Exhibit 10.2
------------
AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT
among
SOLECTRON CORPORATION,
as Originator, Servicer and Guarantor,
SOLECTRON CALIFORNIA CORPORATION
and
SOLECTRON TECHNOLOGY, INC.,
as Originators,
and
SOLECTRON FUNDING CORPORATION,
as the Initial Purchaser
Dated as of February 22, 1999
TABLE OF CONTENTS
PAGE
ARTICLE I AMOUNTS AND TERMS OF THE PURCHASES
SECTION 1.1. Previous Purchases...................................2
SECTION 1.2. Agreement to Purchase and Sell.......................2
SECTION 1.3. Timing of Purchases..................................3
SECTION 1.4. Calculation of Purchase Price........................3
SECTION 1.5. Definitions and Calculations Related to
Purchase Discount....................................4
SECTION 1.6. Purchase Price Payments..............................6
SECTION 1.7. The Initial Purchaser Notes..........................6
SECTION 1.8. Deemed Collections, Etc..............................6
SECTION 1.9. No Recourse..........................................7
SECTION 1.10. True Sales...........................................7
SECTION 1.11. Payments and Computations, Etc.......................8
ARTICLE II CONDITIONS TO PURCHASES; REPRESENTATIONS AND WARRANTIES;
COVENANTS; PURCHASE AND SALE TERMINATION EVENTS
SECTION 2.1. Conditions to Purchases..............................9
SECTION 2.2. Representations and Warranties; Covenants............9
SECTION 2.3. Purchase and Sale Termination Events.................9
ARTICLE III INDEMNIFICATION
SECTION 3.1. Indemnities by each Originator......................10
SECTION 3.2. Contribution........................................11
ARTICLE IV ADMINISTRATION AND COLLECTIONS; ADDITIONAL RIGHTS
AND OBLIGATIONS IN RESPECT OF THE RECEIVABLES
SECTION 4.1. Servicing of Receivables and Related Assets.........12
SECTION 4.2. Rights of the Initial Purchaser; Enforcement Rights.12
SECTION 4.3. Responsibilities of each Originator.................13
SECTION 4.4. Further Action Evidencing Purchases.................14
ARTICLE V MISCELLANEOUS
SECTION 5.1. Amendments, Etc.....................................15
SECTION 5.2. Notices, Etc........................................15
SECTION 5.3. Acknowledgment and Consent..........................15
SECTION 5.4. Binding Effect; Assignability.......................16
SECTION 5.5. Costs, Expenses and Taxes...........................16
SECTION 5.6. No Proceedings; Limitation on Payments..............17
SECTION 5.7. GOVERNING LAW AND JURISDICTION......................17
SECTION 5.8. Execution in Counterparts...........................18
SECTION 5.9. Survival of Termination.............................18
(i)
SECTION 5.10. WAIVER OF JURY TRIAL................................18
SECTION 5.11. Entire Agreement....................................19
SECTION 5.12. Headings............................................19
SECTION 5.13. Several Obligations.................................19
ARTICLE VI GUARANTEE
SECTION 6.1. Guarantee...........................................19
SECTION 6.2. Representation and Warranty.........................21
SECTION 6.3. Subrogation.........................................21
EXHIBIT I CONDITIONS OF PURCHASES
EXHIBIT II REPRESENTATIONS AND WARRANTIES
EXHIBIT III COVENANTS
EXHIBIT IV PURCHASE AND SALE TERMINATION EVENTS
ANNEX A FORM OF INITIAL PURCHASER NOTE
(ii)
AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT
This AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT (this "Agreement")
is entered into as of February 22, 1999 among SOLECTRON CORPORATION, a Delaware
corporation ("Solectron"), as Servicer (in such capacity, the "Servicer"), as an
Originator (in such capacity, an "Originator") and as Guarantor (in such
capacity, the "Guarantor"), SOLECTRON CALIFORNIA CORPORATION, a California
corporation ("Solectron California"), as an Originator (in such capacity, an
"Originator"), SOLECTRON TECHNOLOGY, INC., a California corporation, ("Solectron
Technology"), as an Originator (in such capacity, an "Originator"), and
SOLECTRON FUNDING CORPORATION, a Delaware corporation, ("Solectron Funding") as
Initial Purchaser (the "Initial Purchaser").
PRELIMINARY STATEMENTS
Definitions
Unless otherwise defined herein or the context otherwise requires, certain
terms that are used throughout this Agreement (including the Exhibits hereto)
are defined in Exhibit I to the Second Amended and Restated Receivables Purchase
Agreement, dated of even date herewith, among the Initial Purchaser, Solectron,
individually and as the Servicer, Quincy Capital Corporation, as Issuer, and
Bank of America National Trust and Savings Association, as Administrator (as the
same may be amended, amended and restated or otherwise modified from time to
time, the "Receivables Purchase Agreement"). Any reference to "this Agreement"
or "the Purchase and Sale Agreement", including any such reference in any
Exhibit hereto, shall mean this Agreement in its entirety, including the
Exhibits and other attachments hereto, as amended, modified or supplemented from
time to time in accordance with the terms hereof.
Background
A. Solectron, Solectron California and Solectron Funding Corporation
entered into the Purchase and Sale Agreement, dated as of September
17, 1997 (as amended, supplemented or otherwise modified and in
effect on February 22, 1999 the "Original Purchase and Sale
Agreement") pursuant to which, among other things, each of Solectron
and Solectron California sold from time to time its Receivables to
Funding.
B. The parties desire to amend and restate in its entirety the Original
Purchase and Sale Agreement in order to, among other things, provide
for the addition of Solectron Technology as an Originator hereunder.
C. Each Originator wishes to sell Receivables that it now owns and from
time to time hereafter will own to the Initial Purchaser, and the
Initial Purchaser is willing, on the terms and subject to the
conditions contained in this Agreement, to purchase such Receivables
from such Originator at such time.
D. The Initial Purchaser entered into the Original Receivables Purchase
Agreement and the Amended and Restated Receivables Purchase Agreement
and will enter into the Second Amended and Restated Receivables
Purchase Agreement, pursuant to which, among other things, the Initial
Purchaser sold and intends to continue to sell to the Issuer undivided
ownership interests in the Receivables and the other items specified
in Section 1.2(c) of the Second Amended and Restated ---------------
Receivables Purchase Agreement.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 1.1. Previous Purchases. Subject to and upon the terms and
conditions set forth in the Original Purchase and Sale Agreement (including
Article II), Solectron and Solectron California sold and assigned to the Initial
Purchaser, and the Initial Purchaser purchased from Solectron and Solectron
California, each of Solectron and Solectron California's right, title and
interest in, to and under:
(a) each Receivable that was owing on the closing of Solectron and
Solectron Corporation's business, as applicable, on September 17, 1997;
(b) each Receivable created or acquired by Solectron and Solectron
Corporation from September 17, 1997, to but excluding the Effective Date;
(c) all Related Security with respect to such Receivables; and
(d) All Collections with respect to, and other proceeds of, such
Receivable and Related Security.
The parties hereto agree that from and after the Effective Date, the terms
and conditions of this Purchase and Sale Agreement and the rights and
obligations of the parties set forth herein, shall apply to the Receivables and
Related Assets purchased by the Initial Purchaser from Solectron and Solectron
California, irrespective of whether such Receivables and Related Assets
originally were purchased by the Initial Purchaser pursuant to the Original
Purchase and Sale Agreement or this Agreement.
SECTION 1.2. Agreement to Purchase and Sell. On the terms and conditions
hereinafter set forth, each Originator agrees to sell to the Initial Purchaser,
and the Initial Purchaser agrees to purchase from such Originator, at the times
set forth in Section 1.3, but prior to the Purchase and Sale Termination Date,
all of such Originator's right, title, and interest in, to and under:
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(a) each Receivable of Solectron and Solectron Corporation that was owing
on the closing of Solectron's and Solectron Corporation's business, as
applicable, on the Effective Date;
(b) each Receivable of Solectron, Solectron Corporation and Solectron
Technology from and including the close of business, as applicable, on February
22, 1999 to and including the Purchase and Sale Termination Date; and
(c) all Related Security with respect to such Receivables, and
(d) all Collections with respect to, and other proceeds of, such
Receivables and Related Security.
The items listed in clauses (c) and (d) of the preceding sentence in
relation to any Receivables are herein collectively called the "Related Assets"
or, with respect to any such Receivable, the "Related Asset".
SECTION 1.3. Timing of Purchases.
(a) Regular Purchases. After the Effective Date until the Purchase and
Sale Termination Date, each Receivable and Related Asset of each Originator
shall be deemed to have been sold to the Initial Purchaser pursuant hereto
immediately (and without any formal or other instrument of assignment and
without further action by any Person) upon the creation of such Receivable.
(b) Lock-Box Accounts. As of the Effective Date, each Originator hereby
sells to the Initial Purchaser, and the Initial Purchaser hereby purchases from
such Originator, all of such Originator's right, title and interest in the
Lock-Box Accounts and any related deposit accounts and post office boxes, all
monies, instruments, and other property from time to time held or on deposit
therein, all certificates and instruments, if any, from time to time evidencing
such Lock-Box Accounts, related deposit accounts and post office boxes and all
related agreements between such Originator and the applicable Lock-Box Banks.
SECTION 1.4. Calculation of Purchase Price. As soon as available and in
any event not later than the tenth calendar day of each month or, if such day is
not a Business Day, the first Business Day thereafter, the Servicer shall
deliver to the Initial Purchaser, the Administrator and each Originator a Seller
Report with respect to the Initial Purchaser's purchases of Receivables and
Related Assets from such Originator during the immediately preceding Purchase
Period. "Purchase Period" means, with respect to any Month-End Date, the
calendar month ending on such Month-End Date. "Payment Date" means the third
Business Day following the day upon which the Seller Report was delivered by the
Servicer as provided in this Section 1.4. The "Purchase Price" to be paid to
such Originator on each Payment Date for the Receivables and Related Assets sold
by such Originator pursuant to Section 1.2 during the Purchase Period
immediately preceding such Payment Date shall be set forth in the relevant
Seller Report and shall be determined in accordance with the following formula:
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PP = AOB - PD
where:
PP = the Purchase Price to be paid to such Originator on the relevant
Payment Date;
AOB = the aggregate Outstanding Balance of the Receivables that
were purchased from such Originator during the Purchase Period
immediately preceding such Payment Date. (For purposes of this
calculation, the Outstanding Balance of a Receivable shall be
measured only at the time of such Receivable's creation and
sale to the Initial Purchaser.)
PD = the Purchase Discount as measured on such Payment Date
pursuant to Section 1.5.
SECTION 1.5. Definitions and Calculations Related to Purchase Discount.
(a) Purchase Discount. "Purchase Discount" for the Receivables and Related
Assets that were purchased from each Originator during the Purchase Period
immediately preceding a Payment Date shall be determined in accordance with the
following formula:
PD = AOB x (LD + FD)
where:
PD = the Purchase Discount as measured on such Payment Date;
AOB, in respect of such Originator, has the meaning set forth in Section 1.4;
LD = the Loss Discount as measured on such Payment Date,
as determine pursuant to paragraph (b) below; and
FD = the Funding Discount as measured on such Payment Date, as
determined pursuant to paragraph (c) below.
(b) Loss Discount. "Loss Discount" in effect for any day with respect to
an Originator shall mean the lesser of (i) fifteen percent (15%) and (ii) the
result, expressed as a percentage, calculated as of the most recent Month-End
Date, of the quotient of (a) the aggregate Outstanding Amount of Receivables
originated by such Originator that became Defaulted Receivables during the
Purchase Period ending on such Month-End Date divided by (b) the aggregate
Outstanding Balance of Receivables that were originated by such Originator
during the Purchase Period that occurred six calendar months prior to the
Purchase Period ending on such Month-End Date.
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(c) Funding Discount. "Funding Discount" with respect to an Originator, as
measured on any Payment Date, means a percentage determined in accordance with
the following formula:
FD = (AM/360) x FR
where:
FD = the Funding Discount as measured on such Payment Date;
AM = the Average Maturity of the Receivables as of the most recent Month
End Date; and
FR = the Funding Rate as measured on such Payment Date, as determined
pursuant to paragraph (d) below.
(d) Funding Rate. "Funding Rate" as measured on any Payment Date means a
per annum percentage rate determined in accordance with the following formula:
FR = 0.02% + DRP + SFP + EXP
where:
FR = the Funding Rate as measured on such Payment Date;
DRP = the "Discount Rate Percentage", which shall be equal to a fraction
(expressed as a percentage) (x) the numerator of which is the sum of
the products obtained by multiplying (A) each CP Rate or Alternate
Rate applicable to each Portion of Capital outstanding as of the first
day of the Purchase Period ending on the Month-End Date immediately
preceding such Payment Date, times (B) the amount of the Portion of
Capital to which such CP Rate or Alternate Rate applied on such first
day, and (y) the denominator of which is the aggregate outstanding
amount of Capital on such first day;
SFP = the "Servicer's Fee Percentage", which shall be equal to the per
annum percentage rate contemplated by the definition of Servicing Fee;
and
EXP = the amount, expressed as a per annum percentage rate, of any fees,
costs and expenses incurred by the Initial Purchaser during the
Purchase Period preceding such Payment Date (and not accounted for in
the Discount Rate Percentage), including without limitation reserve
costs, tax payments and indemnity obligations of the Initial Purchaser
for which the Initial Purchaser is not indemnified pursuant to this
Agreement; provided, however, that, for purposes of minimizing
fluctuations in the rate calculated as the Funding Rate, the Servicer
may allocate and spread any unscheduled or unaccruable
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costs and expenses of the Initial Purchaser over several Payment Dates
at the Servicer's reasonable discretion, subject to the requirement
that such allocation be reasonably calculated to allow the Initial
Purchaser to recover such costs and expenses over a reasonable period
of time.
SECTION 1.6. Purchase Price Payments. On the Effective Date, the Initial
Purchaser shall pay each Originator the Purchase Price for the Receivables and
Related Assets sold by such Originator, if any, on that date. On each Payment
Date falling after the date of the purchase pursuant to Section 1.3, on the
terms and subject to the conditions of this Agreement, the Initial Purchaser
shall pay to each Originator the Purchase Price for the Receivables and Related
Assets purchased from such Originator, if any, during the immediately preceding
Purchase Period as follows:
(i) First, by making a cash payment to or at the direction of such
Originator to the extent that the Initial Purchaser has cash available to
make such payment subject to the terms of clause (m) of Exhibit IV to the
Receivables Purchase Agreement; and
(ii) Second, to the extent any portion of the Purchase Price remains
unpaid, the principal amount outstanding under the Initial Purchaser Note
issued to such Originator automatically shall be increased in an amount
equal to such remaining Purchase Price.
SECTION 1.7. The Initial Purchaser Notes.
(a) On or prior to the date hereof, the Initial Purchaser shall deliver to
each Originator a promissory note in the form of Annex A to this Agreement
payable to the order of such Originator (each such promissory note, as it may be
amended, amended and restated, endorsed or otherwise modified from time to time,
together with any promissory notes issued from time to time in substitution
therefor or renewal thereof in accordance with the Transaction Documents, being
called the "Initial Purchaser Note"). The obligations of the Initial Purchaser
to each Originator under the related Initial Purchaser Note shall be
subordinated in accordance with the terms of such Initial Purchaser Note.
(b) The Servicer shall hold the Initial Purchaser Notes for the benefit of
the Originators, and shall make all appropriate record-keeping entries with
respect to the Initial Purchaser Notes or otherwise to reflect the payments on
and adjustments of such Initial Purchaser Notes. The Servicer's books and
records shall constitute rebuttable presumptive evidence of the principal amount
of and accrued interest on the Initial Purchaser Notes at any time. By its
execution of this Agreement, the Servicer acknowledges receipt of the Initial
Purchaser Notes relating to the Originators. Each Originator hereby irrevocably
authorizes the Servicer to ▇▇▇▇ its Initial Purchaser Note "CANCELLED" and to
return such Initial Purchaser Note to the Initial Purchaser upon the full and
final payment thereof after the Purchase and Sale Termination Date.
SECTION 1.8. Deemed Collections, Etc. On and after the Initial Purchase
Date:
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(a) if on any day the Outstanding Balance of any Receivable is reduced or
adjusted as a result of any defective, rejected, returned, repossessed, goods or
services, or any discount or other adjustment made by an Originator, or any
setoff or dispute between such Originator and an Obligor, such Originator shall
be deemed to have received on such day a Collection of such Receivable in an
amount equal to the amount of such reduction or adjustment and shall deliver to
the Servicer for application in accordance with Section 1.4(b) of the
Receivables Purchase Agreement in same day funds an amount equal to the amount
of such reduction or adjustment;
(b) if on any day any of the representations or warranties in paragraph
(h) of Exhibit II hereto is not true with respect to any Receivable, the
applicable Originator shall be deemed to have received on such day a Collection
of such Receivable in an amount equal to the Outstanding Balance of such
Receivable and shall deliver to the Servicer in same day funds an amount equal
to the Outstanding Balance of such Receivable for application in accordance with
Section 1.4(b) of the Receivables Purchase Agreement;
(c) except as provided in paragraph (a) or (b) of this Section, or as
otherwise required by applicable law or the relevant Contract, all Collections
received from an Obligor of any Receivables originated by an Originator shall be
applied to such Receivables of such Obligor in the order of the age of such
Receivables, starting with the oldest such Receivable, unless such Obligor
designates in writing its payment for application to specific Receivables; and
(d) if and to the extent the Initial Purchaser shall be required for any
reason to pay over to an Obligor (or any trustee, receiver, custodian or similar
official in any Insolvency Proceeding) any amount received by it hereunder, such
amount shall be deemed not to have been so received but rather to have been
retained by the applicable Originator and, accordingly, the Initial Purchaser
shall have a claim against such Originator for such amount, payable immediately.
SECTION 1.9. No Recourse. Except as specifically provided in this
Agreement, the purchase and sale of Receivables and Related Assets under this
Agreement shall be without recourse to the Originators; provided that each
Originator shall be liable to the Initial Purchaser for all representations,
warranties, covenants and indemnities made by such Originator pursuant to the
terms of this Agreement, it being understood that, under the terms of this
Agreement, such obligations of such Originator will not arise on account of the
failure of the Obligor for credit reasons to make any payment in respect of a
Receivable.
SECTION 1.10. True Sales.
(a) Each Originator and the Initial Purchaser intend the transactions
hereunder to constitute true sales (or to the extent the Subscription Agreement
applies, true conveyances in the form of capital contributions) of Receivables,
Related Assets and the Lock-Box Accounts (and the other items described in
Section 1.2) by such Originator to the Initial Purchaser providing the Initial
Purchaser with the full benefits of ownership thereof, and no party hereto
intends the transactions contemplated hereunder to be, or for any purpose to be
characterized as, a loan from the Initial Purchaser to the Originators.
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(b) In the event (but only to the extent) that the conveyance of
Receivables and Related Assets hereunder is characterized by a court or other
Governmental Authority as a loan rather than a sale, each Originator shall be
deemed hereunder to have granted to the Initial Purchaser, and such Originator
hereby grants to the Initial Purchaser, a security interest in all of such
Originator's right, title and interest in, to and under all of the following,
whether now or hereafter owned, existing or arising: (A) all Receivables of such
Originator, (B) all Related Security with respect to each such Receivable, (C)
all Collections with respect to each such Receivable, (D) the Lock-Box Accounts,
all amounts on deposit therein, all certificates and instruments, if any, from
time to time evidencing such Lock-Box Accounts and amounts on deposit therein,
and all related agreements between such Originator and the Lock-Box Banks, and
(E) all proceeds of, and all amounts received or receivable under any or all of,
the foregoing. Such security interest shall secure all of such Originator's
obligations (monetary or otherwise) under this Agreement and the other
Transaction Documents to which it is a party, whether now or hereafter existing
or arising, due or to become due, direct or indirect, absolute or contingent. In
the event (but only to the extent) that the conveyance of Receivables and
Related Assets hereunder is characterized by a court or other Governmental
Authority as a loan rather than a sale, the Initial Purchaser shall have, with
respect to the property described in this Section 1.10(b), and in addition to
all the other rights and remedies available to the Initial Purchaser under this
Agreement and applicable law, any additional rights and remedies of a secured
party specified under any applicable UCC, and this Agreement shall constitute a
security agreement under applicable law.
SECTION 1.11. Payments and Computations, Etc.
(a) All amounts to be paid or deposited by each Originator or the Servicer
hereunder shall be paid or deposited no later than 12:00 noon (New York City
time) on the day when due in same day funds in United States dollars. All
amounts received after 12:00 noon (New York City time) will be deemed to have
been received on the immediately succeeding Business Day.
(b) Each Originator shall, to the extent permitted by law, pay interest on
any amount not paid or deposited by such Originator when due hereunder, at an
interest rate per annum equal to 2.0% per annum above the Base Rate, payable on
demand.
(c) All computations of interest under Section 1.11(b) and all
computations of the Purchase Price, fees, and other amounts hereunder shall be
made on the basis of a 360-day year and actual days elapsed. Whenever any
payment or deposit to be made hereunder shall be due on a day other than a
Business Day, such payment or deposit shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
such payment or deposit.
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ARTICLE II
CONDITIONS TO PURCHASES; REPRESENTATIONS AND WARRANTIES;
COVENANTS; PURCHASE AND SALE TERMINATION EVENTS
SECTION 2.1. Conditions to Purchases. The obligation of the Initial
Purchaser to make any purchase of Receivables and Related Assets hereunder is
subject to satisfaction of the conditions to purchase set forth in Exhibit I
hereto.
SECTION 2.2. Representations and Warranties; Covenants. Each Originator
hereby makes the representations and warranties set forth in Exhibit II as of
the Effective Date, and hereby agrees to perform and observe the covenants set
forth in Exhibit III hereto.
SECTION 2.3. Purchase and Sale Termination Events. If any Purchase and
Sale Termination Event set forth in Exhibit IV shall occur, the Initial
Purchaser may, with the prior written consent of the Administrator, by notice to
each Originator (with a copy to the Administrator), declare the Purchase and
Sale Termination Date to have occurred; provided that automatically upon the
occurrence of an event (without any requirement for the passage of time or the
giving of notice) described in clause (f) of Exhibit IV hereto the Purchase and
Sale Termination Date shall occur.
The agreement of each Originator to sell Receivables and Related Assets
hereunder, and the agreement of the Initial Purchaser to purchase Receivables
and Related Assets from such Originator hereunder, shall terminate automatically
on the earlier to occur of (i) the Purchase and Sale Termination Date and (ii)
the Facility Termination Date; provided that in the event that each related
Purchase and Sale Termination Event shall cease to exist, such agreements of the
Originators and Initial Purchaser shall be automatically reinstated as though
such Purchase and Sale Termination Date had never occurred. Notwithstanding the
occurrence of the Purchase and Sale Termination Date, all obligations of each
Originator under the Transaction Documents that shall have arisen prior to the
Purchase and Sale Termination Date shall survive until each such obligation has
been finally and fully paid and performed by such Originator.
