Purchase and Sale Agreement - Solectron Corp., Solectron California Corp., Solectron Technology Inc., and Solectron Funding Corp.


                      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:

                                       2



      (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:

                                       3


     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.

                                       4




     (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 

                                       5



          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 mark 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:

                                       6



      (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.


                                       7


      (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.


                                       8




                                   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.



                                       9



                                   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;

                                       10



            (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.

                                       12



      (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

                                       13


     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,

                                       20



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/ Susan A. Wang                      
                                   Name: Susan A. Wang                        
                                   Title: Sr. Vice President, CFO and Secy.   

                                   847 Gibraltar Drive, Building 5
                                   Milpitas, California 95035
                                   Attention: Treasurer
                                   Telephone: (408) 956-6577
                                   Facsimile: (408) 956-6062



                                   SOLECTRON TECHNOLOGY, INC.,
                                   as an Originator

                                   By: /s/ Robert Aeschliman                  
                                   Name: Robert Aeschliman                    
                                   Title: Assistant Secretary                 
                                   
                                   6800 Solectron Drive
                                   Charlotte, North Carolina 28262


                                   Attention:                                 
                                   Telephone:                                 
                                   Facsimile:                                 

        
                                      S-1





                                   SOLECTRON CALIFORNIA CORPORATION,
                                   as an Originator

                                   By: /s/ Susan A. Wang                      
                                   Name: Susan A. Wang                        
                                   Title: Chief Financial Officer and Secretary

                                   847 Gibraltar Drive, Building 5
                                   Milpitas, California 95035
                                   Attention: Treasurer
                                   Telephone: (408) 956-6577
                                   Facsimile: (408) 956-6062

                                   SOLECTRON FUNDING CORPORATION, as
                                   Initial Purchaser

                                   By: /s/ Susan A. Wang                      
                                   Name: Susan A. Wang                        
                                   Title: President                           

                                   847 Gibraltar Drive, Building 5
                                   Milpitas, California 95035
                                   Attention: Treasurer
                                   Telephone: (408) 956-6577
                                   Facsimile: (408) 956-6062


                                      S-2


                                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.


                                      II-2


            (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.

                                      II-3



            (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.


                                     III-2



            (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 mark 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;

                                     III-4



               (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 Murphy
            Sheneman  Julian & Rogers  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, sue 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: