,
\nsubject to his election as a director of Celestica at its annual general
\nmeeting.<\/p>\n

2. Fees.<\/u><\/strong> In consideration of the services to be
\nrendered by Onex as described herein, Celestica shall pay to Onex a fee of USD
\n200,000.00 per year (the “Fees”) in deferred share units (each, a “DSU”) payable
\nin equal quarterly instalments in arrears, as calculated in accordance with
\nparagraph 2(a). Each DSU will entitle Onex to receive, in accordance with either
\nparagraph 2(c) or 2(d), a subordinate voting share of Celestica (a “Share”) or a
\ncash payment equal to the value of a Share following the date on which this
\nAgreement terminates.<\/p>\n

a. DSU Calculation.<\/u> Onex shall receive: (i) in respect of each fiscal
\nquarter of services rendered under this Agreement, a number of DSUs equal to the
\nquarterly instalment of USD 50,000.00 divided by the closing price of Shares on
\nthe New York Stock Exchange on the last trading day of the fiscal quarter in
\nrespect of which the instalment is to be paid; or (ii) if this Agreement is
\nterminated during a fiscal quarter pursuant to section 5, a number of DSUs equal
\nto the pro-rated amount of such quarterly instalment that reflects Mr. Schwartz153
\nactual period of service as a director of Celestica from the commencement of the
\napplicable fiscal quarter to the date of termination of this Agreement divided
\nby the closing price of Shares on the New York Stock Exchange on the last
\ntrading day of the immediately preceding fiscal quarter.<\/p>\n

b. DSU Account.<\/u> Celestica shall keep or cause to be kept records for
\nOnex, including an account (the “Account”) showing the number of DSUs, as
\ndetermined in accordance with paragraph 2(a), and in each case rounded to two
\ndecimal places, that Onex has been granted.<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

c. Delivery of Shares<\/u>. Subject to paragraph 2(d), on
\nthe date that is 45 days following this Agreement153s effective date of
\ntermination, or the following business day if such 45th day is not a business
\nday (“Valuation Date”), or as soon as practicable thereafter (but in all cases
\nwithin 90 days following the effective date of termination of this Agreement),
\nCelestica shall deliver to Onex the number of Shares that equals the number of
\nDSUs in Onex153s Account on the Valuation Date, less such number of Shares the
\nvalue of which is sufficient to satisfy withholding taxes and source deductions,
\nif any. Celestica shall, in accordance with the instructions of Onex, deliver to
\nOnex a certificate representing such Shares, or credit such Shares to an account
\nwith a broker in the name of Onex, as soon as practicable thereafter. Onex shall
\ncomply with all applicable securities regulations, and policies of Celestica,
\nrelating to the purchase and sale of Shares.<\/p>\n

d. Cash Payment<\/u>. Celestica shall have the right, in its sole
\ndiscretion, to pay all or a portion of the value of the DSUs to Onex in a lump
\nsum cash payment in an amount equal to the product obtained by multiplying the
\nnumber of DSUs in Onex153s Account on the Valuation Date by the closing price of
\nthe Shares on the NYSE on the Valuation Date, less applicable withholding taxes
\nand source deductions if any, and in the event there is no public market for the
\nShares, on the basis of a valuation of the market value of an equivalent number
\nof Shares. Such lump sum cash payment will be made on the Valuation Date, or as
\nsoon as practical thereafter (but in all cases within 90 days following the
\neffective date of termination of this Agreement).<\/p>\n

e. Reorganizations<\/u>. In respect of Celestica, in the event of a (i)
\ncapital reorganization, (ii) merger, (iii) amalgamation, (iv) offer for shares
\nof Celestica which if successful would entitle the offeror to acquire all of the
\nshares of Celestica or all of one or more particular class(es) of shares of
\nCelestica to which the offer relates, (v) sale of a material portion of the
\nassets of Celestica, (vi) arrangement or other scheme of reorganization or
\nproposed reorganization, or (vii) an increase or decrease in the outstanding
\nShares as a result of a stock split, consolidation, subdivision,
\nreclassification or recapitalization but, for greater certainty, not as a result
\nof the issuance of Shares for additional consideration, by way of a stock
\ndividend or other distribution in the ordinary course or as a result of a rights
\noffering, Celestica may adjust the Account of Onex in such matter as Celestica
\ndetermines, in its discretion, is equitable to reflect such event. Any
\nadjustment so made by Celestica shall be conclusive and binding for all purposes
\nof this Agreement, and Onex shall have no other rights as a result of any change
\nin the Shares or of any other event.<\/p>\n