Upon the occurrence of a Purchase and Sale Termination Event, the Initial
Purchaser shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided under the UCC of
each applicable jurisdiction and other applicable laws, which rights and
remedies shall be cumulative. Without limiting the foregoing, the occurrence of
a Purchase and Sale Termination Event hereunder shall not deny to the Initial
Purchaser any remedy to which the Initial Purchaser may be otherwise
appropriately entitled, whether by statute or applicable law, at law or in
equity.
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ARTICLE III
INDEMNIFICATION
SECTION 3.1. Indemnities by each Originator. Without limiting any other
rights which the Initial Purchaser or any Indemnified Party may have hereunder
or under applicable law, each Originator hereby agrees to indemnify the Initial
Purchaser and each Indemnified Party from and against any and all Indemnified
Amounts arising out of or resulting from this Agreement (whether directly or
indirectly) or the use of proceeds of purchases or the ownership of any
Receivable or Related Asset, excluding, however, (a) Indemnified Amounts to the
extent resulting from gross negligence or willful misconduct on the part of the
Initial Purchaser or such Indemnified Party, (b) recourse (except as otherwise
specifically provided in this Agreement) for uncollectible Receivables or (c)
any overall net income taxes or franchise taxes imposed on the Initial Purchaser
or such Indemnified Party by the jurisdiction under the laws of which such
Indemnified Party is organized or any political subdivision thereof. Without
limiting or being limited by the foregoing, but subject to the exclusions set
forth in the preceding sentence, each Originator shall pay on demand to the
Initial Purchaser and each Indemnified Party any and all amounts necessary to
indemnify the Initial Purchaser and such Indemnified Party from and against any
and all Indemnified Amounts relating to or resulting from any of the following:
(i) the failure of any information provided by such Originator to
the Initial Purchaser, the Issuer, the Administrator or the Servicer with
respect to Receivables or this Agreement to be true and correct;
(ii) the failure of any representation or warranty or statement made
or deemed made by such Originator under or in connection with this
Agreement to have been true and correct in all respects when made;
(iii) the failure by such Originator to comply with any applicable
law, rule or regulation with respect to any Receivable or any Related
Asset; or the failure of any Receivable or Related Asset to conform to any
such applicable law, rule or regulation;
(iv) the failure to vest in the Initial Purchaser a valid and
enforceable (A) perfected ownership interest in each Receivable originated
by such Originator at any time existing and the Related Assets with
respect thereto and in the items covered by Section 1.3(b) and (B) a first
priority perfected security interest in the items described in Section
1.10(b) to the extent Section 1.10(b) is applicable, in each case free and
clear of any Adverse Claim;
(v) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any
Receivables originated by such Originator and the Related Assets in
respect thereof, whether at the time of any purchase or at any subsequent
time;
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(vi) any dispute, claim, offset, billing adjustment or defense
(other than discharge in bankruptcy of the Obligor) of the Obligor to the
payment of any Receivable originated by such Originator (including,
without limitation, a defense based on such Receivable or the related
Contract not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the sale of the goods or services related to such
Receivable or the furnishing or failure to furnish such goods or services
or relating to collection activities with respect to such Receivable (if
such collection activities were performed by such Originator, or any of
its Affiliates, acting as Servicer or by any agent or independent
contractor retained by such Originator or any of its Affiliates);
(vii) any failure of such Originator to perform its duties or
obligations in accordance with the provisions hereof or to perform its
duties or obligations under the Contracts;
(viii) any breach of warranty, products liability or other claim,
investigation, litigation or proceeding arising out of or in connection
with merchandise, insurance or services which are the subject of any
Contract relating to a Receivable originated by such Originator;
(ix) the commingling by any Solectron Party of any portion of
Collections of Receivables at any time with other funds;
(x) any investigation, litigation or proceeding related to this
Agreement or the use of proceeds of purchases or the ownership of any
Receivable or Related Asset;
(xi) any requirement that all or a portion of the payments or
distributions made to the Initial Purchaser pursuant to this Agreement
shall be rescinded or otherwise must be returned to such Originator for
any reason; or
(xii) the breach of any covenant or any representation and warranty
made by Solectron in the Solectron Credit Agreement.
For purposes of this Article III, in determining whether any
representation or warranty or information was true and correct, any
qualification or limitation in such representation and warranty or information
as to materiality, material adverse effect, knowledge or limitation on
enforcement shall be disregarded.
SECTION 3.2. Contribution. If for any reason the indemnification
provided above in this Article III (and subject to the exceptions set forth
therein) is unavailable to the Initial Purchaser or an Indemnified Party or is
insufficient to hold the Initial Purchaser or an Indemnified Party harmless,
then each Originator shall contribute to the maximum amount of Indemnified
Amount payable or paid by the Initial Purchaser or such Indemnified Party in
such proportion as is appropriate to reflect not only the relative benefits
received by the Initial Purchaser or such Indemnified Party on the one
11
hand and such Originator on the other hand, but also the relative fault of such
Indemnified Party (if any) and such Originator and any other relevant equitable
considerations.
ARTICLE IV
ADMINISTRATION AND COLLECTIONS; ADDITIONAL RIGHTS
AND OBLIGATIONS IN RESPECT OF THE RECEIVABLES
SECTION 4.1. Servicing of Receivables and Related Assets. Consistent with
the Initial Purchaser's ownership of the Receivables and the Related Assets, the
Initial Purchaser shall have the sole right to service, administer and collect
the Receivables, to assign such right and to delegate such right to others. In
consideration of the Initial Purchaser's purchase of the Receivables and the
Related Assets, each Originator agrees to cooperate fully with the Initial
Purchaser to facilitate the full and proper performance of such servicing,
administering and collecting for the benefit of the Initial Purchaser, the
Issuer and the Administrator. To the extent that the Initial Purchaser,
individually or through the Servicer, has granted or grants powers of attorney
to the Administrator under the Receivables Purchase Agreement, each Originator
hereby grants a corresponding power of attorney on the same terms to the Initial
Purchaser. Each Originator hereby acknowledges and agrees that the Initial
Purchaser, in all of its capacities, shall assign to the Administrator for the
benefit of the Issuer and the Administrator such powers of attorney and other
rights and interests granted by such Originator to the Initial Purchaser
hereunder, and agrees to cooperate fully with the Administrator in the exercise
of such rights.
SECTION 4.2. Rights of the Initial Purchaser; Enforcement Rights.
(a) The Initial Purchaser shall have no obligation to account for, to
replace, to substitute or to return any Receivables or Related Assets to any
Originator. Without limiting the foregoing, the Initial Purchaser shall have no
obligation to account for, or to return to any Originator, Collections, or any
interest or other finance charge collected pursuant thereto, without regard to
whether such Collections and charges are in excess of the Purchase Price for
such Receivables and Related Assets.
(b) The Initial Purchaser shall have the unrestricted right to further
assign, transfer, deliver, hypothecate, subdivide or otherwise deal with the
Receivables and Related Assets (and other items covered by Section 1.2(c) and
(d)), and all of the Initial Purchaser's right, title and interest in, to and
under this Agreement, on whatever terms the Initial Purchaser shall determine,
pursuant to the Receivables Purchase Agreement or otherwise.
(c) The Initial Purchaser shall have the sole right to retain any gains or
profits created by buying, selling or holding the Receivables and Related Assets
and shall have the sole risk of and responsibility for losses or damages created
by such buying, selling or holding, it being understood that this Section shall
not limit the Initial Purchaser's rights and remedies pursuant to Article III or
other provisions of this Agreement or pursuant to applicable law.
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(d) At any time following the designation of a Servicer (other than
Solectron) pursuant to Section 4.1 of the Receivables Purchase Agreement:
(i) the Administrator may direct the Obligors that payment of all
amounts payable under any Pool Receivable be made directly to the
Administrator or its designee;
(ii) the Administrator may instruct any Originator to give notice of
the Initial Purchaser's or the Issuer's interest in Receivables to each
Obligor, which notice shall direct that payments be made directly to the
Administrator or its designee, and upon such instruction from the
Administrator such Originator shall give such notice at the expense of
such Originator; provided, that if such Originator fails to so notify each
Obligor, the Administrator may so notify the Obligors; and
(iii) the Administrator may request such Originator to, and upon
such request such Originator shall, (A) assemble all of the records
necessary or desirable to collect the Receivables and the Related Assets,
and transfer or license the use of, to the new Servicer, all software
necessary or desirable to collect the Receivables and the Related Assets,
and make the same available to the Administrator or its designee at a
place selected by the Administrator, and (B) segregate all cash, checks
and other instruments received by it from time to time constituting
Collections with respect to the Receivables in a manner acceptable to the
Administrator and, promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of transfer,
to the Administrator or its designee.
(e) Each Originator hereby authorizes the Initial Purchaser, and
irrevocably appoints the Initial Purchaser as its attorney-in-fact with full
power of substitution and with full authority in the place and stead of such
Originator, which appointment is coupled with an interest, to take any and all
steps in the name of such Originator and on behalf of such Originator necessary
or desirable, in the determination of such Originator, to collect any and all
amounts or portions thereof due under any and all Receivables originated by such
Originator or Related Assets, including, without limitation, endorsing the name
of such Originator on checks and other instruments representing Collections and
enforcing such Receivables and Related Assets. Notwithstanding anything to the
contrary contained in this subsection (e), none of the powers conferred upon
such attorney-in-fact pursuant to the immediately preceding sentence shall
subject such attorney-in-fact to any liability if any action taken by it shall
prove to be inadequate or invalid, nor shall they confer any obligations upon
such attorney-in-fact in any manner whatsoever.
SECTION 4.3. Responsibilities of each Originator. On and after the
Effective Date, anything herein to the contrary notwithstanding:
(a) Each Originator agrees to deliver any Collections that it
receives, in the form so received, to Lock-Box Accounts in accordance with
clause (j) of Exhibit III and agrees that all such Collections shall be
deemed to be received in trust for the Initial Purchaser and
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shall be maintained and segregated separate and apart from all other funds
and moneys of such Originator until such delivery; and
(b) Each Originator shall (i) perform all of its obligations
hereunder and under the Contracts related to the Receivables and Related
Assets (and under its agreements with the Lock-Box Banks) to the same
extent as if the Receivables, Related Assets and Lock-Box Accounts (and
the other items described in Section 1.2(c) and 1.2(d)) had not been sold
hereunder, and the exercise by the Initial Purchaser or its designee or
assignee of the Initial Purchaser's rights hereunder or in connection
herewith shall not relieve such Originator from such obligations and (ii)
pay when due any taxes, including, without limitation any sales taxes,
payable in connection with the Receivables and their creation and
satisfaction. Notwithstanding anything to the contrary in this Agreement,
the Initial Purchaser, the Administrator and the Issuer shall not have any
obligation or liability with respect to any Receivable, Related Asset, or
Lock-Box Account (or any other item described in Section 1.2(c) and
1.2(d)) nor shall any of them be obligated to perform any of the
obligations of such Originator under any of the foregoing.
SECTION 4.4. Further Action Evidencing Purchases. Each Originator agrees
that from time to time, at its expense, it will promptly execute and deliver all
further instruments, UCC financing statements and documents, and take all
further action, reasonably requested by the Initial Purchaser or the
Administrator in order to perfect, protect or more fully evidence the purchase
of the Receivables and the Related Assets and Lock-Box Accounts (and the other
items described in Section 1.3(b)) by the Initial Purchaser hereunder, or to
enable the Initial Purchaser or the Administrator, the Issuer or any other
Indemnified Party to exercise or enforce any of its or their respective rights
or remedies hereunder or under any other Transaction Document or Program Support
Agreement; provided that the Originators shall not be required pursuant to this
Section 4.4 to take any action that conflicts with any other provision of this
Agreement or of the Receivables Purchase Agreement. Without limiting the
generality of the foregoing, upon the request of the Initial Purchaser or the
Administrator, such Originator will:
(a) execute and file such UCC financing or continuation statements,
or amendments thereto or assignments thereof, and such other instruments
or notices, as the Initial Purchaser or the Administrator may reasonably
determine to be necessary or appropriate; and
(b) legend the related Contracts, to reflect the sale of the
Receivables and Related Assets pursuant to this Agreement and the
Receivables Purchase Agreement.
Each Originator hereby authorizes the Initial Purchaser or its designee or
assignee to file one or more UCC financing or continuation statements, and
amendments thereto and assignments thereof, relative to all or any of the
Receivables and Related Assets, in each case whether now existing or hereafter
generated. If any Originator fails to perform any of its agreements or
obligations under this Agreement, the Initial Purchaser or its designee or
assignee may (but shall not be required to) itself perform, or cause performance
of, such agreement or obligation, and the
14
reasonable expenses of the Initial Purchaser or its designee or assignee
incurred in connection therewith shall be payable by such Originator under
Section 5.5.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Amendments, Etc. No amendment or waiver of any provision of
this Agreement or consent to any departure by an Originator or the Servicer
therefrom shall be effective unless in a writing signed by the Administrator
(and, in the case of an amendment, by the Administrator, such Originator and the
Servicer), and any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No failure on
the part of the Initial Purchaser or Administrator to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.
SECTION 5.2. Notices, Etc. All notices and other communications hereunder
shall, unless otherwise stated herein, be in writing (which shall include
facsimile communication) and sent or delivered, to each party hereto, at its
address set forth under its name on the signature pages hereof or at such other
address as shall be designated by such party in a written notice to the other
parties hereto. Notices and communications by facsimile shall be effective when
sent (and shall be followed by hard copy sent by first class mail), and notices
and communications sent by other means shall be effective when received.
SECTION 5.3. Acknowledgment and Consent.
(a) Each of the Originators and the Guarantor acknowledges that,
contemporaneously herewith or at any time hereafter, the Initial Purchaser (i)
is assigning or will assign to the Issuer, pursuant to the Receivables Purchase
Agreement, one or more undivided interests in all of the Initial Purchaser's
rights, title and interest in, to and under the Receivables and Related Assets,
and (ii) is assigning to the Administrator, pursuant to the Receivables Purchase
Agreement, all of the Initial Purchaser's right, title and interest in, to and
under this Agreement and the other Transaction Documents (and all rights,
remedies, powers, privileges and claims of the Initial Purchaser under this
Agreement (including Article VI) and the other Transaction Documents), it being
understood that such assignment shall not relieve any party hereto from (or
require the Issuer or the Administrator to undertake) the performance of any
term, covenant or agreement on the part of any party hereto to be performed or
observed under or in connection with this Agreement, any other Transaction
Document, and any Pool Receivable or any Related Security. Each of the
Originators and the Guarantor hereby consents to such assignments, including,
without limitation, the assignment by the Initial Purchaser to the Administrator
for its benefit and the benefit of the Issuer of (i) the right of the Initial
Purchaser, at any time, to enforce this Agreement and any other Transaction
Documents against such Originator and the Servicer, (ii) the right to appoint a
successor to the Servicer as set forth therein, (iii) the right, at any time, to
give or withhold any and all
15
consents, requests, notices, directions, approvals, demands, extensions or
waivers under or with respect to this Agreement, any other Transaction Document
or the obligations in respect of such Originator or Guarantor thereunder to the
same extent as the Initial Purchaser may do, and (iv) all of the Initial
Purchaser's rights, remedies, powers, privileges, and claims under or with
respect to this Agreement and the other Transaction Documents (whether arising
pursuant to the terms of this Agreement or any other Transaction Document or
otherwise available at law or in equity). Each of the parties hereto
acknowledges and agrees that the Issuer, the Administrator and the other
Affected Persons are third party beneficiaries of the rights of the Initial
Purchaser arising hereunder and under the other Transaction Documents to which
such Originator and the Guarantor is a party.
(b) Each of the Originators and the Guarantor hereby agrees to execute all
agreements, instruments and documents, and to take all other action, that the
Initial Purchaser or the Administrator reasonably determines is necessary or
reasonably desirable to evidence its consent described in Section 5.3(a);
provided that neither the Originators nor the Guarantor shall be required
pursuant to this Section 5.3 to execute any agreements, instruments or
documents, or take any actions, that conflict with any other provision of this
Agreement or of the Receivables Purchase Agreement.
(c) Each of the Originators and the Guarantor hereby acknowledges that its
obligations to the Administrator for its benefit and the benefit of the Issuer
are and shall be, to the extent permitted by applicable law or not prohibited by
any order of any court or administrative or regulatory authority, absolute and
unconditional under any and all circumstances and shall be unaffected by any
claims, offsets or other defenses such Originator or the Guarantor may have
against the Initial Purchaser (other than in respect of the Initial Purchaser
Note), and each of such Originator and the Guarantor agrees that it shall not
interpose any such claims, offsets or defenses as a defense to its performance
of its obligations under the Transaction Documents to which it is a party.
SECTION 5.4. Binding Effect; Assignability. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No Originator shall assign any of its rights
or delegate its obligations hereunder or under any other Transaction Document or
any interest herein or therein without the prior written consent of the Initial
Purchaser and the Administrator. Without limiting any other rights that may be
available under applicable law, the rights of the Initial Purchaser may be
enforced through it or by its agents.
SECTION V.5. Costs, Expenses and Taxes. In addition to the rights of
indemnification granted under Article III, each Originator agrees to pay on
demand all costs and expenses in connection with the preparation, execution,
delivery and administration (including, without limitation, periodic auditing of
Receivables) of this Agreement and the other Transaction Documents, and any
amendment, modification or waiver of any of the foregoing, including, without
limitation, Attorney Costs for the Administrator, the Initial Purchaser and
their respective Affiliates and agents with respect thereto and with respect to
advising the Administrator, the Initial Purchaser and their respective
Affiliates and agents as to their rights and remedies under this Agreement and
the other Transaction Documents, and all costs and expenses, if any (including,
without limitation,
16
Attorney Costs), of the Administrator, the Initial Purchaser and their
respective Affiliates and agents, in connection with the enforcement of this
Agreement and the other Transaction Documents.
SECTION 5.6. No Proceedings; Limitation on Payments.
(a) Each party hereto hereby agrees that it will not institute against, or
join any other Person in instituting against, the Initial Purchaser or the
Issuer any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding, or other proceeding under any federal or state bankruptcy or similar
law, for one year and one day after the latest maturing Note is paid in full.
(b) Notwithstanding any provisions contained in this Agreement to the
contrary, the Initial Purchaser shall not, and shall not be obligated to, pay
any amount pursuant to this Agreement unless the Initial Purchaser has excess
cash flow from operations or has received funds with respect to such obligation
which may be used to make such payment.
SECTION 5.7. GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF ILLINOIS (WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAWS PRINCIPLES THEREOF), EXCEPT TO THE EXTENT THAT THE PERFECTION (OR THE
EFFECT OF PERFECTION OR NON-PERFECTION) OF THE INTERESTS OF THE INITIAL
PURCHASER IN THE RECEIVABLES AND THE OTHER ITEMS DESCRIBED IN SECTION 1.10(b) IS
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF ILLINOIS.
(b) EACH SOLECTRON PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT OF THE
NORTHERN DISTRICT OF ILLINOIS, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT
ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN
SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
17
ADMINISTRATOR OR THE ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT AGAINST ANY
SOLECTRON PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. EACH
SOLECTRON PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT IN ANY
COURT REFERRED TO IN THIS CLAUSE (b). EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT. EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 5.2. NOTHING IN THIS AGREEMENT
WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.
SECTION 5.8. Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together shall constitute one and the
same agreement.
SECTION 5.9. Survival of Termination. The provisions of Section 1.11,
Section 2.3, Article III, Article IV, Section 5.3, Section 5.5, Section 5.6,
Section 5.7, Section 5.10, Article VI and of this Section 5.9, shall survive any
termination of this Agreement.
SECTION 5.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ITS
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR INDEMNIFIED PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. EACH PARTY HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT
TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, AMENDMENTS AND RESTATEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OTHER
18
TRANSACTION DOCUMENT (INCLUDING WITHOUT LIMITATION ANY EXTENSION OF THE FACILITY
TERMINATION DATE).
SECTION 5.11. Entire Agreement. This Agreement embodies the entire
agreement and understanding of the parties hereto, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof. The Exhibits, Schedules and
Annexes to this Agreement shall be deemed incorporated by reference into this
Agreement as if set forth herein.
SECTION 5.12. Headings. The captions and headings of this Agreement and in
any Exhibit hereto are for convenience of reference only and shall not affect
the interpretation hereof or thereof.
SECTION 5.13. Several Obligations. The obligations of the Originators under
this Agreement are several but not joint obligations.
ARTICLE VI
GUARANTEE
SECTION 6.1. Guarantee. (a) Guarantor hereby unconditionally and
irrevocably covenants and agrees that it will cause Solectron California and
Solectron Technology duly and punctually to perform and observe all of the
terms, conditions, covenants, agreements (including, without limitation,
agreements to make payments or deemed Collections) and indemnities under this
Agreement and the other Transaction Documents strictly in accordance with the
terms hereof and thereof and that if for any reason whatsoever Solectron
California or Solectron Technology shall fail to so perform and observe such
terms, conditions, covenants, agreements and indemnities, Guarantor will duly
and punctually perform and observe the same.
(b) The liabilities and obligations of Guarantor under this Section 6.1
shall be absolute and unconditional under all circumstances and shall be
performed by Guarantor regardless of (i) whether the Initial Purchaser, the
Administrator, or the Issuer shall have taken any steps to collect from
Solectron California or Solectron Technology any of the amounts payable by
Solectron California or Solectron Technology to the Initial Purchaser or shall
otherwise have exercised any of their rights or remedies under this Agreement or
the other Transaction Documents against Solectron California or Solectron
Technology or against any Obligor under any of the Pool Receivables, (ii) the
validity, legality or enforceability of this Agreement or any other Transaction
Documents, or the disaffirmance of any thereof in any event of bankruptcy
relating to Solectron California, (iii) any law, regulation or decree now or
hereafter in effect which might in any manner affect any of the terms or
provisions of this Agreement or any other Transaction Document or any of the
rights of Initial Purchaser, the Administrator or the Issuer as against
Solectron California, or Solectron Technology, or as against any Obligor under
any of such Pool Receivables or which might cause or permit to be invoked any
alteration in time, amount, manner of payment or performance of any amount
payable by Solectron California or Solectron Technology to the Initial
Purchaser, the
19
Administrator or the Issuer under the Transaction Documents, (iv) the merger or
consolidation of Solectron California or Solectron Technology into or with any
corporation or any sale or transfer by Solectron California or Solectron
Technology of all or any part of its property, (v) the existence or assertion of
any Adverse Claim with respect to any Pool Receivable, or (vi) any other
circumstance whatsoever (with or without notice to or knowledge of Guarantor)
which may or might in any manner or to any extent vary the risk of Guarantor, or
might otherwise constitute a legal or equitable discharge of a surety or
guarantor, it being the purpose and intent of Guarantor that the liabilities and
obligations of Guarantor under this Section 6.1 shall be absolute and
unconditional under any and all circumstances, and shall not be discharged
except by payment and performance as in this Agreement provided. The guaranty
set forth in this Section 6.1 is a guaranty of payment and performance and not
just of collection.