3. Expenses.<\/u><\/strong> Celestica shall pay to Onex, as and when
\ninvoiced from time to time, the reasonable out-of-pocket expenses payable to Mr.
\nSchwartz in connection with his services as a director of Celestica, in
\naccordance with the “Celestica Director Expense Policy”, as amended from time to
\ntime.<\/p>\n

4. Term.<\/u><\/strong> This Agreement shall have an initial term
\nbeginning January 1, 2009 and ending December 31, 2009 and shall automatically
\nrenew for successive one-year terms unless either Celestica or Onex provides
\nnotice of intent not to renew, in writing, at least 60 days prior to the
\nexpiration of the then current term.<\/p>\n

2<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

5. Automatic Termination.<\/u><\/strong> This Agreement shall
\nterminate automatically and the rights of Onex to receive Fees (other than
\naccrued and unpaid Fees) will terminate (a) 30 days after the first day on which
\nOnex ceases to hold at least one multiple voting share in the capital of
\nCelestica or any successor company or (b) the date Mr. Schwartz ceases to be a
\ndirector of Celestica, for any reason.<\/p>\n

6. Indemnification<\/u><\/strong>. It is the parties153 understanding
\nthat Celestica is not required to make any withholdings or deductions in
\nrelation to payments hereunder. Should any withholdings or deductions in
\nrelation to payments be required by law at the time of payment, Onex shall
\nindemnify Celestica in respect of any and all liabilities and expenses in
\nrespect of any failure of Celestica to make any such withholdings or deductions.\n<\/p>\n

7. Notice.<\/u><\/strong> Any notice required or permitted to be
\ngiven under this Agreement and shall be given by delivering the same or by
\nsending it by facsimile transmissions, in the case of Onex, to 161 Bay Street,
\n49th Floor, Canada Trust Tower, Toronto, Ontario, M5J 2S1, Attention: Donald
\nLewtas, fax: (416) 362-5765 and, in the case of Celestica, to 12 Concorde Place,
\n5th Floor, Toronto, Ontario, M3C 3R8, Attention: Chief Executive Officer, fax
\n(416) 448-4758. A notice so given shall be deemed to have been given and
\nreceived on the business day on which it is delivered or sent by facsimile
\ntransmission. Either party may change its address for service from time to time
\nby notice given in accordance with the foregoing.<\/p>\n

8. Entire Agreement.<\/u><\/strong> This Agreement constitutes the
\nentire agreement between the parties hereto relating to the subject matter
\nhereof. This Agreement may not be amended or modified in any way except by the
\nwritten consent of the parties hereto.<\/p>\n

9. Further Assurance.<\/u><\/strong> Each party shall from time to
\ntime and at all times hereafter do such further acts and things and execute such
\nfurther documents and instruments as shall be reasonably required in order to
\nperform fully and carry out the terms of this Agreement.<\/p>\n

10. Time of the Essence.<\/u><\/strong> Time shall be of the essence
\nof this Agreement.<\/p>\n

11. Governing Law.<\/u><\/strong> This Agreement shall be governed
\nby and construed in accordance with the laws of the Province of Ontario and the
\nfederal laws of Canada applicable therein, and the parties hereto herby
\nirrevocably attorn to the non-exclusive jurisdiction of the courts of the
\nProvince of Ontario.<\/p>\n

12. Execution in Counterparts.<\/u><\/strong> This Agreement may be
\nexecuted in counterparts, each of which shall constitute an original, and all of
\nwhich taken together shall constitute one and the instrument.<\/p>\n

13. No Effect on Director153s Duties.<\/u><\/strong> Nothing herein
\naffects Mr. Schwartz153 obligations, duties, rights and powers as a director of
\nCelestica.<\/p>\n

3<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as
\nof the date first above written.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n\n

CELESTICA INC.<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n\n

by<\/p>\n<\/td>\n

\n

\/s\/ Craig Muhlhauser<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Name:<\/p>\n<\/td>\n

\n

Craig Muhlhauser<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Title:<\/p>\n<\/td>\n

\n

Chief Executive Officer<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n\n

ONEX CORPORATION<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n\n

by<\/p>\n<\/td>\n

\n

\/s\/ Donald Lewtas<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Name:<\/p>\n<\/td>\n

\n

Donald Lewtas<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Title:<\/p>\n<\/td>\n

\n

Chief Financial Officer<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

4<\/p>\n<\/p>\n<\/p>\n

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