(c) Without in any way affecting or impairing the liabilities and
obligations of Guarantor under this Section 6.1, the Initial Purchaser, the
Administrator and the Issuer may at any time and from time to time in its
discretion, without the consent of, or notice to, Guarantor, and without
releasing or affecting Guarantor's liability hereunder, (i) extend or change the
time, manner, place or terms of any Transaction Document, (ii) settle or
compromise any of the amounts payable by Solectron California or Solectron
Technology to the Initial Purchaser, the Administrator or the Issuer under any
Transaction Document or subordinate the same to the claims of others, (iii)
retain or obtain a lien upon or security interest in any property to secure any
of the obligations under any Transaction Document, (iv) retain or obtain the
primary or secondary obligation of any obligor or obligors, in addition to
Guarantor, with respect to any of the obligations due under any Transaction
Document, or (v) release or fail to perfect any lien upon or security interest
in, or impair, surrender, release or permit any substitution in exchange for,
all or any part of any property securing any of the obligations under any
Transaction Document, it being understood that nothing contained in this Section
6.1(c) shall give the Initial Purchaser, the Administrator or the Issuer the
right to take any of the foregoing actions if not permitted by the other
provisions of this Agreement, by law or otherwise.
(d) The provisions of this Section 6.1 shall continue to be effective or
be reinstated, as the case may be, if at any time payment of any of the amounts
payable by Solectron California or Solectron Technology, to the Initial
Purchaser, the Administrator or the Issuer under any Transaction Document is
rescinded or must otherwise be restored or returned by any of such Persons, as
the case may be, upon any event of bankruptcy involving Solectron California or
Solectron Technology, or otherwise, all as though such payment had not been
made. Guarantor hereby waives (i) notices of the occurrence of any default under
any Transaction Document, (ii) any requirement of diligence or promptness on the
part of the Initial Purchaser, the Administrator or the Issuer in making demand,
commencing suit or exercising any other right or remedy under any Transaction
Document, or otherwise, and (iii) any right to require the Initial Purchaser,
the Administrator or the Issuer to exercise any right or remedy against
Solectron California or Solectron Technology or the Pool Receivables prior to
enforcing any of their rights against Guarantor under this Section 6.1.
Guarantor agrees that, in the event of an event of bankruptcy with respect to
Solectron California or Solectron Technology, and if such event shall occur at a
time when all of the indemnified amounts and other amounts due under any
Transaction Document may not then be due and payable,
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Guarantor will pay to Initial Purchaser or the Administrator or the Issuer, as
the case may be, forthwith the full amount which would be payable hereunder by
Guarantor if all such indemnified amounts and other obligations were then due
and payable. Without limiting the foregoing, Guarantor hereby expressly waives
any and all benefits of California Civil Code Sections 2787 through 2855,
inclusive, 2899 and 3433 and California Code of Civil Procedure Sections 580(a),
580(b), 580(d) and 726.
Nothing in this Section 6.1 shall be construed to impose any liability or
obligation on Guarantor for any losses in respect of the collectibility of any
Receivable that would constitute credit recourse to Solectron California or
Solectron Technology for the amount of any Receivable or Related Asset not paid
by the applicable Obligor.
SECTION 6.2. Representation and Warranty. Guarantor represents and
warrants that it now has, and will continue to have, independent means of
obtaining information concerning the affairs, financial condition and business
of Solectron California, Solectron Technology, and the Initial Purchaser.
Neither the Administrator or the Issuer shall have any duty or responsibility to
provide Guarantor with any credit or other information concerning the affairs,
financial condition or business of Solectron California, Solectron Technology,
and the Initial Purchaser which may come into the possession of the
Administrator or the Issuer.
SECTION 6.3. Subrogation. Guarantor will not exercise or assert any
rights which it may acquire by way of subrogation under any Transaction Document
unless and until all of the obligations of Solectron California and Solectron
Technology shall have been paid and performed in full. If any payment shall be
made to Guarantor on account of any subrogation rights at any time when all of
the obligations of Solectron California or Solectron Technology shall not have
been paid and performed in full, each and every amount so paid will be held in
trust for the benefit of the Initial Purchaser, the Administrator and the Issuer
and any other applicable Person and forthwith be paid to the Administrator to be
credited and applied to the obligations of Solectron California or Solectron
Technology to the extent then unsatisfied, in accordance with the terms of the
Transaction Documents or any document delivered in connection with the
Transaction Documents, as the case may be.
[SIGNATURES FOLLOW]
21
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
SOLECTRON CORPORATION, as the Guarantor,
as an Originator and as Servicer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Sr. Vice President, CFO and Secy.
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SOLECTRON TECHNOLOGY, INC.,
as an Originator
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Assistant Secretary
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Telephone:
Facsimile:
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SOLECTRON CALIFORNIA CORPORATION,
as an Originator
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Financial Officer and Secretary
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SOLECTRON FUNDING CORPORATION, as
Initial Purchaser
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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EXHIBIT I
CONDITIONS OF PURCHASES
1. Conditions Precedent to the Effectiveness of this Agreement. Any
purchase under the Purchase and Sale Agreement is subject to the condition
precedent that the Initial Purchaser shall have received each of the following
(with copies to the Administrator), on or before the date of such purchase, each
in form and substance (including the date thereof) satisfactory to the Initial
Purchaser and the Administrator:
(a) The Second Amended and Restated Receivables Purchase Agreement,
duly executed by the parties thereto, together with evidence reasonably
satisfactory to the Initial Purchaser that all conditions precedent to the
initial purchase of an undivided interest thereunder shall have been met;
(b) Duly executed counterparts of the Lock-Box Agreements;
(c) Evidence that a capital contribution of Receivables having an
aggregate Outstanding Balance of not less than $10,000,000 shall have been
made to the Initial Purchaser thereunder by Solectron Corporation; and
(d) Such other agreements, instruments, UCC financing statements,
certificates, opinions and other documents as the Initial Purchaser or the
Administrator may reasonably request.
2. Certification as to Representations and Warranties. Each Originator, by
accepting the Purchase Price paid for each purchase of Receivables and Related
Assets on any day, shall be deemed to have certified that its representations
and warranties contained in paragraphs (e), (f), (h), (j), (k), (o), (p) and
(q), Exhibit II to the Purchase and Sale Agreement are true and correct on and
as of such day, with the same effect as though made on and as of such day.
3. Effect of Payment of Purchase Price. Upon the payment of the Purchase
Price (whether in cash or by an increase in the principal amount outstanding
under the applicable Initial Purchaser Note) for any purchase of Receivables and
Related Assets, title to such Receivables and Related Assets shall vest in the
Initial Purchaser, whether or not the conditions precedent to such purchase were
in fact satisfied; provided that the Initial Purchaser shall not be deemed to
have waived any claim it may have under the Purchase and Sale Agreement for the
failure by any Originator in fact to satisfy any such condition precedent.
4. Conditions Precedent to All Purchases. Each purchase under the Purchase
and Sale Agreement is subject to the condition precedent that the agreement of
each Originator to sell
Receivables and Related Assets, and the agreement of the Initial Purchaser to
purchase Receivables and Related Assets, shall not have terminated pursuant to
Section 2.3 of the Purchase and Sale Agreement.
I-2
EXHIBIT II
REPRESENTATIONS AND WARRANTIES
In order to induce the Initial Purchaser to enter into the Purchase and
Sale Agreement and to make purchases thereunder, each Originator hereby
represents and warrants as follows:
(a) Organization and Good Standing. Such Originator is a corporation
duly incorporated, validly existing and in good standing under the laws of
the jurisdiction of its organization, and is duly qualified to do
business, and is in good standing, in every other jurisdiction where the
failure to so qualify could reasonably be expected to result in a material
adverse effect on the business, assets, operations, prospects or
condition, financial or otherwise, of such Originator and any of its
subsidiaries taken as a whole, the ability of such Originator to perform
its obligations under the Purchase and Sale Agreement, or the rights of or
benefits available to the Initial Purchaser hereunder.
(b) Due Qualification; No Conflicts. The execution, delivery and
performance by such Originator of the Purchase and Sale Agreement and the
other Transaction Documents to which it is a party, including, without
limitation, such Originator's use of the proceeds of purchases, (i) are
within such Originator's corporate powers, (ii) have been duly authorized
by all necessary corporate action, (iii) do not contravene or result in a
default under or conflict with (1) such Originator's certificate of
incorporation or by-laws, (2) any material law, rule or regulation
applicable to such Originator, (3) any contractual restriction binding on
or affecting such Originator or its property (including, without
limitation, the Solectron Credit Agreement) or (4) any order, writ,
judgment, award, injunction or decree binding on or affecting such
Originator or its property and (iv) do not result in or require the
creation of any Adverse Claim upon or with respect to any of its
properties. The Purchase and Sale Agreement and the other Transaction
Documents to which it is a party have been duly executed and delivered by
such Originator.
(c) Consents. No authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority or any other
Person is required for the due execution, delivery and performance by such
Originator of the Purchase and Sale Agreement or any other Transaction
Document to which it is a party (other than UCC financing statements filed
on or prior to the date of the initial purchase under the Purchase and
Sale Agreement, all of which have been filed in the appropriate
jurisdiction).
(d) Binding Obligations. Each of the Purchase and Sale Agreement and
the other Transaction Documents to which it is a party constitutes the
legal, valid and binding obligation of such Originator enforceable against
such Originator in accordance with its terms.
(e) Financial Statements. The balance sheets of Solectron and its
subsidiaries, in each case as at September 30, 1998 and the related
statements of income and retained earnings of Solectron and its
subsidiaries, in each case for the fiscal year then ended, copies of which
have been furnished to the Administrator, fairly present the financial
condition of Solectron and its subsidiaries, as at such date and the
results of the operations of Solectron and its subsidiaries, for the
period ended on such date, all in accordance with generally accepted
accounting principles consistently applied, and since September 30, 1998
there has been no material adverse change in the business, operations,
property or financial or other condition or operations of Solectron any of
its subsidiaries, the ability of any Originator to perform its obligations
under the Purchase and Sale Agreement or the other Transaction Documents,
the collectibility of the Receivables, or which affects the legality,
validity or enforceability of the Purchase and Sale Agreement or the other
Transaction Documents.
(f) No Proceedings. There is no pending or threatened action or
proceeding affecting such Originator or any of its subsidiaries before any
Governmental Authority or arbitrator which could reasonably be expected to
materially adversely affect the business, operations, property, financial
or other condition or operations of such Originator or any of its
subsidiaries, the ability of such Originator to perform its obligations
under the Purchase and Sale Agreement or the other Transaction Documents
or the collectibility of the Receivables, or which affects or purports to
affect the legality, validity or enforceability of the Purchase and Sale
Agreement or the other Transaction Documents.
(g) Securities Exchange Act. No proceeds of any purchase will be
used to acquire any equity security of a class which is registered or
required to be registered pursuant to Section 12 of the Securities
Exchange Act of 1934.
(h) Quality of Title; Valid Sale; Etc. Upon its creation and prior
to its sale (or contribution) to the Initial Purchaser under the Purchase
and Sale Agreement, such Originator is the legal and beneficial owner of
each of the Receivables and Related Assets and the items described in
Section 1.2(c) and 1.2(d) of the Purchase and Sale Agreement free and
clear of any Adverse Claim; and (i) upon each purchase (or contribution)
the Initial Purchaser shall acquire a valid and enforceable first priority
perfected ownership interest in each Receivable then existing or
thereafter arising, in the Related Assets with respect thereto, and the
items described in Section 1.2(c) and 1.2(d) of the Purchase and Sale
Agreement, free and clear of any Adverse Claim; or (ii) the Purchase and
Sale Agreement creates a security interest in favor of the Initial
Purchaser in the items described in Section 1.10(b) of the Purchase and
Sale Agreement, and the Initial Purchaser has a first priority perfected
security interest in such items, free and clear of any Adverse Claims.
Each Receivable constitutes an "account" as such term is defined in the
UCC. No effective UCC financing statement or other instrument similar in
effect covering any Receivable or Related Asset with respect thereto or
any Lock-Box Account or any other item described in Section 1.10(b) of the
Purchase and Sale Agreement is on file in any recording office, except
those filed in favor of the Initial Purchaser pursuant to the Purchase and
Sale Agreement and in favor of the Administrator pursuant to the
Receivables Purchase Agreement.
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(i) Accuracy of Information. Each report, information, exhibit,
financial statement, document, book, record or report furnished or to be
furnished at any time by or on behalf of such Originator to the Initial
Purchaser or the Administrator in connection with this Agreement is or
will be accurate in all material respects as of its date or (except as
otherwise disclosed to the Administrator at such time) as of the date so
furnished, and no such item contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact
necessary in order to make the statements contained therein, in the light
of the circumstances under which they were made, not misleading.
(j) Principal Place of Business. The principal place of business and
chief executive office (as such terms are used in the UCC) of such
Originator and the office where such Originator keeps its records
concerning the Receivables are located at the address referred to in
paragraph (b) of Exhibit III to the Purchase and Sale Agreement (or at
such other addresses designated in accordance with such paragraph (b)),
and during the six years prior to the initial purchase under the Purchase
and Sale Agreement such principal place of business, chief executive
office and office were located at such address.
(k) Lock-Box Banks, Accounts. Such Originator has irrevocably
instructed all of the Obligors to make payments on the Receivables only to
the Lock-Box Accounts or to one or more post office boxes covered by a
Lock-Box Agreement; provided that, consistent with its efforts to maximize
Collections and its month-end collection practices in effect as of the
date of the Purchase and Sale Agreement, such Originator may permit
Obligors to make payments on Receivables directly to such Originator so
long as the Rated Long Term Debt of Solectron is Investment Grade or
otherwise with the prior written consent of the Administrator. Except as
contemplated by the Lock-Box Agreements, no Person other than employees of
such Originator has signing authority with respect to, or otherwise has
the power to withdraw funds from or to direct amounts on deposit in, the
Lock-Box Accounts and any related deposit accounts or post office boxes.
The names and addresses of all the Lock-Box Banks, together with the
account numbers of the Lock-Box Accounts at such Lock-Box Banks, are
specified in Schedule II to the Receivables Purchase Agreement (except as
permitted by paragraph (i) of Exhibit III to the Purchase and Sale
Agreement). Each Lock-Box Bank has complied with all the terms of its
Lock-Box Agreement.
(l) No Violation. Such Originator is not in violation of any order
of any court, arbitrator or Governmental Authority.
(m) Proceeds. No proceeds of any purchase will be used for any
purpose that violates any applicable law, rule or regulation, including,
without limitation, Regulation U of the Federal Reserve Board.
(n) No Purchase and Sale Termination Events. No event has occurred
and is continuing, or would result from a purchase, in respect of the
Receivables or Related Assets or from the application of the proceeds
therefrom, which constitutes a Purchase and Sale Termination Event.
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(o) Maintenance of Books and Records; Taxes. Such Originator has
accounted for each sale (and contribution) of Receivables and Related
Assets in its books and financial statements as sales (or, in the case of
contributions, as capital contributions), consistent with Generally
Accepted Accounting Principles. In addition, each Originator shall treat,
and, to the extent such treatment affects its returns or tax liabilities,
report, the sale of Receivables and Related Assets as a true sale for tax
purposes.
(p) Credit and Collection Policy. Such Originator has complied in
all material respects with the Credit and Collection Policy with regard to
each Receivable.
(q) Solvency. Such Originator is Solvent; and at the time of (and
immediately after) each purchase pursuant to the Purchase and Sale
Agreement, such Originator shall have been Solvent.
(r) Compliance with Transaction Documents. Such Originator has
complied with all of the terms, covenants and agreements contained in the
Purchase and Sale Agreement and the other Transaction Documents and
applicable to it.
(s) Corporate Name. Such Originator's complete corporate name is set
forth in the preamble to the Purchase and Sale Agreement, and such
Originator does not use and has not during the last six years used any
other corporate name, trade name, doing business name or fictitious name,
except for names first used after the date of the Purchase and Sale
Agreement and set forth in a notice delivered to the Administrator
pursuant to clause (b) of Exhibit III to the Purchase and Sale Agreement.
(t) No Labor Disputes. There are no strikes, lockouts or other labor
disputes against such Originator or any of its subsidiaries, or, to the
best of such Originator's knowledge, threatened against or affecting such
Originator or any of its subsidiaries, and no significant unfair labor
practice complaint is pending against such Originator or any of its
subsidiaries or, to the best knowledge of such Originator, threatened
against any of them by or before any Governmental Authority.
(u) Pension Plans. During the preceding twelve months, no steps have
been taken to terminate any Pension Plan, and no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a
lien under section 302(f) of ERISA. No condition exists or event or
transaction has occurred with respect to any Pension Plan which could
result in the incurrence by such Originator of any material liability,
fine or penalty. Such Originator has no contingent liability with respect
to any post-retirement benefit under a Welfare Plan, other than liability
for continuation coverage described in Part 6 of title I of ERISA.
(v) Investment Company Act. Such Originator is not, and is not
controlled by, an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended.
II-4
EXHIBIT III
COVENANTS
Until the later of the Purchase and Sale Termination Date and the Final
Payout Date each Originator covenants and agrees, as to itself, as follows:
(a) Compliance with Laws, Etc. Such Originator shall comply in all
material respects with all applicable laws, rules, regulations and orders,
and preserve and maintain its corporate existence, rights, franchises,
qualifications, and privileges except to the extent that the failure so to
comply with such laws, rules and regulations or the failure so to preserve
and maintain such existence, rights, franchises, qualifications, and
privileges would not materially adversely affect the collectibility of the
Receivables or the enforceability of any related Contract or the ability
of such Originator to perform its obligations under any related Contract
or under the Purchase and Sale Agreement.
(b) Offices, Records and Books of Account; Etc. Such Originator:
(i) shall keep its principal place of business and chief
executive office (as such terms are used in the UCC) and the office
where it keeps its records concerning the Receivables at the address
of such Originator set forth under its name on the signature page to
the Purchase and Sale Agreement or, upon at least 30 days' prior
written notice of a proposed change to the Administrator, at any
other locations in jurisdictions where all actions reasonably
requested by the Administrator to protect and perfect the interest
of the Initial Purchaser, the Administrator and the Issuer in the
Receivables and related items (including without limitation the
items described in Section 1.10(b) of the Purchase and Sale
Agreement) have been taken and completed; and
(ii) shall provide the Administrator with at least 30 days'
written notice prior to making any change in such Originator's name
or making any other change in such Originator's identity or
corporate structure (including, without limitation, a merger) which
could render any UCC financing statement filed in connection with
the Purchase and Sale Agreement "seriously misleading" as such term
is used in the UCC; each notice to the Administrator pursuant to
this sentence shall set forth the applicable change and the
effective date thereof.
Such Originator also will maintain and implement administrative and
operating procedures (including, without limitation, an ability to
recreate records evidencing Receivables and related Contracts in the event
of the destruction of the originals thereof), and keep and maintain all
documents, books, records, computer tapes and disks and other information
reasonably necessary or advisable for the collection of all Receivables
(including, without limitation, records adequate to permit the daily
identification of each Receivable and all Collections of and adjustments
to each existing Receivable).
(c) Performance and Compliance with Contracts and Credit and
Collection Policy. Such Originator shall at its expense, timely and fully
perform and comply with all material provisions, covenants and other
promises required to be observed by it under the Contracts related to the
Receivables, and timely and fully comply in all material respects with the
Credit and Collection Policy with regard to each Receivable and the
related Contract.
(d) Ownership Interest, Etc. Such Originator shall, at its expense,
take all action necessary or desirable to establish and maintain a valid
and enforceable first priority perfected ownership interest in the
Receivables, the Related Assets, and the items described in Section 1.2(c)
and (d) of the Purchase and Sale Agreement to the extent transferred
pursuant to the terms of Section 1.3 of the Purchase and Sale Agreement,
or a first priority perfected security interest in the items described in
Section 1.10(b) of the Purchase and Sale Agreement, in each case free and
clear of any Adverse Claim, in favor of the Initial Purchaser, including,
without limitation, taking such action to perfect, protect or more fully
evidence the interest of the Initial Purchaser under the Purchase and Sale
Agreement as the Administrator may reasonably request.
(e) Sales, Liens, Etc. Other than a sale to the Initial Purchaser as
contemplated by the Purchase and Sale Agreement, such Originator shall not
sell, assign (by operation of law or otherwise) or otherwise dispose of,
or create or suffer to exist any Adverse Claim upon or with respect to,
any or all of its right, title or interest in, to or under, (i) any item
described in Section 1.2(c) and (d) or Section 1.10(b) of the Purchase and
Sale Agreement or (ii) any post office box to which any payments in
respect of any Receivable are sent, including, without limitation, any
assignment of any right to receive income in respect of items contemplated
by clause (i) or (ii) of this paragraph (e).
(f) Extension or Amendment of Receivables. On and after the
Effective Date, such Originator shall not extend the maturity or adjust
the Outstanding Balance or otherwise modify the terms of any Receivable,
or amend, modify or waive any term or condition of any related Contract;
provided that this clause (f) shall not limit the ability of the Servicer
to take such actions pursuant to the Receivables Purchase Agreement.
(g) Change in Business or Credit and Collection Policy. Such
Originator shall not make any material change in the character of its
business or in the Credit and Collection Policy that would adversely
affect the collectibility of the Receivables or the enforceability of any
related Contract or the ability of such Originator to perform its
obligations under any related Contract or under the Purchase and Sale
Agreement without the prior written consent of the Administrator.
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(h) Audits. Such Originator shall, from time to time during regular
business hours with prior written notice to it as reasonably requested by
the Administrator, permit the Administrator, or its agents or
representatives, (i) to examine and make copies of and abstracts from all
books, records and documents (including, without limitation, computer
tapes and disks) in the possession or under the control of such Originator
relating to Receivables and the Related Assets (including, without
limitation, the related Contracts and any books, records and documents
relating to the identification of Obligors and agings, charge-offs,
offsets and delinquencies of Receivables), and (ii) to visit the offices
and properties of such Originator for the purpose of examining such
materials described in clause (i) above, and to discuss matters relating
to Receivables and the Related Assets or such Originator's performance
hereunder or under the Contracts with any of the officers, employees,
agents or contractors of such Originator having knowledge of such matters.
(i) Change in Lock-Box Banks, Lock-Box Accounts and Payment
Instructions to Obligors. Such Originator shall not add or terminate any
bank as a Lock-Box Bank or any account as a Lock-Box Account from those
listed in Schedule II to the Receivables Purchase Agreement, or make any
change in its instructions to Obligors regarding payments to be made to
such Originator or payments to be made to any Lock-Box Account (or related
post office box), unless the Administrator shall have consented thereto in
writing and the Administrator shall have received copies of all agreements
and documents (including, without limitation, Lock-Box Agreements) that it
may reasonably request in connection therewith.
(j) Deposits to Lock-Box Accounts. Such Originator shall (i)
instruct all Obligors to make payments of all Receivables only to one or
more Lock-Box Accounts or to post office boxes which are covered by
Lock-Box Agreements and to which only Lock-Box Banks have access, provided
that, consistent with its efforts to maximize Collections and its
month-end collection practices in effect as of the date of the Purchase
and Sale Agreement, such Originator may permit Obligors to make payments
on Receivables directly to such Originator so long as the Rated Long Term
Debt of Solectron is Investment Grade or otherwise with the prior written
consent of the Administrator, (ii) instruct the Lock-Box Banks to cause
all items and amounts relating to such Receivables received in such post
office boxes to be removed and deposited into a Lock-Box Account on a
daily basis, and (iii0 deposit, or cause to be deposited, any Collections
of Receivables received by it into Lock-Box Accounts not later than three
Business Days after receipt thereof. Each Originator will not deposit or
otherwise credit, or cause or permit to be deposited or credited, to any
Lock-Box Account cash or cash proceeds other than Collections of
Receivables or interest accruing on amounts held in such account.
(k) Marking of Records. At its expense, on or before the Effective
Date, such Originator shall ▇▇▇▇ its master data processing records
relating to Receivables and related Contracts, including with a legend
evidencing that the Receivables and related Contracts (and interests
therein) have been sold (or, in the case of contributions, transferred as
a capital
III-3
contribution) in accordance with the Purchase and Sale Agreement and/or the
Receivables Purchase Agreement.
(l) ERISA Matters. Such Originator shall notify the Administrator as
soon as is practicable and in any event not later than two Business Days
after (i) the institution of any steps by such Originator or any other
Person to terminate any Pension Plan, (ii) the failure to make a required
contribution to any Pension Plan if such failure is sufficient to give rise
to a lien under section 302(f) of ERISA, (iii) the taking of any action
with respect to a Pension Plan which could result in the requirement that
such Originator furnish a bond or other security to the PBGC or such
Pension Plan or (iv) the occurrence of any other event concerning any
Pension Plan which is reasonably likely to result in a material adverse
effect on the business, operations, property or financial or other
condition of such Originator or any other Solectron Party.
(m) Separate Corporate Existence of the Initial Purchaser. Each of the
Initial Purchaser, the Originators and Solectron hereby acknowledges that
the Initial Purchaser, the Issuer and the Administrator entered into the
Original Purchase and Sale Agreement, the Original Receivables Sale
Agreement and the Amended and Restated Receivables Sale Agreement and are
entering into the transactions contemplated by this Agreement and by the
Receivables Purchase Agreement in reliance upon the Initial Purchaser's
identity as a legal entity separate from its Affiliates. Therefore, each of
the Initial Purchaser, such Originator and Solectron shall take all steps
to continue the Initial Purchaser's identity as such a separate legal
entity and to make it apparent to third Persons that the Initial Purchaser
is an entity with assets and liabilities distinct from those of its
Affiliates and those of any other Person, and not a division of any of its
Affiliates or any other Person. Without limiting the generality of the
foregoing, each of the Initial Purchaser, each Originator and Solectron
will, and will cause its Affiliates to, take such actions as shall be
required in order that:
(i) The Initial Purchaser will be a limited purpose corporation
whose primary activities are restricted in its articles of
incorporation to purchasing Pool Receivables from such Originator (or
other Persons approved in writing by the Administrator), entering into
agreements for the servicing of such Pool Receivables, selling
undivided interests in the Pool Receivables to the Issuer and
conducting such other activities as it deems necessary or appropriate
to carry out its primary activities;
(ii) At all times, at least one member of the Initial Purchaser's
Board of Directors shall be an individual who is and has never been a
direct, indirect or beneficial stockholder, officer, director (except
in his capacity as a member of the Initial Purchaser's Board of
Directors), employee, Affiliate, associate, customer or supplier of
any of the Initial Purchaser or of any of the Initial Purchaser's
Affiliates;
(iii) No director or officer of the Initial Purchaser shall at
any time serve as a trustee in bankruptcy for any of its Affiliates;
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(iv) Any employee, consultant or agent of the Initial Purchaser
will be compensated from the Initial Purchaser's own bank accounts for
services provided to the Initial Purchaser except as provided in the
Agreement in respect of the Servicing Fee. The Initial Purchaser will
engage no agents other than a Servicer for the Pool Receivables, which
Servicer (if an Affiliate) will be fully compensated for its services
to the Initial Purchaser by payment of the Servicing Fee;
(v) The Initial Purchaser may incur indirect or overhead expenses
for items shared between the Initial Purchaser and any of its
Affiliates which are not reflected in the Servicing Fee, such as
legal, auditing and other professional services, but such expenses
will be allocated to the extent practical on the basis of cost, it
being understood that Solectron shall pay all expenses relating to the
preparation, negotiation, execution and delivery of the Transaction
Documents, including legal and other fees;
(vi) The Initial Purchaser's operating expenses will not be paid
by any of its Affiliates;
(vii) The Initial Purchaser will have its own separate telephone
number, stationery and bank checks signed by it and in its own name
and, if it uses premises leased, owned or occupied by any of its
Affiliates, its portion of such premises will be defined and
separately identified and it will pay such other Affiliates reasonable
compensation for the use of such premises;
(viii) The books and records of the Initial Purchaser will be
maintained separately from those of its Affiliates;
(ix) The assets of the Initial Purchaser will be maintained in a
manner that facilitates their identification and segregation from
those of its Affiliates; and the Initial Purchaser will strictly
observe corporate formalities in its dealings with each of its
Affiliates;
(x) The Initial Purchaser shall not maintain joint bank accounts
with any of its Affiliates or other depository accounts to which any
of its Affiliates (other than Solectron (or any of its Affiliates) in
its capacity as the Servicer under this Agreement or under the
Receivables Purchase Agreement) has independent access;
(xi) The Initial Purchaser shall not, directly or indirectly, be
named and shall not enter into any agreement to be named as a direct
or contingent beneficiary or loss payee on any insurance policy
covering the property of any other Solectron Party or any Affiliate of
any other Solectron Party unless it pays a proportional share of the
premium relating to any such insurance policy;
III-5
(xii) The Initial Purchaser will maintain arm's-length
relationships with each of its Affiliates. Any of its Affiliates
that renders or otherwise furnishes services or merchandise to the
Initial Purchaser will be compensated by the Initial Purchaser at
market rates for such services or merchandise;
(xiii) Neither the Initial Purchaser, on the one hand, nor any
of its Affiliates, on the other hand, will be or will hold itself
out to be responsible for the debts of the other or the decisions or
actions in respect of the daily business and affairs of the other;
and
(xiv) Every representation and warranty of the Initial
Purchaser, such Originator and Solectron contained in the officer's
certificates delivered in connection with the opinion of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ pursuant to Section 1(j) of Exhibit II of
the Receivables Purchase Agreement, is true and correct in all
material respects as of the date hereof; and each of the Initial
Purchaser, such Originator and Solectron shall comply with all of
the assumptions set forth in such opinion and with all of its
respective covenants and other obligations set forth in such
officer's certificates.
III-6
EXHIBIT IV
PURCHASE AND SALE TERMINATION EVENTS
Each of the following events or occurrences described in this Exhibit IV
shall constitute a "Purchase and Sale Termination Event":
(a) The Servicer shall (i) fail to deliver the Seller Report
pursuant to the Purchase and Sale Agreement and such failure shall remain
unremedied for five days, (ii) fail to make when due any payment or
deposit to be made by it under the Purchase and Sale Agreement, or (iii)
fail to perform or observe any other term, covenant or agreement under the
Purchase and Sale Agreement and such failure shall remain unremedied for
ten (10) days; or
(b) Any Originator or the Guarantor shall fail to make any payment
required under the Purchase and Sale Agreement and such failure shall
remain unremedied for two Business Days; or
(c) Any representation or warranty made or deemed to be made by any
Originator (or any of its officers) under or in connection with the
Purchase and Sale Agreement or any other information or report delivered
by such Originator or the Servicer pursuant to the Purchase and Sale
Agreement shall prove to have been incorrect or untrue in any material
respect when made or deemed made or delivered; or
(d) Any Originator or the Guarantor shall fail to perform or observe
(i) any term, covenant or agreement contained in paragraphs (d), (f), (g),
(i), (j) and (l) of Exhibit III to the Purchase and Sale Agreement and, in
the case of any such failure to paragraphs (i) and (j) that is solely the
result of the termination of the applicable Lock-Box Agreement by Bank of
America National Trust and Savings Association, such failure shall remain
unremedied for fourteen (14) days or (ii) any other term, covenant or
agreement contained in the Purchase and Sale Agreement on its part to be
performed or observed and the failure to perform such other term, covenant
or agreement referred to in this clause (ii) shall remain unremedied for
thirty (30) days; or
(e) The Purchase and Sale Agreement shall for any reason (other than
pursuant to the terms thereof) (i) cease to create in favor of the Initial
Purchaser a valid and enforceable first priority perfected ownership
interest in each Receivable, the Related Assets, and the items described
in Section 1.2(c) and (d) of the Purchase and Sale Agreement, or (ii)
cease to create, with respect to the items described in Section 1.10(b) of
the Purchase and Sale Agreement, a valid and enforceable first priority
perfected security interest in favor of the Initial Purchaser, in each
case free and clear of any Adverse Claim; or
(f) Any Originator or any of its subsidiaries shall generally not
pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against such Originator or any of its
subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding
shall remain undismissed or unstayed for a period of 30 days, or any of the
actions sought in such proceeding (including, without limitation, the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of
its property) shall occur; or such Originator or any of its subsidiaries
shall take any corporate action to authorize any of the actions set forth
above in this clause (f); or
(g) Any Change of Control shall occur; or
(h) A Termination Event shall have occurred.
IV-2
ANNEX A
FORM OF INITIAL PURCHASER NOTE
[AMENDED AND RESTATED]
NON-NEGOTIABLE PROMISSORY NOTE
Chicago, Illinois
February 22, 1999
FOR VALUE RECEIVED, the undersigned, SOLECTRON FUNDING CORPORATION, a
Delaware corporation (the "Initial Purchaser"), promises to pay to [NAME OF
ORIGINATOR], a [California] [Delaware] corporation (the "Originator"), on the
terms and subject to the conditions set forth herein and in the Purchase and
Sale Agreement referred to below, the aggregate unpaid Purchase Price of all
Receivables and Related Assets purchased and to be purchased by the Initial
Purchaser pursuant to the Purchase and Sale Agreement (subject to adjustment
pursuant to Section 1.9 of such Purchase and Sale Agreement).
1. Purchase and Sale Agreement. This [Amended and Restated] Non-Negotiable
Promissory Note (this "Note") is the "Initial Purchaser Note" described in, and
is subject to the terms and conditions set forth in, that certain Amended and
Restated Purchase and Sale Agreement, dated as of February 22, 1999 (as amended
and in effect on the date hereof and as the same may be amended, amended and
restated, or otherwise modified in accordance with its terms, the "Purchase and
Sale Agreement"), among the Originator, the other "Originators" referred to
therein, Solectron Corporation, as Servicer and Guarantor, and the Initial
Purchaser. Reference is hereby made to the Purchase and Sale Agreement for a
statement of certain other rights and obligations of the Initial Purchaser and
the Originator. In the case of any conflict or inconsistency between the terms
of this Note and the terms of the Purchase and Sale Agreement, the terms of the
Purchase and Sale Agreement shall control.
2. Definitions. Capitalized terms used (but not defined) herein have the
meanings ascribed thereto in the Purchase and Sale Agreement. In addition, as
used herein, the following terms have the following meanings:
"Final Maturity Date" means the date that falls ninety one (91)
days after the later of (x) the Purchase and Sale Termination Date and
(y) the date all amounts due to the Issuer, the Administrator, any
Indemnified Party or any Affected Person under the Receivables
Purchase Agreement have been paid in full.
"Junior Liabilities" means all obligations of the Initial
Purchaser to the Originator under this Note.
"Senior Agent" means Bank of America National Trust and Savings
Association, as the Administrator and the Parallel Asset Purchase
Administrator.
"Senior Interests" means (a) the undivided percentage ownership
interests acquired by the Issuer pursuant to the Receivables Purchase
Agreement, (b) the undivided percentage
ownership interests acquired by the Parallel Purchasers pursuant to
the Parallel Purchase Agreement and (c) all obligations of the Initial
Purchaser to the Senior Interest Holders, howsoever created, arising
or evidenced, whether direct or indirect, absolute or contingent, now
or hereafter existing, or due or to become due on or before the Final
Maturity Date.
"Senior Interest Holders" means, collectively, the Issuer, the
Administrator, the Parallel Purchasers, the Parallel Purchase
Administrator and the other Affected Persons and Indemnified Parties.
"Subordination Provisions" means, collectively, clauses (a)
through (k) of Section 7 hereof.
3. Interest. Subject to the Subordination Provisions, the Initial
Purchaser promises to pay interest on the aggregate unpaid principal amount of
this Note outstanding on each day (a) prior to the final payment in full and in
cash of the Senior Interests, at a variable rate per annum equal to the Discount
Rate Percentage, determined as of the then most recent Payment Date, and (b)
after such final payment, at a variable rate per annum equal to the Base Rate,
as determined by the Servicer.
4. Interest Payment Dates. Subject to the Subordination Provisions, the
Initial Purchaser shall pay accrued interest on this Note on June 1 and November
1 of each calendar year and on the Final Maturity Date (or, if any such day is
not a Business Day, the next succeeding Business Day). The Initial Purchaser
also shall pay accrued interest on the principal amount of each prepayment
hereof on the date of each such prepayment.
5. Basis of Computation. Interest accrued hereunder shall be computed for
the actual number of days elapsed on the basis of a 360-day year.
6. Principal Payment Dates. Subject to the Subordination Provisions, any
unpaid principal of this Note shall be paid on the Final Maturity Date (or, if
such date is not a Business Day, the next succeeding Business Day). Subject to
the Subordination Provisions, the principal amount of and accrued interest on
this Note may be prepaid on any Business Day without premium or penalty.
7. Subordination Provisions. The Initial Purchaser covenants and agrees,
and the [name of Originator], by its acceptance of this Note, likewise covenants
and agrees, that the payment of all Junior Liabilities is hereby expressly
subordinated in right of payment to the payment and performance of the Senior
Interests to the extent and in the manner set forth in the following clauses of
this Section 7:
(a) No payment or other distribution of the Initial Purchaser's
assets of any kind or character, whether in cash, securities, or other
rights or property, shall be made on account of this Note except to the
extent such payment or other distribution is permitted under (i)
2
clause (m) of Exhibit IV to the Receivables Purchase Agreement and the Parallel
Purchase Agreement and (ii) Section 4 or Section 6 of this Note;
(b) (i) In the event of any Insolvency Proceeding with respect to
the Initial Purchaser, and (ii) on and after the occurrence of the
Purchase and Sale Termination Date, the Senior Interests shall first be
paid and performed in full and in cash before each Originator shall be
entitled to receive and to retain any payment or distribution in respect
of the Junior Liabilities. In order to implement the foregoing: (x) all
payments and distributions of any kind or character in respect of the
Junior Liabilities to which the Originator would be entitled except for
this subsection 7(b) shall be made directly to the Senior Agent (for the
benefit of the Senior Interest Holders); and (y) the Originator hereby
irrevocably agrees that the Issuer or the Parallel Purchasers (or the
Senior Agent acting on their behalf), in the name of the Originator or
otherwise, may demand, ▇▇▇ for, collect, receive and receipt for any and
all such payments or distributions, and file, prove and vote or consent in
any such Insolvency Proceeding with respect to any and all claims of the
Originator relating to the Junior Liabilities, in each case until the
Senior Interests shall have been paid and performed in full and in cash.
(c) In the event that the Originator receives any payment or other
distribution of any kind or character from the Initial Purchaser or from
any other source whatsoever in respect of the Junior Liabilities, other
than as expressly permitted by the terms of this Note, such payment or
other distribution shall be received in trust for the Senior Interest
Holders and shall be turned over by the Originator to the Senior Agent
(for the benefit of the Senior Interest Holders) forthwith. All payments
and distributions received by the Senior Agent in respect of this Note, to
the extent received in or converted into cash, may be applied by the
Senior Agent (for the benefit of the Senior Interest Holders) first to the
payment of any and all reasonable expenses (including, without limitation,
reasonable attorneys' fees and other legal expenses) paid or incurred by
the Senior Agent or the Senior Interest Holders in enforcing these
Subordination Provisions, or in endeavoring to collect or realize upon the
Junior Liabilities, and any balance thereof shall, solely as between the
Originator and the Senior Interest Holders, be applied by the Senior Agent
toward the payment of the Senior Interests in a manner determined by the
Senior Agent to be in accordance with the Receivables Purchase Agreement
or the Parallel Purchase Agreement, as applicable; but as between the
Initial Purchaser and its creditors, no such payments or distributions of
any kind or character shall be deemed to be payments or distributions in
respect of the Senior Interests.
(d) Upon the final payment in full and in cash of all Senior
Interests, the Originator shall be subrogated to the rights of the Senior
Interest Holders to receive payments or distributions from the Initial
Purchaser that are applicable to the Senior Interests until the Junior
Liabilities are paid in full.
(e) These Subordination Provisions are intended solely for the
purpose of defining the relative rights of the Originator, on the one
hand, and the Senior Interest
3
Holders, on the other hand. Nothing contained in the Subordination
Provisions or elsewhere in this Note is intended to or shall impair, as
between the Initial Purchaser, its creditors (other than the Senior
Interest Holders) and the Originator, the Initial Purchaser's obligation,
which is unconditional and absolute, to pay the Junior Liabilities as and
when the same shall become due and payable in accordance with the terms
hereof and of the Purchase and Sale Agreement or to affect the relative
rights of such Originator and creditors of the Initial Purchaser (other
than the Senior Interest Holders).
(f) The Originator shall not, until the Senior Interests have been
finally paid and performed in full and in cash, (i) cancel, waive, forgive,
transfer or assign, or commence legal proceedings to enforce or collect, or
subordinate to, any obligation of the Initial Purchaser, howsoever created,
arising or evidenced, whether direct or indirect, absolute or contingent,
or now or hereafter existing, or due or to become due, (other than as
permitted by this Note) or (ii) convert the Junior Liabilities into an
equity interest in the Initial Purchaser, unless, in the case of each of
clauses (i) and (ii) above, the Originator shall have received the prior
written consent of the Administrator and the Parallel Asset Purchase
Administrator in each case.
(g) The Originator shall not, without the advance written consent of
the Administrator and the Parallel Asset Purchase Administrator, commence,
or join with any other Person in commencing, any Insolvency Proceedings
with respect to the Initial Purchaser until at least one year and one day
shall have passed since the Senior Interests shall have been finally paid
and performed in full and in cash.
(h) If, at any time, any payment (in whole or in part) made with
respect to any Senior Interest is rescinded or must be restored or
returned by a Senior Interest Holder (whether in connection with any
Insolvency Proceedings or otherwise), these Subordination Provisions shall
continue to be effective or shall be reinstated, as the case may be, as
though such payment had not been made.
(i) Each of the Senior Interest Holders may, from time to time, at
its sole discretion, without notice to the Originator, and without waiving
any of its rights under these Subordination Provisions, take any or all of
the following actions: (i) retain or obtain an interest in any property to
secure any of the Senior Interests; (ii) retain or obtain the primary or
secondary obligations of any other obligor or obligors with respect to any
of the Senior Interests; (iii) extend or renew for one or more periods
(whether or not longer than the original period), alter or exchange any of
the Senior Interests, or release or compromise any obligation of any
nature with respect to any of the Senior Interests; (iv) amend,
supplement, or otherwise modify any Transaction Document; and (v) release
its security interest in, or surrender, release or permit any substitution
or exchange for all or any part of any rights or property securing any of
the Senior Interests, or extend or renew for one or more periods (whether
or not longer than the original period), or release, compromise, alter or
exchange any obligations of any nature of any obligor with respect to any
such rights or property.
4
(j) The Originator hereby waives: (i) notice of acceptance of these
Subordination Provisions by any of the Senior Interest Holders; (ii)
notice of the existence, creation, non-payment or non-performance of all
or any of the Senior Interests; and (iii) all diligence in enforcement,
collection or protection of, or realization upon the Senior Interests, or
any thereof, or any security therefor.
(k) These Subordination Provisions constitute a continuing offer
from the Initial Purchaser to all Persons who become the holders of, or
who continue to hold, Senior Interests; and these Subordination Provisions
are made for the benefit of the Senior Interest Holders, and the Senior
Agent may proceed to enforce such provisions on behalf of each of such
Persons.
8. Amendments, Etc. No failure or delay on the part of the Originator, the
Senior Agent or the Senior Interest Holders in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No amendment, modification
or waiver of, or consent with respect to, any provision of this Note shall in
any event be effective unless (a) the same shall be in writing and signed and
delivered by the Initial Purchaser and the Originator and the Senior Agent, and
(b) all consents required for such actions under the Transaction Documents shall
have been received by the appropriate Persons.
9. Limitation on Interest. Notwithstanding anything in this Note to the
contrary, the Initial Purchaser shall never be required to pay unearned interest
on any amount outstanding hereunder, and shall never be required to pay interest
on the principal amount outstanding hereunder, at a rate in excess of the
maximum interest rate that may be contracted for, charged or received without
violating applicable federal or state law.
10. No Negotiation. This Note is not negotiable.
11. Governing Law. THIS NOTE SHALL GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF).
12. Captions. Paragraph captions used in this Note are provided solely for
convenience of reference only and shall not affect the meaning or interpretation
of any provision of this Note.
5
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed by
its officer thereunto duly authorized on the date first above written.
SOLECTRON FUNDING CORPORATION,
a Delaware corporation
By:
Title: